Technology has been a big business growth driver in the broking space. The broking houses have to upgrade the technology to scale up business, engage customers and yet manage costs.
In today’s real time environment, customers require access to the latest information and analytical tools to be able to engage effectively in capital markets.
Automated trading is one step ahead towards achieving technological innovations in the capital market, which has aided the regulators and market intermediaries.

Automated trading systems, also referred to as mechanical trading systems, algorithmic trading or system trading which allow traders to establish specific rules for both trade entries and exit that, once programmed, can be automatically executed via a computer.

The trade entry and exit rules can be based on simple conditions such as a moving average crossover, or can be complicated strategies that require a comprehensive understanding of the programming language specific to the user’s trading platform, or the expertise of a qualified programmer, Automated trading systems typically require the use of software that is linked to a direct access broker, and any specific rules must be written in that platform’s proprietary language.
Some trading platforms have strategy building “wizards” that allow users to make selections from a list of commonly available technical indicators to build a set of rules that can then be automatically traded.
For example, the user could establish that a long trade will be entered once the 50-day moving average crosses above the 200-day moving average on a five-minute chart of a particular trading instrument. Users can also input the type of order (market or limit, for instance) and when the trade will be triggered (for example, at the close of the bar or open of the next bar), or use the platform’s default inputs.
Many traders, however, choose to program their own custom indicators and strategies or work closely with a programmer to develop the system. While this typically requires more effort than using the platform’s wizard, it allows a much greater degree of flexibility and the results can be more rewarding.
Once the rules have been established, the computer can monitor the markets to find buy or sell opportunities based on the trading strategy specifications. Depending on the specific rules, as soon as a trade is entered, any orders for protective stop losses, trailing stops and profit targets will automatically be generated.