How Algo Trading Works
Algo trading is nothing but “Machine Trading” in which the machine/system trades on behalf of you. You have the opportunity to control the system by pre tuning / fine tuning the same as per your requirement or based on market developments or movements.For example, when a Market is going to have a “Gap up opening”, it means, the market is going to open at a higher level than the usual expected level and Algo should also be made to work at par with a gap up level.
How Algo Trading Works
Algo trading is nothing but “Machine Trading” in which the machine/system trades on behalf of you. You have the opportunity to control the system by pre tuning / fine tuning the same as per your requirement or based on market developments or movements.For example, when a Market is going to have a “Gap up opening”, it means, the market is going to open at a higher level than the usual expected level and Algo should also be made to work at par with a gap up level.
Algo Trading in India
The recent phenomena is Algo is “Humanoid Robot Algorithms” where fully automated bots with a certain level of human intelligence have taken over the trading process.Now the market is gradually getting into the advanced level as Algos can be exclusively tailor made, based on individual priorities, suiting their trading pattern.Lot of research work is going on in Algos to bring-in more sophisticated Algo trading systems and many bots are launched periodically using Algo / AI keys.
Understanding Algo Trading
The same logic goes well for a “Gap down opening” also and the vice versa happens. Automated trading with Algo System is the happening area in share trading and lot of developments are happening. More such products and services are in the pipe line in this sector & the coming years will be have many exciting opportunities in this area. This suits people who don’t want to have their hands-on in trading & but still wants to get market returns for their hard earned money. Algo trading or investing can happen in equity due to the technically advanced Algo keys & AI keys which are embedded as a part of the trading platform, to enable trading / investing under the auto pilot mode.Even though India is the number one market in the world for “Futures & Options” in terms of volume of transactions, F&O through Algo has not become as big as the regular market. The reasons are like, the acceptance of Algo as a mode of trading & the lesser penetration and awareness of Algo as a concept. The trust element on Algo is somewhere not upto the mark. India has a long way to go in terms of making a dent in its volume of transactions with Algos.
