Strategic and tactical aspects for executing trades through systematic algorithms

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Any market reacts to buy and sell orders. The larger the order, the stronger the market reaction. The smaller the order, the lower the probability to be able to buy and sell a desired quantity at the desired price in a systematic way. For this reason, trade execution matters. It matters all the way even more in trading venues where algorithmic traders play an important role. 'Algorithmic' traders plan their actions carefully. They innovate on existing strategies, and test the ones that they deem most promising. The functioning of modern financial markets has become more sophisticated because of the dominant presence of actors that trade both systematically, and more frequently than in the older age of voice trading. In today's markets, understanding the costs of carrying out a transaction determines the possibility to obtain the highest profits achievable.

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