Electronic trading can then be divided into manual, where instructions are executed by humans on an electronic trading platform, and automated, where instructions are executed by computer algorithms and there is little or no human intervention. The split here is about fifty-fifty. Mind you, the landscape is changing at a high frequency!
In the FX market, segmenting types of traders is difficult; there is inevitably a lot of crossover in styles and blurring of boundaries. So for the purposes of our study, we split algorithmic (algo) trading into two categories: algo execution and algo decision-making. The former is when a trader uses an algo to execute an order, often used for large orders.