Conceptual Model of Automated Trading Systems Implementation

Abstract

Automated trading systems have been present in the world of finance for a number of years and as a result, these systems have been the subject of academic research. However, integrating the automated systems within a particular trading environment has not been investigated in any depth previously. Therefore, following on from the work around assessing the impact of automated systems integration, this article focuses on developing a conceptual model which enables individual and institutional traders to identify the best operating conditions for using automated trading systems within a particular trading environment. The model considers a wide range of variables including technological factors, market conditions, cultural plus ethical characteristics, and experiential considerations. Each of these categories has a distinguishing multilayered effect on the process of deploying automated trading systems. The developed conceptual model acknowledges that the various aspects of each category are not independent as they are joined together into a singular network of factors showing the cause-and-effect interrelationships between them.