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LATHICAI Glossary

Enterprise AI

Algorithmic trading

Using computer rules or predictions to decide or carry out financial trades.

Example

A system places orders when specified market conditions are met.

Why people use it

It automates trading decisions or actions according to a chosen approach.

What you'll hear

“Which rule causes it to place the order?”

What this means for you

Distinguish the automation method from evidence about performance and risk.

Can you control it?

Sometimes

Sometimes. Your choices depend on the tool and your access. The settings available to an everyday user may differ from those available to the people running it.

Common questions

Does algorithmic trading necessarily use AI?
No. Fixed rules are also common, and automation does not guarantee profit.
Can a system lose money while following its rules correctly?
Yes. Correctly executing a strategy does not make the strategy profitable.
Can past results mislead?
Yes. Market conditions and the costs of actual trading can differ from a historical test.

Related terms

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