Trading is a process in which a person who is the first party invests in an economic entity and gets something in return. The unit returned can be an asset or anything with monetary value. The process of trading is not new. It is continuing its process from time immemorial. Each country has an economic center commonly known as the stock market where all trading takes place. The customers who are interested in trading follow the time and schedule of these institutions and invest their time and money in the market. Visit Official Site to know more about bitcoin trading.
This was the case in a traditional market. Now the time has changed and people want everything including trading to be smart. This demand is fulfilled by the digital platforms aka cryptocurrencies that have completely managed to bring a revolution in the process of trading. Moreover, the number of traders on the digital platform has outgrown as compared to the traditional market. In this article, we are going to discuss several advantages and disadvantages of this market working on an automated trading practice.
Automated trading system
An automated system is the latest trend in the digital market. It is also referred to as mechanical or algorithm trading. As the word suggests it is the form of trading that gets commenced and completed by itself. The set of rules and regulations along with various protocols are set up by the user itself that work out similarly as prescribed without the intervention of a third party. Thus, the process gets completed in a pre-determined manner. The control of entry and exit in the trading practice is at the disposal of the customer and as a result, acts like a controller. There can be various parameters on which the whole process is divided. The parameters decide whether the trading practice has to go ahead or the process needs to be terminated.
Working on an Automated trading system
Originally, this trading system require specified trading software that can hold the transactions as well as the instruction set up by the customers. Various platforms provide this facility and this is helping many users who are busy and find less time for trading. Some of the advantages and disadvantages of this system are consolidated here as under.
Advantages
- No place for emotions
As the machine knows no emotions and there is no intervention of the human brain while performing automatic trade. The advantage of a lack of emotions is that there is no delay in taking decisions and anything that can affect the decision of a person does not affect this process.
- Maintaining discipline
It is possible to stick to the rules while using this software so it helps to check the rules and regulations of performing the trading activity. Moreover, discipline is required while performing in such a volatile environment.
- Increase in speed and accuracy
It helps to maintain speed along with accuracy while performing the functions. The accuracy that is required is a good trait and this software helps to maintain both the qualities of the trading platform.
Disadvantages of automated trading system
- Chances of mechanical failure
As the system is based on machines so there is a possibility of mechanical failure even after taking too much caution. The mechanical failure can prove fatal for the system, so should be checked before using it for any crucial project.
- Poor performance
Delays in network packets can lead to delays in instructions. As a result, sometimes some important instruction needs to be executed quickly and can face a network lag due to poor connection and poor infrastructure.
- Chances of scams
The digital platform is prone to scams and there are plenty of scammers available online to seek an opportunity to take advantage. These should be avoided by your knowledge and experience.
