How to Build an Automated Trading System

So you want to learn how to build an automated trading system? There are several steps you should follow. These include: deciding which asset to trade, working with a developer, scalability, risk management, and reputation. In this article, we’ll walk you through the basics. After reading this article, you’ll be well on your way to building your own automated trading system. Read on to learn more! The next step is deciding what kind of asset you want to trade, as well as the strategy.

Working with a developer

If you aren’t an expert programmer, or if you don’t want to spend hours learning how to code, you can work with a developer to build an automated trading software. Trading systems require a detailed trading plan to determine the risk/reward ratio and trading goals. Before you start coding, decide on the strategy you want to use. There are two common strategies to consider: trend trading and breakout trading.

When developing an automated trading system, there are two types of programming: custom and all-inclusive. The first one requires a good knowledge of the programming language and platform. A custom system requires programming knowledge, and is more expensive and time-consuming to develop. However, it can produce higher returns and be backtested using historical market data. As long as you understand how programming works, you’ll be well-prepared to work with an expert programmer.

Scalability

The Scalability of an automated trading system is determined by its ability to cope with an increasing workload. For instance, a system capable of replacing 100 traders could create 100,000 orders per second. Hence, the decision-making part of an automated trading system must be faster than the receiver of market data. For a trading system to be scalable, it must have a high-speed processor. Listed below are some of the features of an automated trading system.

High-speed performance: Whether you’re trading in a large stock exchange or a single trader, high-performance software is an important factor. With a server-based platform, you’ll enjoy high-performance without sacrificing latency. This server-based software also features extensive performance tuning and seamless vertical scalability. Despite its flexibility, the Tbricks trading platform provides exceptional scalability and reliability.

Risk management

An automated trading system should consider risk management and account management, incorporating strategies like position sizing and entrance and exit signals. This topic shouldn’t be approached casually – it could lead to your algorithm running itself to death. To avoid this outcome, you must define what a success or failure means for you. For example, you might set a limit at a certain price to stop the trading system from entering the trade. For this reason, you may need to hire a developer if you have limited knowledge of coding.

In addition to implementing order management, an automated trading system should incorporate a simulator. A simulator can easily integrate with third-party vendors and market data feeds. It is a good idea to have multiple processor cores in the system so you can avoid having to switch between processes. Moreover, an automated trading system should be able to make 1000 trading decisions in a second. This is simply too much to handle for a human.