Algo Trading – The Day Trader VS the Millisecond Trader

How many trades can a human execute in a day manually? maybe few hundred or thousands before his finger will become numb.

 

 

 

 

 

 

 

 

 

 

 

 

In today’s hyper-competitive and cost-conscious trading environment, the big market participants (banks, fund managers, etc) have turned to computerized algorithms. provided by brokers Algorithmic trading is the method of using pre-programmed computer systems for placing in the financial markets. Computer science and technologies have become a must-have for market the major market participants seeking to gain new business and retain their current clientele. Trade carried out using automated machines is known as algorithmic trading. Algorithmic trading can be defined as “placing a buy or sell order of a defined quantity into a quantitative model that automatically generates the timing of orders and the size of orders based on goals specified by the parameters and constraints of the algorithm”. The rules built into the model attempt to determine the optimal conditions for a trade to be placed. Algorithmic trading is a way to systematize a trader’s execution strategy and implement it by a state of an art hardware and computer programming technologies, creating an autonomous trading machine which operates without any human interference. Algorithmic trading or computer directed trading cuts down, time, manpower and other transaction costs and-and enable fund managers to take the craft of trading to its optimal level. Algo training aims to enhance the competitiveness of traders of all levels in the financial industry. It is designed to assist professionals to take up a leadership role in the markets while improving their knowledge. Today this industry attracts some of the finest minds from computer science and finance sciences in the goal of creating the ideal trading machine.
Andrew Bradford defines Algo Trading in his book “The Investment Industry for IT Practitioners: An Introductory Guide” as ““placing a buy or sell order of a defined quantity into a quantitative model that automatically generates the timing of orders and the size of orders based on goals specified by the parameters and constraints of the algorithm”.
Quantitative trading is another term used to describe this industry It is estimated that more than 80% of all stock market trading transactions performed in the US were executed by algorithmic tradings,
other terms know in this sector is. Algo Trading Robot, STP Traning, ECN Trading, automated trading, and black-box.

When it comes to retail traders there are many software providers which offer different trading software for CFD, Forex binary options and other types of trades. This appication are commonly marketed as trading robots.

Isaac Asimov’s “Three Laws of Robotics”

A robot may not injure a human being or, through inaction, allow a human being to come to harm.
A robot must obey orders given it by human beings except where such orders would conflict with the First Law.
A robot must protect its own existence as long as such protection does not conflict with the First or Second Law.