Semi automated trading

What is the difference between semi-automated and fully-automated trade management?

Fully automated trade management is based on the following principles:

  1. the system suggests a setup;

  2. the system places this on the market;

  3. the system manages the trade.

Semi automated trade management is based on the following principles:

  1. the system suggests a setup;

  2. the trader decides whether to accept these suggestions or not;

  3. the system manages the trade.

Before submitting a trade, you should ask yourself the following questions:

  • Does the market provide sufficient entry criteria for placing a trade?

  • Can the criteria be replicated?

  • What is the current trend on the market? Does the signal support the trend or is opposite to it?

  • What is the overall market trend (index)? Does the signal support the overall market trend or not?

  • At which price level should I place an entry?

  • What is the acceptable level of risk for the trade?

  • At which price level should I place a stop?

  • Which currency should the instrument be traded in?

  • Which currency is my account held in?

  • What is the currency conversion for the risk?

  • What is the current price of currency pairs for the instrument/risk calculation?

  • What spread does the instrument have?

  • What average slippage does the instrument have?

  • Taking all of these factors into consideration, how large should the order size be?

  • Is the calculated order size even or odd? (Odd lots can lead to disadvantageous price setting by the market maker and bad execution)

  • Is the order size already extensive?

  • Is it better to scale in a position? If yes, then how?

  • Which order type should be used in the market (market, limit, stop, stop limit)?

  • How can currently running trades be secured (trailing stops)?

  • Where should the targets be placed in order to reach a positive ratio of chances to risks?

  • How will I scale out of the position (1 to targets)?

  • By what order size proportion will the positions be reduced when scaling out?

  • What is the impact on the trading account?

  • How many long/short positions are going to be held?

  • What will be my actions in the case of a crash? Are my positions market-neutral?

These are just some questions that should be answered by the trader, especially when dealing will smaller time frames such as 1 minute or 5 minutes. When using full automatism, this is no longer necessary because the system performs all trades automatically. Nevertheless, the human perspective has many advantages over automation. For example, many complex patterns/confluences can be better perceived visually and therefore more clearly interpreted. Semi-automatism will allow you to combine the best of both worlds.

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