Autotrading platforms enable users (“Followers”) to program their trades by reference to certain trading signals generated by other users (usually called “Signal Providers”), who have consented to the public disclosure of their trading signals. It should be noted however, that autotrading is not limited to the provision of signals and automated strategies to followers. An important aspect of autotrading that gathers less attention than it probably should, is the number of filters and customization settings available to followers, for the purpose of managing their autotrading accounts.
Therefore, what autotrading platforms actually do is not limited to “copy trading” only. Autotrading platforms permit followers to automatically mimic the investment behavior of the selected signal provider(s), by taking into account the custom parameters and filters defined by the Followers, in order to fully configure their transactions.
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Additional filters may consist of custom limit, take profit and stop loss orders, reject signals filters (the user configures the application in order to prevent the execution of the provider’s signals unless they meet specific criteria set by the user), custom settings that limit the number of open positions, investment amounts per signal provider or even custom settings per specific trading instruments.
Apart from settings that apply a number of restrictions on the reproduction of signals on followers’ accounts, the platforms provide tools that customize the users’ autotrading experience and increase the user’s trading flexibility. A good example of such a feature is a tool that allows followers to open trades at different rates than the Signal Providers, by opening their trades in their account as pending orders with an offset entry rate! By using this tool, followers can open trades at a better entry rate, after a certain drawdown has been reached from the Signal Provider. Such tools sometimes are even available for back testing, thus providing an estimate of the effective impact per case.
All of these features derive mainly from customer requests over many years of autotrading experience. The objective is the provision of practical tools that will not only meet the requirements of sophisticated traders, but will also essentially increase the flexibility of users by allowing them to exercise discretion over automatic strategies. These features provide Followers with an additional layer of protection and assist them in exercising full control over their autotrading account. The flexibility offered by such filters, in combination with other critical risk management tools, is vital in the provision of a complete autotrading service. Technology and innovation remain key factors in the expansion of the autotrading industry, so platform providers would do well to carefully listen to the ever-growing auto-trading community.