In today’s fast paced world, Autotrading became a convenient way for traders to take advantage of the markets’ volatility, while investing a minimal amount of their time.
Many investors and traders are taking advantage of the multiple solutions available online. These online trading solutions can benefit novice and more experienced traders depending on their background and the results they want to achieve. This article will cover options available for automated trading, which should allow traders to generate a stream of passive income. We will also provide key takeaways so that traders can reap the benefits of Automated trading. It allows traders to benefit from the automation of most of the trading process. The Metatrader platform is the most popular option and offers traders multiple features:
The MT4 and MT5 platforms depending on the level of expertise and involvement traders require.
Trading bots generating trading signals and executing fast paced trades; Trading bots are particularly helpful when trading in the Forex market.
Scripts for the execution of single trades
Expert advisors offered through the MT4 platform. These programs are referred to as expert advisers and can identify entries, exits and profit targets to execute both the analytical and the trading aspect of the process.
Social trading is another popular online trading method. It’s based on user generated content, and the trading platform allows traders to copy high performing traders’ trades (Copy trading) or strategies (Mirror trading). The trades and strategies can be copied or mirrored fully or partially.
In fact, copying traders can copy the whole trade or strategy in a hands-free approach. They can also use the trading signals to initiate a position and manage it 100 per cent, manually or partially, depending on their level of comfort and availability.
Advantages of Autotrading
The trading methods mentioned above are great for traders as they can trade without the need for a financial education. The time traders need to invest in the trades is minimal, and they don’t have to spend time studying and monitoring markets. The investment in terms of personal capital is minimal as well, given margin trading is available at competitive interest rates.
Key factors to generate passive income with Autotrading
Although the process is conveniently automated, traders cannot just ‘set and forget’ their trades. A minimal degree of monitoring is still required to make sure that the strategies are generating the targeted returns.When we consider the end-to-end process of autotrading, we believe these are the key factors to succeed in autotrading, and generate a passive income using the methods mentioned above:
Choosing a reliable brokerage providing access the right trading platforms.
Choosing a reliable trading platform offering access to the best algorithms, trading signals, traders and strategies available.
When Copy or Mirror trading, traders have to monitor the performance of the strategies or traders they are following. They might need to switch strategy or signal providers if the performance deteriorates, or if their risk tolerance or objectives change.
When using Automated trading solutions, traders need to Monitor their trading results closely and adjust their rules or fine-tune their algorithms to make sure they continue getting the maximum return on their investment.
Managing risk remains a priority even when you copy the best traders.
The Metatrader platform for instance offers detailed reports, so traders can review the history of their trades: measure their success and if need be and re-evaluate their strategies.
All-in-all, Autotrading can help traders secure a relatively steady source of income – provided the process is set the right way. Traders also need to monitor their trading results, and adjust the rules as they go, to make sure they get the maximum return on their investment.