We’ve discussed before in this blog about how to come up with the funds you need to start or further your business. One of those ways is by using trading software to invest in the markets. If you’re considering this method, read on to learn more.
First off, just know that there are advantages and disadvantages to using trading software. One thing to realize is that they are not perfect. Once you understand this then you can focus on the things that really matter when it comes to trading stocks on a regular basis. In this article, we look at some things you need to remember when using trading software.
When Trading Software Misses the Mark
Clients all too often come to me distraught because the trading software they were using missed the mark and led them to lose a lot of money. When I ask them why they were relying on a piece of software alone, they answer, “Well, it seemed better to rely on software than on a person.”
The flaw with that logic is that software cannot always react as quickly as a human could to the ever-changing aspects of the markets.
When something tragic and unexpected occurs, the markets may shift violently and without any real warning. Because of these rapid shifts, lots of people suddenly lose lots of money. That’s because their software can’t respond quickly enough to avoid damage.
For example, the “in or out” vote in the UK sent shocks waves around the world. All predictions were suggesting a definite call for the UK to remain in the European Union, yet the opposite happened. This unexpected event immediately caused currencies and other commodities to fluctuate.
Have a Human Backup Plan
Believe me, it’s always a good idea to have a person that you can fall back on to help you with your investing.
If you’re totally dependent on trading software to make your trades, mechanical and electronic failures can ruin you.
To give an example, let’s say for a moment that you are starting a trade. You are in the process when you lose power or your internet connection goes down, leaving you stuck. As a result, you don’t know if your order went through or not.
But if you have a human backup, you can call your broker to take care of the trade for you, possibly saving you from a big loss because of a mechanical or electronic failure.
Weigh the Pros and Cons
So, if you are wondering if trading software is right for you, take a moment to look at both the advantages and disadvantages. Find out more by talking with people who use trading software. Learn from them the issues they have when it comes to using software in their trading activities.
Make your decision cautiously, as the methods you use for your trading activities can affect your overall finances.