Algorithmic trading (also known as automated trading, or algo trading) is a process of executing orders using the pre-programmed computer algorithm in the running financial market. It generates profits at a speed that is not possible for a human trader. Algo trading software trades in a more systematic way without the impact of human emotions on trading activities using MetaTrader4 and MetaTrader5. You may visit Basics of Algorithmic Trading for more information on Algo Trading.
Using A1 Advance Infotech as the platform for your algo trading will be more beneficial for you. We provide the best strategies which minimize your losses and increase profit. The algorithmic trading software automatically buys and sells trades by identifying the trade opportunities effectively and accurately.
Benefits of Algo Trading:-
Trades are managed with the best feasible prices.
Increases the chances of execution of trades at the desired levels.
Correctly timed trading is done.
Reduces transaction costs.
Keep checks on multiple market conditions.
Reduces the risk of manual trading errors while placing trades.
Algorithmic trading can be backtested using historical and real-time data.
Reduces human mistakes based on emotional and psychological factors.
Algo Trading Strategies
Here is the list of commonly used algo trading strategies:-
This is the most common algorithmic strategy which follows trends in moving averages, channel breakouts, and price level movements, and is related to technical indicators.
Arbitrage is the buying of a dual-listed stock at a lower price in one market and selling it at a higher price in another market. So that you can trade in a risk-free manner.
Index Fund Rebalancing
Index fund creates profitable opportunities for algo traders, who capitalize on expected trades that offer 20 to 80 basis points profits depending on the number of stocks in the index fund just before index fund rebalancing.
Mathematical Model-based Strategies
Mathematical models allow trading on a combination of options and the underlying security. (Example: delta-neutral trading strategy)
Trading Range (Mean Reversion)
The concept of the high and low prices of an asset that revert to their mean value periodically is called Mean reversion.
Volume-weighted Average Price (VWAP)
VWAP Strategy breaks up large orders and releases smaller chunks of the order using stocks historical data.
Time Weighted Average Price (TWAP)
TWAP Strategy breaks up large orders and releases smaller chunks of the order using even divided time slots from start to end time.
Percentage of Volume (POV)
In POV the algorithm continues sending partial orders according to the defined participation ratio and according to volume traded in the market.
This strategy targets to minimizing the execution cost order by trading off the real-time market.