Algo Presentation
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This document discusses algorithmic trading (also called algo or automated trading), where computers automatically trade currencies or shares based on predefined market conditions. Algorithmic trading is used by investment banks, funds, and now individual retail traders. The advantages include speed, consistency, risk management, and finding repeatable patterns. However, it lacks human judgment around news events. Proper strategy, money management, testing, and monitoring are keys to success with algorithmic trading.
Algo Presentation
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- 3. Algorithmic trading, also referred to as Algo trading and black box/Expert advisor. automated trading by computers which are programmed to take certain actions in response to varying market data: Algorithmic trading relies on computer systems to buy Currency or shares automatically when predefined market conditions are met
- 4. Who use it ? investment banks, pension funds, mutual funds, institutional traders, Small Speculators Retails Traders ( You and Me) Now have access
- 5. Advantages Unemotional Faster Reaction Consistence Repetitive action (looking for repeatable patterns Better risk Management Disadvantage Human Touch(gut Feeling) News events Selecting which algorithm to use Market Moves against your Position
- 6. Clear understanding strategy objectives Robust pre-trade models Built in money Management Faster Reaction Thorough post-trade analysis Adaptable Human Monitoring Many Programmers are not Traders
- 7. Trader has Clear understanding strategy objectives Close out or reduces trade size Adds to Winning Positions Turns off during News Events Selection of the best Algo to uses Reduce any draw downs that may occur
- 15. Demo Testing Live Testing Development of Improved Techniques (Fine Tuning) Quantitative High Frequency Trading
- 17. One Size Does not fit all Strategies & Techniques does not work all the time. Picking the best environment for the Algo in my opinion is the Most sensible approach. Consistent Monitoring for Optimal efficiency Past History does not Guarantee Future results