An algorithm is a set of mathematical instructions or rules programmed into computer software to produce a specific outcome or solve a defined problem. In cryptography and data security, cryptographic algorithms turn readable data into protected data that cannot be easily read by the human eye, and back to readable data. In trading, algorithms power everything from automated order execution to complex quantitative strategies.
Example
“The exchange uses a matching algorithm to pair buy and sell orders in the order book at the best available price.”