Humans are smart. We have sent men to the moon. We have harnessed nuclear power. We have created beautiful symphonies, paintings and art. We do have our limitations, however, the inability to fully understand and profit from the financial markets runs up against those limitations. Therefore, many traders and analysts have turned to mathematics and computers to attempt to model the markets and predict future price movements.
Algorithmic trading systems use mathematical models to analyze financial markets to determine when to buy and sell, as well as to execute and manage orders once they have been placed. Such systems can be manually operated by human traders, partially automated by human traders and algorithms, or fully automated through the use of algorithms in a form of artificial intelligence.