Algorithmic trading capitalizes on digital automated technology to provide intelligence to identify opportunities and to execute trades quicker than it is possible to with humans. As a result, it provides additional yields, rapid order execution, lower transaction costs, and efficient processing.
Finding the right tools to put the best algo trading strategy in place can be difficult. However, joining user communities can be a big help. This article outlines the best algo trading communities and the advantages they offer to programmers, fund managers, and traders.
What Is Algorithmic Trading and How It Can Help Your Fund
Algorithmic trading is the automation of trades to pre-defined orders. It takes advantage of the speed computers can complete transactions compared to humans.
With algo trading, prices, thresholds, volumes, and timings can be specified to the trader’s strategy. Algo trading works by utilizing the power of modern computer processing and data to maximize the market returns for funds. It also cuts the costs of manual labor for processing bulk trades. In addition, it harnesses complex algorithms to assess trades and turn them into successful investment choices. This power can anticipate sudden changes such as rises or falls in volatile assets such as cryptocurrency. In these situations, algo trading can execute trades much quicker than humans.
Algo trading currently accounts for around 60-75% of all stock trades in the US. Cloud technologies provide the means to automate processes, as well as efficiently maintaining and storing data. In addition, cloud-based trading provides the benefits of remote servers to process trades. This reduces onsite IT infrastructure costs and harnesses the cloud’s power to test and model trades.
The Best Algo Trading Communities
Some of the best tools for algorithmic trading communities consist of backtesting of trades, dummy data or real data to be loaded for testing trades, and other useful functionalities. Not only that, but having access to experienced traders can be extremely helpful.
QuantConnect Community offers the ability for developers to backtest algorithms with financial time series data. From there, algo-based trading strategies can be developed. Although it is good for Bitcoin, QuantConnect is limited in its abilities in stocks and securities. Even on the free version, algorithms can be used by traders themselves or licensed out for others to utilize.
For live Python platform testing with interactive brokers, QuantRocket provides forex and US stocks. Its flexibility makes it popular since it supports its own engine or those preferred by its users. Note there is no free version of QuantRocket, with pricing plans starting at $19.99 per month.
Other popular platforms include the MQL 5 Community for purchasing ready-made applications, hosting source codes, and many more functions. It even has a built-in chat feature to connect with like-minded peers in the trading community. The MQL 5 Community is another great option that connects traders and developers. This platform provides a way for traders and developers to connect to identify new opportunities and businesses.
MetaQuotes Language 5 (MQL5) is a programming code that underpins algo trading. Building off the C++ style, MQL5 harnesses robotics and AI to produce streamlined, automated transactions for traders.
For programmers, MQL5 provides the ability to produce creative approaches to problems traders face. The community offers innovative solutions for assessing, analyzing, and executing trades. In addition, it facilitates connections into various databases, open-source tools, and social networks to build, integrate and share results.
How Fund Managers Can Leverage Algo Trading Communities
There are several advantages for traders to leverage from algo trading communities. These consist of profit gains, faster execution, and more efficient research methods.
The MQL5 community offers a full range of features for traders to analyze and execute trades. For fund managers, MetaTrader 5 for hedge funds provides a multi-asset infrastructure all in one place with many integrated features. Not only do you have full access to the MQL5 community, but you also have exclusive technical support in the form of an online chat, a hotline, and an extensive set of documentation.
Services provided on the community include:
- The Documentation section provides downloadable descriptions of programming languages with accompanying notes. Further detail is also available in the Articles section. This educates programmers about technology advances, new algorithms, and tools.
- Source codes for applications are downloaded from CodeBase. This allows users to download pre-written codes for free and submit their own work.
- The MQL5 Community Market offers users the ability to download applications to make for efficient and more successful trading. In addition, tools such as trend indicators, dashboards, and analysis are available to download.
- Freelance developers can also capitalize on the community to get paid work. For example, freelancers specialized in financial trading can connect their requirements and skills with customers. Custom applications such as technical indicators, trading robots, or analysis tools can be ordered from reputable developers in the community. For freelancers, payments can be received in a secure, reliable manner.
- Additional tools such as Signals allow users to subscribe to alerts about the topics most relevant to them. Sellers can also use the platform to provide paid signals to relevant users globally.
- Virtual Hosting services are also offered. These give 24/7/365 availability through virtual servers that enable AI robots to perform analysis and trades continuously. In addition, local servers can be chosen to work in tune with brokers’ servers to maximize network optimization during trading periods.
- Forum discussions provide traders and developers to connect to optimize tools and experiences from anywhere. It allows users to post specific questions or requirements and other users or freelancers to suggest specific solutions.
Arguably the greatest advantage of the MQL5 is its Cloud Network. This provides fund managers the ability to backtest and analyze profitable trading strategies using the Strategy Tester. With the MQL5 Cloud Network, what would manually take weeks or months to fully analyze a strategy can be done in minutes.
By relying only on manual research and processes, modern traders are at a significant disadvantage. Automation provides the ability to streamline analysis and execution and capitalize on the vast levels of computing power now available.
However, finding the right off-the-shelf applications and freelancers to build custom programs can be challenging. If the right skills cannot be recruited in-house or through freelancers, it means some trading funds can miss out on cutting-edge process automation. With almost three-quarters of US traders now using some form of algo technology.