Not too long ago, computer-based trading was limited to the institutional participants of the futures markets. Investment banks, money managers, and proprietary firms were among the few parties benefiting from exclusive technological capabilities.
Over time, rapid advancements in exchange connectivity and computing power have brought the potential of trade automation to the masses. As a result, the traditional impediments to success in the marketplace no longer inhibit the retail trader’s upside potential.
In many ways, the technological boom has brought institutional aptitude to the retail environment.
Why Automation Is So Valuable
Automated trading gives individuals a way to engage the marketplace in a completely hands-off capacity. This eliminates many of the pitfalls associated with successfully creating and implementing a conventional discretionary approach.
Below are a few of the ways automation can enhance the trading experience:
- Built-in expertise: Becoming a market professional requires dedication and commitment. Years of study and trade in live-market conditions often come before a trader develops a viable strategy. Proven automated trading strategies can be purchased or accessed on a subscription basis, eliminating the need for personal expertise.
- Time allocation: The contemporary futures marketplace functions on a near 24/5 basis. Extensive hours are needed to complete the preparation, active trading, and market study attributable to success. Simply put, trading is a full-time job. Through automation, computers perform all active trading and due diligence in real-time without any need for human intervention.
- Consistency: The ability to interact with the market in a consistent manner over time eludes many traders. Executing trades regularly and adhering to proven risk-management parameters without emotion or physical error can be formidable challenges. Trade automation effectively eliminates inconsistency.
Automation removes these variables from the trading equation. It streamlines operations, depending upon precise and consistent strategy execution to ensure the best possible chance of achieving long-term success.
Portfolio Optimization through Trade Automation
Automated Trading Strategy Execution (ATSE) can be a valuable tool when diversifying risk and maximizing profitability. Whether you’re strictly a futures trader or a mixed-asset investor, ATSE can open the door to many exciting possibilities.
It can enhance portfolio optimization in three primary ways:
- Strategy Diversity: ATSE makes it possible to employ a wide variety of proven approaches to the markets. Scalping, position, or swing trading methodologies can be executed and managed side-by-side. In addition, automated strategies can be selected according to overall suitability given the resources of the trading operation.
- Market Accessibility: Futures markets offer many unique products and opportunities to active traders. Unfortunately, manual trading focuses the trader’s attention to a select few products. ATSE allows for the simultaneous engagement of a multitude of distinct products and underlying asset-classes..
- Quantified Risk: Automated trading strategies predefine risk. According to the individual strategy, every signal that is taken adheres to an adopted capital risk and trade management model. This ensures precise capital management and that money is not sacrificed as a result of an ill-advised “judgment call.”
Through ATSE, one can execute a vast number of trades perfectly based upon a collection of specific strategies deemed suitable. Each and every trade is conducted flawlessly, ensuring long-run consistency. The result is a level of diversification previously not possible.
Getting Started With Trade Automation
It’s true that the technology and methods behind trade automation are complex. Advanced algorithms, order routing, and dedicated servers are all a bit mysterious to the average trader.
Fortunately, you don’t have to grasp these concepts to make ATSE work for you. The team at Daniels Trading has the expertise necessary to help get you integrate trade automation into your approach to the market.
Learn more about how automated strategies can drive profitability into the future.