Intertwined System of Risk Management and Financial Institutions

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Managing risk is essential in any trade. Hence it is always been overlooked as a prerequisite for any active trade. A trader who has made substantial profits in many trades all through his life can loose it all in one or two trades, if the risk management is not so effective. This is why risk management is considered as an essential part of trading now. Especially in current market, risk management is must for a trader to safeguard himself from unstable market environments. This article is mainly to discuss on strategies to be used to save you from the market risks.

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Best Practices for Risk Management in Automated Trading – Part 2

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It is well known to world that the automated trading has become a giant in the world market now. The trading cannot be imagined in future without automated systems. The impact of automated trading in the market now is very high. Though the technology is being appreciated for the speed and other features, which are not possible by human actions, the risk involved in this has always created a fear among the marketers. Many marketers still don’t believe in automated trading. Thus the risk management has become a must in every automated system. In order to have a risk free trading, the marketers are advised to follow certain practices. This article is to discuss on those practices to avoid risks and enhance the trading.

Continue reading “Best Practices for Risk Management in Automated Trading – Part 2”

Best Practices for Risk Management in Automated Trading – Part 1

Best Practices for Risk Management in Automated Trading.png

It is well known to world that the automated trading has become a giant in the world market now. The trading cannot be imagined in future without automated systems. The impact of automated trading in the market now is very high. Though the technology is being appreciated for the speed and other features, which are not possible by human actions, the risk involved in this has always created a fear among the marketers. Many marketers still don’t believe in automated trading. Thus the risk management has become a must in every automated system. In order to have a risk free trading, the marketers are advised to follow certain practices. This article is to discuss on those practices to avoid risks and enhance the trading.

Continue reading “Best Practices for Risk Management in Automated Trading – Part 1”

Why Is Latency So Important In Trading?

algorithmic trading institutesDavid Cheriton has once told “stupid latency”. The term latency always has hindered the trading. A network with low bandwidth can also be used to compete with the high bandwidth networks in trading. But a high latency network can never be matched with the low latency network. Let us understand this better. Say Boeing 747 is carrying 500 passengers and Boeing 737 is carrying 150 passengers. Can you say that the Boeing 747 will travel faster than Boeing 737? No. Both the planes travel at 500 kmpf. Thus they reach the destination at same time duration. But if there is a latency in any one plane, then it reaches little late than the other one. Latency is a very important factor in algorithmic trading.

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Need To Regulate Algorithm Trading Questioned

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There has been heated debate on algorithm based trades. Amidst this debate, Rakesh Jhunjhunwala, an ace investor, has backed this kind of trading and has even raised questions on the need to regulate this form of trading.

Rakesh Jhunjhunwala even told reporters that he does not agree that there should be regulations for algorithm (algo) based trading. He also said that regulation of algo trading and norms to do the same should be brought in only in case of enough evidence of manipulation in the market. Rakesh Jhunjhunwala also said that any method of trading can be used by an investor. The method can be technical also but that does not mean that it is an incorrect method. He vehemently said that just because someone is doing algo trading, that investor should not be regulated and that regulations should not be there unless there is strong and solid evidence that the trading is being done to manipulate the stock market prices.

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