What is meant by automation in trading?

Automation in trading refers to the use of systems or programs designed to execute trades based on predefined rules and algorithms. This approach enables traders to streamline the trading process, reducing the need for manual intervention and allowing for faster execution of trades. Automated trading systems can monitor market conditions and execute orders without the trader's direct involvement, which can lead to more efficient trading, as they can react to market movements in real-time.

By utilizing these automated systems, traders can implement strategies with discipline and consistency, minimizing emotional decision-making that often affects trading outcomes. This level of automation can also allow for backtesting strategies against historical data, optimizing them before deploying in live markets.

The other options do not encapsulate the essence of automation. Manual trading methods (the first choice) do not involve automation at all and thus do not reflect the technology use in trading. Trading during specific hours (the third choice) pertains to market hours and trading schedules, rather than the automation process itself. Visual trading aids for manual traders (the fourth choice) support traders in making decisions but do not involve automating the trading process.