New to trading? Or are you an experienced trader looking to increase the efficiency of your trades? Automated trading can enable you to trade like a pro without watching your screen all day.

On top of simplifying trading and freeing up your time, automated trading improves your trading results. You won’t have to worry about hefty losses from falling stock prices, forex rates, or, if you’re a crypto trader, sudden dips in Ethereum price.

But what exactly makes automated trading platforms so beneficial? In this article, we take a look at how automated trading can help you make more money.

Minimize Emotions

Plan the trade and trade the plan – no doubt a famous phrase but one that’s hard to follow. Emotions often get in the way, leading to impulsive and irrational trading decisions. Many traders find it hard to stay calm during winning or losing periods, and automated trading platforms can prove the difference.

They operate based on a preset algorithm devoid of emotional biases, effectively removing fear, greed, and other trading fallacies from the equation. If you’ve traded manually long enough, you’ve probably lost out on a winner because you were afraid of taking a loss. Or you’ve probably ended up taking a loss from a winning position due to a desire to eke out a little more profit from a trade. With automated trading, you can maintain discipline and consistency in executing trading strategies.

Fit Your Trading Around Your Schedule

Trading manually can be time-consuming, not just in backtesting but in live trading. Automated trading helps minimize screen time, allowing you to fit your trading around your day job and other responsibilities.

You can leave your strategies running all day and night, and the trading platform will monitor the market and place trades based on your preset conditions.

Improving Order Entry Speed

In a volatile market, a slight delay in opening or closing a position can cause you to incur heavy losses. Automated trading platforms execute trades at neck-breaking speeds, allowing you to exploit market opportunities that manual traders may miss. You can instantly enter and exit positions, capturing price movements and reducing slippage.

24/7 Market Monitoring

Automated trading allows you to take advantage of opportunities outside your regular trading hours. Remember, global financial markets operate around the clock, and unless you’re a robot, you can’t possibly monitor them continuously. And you shouldn’t – taking a break from time to time can help maintain your psychological health.

Automated trading allows you to capitalize on trading opportunities across different time zones. You can also take a few days off without risking missing out on big trade.

Better Backtesting

You can backtest your trading strategy over a long period and get a good picture of its reliability before risking your money. On top of that, automated trading helps you optimize your trading strategy by identifying weaknesses and areas of improvement. This significantly reduces risk and enhances performance.

Risk Management

Using risk controls like stop-loss orders and position sizing limits, you can preserve capital and trade when market conditions are favorable. Automated trading allows you to set and automatically execute risk management rules to prevent potential losses.

You can also use an automated trading system to hedge against losing positions. While it can take a human lot of time-consuming calculations to do so, it takes an algorithm only a couple of milliseconds.

Diversify Your Trades

Automated trading platforms enable you to trade multiple strategies or instruments simultaneously. You can spread activities across different markets, assets, and timeframes, distributing the risk over numerous trades. This will allow you to have a more balanced and resilient trading portfolio, enhancing your overall chances of success in the ever-changing financial landscape.