Having worked in the investment banking industry for several years i was always slightly in awe of some of the bank's traders and their financial success. Do not get me wrong I have been paid well for my services however it is nothing inn comparison to some of the traders working in the bank. These are the guys you hear about that get multi million dollar bonuses. I wondered how they made so much money that warranted the bank paying them such big bonuses until I discovered their secret - automated stock trading.
I want to share exactly how they use automated trading to make such good money in this article. The information in the is article has had a huge impact on the profitability of my stock investing and i know it can do the same to yours. If you invest in stocks, this may be the most important article you have read in a long time.
The closer in the bank I worked to the traders the more I became aware that most of them used automated stock trading to give them a edge. The reason is quite simple really when you break it down. All traders trade a particular strategy. By this I mean that each trader has a set criteria that must be in place before they enter a trade. Essentially this is can be a long list of calculation results, ratios or more general factors that they look for in a trade.
Computerization and the Internet have changed the stock markets hugely in recent years. A few years ago what traders started doing was translating their strategies into computer programs. This gave them the advantage that they could run their checklist or strategy over thousands of companies each day (or even several time a day) in order to seek out good trades. This automation meant that they no longer relied so heavily on a team of research analysts trawling the stock markets looking for suitable companies to trade.
Only recently has the private individual investor been able to gain access to such automated stock picks. Naturally the cost of such software can be incredibly high however more recently some ex traders have effectively licensed their software or the results their software produces to make automated stock trading a possibility for the private investor at home.
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