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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