What Is Algorithmic Trading? An Education Guide
The meaning
Algorithmic trading, often called algo trading, means writing a trading plan as fixed rules that a computer can follow. The rules can cover when to enter, when to exit and how much to risk. The computer follows them without hesitation or emotion.
Robotic or automated trading
People also say robotic or automated trading. These are the same idea: a program places or suggests orders based on rules that a person wrote and tested. The program does not think for itself. It only does what the rules say.
What you need to learn first
Before automation, you need to understand markets, charts, order types and risk. A rule you cannot explain is a rule you cannot trust. This is why UNARMED TRADERS teaches the basics first and automation as a later step.
Limits and risks
Automation can still lose money. Rules can stop working when markets change, data can be wrong, and technical faults happen. A system must be tested, watched and limited in size. No system is guaranteed.
Key points
- Algo trading means turning a plan into fixed rules.
- Robotic or automated trading follows rules a person made.
- Learn markets and risk first, automation second.
- Automation does not remove risk.
Trading involves risk. This article is for education and information only. It is not investment advice, and no course or method promises a return or removes the risk of loss.