Building Automated Trading Strategies October 2018 | Page 7

CHAPTER-1: THE BASICS OF AUTOMATED TRADING
Automated trading is a method of trading the global financial markets based
on a combination of computer software and hardware. Automated trading is a
sophisticated branch of systematic trading and all automated trading systems
are systematic.
Major Assumptions of Systematic Trading
Systematic trading assumes the following:
1. The existence of a rules-driven trading strategy that is based on
objectively reproducible (computable) inputs
2. The application of that strategy with discipline and outside of the
human emotional context 1
When we refer to automated trading, we refer to the way that trading orders
are actually executed. An automated trading system must be able to execute
trades without human intervention by placing also limit orders (usually a take-
profit and a stop-loss).
1
Professional Automated Trading Theory and Practice (Eugene A. Durenard)
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