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- 1 Algorithmic trading
- 2 Strategy back-testing
- 2 Strategy creating
- 3 Strategy launching
Algorithmic trading is the formalized process of using special computer systems (trading robots) designed to follow a defined set of instructions – users’ algorithms.
Trading robots are quite popular among institutional investors when a big order needs to be done. Also private traders and hedge funds use the robots to get profit from their speculations. The share of algorithmic trading is up to 70% of the total volume of the U.S. stock market.
The main goal of a speculative strategy is to generate profits from volatility of stock prices at the speed which is impossible for a human trader.
Why you need to back-taste your strategy on historical data
When creating a strategy, you can apply dozens of technical analysis indicators. Besides that, there are diverse parameters of the indicators, various time-frames and different stocks. All those give us almost infinitive variation of trading robots.
Back-testing is used to see how a strategy works. There is a special program which emulates robot’s trading process using historical quote prices.
The results of back-testing show how a tested strategy will work with real market data, so you can see the risks and profit it can generate.
At the Strategy builder tab you can modify parameters of trading strategies by other users, and create your own.
The system emulates the work of your strategy using historical quotes and shows the result of such work immediately.
How to create your own trading strategy
You can easily create your own trading strategy with our builder. First, you should specify conditions to open and close a position.
A robot automatically analyzes received data and shows the results of back-testing for a defined security or a time-frame.
You can select other tickers, time-frames or indicators. A robot will calculate the results of your new strategy.
Possible options to open or close a position
You can apply two dozens of technical analysis indicators which are used to create signals.
For instance, try to choose RSI and set it opens positions if its value is less than 35. Here it is - your first strategy.
There are many other indicators: ADX, MACD, OBV, SMA, etc. Use them the same way as you did it with RSI.
Combining several indicators, you can create more complex conditions to open or close positions.
How to make your robot start trading
Testing on historic data to assess functionality and profitability of a strategy is the preliminary to launching a robot on your account.
Now we are at the final stage of testing server functionality which allows you to use live strategies.