Algo Trading software can provide precise market entry and exit. The beauty is that it includes features like back-testing & paper trading which allows users to execute their strategy and examine the outcomes. Algo Trading platform that lets users create their own strategy and trade at a pace and frequency that is impossible for a person to achieve.
Today investors are very concerned about market volatility and unpredictability. Algorithmic Trading is the technique of using pre-programmed trading instructions to execute trade orders at rapid speed in the financial market. Trading software is used by investors and traders who input trading instructions based on time, volume, and price. The trading program executes the investors orders once the predefined instructions are triggered in the market. Mutual funds, hedge funds, insurance companies, banks, and other financial institutions employ algorithmic trading to perform a large number of high-volume trades that would be impossible for humans to accomplish otherwise.
In 2010, algo trading accounted for 9.26 percent of total equities transactions. In March 2020, this percentage had risen to about 18%. In the derivatives market, the percentage of high-frequency trading orders increased from 78% to 98% between 2012 and 2017. At this rate, algo trading may soon be the most popular method of stock market trading.
Algorithmic trading is not as difficult as it may appear; modern trading software can provide precise market entry and exit. Some traders, on the other hand, utilize customized software with their own indications and strategies. Although customized software offers greater flexibility and improved trend analysis, it requires a high level of technical expertise, coding abilities, and language ability.
Investors and financial institutions employ algorithmic trading as:
• It can execute trades or large-volume orders quickly.
• Orders are placed automatically and with great precision, with no human error.
• The orders are processed in seconds; which prevents major price fluctuations.
• It enables transaction costs to be reduced.
• Investors can make profits by identifying different priced stocks in diverse marketplaces.
• Big financial institutions can execute a high number of orders without impacting the asset's market price.
• It allows for more varied trading, faster order entry, reduced emotion, and a highly disciplined investing approach.
The beauty of Algo Trading is that it includes features like back-testing, which allows users to execute their strategy and examine the outcomes. One might also use simulation in Algo Trading to test the strategy in real-time without having to make any actual deals. Algorithms, on the other hand, should be utilized only when absolutely confident. Furthermore, risk management in algorithmic trading allows for multiple levels of limit setting.
Intelligent investors use perceptive strategies to avoid losses. The use of AI-driven algorithmic trading to forecast future trends and stock prices is highly beneficial. Furthermore, like with other businesses and professions, risk can be reduced, but not eliminated. When a successful investor suffers a loss, he or she does not give up but instead takes fast corrective action to avoid more losses, and algorithmic trading may help in this situation as well. It does not imply that one should rely solely on algorithms and artificial intelligence; a thorough understanding of the stock market is required of every aspiring investor, and one should continue to improve their knowledge through credible sources.
To begin working with Algo Trading, users must have a Broker account, User ID, API key, and secret key. Following that, the user is required to create a strategy based on their entry and exit condition, technical indicators, candlestick or time interval, stop loss, and target. Also, the user can select timings for their strategy to run. After entering into the software, the user will enter the API key and Secret key issued by the broker such as Zerodha, Angel Broking, and Alice Blue which acts as authentication for any trading done between the trader and the broker. Then the users will Select The Symbol for which they want to trade and also the number of shares to be traded. After deciding the number of shares to be traded, then comes the automatic trading. Automatic trading is a code base that is computer programmed and will be initiated automatically based on the strategies' entry and exit conditions. After the user starts the algo trading, the system will place the orders and the trader no longer needs to put the orders manually or keep a watch for live prices and graphs. The algorithmic trading system automatically does it.
Sri Technocrat provides the best Algo Trading platform in India that lets users create their own strategy and trade at a pace and frequency that is impossible for a person to achieve. It's a complete API based trading.