Knowledge Center

Knowledge Center

Expand   What is autotrading?

Autotrading is a computerized method to efficiently implement trading. Traders and investors can implement entry and exit rules into automated trading systems that allow computers or server-based platforms to execute and monitor the trades. Autotrading is also known as automatic stock trading. Online brokers may execute trades automatically. Online brokers are paid by their clients to execute the trades.

Expand   Is autotrading the same as high-frequency trading?

No, high-frequency traders may leverage automated trading systems, but not all autotrading is high-frequency trading.

Expand   Is autotrading the same as day trading?

No, day trading strategies may leverage automated trading systems, but not all autotrading is day trading.

Expand   What are automated trading systems?

Automated trading systems, also referred to as mechanical trading systems, algorithmic trading, automated trading, or system trading, allow traders to establish specific rules for both trade entries and exits that, once programmed, can be automatically executed via a computer or server-based platform. The trade entry and exit rules can be based on simple conditions such as a moving average crossover, or they can be complicated strategies that require a comprehensive understanding of the programming language specific to the user's trading platform, or the expertise of a qualified programmer. Automated trading systems typically require the use of software that is linked to a direct-access broker service.

Expand   How do automated trading systems work?

Expand   Is automated trading a replacement for a financial advisor?

No, automated trading does not a replace the need to consult with a financial advisor. Investors should always consult with a financial advisor before starting any investment strategy. Autotrading is a computerized method to efficiently implement a trading strategy. Only a qualified financial advisor should give advice to investors as to which investment strategy is right to meet their financial goals.

Expand   What is a direct access broker service?

Automated trading systems typically require the use of software that is linked to a direct-access broker service. A direct-access broker service uses computer systems to allow investors to make trades without going through a broker. Direct-access broker services enable Buy and Sell orders to be placed very quickly.

Expand   What is an ETF?

An ETF, or exchange traded fund, is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds, an ETF trades like a common stock on a stock exchange. ETFs experience price changes throughout the day, as they are bought and sold.

Expand   What is significant about the S&P 500?

There are numerous ways to gauge the performance of the stock market, but the S&P 500 probably has the best following among institutions and serious investors. It is, and has been for decades, the gold standard against which mutual fund and pension fund managers rank their own performance. The S&P 500 tracks the performance of approximately 500 large stocks that characterize the US marketplace. It is a small portion of the more than 3,000 stocks that actively trade in the US, but because these 500 companies are so large, the S&P 500 Index captures about 80% of the total value of the market.

Expand   Why does EC500 utilize SPDR S&P 500 ETF (SPY)?

Each share of SPY ETF holds a stake in the 500 stocks represented by the S&P 500. SPDRs have a set number of shares that are bought and sold on the open stock market. Each SPDR ETF share represents proportional interest in the unit investment trusts that hold the stocks of each of the underlying indexes that they represent.

Expand   Trading Stocks Online: A Guide for Beginners

Thanks to online brokerages, stock trading, once the sole domain of Wall Street, has become easily and affordably available to the general public in the last twenty years. Prior to online trading, people relied on the services of a stock broker, who would make Buy and Sell orders on the customer's behalf. Today, individuals are able to execute Buy and Sell orders themselves, in a fraction of a second using computerized trading services.

While buying and selling stocks - which are shares of ownership in a company - can make you a fortune, it's just as easy to lose that money. To become a successful trader, it is crucial that you become familiar with the tools of trading, the theory behind it and the daily reports that drive market shifts.

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Expand   Do investors buy fractional shares?

Not typically, one share is the smallest number of units an investor can buy. This is important to note for EC500 subscribers. Brokerage services working with Earning Curve pool the funds of all subscribers, transacts in whole units, and divides the sum in fractional units proportional to the principal of each investor-subscriber.