Can I get a stable returns in Algo Trading?
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Algo Trading – Also Called Algorithmic Trading or Automated Trading is the process of giving programmed instructions to the computer to execute the trades on your behalf.
Benefits:
Most of the traders are programming their daily using strategies and implementing through the software. Compter has zero emotions, so it executes the trades as per the instructions given in the code.
It has both pros and cons. It is better to monitor the trades even you are using algorithmic trading.
What is Algo Trading?
Algo Trading is nothing but the execution of trades by a designed code.
A computer generated code on your designed trading strategy to identify entry/exit levels for the purchase and selling of the shares. The codes are written in a programming language such as Python, C++. The automated trading provides results in an accurate manner.
After completion of trading strategy’s coding, you can get in contact with your broker to place the trade orders. The algorithm shall function as per the set trading logic for buying or selling the shares and the process continues until the exit point.
Algorithmic Trading Process:
The process of algorithmic logic exists in this manner:
You opt to buy ONGC ltd shares provided the share price is above the 220 day moving average of the stock. It means the trading strategy is built on the moving average strategy.
You can opt to sell the ONGC ltd share if the existing market price lies below the 220 day moving average of ONGC ltd, that means, it will exit the market.
Steps Involved in the Algorithmic Trading: