A set of directions or process for performing a particular job or purpose is called an algorithmic trading uses computer for swift traders. This kind of trading encompasses timing, price and quantity. It also ensures systematic trading and makes market liquid. 1. Algorithm trading Strategies: The easiest and simplest strategies is trend following strategy it does not need predictive analysis but follows trend moving averages channel breakout and price level movements. 2. Arbitrage trading: Arbitrage or risk free profit is based on price differential trading here a customer can buy a dual listed store at lower price and at the same time sell is at higher value in another market 3. Mathematical model strategies: There are many mathematical model strategies that provide trading on a set of choices and its underlying strategies. 4. Trading range strategies: Here the algorithm takes the decision of buying or selling the stocks whenever the price soars goes down, In this type of algorithm only partial orders are placed till the entire order is fulfilled, And these orders placed depending on the volumes traded and the participation ratio. 5. Time Weight average Price (TWAP) : A large order is broken and released into the market as smaller chunks at regular intervals. It tries to maintain the average price from start to end. Best price, less transaction cost, no chance for manual error are the advantages if algorithmic trading. It can also automatically monitor different market conditions. It requires a proper stock market analysis software, technical analysis software's, price feeds, forex rate feeds, order placing and back testing capabilities.All Rights Reserved
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