How Experienced Traders Can Leverage Automation for Success

Experienced traders understand that success goes beyond just having a good strategy. It’s about executing the trading plan efficiently and, notably, adapting to market changes. 

By tapping into automated tools, traders can save time, minimize mistakes, and stay on top of market shifts.

This article explores how seasoned traders can use automation to strengthen their strategies. We also discuss the tools and techniques required to obtain a competitive edge in the market. 

What is Trading Automation?

In simple terms, automation uses algorithms and software to execute trading strategies autonomously. Depending on the level of automation, you can handle the entire trading process without manual intervention. This enables experienced traders to implement complex strategies, manage large portfolios, and react effortlessly to real-time market changes. 

Importantly, automation also removes emotions from the equation. It helps you stick to your plan and avoid costly mistakes during market swings. Plus, you can backtest strategies of historical data to fine-tune them before going live.

Whether diversifying across markets or aiming for lightning-fast execution, automation lets you focus on the big picture while it handles the grind.

Benefits of Automation for Experienced Traders

Considering automation to step up the trading game?

Understand its benefits before making a decision:

• Efficiency and Time-Saving – Automation takes the workload off your plate – executing trades, tracking your portfolio, and exploring markets. This means you can focus on the bigger picture, such as refining your strategies, without worrying about missing opportunities, no matter the time zone.
• Increased Accuracy – Trading mistakes aren’t uncommon, especially when under pressure. Automated systems eliminate human error by sticking to the rules you’ve set. For instance, bots can trigger stop-loss orders exactly when they’re needed. No slip-ups, just precise execution.
• Emotion-Free Trading – Trading can get emotional. FOMO, greed, and panic often meddle with even the best strategies. In comparison, automation follows your strategy to the letter, even during market volatility.
• Diversification – Trading across multiple markets, such as stocks, crypto, and forex, can be overwhelming. Automation makes it uncomplicated to manage different strategies and assets simultaneously, spreading risk without stress.
• 24/7 Trading – Markets like crypto never sleep, and neither does automation. It works around the clock, catching opportunities even when you’re away from the charting screen.

Best Ways to Use Automation for Advanced Trading 

Now, let’s consider how experienced traders can use automation to their advantage.

Automated Portfolio Rebalancing 

Typically, portfolio rebalancing requires manually calculating fund allocations and periodically adjusting them based on market movements.

• So, suppose you define the target asset allocation – say, 60% stocks, 30% crypto, and 10% cash.
• Over time, market movements will cause these asset values to fluctuate, resulting in an imbalance.
• After a strong stock market bull run, the equity portion may grow to 80%, while the crypto and cash portions drop to 15% and 5%, respectively.
• Instead, with bots, you could set an automated rebalancing threshold at 75%.
• Once the equity allocation reaches 75%, the system automatically sells off equities. It will also purchase bonds or cash to restore the balance back to 60% equities, 30% crypto, and 10% cash.

This process is entirely under your control. You set the rules and thresholds based on your investment strategy, and they’ll be followed without constant monitoring. Nowadays, many brokers also integrate automated portfolio rebalancing into their platforms. Alternatively, third-party platforms can access your investment accounts via API and automate the rebalancing.

Automated Trade Execution 

In a market where every second counts, algorithms can place trades in milliseconds. This thereby allows traders to act on opportunities when they arise. For instance, if a stock price drops to a target level, an algorithm can instantly buy in without waiting for a human trader to react. This ensures that trades are executed at the right price without unfavorable slippage.

These pre-programmed algorithms follow specific rules based on price, volume, and timing – effectively removing much of the guesswork from trading. Automating trades also reduces the chance of human errors, emotional impulses, and delays that can occur with manual trading.

Automating Risk Management 

Risk management automation is necessary for experienced traders seeking to protect their capital and stay in control – especially in volatile markets. Traders can manage their positions by automating key risk strategies like stop-loss, take-profit, and trailing-stop orders. Crucially, these measures will occur even when you’re not actively watching the market.

Moreover, with the best bots, you don’t even need to set them individually for each trade. Based on your risk appetite, the bots automatically calculate the ideal take-profit and stop-loss levels. Some are even capable of adjusting them dynamically based on the market.

Market Scanning and Alerts 

By setting predefined criteria, traders can automate market scanning and be notified when an asset meets those conditions. Market scanners monitor assets for specific price movements, patterns, or technical indicators, such as moving averages, RSI, or support/resistance levels.

When these conditions are fulfilled, the system sends an alert via email, SMS, or platform notifications, allowing traders to act quickly.

For example, a trader might set a scanner to alert them when a crypto price breaks a certain threshold or a stock volume spikes – signaling potential volatility. This automation saves time and ensures traders don’t miss key opportunities due to distractions.

Copy Trading Algorithms 

There’s a misconception that copy trading is suited only for beginners. However, it’s also a way for busy, experienced traders to leverage automation. This can be done by mirroring successful strategies from other seasoned traders or pre-vetted automated systems. 

For example, an experienced trader can subscribe to a top-performing bot or algorithm with a proven track record. The copy trading tools automatically replicate the bot’s trades, benefiting from winning strategies in real-time. Moreover, you can handpick algorithms or traders, aligning strategies with risk tolerance and trading goals. This control ensures consistent performance with minimal effort.

Copy-trading algorithms can also be crucial for managing diversified portfolios. Traders can mirror multiple bots across different markets. For instance, it could run a long-term equity strategy, a forex scalper, and a crypto swing-trading bot simultaneously – without manually overseeing every move. This diversification can help manage risk and take advantage of different market conditions.

Experienced traders can also use copy trading to test new strategies before committing significant capital. By observing and tweaking replicated trades, they can refine their approaches. This time-saving feature of copy trading automation allows traders to focus on other aspects of their trading,

Top Automation Tools for Experienced Traders 

With the basics out of the way, let’s explore the best trading bots and tools to help you with automation.

1.  Algobot –  AI-Driven Trading Bot With an 81% Win Rate

Best known for its AI-based algorithm, Algobot has emerged as one of the best algo trading bots. It utilizes machine learning to process market data, recognize profitable setups, and manage trades autonomously.

Algobot’s highlight is its ability to customize trading strategies based on risk tolerance and preferred asset classes. It supports crypto, forex, stocks, commodities, and indices. It also seamlessly integrates with popular exchanges and brokers for rapid trade execution. For experienced traders who prefer more control, Algobot also sends trading signals in real-time through Telegram.

The demo mode further reassures users, allowing them to test strategies in a simulated environment. These features make Algobot a great option for traders who want to fine-tune their approach without risking capital. The Algobot proprietary technical indicator can also be loaded onto TradingView. 

With Algobot, traders can choose a pricing plan that suits their needs. It offers a free copy trading plan with its partnered brokers. Alternatively, users can choose the Premium plan, which costs $59.99 per month. The Ultimate plan costs $109.99 per month and is the perfect choice for those who want access to all supported asset classes.

2. AvaTrade – For Copy Trading Algorithms and Professional Traders 

AvaTrade is a renowned regulated broker tailored for professional traders and those interested in copy trading algorithms. The platform offers diverse assets, including access to forex, stocks, indices, and crypto, catering to a broad spectrum of trading needs.

AvaTrade excels in copy trading, enabling users to replicate strategies from expert traders or follow algorithms. This tool is ideal for those seeking a hands-off approach while leveraging automation. In fact, AvaTrade has partnered with Algobot to offer forex copy trading via its AI-based algorithm.

Additionally, Algobot offers advanced charting, risk management features like guaranteed stop losses, and integration with MetaTrader 4 and 5. AvaTrade’s fee structure is competitive, with no commission on trades and spreads starting as low as 0.9 pips on EUR/USD.

3. ByBit – Great for Experienced Crypto Traders Looking to Automate Strategies 

With its intuitive and user-friendly platform, ByBit is a top choice for experienced crypto traders. Its impressive speed makes it particularly suitable for high-frequency strategies. It also supports various order types, including stop-loss, take-profit, and trailing-stop orders.

ByBit’s range of advanced features includes predesigned trading bots. These follow popular strategies such as grid, martingale, and dollar cost averaging (DCA). Experienced traders can run them on the crypto spot and futures markets. These are available for thousands of crypto pairs, and traders can choose the best one based on the performance stats.

Furthermore, ByBit has an exclusive AI tool that recommends the top-performing bots of the week. All available bots are customizable to fit your needs. ByBit also offers its bots for free. The only cost is the trading commission, up to 0.1% for spot and 0.055% for futures.

4. TradingView – Advanced Chart Analysis and Market Alerts

Experienced traders will already be familiar with TradingView. After all, it offers one of the most powerful suites of advanced charting and alert tools tailored for professionals. TradingView provides 21 customizable chart types, including unique options like Renko, Kagi, and Point & Figure. It also features 400 pre-built indicators and extensive drawing tools.

TradingView’s alert system is particularly robust, allowing users to set notifications based on price movements, technical indicators, and custom scripts. Alerts can be configured for multiple conditions and time frames – for virtually any asset. Notifications are delivered through numerous channels, including email, mobile push, and on-platform alerts.

TradingView’s Pine Script can also be used to develop custom indicators and automate strategies. Today, TradingView integration is available with the most popular brokers. Thus, you can create a strategy and execute it directly.

TradingView also supports backtesting, a crucial tool for experienced traders. Moreover, TradingView offers advanced plans for professionals, which include additional features such as tick-based intervals and Depth of Market (DOM) trading.

5. Trade Ideas – AI-Driven Automated Stock Scanning Platform

Trade Ideas is suitable for those who prefer a hands-on approach to strategy design. Its AI engine, Holly, scans thousands of stocks daily. It then uses predictive analytics to identify high-probability trading signals. Traders can create fully customized stock scans by setting filters like volume spikes, price breakouts, and technical indicators, ensuring strategies align with their goals.

Beyond scanning, Trade Ideas offers essential tools like backtesting and strategy optimization. The platform also features a real-time trading simulator, enabling users to test strategies in live market conditions without risking capital.

Another innovative feature is its integrated GPT-powered assistant. It allows traders to ask trading-related questions and receive immediate, AI-driven insights. To streamline order placement, Trade Ideas integrates seamlessly with major brokers, enabling automated trade execution directly from the platform.

However, such robust functionality comes with challenges. The platform has a steep learning curve, requiring time to fully master its tools and features. Additionally, Trade Ideas is a premium service, with subscription costs starting at $127 per month, which may be a barrier for some traders.

6. QuantConnect – Open-Source Algorithmic Platform For Tech-Savvy Traders

QuantConnect is a leading platform for experienced traders who know how to code. Built on the open-source LEAN engine, QuantConnect allows traders to code in popular programming languages like C#, Python, and F#. This way, it provides unmatched flexibility for custom strategy development.

QuantConnect lets you build, test, and execute algorithmic trading strategies across various asset classes. This includes equities, forex, options, futures, and crypto. Its cloud-based environment allows for scalability and speed, which are crucial for complex models. QuantConnect also offers paper trading to refine strategies in a live market without financial risk.

It also integrates with leading brokerages for real-time execution. While its features cater to advanced traders, some might find the coding-heavy interface overwhelming. Additionally, running extensive backtests on cloud resources may incur extra costs, and the platform requires a strong understanding of quantitative analysis. QuantConnect is available from $60 a month.

7. Shrimpy – Ideal for Automated Crypto Portfolio Management 

Shrimpy is yet another platform catering exclusively to crypto traders. It connects to all leading crypto exchanges, enabling you to manage portfolios from a single place. Experienced traders can create custom asset allocations using specific weighting methods. It’s also possible to set minimum/maximum allocation amounts or perform threshold rebalancing.

For example, you can set a target allocation of 50% Bitcoin, 30% Ethereum, and 20% altcoins. Shrimpy monitors price movements and rebalances assets to stick to those goals. It also supports a custom stop-loss threshold for proper risk management. It’s also equipped with backtesting features so you can do a trial for strategies first.

Experienced traders can also connect their wallets to Shrimpy, automatically tracking balance changes. Regarding pricing, Shrimpy has a free version. However, you must pay $19 or $49 per month to access automation, depending on your desired features.

8. Metatrader Platforms – Suitable for Powerful Charting and EA Automation

MT4 and MT5 are industry-leading platforms for experienced traders seeking robust automation tools. Their intuitive, user-friendly interfaces and powerful customization capabilities make them a comfortable choice. Both platforms support Expert Advisors (EAs) and custom scripts that automate trade execution, strategy testing, and portfolio management.

They also allow traders to build or deploy pre-built EAs using the MQL4 or MQL5 programming languages. This allows for tailored automation based on complex strategies, technical indicators, and risk management rules. Additionally, they offer backtesting tools with historical data to refine strategies, helping traders optimize performance before live execution.

MT4 is widely favored for forex trading, while MT5 supports additional asset classes like stocks, futures, and commodities, making it ideal for diversified portfolios. The platforms’ flexibility allows integration with third-party tools, brokers, and copy trading systems.

However, while MT4 remains popular, it lacks advanced features, like multi-asset support and economic calendars. Nevertheless, these are available in MT5. Additionally, traders not well-versed in coding may need third-party developers to create custom EAs.

9. Tickeron – AI-Based Stock Analysis and Trading Signals

Tickeron is an AI-powered trading platform designed to help experienced traders automate their strategies. It supports various asset classes, including stocks, ETFs, options, and crypto. Tickeron’s tools provide real-time market predictions, trade signals, and pattern recognition. 

One of the platform’s key features is its AI Robots, which continuously scans the market for profitable opportunities based on pre-set criteria. These generate trading signals using Tickeron’s custom algorithms or from predefined strategies for stocks, forex, crypto, and ETFs. 

These are categorized based on different styles, such as swing, trend, and intraday trading. Additionally, Tickeron provides AI-based trend forecasting, allowing users to anticipate market shifts. Tickeron has very flexible pricing – you can pay specifically for the features you want, starting from $20 a month. 

10. 3Commas – Popular Option for Using Predefined Crypto Trading Bots  

3Commas is a robust and versatile trading automation platform tailored for advanced traders. It supports over 20 major exchanges, including Binance, Coinbase Pro, and Kraken. At the heart of its offerings are automated trading bots.

Its grid bot excels in capitalizing on market fluctuations, while the DCA bot helps average out entry points to reduce risk. 3Commas’ SmartTrade feature is a powerful tool that enhances trade customization. It enables users to set take-profit and stop-loss targets in a single order, implement trailing stops, and use other advanced controls.

To further support strategy optimization, 3Commas includes backtesting capabilities. The TradingView integration adds another layer of sophistication. It allows users to automate trades based on custom alerts and signals generated by TradingView. Pricing starts at $49 a month.

Challenges of Automation and How to Address them

With all its advantages, automation also presents challenges. This section explores some key hurdles traders must overcome when using automated trading systems.

Market Volatility and Automation

One of the most significant challenges in automated trading is managing market volatility. Financial markets are inherently unpredictable, and sudden price swings or unexpected events can cause rapid changes in trading conditions.

Automation relies on algorithms that follow predetermined strategies – which, unfortunately, can be vulnerable to sharp, unexpected market moves. 

• Imagine an experienced trader who uses an automated trading bot. It’s designed to execute trades based on a simple moving average (SMA) strategy.
• This bot buys assets when the price crosses above the 50-day SMA and sells when it crosses below.
• This strategy works well in normal market conditions, capturing trends as the price moves steadily in one direction.
• However, during high volatility, the market can move unpredictably. For example, let’s say there’s sudden political unrest that causes massive price swings in a particular asset.
• The bot, following its usual strategy, might buy when the price spikes or drops suddenly. It might not recognize that the market is overly volatile and that it could quickly reverse.
• To mitigate this risk, advanced traders often build volatility filters into their automated strategies.

Experienced traders can do this using technical indicators that track volatility. For instance, the average true range (ATR) measures how much an asset’s price fluctuates over a certain period. When volatility rises above a certain threshold – the ATR spikes 30% higher than usual – the bot recognizes that the market is at heightened risk.

With the filter in place, the bot can do one of three things:

1. Pause Trading –  The bot can stop executing trades during high volatility. This allows the trader to avoid making poor trades based on unpredictable price movements.
2. Dynamic Risk Management: If the market is highly volatile, the bot may reduce its position size. Instead of risking $1,000 per trade, it might only risk $500, reducing exposure.
3. Adjust Strategy – The bot can also change how it operates. For example, it might widen the criteria for buying or selling, meaning it’ll only make trades if the price crosses the moving average by a larger amount to avoid jumping into short-term price swings. 

Ultimately, volatility filters help automated trading systems avoid costly mistakes during larger-than-usual price swings. This makes them adaptable and reliable for experienced traders. Although automation provides an efficient way to trade, it still requires human oversight to intervene when necessary. This ensures the algorithm stays aligned with the trader’s strategy and risk tolerance.

Technical Failures and Risks

Another critical challenge in automated trading is the risk of technical failures. Automation relies on complex algorithms, infrastructure, and constant connectivity. Meaning, even small issues with a server, internet connection, or bot software can lead to trading errors.

For example, if a bot loses connection to the trading platform, it may fail to execute orders or update its positions – potentially causing missed opportunities or unhedged risks. Similarly, bugs in the algorithm can cause incorrect data processing or faulty decision-making, leading to unwanted trades.

To mitigate the risk of technical failures, traders can implement several strategies:

• Redundant Systems – Experienced traders can set up backup systems and fail-safes to minimize the impact of a system crash. These may include alternative trading platforms or duplicate servers that can quickly take over in case of failure.
• Regular Testing and Maintenance – Automated systems should undergo regular testing to identify potential bugs or vulnerabilities before they cause significant issues. A robust testing environment allows traders to simulate market conditions and validate algorithm performance.
• Alerts and Monitoring – Traders can set up real-time alerts to notify them of connectivity issues or system errors.

The key is continuous monitoring, allowing traders to intervene immediately when things go wrong.

Adjusting Strategies in Real-Time

As mentioned, automated systems require real-time strategy adjustments. Experienced traders understand that automation requires ongoing attention. They regularly monitor market conditions and adjust their automated strategies accordingly.

For instance, an automated strategy might focus on a trend-following approach. However, if the market exhibits choppy price action, the trader may need to switch to a mean-reversion strategy to avoid unnecessary losses.

Traders can adjust strategies in real-time by switching between different approaches. Alternatively, you can also integrate machine learning or AI trading bots like Algobot. These adapt and improve their performance by learning from new data. This level of resilience is crucial for maintaining an edge in the market.

Conclusion 

For experienced traders, automation isn’t about replacing expertise. Rather, it’s about enhancing it. Automation enables you to scale strategies, diversify portfolios across asset classes, and optimize performance using real-time insights and historical analysis.

Algobot, powered by its advanced AI-based algorithm, elevates trading automation. Its customizable strategies adapt to individual risk tolerance and trading goals. Plus, you can now seamlessly copy Algobot’s proven algorithm directly through AvaTrade for added convenience.

FAQs

Can I automate my trading strategy?

Yes, you can automate your trading strategy using various platforms that offer algorithms, pre-programmed rules, and backtesting tools. These platforms allow you to execute trades based on predetermined criteria without manual intervention.

How effective is automation for experienced traders?

Automation helps experienced traders by reducing emotional bias and speeding up trade execution. It allows them to focus on refining strategies while automation handles routine tasks.

Is it legal to automate trading?

Yes, automation is legal if it adheres to financial regulations and exchange rules. However, ensuring that the automation tools used do not violate market manipulation laws is important.

What are the risks of automating my trading?

Automation can lead to risks, such as technical glitches or connectivity issues, which may cause unexpected losses. Additionally, bots might not respond well to sudden market changes or unforeseen events.

How do I choose the right automation tool for my strategy?

Choose an automation tool based on your trading style, preferred asset classes, and customization needs. To resonate with your strategy, look for features like backtesting, real-time data, and risk management.