Stock trading robots - Are they worth the hassle?

Stock trading robots are tools for traders, which allow them to conduct trading processes automatically. Trading robots are AI-based and can analyze data quickly and more accurately. 

Trading robots use AI algorithms, through which robots can predict future changes that are quite helpful for rational and efficient trading decisions. What’s more, AI can come up with predictions with the use of analyzing sentiments. Those sentiments can be measured through news channels.

A good example is the Twitter sentiment analysis program, which judges each tweet related to a topic. Each negative tweet is given a coefficient of -1, a neutral tweet is 0 and a positive tweet is +1. Based on the final score of multiple tweet analyses about a particular topic, it is determined whether the sentiment is positive or negative and to what extent. But this is just a small part of what robots can do.

Trading with the stock trading robot is similar to smart trading, which is also known as HFT (high-frequency trading). HFT is a method of trading, which requires using computer programs for analyzing a large amount of data in a very short period of time.

The main idea behind the stock robots is that you manually indicate what is your strategy, what are the minimum and maximum prices you want to close or open positions. Also, you can indicate the stop-loss and take-profit functions. Through them, you can determine the point where you want the robot to stop trading.

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How does a stock trading robot work?

The stock trading robot is artificial intelligence, which uses algorithms to analyze data, charts, which can be seen on news channels, trading platforms, and several trade-related sources.
The main thing that a trader should do is indicate the things that are related to strategy, including stop-loss, take-profit, close, and open position orders.
The stock robots can analyze not only the charts and the past performance for a certain asset, but also the tendency and the sentiments of traders in the stock market.
Through sentiment analysis AI robots stock trading systems can predict what are the most supposed future changes that are going to take place in the stock market. After analyzing the sentiments robots can decide whether it is worth it to trade with a certain stock or not.
To make it more simple to understand how stock trading robots work let’s take an example. Imagine, that you as a trader don’t have time for analyzing charts and looking at screens all day long. But you know that the quantitative strategy, which means analyzing present and past changes in the stock market can be quite beneficial. So, you are starting stock market robot trading, which furnishes you with the analyzed data. Also, it gives you information about the present tendencies.
The thing you do is that you indicate your preferences, what are the minimum and maximum prices you are ready to pay for a stock, what is the point you are willing to reach, and what is the point where you want to stop trading and get earned payouts.
What’s more, you can not only indicate your own strategy manually but also, you can use the feature of the AI robot, which offers you several strategies. You are allowed to choose the best one among other strategies and decide whether it can be successful or not.

What are the advantages of trading stocks with AI?

There are several advantages traders can get through trading stocks with AI, including:
  1. Trading 24/7
  2. Trading without influencing human emotions
  3. Fast and efficient trading
  4. Operating more complex and efficient trading strategies
  5. Fewer risks of losing funds

Trading 24/7

As the stock market is open 24/7 investors are allowed to trade any time they want. While humans aren’t capable of sitting at the screen 24/7 and conducting trade-related processes, robots don’t need to have a rest. What’s more, the stock market, which is an unpredictable and volatile market, the beneficial opportunities can appear at any time. So, using robot share trading software allows traders to claim those opportunities and get payouts with the help of AI and automatically implemented processes.


Trading without influencing human emotions

Trading robots as already mentioned are operating with predetermined rules and algorithms. So, this means that all the processes are automatic and the chance of influencing your emotions on trading decisions equals zero. Human emotions can make an impact on your decision-making and lead you to emotional trading or overtrading. For avoiding such circumstances, one of the best remedies is using AI stock robots.

Fast and efficient trading

While traditional trading means that traders need to operate trading manually, the best stock trading robots can conduct all the processes with the use of algorithms in a few seconds. When the investors are trading manually, they may miss the chances and opportunities. What’s more, when the traders are trading by themselves they are focused on only one asset, while the robots are familiar with multitasking and the chances of errors are quite low.

Operating more complex and efficient trading strategies

As already mentioned above, robots are much better at operating several tasks at the same time. They can both implement trading processes, execute stop-loss orders and take profits. In addition, they are able to monitor the changes in the stock market.

Fewer risks of losing funds

Because of its automated system, algorithms, and stop-loss orders, the best AI stock trading bot furnishes traders with fewer risks of losing funds. Through using it traders can get rid of the emotional trading, can monitor the changes that are taking place in the stock market, and through the stop-loss order stop trading processes if the trading doesn’t go in the desired direction.

What are the disadvantages of stock trading AI bots?

Even though there are quite a lot of advantages traders can get with the use of AI stock robots, there are some disadvantages too, which are worth considering while you start stock trading AI bots. Some of the disadvantages of using AI for stock trading are:
  1. The necessity of having a good and constant internet connection
  2. Lack of human-like imagination and interpretation
  3. Risks of errors in algorithms

The necessity of having a good and constant internet connection

When you are using robots for trading processes, one of the essential things is having good quality and constant internet connection. Any delays or hampers in the processes may lead the robot to trade incorrectly.

Lack of human-like imagination and interpretation

Successful traders are usually using their imaginations and the capacity of interpretation after analyzing the data and tendencies. Through their creativity, they are able to predict how the market is going to change in the future. In contrast with that, AI stock robots can’t use their imagination because they are implementing processes the way they are programmed.


Risks of errors in algorithms

As nothing is perfect in the world there are a few, but a chance of having errors in the algorithms. While you are trusting your funds with the robot, you are assured that you won’t lose your funds. However, in the worst-case scenario, if there are some errors in the algorithms it may lead you to lose funds.

Final points on share trading AI robots

Using stock trading robots is one of the most used methods in the stock market. Through AI stock trading investors are allowed to conduct trading processes automatically without additional efforts.
Stock trading robots are using the algorithm and through it analyze a large amount of data. They can analyze charts, news channels, and investors’ sentiments. Through analyzing them they are able to predict the future and make better trading decisions.
What’s more, using AI robots in stock trading is almost identical to high-frequency trading, which allows people to analyze patterns and trends and other information about the stock-related trading market. So, if you are a type of trader who is smart trading, you’ll easily get the benefits of using an automated trading system.
Furthermore, there are lots of advantages traders can get through using AI robots in share trading. Those advantages allow traders to conduct trading processes successfully and with minimized costs. Also, stock trading robots are protecting you from losing your funds if the situation doesn’t go the desired way or you tend to be an emotional trader.
Besides, while strategy means a lot in stock trading, there are several stock trading robots that allow you to use numerous complex and sophisticated strategies and make your trading more efficient.

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FAQ on share trading AI robots

Are stock market bots illegal?

No, stock market bots aren’t illegal. Traders are allowed to use stock trading robots during stock trading processes. As technology develops more and more and the AI becomes more eloquent people realize that computers cannot only be used for electronic orders. They are able to conduct trading processes as well.

Are stock trading bots profitable?

Yes, stock trading bots are profitable. Investors that are using stock trading bots for implementing trade-related processes can find out how beneficial trading robots can be. Through AI robots they are allowed to save their time, execute trading automatically, get benefits and maximally protect their funds from losing. What’s more, stock trading robots allow traders to analyze a large amount of data, which means a lot in the stock market, in a few seconds. Through the use of AI in stock trading, investors can operate trading with more complex and sufficient strategies.

Are trading bots worth it?

Yes, trading bots are worth it. If there was no worth of trading bots, there wouldn’t be people who use them. With robots, investors can get a lot of benefits. When the traders are using AI trading, they don’t need to look at the screens 24/7 to not miss the chances and opportunities. Furthermore, they don’t need to implement trading manually, instead, they can program the robot the way they think is the most efficient. Also, AI robots are quite well with multi-tasking, unlike humans, who have limited resources.

Are trading bots safe?

Trading bots are safe. There are many traders, who are using the stock trading robots and trusting their funds to AI-based bots. There can always be the risks of not conducting the processes absolutely correctly, however, the benefits you can get through the use of trading bots are more than the risks.
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