There is still a lot of confusion in the trading community if trading using the auto- trading software is safe. The good news is that these are absolutely safe if you have registered for the right one. It is important that you read the full review and do proper research to know if the trading software is legit. There are a number of them in the market and if you research well you will be able to find one that is totally genuine.
Why trade with robotic trading software?
This trading software is beneficial because it is designed by experts who come with a lot of knowledge in trading. The algorithm that they have designed lets one make huge profits in trading. The the other advantage of using a trading software is that these robotic software trade without emotions and thus they trade only on the basis of a trading plan. There is no guesswork in these trades.
A trading plan is essential and every professional trader would emphasis on having tried and tested trade plan. However, even after having a trading plan, there are traders who overlook it and take trades based on gut feeling and emotions. This eventually washes off their entire capital.
A trading plan is nothing but a step by step algorithm of how a trade should be taken. This will include what all you need to double check and what criteria have to be met in order to generate a trade. The one who follows this trade plan will be able to generate profits on his trade because he keeps his emotions aside. However being humans we are bound to be making decisions based on emotions from time to time. It is these emotions that prove to be a big disadvantage in the trades and thus trading with the software is recommended.
The algo-trading software uses technical analysis to generate trading signals. Technical analysis is an important study and it works on some assumptions. The securities are traded based on demand and supply.
Drawbacks of using technical analysis
Technical analysis works only on those securities that are liquid. The liquid stocks are those that can be traded quickly and easily. Those stocks that are not liquid are very difficult to buy and sell. Thus technical analysis is best used for stocks that trade with high volumes.
There may be price changes not only because of sentiments in the market but also because of a spilled or a bonus. This affects the chart and this makes it difficult to apply technical analysis to those charts.
Technical analysis is not designed to work when there is some major unexpected news. Thus in case there is a terrorist attack or the company’s CEO dies, technical analysis will fail to work in such a scenario.