Can “RoboTrader” take the emotion out of picking individual stocks?

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Robot hand, ordering on a laptop keyboard, an exchange trade. Robot trading system is a computer trading program that automatically submits trades to an exchange without any human interventions. Depth of field with focus on finger.My latest Financial Post blog looks at a new term, RoboTrader. You can find it by clicking on the highlighted text: VectorVest-Questrade partnership brings unemotional ‘robo’ to retail investing.

As I point out in the piece, the better-known term robo-advisor is well entrenched as a shorthand description of automated online investment services, and generally refers to semi-automated portfolio management systems built on low-cost exchange-traded funds or ETFs.

The idea is to build low-cost well-diversified portfolios and benefit by gradual dollar-cost-averaging of the underlying ETFs, as well as regular rebalancing. This takes a lot of the emotion out of building and monitoring an ETF portfolio.

By contrast, RoboTrader attempts to do a similar thing in the realm of individual stock-picking. RoboTrader revolves around 23,000 individual stocks rated every day by  VectorVest Inc. of Charlotte, N.C., which provides investors with both tools to help them with both technical and fundamental analysis of stocks, as well as ETFs. VectorVest has announced RoboTrader as part of a partnership with Questrade Inc., the Toronto-based discount brokerage service.

VectorVest describes RoboTrader as a “powerful new trading tool that solves the biggest problem for many traders: executing a trading plan without letting emotions cloud judgement.” RoboTrader lets clients implement a trading plan that requires only client confirmation for fast, accurate execution, with results monitored in real time.

VectorVest says RoboTrader leverages the intelligence of its fundamental and technical analysis, making it easier to manage portfolios. RoboTrader sends instant alerts to investors’ VectorVest accounts, phone and email, “letting traders know exactly which trades to make, when to make them and in what order quantity.”

Similar deals with US-based TradeKing and TradeStation

In an early version of the release, VectorVest founder Dr. Bart DiLiddo said “My emotions often caused me to stray from my trading plan: I needed a tool to trade my plan the way it was intended, and keep me out of the way. That’s what RoboTrader does.”

Privately owned VectorVest, which has been around 28 years, has similar deals with two US firms: Charlotte, NC-based TradeKing and Florida-based TradeStation Group Inc. However, the partnership with Questrade is its first in Canada, according to VectorVest manager of research Todd Shaffer.

You can try RoboTrader for 30 days for US$29 or get more info at vectorvest.com/vvrobotrader/. A Vectorvest subscription costs US$99/month though the companies have not yet finalized Canadian pricing.

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