An algorithm is a set of codes or conditions which are designed by the investor/trader to carry out a certain process. Algorithmic trading uses computer programs to trade at high speeds and based on the criterias and market conditions. Algorithm trading executes according to the conditions rapidly when a certain stock reaches the price or condition reaches, which will make the traders job easy. They can sit back and relax knowing the trade will take place with the given conditions.
We are mainly focusing on the Zerodha Pi and Chartink Screeners to create backtesting algorithms and screeners, through which traders/investors can check for their algorithms efficiency and screen stocks lively. Through backtesting the algorithms traders/investors can find which all technical indicators they must use while buying a stock and where are they making mistakes and which combination of indicators are the best to be used.
Another advantage of Algorithmic trading is the traders will be executed at the best possible price with less manual errors caused by emotional and psychological factors.