Frequently Asked Questions for any user who needs an information of Algo Trading software
Algorithmic trading is the process of using computers programed to follow a defined set of instructions (an algorithm) for placing a trade in order to generate profits at a speed and frequency that is impossible for a human trader. The defined sets of rules are based on timing, price, quantity or any mathematical model. Apart from profit opportunities for the trader, algo-trading makes markets more liquid and makes trading more systematic by ruling out the impact of human emotions on trading activities.
In layman terms, algo trading completely eliminates the need for manual intervention. Once the rules of the logic have been coded into the algo, it will carry out end-to-end automation of trading ie. tracking the market for opportunity, placing the order, monitoring stop loss and risk, squaring off when required.
Algos can be used for trading on any exchange segment- equities, F&O, foreign exchange, commodities as well as cryptocurrency. Indian exchanges like NSE, BSE, MCX, NCDEX, FX, or crypto exchanges like BITMEX, BITFINEX, etc.
Consider the below example:
When trading manually, a trader’s usual work flow will be as follows.
Yes. It is legal in India.
The regulation demands that the broker should take the approval on your behalf, you as a retail trader cannot go to the exchange and ask for approval.