My 2 cents is free

Every second counts in today’s competitive market. Automatic stock investing softwares are of great importance to professional traders who wish to strive in this ever-changing financial arena. Automated trading systems are financial tools whose primary purpose is to enable trading sans any human intervention. Orders can be executed through these automated systems even if traders are away from their computers.

There are several different components to automated stock software. One piece of the trading software is a screen stock market piece. This part will screen for stocks that meet whatever criteria the user inputs. Another element of any good automated stock software is direct access trading features, meaning that you can trade directly with any other client. Any package worth the money will include these modules.

Eliminating human intervention may likely to improve order execution. In doing so, every opportunity to trade shall be maximized. Traders are left without any alibis that usually involve second-guessing your own system or making typographical mistakes while encoding orders. It may also allow trading with several brokers at one time.

Automated trading started 15 years ago in the equities market. Back then, boiler room and outcry trading floors are the more popular platform. In the long run, hands-on trading processes have been replaced by automated trading systems. Before, prices are quoted over the phone or through on-screen publishing that still requires manual confirmation. Now, everything-from execution to publishing-is done through the computer. What happened then was that equity market vendors used to do trading through phone calls and on-screen trading systems until they decided to expose their softwares which beckons its use for other instruments such as foreign exchange, money and bond markets. These were previously hidden behind online trading screens. Vendors that started the exposure of automated trading softwares in various instruments include Bloomburg and Reuters. Meanwhile, banks that do not have the capacity to offer online screen trading found a way through web interfaces.

Automated trading softwares are user-friendly. All you need is to submit an order by keying in the instrument, price, quantity, and the trader’s plan to bid or offer. Instruments mean the type of financial market you want to trade in. There are certain market conventions when it comes to price. It may be quoted in terms of amounts or units (e.g. 1 unit = $1 million). Traders can choose whether to bid (to buy) or to offer (to sell) an instrument. To illustrate, a trader may choose to bid $5 million for the forex instrument GBP/USD (Great Britain Pound-US Dollars) at a rate of 1.6789. This bid means that you are looking to buy 5 million dollars for 2.9781 pounds-your bid over the exchange rate.

Clearly, the financial market is in constant motion. Bids and offers sit anxiously in queue. A trader’s offer instantly adds up to this roster. Traders can also cancel their orders whenever they seem to have bid at an expensive price or a price that is too cheap and vise versa. Canceling an order means that the trader automatically gets placed in the back of the queue which risks not getting dealt with. So before entering a trade, it is important that traders know what they’re getting into.

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