Algo trading means buying and selling securities using computer algorithms that follow a set of predefined rules to execute trades. In algo trading, predefined rules can be set to act on triggers like stock price, volume, time, and others.
Two of the key benefits of algo trading over human trading are speed and accuracy. Pre-defined and well executed algorithms. It completes transactions in a split second. Human traders are unable to deal at this speed. It runs and scans on a number of factors that are nearly hard for a person to handle. Therefore, there are more solutions available at lower costs. On the other hand, there is no chance of making mistakes by selecting the incorrect deal. If you choose the manual option, there is a potential that you may invest in the incorrect currency pair or trade for the incorrect amount. A cross check of an algorithm has already been performed to confirm the correct sequence. Additionally, algorithmic trading eliminates human emotions that produce irrational conclusions. The most frequent offenders that influence the human mind are greed and fear.
Quant Hub offers in-depth derivative analytics in multiple time frames.
Download Indiabulls Securities App Now!
Scan to download Indiabulls Securities App
Open FREE Demat Account! Join our 9 lakh customers