What is Algorithmic Trading?
Share market is a well-known platform which not only gives
details about the economy of the country but also helps people to earn money.
In the share market, people can invest, do trading and earn money regularly. If
you are looking to make a regular profit then this is the right place for you
to build a portfolio. People who are well aware of all the market trends and
movements may earn a good amount of money. Many people who are a novice in
trading try to enter into trading without having proper knowledge about algorithmic trading. So the market moves based on supply and demand since the
quantity of shares is the same.
For the traders who want to take it as a business it is
necessary to know the ins and outs of the market first on the basis of which
they can have better information as well as options to have accurate trade and
increase profit margin. For this purpose they need to know the algorithm which
drive the market and make it possible to place the order or set a stop loss to
prevent the damage to the profile and loss. This algorithm is little
complicated to learn and understand and hence it is not possible for everyone
to learn the same.
What is the movement of the market?
It is really interesting to know how the market moves. Well,
if you look on the website, you will find the list of all the shares and their
quantity, also it is available on computers. Sometimes it happens that there is
some news and buyers buy shares, it increases the price of the share since
demand increases. If a seller increases supply and demand decreases prices may
go down. Also, you will find various limits such as lower limit as well as the
upper limit in the share price movement which is also known as the circuit.
Sometimes it happens that sellers and buyers are less in number which causes
the fluctuation in prices of shares. So, in short, the whole market works based
on supply and demand of the concerned shares.
What are the limits?
People who are traders may have a fixed mindset, hence it is
needed to know the limits. People while trading may set stop loss and limit as
per the movement of the market. So, stop loss is used when the prices fall and
a trader wants to protect itself from the damage of loss. Once the prices reach
the stop-loss limit, shares automatically get sold and further damages are
prevented. Also, if the prices hit the limit, the shares are sold and profit is
made. Also sometimes it happens due to volatility prices going up and down, during
that time also traders can have profit since the shares get sold. People who do
not want to have any damage may prefer to get a limited profit, also it will
help to gain money. For any prudent trader, it is required to have limits since
it can save one from having huge damage.
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