Algorithmic Trading versus Automated Trading

Trading algorithms and algorithmic trading have been around for years, they are used by larger financial institutions together with investment banks, hedge funds, pension/superannuation funds, broker-dealer and market makers.

Original algorithmic trading applications were predominantly static, they were not on a continuous learning curve and had a relatively short shelf life. Algorithms were simply a set of rules that a computer program executed in sequence until a desired end point. The algorithms were simply a series of criteria that must be met in order to have executed a buy or sell order. Traditional trading algorithms need to be modified over time in order to keep ahead of competition and market trends. If the edge is lost, trades can quickly turn negative and losses can pile up.

These days, trading algorithms (or algo trading, as they are most commonly known) adapt to what is going on in the market in other asset classes and data feeds that change their behaviour or bias.

For example, Jaaims assesses approximately 10 million pieces of data daily consisting of social media feeds, news, trades – everything. By combining these real time pieces of information, it is able to continually learn and proactively act on market trends. Therefore, learning far quicker than humans, allowing it to make better informed trading decisions.

Is there a difference between algorithmic trading and automated trading?

Algorithmic trading is a clearly defined step by step set of instructions to be carried out. Automated trading is the full automation of the trading process using a trading algorithm. In automated trading, the decisions about buying and/or selling are also carried out automatically and at a speed faster than humans can buy or sell trades.

Jaaims has combined our sophisticated AI algorithm with automation to deliver automated trading using one of the most powerful trading algorithms in the world. For the first time, we are releasing this technology to the everyday investor at an affordable price point, starting from just $49AUD per month.