Algo trading, an organized way of trading markets since a long time has definite pre-decided rules. The key tenets to this trading include discipline, systematic approach and strictly abiding by the rules. Usually, manual trading incorporates lot of emotions where people tend to make mistakes, whereas in automated trading, there is no scope of emotions. The system takes care of an individual’s investments. Since 2009, Algo trading companies of India have witnessed growing interest from big domestic as well as foreign institutional investors. Commonly, used Algos in India utilize Application Programming Interfaces. This facilitates the investors to choose their strategy and implement it from the broker’s end. Why is Algo Trading Important? It helps the institutional investors to enhance the efficiency of trade implementation and speck fleeting trading opportunities. It adds liquidity in the market, and hasa flip side as well as this trade is blamed for untamed swings and instant crashes in the stock market. Say for instance, when the market hits key milestone, nearly 52- week high / low or 200-day moving average, then algos triggers to a great extent, which magnifies the trend. This is the reason India has strict regulations algorithmic companies. To summarize, Algo trading is quite a rage amongst institutional investors, thereby accounting for approximately 35% to 40% turnover in Indian Exchange. No doubt speed thrills, but at the same time, it kills. This is not just relevant for drivers, but for the investors in stock markets.
0 Comments
Leave a Reply. |
|