Algorithmic trading

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Algorithmic trading is a method of executing orders using automated pre-programmed trading instructions accounting for variables such as time, price, and volume. This type of trading attempts to leverage the speed and computational resources of computers relative to human traders. In the twenty-first century, algorithmic trading has been gaining traction with both retail and institutional traders. A study in 2019 showed that around 92% of trading in the Forex market was performed by trading algorithms rather than humans. It is widely used by investment banks, pension funds, mutual funds, and hedge funds, which may need to spread out the execution of large orders or carry out trades too quickly for human traders to react. However, it is also available to private traders using simple retail tools. Algorithmic trading is widely used in equities, futures, crypto, and foreign exchange markets. The term algorithmic trading is often used synonymously with automated trading system. These encompass...

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