Stock market glossary

Automated investment algorithms

An investment algorithm is a set of rules decided in advance that buys and sells on its own, without you having to step in every time.

The simplest forms are the accumulation plan (for example €200 in an ETF every month, whatever the price), rebalancing (periodically bringing the portfolio back to the chosen weights, such as 60% stocks and 40% bonds) and conditional rules («if the stock falls 5% in a day buy €1,000», «if the price drops below the 200-day moving average sell»). The advantage is discipline: rules don't give in to fear or euphoria. The risk is trusting rules that worked in the past but won't work in the future: they must be tested, checked and corrected.

💡 On Fanta-Trade you can create your own algorithms in the Algorithms section and see how they behave with virtual money, and follow Fanta-AI, the artificial investor that picks securities with a machine learning model.

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