Economy
All You Need To Know About Algorithmic Trading
There are now more options to improve or expand existing apps due to the rapid advancement of computer science and communication technology. The current developments have opened up fresh trading avenues.
Trades are placed using a computer program that follows a predetermined set of instructions (an algorithm). This kind of trading is also known as automated, black-box trading, or algo-trading. Profits may be generated at a pace and frequency inconceivable for a human trader to achieve in principle.
Just because it’s computer-driven doesn’t imply no one is involved. As a result of automated trading, human involvement has been shifted to a more back-office position, where new alpha-seeking techniques are developed on a regular basis.
High-frequency trading (HFT) is the most common kind of algo-trading today, and it relies on preprogrammed instructions to place a large number of orders quickly across a variety of markets and decision factors.
In this article, we’ll provide you with information on what are the main things that every trader should know about algorithmic trading.
How does algo trading work?
Pre-programmed instruction is used in algorithmic trading to execute transactions. Input characteristics like price, time, volume, and more are taken into consideration by these laptop applications. In order to make use of the processing power and speed of modern computers, several types of systems are employed. Automated trading is primarily a rapid, reliable, and accurate technique of placing orders. However, not everyone can apply this strategy, and some people may have doubts about its efficacy.
Because the decision to buy or sell is based only on the composite programs, algorithmic trading is a generally recognized method. There is no human intervention in making the transactions, which eliminates the influence of emotions. There are several ways to learn more about the way algorithmic trading works. One of the most common ways for investors is to visit an education section of Elite Currensea, where they can get more information about algo trading and its benefits. In addition to that, the section allows traders to generate trading strategies based on AI. Computers are better at completing tasks quickly than people are. Depending on the specifications, it can execute and monitor a variety of stocks at the same time.
There are no trades left unattended, thus it is quite skilled and resourceful. When traders take a break, the robot takes care of online share trading orders.
As a primary benefit, algorithmic trading removes human emotions from the trading process. Trades are carried out in accordance with a predetermined set of guidelines. Human trading, as opposed to algorithmic trading, is more susceptible to illogical trading choices due to human emotions. Thus, algo-trading often pushes traders to avoid taking on more risk than they can manage in order to prevent feelings of uncertainty.
For those interested in learning about algorithmic trading, the online education market has grown rapidly in the last several years. Getting into this field is now feasible without having to go through the lengthy academic path (8-10 years).
What are the main pros of algorithmic trading?
Individual involvement is minimal when it comes to algorithmic trading. Orders made on the basis of various technical indications are automatically distributed using digital means. Simple data access is all that is required for these gadgets. By not having to worry about losing money, they are safer than human dealers. Another advantage of these systems is that they may be quite profitable. However, there are several difficulties to overcome. Basic computer abilities are required for success in algorithmic trading.
Algorithmic trading’s performance is heavily reliant on precision and timeliness. The margin of error in algo trading is often extremely large if humans are involved. It’s possible for a computer to conduct transactions under a set of instructions, but this isn’t the case for algo-trading banks. As a result, strategic thinking is emphasized in order to help businesses make better, more accurate trade choices.
Moreover, there is no opportunity for traders to be influenced by their emotions since the tactics are pre-formulated. This means that once the pre-specified goals are satisfied, the deal is automatically performed, and the trader is left with no choice except to accept it as is. Over- and under-trading are kept in check by algo trading. As a result, there is no tolerance for error or divergence from the original trading plan.
A trader’s job is to identify the weak points in their trading system and devise workarounds as early as possible in order to prevent more losses. Trading algorithms allow traders to back-test their trades using historical data and compare them to the current market conditions. Using this approach, traders may determine for certain if their deals would have turned out identically.
Trading algorithms used in algo trading execute deals without human intervention. In response to market changes, the algorithm creates orders as soon as they are met. The trading process relies heavily on the quickness of entry and exit. Even a delay of a few seconds might result in losses. Better entry and exit speeds allow traders to catch market moves at their precise moment of entrance.
With the advent of automated trading, traders now have the chance to experiment with a wider range of trading platforms. Individuals and businesses may effectively and quickly exchange huge volumes of shares. Market participants may thus acquire a large number of shares and then sell them nearly immediately for a significant profit.
Algorithms and computers are used in algo trading. Because of this, executing many trades and strategies simultaneously becomes quite simple. Humans just could not have accomplished this.
By Dipo Olowookere
Nigerian stocks shrank by 0.02 per cent as a result of renewed selling pressure, after the consumer goods index crumbled by 0.89 per cent, and the banking space contracted by 0.23 per cent.
Business Post reports that the Nigerian Exchange (NGX) Limited weakened yesterday despite the energy sector closing 1.78 per cent higher, the insurance segment increasing by 0.31 per cent, and the industrial goods counter closing flat.
The All-Share Index (ASI) eased by 44.83 points to 200,913.06 points from 200,957.89 points, and the market capitalisation decreased by N29 billion to N128.969 trillion from N128.998 trillion.
eTranzact lost 10.00 per cent to trade at N20.70, Abbey Mortgage Bank declined by 10.00 per cent to N9.90, Cadbury Nigeria retreated by 10.00 per cent to N63.00, Eterna also fell by 10.00 per cent to N33.75, and DAAR Communications dipped by 9.50 per cent to N1.81.
Conversely, Premier Paints appreciated by 9.97 per cent to N37.50, Zichis gained 9.97 per cent to trade at N13.79, McNichols improved by 9.93 per cent to N7.42, John Holt chalked up 9.86 per cent to close at N18.95, and Trans Nationwide Express went up by 9.75 per cent to N2.59.
On the last day of the week, 595.2 million equities valued at N24.5 billion were transacted in 43,440 deals versus the 678.1 million equities worth N33.1 billion traded in 42,222 deals in the previous session.
This showed an improvement in the number of deals by 2.89 per cent, and a cut in the trading volume and value by 12.22 per cent and 25.98 per cent, respectively.
Wema Bank ended the day as the busiest stock after a turnover of 131.5 million units worth N3.5 billion, Legend Internet traded 41.6 million units valued at N339.2 million, Zichis sold 35.2 million units for N485.6 million, Access Holdings exchanged 29.4 million units worth N764.8 million, and Japaul transacted 21.5 million units valued at N74.6 million.
By Adedapo Adesanya
A loss recorded by market bellwether, Central Securities Clearing System (CSCS) Plc, outweighed the presence of three price gainers, weakening the NASD Over-the-Counter (OTC) Securities Exchange by 0.73 per cent on Friday, March 27.
The Nigerian securities depository firm lost N6.27 during the session to close at N80.10 per share compared with the previous day’s N86.37 per share.
As a result, the market capitalisation shrank by N18.41 billion to N2.512 trillion from the previous session’s N2.531 trillion, and the NASD Unlisted Security Index (NSI) declined by 30.77 points to 4,199.69 points from 4,230.46 points.
The green side of the price movement log showed 11 Plc appreciating by N31.92 to N351.17 per unit from N319.25 per unit, Nigeria Mortgage Refinance Company Plc (NMRC) rose by 55 Kobo to sell at N6.05 per share compared with Thursday’s closing price of N5.50 per share, and IPWA Plc recorded a 50 Kobo growth to end at N5.51per unit, in contrast to the preceding day’s N5.01 per unit.
When the bourse closed for the day, there was a 17,067.5 per cent surge in the voluime of transactions to 58.6 million units from 342,825 units, the value of trades increased by 6,895.4 per cent in the value of securities traded as it closed at N1.6 billion compared to N23.0 million, and the number of deals executed at the session rose 85.2 per cent to 50 deals compared to the preceding session’s 27 deals.
CSCS Plc remained the most active stock by value on a year-to-date basis with 56.2 million units exchanged for N3.8 billion, Infrastructure Guarantee Credit Plc followed with 400 million units valued at N1.2 billion, and Okitipupa Plc came next with 6.5 million units traded at N1.2 billion.
Resourcery Plc closed the trading session as the most traded stock by volume on a year-to-date basis with 1.1 billion units sold for N415.7 million, followed by Infrastructure Credit Plc with 400 million units sold for N1.2 billion, and Geo-Fluids Plc with 133.0 million units at N511.1 million.
By Adedapo Adesanya
The Naira maintained stability against the United States Dollar in the black market segment of the foreign exchange (FX) market on Friday, March 27, data obtained by Business Post showed. It also remained unchanged at the GTBank FX counter at N1,401/$1.
However, it further appreciated in the Nigerian Autonomous Foreign Exchange Market (NAFEX) during the session by N3.30 or 0.2 per cent to N1,380.58/$1 from the previous day’s rate of N1,383.88/$1.
In the same vein, the domestic currency improved its value against the Pound Sterling in the spot market yesterday by N10.77 to trade at N1,836.99/$1 compared with the preceding session’s N1,847.76/£1, and gained N5.06 against the Euro to sell at N1,592.08/€1 versus N1,597.14/€1.
The Naira remains under pressure, but the current range indicates a form of stability as the Central Bank of Nigeria (CBN) reiterated its promise to anchor reforms around FX rate stability and stronger reserves to support financial markets.
Amid the currency pressures, the apex bank introduced a series of measures aimed at improving liquidity and strengthening the FX market. In a key move, the apex bank removed the cash pooling requirement for International Oil Companies (IOCs), allowing them full access to their repatriated export proceeds from the previous 50 per cent.
However, the country could see less short-term Dollar supply staying in the country and may invite pressure on the Naira if outflows exceed inflows.
The pressure on the currency comes amid a sustained decline in Nigeria’s external reserves, which provide the central bank with the buffer to support the naira. The reserves fell for the ninth consecutive day to $49.48 billion as of March 26, 2026, marking a decline of $540 million, or 1.08 per cent, from $50.02 billion recorded on March 11.
Meanwhile, the cryptocurrency market tumbled on Friday due to a broader sell-off in US equities, which recorded a $17 trillion loss. The Friday plunge fits into a pattern since the war in Iran broke out, with gains on Monday turning into losses by the end of the week.
Ethereum (ETH) depreciated by 3.2 per cent to $2,003.73, Bitcoin (BTC) fell by 3.1 per cent to $66,439.48, Solana (SOL) dropped by 2.9 per cent to $83.44, Cardano (ADA) crashed to $0.2474, Binance Coin (BNB) went down by 2.4 per cent to $613.17, TRON (TRX) dipped 1.5 per cent to $0.3113, Dogecoin (DOGE) declined by 1.4 per cent to $0.0908, and Ripple (XRP) slumped 1.4 per cent to sell at $1.33, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
-
Feature/OPED6 years agoDavos was Different this year
-
Travel/Tourism10 years ago
Lagos Seals Western Lodge Hotel In Ikorodu
-
Showbiz3 years agoEstranged Lover Releases Videos of Empress Njamah Bathing
-
Banking8 years agoSort Codes of GTBank Branches in Nigeria
-
Economy3 years agoSubsidy Removal: CNG at N130 Per Litre Cheaper Than Petrol—IPMAN
-
Banking3 years agoSort Codes of UBA Branches in Nigeria
-
Banking3 years agoFirst Bank Announces Planned Downtime
-
Sports3 years agoHighest Paid Nigerian Footballer – How Much Do Nigerian Footballers Earn