Automated Trading

Sal Sal Follow Aug 03, 2023 · 9 mins read
Automated Trading
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Mastering the Art of Automated Trading: A Comprehensive Guide for Smart Investors

Table of contents

  • Introduction • The Basic Nitty-Gritty • The Unseen Hand: Algorithmic Trading • The Art of Selecting a Trading Bot • Rolling in money or just rolling eyes? Pros and Cons of Automated trading • Gear Up: How to Get Started with Automated Trading • Conclusion


Ah, automated trading! Who would’ve thought that this unassuming term would be capable of tickling your funny bone, right? Trading and humour – seems like an oxymoron straight out of the Shakespearean era. But hold on to your seats, folks, this financial roller coaster ride can be quite a hoot! Do you remember the scene in Wall Street where Gordon Gekko is frantically yelling into his phone? Imagine Gekko replaced by a cool, calm, and collected bot, managing trades while being utterly immune to the stock market’s temper tantrums. High-strung brokers are replaced by lines of codes! Oh, the absolute drama-lessness of it all. The hype around automated trading is kind of like that new kid who joined your school mid-term – mysterious, all the buzz, and engrossing! Right from Mr. A who’s glued to his computer screen all day trading stocks, to Mrs. B, who’d rather watch paint dry than touch a stock symbol – they’ve all been swept off their feet by the automated trading whirlwind! Well, let’s unpack this Pandora’s box and figure out what the fuss is all about, shall we? And as we put on our explorer’s hat, remember, in the world of automated trading, it’s the bots who bring home the bacon. We just sit back, sip our tea, offer moral support, and yes, provide the electricity!

The Basic Nitty-Gritty

Roll up your sleeves, folks, we’re diving headfirst into the awe-inspiring world of automated trading. Ride the waves of the stock market without even lifting a finger, talk about living the dream! So, gather round, I’m going to let you in on a little secret! Automated trading, my dear friends, is a superhero in the world of trading (short of wearing a cape, though that would be cool!). It simply refers to the process of using computers programmed to follow specific trading rules to place trades. Ah, the joy of watching machines do the job while you sip your morning coffee! It’s a total ‘rise of the machines’ situation, without the dystopian aftermath. Moving on, let’s unveil the magic behind this mystifying machine-led operation. Picture a party where the automated trading system is the DJ. It’s got its protocols (the playlist) to follow, like market conditions, timing, price, quantity etc. If these elements match up (like the beats of a sick tune), BAM! A trade takes place. DJ ATS (Automated Trading System, get with the abbreviations, people!) is less about the “feel” of the crowd (or market), and more about the syntax and analysis. You might think automated trading is bias-free. Fair assumption. The caveat though- your bot could be secretly nursing a glitch. If a glitch and volatile market shake hands, that’s one hell of a cocktail you don’t want to get tipsy on. Ladies and gentlemen, there you have it! A quick peek into the chatter about automated trading and its working principle- as much a part of today’s pop culture as flat whites and avocado toast. Right now, your trading bot might just be another face in the crowd, but let’s bolster it above the rest, slash out manual effort, and win this game! Stay tuned!

The Unseen Hand: Algorithmic Trading

Ah, the unseen hand of algorithmic trading – let’s explore this world where numbers and charts are replaced by codes and robots. Join me in this adventure worthy of a sci-fi thriller! So, what’s with all these algorithms? Picture a robot making a sandwich with the precision of a Swiss watch, but instead of a sandwich, our bot friend crafts winning trades. These algorithms are pieces of code specially designed to analyze tons of data, calculate potential risks, and execute trades in the blink of an eye. Could you do that? Yeah, I didn’t think so. Now, if you’re an old-school, manual trader who’s used to spending hours glued to a screen, analyzing charts and screaming “SELL!” at your screen, this might sound straight out of a dystopian nightmare. But wipe that cold sweat off your brow, because this isn’t some “bots vs. traders” battle royale. It’s more of a WWE tag team match! Algorithmic trading can coexist with manual trading, making our lives a little bit easier by automating the nitty-gritty and leaving us more time for those long romantic walks on the beach – or to focus on more complex trading strategies, if you’re into that sort of thing. So, bots or no bots, remember that at the end of the day, it’s your fingers on the keyboard (or the code) that hold the power. Embrace the world of algorithmic trading, and give a warm welcome to your new bot buddy. Our adventure has only just begun!

The Art of Selecting a Trading Bot

Gather around, my fellow investors, as we embark on the quest to discover our perfect trading bot companion. But, let’s not forget the wise words of Uncle Ben (yes, Spiderman’s uncle); with great power comes great responsibility. Bots may be brilliant, but they’re not all-powerful superheroes. They’re mere mortals - just like the rest of us. Before diving headfirst into the magical world of bot-dolphins, let’s dip our toes into The Handy Guide to Choosing Your Bot Companion. This will ensure we’re not left drowning in the sea of technical jargon or getting into a tangle with some dreadful bot-lifeguards. To make things a tad easier, tattoo this on your brain cells - research, reliability, and reviews are your golden ticket to bot paradise. Choose a bot backed by solid technology, trustworthy developers, and glorious reviews from other overjoyed investors. And hey, while you’re at it, make sure that the bot aligns with your unique trading style and personality. You sure wouldn’t want to end up on a blind date with a bot that’s not your type, would you? So, pull up your socks, whip out your thinking caps, and embark on this exhilarating journey of bot-selection. Remember, some bots may dazzle you with their charm, just ensure you take them through the ‘3 Rs’ of Dating (or rather, Trading) 101: Research, Reliability, and Reviews!

Rolling in money or just rolling eyes? Pros and Cons of Automated trading

Alright my savvy investors, brace yourselves, for we’re diving into the rollercoaster of automated trading. Let’s paint the scenario with some pizzazz, shall we? Starting with automated trading’s sassy side, it’s as though you hired a personal assistant who not only makes you coffee but also trades like a Wall Street whiz, all while you binge-watch your favourite series! How cool is that? In this 24/7 world, these tireless bots outshine us languid humans, performing trades with the speed of lightning, without breaking their virtual sweat. They’ll coolly execute your pre-programmed strategies keeping emotions at bay because let’s face it, we humans are a rollercoaster of emotions in a heartbeat! But my dear readers, let’s not get too carried away. Bots, like us, have some moody blues too. For instance, imagine you programmed your bot to buy a yacht if your stock hits a sky-high price. Unfortunately, a bug made it read ‘high’ as in ‘Dazed and Confused’ high (I mean, artificial stupidity, amirite?), and there you are— bankrupt and yacht-less. On a serious note, system failures and unpredicted market movements can also be the dark clouds in your otherwise sunny bot romance. Plus, the initial cost might be a daunting path for newcomers. So, dear investors, automated trading can be your golden goose or your sworn enemy. It’s like getting a pet: delightful yet demanding. So study well, or you might end up with a bot that has the logic of a rock and the speed of a snail – amusing, but not quite what you bargained for!

Gear Up: How to Get Started with Automated Trading

After our enlightening ordeal with the ups and downs of automated trading, it’s time to suit up. No, we’re not going on a space mission; it’s just something way more thrilling - setting up your own automated trading! How, you ask? Well, my friend, all you need is the right guide - a tech-geek with a sense of humour, perhaps winks. Hang on and watch the magic unfold. Set up a demat account, wipe it clean, maybe put on some candles, just for the atmosphere. Install trading software that has asked you out several times but you never really gave a chance (they are generally harmless). Configure the bot, make it your friend, give it a nickname if you fancy. Throw some strategies their way - input them, not literally. To make the bot feel at home, tweak the settings, make it comfortable. This tedious nursing of the bot finally leads to the exciting part - Execution! Oh, that was it? Yes, indeed. Setting your journey into automated trading is similar to making instant noodles - it’s quick, easy, and gets the job done! Here’s a silly tip from your neighbourhood tech-geek: never ever challenge your bot to a game of speed chess. You’ll lose. Painfully. Also, always update and monitor your bot - they need attention too, you know! Gear up, it’s only going to get more exciting from here! Get ready, because in the next section, we will be doing some serious unpacking - we are recapping this awesome adventure of ours!


So, you survived the roller-coaster of automated trading, huh? Kudos! Let’s rewind the tape. We delved into bots, ditched our crushing emotions, and what did we get? A tech-induced trading paradise. Highs, lows? Pfft! Now, they’re just cute little bumps in our automated roadmap. Ah! Life’s good when you’re an emotionless trading aficionado, ain’t it?

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Written by Sal Follow
Hi, I am Sal, the author of mastering, the theme you're currently previewing. I hope you like it!