What does "algorithmic trading" involve in financial markets? 🔊
"Algorithmic trading" involves the use of computer algorithms to execute trades in financial markets. These programs analyze market data and execute trades at optimal prices based on predefined criteria and mathematical models. Algorithmic trading offers advantages such as speed, accuracy, and reduced emotional bias in trading decisions. It facilitates high-frequency trading and can react to market changes in milliseconds, which is essential in volatile markets. Moreover, it can help investors implement complex strategies and manage risk more effectively, significantly influencing market dynamics.
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