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Automated Trading System Meaning

An automated trading system is a computer program that generates and executes buy and sell orders in financial markets without manual intervention. Using predefined rules based on technical indicators, statistical models or algorithmic strategies, it scans the market for opportunities and places orders at high speed. Such systems are widely used by hedge funds, proprietary trading desks and investment banks to exploit minute price discrepancies and manage large volumes of transactions.

The appeal of automation lies in its ability to remove emotion from trading and to execute strategies consistently and rapidly. A trader can back‑test a strategy on historical data, refine the rules and let the system run, only intervening to adjust parameters or shutdown in volatile conditions. High‑frequency trading algorithms, which operate at sub‑second timescales, have become a significant source of market liquidity but have also raised concerns about systemic risk and market fairness.

Regulatory bodies require firms using automated systems to implement safeguards against errant trades and market abuse. This includes circuit breakers, risk limits and real‑time monitoring of algorithmic behavior. As machine learning techniques mature, some systems incorporate adaptive models that learn from market data, but the core principle remains the same: codifying a strategy into automated instructions and letting software handle execution.

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Important Disclaimer:

Finery Markets BVI Limited (“Finery Markets”) provides software, technology infrastructure, and related Information and Communication Technology (ICT) services on a Software-as-a-Service (“SaaS”) basis. Finery Markets acts solely as a software vendor and does not operate a trading platform, does not intermediate, match, execute, clear, or settle transactions, and does not engage in any activities that would require regulatory authorisation under applicable laws.

Finery Markets’ software is non-custodial and is provided exclusively to licensed institutional entities that act as independent operators of their own environments. All counterparties are solely responsible for establishing and maintaining their own bilateral trading and settlement relationships. Finery Markets is not a party to any such arrangements and assumes no responsibility for the conduct, verification, or compliance obligations of any users of the software.

Nothing on this website shall be construed as a financial promotion, investment advice, or an offer to engage in regulated activities. Access to and use of the software is strictly limited to clients who have entered into a software licensing agreement with Finery Markets. Persons located in jurisdictions where such access is restricted should not rely on this website or any of its contents.

Additional notice to UK visitors: This website and associated communications are not intended to constitute a financial promotion under The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) and related guidance. Access to services provided by Finery Markets is limited to regulated entities, professional clients and eligible counterparties as set out by the Financial Conduct Authority. UK users are not permitted to use this website for the services of Finery Markets if they don't fall within these categories.