JJEM: Special Edition 4 (May 2025)
JJEM: Special Edition 4 (May 2025)
2025-05-31
Algorithmic Trading System in Indian Stock Market: A Study
Dhananjaya U S, Dr. Giridhar K.V
Algorithmic trading tools have transformed the financial markets, particularly the Indian stock market operations. These systems employ computer algorithms to automatically execute transactions based on predetermined rules and strategies, allowing traders to react swiftly to market fluctuations. They work by analysing historical data, recognizing trading opportunities and executing orders quickly to maximize profits and minimize losses. The capacity of algorithmic trading to boost market liquidity and pricing efficiency highlights its significance in the Indian stock market. It minimizes trading costs and time by allowing for speedier transactions, making it easier for market players to acquire and sell assets. Furthermore, algorithmic trading reduces emotional decision-making by sticking purely to data-driven tactics. The advantages of employing algorithmic trading systems include the ability to evaluate massive amounts of data, execute several trades at the same time and develop sophisticated trading strategies that are not possible with manual trading. Built-in controls such as stop-loss orders help to improve risk management in these systems. Algorithmic trading systems are critical in the Indian stock market, providing a variety of benefits such as increased efficiency, lower costs and enhanced risk management. As the market evolves and technology advances, algorithmic trading is likely to gain better returns and providing traders with the tools they need to compete in a fast-paced financial environment. This evolution will help individual traders while also contributing to the market's general strength and stability.
Algorithm trading, Indian Stock Market, Trading Strategy and Risk Management.