Algorithmic Trading
About Algorithmic Tradingc
Algorithmic Trading (Algo Trading) is the use of computer programs and algorithms to automatically execute financial trades based on predefined criteria like price, timing, volume, or other market signals.
It combines finance, computer science, statistics, and increasingly, machine learning to build automated trading systems that are faster, more precise, and less emotional than human traders.
Types of Algo Strategies
| Strategy Type | Description |
|---|---|
| Trend Following | Uses moving averages, breakout strategies, momentum indicators |
| Mean Reversion | Buys/sells when asset prices deviate from historical average |
| Statistical Arbitrage | Exploits short-term mispricings between correlated assets |
| Market Making | Provides liquidity by placing simultaneous buy/sell orders |
| High-Frequency Trading | xecutes thousands of trades per second, exploiting micro-inefficiencies |
Languages & Tools
Languages: Python š, C++, Java, R
Libraries: pandas, numpy (data manipulation) ta-lib, bt, zipline (backtesting & indicators) scikit-learn, TensorFlow, XGBoost (ML)
Platforms: QuantConnect (C#/Python) AlgoTrader, Backtrader InteractiveĀ Broke