Advantages and Disadvantages of Algorithmic Trading
Do you often wonder what is Algorithmic trading? Algorithmic trading is a decision-making process used in trading which employs computers specialized in manipulating the markets. This process has evolved with more companies integrating best practices to make it more competitive. Algorithms can assess data and make instant calculations, while humans need hours or days to do so. In this article, we will explore some of the advantages that algorithmic trading offers traders when deciding on what and how much to trade as well as when and for how long. As the name suggests, algorithmic trading is based on advanced quantitative analysis, and this technology is used extensively by investment banks, hedge funds, and elite proprietary trading firms across Wall Street. Algorithmic trading allows firms to execute trades in both large and small volumes with guaranteed speed, and accuracy and based on market-beating criteria. Decision-making processes The term “algorithmic trading” is used to refer...