A stock trading system comprises of parameters that determine the entry and exit points for a stock. These points are known as signals and are used as prompters for the stock trading. Traditionally, stock markets have been the physical locations for buying and selling of stocks. However, with the advancement of communication technology, the requirement of a physical location has declined significantly. Traders exchange stocks from the remotest of locations via the Internet.
In 1971, the NASDAQ became the first stock market to allow electronic stock trading. Gradually, such electronic trading markets have mushroomed across the globe. Here, stock trading can be done with the help of a share trading system.
How does a Stock Trading System work?
A stock trading system acts as a controller of the whimsical tendencies of a stock trader. Share trading systems are heavily dominated by computer software. The software is designed around a set of principles. They provide traders the information they want regarding the market. The stocktrading system is implemented by a broker who has real trading experience. The ultimate objective of a stock trading system is to maximize the profit from stock trading under any market or economic condition.
Benefits of a Stock Trading System
The main benefits of stock trading systems are:
- It takes emotions out of stock trading.
- Since a stock trading system performs most of the analysis and actual trading, it saves a lot of time.
· There are many vendors who offer stock trading systems. Traders can free themselves from the routine trading exercises by buying or hiring their services.
Dangers of a Stock Trading System
The main drawbacks of stock trading systems are:
· Automated trading systems can not always deliver perfect results.
· Stock trading systems are complex and require a great deal of practice.
Despite these risks, traders prefer to take advantage of stock trading system to stay up-to-date with the market and perform thorough analysi
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