An algorithm is a particular range set of distinctly defined instructions intended to carry out a task or process.
Algorithmic trading also referred to as Algo Trading or automated trading, is the process of utilizing computers programmed to follow a pre-defined set of instructions for opening a trade in order to generate profits at a frequency and speed which no human trader is able to achieve. The defined sets of rules are based mathematical based on several parameters like price, timing and quantity.
Algo Trading takes emotions affecting the trading out of the equation and makes the markets more liquid while systematic identifying the profit opportunities.
Algo-trading provides the following benefits:
- Trades executed at the best possible price.
- Trade order placement that are accurate and,
- Avoidance of price corrections due to the instant order placement.
- Simultaneous automated checks on multiple market conditions
- Reduced risk of manual errors in placing the trades
- Constant QA of the algorithm, based on available historical and real time data.
Ask for more information from your account manager