How to Choose an Autotrading System



With today’s fast paced trading options, choosing the trading ‘robot’ has taken on a major role in all areas of investing.  The use of a robot is basically one of the methods employed by a trader to buy or sell on an underlying system or program. It is often referred to as ‘autotrading.’

Although autotrading was originally used on the Chicago Mercantile Exchange as far back the 1970’s, it emerged big time with the advent of the internet in 1999. Today, most online brokerages, especially Forex brokers,  allow the trader the use autotrading.


There continues to be a debate, however, as to which is a more beneficial manner for placing trading—using autotrading or employing the service of an ever present and alert human trader or market maker. Obviously, an automated trading situation can accommodate more trades per market than any human can cope with. In addition, with autotrading trades are placed in real time and a trader can replicate these actions across several timeframes and on several markets at the same time. What’s more, without any doubt, robots are not subject to the emotional ups and downs of mortal traders.

On the other hand, even the best autotrading system can be failed by any one of the many monetary scams and investment frauds that continue to plague the financial markets. There are many traders that don’t take the time to familiarize themselves with how the autotrading structure works and this leaves them vulnerable to all sorts of broker rip-offs. Traders can end up placing unsuitable trades for inappropriate amounts of money or they can be taken in by shrewd brokers who surreptitiously close up shop and abscond with all their clients’ funds. If the autotrading concept is not fully understood, an unsuspecting trader’s trading activity can go unmonitored and will consequently lead to deep losses.

The wide choice of customized trading strategies can be overwhelming for novice traders. And to make matters worse, most autotrading systems are complicated to set up and are usually not accompanied by clear installment instructions in the language needed by the trader.

The Best Autotrading System

Choosing the best autotrading system from the plethora of those available is not always an easy undertaking. Besides the hundreds of online brokers touting the best autotrading software, the most outstanding platforms and the finest technical analysts, there are independent companies selling autotrading programs that can be purchased online and do not necessitate having to open a trading account with any particular broker. Anyone looking to buy these systems from independent salespeople should be cautious before plunking down any money.

At the end of the day, the most advantageous way to reach a decision as to the autotrading system that makes the most sense to you is to speak to people who have used autotrading for a while. Experience is the mother of invention. And referrals from veteran traders can go a long way in weeding out brokers who do not abide by industry regulation or who are not bona fide brokers. Old-time traders who have been in the trading arena for years are also privy to information concerning brokers who have not performed in the manner they promised or are rumored to have conducted business in an unacceptable manner. A word to the wise is sufficient.

In addition, anyone interested in trading should do the proper research and due diligence before choosing an online broker. He/she should check out where the brokerage house is domiciled since the location is often a good indication of the degree of its regulation and authorization. One should never choose a broker who is not certified by at least the local regulatory organization, but preferably by more than one such regulator.  After all, the robot is only as good as the brokerage offering it.