Algo Trading Leaving Traditional Traders Behind


Recent reports suggest the global ranking of India in the algorithmic trading market will grow from No. 7 to No. 3 in the next 10 years. In India, more than 40 percent of traders are using algo trading software.
Algo Trading Leaving Traditional Traders Behind

Recent reports suggest the global ranking of India in the algorithmic trading market will grow from #7 to #3 in the next 10 years. Globally 75% of traders are using algo trading software and in India, it’s more than 40%. Today, instead of trying to find opportunities on their own, traders are automating their trading strategies to generate and execute a signal whenever an opportunity arises.

Technology & tools have offered retail traders more capability to perform highly disciplined trades in fast-evolving market conditions by decreasing human intervention. The greatest advantage of algo trading is their ability to detect arbitration possibilities in microseconds and execute trades in order to maximize profits even before a human trader blinks.

Recently algos have also been created to trade upon news, reports, keywords or any similar events. In algo trading software rules are pre-defined, back-tested and trades are placed at pre-defined levels.

To be profitable Algo trading is now a requirement and not just a tool for survival in the stock markets because automation is the future of trading.

Although algo trading works better than traditional trading in many ways, human activity is still needed to some extent for stock analysis and algo implementation.

Advantage of Online Algo Trading Software

1. As soon as the trigger is generated, the order is executed. There is no time lag or delay. If you are doing it manually, first you get the trigger, then go to the trading account and enter the order, all of which take time and your signal is likely to be missed.

2. Human emotions are not involved. Once, a stop loss or limit is set, the algo executes it automatically.

3. If the algo is well-tested and implemented with all set of rules and calculated during back testing, it will only give you profits.

4. If you make a profit in your previous trade, a percentage of it can be deployed in your next trade. So your trades will reposition automatically and buy/sell signal is generated.

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