Introducing Auto Trading

Some investment companies have come up with the perfect solution to this quandary. An investor can set up an auto trading account and subscribe to their newsletter of choice, while a broker executes the trades that are recommended in the material. This ensures that none of the recommendations are missed even if the investor isn’t available right when the newsletters alerts are sent.

How Does It Work?

How auto trading systems work is simple. Typically, there will be a few steps that need to be taken to get everything set up. First, the investor will need to sign up for an investment newsletter and set it up so that a copy of the trading alerts are forwarded to the brokerage. Then, it’s time to choose the maximum amount per trade. This can be based on dollar amount, percentage of account value, or number of contracts.

At reputable brokerage firms, the investor can change parameters at any time. This makes it easy to keep up with evolving finances, portfolio sizes, and other key factors.

Are There Any Pitfalls to Watch Out For?

There are risks associated with any kind of trading, but the auto variety brings in a few of its own. One is a result of the use of a newsletter as a guide to trades. If the newsletter’s advice is wrong, money will be lost.

If the investor doesn’t agree with the newsletter’s advice, it’s likely that trades will be made anyway. While it might be technically possible to apply the brakes on a trade at any time, most people who use an auto trading service choose it specifically because they don’t want to babysit the action.

Extra fees can apply to trades made through a brokerage’s auto trading desk. While these are usually reasonable, it’s important to factor them into calculations for potential profits.

How to Use Auto Trading Successfully

While there is no way to guarantee success with any trading strategy, there are ways to increase the chances of favorable results. The first area of focus should be the choice of investment newsletter. That’s because the newsletter is the foundation of this type of auto trading. If its advice is wrong, success will elude the investor.

The next area of attention is the parameters that are set for trading. By controlling the amount of trading that can take place, investors also control their levels of risk exposure.

Due diligence is also required when choosing which broker to use as an auto trading partner. Choose a company with a good reputation for stability, honesty, and competence. Trading stocks and options may be inherently risky, but the brokerage firm doesn’t have to be.

eOption does not advise, consult or assist any advisor with respect to the content, recommendations or strategies contained in any advisor or trade alert published by any advisor.

Options involve risk and are not suitable for all investors. Prior to trading options, you must be approved for options trading and read the Characteristics and Risks of Standardized Options. A copy may also be requested via email at support@eoption.com or via mail to eOption, 950 Milwaukee Ave., Ste. 102, Glenview, IL 60025. Online trading has inherent risks due to loss of online services or delays from system performance, risk parameters, market conditions, and erroneous or unavailable market data.

The post How to Set Up Auto Trading first appeared on eOption.

What is Automatic Trading?

Automatic trading is an approach to stock or options trading that allows your broker to carry out trades on your behalf. The broker’s trading activity is determined by a third-party newsletter provider’s recommendations. If the provider recommends selling a specific option, for example, the broker takes action without any prompting from you within the guidelines you previously set for your account.

Benefits of Auto Trading

Auto trading offers many potential benefits for investors. Some of these benefits include:
Less research and fewer headaches. – With auto trading, your third party newsletter provider will do all of the research and decision making for you.

Fewer missed opportunities. – Because trading takes place without your involvement, you are less likely to miss opportunities because you were otherwise engaged.

Ability to control certain aspects of transactions. – Even though you will be relying on your third-party provider to make your trading decisions, you will still be able to control certain aspects of the process, including the maximum amount per trade.

Lower rate of “emotional” decisions. – Because a third-party, neutral provider will be responsible for your trading decisions, you won’t be at risk of making hasty decisions based on your emotions at the time.
Opportunity for significant earnings. – With the right provider and circumstances, you will have the opportunity to earn significant profits through auto trading.

Keep in mind that, although auto trading offers a number of benefits, it can be risky as well. In order to use this strategy effectively, you need a reputable service and successful newsletter provider.

How Can I Invest Automatically?

Before you can start auto trading, you must first choose an auto trading service and a newsletter provider. Once you have signed up with the service of your choice and have a broker that provides auto trading services, you can begin making trades.

eOption recommends you read the following SEC release concerning the risks of auto trading: http://www.sec.gov/investor/pubs/autotrading.htm.

eOption does not advise, consult or assist any advisor with respect to the content, recommendations or strategies contained in any advisor or trade alert published by any advisor.

Options involve risk and are not suitable for all investors. Prior to trading options, you must be approved for options trading and read the Characteristics and Risks of Standardized Options. A copy may also be requested via email at support@eoption.com or via mail to eOption, 950 Milwaukee Ave., Ste. 102, Glenview, IL 60025. Online trading has inherent risks due to loss of online services or delays from system performance, risk parameters, market conditions, and erroneous or unavailable market data.

The post How Automatic Trading Works first appeared on eOption.

Using a Service to Perform Trades

There are many risks involved with this practice, which involves signing up for an investment newsletter and then allowing the newsletter operators to instruct your broker to make the trades recommended in the publication. These risks are common to many investment advice schemes: The newsletter’s performance may be overstated, its operators may have serious conflicts of interest, or it may be an outright scam. Keep in mind if you are using a discount broker, they are not authorized to consult or assist any advisor with respect to recommendations or strategies contained in any advisor or trade alert published by any advisor.  The broker’s sole responsibility will be to execute transactions for your account. As an Auto Trader, your investment object is speculation and will be recorded as such in the broker’s records.

To mitigate these risks, the SEC says to make sure to do plenty of due diligence, including following the money to see who can benefit from the trades and how. This agency also warns would-be investors to watch out for cherry-picked testimonials and profit reports, noting that some newsletters scrub their reports of negative results and bad reviews.

Options involve risk and are not suitable for all investors. Prior to trading options, you must be approved for options trading and read the Characteristics and Risks of Standardized Options. A copy may also be requested via email at support@eoption.com or via mail to eOption, 950 Milwaukee Ave., Ste. 102, Glenview, IL 60025. Online trading has inherent risks due to loss of online services or delays from system performance, risk parameters, market conditions, and erroneous or unavailable market data.

The post What Are the Risks Associated with Automatic Trading Services and Newsletter Publisher Trading Alerts? first appeared on eOption.