HARI MONISH
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UNTOLD ABOUT TRADING & TECHNIQUE
Algorithm Tra ding: Algorithmic trading, also known as algo trading, is a trading technique that uses computer algorithms to execute trades automatically. These algorithms are based on mathematical models and rules that are designed to identify market opportunities and make trading decisions based on predetermined criteria. Algorithmic trading has become increasingly popular in recent years due to the growth of technology and the availability of high-speed internet connections. It allows traders to execute large volumes of trades with greater speed and efficiency than traditional manual trading methods. The algorithmic trading process typically involves four steps: data collection, analysis, strategy formulation, and execution. In the first step, data is collected from various sources, such as financial news, stock prices, and other market indicators. This data is then analyzed using statistical and mathematical models to identify patterns and trends in the market. Based on the analysis, trading strategies are formulated using a set of rules and parameters that govern the buying and selling of assets. These strategies can be customized to meet the specific needs and preferences of individual traders. Once a strategy has been formulated, it is backtested using historical data to assess its performance and refine the parameters as needed. Finally, the strategy is executed automatically using trading software that interfaces with the broker's trading platform. Trades are executed in real-time based on the rules and parameters set forth in the strategy. Algorithmic trading can be used for a variety of purposes, such as to execute high-frequency trades, to execute trades across multiple markets and assets, or to execute trades based on specific market conditions or events. It is important to note, however, that algorithmic trading is not a guarantee of success and carries its own set of risks, such as system failures, data errors, and the potential for unforeseen market events.
By HARI MONISHabout a year ago in Trader