# What is ALGO Trading?

Algorithmic trading, commonly known as algo trading, involves the utilization of computer algorithms to execute trading strategies in financial markets. Instead of human traders manually placing orders, algorithms autonomously make trading decisions based on predefined rules, parameters, and mathematical models.

In algo trading:

* Your demat account is linked to algorithmic software.
* The software generates buy or sell signals based on applied strategies.
* These signals are then executed in your demat account by your broker.
* Auto-booking occurs when the target is reached.
* An auto exit is triggered if a stop-loss is hit.

<figure><img src="/files/2dun6yLQPfvmHbze8eWO" alt=""><figcaption></figcaption></figure>

This method enables faster trade execution, minimizes human error, and proficiently implements complex trading strategies.


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