Algorithmic trading looks to remove the human factor and instead follows predetermined, statistics-based strategies that can be run 24/7 by computers with minimal oversight.
Computers can offer multiple advantages over human traders. For one, they can stay active all day, every day without sleep. They can also analyze data precisely and respond to changes in milliseconds. To top it off, they never factor emotion into their decisions. Because of this, many investors have long since realized that machines can make excellent traders, given that they are using the correct strategies.
This is how the field of algorithmic trading has evolved. While it began with computers trading in traditional markets, the rise of digital assets and 24/7 exchanges has brought this practice to a new level. It almost seems as if automated trading and cryptocurrencies were made for each other. It’s true that users will still have to work out their own strategies, but when applied correctly, these techniques can help traders take their hands off of the wheel and let mathematics do the work.