Automated Versus Algorithmic Trading – Which is it?

December 16th, 2008

This is a follow up to the informal survey I posted a few days ago about the best name for automated trading. I’ve heard it referred to a number of different ways and I was wondering what most people refer to it as.

My Thoughts

I have a real problem with referring to automated trading as “systems trading”. It seems like a lot of people call it that, but I think it implies that any trader that isn’t traded automatically can’t possibly be actually trading a system. That’s obviously not the case.

I couldn’t quite figure out why I didn’t like “program trading”, but I like Jason’s reply that it just seems like 80’s terminology for some reason.

That leaves algorithmic versus automated trading. I like the phrase automated trading because I think it implies that it can be applied to essentially any trading system. Algorithmic trading on the other hand seems to imply a specific style of trading – one that involves intense and complex computations. Oooh – scary and complicated! 😉

What Do People Search For?

Max Dama sort of stole my thunder with his post on the subject, but here’s what Google says about automated versus algorithmic trading in terms of what people search for. It turns out that automated trading is searched for about 30% more than algorithmic trading – which seems to be about right.

I looked in the Google Adwords tool to compare automated trading and algorithmic trading and it indicates that advertising competition for “automated trading” is significantly higher than it is for “algorithmic trading”. This means that a lot more advertising is targeted at automated rather than algorithmic trading.

So no matter what your personal opinion on the subject, it’s hard to argue with where most advertising dollars go. 😉


  1. David Loomis Said,

    December 16, 2008 @ 7:43 am

    Automated is a 6th grade word and algorithmic is a college word, no wonder no one looks for algorithms 🙂

  2. Dave Said,

    December 16, 2008 @ 7:49 am

    That’s funny, David. Good point! Thanks for the comment.

  3. Dave Said,

    December 17, 2008 @ 2:55 am

    @Max – sorry about that. I just corrected it. Thanks for the video link – it looks very interesting.

    Thanks for the comments.

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