PROS AND CONS OF USING SOFTWARE TO TRADE

Trading online with software which is a hand free trading has its own advantages and disadvantages. It has been a blessing as well as curse to some traders in the trading industry. To make money online this software, fintech can be used.

Advantages of using trading software:

  1. By using the software to trade, the emotions involved are almost zero. For those who are scared to trade and those who are prone for overtrading are well controlled by the trading software. There is no psychological or emotional trigger that defies trading.
  2. The ability to back test is an excellent way to trade before actual market trading. It refers to the rules of trading that determine the quality of the trading idea. In software all rules should be optimized as there is no scope for change or the software will not modify itself as per the changing trend of the market.
  3. While trading with the software discipline is well maintained even in harsh volatile market. This is because the trading plan is well established automatically.
  4. The software provides the traders to have and achieve consistency with trading. This is by trading the plan and not planning the trade.
  5. The software executes orders as soon as the trade criteria are met. This is not possible with manual trading as it takes time.
  6. With software trading multiple accounts can be used simultaneously.

 

Disadvantages of using trading software:

  1. Mechanical failures are inevitable with using trading software. If there is any issue with the internet connection, the trade order may not be placed. There could be other discrepancies arising with mechanical failures in trade.
  2. Though using software is all automated, it requires monitoring. Connectivity issues, power loss, computer crash or any such problem can be resolved if there is close monitoring.
  3. Over optimization leads to a trade plan that is not possible to execute while trading in live market. Over optimization to get 100% profit in trading will never be a viable plan.

Though the advantages outnumber the disadvantages, using trading software should not be considered as an alternative. It should be used carefully and with caution.  Mechanical failures are bound to happen. So there must be strict monitoring even if you wish to use the trading software. Before investing in trading software it is better to use it and then invest on it.