What You Should Know to Win at Algorithmic Trading

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Among all the trading techniques, one of the most popular and sophisticated is algorithmic trading. Algorithmic trading uses automated computer programs following a defined set of instructions. In theory, algorithmic traders can generate profits with speed and frequency undoable by human traders. Algorithmic trading makes up a significant share of trading activity for various asset classes worldwide. According to Mordor Intelligence, it accounts for around 60-73% of equities trading in the US markets, the largest in the world. In the global commodities market, it’s about 35-50%. Here’s a simple example of an algorithmic trade. Write a computer program that: Buys 100 shares of a stock when its 30-day moving average falls below the 60-day moving average; Sells 100 shares when its 30-day moving average goes above the 60-day. There are more complex algorithmic trading forms, but this is a good introductory example.