Trading algorithms

Building a trading algorithm is a complex task that requires a deep understanding of the market I have been programming trading algorithms for several years now. I have tested many strategies and I want to share my experience with you.

What is a trading algorithm?

A trading algorithm is a set of instructions that a computer follows to make trading decisions. It is used to buy and sell assets in the market automatically.

What can a trading algorithm do?

A trading algorithm can do many things. It can be used to

• scalp cryptocurrencies,
• arbitrage between different markets,
• trend follow,
• mean reverting,
• event driven trading,
• etc.

What do you need to build a trading algorithm?

To build a trading algorithm, you need to have a deep understanding of the market and the tools used to trade. You need to have a good understanding of the programming language you are using. You need to have a good understanding of the trading strategy you are implementing.

What are the steps to build a trading algorithm?

1. Define the trading strategy :
   • Choose the asset you want to trade
   • Choose the time frame you want to trade
   • Choose the trading strategy you want to use
2. Implement the trading strategy :
   • Choose the programming language you want to use
   • Choose the tools you want to use
3. Test the trading strategy (Backtesting)
4. Optimize the trading strategy
5. Deploy the trading strategy

What are the tools I use?

I use python for the trading algorithms. I know people use ccxt to get the price of the asset but I prefer to code my own REST API. I use pandas to manage the data. I use numpy to do the math. I use sklearn to do the machine learning.

What are the challenges?

The main challenge is to find a strategy that works. You need a strong architecture to manage everything and a good backtesting system. It is a long process of trial and error.