Algorithmic Trading

Posted in Finance, Accounting and Economics Terms, Total Reads: 150

Definition: Algorithmic Trading

Algorithmic Trading is an automated trading mechanism that uses a set of logical programs in a computer with the help of which profits can be maximized. Algorithmic Trading follows a set of rules and various mathematical concepts are applied in order to arrive at the final result which makes this type of trading to take place in the least possible time at a very high speed.

Whenever such trading needs to be done, humans are not that capable of taking crucial decisions because of emotional and personal biases and hence this type of trading mechanism enables in taking the best decisions without human interference.

For example, when a broker wants to buy/sell stock at a price as suggested by his client, he can use the algorithmic trading in order to automate his trading task and to generate profits.



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