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14 - Intro To Automated Trading and End of Semester Review

This document provides an introduction to automated trading and building trading systems. It discusses the benefits of developing an automated trading system such as being able to trade around the clock and reacting faster than humans. However, it also notes some reasons not to build a system, such as thinking you can become a millionaire without work or not being willing to extensively backtest a system. The document then provides an overview of basics for system development like available programming languages and tools, and concludes with reminding readers to control their biases and take a break over the holidays.

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collegetradingexchange
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344 views

14 - Intro To Automated Trading and End of Semester Review

This document provides an introduction to automated trading and building trading systems. It discusses the benefits of developing an automated trading system such as being able to trade around the clock and reacting faster than humans. However, it also notes some reasons not to build a system, such as thinking you can become a millionaire without work or not being willing to extensively backtest a system. The document then provides an overview of basics for system development like available programming languages and tools, and concludes with reminding readers to control their biases and take a break over the holidays.

Uploaded by

collegetradingexchange
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 5

FOREX:

LESSON SEVEN
End of the Year Review and Intro to Automated Trading

The Trading Pitt 2010 1


TERMS TO • HFT – Traders using co-location and high
KNOW: level/low latency coding and engines to trade
often in nano-mili seconds
• Quantitative Analysis – Analyze financial
products in a mathematical method based on
price changes, devoid of human
interpretation and qualitative decisions
• Algorithm – Fancy term for code written to
complete a task of steps. Can be as simple as
one line.
• Quants – Often PhD’s and Master’s degree
students who look to find generate alpha by
mathematical models or complex algorithms
based around probability, asset price
behavior, and various theories

The Trading Pitt 2010 2


WHY SHOULD I BUILD A TRADING
SYSTEM?
• FX is 24 Hours.
– Can you trade all day or wait patiently enough for your signal?
• Computers react faster than humans
– Can improve average fill prices and improve your bottom line.
– Bid instead of pay the offer and catch the quick tick reversions
• Build a Gray Box
– You are still the primary trader and decide when it needs to work
• Have a chance to “game” the best of trading algos the Street puts out

WHY SHOULD I NOT BUILD A


TRADING SYSTEM
• Think You’ll be the next Millionaire without any hard work
• If you have no programming experience
• If your not willing to back test, forward test, and continue to
demo test your system for a long period of time
• Think You’ll build a black box that will never need improvements

The Trading Pitt 2010 3


BASICS OF SYSTEM
DEVELOPMENT

Quick Demos:
• Interactive Brokers Student Trading Lab
• DDE Basics
– Interfacing with Excel
• What is an API? (Application Programming Interface)
• Programming Languages
• Getting started
• MATLAB and EXCEL

• Where can I get help?


– Wilmott
– Take a programming course at Pitt
– Libraries, online websites

The Trading Pitt 2010 4


END OF THE • Putting all our skills together.
YEAR REVIEW • The fundamental, technical, and
TRADE behavioral aspects of trading
• Two Accounts and controlling your
biases
• If you can do this you can be one of the
best traders
• Very similar to trading around your core
position except on a bigger scale
• Have a Good Christmas Break

The Trading Pitt 2010 5

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