Now more and more people are learning to invest. Trading platforms have become more relevant than ever. People want to make money with bitcoin and stocks, because quite recently it made a splash. Therefore, the growth in popularity of trading platforms will only grow.
The easiest way to create a trading system is to properly program the trading software in an appropriate standard language. To do this, you can order stock trading software development from real specialists. Thus, you will receive a quality project in accordance with your requirements. Let’s look at useful information regarding the design of a trading system, implementation in code, as well as the stages of testing and troubleshooting.
Create an automated trading system
Automated trading systems are created by converting the rules of your trading system into computer-readable code. These rules can be implemented in software or a trading platform, since there are many programs that support automated trading today. The advantage of automated trading systems is that once a profitable system has been developed, they do not need to be fine-tuned unless market conditions require changes. However, they also have disadvantages: firstly, if the system is not properly programmed and tested, large losses can quickly occur. Moreover, it is sometimes impossible or extremely difficult to encode certain rules into an algorithm.
The first step in creating a trading system is its design. Design is essentially a process divided into 3 steps:
- selection of rules for the trading system regarding entry/exit signals, buy/sell orders, etc.;
- identification of the components for the implementation of each rule and, in particular, the indicators used and the corresponding settings;
- adding “actions”, i.e. tasks that must be completed when certain conditions specified in the rules occur.
Once we have decided on the type of trading system we want to implement, we need to move on to the next step: transforming the rules that characterize it. Writing a trading system code basically means creating and assigning “variables” (user-defined objects to store data) and tables, and providing data manipulation instructions to produce results that can be used to make a decision or directly translated into actions. In this case, you will also have to add the commands required to open and close positions.
Trading system testing
Most programmable trading platforms offer the ability to run tests, which are basically of two types: technical and logical. The former looks for errors in our code (for example, a missing programming element) that, if present, interfere with its operation. On the other hand, logic tests check that the code and the results obtained make sense. The most famous logic testing tool is the backtest, which allows you to apply your trading system to past data to see if it is profitable, under what conditions it is most profitable, and if there are errors in the rules assigned to it. It is recommended to test the system on different markets, indices, stocks or stocks to avoid the point where performance is so tied to the exact settings (too many parameters) that have worked in the past that the system is no longer flexible.
Solve problems and reduce losses
After the testing phase, it may be necessary to solve some problems, such as accounting for an event that generates losses, too general rules that need to be optimized, etc. In fact, a decent trading system is profitable under most market conditions, but if it makes big losses from time to time, the problem needs to be identified and addressed. Sometimes, for example, it happens that the system cannot sell or buy when the price rises or falls sharply, or when the trading volume is too low, or simply does not take into account the “spread”. It should be borne in mind that sometimes even solutions to problems have an unexpected effect, so after their application it is necessary to conduct new tests.