Pepperstone: 5 reasons to automate your trading

Automated or algorithmic trading is basically a trading system that uses a computer program to execute trades on your behalf based on a set of predefined rules.

Pepperstone is one of the best brokers that offers several handy tools to execute your trades automatically based on existing or new trading scenarios.



1. Minimise emotions

One of the things you should avoid is trading under the influence of emotions (or alcohol!). Traders can easily be overwhelmed by fear, euphoria, panic, greed and many other feelings which can lead to irrational decisions and significant loss of capital. Although having emotions is completely normal for humans, it can affect your trading results if you can't control them.

There are some methods you can use to deal with your emotions, such as meditation, journaling, etc. However, it may take a long time before you can fully control your emotions while trading. This is what makes automated trading a great solution for any trader.

Automated trading can help traders control their emotions when trading. The algorithm will execute your orders according to a predefined plan, regardless of the circumstances. This means that there will be no impulsive actions or self-sabotage. As a result, you can be sure that your trades are carried out the way they're supposed to.

2. Backtesting

Automated trading can ensure that every rule in the strategy is followed correctly. It can help you test the effectiveness of your strategy and understand the markets based on historical data. Other than that, Pepperstone allows you to examine multiple possible outcomes of multiple trading robots across all platforms, further confirming the strength of your strategy in certain market conditions.

Just keep in mind that the computer is the main system driver here. A machine cannot guess or change the plan on the spot, so be sure to check the trading scenario before activating it.

3. Improved trading speed

Automated trading can generate more money because a computer works much faster than a normal human. Once all the rules are met, the system will immediately execute the trade, along with profit targets and stop losses. Thus, automated trading can capitalise on the market more efficiently than manual trading.

It should be noted that most financial markets move very quickly in real time, so you can easily lose trading opportunities. This is why entering and exiting the markets quickly is a great advantage that can make a huge difference in the trading result. Automated trading can prevent this from happening and minimise human error.

4. Reduced time

Every trader knows that making money from trading is not easy. It takes a lot of time and dedication to formulate a powerful trading strategy and analyse the markets. However, this is not the case with automated trading. The system is designed to save you time and make your job easier, making it a great choice for everyone.

All you have to do is set the parameters for your future plans and let the system do the trading for you. You can even choose from existing strategies on the platform instead of creating a new one. Once the plan is checked and optimised, you just need to monitor your positions from time to time.

5. A Promising Future

Automated trading is currently a growing segment in the trading world. We continue to see new updates and innovations everywhere, further confirming the relevance of automated trading in the future. As a result, those just starting their algorithmic journey in Pepperstone may have the chance to spend less time getting to grips with the system and earn higher potential profits.