Any effective algorithmic trading strategy must work to increase trading profits and decrease trading expenses. Arbitrage, mean reversion, market timing, and index fund rebalancing are the most widely used tactics. Scalping, lowering transaction costs, and pair trading are additional tactics. The term "algorithmic trading" refers to trade execution procedures that fund managers often utilize to purchase and sell huge quantities of assets. These methods use automated formulas to detect market inefficiencies and profitable patterns at a frequency and pace well beyond what people are capable of.