If you are new to automated or algorithmic trading using cTrader cBots, we will help you with the basics of what is an automated trading system, the cTrader Algo application, optimisation, backtesting & trading system timing.
An automated trading system is a computer program that uses a set of rules and algorithms to automatically execute trades in financial markets without the need for human intervention. These systems can be used for a variety of financial instruments, such as stocks, futures, options, and currencies.
Automated trading systems typically use technical analysis indicators, such as moving averages, trend lines, and momentum indicators, to identify trading opportunities. The system then automatically generates buy or sell signals based on these indicators and executes trades accordingly.
Automated trading systems can be designed for a range of trading strategies, from simple trend-following strategies to more complex quantitative models. They can also be backtested using historical data to evaluate their performance and refine the trading rules.
One of the main advantages of automated trading systems is their ability to execute trades with speed and precision, which can be particularly useful in fast-moving markets. They can also eliminate human emotions, such as fear and greed, which can often lead to irrational trading decisions.
Overall, automated trading systems can be a powerful tool for traders looking to implement a disciplined and systematic approach to trading.
Automated Trading vs Algorithmic Trading
Algorithmic trading involves utilizing short-term signals regarding price and microstructure to optimize the execution of a large trade in a specific direction. This practice is heavily relied upon by large banks and funds operating at lower frequencies.
On the other hand, high-frequency trading is usually carried out by proprietary trading shops or smaller teams within hedge funds. It involves using price, microstructure, and hardware advantages to generate profits directly. While some of these strategies may be profitable on a daily or even hourly basis, their capacity is limited.
Automated trading encompasses both algorithmic and high-frequency trading. It refers to trading in which a computer system executes the trades instead of humans.
Learn the Basics of Algo Trading
We have provided all the information for anyone who wishes to learn more about automated trading using the cTrader desktop platform, the following subjects are covered to help you get started.
- How to download cTrader
- What is algorithmic trading?
- cTrader Algo application overview
- What is optimisation
- How to optimise a cBot
- What is backtesting
- How to backtest a cBot
- What is a trading system timing
If you wish to learn all the above just visit our cTrader Algorithmic Trading Basics page.