Algorithmic trading uses automated pre-programmed trading conditions to execute orders on the stock exchange in real time. Since 2008, algorithmic trading has dominated the Indian market, and they are effectively using the market to be inefficient for their own benefit.
Automation is the natural gateway to any technology in the future. Since investment is a process - it will be better translated into algorithmic trading. Since the Algo deal is in the early stages of India, it brings nearly 50% of the overall deal. This amount is very low compared to the US and UK markets, with more than 90% of transactions [more] being done using algorithms.
The Indian market offers a very good opportunity for Algo traders
• Intelligent order routing system
• Co-location facilities and advanced technologies of the two major exchanges
• Mature and liquid stock exchanges
The Indian market is addressing the growth trends and needs of HFT and algorithmic trading by educating its members about the technology. It also helps them develop the skills they need to understand the complications of the transaction.
For the Algo trading scene in India, Mr. Richard Gula said, "I look forward to the highly complex Algo development, but may focus on reliable, small liquidity stocks. Liquidity will determine the success of this effort. Regulatory issues may arise." Mr. Gula developed It has deployed stocks, futures, ETF databases, and has been established since 1975 to manage and use financial databases.
Mr. Gula further pointed out that the Indian market should adopt a separate strategy and should include:
• Identify the right stocks to drive the market
• Research and understand the entire Indian market
• Understand the way old traders are and extract information
• Create specific market rules to drive algorithms on a macro scale
• Create custom algorithms for each stock for frequently traded stocks
Speed is the key to HFT's execution of transactions in sub-milliseconds - traders will need to provide algorithms and solutions for low latency and faster calculations.
With the further development of the market every day, the statistical model needs to be constantly adjusted. Clearly, investors use algorithmic trading to customize algorithms and automate their trading strategies to manipulate their goals. There is also the use of artificial intelligence solutions to adapt to changing markets. These systems will be able to use news, satellite imagery, social media feeds, etc. to predict market trends.
However, the introduction of the Algo deal in the Indian stock market – one of the most liquid open markets in the world – is seeking to improve the trading market. India is easy to open to foreign investors and they will aggressively trade Algo. Algo trading is quickly becoming the market's future, with the lowest cost and risk of executing orders.
Orignal From: The future of Indian algorithmic trading - reshaping the stock market
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