Emporio Trading Explains the Benefits of Algorithmic Trading

PORT VILA, VANUATU / ACCESSWIRE / May 31, 2018 / Algorithm trading is a very advanced and sophisticated investing mechanism which uses complex mathematical formulas and models to make quick decisions and transactions in financial markets. According to a recent study from FinTech research company Technavio, algorithm trading is expected to continue growing at a global annual rate of 10.3 percent through the year 2020. Emporio Trading, an industry-leading online Forex brokerage firm, explains why traditional investment institutions are building tech-savvy algorithm platforms to help improve market intelligence and long-term trade decisions.

The expert panelists from Emporio Trading explained that there are various algorithm trading strategies being implemented by both large firms and institutional brokers today. However, nearly all of these advanced solutions have the same focus — to predict future stock prices by using past trading analysis. Recent studies conducted by Nature Scientific Reports indicated that even Google and Wikipedia searches can be used in algorithms to assist during the information gathering phase. Weekly and monthly search averages for a particular term (e.g. Loans by Private Banks) can be measured to buy, hold, sell or re-buy stocks for that period. Algo (algorithm) traders are also using the mean reversion theory, which states that the prices of stocks converge to their average value over time, to execute orders automatically if a price moves out of a defined range. While selling high performing stocks and buying low performing ones is a simple, widely-used strategy, having the technology to set strict parameters and carry out orders autonomously removes almost all legwork for the investor.

Essentially, these computer-directed trading models turn pieces of information into intelligent trading decisions by analyzing every quote and trade in the stock market and identifying liquidity opportunities. Because algorithms are written in advance, their functions are executed automatically as and when required, without any user guidance. As such, Algo traders generally enjoy three benefits over the traditional investor – speed, accuracy and lower cost. Algorithms can execute on multiple indicators simultaneously, so orders are carried out in a fraction of a second, removing the chance of human error and making greater opportunities available at better prices. For example, in the Forex market, changes in exchange rates can be continuously monitored 24/7 and acted upon immediately if necessary without any user intervention. Traders do not have to follow up on their stocks frequently, allowing them more time to explore and focus on other investment opportunities. Most importantly, Algo trading mitigates risk and ensures security for investors. Algorithms prevent information leakage for those who do not wish to share quotes; in addition, they calculate risks continuously and accordingly hedge a position in the market, leading to minimum losses.

Headquartered in the Republic of Vanuatu, Emporio Trading is a globally recognized Forex Company that offers the industry’s most competitive pricing, reliable trade execution, and innovative trading tools. Today, Emporio Trading is a comprehensive trading center with five types of instruments to trade 48 currency pairs, metals, indices share, and cryptocurrencies.

EmporioTrading.com – Worldwide Forex Market Leader: http://emporiotradingnews.com

Emporio Trading – Explores the Role of Institutional Investors in Currency Trading: https://finance.yahoo.com/news/emporio-trading-explores-role-institutional-141000106.html

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SOURCE: EmporioTrading.com

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