By James McKerr
Learning to trades stocks can be a daunting task. Successful traders working for the big banks (the ones you hear about with the million dollar bonuses) spend many years learning from fellow professionals. For years this old boy network has kept the knowledge required to be a successful trader secret.
The secret shortcut.
Computerization in the financial markets has changed things dramatically. In professional circles it has enabled traders to write their most successful trading strategies into computer programs that will analyze market data and apply the strategy and produce a list of trades that should be executed. In short traders have automated the process of finding profitable trades.
How it works
Any stock picking system relies on a set of indicators being met. For example when picking a trade you might ask the following questions:
# Is the company profitable
# Is the companies industry growing or shrinking?
# Does the company have a PE ratio of over 10?
Of course a profession trader would have a much bigger list with much more in depth questions. Any strategy is simply a different collection o questions or criteria that need to be met. Automated trading software simply puts all of these questions into a piece of software that will do all of the research and checking for you.
There are two main advantages of these systems. Firstly they perform research that could take you hours, days or even weeks to perform manually. Secondly they allow the system to be applied with 100% accuracy by someone with little or no knowledge or experience.
How to get access to these systems
Until recently these automated trading strategies were only used inside investment banks. However in recent times a number of ex traders have brought such systems to the market and made them available to amateur or individual traders.
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