Mechanical Investing


Mechanical Investing

Any investment strategy that uses a computerized system to make trades according to a certain algorithm. That is, one may program a mechanical investing system to buy or sell different security under specified circumstances. Mechanical investing often uses complicated mathematical formulas to identify the ideal times to buy and sell securities in large batches. Its use is intended to minimize the role human emotion plays in investing. See also: Computerized investing, Algorithmic Trading, Program Trading, Behavioral finance.