WHAT IS ALGORITHMIC TRADING ?
These Days Algo Trading Has Become Popular With The Traders. Because Of Its Advantages, Many Of Us Will Be Thinking Of It
Algorithmic Trading Is Also Known As Algo Trading Or Automated Traded. In This Type Of Trading, There Is human Interference And Computer Programs Are Use To Trade At Higher Speed And Volumes According To The Pre-Defined Parameters. Algorithmic Trading Is a Method Of Executing Orders Using Automated Pre-Programmed Trading Instructions Accounting For Variables Such As Time, Price, And Volume.
We At Smartvest Believe, Algorithm Trading Is The Future Of Trading In Stock And Commodity Markets. Every Trader Has a Life Cycle Of Trading Where He Goes Through a High And Lows Of Emotions With His Profit And Losses In The Trading. This Drastically Hampers His Manual Trading Decision Making. Algo Trading Or Artificial Intelligence Helps A Trader To Overcome His Emotional Quotient And Remove All trading Biases And Past Emotional Backlogs. It is widely used by investment banks, pension funds, mutual funds, and hedge funds that may need to spread out the execution of a larger order or perform trades too fast.
WHY TO CHOOSE ALGORITHMIC TRADING?
- Algo Trading is fully Automatic and Emotionless trading.
- This trading method attempts to capitalize on placing a large number of orders at very fast speeds, across multiple markets, and multiple decision parameters, based on per-programmed instructions.
- Trades are executed at the best possible prices.
- Instant and accurate trade order placement
- Trades time correctly and instantly. This avoids significant price changes.
- Reduced transaction costs due to lack of human intervention.
DIFFERANCE BETWEEN MANUAL AND ALGO TRADING
LETS GO ALGO
Algo trades account for over 43% of India’s stock market turnover
In the US, where retail investors also engage in algo trades, 90% of the turnover is from automated systems. The global average is 75%
Sebi was among the first regulators to issue a discussion paper proposing strengthening of rules on Algo trading From Past 2 to 3 years.
It produced a set of seven proposals aimed at creating a level playing field between institutional investors using colocation facilities offered by the stock exchanges and retail investors.