What is Trading Automation and What is it Good For?
Trading Automation provides undeniable benefits. A robot can monitor large pools of securities simultaneously and extract value based on specific criteria. It autonomously trades using your personalized strategy. Instrumented properly, it solves a timing and availability problem, it becomes a workhorse designed to make money on your behalf while you attend other important life events.
If you think of robots in terms of 'employees' you can start seeing how their work can benefit your 'enterprise'. Just like employees, their work translate into value. In the context of stock investing, your new 'employee' will work for you to grow your account. As time passes, you can add other accounts and manage several money trees. Investment accounts on auto-pilot can eventually grow to manage thousands or millions of dollars with minimum expenses. For the robot, its just a few more digits to manage but for you it may make a big difference when time comes to send your kids to college or retire.
Robots bring consistency and predictability to stock investing. They don't panic or become emotional in volatile markets. They execute their program and that's it. They are not bias towards one company or another. For them, all companies are equal opportunities. They work tirelessly towards your goal and market helping, they harvest value on your behalf.
Because Wall Street measures Companies based on their individual financial performance. Companies tend to work hard to increase their revenue and to report good news. On the market, it translates into a positive bias towards growth. According to Investopedia, "the S&P 500 averaged a 9.8% yearly return in its 90 years existence". This means that chances are that if you setup your robot to invest in elite Company stocks such as the ones found on the S&P, you have more chances to make money year after year than not. If on top of that your robot is good at screening opportunities and at exiting its positions, your investments should appreciate even more due to the timeliness of trades and consistency of your robot's actions.
Last but not least, another important factor to stock investing relates to being a disciplined investor. Reinvesting your profits for example, adds to your chances of growing your investment quicker. Robots do help with discipline but it is up to you to make decisions that foster growth.
Adding a robot to your investment strategy is akin to hiring a professional trader to work on your behalf. Robots bring discipline and consistency to stock investing. Placed to harvest money in positively biased markets with highly scrutinized securities helps put the odds in your favor. If on top of that your robot is good at what it does, you can let it grow your investments while you eat, sleep or are just plain busy working.