TradeStation Automated Trading
TradeStation Automated Trading was an early development of the company. The online trading platform and brokerage has been committed to providing a high quality trading experience and remains competitive thanks to its low - or sometimes nonexistent - commission fees, but most traders who prefer the use of TradeStation do so because of how easy it is to automate trading.
How does TradeStation Automated Trading Work?
Automated trading can be set up easily on TradeStation as well as a variety of other platforms. Essentially, an automated trade is the same as placing any other trade, but you do not physically have to click the button to place the buy or sell order.
Instead, you make use of a strategy, usually in the form of multiple indicators that can be used on the platform.
When these indicators all come together and indicate that a trade should be entered or exited, instead of being alerted and placing the trade manually, the indicator sends the order for you.
Steps to Set Up TradeStation Automated Trading
Plans for TradeStation Automated Trading start at $99 a month, you can visit their website here.
Strategies specifically for TradeStation are available for free, or paid versions are available if you do not feel confident in creating your own from scratch. These can then be adjusted to suit your needs better.
Once you have imported or created the strategy, open the chart analysis window containing that strategy and ensure that the strategy is "on". You will only be able to automate strategies that are turned on.
Once you have ensured that everything is in order, move to Automation, in the TradeManager's Strategy Orders tab. There should be an option to Generate. This will generate and display orders regarding the strategies that are on.
The option should then be available to Automate Execution. It is important to ensure that you are happy with the strategy before this point as trades will be immediately executed once the account number has been confirmed. If you are not happy with the trade it could result in a loss which will not be refunded by TradeStation.
Once any property settings are changed, or any alterations are made to the strategy itself, automated trading is automatically turned off, but it can also be turned off manually when you no longer wish to use the automated trading software.
It is important that you backtest and ensure that your strategy is still doing what you want it to do after these changes are made, before you activate the automated trading again.
If there are any issues with the setup, customer service can be contacted, however they are reputably slow and have a low satisfaction rating on Trustpilot, 1.5 from 124 reviews when this article was published on July 1st 2022.
Advantages of TradeStation Automated Trading
Overcoming Human Emotions
Emotions are one of a trader's biggest downfalls. You need to be able to remain objective and logical even after taking a big loss or making a big gain. You cannot push your luck because you have been successful in the past, and you cannot become fearful because you have had a few losses.
TradeStation Automated Trading allows both the entering and the exiting of trades built on the strategy that you have created, completely removing the human element of those trades.
Avoid Losses due to Connection Issues
If you live in an area where connection is incredibly stable, then you do not need to worry as much about missing your exit or being late entering a trade because of technical issues. However, nowhere can guarantee that there will be no issue.
If you use the TradeStation Automated Trading feature, then you do not need to be online to enter or exit a trade.
This hopefully means that you will minimize losses and maximize profits.
Strategies can be Backtested
One of the best ways to know if a strategy will work is to backtest it. A backtesting feature is available with TradeStation Automated Trading. You can test your strategy over various intervals in the past to determine how successful it is before you place your first trade with it, allowing you to adjust it if necessary.
TradeStation Automated Trading can be used by both seasoned professionals with some programming knowledge, and rookies who have very limited knowledge of any code.
This decreases the time that you spend developing the strategy, and increases the time that you can spend making small adjustments or backtesting and trading.
This makes it especially appealing for those dabbling with automated trading for the first time, who are unsure if it would be something that they are interested in using in the future.
Disadvantages of TradeStation Automated Trading
If a strategy seems to be working particularly well, and the automated trading software works smoothly enough that it does not have to be constantly monitored, traders tend to not observe the trades that are being placed as often as they could.
If the market becomes particularly choppy and the automated trading is not adjusted or temporarily removed this can result in large losses before the trader is even aware of what is happening.
No matter what indicators or parameters you may use in order to set up your automated trades, there will always be a delay because the indicators only take shape after the market has moved. This means that a series of false trade entrances may occur, and trades may be exited early.
Of course, there are various ways that the sensitivity may be adjusted through the use of additional periods etc. But it would never be perfect.
TradeStation Automated trading is one of the easiest automated trading systems to set up. For that reason it is suitable for both professionals and beginners.
It can prove to be extremely useful if you live in areas where the network connection is unsteady and can prevent losses due to delays caused by technical issues. However, it should not be relied upon solely. No trading strategy is perfect, and there is always risk in any trade. For that reason, you should closely monitor the TradeStation Automated Trading system whenever possible and should always be ready to take over.
You can visit the TradeStation website to purchase it here.