00:00Investing in the share market is not just about investing money, but it is entirely dependent on trading, knowledge and market analysis.
00:12To bring changes to the market, SEBI, the Securities and Exchange Board of India, also makes a lot of changes, which has a strong impact on investor trading.
00:23In this, SEBI has proposed to allow retail investors to participate in algorithm trading.
00:30So, in this video, let's tell you what is algo trading and its advantages and disadvantages in detail.
00:37So, first of all, let's understand what algo trading is.
00:40So, algo trading is also called automated trading or programmed trading.
00:46This trading is done through a computer program that follows an algorithm to trade.
00:53It is believed that it generates a lot of profit at a very fast rate.
00:58To understand this better, assume that you want to buy 50 shares of a company at a time when its 50-day moving average exceeds the 200-day moving average.
01:09Using this transaction, a computer program automatically monitors the price of the share and places an order to buy.
01:17In this, the trader does not need to continuously monitor the life, price and graphs of the share, nor does he have to place an order manually.
01:26Algorithm trading recognizes the opportunities of system trading correctly and works automatically.
01:34If we talk about the benefits of algo trading, it helps you a lot in decision-making.
01:40Algo trading does market analysis in a very precise way.
01:44There is no need for human interference in this, which reduces the cost in the business.
01:50In addition, transaction fees and other expenses are also saved.
01:54Algo trading will track the 24x7 market, which will benefit retail investors more.
02:01Now if we talk about the dangers of algo trading, then over-optimization is a big drawback.
02:07Algo trading will quickly complete orders and liquidity will also increase in the market.
02:12If SEBI's proposal starts, it will benefit small investors who want to trade using the algorithm with full security.
02:22To increase efficiency and transparency in the market, SEBI started trading through direct market access.
02:30This has many benefits, such as order completion, low transaction costs, more transparency, better audit trails and liquidity improvement.
02:40But this facility has been limited only to large institutional investors.
02:45And now SEBI wants to give this benefit to small investors, i.e. retail investors.
02:50So if you also invest in the share market, then what is your opinion on SEBI's algo trading?
02:57Give us your opinion in the comment box and keep watching GoodReturns for such updates.
03:01Don't forget to like and subscribe to our channel.
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