Question

Can you explain what it mean with you state that a good trader wants to find the best liquidity and entry point ( a balance between the two) and what is meant by using the metric ( the impact of the cost of the execution and the timing decision by the trader)? I am trying to understand how the overall effect of electric trading and high frequency trading algorithm played a role in how trading has changed,

Answer 1

A good rader always want to find high liquidity which helps him into buying and selling asset as and when he wants to.

a good trader also wants to find a better entry point so it provide him with the comfort and high amount of profit so that he could ride the entire rally or fall from a trading perspective.

Trader needs to find a combination between an optimum liquidity and a good entry price in order to maximize overall return and minimise his overall risk and that should give him a comfort for squaring off his position as and when he wants to.

Algo trading help traders to use machine programme, that can execute different type of trades for them when a certain level is executed so since that is a machine based trading the trader just need to put his command and treads are executed, so it will help the trader to save the time and save the energy and focus on other things which are of more use.