When you start trading you might want to write a stock trading algorithm to help you in your trading career.
An algorithm is a set of fixed commands
that will direct to perform a particular function. It is used effectively in
Mathematics and computer science. However it finds applications in the stocks
world too. Algorithmic trading involves using electronic meters to enter trades
using an algorithm and also touches upon aspects like price, time, and quantity
and even fixes orders at times. Its main purpose is to divide huge trades into
smaller ones and overall improve its impact on the market.
To write a stock trading algorithm, you
need to specify certain commands and then the set of commands will help your
trade function in the manner you want it to. You will need to gather all the
raw data first which includes stock prices, market positions etc. the data is
then purchased from the stock exchange. Some websites display this information
and also have additional facilities for the user to add his trades. All this
information that is collected goes back to the stock exchange. This is the
method you need to master. The algorithm can then be written using these in
mind.
Most of the work is mechanized and can be
done easily provided all instructions given are correct. It handles your work
without you having to take efforts to intervene. Its main purpose is to reduce
financial expenses and also assist the decision making process. The algorithms
has given rise to what is called as automated trading where a computer is
designed to handle the entire process and is programmed in a way that it
functions efficiently.
Stock trading algorithm is thus a function
that will ease your workload. You must understand all the functions fully well
and then write your stock trading algorithm as per your requirement. It is one
of the most complex jobs to write a stock trading algorithm.
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