Automated trading is a strategy that utilizes a program to execute trades according to a set of predetermined rules. A trader will set limits, such as guaranteed stop and loss orders, using technical analysis and advanced tools.

Depending on the strategy, entry and exit rules can be rooted in straightforward conditions, such as moving average crossovers. Alternatively, they can be built on more complex indicators and requirements.

Once the rules are programmed, automated trading systems monitor the markets, deciding whether to buy or sell according to the inputted rules. Algorithms essentially follow trends and execute positions accordingly. Some systems even integrate news feeds and adjust their approach according to key headlines and announcements.

Once a trade is entered, orders for protective stop losses, trailing stops and profit targets will all be automatically generated. Importantly, if you are in a fast moving market, instantaneous order entry could be the difference between a tiny loss and a significant cost.

Automated trading services can be applied to a range of asset classes including forex, stocks, futures and options. Automated trading platforms are also available to traders worldwide, from the UK to the US and all major global exchanges accept automated strategies, including the NYSE and LSE.