From a Quant: Algo/Quant trading and how you can start

TL;DR

The market is increasingly entirely bots because they are much faster than humans, emotionless, and easily programmable by very smart people. If you're interested in taking advantage of this wave – and likely future of finance, there are ways (linked below) for even beginners to get started. Algo trading removes your emotions, is faster than you, and can be a great way to augment an active portion of your portfolio or even make it a completely passive process for you.

First off, none of this is investing advice, I just wanted to write a quick guide on how to start algo trading for those who wanted to but think they don't have the knowledge or time.

Why does this matter?

I've been a quantitative trader in various roles for nearly 7 years now from FX, to equities, and even infrastructure. I've seen how drastically and quickly finance has gone from humans on the floor to server farms and desks with 6 monitors on them – and it's only accelerating.

A lot of retail investors know the hype, but assume these require deep knowledge, expensive infrastructure, or even knowing how to code. This is false nowadays, as there's so many new tools that make it increasingly available to retail investors for free and without a single line of code.

Not only can you augment your active portion of your portfolio (buying or selling immediately when something that worries or excites you takes place – much faster than you ever could), but these can complement passive methods by turning almost any strategy into a passive, emotionless portfolio.

How do I start?

Now the main hurdle (and question I've seen around here a lot) is how to start. While there are plenty of APIs, platforms, and other tools that require coding knowledge or deep background, I'd suggest starting by:

  1. Do it manually: set alerts on your favorite index and perform a trade when you receive the alert
  2. Once you have the hang of it, AUTOMATE: use a no-code platform like Streaks to build algo traders from your practice just by filling out a form (I'm not affiliated with this platform in any way, it's just what I use). Backtest your program, then deploy it.
  3. Read and watch videos: I put this third but it really fits along the way. You're going to learn pretty quickly and stay motivated if you start first and can see your impact, but keep learning to optimize your strategies and improve your algo-trader.

Of course: DONT SPEND REAL MONEY YET. All of these (and the resources I list below) can already be done just simulating your algo-trader until you're confident in it, and all provide stops so you don't make a dumb mistake and train it to buy high and sell low 🙂

Resources

No-code algo trader: streaks.world (easiest way to get started), quantreex.com (little more in-depth)

Code algo trader APIs: alpaca.markets (commission free), interactivebrokers.com (more in-depth)

Guides and strategies: https://www.investopedia.com/articles/active-trading/101014/basics-algorithmic-trading-concepts-and-examples.asp, https://medium.com/the-owl/algorithmic-trading-strategies-5c3b9d6ab618,

Learning and resources:

https://www.datacamp.com/community/tutorials/r-trading-tutorial

https://www.datacamp.com/community/tutorials/finance-python-trading

Edit: I kept this kind of high level for beginners, but if you have questions on quant/algo trading from an industry/institutional perspective I'll try to answer!

Submitted October 25, 2020 at 02:35PM by bigcanofsoda
via https://ift.tt/2J06E9z

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