Algorithmic trading, at its most basic, is an automated trading system in which computers are programmed to take specific actions based on a set of input criteria alongside market data.
Essentially, this allows traders to use computing to quickly make trades based on emerging trends and profitable patterns, without the need for human intervention.
The trend towards algorithmic trading is significant: more than half of all equity trades are completed using algorithmic trading1, and the number of foreign exchange trades that use the technology is steadily rising.
Oxford University’s Saïd Business School, in collaboration with GetSmarter, is offering the Oxford Algorithmic Trading Programme in order to provide participants with the tools needed to understand the principles behind algorithmic trading.
Use the frequently asked questions below to find out more about this programme, and how it can help you trade on success.
What is this programme about?
The Oxford Algorithmic Trading Programme is an introductory programme on algorithmic trading, giving you a comprehensive overview of the rules that drive successful algorithmic trading strategies, along with a grounded introduction to financial theory and behavioural finance.
How would this programme benefit traders?
There are four key benefits to algorithmic trading:
- The ability to break large orders into multiple smaller pieces reduces cost and the potential impact on the market of such large trades
- High frequency trading, a form of algorithmic trading executes trades at frequencies far beyond what even the most accomplished trader could achieve on their own
- Algorithmic trading is far more accurate, eliminating much of the human error that can otherwise occur
- The automation of certain trades allows traders to focus on issues where human intelligence and judgement are most useful
Why take an online programme on algorithmic trading?
The surge in algorithmic trading applications makes it an important topic of study for anyone who wishes to gain a full picture of the market and modern trading environment.
By taking a deeper look at the theories underpinning algorithmic trading, you’re able to more effectively interact with the market as a whole, as well as evaluate algorithmic models yourself.
What does this programme cover?
The Oxford Algorithmic Trading Programme takes place over six weekly modules, excluding orientation.
Over the course of the programme participants will cover:
- Classic and behavioural finance theory
- The investment industry and systematic trading
- Trading system design and technical analysis
- How to build a simple algorithmic model
- The key evaluation criteria of systematic models and funds
- Future trends in algorithmic trading
Does this programme address the role of human emotion and ‘gut feeling’ in trading?
One of the main intentions of algorithmic trading is to remove human emotion.
Nevertheless, emotions remain an important consideration in trade – unconscious bias can affect both individual trades and the market at large. Therefore, this programme will address biases present in the market and how these traits create exploitable patterns that algorithms can target.
Will this programme teach me to trade using algorithms?
The focus of the Oxford Algorithmic Trading Programme is theoretical – it’s about the industry principles behind algorithmic trading. Learning how to trade is not a part of the programme.
The programme will, however, allow you to critically evaluate an algorithmic trading model or fund enhancing your ability to interact with the market.
Are there any terms in this programme I need to know?
You don’t require any prior knowledge to take this programme, and all terms used in the content will be clearly explained.
Does this programme use trading software?
Because the programme is theoretical in nature, no training on trading software is included. You will only need access to, and a basic knowledge of, Microsoft Excel.