The basic concept of algorithmic trading

Algorithmic trading is swift, relentless, and trustworthy, considered as the forward movement in the evolution of trading, the technology of tomorrow that has already taken the world by storm. Although there are some rumors and disbeliefs that prevent individuals from making the utmost of this significantly advanced stock trading, it is time to realize its true potential.

Algorithmic trading in New York

Algorithmic trading in New York happens through a computer program following a defined set of instructions for placing a trade. It generates profits at a pace and frequency no match to human traders. The instructions are set upon price, timing, quantity, and any mathematical model. Besides the profit factor for the trader, it renders trading more systematic and markets more fluid, as it rules out the effect of human emotions over trading activities.

Advantages of algorithmic trading

Before you seek Ultra low latency services in New York, you must know the benefits of algo-trading:

·    Order placement is immediate and exact

·    Trades are properly and instantly timed for avoiding price changes

·    Lessen transaction costs

·    Concurrent automated checks on several market situations

·    Lower risk of human errors while placing trades

·    It can be backtested through available real-time and historical data to consider whether it is a workable trading strategy

·    Reduced the chances of mistakes by traders in terms of psychological and emotional factors

This system can be used in different forms of trading as well as investment activities like:

Mid-long-term investors

Mutual funds, pension funds, insurance companies use algorithmic trading to buy large quantity stocks while they avoid influencing stock prices with large volume investments.

Short-term traders

Speculators, brokerage firms, arbitrageurs prefer automated trade execution. Moreover, algo-trading helps in generating enough fluidity for sellers in the market.

Systematic traders

Hedge funds, trend followers find it efficient to program trading rules, letting it trade automatically.

Note

Nowadays, most algorithmic trading is HFT (high-frequency trading) which tries to capitalize on placing big orders at fast speeds across several markets and several decision parameters formed on preprogrammed instructions.

URL: https://www.sissoftwarefactory.com/

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