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Automated Trading: How to Become an Algo Developer?

Automated Trading: How to Become an Algo Developer?

Last week we discussed the subject of automatic trading by explaining the different varieties of algorithms and how they work.

This week we will answer the following: How to become a trading algorithm developer?

Learning to trade

The first step if you ever want to develop a trading algorithm will be learning manual technical trading.

There are highly mathematical ways to create algorithms, by relating variables that most of us don’t even know exist. Add an artificial intelligence into the mix and you have a highly specialized trading algorithm created by a team of mathematicians, physicists and computer scientists. I may be exaggerating but only a little!

For an algorithm based on technical analysis, you will have to learn at least the basics, i.e. the most used technical indicators, moving averages and volume. This is a sufficient basis to start building your first algorithm.

You can of course add some knowledge of price action, trading without indicators, but this is less affordable and more difficult to code.

The programming language 

Yes, learning technical analysis is only the first step to becoming an algo dev! After that you will have to learn a programming language. Luckily, there’s a plethora of choice!

Are you already a developer or an IT student?

In that case you will have an easier time than most of us to get over the language barrier. If you are already familiar with a programming language such as Python, look no further, it is one of the best languages when it comes to trading algorithms and financial analysis. Indeed, Python has a lot of libraries available, just like R.

You have never written a line of code in your life?

You can also turn to Python but it will be a bit more complicated. Therefore using the PineScript language, available on Tradingview might be much easier.

This will allow you to familiarise yourself with programming without being overwhelmed by the amount of information that is available on more complete programming languages.

AB Testing

You are now able to write code and you have knowledge of technical trading. Now comes the hard part: creating a strategy.

It is not enough to know the supports and resistances and the RSI to be able to code a winning trading strategy, you also have to find out how to use them together. This will require your inspiration and creativity.

From now on, it will be trial and error, to eliminate what doesn’t work and keep what does work, to eventually improve it.

Conclusion

The road to mastering algorithmic trading is not the easiest and you now know the steps. Next week we will discuss the best way to test your strategies through backtesting.

Simple at first glance but more complete than it seems, we will see that together next week!

Rent your Algos

Do you already have a trading algorithm or working, or even know someone having a good one? Do you want to earn passive income by renting it to one of the best trading communities and be sure to get what you deserve? If you answer yes to this, we invite you ta contact us : [email protected]

You can also check more details HERE

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