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Algo Trading | March 22, 2019

What are the benefits of Algo Trading?

Finances lure everyone but financial matters aren’t an easy nut to crack. The world of finance is complex and you need some serious superpowers to deal with it. Investments, trading, returns, etc. add to the complexities of the financial world.

Many such instances happen where a human trader is unable to handle the huge numbers of trading. You need to seek help from an intelligent algorithm. This is where algo trading comes into the picture.

What is Algo Trading?

Algo trading is the short name for algorithm trading. It is also known as automated trading & black-box trading.

Algorithmic trading is the process of using computers programmed to follow a defined set of instructions to trade in the financial market. These algorithms can help you place a trade request to produce benefits at a speed and frequency that is impossible for a human trader.

Algo trading has been garnering a lot of popularity in India.

Also Read - Effective ways of trade execution with Algo Platforms

The Benefits of Algo Trading

There are various advantages of algorithmic trading, which are discussed as under:


Algorithms are composed in advance so you can execute the guidelines consequently. The primary advantage of doing this is speed. The speed is fast to the point that it is hard to take note of, as an individual.

You can examine and execute various indicators at a quick speed that is hard to spot. This empowers trades to be analyzed and executed quicker and gives better chances.


Precision is essential in algorithmic exchanging. Much like any other business, precision is the key to getting better outcomes in stock trading too.

Utilizing computers in trading, you can diminish a few errors that may occur when you perform the same action manually. It encourages you to expel any mistakes prior to trading in the live market.

Cost Reduction

You would not be at the risk of losing your income. You don't need to invest a considerable time in checking business sectors as exchanging should be possible without your consistent supervision.

The time spent on observing the market is radically lessened and gives you the chance to take part in different activities.

Back-Testing Ability

Watchful back-testing enables traders to assess and tweak a trading idea. It enables them to decide the framework's expectancy – the normal sum that a broker can hope to win (or lose) per unit of risk.

Diversify Trades

Mechanized exchange of frameworks allows the client to exchange multiple accounts or use different techniques at one time. The computer can scan for trading openings over a scope of business sectors, produce orders, and monitor trades.

Also Read - Dealing with Market Volatility using Algo Strategies

So if we have a look at the overall benefitsof algo trading, they can be summed up the following way:

·  Trades are executed in most ideal costs.

·  Quick and exact exchange order situation

·  Exchanges time effectively and in a split of a second. This helps you maintain a strategic distance from huge price changes

·  Algo-trading makes markets more liquid.

·  Lower exchange costs due to the absence of human intervention

·  Concurrent automated checks that keep an eye on numerous market situations

·   A decreased threat of manual mistakes in setting trades

·  High-frequency trading. This exchange strategy generates great profits by submitting a substantial number of requests at a quick speed, over different markets and various decision parameters, in the light of pre-customized guidelines.


So, considering the benefits that algo trading has to offer, you should use it to trade successfully and create more wealth.

Get Started with Algo Trading

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