Automated trading has emerged as a winning phenomenon in the world of trading. your puts Business practices on autopilottaking manual errors out of the equation.
More and more traders – seasoned and novice – are turning to automated trading because it greatly improves the efficiency of your trades.
However, with so many automated trading platforms on the market, it becomes especially important to choose the one that best suits your trading style.
In this article, we look at the features a trader should look for when choosing the right trading platform for automated trading.
Automated trading is practical Participation in the financial market using algorithm programs and software solutions to carry out your trades. Rather than running your trade yourself, you create software that operates according to a predetermined set of rules.
Also called Algorithmic tradingThis way of investing in the financial markets has seen a huge rise in recent years. Around 92% of trades are made in the forex market In 2019, it was found to be from an algorithmic trade rather than a human being.
With the emergence of automatic trading as a preferred practice in the market, Traders need to be careful about the platforms they choose to implement their strategies with. There are some key features that you should look for in a trading platform before you start working with it.
We have identified the most important must have features of the right auto trading platforms to help you achieve success as a trader. Check them out below.
1. Backtesting
Source: Composer Merchant
Automated trading works on a range of predefined rules That defines when you should enter or exit an order as well How much money should you invest in all of them. Trading strategies vary depending on market trends, your budget, and approach you want to implement.
The best trading platforms like Day Trade The World place all of the above elements in perspective and formulate the best strategies for you. Backtesting is one such feature that highlights its efficiency Automated trading platform You choose.
It’s practical Use historical market data to determine strategies for the present or near future. This involves programmers running algorithm programs on market data collected in the past to determine a profitable strategy that produces the expected results for traders.
Your automated trading platform should provide back-testing strategies as is Help you test your trading solutions and get improved results. Although the results are not always accurate, backtesting gives you a fair idea about the profitability of your plans.
2. Frontal testing
Future testing is another feature offered by automated platforms that enhances your trading. Unlike back testing which relies on historical data to formulate strategies for the future, Forward testing uses real-time market data to validate the effectiveness of your current trading strategy.
As a trader, you have to research trading Platforms that provide you with the tools and means to take future exams as a strategy. It uses simulated trading and real-time market data to help you make the moves right then and there.
Prospective testing can also be used to Identify and detect problems in computer code You use it as the basis for your strategies. Your trading platform must be flexible, agile and robust to enable you to perform high intensity calculations for longer periods of future testing.
Also known as Paper tradingforward test Do not rely on historical data but rather on sample data collected directly. It is called paper trading as the qualities are made and implemented on paper and not in reality.
3. Direct testing
Live backtesting is a complex and modified approach, often described as the final stage of a trader’s strategy development cycle. As the name suggests, the live test Occurs during the live performance of the strategyor when the strategy is in action.
here , performance from the strategy in real time Compare back test results as well as forward test results. This means that the results Predicted by the historical data in the back-testing strategy as well as the trading system effectiveness results predicted by the forward-testing Strategy in live performance.
Related “ How to improve your trading strategy
The following metrics are evaluated for the purpose of direct testing of strategies:
- profit factor
- Average realized profit per trade
- maximum undo
- Profit Ratio
the The overall goal of the automated trading platform is Meet the expected results obtained from backtesting as well as a competency rating derived from forward testing. The platform you choose should be able to provide you with the tools to perform live testing during real time trading sessions.
The live test is Trading platform testing to be able to produce high quality instruments In addition to providing a first-class service to traders that enables them to conduct their trades with ease.
4. Multi-asset trading
The algorithmic trading market is Growing at a staggering 12.7%. The market size is expected to reach $31.494 million by 2028 if it continues at the set rate. The versatility of trading platforms has been a major contributor to the exponential growth of the trading market.
Dealers don’t just deal traditional securities such as StoresAnd Exchange Traded FundsAnd CFDs. They are now dealing in more financial assets than ever before with the introduction of cryptocurrencies and many more digital assets.
This is why it is so crucial to you as a trader Choose a trading platform that allows multi-asset trading.
Related “ What should you consider when choosing the best assets for trading
Whether you are a new or an experienced trader, you need to have the option available to you to trade in a variety of assets.
Whether or not you deal with them is entirely up to you. But your auto trading platform should be It gives you the option to trade in multiple assets at the same time. You can expand your portfolio without having to deal with multiple platforms.
5. Low fees/commission
Trading platforms often charge fees and commissions to allow you to trade on their platform. exist Different types of fees associated with the actions you take And the deals you do, like freelancer competitors please, transfer fees, withdrawal fees.
Paying some kind of fee for your trades is inevitable. But, Trading platforms are notorious for charging hidden fees while advertising Unlike that. Therefore, you need to choose an automated trading platform that is honest and transparent about the fees it charges.
Look for platforms that charge low fees, especially for new traders. Ensure that the platform does not take advantage of new traders by charging them more or hidden fees. Many platforms advertise 0% commission and no hidden fees.
Platform The rights to the underlying asset shall be transferred to you after purchase rather than keeping it to herself. Fees can also vary from country to country depending on your status as a new user or a long-time user.
6. Customer Service
Customer service is a determining factor in choosing any service. Your automated trading platform It needs to offer you consistent assistance in the form of chats, calls, emails, support tickets, and help centers.
Traders need different types of support during the different cycles of their travels. New traders will need educational centers to gain more knowledge about the market Choosing strategies. They will also need more hands-on support while executing trades in real time.
Experienced trades may need less platform support however They’ll be sure to appreciate a quick reply if they run into a problem during a trade or raise a support ticket. The trading platform must provide quality customer service to help traders excel in automated trading.
DTTW™ even has a dedicated service to help its partners build and develop their trading desk, Team TFD (Trading Floor Development).
7. Security
Cyber security has emerged as an urgent concern today. Market fraud, especially in the unregulated cryptocurrency arena It can discourage traders from trusting the digital process of automated trading.
When choosing a trading platform, make sure it is It provides a safe and regulated platform for all types of trading and has a reliable record of storing investors’ funds.
A good platform would store investors’ funds in cold storage to reduce the chances of losing money due to fraudulent hacks or technical errors.
Related “ How to avoid scams in day trading
Choose a secure and feature-rich platform for superior automated trading
Automated trading has transformed the weight trades that operate in the market. It has taken into account everything from traditional securities to newer cryptocurrencies to help traders access the modern market with pre-made strategies.
Choosing the right auto trading platform can enhance your trading practices by providing the required support in the form of tools and features. Choose a fast, secure and feature-rich platform to help you improve your trading experience and achieve success in the market.
Tell us in the comments what features you think the auto trading platform should have.