Automated Trading System development

Friday, December 10, 2010

Trading development system is simply the process of building a trading system, including research, testing and implementation of that system.

But what exactly is a trading system? Is a set of rules to help direct negotiation. The rules would be write-only, like the end of the current price over the high of the previous days, 50, or you can define rules for entry and exit.

Trade rules can be thought of as answers to questions. Posting rules replied, "what is the best time to enter the market?" Rules out two questions: "what is the best time to exit from the market where the market is in profit?" And "What is the best time output placed on the market when the market is a loss?"

These issues will examine common to every trader because these are questions that merchants struggle with every day. Over time, with experience, traders are beginning to have pet answers they have seen tend to be more efficient. But the problem is this process can take a long time, sometimes even decades.

Automated trading system development is the process of accelerating this process, using computers and thousandth of historical data. I am not going to say is goofed evidence or easy. The process goes something like this:

1. research and discover patterns of behaviour in markets

2. Registration of entry and exit rules

3. Test the entry and exit rules using historical data

4. optimize and tweak the rules

5. Implementation of trading system and trade on the market

Of course, this is a simplified version and it is not always that linear: after step four is common to jump back in step three and then to step five. But overall, these are the steps to create an automated trading system. Best of luck.


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