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Ross Givens

Stock Trader & Educator

Auto Trading Strategy

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Auto Trading Strategy, Automated trading systems, also known as mechanical trading systems, algorithmic trading, automated trading, or machine trading, allow traders to define basic rules for trade entry and exit that, once configured, can be performed automatically by a computer. Indeed, various platforms say that automated trading systems account for 70% to 80% or more of shares exchanged on US stock exchanges.

Traders and investors will simplify their trading processes by defining specific entry, exit, and money control rules. Algorithms can then conduct and track the trades. One of the primary benefits of strategy automation is that it can remove some of the emotion from trading by automatically placing trades when such conditions are reached.

Trade entry and exit rules may be as basic as a moving average crossover or as difficult as complex methods requiring a thorough comprehension of the programming language used by the user’s trading network. Additionally, they may be built on the skills of a trained programmer.

Usually, automated trading platforms entail the use of software connected to a direct access broker, and all custom rules must be written in the proprietary language of that network. For example, the TradeStation platform is written in the EasyLanguage programming language. By contrast, the NinjaTrader platform makes use of NinjaScript. The following figure illustrates an automatic technique that executed three trades within a trading session.