Getting Started with Automated Trading

Automated trading can seem intimidating at first, but with the right approach, anyone can set up their first strategy in minutes. This guide will walk you through everything you need to know to get started.

What is Automated Trading?

Automated trading means using software to execute trades based on pre-defined rules and triggers. Instead of manually placing orders when you see news or signals, your computer does it for you, instantly. Think of it like setting an alarm clock. You decide when you want to wake up, and the alarm goes off automatically. With automated trading, you decide what conditions trigger a trade, and the system executes it when those conditions are met.

Choose Your News Sources

The foundation of any automated trading strategy is reliable information. You need to identify which news sources you trust and want to act on. Popular options include email newsletters from premium research services and analyst reports, RSS feeds from financial news sites and company press releases, and Substack publications from independent analysts and expert investors. Start with 2 to 3 sources you already trust. You can always add more later as you get comfortable with the system.

Define Your Trading Rules

Once you've selected your news sources, you need to decide what actions to take when specific information appears. A good rule has three parts: a trigger (what needs to happen, like "When newsletter X mentions stock Y"), an action (what should the system do, like "Buy 10 shares"), and limits (what are the safety boundaries, like "Only if price is below $100").

Connect Your Brokerage

For automated trading to work, the platform needs permission to place trades on your behalf. This is done through a secure API connection with your brokerage account. With Subsequity, we support Trading212 and other major brokers. The connection process is simple (usually takes less than 5 minutes), secure (uses industry-standard encryption and authentication), and revocable (you can disconnect at any time).

Set Your Budget and Risk Controls

Before activating any automated strategy, it's crucial to establish financial guardrails. These protect you from unexpected outcomes. Key settings to configure include per-trade limits (maximum amount to invest in a single trade), daily budgets (total amount available for trading each day), stop-loss orders (automatic sell triggers if a trade loses a certain percentage), and position limits (maximum exposure to any single stock or sector).

Test Before You Commit

Most automated trading platforms offer a paper trading or simulation mode. This lets you test your strategy with fake money before risking real capital. Run your strategy in test mode for at least a week to verify your rules are working as intended, check that triggers are firing correctly, and ensure you're comfortable with the frequency and size of trades.

Common Mistakes to Avoid

Overcomplicating rules: Start simple. Complex strategies are harder to understand and debug. Ignoring risk management: Always set stop-losses and position limits. Following too many sources: More signals doesn't mean better returns. Focus on quality over quantity. Not reviewing performance: Check your results weekly and adjust strategies that aren't working.

Ready to Begin?

Automated trading isn't about removing human judgment, it's about removing human delay. You still make the strategic decisions; the system just executes them faster than you ever could manually. Start small, learn from each trade, and scale up as you gain confidence.