How does algo trading work?

Algorithmic trading involves creating a set of commands to specify how and when to buy/sell stocks, commodities or currencies, etc. Traders who are proficient with coding can create their own algorithms for this purpose. Others can use trading software to enter instructions based on price, volume, time or even complex patterns.

Here are some examples of instructions you can issue to algorithms for Algo trading.

• To buy 200 shares of a company (ABC) if its price goes below ₹300 before 1 PM.
• Buy 200 shares of a company (XYZ) if its 10-day moving average decreases below the 100-day moving average before the market closes.
• Sell shares of PQR, quantity 500 at 2 PM if Nifty is below 17,000.
• Buy shares of MNO, quantity 200, intraday if its price is 2% higher than its