How to Trade Automatically (Even If You’re a Beginner)

• What automatic trading means in plain English
• How to build or subscribe to your first system
• The credit spread strategy I personally use for consistency
• What to avoid so your automation doesn’t backfire

By the end, you’ll know exactly how to trade automatically. You’ll be able to start small, stay safe, and think like a pro – even if you’re just starting out.

What Does It Mean to Trade Automatically?

Let’s clear this up first – trading automatically doesn’t mean giving up control. You’re not handing your money to a black box. Instead, you’re putting rules in place that execute trades the moment your conditions are met.

Back in the day, I sat in front of five monitors, watching every tick. I typed in orders as fast as I could. Today, things work differently. I set my entry price, strategy, and stop-loss once. Then, automation takes over and executes with precision.

At its core, automatic trading means using software or a platform to place trades on your behalf. These systems follow pre-defined criteria like price triggers, timing, or even volatility changes. In short, there’s no hesitation or emotion – just clean execution.

To make it easier, let me break it down into three common types:

• Algorithmic Trading – This means writing code or logic that lets your system make decisions. Here’s Investopedia’s full explanation.
• Signal-Based Trading – You receive trade alerts from a professional or automated source. You can execute manually or set up automation to follow them.
• Bot Platforms – These offer drag-and-drop rule builders. As a result, you can automate trades without writing a single line of code.

For beginners, coding isn’t required. You can subscribe to a strategy that’s already working and use a broker that supports automation. Personally, that’s exactly how I run my SPX credit spreads.

In the next section, I’ll show you the exact tools you need to do this with confidence.

Tools You’ll Need to Start Automated Trading

You don’t need a Bloomberg terminal or an IT team to trade automatically. However, you do need the right tools – and they depend on how involved you want to be.

Here’s what I recommend based on 30+ years of trading:

1. A Broker That Supports Automation

This is essential. Some brokers restrict order types or block API access. You need one that allows trade automation. If you’re using Robinhood, unfortunately, that won’t cut it – it’s not built for serious traders.

👉 For better platforms, check out my list of Robinhood alternatives for automation.

2. Automation Access (API or Autotrade Integration)

Think of an API like a translator between your strategy and your broker. You set the logic. The API makes sure trades are placed when conditions are met. Some brokers – like Tradier or Interactive  – have built this in.

3. Strategy Logic or Signal Subscription

This is where most new traders pause. Fortunately, you don’t need to create a strategy from scratch. Instead, follow a proven one – like credit spreads – and connect it to your brokerage for automation. That’s what I’ve done for years.

4. Optional: Risk Settings, Filters, and Alerts

Good automation tools let you manage risk easily. For example, you can cap your trade size, pause during high-volatility events, or limit the number of open positions. These features are critical for staying safe during fast-moving markets.

For a full comparison of the top brokers and platforms that make automation easy, check out our Best Automated Options Trading Platforms in 2025.

Once you’ve got these tools in place, you’re ready to connect the dots. That’s exactly what we’ll do in the next section.

How to Set Up an Automated Trading System

Now that you’ve got the tools, it’s time to put them to work. Setting up an automated trading system might sound technical – but trust me, it’s easier than you think.

Here’s how I approach it, step by step:

Step 1: Choose Your Strategy

Don’t overcomplicate it. A good place to start is a rules-based options strategy like a bull put spread. Why? Because it has defined risk, clear entry rules, and steady probabilities.

If you’re unsure what strategy to pick, use one that’s already working. I personally trade SPX credit spreads with a fixed max loss per trade. They’re reliable, scalable, and perfect for automation.

Step 2: Define Your Entry and Exit Rules

Think in terms of “if this, then that.” For example: If SPX falls to support and implied volatility rises, then enter a credit spread expiring Friday.

Don’t forget to set your exit plan too. You can automate stop-loss orders and take-profit levels. These keep you disciplined – no second-guessing needed.

Step 3: Connect to a Broker That Supports Autotrading

Once your rules are in place, you’ll need to connect them to your broker. Some platforms let you do this natively. Others use third-party services that forward your alerts to your brokerage account.

I use a platform that integrates directly with Tradier and AutoShares. My strategy sends out the signal; the system handles the rest in seconds.

Step 4: Run Small Tests First

Even if your logic looks solid, always start small. Run the system in paper trading mode or with one contract. You’ll spot mistakes early and avoid costly surprises.

Once your setup is running smoothly, you’ll have built something most traders dream about: a strategy that works even when you’re off the screen.

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Popular Automated Strategies That Actually Work

I’ve seen a lot of strategies come and go. Some worked for a while, then crashed. Others promised the moon but had no real edge. So let me be blunt – automation won’t save a bad strategy. But it can make a good one much better.

Here are the automated strategies I’ve used or seen consistently deliver results, especially when paired with proper risk controls:

1. Credit Spreads (Especially on SPX or SPY)

This is my bread and butter. Credit spreads, like bull put spreads or bear call spreads, give you a clear edge: defined risk, consistent probabilities, and weekly income potential. I automate these using SPX options, targeting expiration each Friday.

👉 Want real results? These are the exact trades I share in our credit spread alerts, with up to 235% annualized return over 12 years.

2. Trend-Following Bots

These systems buy strength and sell weakness based on moving averages or breakout signals. They’re great for directional trading. However, they tend to struggle in choppy markets unless properly filtered.

3. Momentum Scanners + Auto Entry

These scan for fast movers and instantly enter a trade when certain volume or price thresholds are met. While powerful, they’re better suited to advanced traders with tight execution logic.

4. Delta-Neutral Strategies (Like Iron Condors)

These profit when the market stays within a range. An Iron Condor is a great example. Automation helps you adjust or close positions when risk thresholds are hit.

In my experience, the best strategies for automation have two things: defined risk and repeatable rules. That’s why I favor credit spreads for most traders starting out.

Risks of Automated Trading and How to Avoid Them

I’ve been doing this long enough to know that automation isn’t magic. It’s powerful – but it’s also blind. If your rules are flawed or your system is unmonitored, mistakes can multiply fast. Let’s walk through the risks I’ve seen firsthand – and how to stay safe.

1. Over-Optimization (aka Curve Fitting)

This happens when traders build strategies that only work on historical data. They tweak so many parameters that the backtest looks perfect, but real trades fall apart. Instead, focus on logic that makes sense in live markets – like selling high-probability credit spreads with clear exits.

2. Market Regime Changes

What works in a quiet market might blow up during high volatility. For example, a range-bound system can fail during a Fed announcement or earnings week. That’s why I adjust exposure during events that may trigger IV Crush or sudden volatility spikes.

3. Technical Errors and Slippage

Sometimes trades don’t get filled properly. Your platform might lag, or your broker’s servers get overloaded. This leads to what’s called slippage – where you get worse prices than expected. It’s common during fast markets, so always set price limits.

4. Letting Bots Trade Unchecked

Yes, automation helps you step away from the screen – but not forever. I’ve seen accounts spiral because someone walked away for a week and didn’t monitor trade size or system performance. At a minimum, review positions and results weekly.

5. Emotional Complacency

Ironically, automation can make traders too relaxed. They stop thinking critically and let the bot run wild. You still need to ask: Is my edge still valid? Has the market shifted?

Personally, I set my systems to cap risk per trade at 5%, with defined entries, exits, and a maximum number of positions. That keeps things tight – even when I’m not watching.

Read also our 2025 ultimate guide about automated options trading.

Can You Really Make Money Trading Automatically?

This is the big question – and it deserves a straight answer. Yes, you can make money with automated trading. But not because a bot is “smart.” You make money because your system has an edge, and automation helps you execute that edge without emotion.

Over the past decade, I’ve run multiple strategies – some automated, some manual. The consistent winners shared a few key traits: they used defined risk, repeatable logic, and a high enough risk-reward ratio to survive losing streaks.

Most beginners blow up accounts not because of bad trades – but because of bad habits. They chase, overtrade, or freeze under pressure. Automation solves that. It removes hesitation and stops you from revenge trading or going off-script.

That said, automation doesn’t fix a flawed strategy. If your signals are junk, your results will be too – only faster. So the real power of automation comes when you pair it with a system that already works.

That’s exactly why I built the Weekly Trend strategy. It uses SPX credit spreads with defined exits, caps max loss at 5% per trade, and has delivered up to 235% annual returns over time. It’s automated, but it’s also disciplined and structured – which is what trading should be.

If you’re serious about long-term consistency, automation is your ally. Just remember: your edge wins the game. Automation just makes sure you don’t fumble the ball.

Here is an article that answers the question in detail: Can You Automate Options Trading? 

Final Thoughts: Automation Doesn’t Mean Set-It-and-Forget-It

I’ve been in this business long enough to know one thing: there’s no such thing as a fully hands-off money machine. Not in options, not in stocks, not anywhere.

Yes, automation is powerful. It removes hesitation, frees up your time, and keeps your trades consistent. But even the best systems need oversight.

Think of it like flying on autopilot. The system handles the routine – but the pilot still checks the instruments and makes adjustments when needed. That’s your job as the trader.

Each week, I review my strategy performance. That includes checking fills, verifying the win rate, and confirming the system still fits current market conditions. It only takes 10 minutes, but that habit adds years to your account lifespan.

So if you’re planning to automate your trades, do it with intention. Don’t walk away. Don’t blindly trust a tool. Stay engaged – even if it’s just once a week.

Done right, automation gives you more freedom, fewer mistakes, and a smoother trading journey. But only if you keep your hands lightly on the wheel.

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