Algorithmic trading – is a kind of market place marketing meaning automatical trade execution with the help of marketing robot within a framework of a definite algorithm, inserted in it by a dealer-in-goods.

 

Marketing robots

A computer program with inserted in it marketing algorithm executing dealers-in-goods and making other operations by itself in a stock market.

 

Kinds of robots:

  • Having no power for independent positions‘opening– it analyses large amounts of information about modern market and provides a dealer-in-goods with it to make them decide on the trade participation.
  • Fully automated robot asking for no permission to open a trade. At the same time, the program takes into account all the market risks and possible losses.

 

Kinds of algorithmic strategies:

  • Execution strategy means buying/selling of large number of assets at a Volume-Weighted Average Price, maximally close to the price of the last executed trade. It gives a chance to a wide extent keep costs connected with positions‘opening/closing down and is mainly used by large-caps of a money market such as brokerage companies and  investment funds.
  • Speculative strategy– a classical for dealers-in-goods system aiming at the getting of maximum profit on the base of difference between asset buying and selling cost. It is mainly used by private investors.

 

Marketing robot making

Firstly, it is necessary to download a special app having so called “algorithms' constructor”. Modern automatical marketing systems are very handy and even people not well-versed in programming can make a sound marketing system.

 

 

Algotrading advantages:

  • High accuracy –the robot uses in marketing the execution sequence you will insert in it.
  • Opportunity to get profit since its first days  Even newcomers who got a marketing robot from more experienced colleges can make money in algotrading.
  • Operational readiness – the program can wait patiently for opportunity 24/7 and it will not affect the efficiency of its activity.
  • Operation speed – the system is able to simultaneously analyse a few diagrams, financial quotes and indicators, and also send tens of applications per a second.
  • Flexibility and scalability –robots made by experienced dealers-in-goods can be used everywhere, in every market and stock exchange. Moreover, if necessary they may be used and improved making algorithms more ideal.

 

Algotrading disadvantages

  • Processing complexity. Complexity lies in the program construction. The market is unpredictable and there are few people ever successfully made an ideal algorithm.
  • Expensiveness – is important for the people who do not work out algorithms by themselves (for free),and buy them from more experienced colleges. If a robot is really good it will take much money to purchase it.
  • Improvisation skillsabsence. Financial markets are highly volatile and algorithm is not always suitable for current state. However a dealer-in-goods noticing the changes can rebel against its strategy and win.
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