Whether you use your own or a borrowed trading system (as long as it is profitable) you will be able to build an automated trading system which is also called a robot or advisor.
It’s created by a programming language, which is used in a trading terminal. There are advantages and disadvantages to trading robots which will review here and come to a conclusion.
The advantages of automated trading systems:
The Superior Speed
The biggest benefit of using automated trading systems. Every program will have the ability to monitor anything up to several dozen trading tools and makes decisions and performs trades based on pre-coded instructions. This is not something that a trader can do.
Accuracy
A very important advantage over humans. An automated trading system can easily perform any trading operation based on programmed price whether it is position opening or closing. It also doesn’t make mistakes in trading volumes
The length of performance
Such programs are able to operate constantly all day or as long as a user needs and the automated trading system doesn’t miss out on any possibilities of placing a trade order.
The absence of emotion
No trader would deny that they are at a disadvantage on this point. Automated trading systems don’t fall victim to any psychological influences in the way people do including those that trade professionally.
Modernisation
The automated trading system gives you the option of amending the program’s code, altering it for the constantly moving market environment and changes in the trading system of traders. You can add necessary functions at any time.
There are still disadvantages to using automated trading systems and this is probably a reason that there is still manual trading today. We can review them here:
Difficulty in development
When you build an automated trading system you need to develop a ‘manual’ trading system as well as be coding specialist to then build a trading robot. You can put your own manual trading system together but when you pass it to a programmer there is no guarantee that they would not make mistakes.
Technical analysis only
Many automated trading systems have this disadvantage. These programs cannot take on board how fundamental data can influence the dynamics of quotes on the forex market.
The Absence of emotion
A disadvantage and an advantage. An automated trading system does not use intuition or emotion so can lose the entire balance of your account. It will only act according to the program so would not stop when common sense would say you should.
Situations of emergency
If you lose your internet connection and need to place or cancel an order an automated trading system can’t phone your broker. Any problem within the hardware of the automated trading system will cause losses.
So having seen the advantages and disadvantages of the automated trading systems, we can conclude that:
Trading robots give traders several undeniable advantages, but you should use automated trading systems intelligently and constantly monitor and modernise your systems.