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Basics

Algorithmic trading — definition & meaning

Using automated programs to place trades by predefined rules.

Algorithmic trading uses computer programs to enter and exit trades automatically based on coded rules, removing emotion from execution.

It ranges from simple retail 'expert advisors' to sophisticated institutional systems. Automation doesn't guarantee profit — a flawed strategy just loses money faster, and bugs or bad data can be costly.

The information on Trding.io is for general information only and is not investment advice. Trading involves a real risk of losing money, and most retail traders lose. Never trade money you cannot afford to lose.

Related terms

Backtesting
Testing a strategy on historical data to see how it would have done.
Trading plan
A written set of rules for what, when and how much you trade.
Expectancy
The average amount you can expect to win or lose per trade.
Long
Buying an asset expecting its price to rise so you can sell higher.
Short
Selling an asset you expect to fall, aiming to buy it back cheaper.
Bid
The highest price a buyer is currently willing to pay.

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