What Exactly Is An Automated Trading System (ATS)?
Automated trading systems, also known as mechanical trading systems, algorithmic trading, automated trading, or system trading, enable traders to create particular rules for trade entry and exit that, once programmed, may be performed automatically by a computer. Indeed, according to several crypto trading platform, automatic trading algorithms account for 70% to 80% or more of shares traded on the US stock Cryptocurrency exchange. KuCoin enables the purchase and sale of crypto currencies. However, you may do it at a lesser rate than other famous businesses. You may also buy and keep the KCS token, KuCoin native cryptocurrency, to receive incentives and lower costs. KuCoin has several trading types.
Traders and investors can automate trading systems that allow computers to execute and monitor deals based on exact entry, exit, and money management criteria. One of the most tempting advantages of strategy automation is that it may take many emotions out of trading by automatically executing trades when specific criteria are met.
Creating Trading “Rules”
Some crypto trading platforms have strategy-building “wizards,” which let users choose from a list of widely accessible technical indicators to create rules that can then be traded automatically. For instance, the client could determine that a long position exchange would be started when the 50-day moving average gets over the 200-day moving, usually on a five-minute outline of a specific exchanging instrument. Users can additionally specify the kind of order (for example, market or limit) and when the transaction is initiated (for example, at the end of the bar or the start of the following bar) or utilize the platform’s default inputs.
Automated Systems Have Many Advantages
There are several benefits to having a computer watch the markets and execute trades, including:
Emotions Should Be Reduced
Automated trading methods minimize emotions throughout the trading system. Traders often have an easier time sticking to the strategy when their feelings are under control. Traders will be unable to pause or challenge the deal since trade orders are fulfilled quickly once trade rules are satisfied.
Backtesting examines the validity of a concept by applying trading rules to past market data. When it comes to system design, All regulations for automatic trading must be strict, with no opportunity for interpretation. The computer cannot make educated assumptions and must be informed precisely what to do. Traders can apply these rules to past data before putting money at risk in actual trading.
Because trading rules are set, and transaction delivery is automated, the focus is achieved even in volatile markets. Discipline is frequently lost due to emotional causes such as fear of losing money or the desire to squeeze out a bit more profit from a deal.
- Backtesting is possible.
- Maintains the trader’s discipline
- Multiple accounts are permitted.
- Mechanical breakdowns are possible.
- Monitoring functionality is required.
- Can’t perform well
Although enticing for various factors, automated trading systems will not be seen as a replacement for meticulous execution. Technology failures are possible, and these systems must still be monitored as a response.