It’s simply a bot employed to either accumulate or distribute a position. That’s all. You really don’t want the alternative to Algo trading so be careful what you wish for.
If a big seller wants out by dumping on market then it crashes the SP and creates a selling frenzy and completely alters sentiment.
And in reverse a big buyer would wipe many lines but it’s temporary as profit takers sell into it.
Therefore they set their position ( either accumulating or distributing) to a selected VWAP and the market absorbs the order. It may take one day or many.
Once you understand how this works it’s easy to see the advantages to all holders .
Cheers.
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