What is an automated trading system?

An automated trade system is any approach to trading whereby you use rules – rather than discretion, instinct or, “gut” – to make investment decisions. When we read about most successful investors, we hear stories of their investment acumen, and how they were able to find the best investments using their own instincts and research. However, these individuals represent a small fraction of all investors. The odds are heavily against you winning the investment game if you try to rely on your own instincts and luck.
This is where automated trading systems come into play, and serve their usefulness. An automated trading system looks at past market behavior (which is actually human behavior) and makes recommendations, based on this recurring behavior. It is much like Arctic explorers 100 years ago. Byrd did not know where he was going, but he had a compass, which proved to be enough. Approaching markets these days without your own automated trading systems can be like venturing into the cold Arctic wilderness without even a compass.

Why do I need an automatic trading system?
We need systems – or methods – because we need filters. In almost every line of work, there is a deluge of information. We could spend our entire day, every day, reading new information and still be no better informed than when we started. So an automated trade system will enable you the investor to filter information, and make timely decisions regarding your investment portfolio, rather than being subject to, “paralysis by analysis”.

How can automated trading systems help me?
Automated trading systems help to relieve us of the anxiety of making blind decisions. When the market has been languishing for a few months, and many seasoned professionals are on the media outlets calling for further downside, it is very easy to feel fear, and ignore signs that the market is coming alive again. An automated trade system will give an unambiguous, unemotional signal to buy or sell, even if the majority of the press is calling for the contrary. An automated trading system will measure how market participants are voting with their dollars, rather than what they are saying on television.

Who can benefit from systems?
Everybody can benefit from automated trading systems. All investors – even professionals – have a finite amount of time to allocate to decision making. With an automatic trade system, all investors can streamline their investment process so they can focus on other tasks – work, social, and family.

How can you implement a trading system?
Aside from fund-logik.com, there are many methods by which to implement an automatic trading system. One of the simplest can be found at
www.DogsoftheDow.com. The advantage of these and other automatic trading systems is that they can be implemented by people who are not programmers, and who are not day trading. Investors can reap above average returns through a careful, disciplined approach to investing. This discipline is most easily implemented with the help of automated trading systems.

If you have any questions, please do not hesitate to write admin@fundlogik.com

 


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