Time is precious wealth !! In the world of stock market, ever thought of saving time and investing more accurately with less time? Here's the term 'Algorithm Trading' for you. It is the system of execution of orders by using automated pre-programmed trading instructions by keeping in account of variables such as time, price, volume. It is short-term trading system which helps you in keeping constant eye on changing market conditions i.e. price and volume. It allows to test before going live in real market. It enhance human trading by equipping them with machine power 'Algorithm Trading'.
Algorithm trading helps investor by saving ample amount of time by placing large amount of orders in fraction of seconds that also without any errors. The trader no longer needs to monitor live prices and graphs or put in the orders manually. The algorithmic trading system does by correctly identifying the trading opportunity. It lowers the risk by cutting out emotional and psychological factors as it depends on your algorithm strategy made by indicators and patterns and not on gut feelings.
Requirement to Implementing the algorithm using a computer program is the final component of algorithmic trading, accompanied by backtesting. The challenge is to have expertise in computer programming with right infrastructure to handle the historical and broadcast data feed. Many tools provides all the features but they are too complex to understand and expensive at times to give overall profit. As said earning money is not easy !!
Keeping Trading !!