What is the scope and future of Algorithm Trading in India?



Computers have taken over the human brain as far as solving big problems is concerned. This same trend has been seen while trading in the stock market. Trading in stock markets has been in fashion for centuries and with the introduction of computers and complex mathematical calculations, trading has taken a new form which is called Algorithm or Algo Trading.
What is the scope and future of Algorithm Trading in India?

Computers have taken over the human brain as far as solving big problems is concerned. This same trend has been seen while trading in the stock market. Trading in stock markets has been in fashion for centuries and with the introduction of computers and complex mathematical calculations, trading has taken a new form which is called Algorithm or Algo Trading.

Algorithm Trading might sound new to Indian Markets but this has been used in the U.S. since the 1970s and by the end of 2010, almost 60% of trading was done using computers and it’s reliable calculations.  

Scope of Algo Trading

Algorithm Trading is fast and easier as compared to the old and traditional ways of trading. If investors are looking for a short term investment then Algorithm Trading is the best solution for it. Algo Trading is automated which means you throw your own strategies to the program and it gives you the result according to your preference.

Algo Trading is backed up with the latest technology which makes your trading hassle-free and easy to use. Due to its ease, it has become highly popular among the experienced traders and those who are new to this industry. In Algo Trading the involvement of humans gets reduced and is taken over by complex calculations and algorithms.

Future of Algo Trading

Almost a decade ago, SEBI (Securities & Exchange Board of India) allowed the DMA (Direct Market Access) to the stockbrokers, making Algo Trading legal in India. Since then, DMA has swept away the entire banking and securities market in India.

The future prospects of Algorithm Trading are certainly very exciting and Algo Trading is set to grow exponentially between 2018 and 2026.

The best part of Algorithmic Trading is that it excludes human emotions and works on conclusive evidence. Hence, it will have an advantage over human trading.

Also Read - Let’s Implement Your Trading Strategy

Written By -
Shivank Srivastava
Ritsumeikan Asia Pacific University
Japan.