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Algorithmic trading strategies need an identification opportunity of the market forces profitable in earnings or cost reduction.
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A Brief Description in the Algorithmic Trading and Types of Strategies!
Algorithmic trading deploys a computer program that works on a defined set of instructions to place a deal in the market. The trade is generally capable of generating profits frequently, swiftly, and efficiently, which is quite impossible when a human trader or broker is involved. The defined instructions are purely based on quantity, timing, price, and other mathematical models. Apart from considering and figuring out profit opportunities for the clients, algorithmic-trading renders trading more systematic and markets more liquid by ruling out the impact of human emotions on trading activities. Algorithmic trading has a systematic approach to active trading than other methods based on trader’s intuition or instinct. Algorithmic Trading Strategies Algorithmic trading strategies need an identification opportunity of the market forces profitable in earnings or cost reduction. Some commonly used Algo-trading strategies in the market are: Trend-following strategies Arbitrage Opportunities Trading Range (Mean Reversion) Volume-weighted Average Price (VWAP) Time Weighted Average Price (TWAP) Implementation Shortfall