An algorithm is a process or set of rules that must be followed in calculations or other problem solving operations, especially by a computer. In other words, all logical arrangements are sorted according to a certain systematic and used to solve a problem.
Most of the algorithms are intended to be implemented as computer programs. Financial companies use algorithms in areas such as loan pricing, stock trading , and asset liability management.
Trading using an algorithm is also known as automated trading, because it uses computer programs to buy and sell securities at a speed that is impossible for humans. This happens because the prices of shares, bonds , and commodities appear in various online formats and in trade data, and therefore the algorithmic process used to digest data becomes easier.
Types of Algorithms
1. Sequential Algorithm
A sequential algorithm is an algorithm whose steps are in order from beginning to end. Step by step that must be ordered from top to bottom.
2. Iteration Algorithm
The looping algorithm is an algorithm that runs certain steps repeatedly or looping. In the problem at hand, there is also a step that must be done repeatedly.
3. Branching or Conditional Algorithms
Conditional algorithm is an algorithm that runs the next step if there are conditions that can be met.