When investors turned their backs to mainstream Wall Street, they opened their arms to automated trading systems. Automated systems take a unique approach to investing. There has always been the desire to eliminate the subjectivity in investment decisions. Those who favored emotionless trading turned to technical analysis, but eventually fell victim to greed and fear.
There have been two schools of thought on investing for the past 100 years--fundamental and technical analysis. Fundamental analysis takes skill and time. Adhering to fundamental analysis means constantly watching company, industry, regional, country, and globally related information. Anything that can influence the price of your stock needs to be discounted in the price of the stock. You can also rely on the financial information distributed by companies. The collapse of investor confidence, due to shady accounting exposed after the crash of 2000, virtually eliminated fundamental analysis.Technical analysis tries to eliminate the subjectivity of investing by finding price patterns on stock charts. When a given formation develops, a specific course of action is taken. The problem, however, is that different people see patterns when others do not. The failure of technical analysis to completely remove subjectivity, coupled with an exodus from fundamental analysis, gave birth to automated traded systems.Automated systems are programs that execute trades whenever certain characteristics evolve. It eliminates the chance for human fear and greed. The stock is never too high or too low to sell--it sells and buys indiscriminately. Automated Forex trading systems helps investors trade currencies without emotion or fear. The advantage is a pure system of trading based on pre-determined data. When looking for an automated investing system, thoroughly research accuracy rates.
