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HOW ALGORITHMIC TRADING HAS RESHAPED THE WORLD MARKET?

Time has changed and so does the share market too. Share market has faced a lot of changes over a period of time. But the impact what the algorithmic trading has created on the world market is huge when compared with so many other aspects seen in the market today. There are still a lot of oppositions on this algorithmic trading. But the growth of algorithmic trading and the modulations it has made in the market today must be accepted widely. This article is to discuss some of the key changes that the world market has faced due to the algorithmic trading.

 

Advanced Computerized Trading

 

Computerized trading telephony trading or wholly called as electronic trading was not new to the share markets across the world. But the way it was used was similar the human sign trading previously. The only advantage it has given to the marketers is the extended boundaries. The marketers were able to trade across countries and continents with the electronic trading. But the human made trading still was not as efficient as the speed has not increased and simple human made errors were often resulting in loss in trade.

 

Advanced Computerized Trading

 

But the invention of algorithmic trading has become a boon to these marketers as the trade procedures will be programmed and the computer automatically does the trade. The best suitable trade will be found by the computers in fraction of seconds, which is not at all possible by humans. Also the trade will be initiated by the computer automatically and the trade will follow the exact algorithms what has been programmed. The traders have got an option of choosing their best suitable algorithm and also they can customize these algorithms according to their needs. The algorithmic trading has given a new dimension to trading.

 

Machine Vs Human

 

The recent debate on machine vs human in trading was unanswered. It is really tough to answer that whether the computerized trading or human trading is the best. Because, the computerized trading will follow one algorithm repeatedly, and if something goes wrong in trade, it may not identify it and will continue the process until the trader identifies and stops it. More the algorithm depends on the criteria it has been programmed with. But it is true that the speed at which it processes the trade can never be matched with the human trading at all.

 

In case of the human trade, the humans will identify any problems in the trade and will be cautious every time when they are involving in trade. If something goes wrong in trade, unlike the algorithms, they will stop the trade. But the speed at which the humans’ trade is far lagging behind the speed of the automated trading. Thus it is not fair to compare the human trade with automated trading. To learn more about algorithmic trading, you can go for an algo trading coursesavailable in many world class trading institutionsacross the world.

 


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