Investors should stick to algo strategy even if it underperforms: Analysts

Hang in there for the optimal period to enjoy the kind of gains seen in back-testing

Many retail investors who have entered equity markets during the current bull-run have now begun to participate in algo trading, which was available only to institutional investors till a few years ago.
   
How does it work?
 
The quant (the person who creates the algorithm or algo) studies historical data to come up with certain trading rules that he believes will make money. He then builds the algo, software that has those rules coded in, which then scans the market. Whe­n­e­ver the conditions that ha­ve been coded are met, it ge­nerates buy and sell signals.
 
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