Algorithms: what is an algorithm?

Computers have the ability to run programs that follow a specific set of instructions to place a trade. In theory, a human can never do this as quickly and as often as a computer for the simple reason that our brains are not fast enough and not always available.

The instructions of an algorithm are usually based on timing, price, volume or another mathematical model. In addition to being able to scan the market 24 hours a day, an algorithm has another great advantage: the exclusion of human emotions from investment activities.

Example of a simple algorithm

• Buy 50 shares of a company when the 20-day moving average crosses above the 500-day moving average.
• Sell 50 shares of a company when the 20-day moving average crosses below the 50-day moving average.

This is, of course, a very simple algorithm and, with the right software, could be performed immediately.

Algorithms of systems from Systems2follow

At Systems2follow, almost all systems are based on an algorithm. These are obviously complex algorithms with many variables. Normally, one buys when all indicators are green, and one sells when all indicators are red. Often, there is also a stop loss built into the algorithm to protect you as an investor from excessive losses. 

As you may have already read, we offer various systems based on algorithms. You can, of course, always find this in the accompanying text for each individual system. We recommend that you first go to the system overview. There you can choose which system you want. Then you can look at the characteristics of the system. If it is what you want, you can subscribe to it. If it does not suit you, you can of course go to the next system. You can sort by return, but also by trader. Take your time to choose a system that suits your needs.