An automated trading platform is used both by trading system publishers, and the investors who subscribe to them. Using it, traders can track marked-to-market performance using several different metrics for verifiability.[1] In addition to tracking performance of these "black box" systems, the automated trading platform also provides a venue to permit the system's buy/sell signals to be executed to the subscriber'sbrokerage account automatically. Some of the automated trading platforms are completely broker-agnostic and permit an interface with almost any brokerage firm.
The immediate benefit to investors is that it allows them to have insight into various trading systems that are on offer, which may make claims of profitability. The platform "allows people or institutions that believe they can outperform the market to prove to the public in a verifiable way that they indeed can do so."[2] In the second stage of use, traders subscribe to one or more of these trading methodologies, and have the trades that are specified by the system executed automatically in a brokerage account.
Although turning over decisions and execution to a "black box" system requires the investor to give up an element of control, the automated trading platform does serve the purpose of allowing the trader to spend more time on strategy and on studying trends, rather than executing those strategies manually.
[edit]Speed of execution
The appearance of automated trading systems and stock markets has greatly narrowed the window of opportunity on many trades, sometimes to just a few seconds in duration. In response, traders are turning to automated systems of their own. If for example, one is trading on one of the many systems that hinge on these very small windows, manual execution is virtually impossible. Execution of the trades must be initiated immediately, with split-second accuracy, as soon as the system gives the buy/sell signal.[3]
[edit]Best practicesThe automated trading platform, in providing a venue for analyzing multiple stock trading systems or "black boxes", provides a tool for verifiable analysis of each of those systems. While such systems often make claims of profitability, and sometimes of unheard-of returns, the automated trading platform allows the investors to vet those systems and play the ones most likely to win. Generally