Benefits of Algorithmic Trading Benefits of Algorithmic Trading

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Now that you know what algorithmic stock trading entails, you’re likely already guessing the advantages it can bring. Just to be sure, let’s go over some of the main ones.

Better prices. With algo-trading, trades are executed at the best possible price thanks to being instantly timed to avoid large price fluctuations.

Improved accuracy. If a computer executes denmark mobile database a trade instead of a person, there’s a lower likelihood of a mistake being made. The human factor often affects the levels of accuracy. Hence, when software that uses trading algorithms is involved, precision is increased.

Increased speed. Since algorithms are pre-written and executed automatically, the speed at which trades are carried out is significantly boosted.

Lower transaction costs. Thanks to traders not needing to monitor the markets as closely and execution being carried out without their involvement, their time is freed up. Thus, transaction costs are reduced and traders can engage in other activities.