Definition ∞ Trading Algorithms are computer programs that automatically execute buy and sell orders in financial markets based on predefined rules, market data, and mathematical models. These algorithms aim to optimize trading strategies, improve execution efficiency, and capitalize on market opportunities.
Context ∞ Trading algorithms play a substantial role in the liquidity, price discovery, and volatility of digital asset markets. Their rapid execution can amplify market movements in response to news events, and their prevalence influences how quickly information is reflected in cryptocurrency prices.