AlgoAchievers: Stock Markets and Algo Trading:
Indian Stock Market and Algo Trading:
Algorithmic trading has gained a lot of popularity due to its ability to handle massive work trends that are not possible only by human intervention. Every quote is analyzed in the Stock market through the pre-set algorithms. While the addition of any manual work, one needs to be aware of the additional charges that will get added as labor costs, therefore replacing machines with all the works possible and constituting error process is the goal. Also, Algo trading will provide lesser risk due to the involvement of precise machine-based trading.
Market Overview:
The pacing markets are expected to grow with an ascending graph in Algo Trading for a few years from now. The Algorithmic Trading shall oversee at least a CAGR of 11.23% for years to come (2021-2026).
The traders have kept a track record of their trading activities and investment portfolio by using different technologies available in the market. But the involvement of intelligence and technology has given it a whole new perspective and has yielded opportunities in the market. There are a lot of factors that promote the need of inculcating Algo Trades for better results and saving a lot of other resources. The Algo Trades shall definitely see a bright future.
Algo Trades also with the help of pre-defined rules is able to analyze every quote and trade that is present in the stock market. These programs help and restructure the opportunities and liquefy the stocks. A sudden rise in Bitcoin which was around 20% was observed in April 2020, the surged value of Bitcoin was speculated to be an outcome of Algo trading. However even if we can’t say it for sure, but they’re definitely is a fair contribution of Algo Trading towards this uprise of markets.
Liquidity plays a vital role when there is a consideration of the financial market. Therefore it can be fair enough to state that Algo Trading constitutes a situation that enables a situation that maintains liquidity and also fosters the qualified process to buy and sell orders at a high level, without any participation from the humans as such, therefore creating an environment that is apt to run a very progressive and result-oriented process.
The COVID also has affected the markets enormously. The same was the reason for the market plunge in 2020, March. The results of the latest survey presented by JPMorgan, found that the tickets sizes of the traders were bigger than USD 10 million, which were around 60% of them.
Scope of the Report:
Algo Trading or Algorithmic Trading or Black-box trading, or Automated trading, is a predefined method of executing trade orders, which is precisely done with the help of auto costumed programs related to reading.
There are many variables related that affect the market and vice versa, and those bits of the information that is exchanged from both sides are analyzed, processed, and restructured, again and again, to assemble the information and provide the apt data for online trading. The variables that affect the market are as follows, price, time, the quantity of the trade, and other related factors.
What does an API do?
With the changing trends, the brokers in the market also have deviated towards this path in markets. Many brokers have now started providing API, which is the Application Programming Interface. The access to which is given to clients, and it acts as a network between the broker and the client. In another word, the clients are the end-users of this API and the stockbroker is on the functionality end. It also allows the investors to use a third-party application to build their front-end features.
The APIs are used by the investors to automate the process and yield a better result. It also helps the user or the investor to test an investing strategy plan according to the possibility of the same. Therefore API is seen as advancement to Algo Trading can have many more new features added to it and formulate better yield.
Key Market Trends:
Institutional investors, invest money to purchase securities, real estate, or any other kinds of investment assets such investors can be banks, credit unions, insurance companies, hedge funds, investment advisors, and mutual funds companies. Institute investors go through a number of computer-driven algorithms strategies in trading markets, which fail to the trade influence and the market makers. These trades help markets to fall in right place and avoid any complications and garner more profits.
The investors are expected to execute a very high-frequency number in trades which might not be as easy as it may sound. The whole amount needs to be broken into parts and continued efforts are needed to be made to be able to deliver 1,00,000 shares at a time. An Algo Trading technique may be the push required to deliver such a necessity and delicate trading move that is required.
The high-frequency traders are market stealers, they are supposed to be the ones that captivate the maximum number of trades per day. Computer programs are being used to automate the trading process and speed up the execution of the trades. Artificial intelligence here plays a major role. The investors who trade with the help of bots have an upper hand because of the presence of advanced technology. The Marketers are aware of this and therefore dodge with online trades.
Following the trends is one of the most well-known techniques used by the trader that requires a lot of knowledge and smart use of algorithms to work with. The approach identifies specified patterns accustomed to performing the buying and selling of assets. Additionally, there’s high adoption of algorithmic trading because traders don’t have to make any predictions or price forecasts to become profitable. After all, the algorithmic trading strategy relies on the specified trends instead of predictive analysis.
Algorithmic Trading Market Share:
There has huge technological advancement in recent years and even including the application of algorithm trading in numerous sectors such as banks and other financial institutions across the region; it is expected to increase the market growth.
Of overall equity trading in the United States, Algorithm trading almost captures about 60-73% of the overall trading.
Algo Trading has many benefits, and a few notable ones are shared below:
Pricing: Algo Trading is an automated process that helps the Bots work and replaces most of the manual trauma. Therefore the execution of the best possible price for any trade is possible with just one click. You can therefore buy trades as per your need and experiments at the current market price and without much effort.
No waiting Period: Everyone is aware of the manual process involved and how difficult it is to get through such processes quickly in various institutions. But the Algo Trading even makes this interaction of yours simple and quick. You can order any trade accurately and quickly after the order placement. Time is an important asset which is very important while reading; therefore what is better than trading at your convenience.
Regular Updates: While you might keep checking for trades to buy and delay of it might make you wonder if the current prices of the same. The same lapse is insignificant in this case because Algo Trading updates the deals instantly. Therefore also manages to avoid any cost-related issues or variations. No need to waste your time constantly checking.
Cheaper Prices: Above we have discussed in detail how Algo Trading is helping save a lot of money due to the missing labor factor. When human intervention is reduced, this reduces the expenditure on the salary and other maintenance costs, therefore, reducing the transaction costs altogether. Save money and invest smartly.
Auto Updates: Markets are constantly changing while it is nearly impossible for humans alone to keep in touch with every possibility and aspect of the market that changes and quickly even update in the required areas but with robots, the process is much easier and also can help you stay touch with the most updated information.
Reduced human error: Humans and their ability to make mistakes are widely known, while it’s just not that it’s one of the factors that make us different from the machine, but while trading or issues as such probably reduced error is appreciated.
Emotions or other related factors eliminated: We think, we feel, we emote, our intelligence can take over the possible required outcomes, but luckily machines can only provide rational and logical replies.
FAQ Section:
Having how much money can make you a full time trader?
That completely depends on the knowledge of the market and trading you have, because without the understanding about your investments, all your money could be like you are dumping in a black hole, however, if you know the trading you can start with little and can go far, but always be aware of the uncertainty of the markets.
Just being a Day trader, can earn you a living?
Your experience, knowledge, your ability to risk, your investments, and the time you have in your pockets decides how far you can go as a trader and how much can you make per day being a trader.
How can I make 100 dollars a day trading stocks?
It is a tedious process, and takes time, but is possible if you trade constantly with complete efforts and make sure to invest your time and money in the right way, you can log on to our website AlgoAchievers. if you wish to trade and earn safely with the help of our robots.
Can Day Trading make you rich?
Day trading is not a money-making game, day trading is only for those who fall short on time, money, or just want to experience trading and do not expect any huge profits out of trading. Day Trading can give you a sort of exploration to trading, but making you rich would be a little difficult for day trading to be doing.
If traders have about 10,000 dollars Accounts, what is the expected amount he will make per day on average?
The earning might differ from investor to investor due to the involvement of various other factors that come into role play when we talk about a trader. However, with so many accounts you can definitely make a min of 400 dollars to a maximum of even 10,000 dollars.
Is it possible for any trader to make 100k a year by only Day Trading?
Yes, if you have accounts worth more than 10,000 dollars.
How much do professional traders make per month?
Professional Traders are called that because they know their game well, and they are even ready to risk if required. Their earing is a proportion of talent; hard work and time that they dedicate to trading and it can up to 1 lakh rupees per month.
Is it risky to trade online?
Risk is an undeniable factor of trading, but here the risk factor involved is not due to the mode of the process carried out, but due to the job itself. New investors will always need to be aware of the market and how unpredictable it can get, therefore will need to function accordingly.
Is Algo Trading safe?
Algo Trading indeed has an upper hand but if its safety could involve a lot of other factors that come handy. You will need to be aware about the trends, the markets, the risks and all other factors that come as bi products with Algo Trading, indeed if you are aware about these things then you definitely can call Algo trading a better mode of trading.
Algo trading is a skill, if you wish to learn, you can do so by referring to our previous blog on AlgoAchievers AlgoAchievers.
You can always reach out to our team through contact details, to understand Algo trading better and to start trading with us.