Is there a difference between Algorithmic trading and the Algorithmic Intelligence used at iFlip? Are there any similarities? Let’s compare the two.
What is Algorithmic Trading?
Your search engine will quickly bring up over 9.4 million entries when “algorithmic trading” is typed in! You won’t want to take the time to research each entry to find the exact definition of algorithmic trading. However, you will find most will give an explanation similar to what Investopedia offers.
“Algorithmic trading is a process for executing orders utilizing automated and pre-programmed trading instructions to account for variables such as price, timing and volume.”
“In recent years, the practice of do-it-yourself (DIY) algorithmic trading has become widespread. The practice has been made possible by the spread of high speed Internet and the development of ever-faster computers at relatively cheap prices. Platforms have sprung up in order to serve day traders who wish to try their hand at algorithmic trading.”
An article in the Robust Trader will tell you algorithmic trading is profitable, provided you get a couple of things right. “These things include proper backtesting and validation methods, as well as correct risk management techniques. It also increases your chances of becoming a profitable trader.”
A blog on Catana Capital says, “Algorithmic trading strategies follow a rule-based system to select trading instruments, identify trading opportunities, manage risk and optimize position size and capital use. In most cases, systems are automated so that entries and exits are executed by the algorithm, too.”
Algorithmic trading is geared towards traders with some computer skills. They can design the algorithms to follow the rules they set up. But who’s to say their rules are proven profitable?
What is AI Investing?
Algorithmic trading sounds similar to the Algorithmic Intelligence (AI) Investing used at iFlip. “The best AI retirement and stock investment trading technology uses algorithmic portfolios that automate all trades for you (buy, sell and hold).”
Three parts of the best algorithmic trading software make AI at iFlip different from DIY Algo trading.
- First, every day, AI looks at how the market performed, and tells the system to buy, sell or hold stock positions. This is better than merely trying to manage risk.
- Every day, when the market opens, AI will run a daily analysis and trade based on its results. This doesn’t mean the software will trade for you every day.
- The most important part of the algorithmic trading software is automation because everything runs automatically. You don’t have to worry about technical analysis, AI rule changes, on-demand trading execution, any technology maintenance, or returns reporting. The best automated trading software does it all for you.
Why would you want to hope Algo trading might pay off when iFlip’s AI has proven results?
See results from the 2020 crash.
The market isn’t always going to go up, so you need to be able to lose small in order to win big. Using Algorithmic Intelligence at iFlip is how you can outperform the average investor.