Does anyone have any ideas for program trading? I would like to make one and am looking for some decent ideas from experienced traders that I can expound on. Thanks for the free advice
Again, yes. Why do you post these questions? Do you really expect somebody to give away their systems?
Start here, this is pretty standard stuff: http://www.cs.utexas.edu/~pstone/Papers/bib2html-links/AMEC04-plat.pdf Of course, this assumes that you have the technical knowledge of how to code up these simple algorithms, get some real data, etc.
There are several approaches you can take, obviously. And, sure, everyone has 'a system'. Some are more protective of their methods of course. Fundmentally, you need to watch the market you are interested in. For a couple years, literally, and get a 'paper trading' account somewhere. Then start to 'build' some theories about what you see. Then watch as each one of your theories gets blown to bits due to the chaos that is 'the market'. Then... after some observation, and a lot of reading, and testing, you will have some basic understanding needed to really build a system. That being said, keep it simple. Don't get hung up on all the indicators and studies. If you don't know the math, you will have a very hard time understanding the implications of the studies/indicators. There is no single, simple, 'formula' that _always_ makes money (that I know of!). And, the market changes over time. Todays hottest technique may be yesterday's news if the markets evolve away from their current behaviours. So, ALWAYS be watching. Start with something simple, like moving averages. Know that they are 'lagging' studies. That is, they represent the history of prices, not the future. But, the near-term history can be very enlightning. The trend is your friend. So, let's say the trend is up. Well, then *perhaps* a buy followed by a sell is in order. Just know this, trends don't last. So, the key is knowing when to get in, and when to get out. STOPs are also your friend. USE THEM. Or suffer massive drawdowns. OK, so that is vague, huh? Tell us something more about what you are looking for. Stocks? NASDAQ? AMEX? NYSE? Foreign? Futures? Bonds? Forex? Do you care? How much capital are you planning to use in this system? What kinds of 'programming' can you do? How much do you know about the market(s) already?
warning, warning, WARNING...this is NOT standard "stuff"....this is PhD-only material....or at least Quant Finance degree stuff from sites like http://www.wilmott.com/index.cfm . I've got a masters degree in finance and it is totally under-powered for this "stuff".