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Introduction to Automated Algorithmic Trading

Lets breakdown the topic backwards, “Automated Algorithmic trading”

Trading is buying and selling of stocks.

Algorithmic trading is buy and selling of stocks based on certain pre-set conditions.

For example, one would want to buy a stock when its previous day’s closing price is higher that the opening price for that day. So simply, a ratio of close/open > 1 would quantify the qualitative idea.

Automated algorithmic trading is buy and selling of stocks based on certain preset conditions automatically using compute codes.

As an example above, an automated algorithmic trading software will trade when the ratio of close/open is greater than 1. And as soon as that happens, the buy order is executed.

The concept sounds simple, isnt it.

The implementation is the tricky part.