By Leanna Kelly Every minute the stock market is open, tens of thousands of transactions occur. Some of them happen when investors hit the buy or sell button. However, a majority of them happen automatically, through a process called algorithmic trading. What is algorithmic trading? It’s computerized, automated trading that happens without any human intervention. Computers trade based on predetermined rules, and execute buy/sell orders within specific parameters.
Algorithmic trading happens instantly, which gives traders using computerized trading software the edge. But, while there’s tremendous upside to algo-trading (as it’s called), there are also a couple of hidden drawbacks. Let’s explore them both, …read more
