The importance of an auto trading software depends on which trader is using it. There are those that prefer to do it manually and there are those that rely on a system that will do everything automatically for them. It is also a given that the software, also known as a binary trading system, must also be adhering to the rules of the trade. Such discipline must also be maintained, since the lack thereof will affect the entire process of the trade, making the trader loose a lot of money. It is true that there are a lot of traders that take advantage of the auto trading systems, but they have also something to share to those who are looking for information regarding the use of the binary trading software, whether it is to be trusted or not.
What you will find here is a list of drawbacks that the traders that made use of it before encountered. This is meant to make future traders aware if they are going to consider utilizing the software with their trade.
Mechanical Failures – The way the auto trading system is created is by setting up the software and its rules together and see how it trades. But when it comes to reality in trading, automated trading is a very complex method. The trade order could settle in the computer and not on the server, depending on the kind of trading platform you are going to use. What this means is if your internet connection gets lost, a particular order from your end may not have been sent to the market. A discrepancy can also happen between the order of the entry platform component and the “theoretical trades” that are generated by its strategy. Most traders are expected to go through a learning curve when they are going to use the automated trading systems. It is also a general idea that you get started with small sizes of trade while the system’s processes are refined.
Over-optimization – though this is pointing specifically to binary trading systems, the traders that are employing the backsetting techniques, considered as one of the best benefits of using the software, can actually make systems that may look amazing on paper yet have poor performance when done in the live market. This particular drawback actually refers to the excessive curve-fitting which produces a kind of trading plan which is not reliable when it comes to live trading.
Monitoring – isn’t is great that you get to have your trades automatically done by a system? One of the greatest drawbacks of using it is this particular factor, however. Even if they are automatically set to do most on their own, monitoring actually requires monitoring. This is because there are potential failures of the first drawback mentioned above, like power losses, computer crashes, connectivity issues and even system quirks. It is even possible for the system to experience anomalies as well, which can result to duplicate orders, missing orders or errant orders.