Algorithmic trading systems operate in financial markets by utilizing complex algorithms to execute trades at optimal times based on predefined criteria. These systems analyze vast amounts of market data, including price movements, trading volume, and historical trends, to predict market behavior. They operate at high speeds, enabling traders to capitalize on market inefficiencies and execute orders within milliseconds. Algorithmic trading reduces emotional decision-making and increases efficiency in trading operations. Additionally, it enables diversification and risk management strategies, making it a crucial tool for institutional investors and hedge funds in modern finance.