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Tuesday, 1 December 2015

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New ways of Trading in Stock Market

Different traders approach the Stock Market to get good profits and amass good wealth. With the advent of the technology new way are coming for stock trading. The automated trading or algorithmic trading is one among them. In the automated trading or algorithmic trading the strategy for trading is programmed with the help of a computer and then the buy and sell calls are placed automatically with the help of computer when the rules of the strategy are met. The algorithmic trading helps the trader to keep the greed and emotions away from their trade and to respond very fast once the rules of the buy and sell trades are met.
The strategies ranging from very simple to complex can be programmed with the help of automated trading. The strategies involving technical indicators can be easily programmed in case of Automated Trading. For example there is a strategy involving moving averages. Here we are having two moving averages of different periods, one with a smaller period and the other with a bigger period. The trading signals or the buy and sell calls can be initiated at the crossover of two moving averages. A buy call will be initiated when the smaller moving average cross over the larger one and the sell call will be initiated when the larger one crosses the smaller one. Thus this strategy can be programmed based on the following rules:
1)      Calculate the moving average of two different periods.
2)      Buy if smaller one crosses the bigger one.
3)      Sell when the bigger on crosses the smaller one.

The automated trading is a new way of trading in the stock market. There is no need of stock market tips from the advisory firms and it works on the rules of the strategy a particular trader is following.


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