In terms of spread betting, there will come a time and temptation to stray away from the norms of trade. A recent trend set off traders to shift stop losses on their intuition in going reversal and recoup their losses or simply wait it out than just taking the profit with the assumption that the movement can still be predictable. Although this method can sometimes pay off, more often than not traders end up being weary as the folly of a shifted stop loss zeros a potential day’s revenue.

Perhaps algorithmic trading executable programmes can solve this problem. It is said that man’s ingenuity gave birth to programmable machines like the computer; surely such clever invention can do flawlessly under human monitoring the technicalities of trades. Even for spread betting individuals with one eye on the basic principles, there is definitely a widened scope of algorithmic functions of trading systems to make things much easier.

The algorithm systems used by major trading firms are perhaps unreachable from an average spread betting traders’ point of view but some platforms can be freely used such as Zignals as an equal alternative. Such systems allow the users to build a list, examine and exchange strategies and then sell the winning schematics to the highest bidder.

The two mortal enemies of any trader are basically greed and fear. Once removed, this enables the trader to trade the market rather than an emotional struggle surrounding his decision. Algorithm systems are ideally very useful when trading FOREX since many of its elements are driven by macro-economic factors over micro. It basically fits the majority of its technicalities in terms of analysing data. Equities are very dynamic as they are directly influenced by directors’ sales, mergers and other elements as well as inside information that is disclosed, whereas with FOREX, market knowledge is summarised within the price.

Although very handy, algorithmic systems are not the golden compass that solve every trader’s predicament. While there are plenty of traders who operate using the algorithmic or the black box type of trading schemes, some see it as the basis why trading can be a bit rough sometimes.

Some rogue algorithms such as the one that caused the recent crash of Nymex natural gas went down 39 cents in the day last July which somehow was the result of a glitch of the algo system that resulted in accelerated falls as they sold their products frenetically. Many would disagree that the also system operating the Nymex system was purely at fault since these types of programmes are only efficient as the people in command of their man-made protocols in trade.