What does “algorithmic trading” refer to in financial markets? 🔊
"Algorithmic trading" in financial markets refers to the use of computer algorithms to automatically execute trading strategies based on pre-defined criteria. It leverages mathematical models and high-speed data analysis to make trades at speeds and frequencies beyond human capability. This method enables traders to capitalize on market inefficiencies, optimize their trading strategies, and minimize risks associated with emotional decision-making. Algorithmic trading has become crucial in modern finance, contributing to increased market liquidity and enabling more efficient pricing mechanisms across various financial instruments.
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