Algorithmic Trading

Abstract

This paper gives an overview of algorithmic trading. It is intended to inform interested traders of the value of incorporating algorithms into their trading strategies. They must also be warned of the dangers of implementing faulty algorithms. This paper highlights the usefulness of categorizing algorithms. An overview of the most popular algorithms is also given. Methods for comparing the performance of different algorithms in trading specific stocks is discussed. The metrics used to evaluate their performance is also mentioned. Challenges within the field of algorithmic trading are important for traders to consider when choosing which algorithms to implement in specific situations. Finally, the integration of machine learning into the field of algorithmic trading is discussed. This revelation has significantly broadened the scope of algorithmic trading. Machine learning now serves as an essential tool for traders to compete in the fast-paced markets of modern day.