What is Algo Trading?

Capital Markets CIO Outlook | Tuesday, January 19, 2021

Many traders utilize the programme trend following the algorithmic trading platform strategies as they are one of the simplest to implement.

Fremont, CA: In the last decade, algorithmic trading has emerged as a new way for financial institutions to gain an edge over other market participants, provided that they use this powerful tool in the right way.

Before the emergence of modern computers, traders were left to rely on rudimentary methods for developing and implementing trading strategies.Traders relied on their own cunning and healthy appetite for risk to ride peaks and troughs, analyse data, and use technical indicators such as Bollinger Bands to predict whether a stock market would rise or fall in value over a given period of time.Traders relied on their own cunning and healthy appetite for risk to ride peaks and troughs, analyse data, 

and use technical indicators such as Bollinger Bands to predict whether a stock market would rise or fall in value over a given period of time.

Simply put, algorithmic trading is a form of automation by which a computer is programmed to carry out a specific set of actions that may include the purchase or sale of an asset in response to changing market data. The main advantage of this form of trading is that it has the power to passively enter and exit positions at a frequency and speed that is impossible for a regular trader to do on its own.

Common algorithmic trading strategies

Financial