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Demystifying Algorithmic Trading: AI and Machine Learning

In a fast-paced and evolving world, artificial intelligence (AI) and machine learning (ML) have revolutionized numerous sectors, including finance. Their most striking impact lies in algorithmic trading, an advanced method of executing trades using pre-programmed instructions.  Today, we'll unravel this fascinating concept and its role in modern trading, in a manner that even beginners can understand. Algorithmic Trading: The Basics Algorithmic trading, also known as algo-trading or black-box trading, employs algorithms to buy or sell stocks. These algorithms are set of rules defined by traders based on various market factors like price, timing, and volume. The goal is to make profitable trades at a speed and frequency that is impossible for a human trader. AI and Machine Learning in Trading Enter AI and machine learning. These technological advancements take algorithmic trading to new heights. Machine learning, a subset of AI, allows systems to learn from data, identify patterns, ...