Automation

Automation is simply having a generated order, for example buy 100 shares of AAPL at $115.12 performed with no input by you.

In a fully automated system, once the script (set of instructions for your computer)  is calculated, if an order is generated, the order is sent through the technology provider you have selected with your broker. The order is then sent to the exchange were it is executed and then reported back to your broker.

Trading systems can be either fully automated or non-automated. I currently use fully automated systems because I trade fast moving instruments that require an immediate fill.

In my case, I live in Denver and trade Chicago based future products (1,000 miles away). It only takes a few hundred milliseconds (1000 milliseconds equal one second) once a trade happens for my computer to receive that quote, calculate the "tick," generate an order, send to the exchange and fill.

When I look at order flow and time stamps at the exchange level, I see microsecond time stamps (1,000,000 microseconds equal one second).  A speed which boggles my mind. And something that retail traders can have access to.

Future systems I am working on are more option related, where positions will be held for a few days and therefore the precision of my fill is such that I may not fully automate those systems.

So the question of automation is really a function of your trading style. The technology is there for retail traders who need very fast (low latency) trade execution, as cost is no longer  a barrier to entry.