Algorithmic Trading
a.k.a. Algo trading, Automated trading, Systematic trading
Trading where a computer program decides and places orders according to pre-set rules.
In algorithmic trading, you write the rules once (when to enter, how big, where to exit) and code carries them out, often faster and more consistently than a human could. It ranges from a simple moving-average bot to bank systems that handle millions of orders.
Code has no fear or greed, but it also has no common sense. A bug, bad data or a market that behaves differently from the past can rack up losses at machine speed. Test on a demo account and watch it closely.
Trusting a bot because its backtest looked perfect, without checking it on fresh data the rules never saw.
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