Research Your Options For The Automated Trading Revolution

You say you want an Automated Trading Revolution?

Your last step will be to research the Automated Trading system or systems that you want to trade your account. The good thing is there are a lot of Automated Trading systems available and more on the way. On the other hand, there are a lot of bad systems available.

Don’t let that discourage you. You need to do some initial research and know what to look for in a high-performance Automated Trading system before you subscribe.

I recommend going to Collective 2 or Strategy Exchange and reviewing the systems available.

Since Automated Trading systems can trade any asset, you’ll need to determine what asset you’ll want to trade; or, you may want to create your own mini hedge fund that features several systems trading different assets simultaneously, in which case, you should select the best examples of Automated Trading systems in those categories.

Some clients immediately want to trade the highest-returning systems, but this can be a mistake. Here are some other criteria you should review:

Look for systems that have long-term success. Anyone can develop a system that makes money for a month and then loses it all.

Find a system with little chance of slippage. A system that loses money before it gains money is problematic.

How many trades? A system that makes money but conducts an insane amount of trades is likely to lose money, or decrease your return through trading fees and commissions.

What about volatility. If a system’s swings scare you on the chart, avoid it. You’ll be spending just as much time watching the trades as you would if you were making the calls yourself.

One final thought: Don’t be fooled by successful trading percentages. A system that makes winning trades 99 percent and a massive losing trade on that hundredth repositioning, is still a losing system. The reverse is also true: if a system makes a series of losing trades and then makes up for it with a single, smart move is worth considering: if you can handle the volatility.

This is the final post in a series about how to prepare to use Automated Trading systems. For more information, you might want to read the first post in this series. It’s called Creating An Account for the Automated Trading Revolution.

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