What is Algorithmic Trading?
Buying and selling transactions in the stock market and financial markets are carried out automatically by software within the framework of predetermined rules.
Overview
People get tired, make emotional decisions, and react slowly. Algorithmic trading, on the other hand, only looks at data. You load rules into the software, such as buy when a price you specify falls and sell when it rises, and the system monitors the market 24/7 and carries out these transactions for you within milliseconds.
How it works
First, a strategy is determined, then this strategy is converted into a computer code. The software constantly monitors market data and transmits the order to the exchange as soon as your rules are met.
Where it is used
It is used in stock markets, cryptocurrency exchanges and high-frequency trading institutions.
Commonly confused with
It can be confused with artificial intelligence but does not always include artificial intelligence; Sometimes it's just simple 'if-then' rules.
Frequently asked questions
Does it always make a profit?
No, if the strategy is wrong, it can cause losses very quickly.
What happens if my internet goes out?
Transactions are usually unaffected since they are done server-side, but it becomes difficult for you to keep track.
Related terms
Related tools
This explanation was written in plain language for TreScout and machine-translated from the Turkish original · the Turkish version prevails. If something looks wrong or missing, write to hello@trescout.com. Read in Turkish →