Advantages of Algo Trading
Speed:- Algorithms can execute orders within milliseconds – far faster than human traders.
Accuracy:- No manual entry means reduced chances of human error.
Backtesting Ability:- Strategies can be tested against historical market data before going live.
Discipline:- The system follows the strategy strictly, removing emotional biases from trading.
Multi-asset Trading:- Algorithms can monitor and trade across multiple stocks and markets simultaneously.
Reduced Costs:- Because trades are executed faster and more efficiently, transaction costs can be reduced.