Decoded: Breaking down how an actual trading algorithm works. Want to impress your friends? Learn how trading algos workThe next step is sending that list onto an order processing algorithm that goes out and buys or sells the stocks that have been selected. The code may seem hard to follow, but it’s one of the oldest tricks in the “quant” book. The algorithm employs a general statistical arbitrage strategy based on the tendency of overvalued stocks to go back down and the undervalued ones to go up. In the 1970s, 19
