Robot trading, also known as algorithmic trading or automated trading, is the use of computer programs to execute trades automatically based on predetermined rules. These rules can be based on a variety of factors, including technical indicators, market conditions, and even news events.
One of the main benefits of robot trading is that it can potentially save traders a lot of time and effort, as the computer program can handle the execution of trades automatically. This can be especially useful for traders who have multiple accounts to manage or who have to analyze a large number of trading instruments.
Another advantage of robot trading is that it can potentially help traders to remove emotion from the trading process. Since the computer program is following predetermined rules, it is not influenced by emotions such as fear or greed, which can sometimes cause traders to make poor decisions.
There are also some potential drawbacks to robot trading. One concern is that the computer program may not always make the best decisions, as it is only following a set of rules and may not be able to adapt to changing market conditions. In addition, there is always the risk of technical errors or malfunctions that could potentially lead to losses.
Overall, robot trading can be a useful tool for traders who are looking to save time and remove emotion from the trading process. However, it is important for traders to thoroughly test and backtest their trading strategies before implementing them in a live trading environment.