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Top automated trading systems in the world introduce an aspect of convenience to stock market trading today. Automated trading systems introduce a fully automated system and keep an eye on the market for you before placing the trades at the right time. Also called algorithmic trading, automated trading systems use predictive technology and data to analyse market trends and help traders make profits.Thus, top automated trading systems look like a win-win situation till now. However, like all other technical applications, automated trading systems have their pros and cons. In this article, we discuss the two different sides of top automated trading systems in the world.The advantages of automated trading systemsTake extremely logical decisionsWithout algorithmic trading, trading gets marred by human emotions. Traders often take clouded decisions about trade. Algorithmic trading minimises the room for human error and takes extremely logical decision according to the pre-set rules. Human traders often deviate from trading rules because of greed or emotions. Top automated trading systems take relevant steps backed by data and predictions.Instead of failing to take correct decisions when necessary, automated trading systems take the right decision in favour of the trader’s profits. Algorithmic trading systems use advanced technology to gain insight into the business scenario. The emotionless approach of the software is, therefore, an advantage for the traders.Validate decisions with backtestingTop automated trading systems allow backtesting of current trading rules on historical data. A careful study of historical data helps determine the validity of the trading rules followed by these algorithmic systems. The study of historical data reveals a pattern that certain decisions have driven. Backtesting reveals the necessity of current trading rules and the accuracy of automated trading systems.In this way, the traders can be sure of algorithmic trading systems' efficacy and choose the right system according to their needs. Backtesting helps a trader estimate the risks and profits attached with a trading pitch before implementing it. Moreover, automated trading systems refine the trading practices followed by the traders.The disadvantages of automated trading systemsSystematic failuresLike all other machines and algorithms, automated trading systems are prone to mechanical failures. The trading system's algorithm and software may have bugs or glitches that can lead to system failures. Although system failures are rare in robust, well developed algorithmic trading systems, the possibility cannot be ruled out. System failures can be a serious problem if you are completely dependent on an automated trading system.Need of monitoringAlthough theoretically automated trading systems can take standalone decisions and keep an eye on stock market trends, they need monitoring at some level to remove connectivity and mechanical failure issues. If a trader is choosing an algorithmic trading system, he has to prepare to monitor the system activity at some level.Conclusive noteEven with some potential disadvantages, the advantages of automated trading systems still stand. A trader should give automated trading systems a try for the benefits of automated trading systems in the stock market. Automated trading systems introduce a sense of convenience and logic into stock market trades.
Top automated trading systems look like a win-win situation till now. However, like all other technical applications, automated trading systems have their pros and cons. In this article, we discuss the two different sides of top automated trading systems in the world.
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