What is automated trading?
Instead of people making decisions about what financial products to buy, hold or sell - with automated trading the decisions and the actions are made by computer software.
Where have you heard about automated trading?
Automated trading is a service promoted by various companies so you may have seen it advertised. Online providers often focus on automated spread-betting, and forex trading.
What you need to know about automated trading...
- It’s very, very fast – more than a million trades per second.
- It’s sometimes called algorithmic trading, because of the complicated maths used to set the rules for buying or selling.
- Even if you use automated trading you still have to decide your own strategy. Some providers will offer you set strategies to choose from.
- Automated trading has been blamed for large, short-term falls in the stock market. This is because patterns of selling can grow very quickly.