Algorithmic Trading? Seriously?

Hello all the seekers. The question is most sought out by traders who wish to keep up with the changing landscape of trading. The speed of the market is ridiculously fast. So you fear that you are being replaced by silent machines with enormous processing power that’ll make better and quicker decisions and snatch your share of margin. Well, that’s true. But I am not writing this to fuel your fear but I am warning you to be cautious against the culprits trying to profit off this logical fear of yours. I often see people having decent trading track records from non engineering background paying up huge sum of money for courses in a hope that they’ll turn out a Quant in a matter of few months, only to find that their hard earned money has been siphoned by loud mouth marketers into their pocket and they are left with some crazy bunch of codes and bag of technical jargon to pass on to others.

1. Algorithmic Trading is a huge domain. If you could master everything than why are their so many hedge fund cooperation running with so many smart people working round the clock.
2. You need a deep specialization(far beyond basics) in all the associated domain, be it finance for tweaking the international financial papers from ssrn according to your market of interest, be mathematics for building mathematical models for translation of those financial models into algorithms or be it computing. Well computing part of Algorithmic trading is itself so huge, I’ve already lost track of skills I have.
3. You need funds. If you think that you are going to turn INR 10K into billions by using margin provided by your broker and applying algorithms, well Good Luck. (You must have seen the fair side compounding, haha).

Are you serious? Are you still reading? Well read on….

You can do it. But it will take time. If you are doing it alone, then it will take more time than you calculated. You will have phases of ups and downs. You’ll feel like you are going nowhere. But it is the sum of incremental steps that amount to massive results.

Often I get questioned… Have you found success? The answer is NO. But today I am closer than I was yesterday. For people who know me closely ask how to get started. Well get your head into the ring. Jump into it without delay. You’ll fail, I guarantee that. But it will clear your foggy brain. You’ll quickly discover that the road ahead is far difficult than what you expected or the fairy tale being circulated around the market. It is often being portrayed that the algorithm owners are plundering the markets and cause of the extreme volatility as seen in the market. Well, I agree on the volatility part but the profit part is far from true.

How to head into the ring?

If you have are from trading background, get decent foundation on programming. I would suggest get free course from coursera or udemy(dirt cheap). You can choose any mooc platform.

If you are from Computing background, get yourself immersed into trading first, after that go into theory, or you’ll get too bored by finance jargons. It’ll be roller coaster of emotions, that’s what traders are master of.

If you are like me and not from any of the above background, you are at advantage. You’re free of all the biases and you can chart your path dynamically. Start practicing programming as well as enter trading world at the same time.

You’ll find huge amount of resources on Internet and yes be cautious. At every corner here, professionals are lurking to snatch away your money. This is cut-throat competition. You may get in touch with me anytime. I’ll be more than happy to help.

Hope it helps. Thank you.

#trading #algorithms #quant