Automated trading, which is also known as black box trading, robotic trading and algorithmic trading, is a strategy that enables traders to have their orders executed automatically. By setting certain prerequisites based on price fluctuations and technical indicators, buying and selling orders can be fully automated.
This form of trading can be used in any type of investment strategies, including market making, arbitrage, inter-market spreading or pure speculation, such as trend following.
By engaging in automated trading, one can also supplement investment and strategy decisions at any point in time with special algorithmic support, or simply let the system operate fully automatically, i.e. on “auto pilot.” This form of trading is used in a wide range of markets including Forex, futures, options and stocks.
An automated system takes the emotion and busy-work out of trading, allowing traders to focus on improving their strategies and money management rules.