How do I develop Trading Systems?

Often, trading model developers “spoil” the eventual results of their model by making errors early in the process. These errors could be using poorly-collected data, not accounting for survivorship bias, or testing too many specifications of a similar model. Data snooping such as that can be particularly costly in that it is an error that …

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Building a Trading System – General Considerations

One of the biggest lessons I’ve learned is the important of separating the trading models–the mathematical or algorithmic logic that analyzes data and decides how to trade–from the trading system–the general framework which provides interfaces for receiving data and interacting with the market to the trading models.  The nature of high frequency trading is such …

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Why High Frequency Trading is so profitable?

Low latency networks: location, location, location…. Or Colocation! This is key to creating an HFT business… without it, you will be another retail investor. Low Latency systems: usually written in Java or C++. Personally, because of my background, I prefer C++. There have been non-sense discussions on what is better C++ or Java? For me, …

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3 Ways to Use Black Box Automated Trading Systems in Forex

Black box trading, algorithmic trading, automated trading, or whatever you’d like to call it, is on the rise. Technology is better, cheaper, and faster than ever before allowing retail traders to take part in an area of trading that was historically reserved only for the big boys. Speaking with Forex traders on a daily basis …

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Exchange Colocation – worth it or not?

Automated trading requires a server, and it often makes sense to collocate it. Even discretionary traders these days can rely on certain automation that may be better off on a server. Tools like NinjaTrader allow “customer assisted trading” where a position automatically gets a profit target and stop loss, even with automatic adjustments. While not …

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The 10 Best Forex Strategies

#1: The Bladerunner Trade The Bladerunner is an exceptionally good EMA crossover strategy, suitable across all timeframes and currency pairs. It is a trending strategy that tries to pick breakouts from a continuation and trade the retests.   #2: Daily Fibonacci Pivot Trade Fibonacci Pivot Trades combine Fibonacci retracements and extensions with daily, weekly, monthly …

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How to Set Up Your Own High-Frequency Trading Firm

First come up with a trading plan: There are multiple strategies when it comes to high-frequency trading. A few of these include, but of course aren't limited to, the following: Liquidity rebate capture (getting money for providing liquidity on the exchange) Latency arbitrage: Exploit delays in orders going through an exchange Automatic market making: Using …

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Begginner’s guide to trade automation ($spy $spx $eurusd)

It is the process of testing a specific trading strategy or idea, and see how it behaved in the past, or, simulate it with past data. All this with the aim of measuring the effectiveness of that strategy/idea. For example, suppose you want to test a strategy based on the idea that the EUR crosses …

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