to Build Your Own Trading Robots to Make Trades for Algorithmic
Trading and High-Frequency Trading
There are many risks included with trading on financial markets, one of them is the risk of making a wrong trading decision. Every trader has a dream of their own trading robot, which is always in good shape and not subject to human weaknesses – impatience, fear, greed.
Large Ecosystem in Trading
Exchanges like NASDAQ, NYSE, CME, etc. are some of the whales that managed by software, which connects buyers with sellers. Closed API’s are provided by exchanges to access their data and perform trades.
Brokers companies act as a middleman that works between small companies/individuals and exchanges. Generally, they are providing their own custom user application to a customer for trading. Sometimes, it looks like a program that charts and buttons to buy/sell stocks.
Some of the financial institutes like hedge funds, mutual funds, and banks are creating their own trading robots for trading. These financial departments need a separate department that dedicatedly work to develop robots and mathematicians called ‘quants', who create mathematical trading models.
In case, you are individual investors, who want to automate the trading then Hire Space-O to create a robot for Algorithmic Trading and High-Frequency Trading.
What did exactly the trading robots do?
Individuals usually want simple robots which run inside broker terminal. Hedge funds and other large firms usually use specialized developed software and even hardware to execute their strategies. At these level, robots operate with a low level exchange or broker API and work very fast.
There is a separate and very specific area called HFT (high-frequency trading) where robot executes millions of trades per day each making tiny bit of money. Sometimes, such robots use market bugs and inefficiencies and to do so, they have to be faster than other robots. So, speed and latency are top priorities here.
Trading Robots and Forex
It is believed that Forex market has a great liquidity. Additionally, it allows 24 hours trading in a day, unlike other markets and thus, many traders are trying to develop trading robots particularly for Forex market, it gives a large number of trading instruments.
MetaTrader 4 and MetaTrader 5 trading terminals are particularly designed to create automated trading systems, however, at the same time, their interface is also suitable for manual trading.
Programming a Trading Robot
Let’s say, you are learning or have learned MQL4 or MQL5 programming language (If you not, then Hire Space-O to do this job, we have experienced developers to develop trading robots), so, you are ready to write your first Expert Advisor for MetaTrader client terminal. Here, many things are possible.
First of all, you can examine many ready-made trading robots that listed in this article for better programming intricacies understanding.
Or, you can ask your queries on MQL4.community or MQL5.community. You will find many experienced newcomers, who show interest in the subject.
Lastly, you can order improvement or development of an Expert Advisor or an indicator in Jobs service, in case you are unable to write a necessary program on your own. Though you make an order through freelancer service, you should have some idea about strategy testing to search a common language with a developer.
Apart from having basic knowledge of a programming language, it enables you to implement minor fixes and changes into the code after the work has been completed. After all, it wouldn’t be too convenient to hire programmers from Space-O to fix every small issue you encounter.
Create Automated Trading System Based on Neural Networks
Developing automated trading system that based on neural networks by using ready-made tools that widely available in math packages and special software. It is an exciting and challenging task to create an automated trading system with the elements of the artificial intelligence. However, it doesn’t require deep mathematical background or programming experience, as everything is done by using visual aids.
A trader should have information about the basics of technical indicators, knowledge of prepare essential price data and experience in certain package for working with neutral networks. However, the drawback of this approach is that a trading robot attained by means of specialized tools for working with neural networks, which is actually a "black box".
Traders don’t know it’s working principles and thus, it becomes difficult for them to predict what market phrase will the most problematic for the robot.
Let’s have an example:
Stock Prophet is a user-friendly Neural Network Trading System and a general purpose trading system development tools for employing BrainMaker neural network technology. It automatically combines multiple indicators into a single clear buy/sell signal. Such things can be applied to futures, stocks, mutual funds and other financial instruments.
According to the all neural network enthusiasts, the tougher step in operating a neural network is collecting and preprocessing voluminous, high-quality data. Being a powerful network, Neural networks depend on applicable data in enough amount and in the perfect format, to work appropriate.
How Neural Network Works?
Neural networks are created from hundreds or thousands of simulated neurons connected together in the same way just like the brain's neurons. Neural networks learn from experience rather than programming. Neural networks are excellent at trend prediction, pattern recognition, and generalization.
Neural networks don’t need formulas or rules, as they are faster and accepting an imperfect data. These networks are trained by repeatedly showing examples to the network. Each of their examples includes both inputs, i.e. information and output, i.e. response, decision.
Would it cost millions to create a robot?
NO, it doesn’t. As the buyers of Robots are different, its creators are also different. There are companies not develops robots for popular terminals. Space-O develops entire trading robots that come in two different forms:
- Plug-in to a terminal app that usually works for simple robots and some algo trading.
- Non-GUI program that works separately from the terminal. Usually, this works when you are doing serious trading and HFT.
Our developers are working with research on building both types of robots. However, we are recommending you to develop your own trading robot, according to your requirements. Exchanges, banks, and Hedge funds have their own internal dedicated robots’ development teams for operating the financial software. Investing in developing and investing in robots truly change the world. Data-driven management decisions could lead to a new management style, where future banking and insurance leaders will ask the right questions related to machines, instead of support agents, who will analyze the data and give you the recommended decisions that leaders and their subordinates will use and motivate their workforce to implement. The financial services sector need to be careful before deployment of robotic processes in order to avoid minimal disruptions to business and full compliance with regulatory standards.