The advent of automated stock trading software has definitely made it easier to play the very lucrative game of the stock market, even if you do not have basic knowledge on stock trading. For decades now, the only way to invest in the stock markets without losing a substantial amount of money is by the sheer use of instinct coupled with years of experience in observing and analyzing the trends of the stock market. This has certainly changed over time.
The usual strategy being recommended to first time stock traders is to buy it low and sell it high. But what exactly does this mean? It means to buy stocks at a low price and sell them at a higher price for a profit. Sounds very simple, right? No, it is anything but simple. The investor must also know when to sell and when not to sell. This is where experience and instinct will come in.
With decades of analyses and attempts to predict the outcomes of stock markets producing no satisfactory results, there comes the need to use the next step in stock trading: computers.
Stock trading programs are used to analyze the trends of stock market prices by taking into record the periods where stock prices rise and fall. When the peak of a share of stock is determined, it is recorded by the system as well. With the use of statistical and probability computations, the program comes up with a recommendation as to what share of stock to buy, when to buy it, and when to sell it.
Although these programs may be beneficial, nothing beats the age-old experience and instinct of the seasoned stock market veteran. At most, this automated stock trading software can only give recommendations with the ultimate decision lying in the hands of the potential investor.