If you’re an established trader or just getting started in the industry, you’re always looking for ways to make your investment strategies more efficient and effective. Many traders use different ways to achieve results, but one has been gaining traction in the last few years. Automated trading platforms in the UK, also known as trading robots, have increasingly gained popularity for their ability to simplify a trader’s job.
Trading robots are computer programs that use complex algorithms to automate the trading function. As a trader, you outfit them with your trading strategy and set parameters on when to enter and exit positions on your behalf. Once this is done, you then launch them, and they automatically take care of the rest. This piece will look at getting started with trading and investment robots and their pros and cons.
What are Investment Robots?
Investment robots are software solutions that automate the trading function. Therefore, instead of constantly having to manually search the markets for trading opportunities and signals that let you know when to enter or exit positions. You train your investment robot to do that for you.
Robots also come with prebuilt trading protocols and research tools you can use to gain a better understanding of market conditions. They also assist you in generating market signals and placing and managing trades.
Most robots are based on the MetaTrader architecture and built with the MQL scripting language, which makes them highly secure and reliable. This means they can help level up your returns if you get the right one for your trading type. Furthermore, there are free versions you can download online and ones you can purchase from trustworthy retailers.
Before getting one, you should consider your trading objectives, instruments, and available budgets. Pro versions that produce better results will require you to pay for them on a one-off purchase or subscription basis. But this is not to mean there are no excellent free ones. A bit of online research and reading reviews will help you identify the one you can use to automate your trading.
Advantages of Using Investment Robots
They are Affordable
The cost of owning and running a trading robot is low. Subscriptions to professional platforms are not overly restrictive to many traders, and there are also excellent ones that don’t cost a thing. Therefore, you can comfortably automate your trading without running the risk of eroding your profit too much.
Access to Investment Models
Chances are you’re trading on a strategy you developed from reading trading books and researching online platforms. However, As much as it works for you, it cannot beat the war-proven ones you access when using trading robots. Some of the platform investment models are from Nobel-winning traders who have changed how we view the markets today.
As human beings, we are hard-wired to use our emotions when making decisions, which is not always the best thing, especially regarding trading. Trading robots help you to separate yourself from the market and the emotional volatility that comes with monitoring the market. Once you set the trading parameters and protocol, the computer program executes them without regard for anything else.
How long can you go on a single trading session? That’s right; you must take breaks every once in a while and even step away from your trading station to attend to other life duties. On the other hand, a trading robot can run indefinitely, optimizing your chances of making high returns. This also allows you to work on other trade-unrelated projects that matter to you.
Disadvantages of Investment Robots
Most trading robots are optimized to handle a single trading asset. Therefore, if your strategy involves having a diversified portfolio, you will need one for each asset or personally trade some. Furthermore, you will need to manually adjust your trading protocols and parameters as market conditions change to keep your robot effective.
When using a trading robot, there is no human interaction taking place. You use your computer to train and change parameters on your robot, which is impersonal and limited to your knowledge and capabilities. Furthermore, using a trading robot is not like calling your online broker to find out what is happening with something or for advice.