Be the first to read about algo trading analysis, research and news

Don’t worry, we want spam you! We only send about 2 emails per month.

Subscribe to: Newsletter
Algorithmic Trading Blog

Algorithmic Trading Blog

Automated Trading System Development
Quantitative Trading Research
Portfolio Backtesting

Trading is a great opportunity for an individual to earn money. As a matter of fact, since the entire concept of day trading was presented to ordinary individuals, the fact is that the majority of individuals have quit their jobs in order to be day traders. As a matter of fact, a conversation was recently held with a young Kenyan man who is making a killing as a day trader. Within the past, it wasn’t possible due to the software to execute the trades not being available. Besides this, the data wasn’t available to retail traders.

A multitude of people have lost and made money in equal measures. Indeed, there was a recent story of a 45-year-old banker who quit his top job to day trade. The man ran out of money a couple of days after beginning. Stories that are similar to this have been told a bunch of times in the past.

Thereby, for you as a trader, it’s extremely vital that you stay vigilant and utilize viable strategies in order to avoid making those losses. There will include multiple available strategies. Those strategies have been tested, as well as proven for a lengthy period of time. As a trader, therefore, the idea includes finding a couple of strategies and then using them in a variety of markets. In this post, I am going to introduce you to algorithmic trading as well as cover a couple of details in regard to how to create your very own strategy for trading.

Algorithmic trading: What is it?

Algorithmic trading, or algo trading, is a concept in which a user uses a variety of codes to align all technical indicators to that. Algorithmic trading, in the past, included a preserve of individuals who had a ton of coding expertise and experience. These days, anybody without all of this knowledge is going to have the ability to create his algorithms as well as execute them utilizing a simplistic strategy of drag and drop. The drag and drop strategy includes one in which the individual takes previously created tools and drags them in order. After he or she has developed the algorithmic tools, it is possible to deploy them in order to execute the trades as you’re there and when you aren’t. In addition, you may create algorithms in order to automatically alert you as a certain market meets your expectations of trading.

Key factors in trading algorithms

In order to create an excellent algorithm to trade, a variety of items are going to be required. First off, you have to have indicators. The entire concept includes acting as specific criteria of technical indicators are met. There will include a multitude of technical indicators which you may use. However, it is recommended that you blend only a couple of indicators which you’ve mastered well within your trading experience. It is recommended to use the following: Relative Vigour Index, Relative Strength Index, Stochastics, Parabolic SAR, as well as Moving Averages.

By having in place this indicator set, you are going to be headed in the right direction.

The following factor of algorithms includes the inputs. Usually, those inputs are assigned to the additional nodes in order to develop an algorithm. Typically, there are 4 kinds of inputs out there which involve: string, integer, Boolean, as well as number.

Then, there are the variables. Generally, there are a number of corresponding variables for every type of data. Those data types include: Boolean, number, text, as well as date time. Those variables are going to inform the algorithm what to do as well as when.

The next vital components include mathematical features that involve: +, -, as well as = amongst other ones.

And finally, the logic is extremely important. They involve: And, and Or. It is possible to direct the algorithm in order to open a buy trade as the RSI value is 29 and Stochastics is at 28 for example. Here, it is possible to use both.


Amongst the most critical components of creating algo tools includes setting the duration. For the day trader, it’d be a mistake to utilize long-term values like a 200 day moving average. The truth is that it will not tell you the correct thing. You should, therefore use short-range durations in creating your programs.

After you’ve created your Expert Advisor (another word for algorithms), the most crucial thing you must do includes backtesting it. If you haven’t done this, you may be certain that you will not be successful. Backtesting provides you the opportunity to take the algo back in time and check how well it performed. If you discover that it hasn’t performed well, odds are that it will not do well in the future. You should therefore avoid it. Alternatively, you may re-create and then backtest it until it properly works.

Post has no comments.
Post a Comment

Captcha Image

Ready to Learn More?

We welcome your messages/calls and we reach out to you as soon as possible to provide more information including in-depth reports for our results and performance. Our CEO will contact any prospective Client personally.

Our office info

  •   US/Canada Toll Free: 1-800-820-3275
  •   Rest of World: +44(0) 247-671-2812
  •   Kemp House, 160 City Road,
    London, EC1V 2NX
    United Kingdom

Connect with us

Contact us - we respond very quickly, email anytime or call from 9am to 5pm GMT London

Send us a Message