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johnsonwalter

johnsonwalter   , 27

from Boise

Statistics

The massive Benefits that Algorithmic Trading Creates for Your Business

https://www.youtube.com/watch?v=5C_OE0l7TdY&feature=youtu.be

Algorithmic trading is also known as automated, black box trading or algo trading. It is the use of computers which have been programmed to follow a set of instructions to determine whether to make a buy or sale in the stock market. The system is adopted by people who want to move a lot of business and make as much profit as possible within short periods in the stock trading day.

For instance, the computers could be programmed to sell shares of a stock when on a trading day, the moving average falls below the 200-day movement average.

Here, are the benefits which come with getting the right algorithmic trading strategies and how they can transform your experience with the stock trading business.

       1. Trading offers maximum profit

There are two aspects that make algo trading perfect. First, sales are made when the shares are moving well, which means that they are selling well. On the other hand, if a certain stock starts performing poorly, the system is programmed to make a sale before the drop creates massive losses for the owner of the shares. The shares are therefore bought and sold at the ideal times, which maximizes profit. There is also the fact that trades are timed accurately, which reduces the possibility of price changes as a result of time differences.

      2.  It is easier to create strategy

The second benefit is that all the data concerning the past transactions is stored within the systems. Therefore, the system can be tested and the historical data used to determine the changes which should be made to the current trading strategy, in case it is not as effective as it was projected to be. There are also simulated and automatic tests on the different market factors at play, which reduces the possibility of a wrong prediction.

     3.  Lack of the human element

There is a benefit that comes from the human interaction in the trading process. However, human involvement also comes with its demerits, and one of them is that too much emotional involvement in the trading process leads to mistakes. The machines will not have this element and all the trading decisions will be based on pure logic. This will make for accurate decisions.

These are some of the benefits which come with algorithmic trading. The machines can be manipulated to assess the past trading data and get the best trading strategy. This reduces the possibility of losses and maximized the efficiency of the trading process.

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