An automated trading system, frequently employed in financial markets, operates according to a pre-defined set of rules. These rules govern when to enter and exit trades based on technical indicators, price action, or other market data. For instance, a system might automatically buy an asset when a moving average crosses above another, signaling a potential upward trend, and sell when the reverse occurs.
The significance of such systems lies in their ability to execute trades without human intervention, eliminating emotional biases and potentially improving efficiency. Historically, these systems were the domain of institutional investors, but advancements in technology have made them increasingly accessible to individual traders. Their use can allow for consistent execution of a trading strategy, even when the trader is unable to monitor the market directly.
