What is Algorithmic Trading
Mercor Finance is the first and only platform that offers fully decentralized algorithmic copy-trading.
But what is algorithmic trading? Let’s start with algorithms themselves. An algorithm is a set of steps in order to solve a specific problem. In algorithmic trading (also called algotrading or automated trading), algorithms utilize pre-programmed instructions to perform trades, based on certain variables like price, timing and volume — depending on the way the algorithm is programmed. These trades, or instructions, are based on variables like price, timing and volume of what is being traded — depending on the way the algorithm is programmed. What the algorithm is doing in algorithmic trading, is buying and selling and the right times, for the right prices (buy low, sell high). Since algorithms are predefined and fully automated, they are able to trade at unmatched speed. This enables algorithms to buy and sell for the most competing prices.
Algorithmic trading is oftentimes called the trading technology of the future. This is because of the fact that algorithmic trading comes with many benefits.
To begin with, as algorithmic trading is fully automated, the investor (or trader) can enjoy trading in a passive manner. The algorithm performs the buy- and sell orders which means that the investor only has to stake their funds in the algorithm, and withdraw them whenever they are satisfied with the results.
Algorithms can achieve results that can be impossibly reached by their human counterpart. This is because most algorithmic trading today makes use of high-frequency trading, which means that trades are made with unparalleled speed. Because they are able to act so fast, algorithms are able to trade for the best possible prices. Besides, trade order placement happens instantly and is as accurate as can be. Further, algorithms are consistent in a way that humans can’t be, as their actions are pre-set and won’t change unless they are told to do so. This reduces the risks of manual errors.
A famous saying in investing goes ‘never include emotions in investing’. Humans have emotions, algorithms don’t. Since they are nothing but bots, algorithms simply can’t incorporate emotions in their trading, which means they are never influenced by external and psychological factors.
Last but certainly not least, the performance of an algorithm can be backtested and forward tested. This is being done using a large chunk of historical and real-time data. Back- and forward testing predicts the results of an algorithm to a precise level.
How to use Algorithmic Trading
Algorithmic trading is not accessible to most people as it usually involves complex formulas and high entry barriers.
Mercor Finance is changing that. At Mercor, anyone can enjoy the benefits of algorithmic trading. On the Mercor platform, one can invest in a trading algorithm in just a few clicks.
Mercor grants developers the exclusive tools needed to build and deploy trading algorithms. The platform of Mercor showcases the algorithms created by developers, and in this way enables a source of revenue for algorithm developers. Besides, Mercor has partnered with leading hedge funds and algorithmic trading firms to provide its users with the best performing algorithms. These algorithms are trading on the Mercor platform, 24/7. They are trading with the highest speed and accuracy, gaining unmatched results. As the algorithms trade fully automatically, they provide a passive income for the investor.