Trading Tip 17: Five Tips For Choosing an Automated Trading Software

Emotions and human errors are the most common mistakes that traders make. By all means you have to avoid these mistakes. Especially during fast markets, it is crucial that you determine the entry and exit points fast and accurately; otherwise, you might miss a trade or find yourself in a losing position.

Therefore you should automate your trading. Automating your trading makes it free of human emotion. The buy and sell operations are all automatic, hands-free, with no manual interventions and you can be sure that you make profits when you should according to your plan.

Here are five steps to choose a great trading software to automate your trading.

1. Hands-free execution of trading signals
Your trading software must allow a complete hand-free execution of trading signals. You don't gain anything if your software requires you to confirm each trading signal. The trading software must place and cancel ALL orders automatically according to the rules you established.

2. Robust, high-quality execution of trading strategies
Your best bet is a server-based solution. Many online trading software packages reside on YOUR computer and send the signals to your broker. This causes a big problem: If YOUR computer freezes or your internet connection is interrupted, the trading signals are not submitted. That's why you want a server-based solution: In this case the strategy is executed directly on the server at your broker's office. This provides a high level of security and reliability, since your broker's servers are usually more reliable than your private computer.

3. Real-Time transparency of strategy performance
At any time you need to know when and at what price you entered a trade, when and where you want to exit it and of course you current profit and loss. Make sure that your online trading software provides you with these important information in REAL-TIME. Especially when trading "old" information is useless information. You need to know your current position and profit and loss NOW, not 10min delayed.

4. Full control over strategy execution and the ability to modify or cancel orders
There might be situations when you have to override your trading strategy. Just think about unusual events like 9/11. Or maybe you have a family emergency and need to stop your trading and take care of personal matters. Your trading software must allow you to stop a trading strategy at any time and modify or cancel existing orders. Stay away from trading software packages that don't let you fully control your trading strategies.

5. Ease of diversification and re-balancing of your trading portfolio
As your account grows you will diverify your trading. You then need a trading software that allows you to add, delete, run, and stop systems as desired. Make sure that there are plenty of systems available for the trading software of your choice. Stay away from products that allow you to run only ONE proprietary strategy. Think ahead: As soon as your account allows you to trade multiple strategies, start diversifying. This will smoothen your equity curve and accelerate your success.

I've been testing dozens of products for automating my trading systems, and currently I am using Strategy Runner. Though there are still some minor flaws I found it very reliable and accurate. As far as I know Strategy Runner is the only server-based trading software available, which makes it an obvious choice for professional traders.

About the Author:
Markus Heitkoetter is an experienced trader and developer of many successful trading systems.
For more free information how to make money with trading systems visit his website: http://www.rockwelltrading.com

More free information how to succeed with trading systems