Hi! This is my first post. Is there a FAQ or a thread for newie? I have 20 years of experiences in C/C++, but I have never try algorithmic trading before. How do I get started? Are there some books I could read? thanks... is the FX market a better place to start than the equity market?
I do not use Algo's or know much about coding... But Algo's is for Institutions only, as a Retail your target should be quality trades, not quantity. You aren't gonna be allocating 2 Billion, with 20-30 positions open at any given time, how can a Code enhance your trading performance on a small scale ? Learn macro, learn how to analyze momentum, master 3 sectors... Remember you don't have to know everything, you just have to know your industries really well, then you trade what you really know. Options and Equities are the best way to rise quickly, Commodities when it's an obvious cyclical situation, FX is straight gambling in my opinion for the Retail If you are a freak and like to spend hours analyzing, and are serious about this... I recommend getting a Analyzing Program, I use QuoteStream and pay 80 something a month for my Data, I am sure you can find some on this site, ask Bob Morse or Baron they can help you better with that. Trade Value for me is the most Important Factor in determining the change in trend, when you look at charts, it just shows you candles or lines going up or down with MA and some other things not too relevent imo, doesn't say anything really. When you look at Trade Value although it is finessed sometimes by HFT, you can instantly see the wave on either side of the trend Ill post pics in next reply to show you example, on how to spot a trend through Trade Value... This example is a really good Company, Iridium Satellite, IRDM Ticker, momentum on the uptrend
Beginning of Wave, see May 30th, where an Institution started dumping a lot more money then what was the usual average of Trade Value, that's when you can spot a Wave forming
This is currently, see how the Trade Value average adjusted accordingly, it never trades below 8 figures anymore... Sharp rise in Trade Value means Institutions are jumping in, Sharp rise in Trade Value in red, means Institutions are leaving, easier to spot somebody Entering then Leaving for me
So you do know about software, but have no knowledge about trading? In that case is it best to first familiarize yourself with trading in general. Read some general trading books, get familiar with various styles of trading, get familiar with various financial instruments, get familiar with time scales (e.g. day trading versus longer term trading) and so on. Try some trading yourself, manually. By the time you understand trading you can start to consider whether software and automation could help you in any way with the style of trading you prefer. The software is just a tool, not the ultimate goal.
I use algorithms to aid my trading, in fact some of my trading strategies operate unsupervised and qualify as algorithms and I am not an institution. Wrong claim. Algorithms do not generate low quality trades by definition, something you suggest. Wrong claim. In fact algorithms enhance trading today in 90% of cases, even if you yourself do not use algorithms. Wrong claim. And this was just your first paragraph. It's reflecting poorly enough on you to make so many unqualified and unsubstantiated claims about the Chinese economy but do you really have to also give such poor advice to beginners? And can you try to be a bit more careful about grammar and English spelling? It's ok not to be in perfect control of a language, I am a non native English speaker and make the occasional mistakes. But it does not have to come down to every third or fourth word being misspelled, incorrectly used, or accepting a messed up sentence structure and grammar. It shows that all your other posts on China are mostly copy/paste operations as those do not linguistically correlate with your post here.
Thanks, I do have some trading experiences. I've done some trading in the past (10 years ago), mostly equity derivatives (eg derivative warrants). I attempted CFA Level I 5 or 6 years ago, but alas, couldn't make it. So I guess I know the basics of trading: fundamental and technical analyses. Basically, this is what I was thinking of doing: (1) In the morning, find something which technical indictors give a good buy signal (eg, RSI, Stochastic, Bollinger Bands, 10-day moving average moving above the 250-day) (2) Do some more analyses on it (eg economic, fundamental analysis, momentum) (3) Buy it (4) sell it if it loses more than 10 to 15% before end of day. (5) or sell if it makes more than 20% before the end of day, for instance.
A good way to start might be to partner with an experienced trader with a manual process that you can automate. You can learn from him/her and you can create a systemic process for him/her.
For stocks and futures, maybe. For options, no. It depends on how much of your strategy is systematic and how much is subjective. If you have created a rule set that is all systematic and works well, automating it takes out some of the emotion of trading but still requires attention and analysis to make it better and protect your assets. IMO, this is not a retail/institutional thing. It holds true for both.