Factor-Based Investing Algorithmic Trading Strategy

Algorithmic trading strategies are used by financial advisors, investors, and traders to quickly execute orders when stocks reach a certain price. Computers are programmed with specific metrics and alert the trader when those metrics are detected. While there are a variety of algorithmic trading strategies used, they all share particular traits.

One trait they share is the fact that they can all be reduced by a set of rules. The other is that these approaches are almost always based on hard data, not forecasts or opinions. AlphaDroid uses a combination of these strategies to follow trends and predict the market for financial advisors and investors. Our award-winning investment algorithms have had great success for our customers. To learn more about our approach, contact us today, or start your 30-day free trial.

Factor-Based Investing

Factor-based investing is a strategy used by financial advisors and investors to choose securities on attributes that are related to higher returns, based on historical data. The two main types of factors that drive returns of stocks, bonds, and other factors are macroeconomic factors and style factors. Macroeconomics captures general risks across different asset classes while style factors work to explain returns and risks within those asset classes.

To break it down, factor-based investing is meant to enhance diversification, generate higher returns, and manage risk. This algorithmic trading strategy is attractive to advisors because it gives them the ability to make investment decisions based on a variety of factors, which are viewed as precise tools for portfolio building and risk management.

How Is It Used?

When put to use, factor-based investing can be a great strategy for financial advisors. An advisor or investor might use this approach to identify less expensive versions of their client’s portfolio. Perhaps an advisor has a client that is nearing retirement and is looking to reduce risk while still being in the market. Factor-based investing is a great option because the advisor can look at low-volatility strategies to use instead of funds with more aggressive growth attributes. Customizable to the clients’ needs and goals, factor-based investing is commonly used by financial advisors and investors that are looking for low-cost indexed strategies.

How AlphaDroid Can Help

We at AlphaDroid have leveled the playing field with Wall Street by providing financial advisors and investors the power of our award-winning investment algorithms. When our financial planning software is used by advisors, they finally have the edge they need to bring results and success to their clients.

Financial advisors have the power to ensure or damage the financial futures of their clients as well as their own. AlphaDroid’s algorithmic trading strategies are dependable and help financial advisors analyze, build, and compare investment portfolios. With this technology, investors are able to optimize returns by quickly moving to where the money is. Learn more about how AlphaDroid can help you achieve your goals by contacting us today or start your 30-day free trial. Our professional staff is here to answer any questions you have or explain our elite software to help you and your clients achieve financial success.