An algorithm is a specific set of clearly defined instructions aimed to carry out a task or process. Algorithmic trading (automated trading, black-box trading, or simply algo trading) is the process of using computers programmed to follow a defined set of instructions for placing a trade in order to generate profits at a speed and frequency that is impossible for a human trader. The defined sets of rules are based on timing, price, quantity or any mathematical model. While you can build your own algorithm and deploy it to generate buy or sell signals, you will need to obtain approvals from the exchange to automate your trades.