What Is Algorithm Trading And How To Master It

Are you a coding enthusiast who loves to analyze real-life stuff and advise people on it? If yes, you probably are looking forward to making a lot of money. Researching what algorithmic traders do might be easy, but becoming one isn’t. 

One needs an in-depth fluency of coding and languages that you won’t need much in other fields. Many languages are suitable for this type of trading, and you won’t have to practice them in any other area of study. 

That is why for a client, finding an algorithm trading who matches the requirements is not easy. The demand is rising rapidly these days, but the supply isn’t enough. 

However, if you are a computer science graduate who knows how to code and wish to polish your skills in the practical world, there is no better option! Algorithms make a better analysis of the financial securities market. 

Thousands of traders and investment firms are waiting for the proper analysis of the big chunks of information regarding every specific company. Algo-traders use the right platform, API, language, and backtesting strategies to ensure people buy the right and less risky securities. 

The traders and coders have to complete orders via ready-made programming instructions based on some variables. Some of these variables include the volume and price of a share. 

While much of the work is the responsibility of traders, software, AI, and automated resources also help with the analysis. 

Benefits Of Algo-Trading

Saves Time

Just like any other code-oriented task, algorithm trading is also popular because it isn’t entirely dependent on human efforts. While it is the best source to collect and make sense of financial securities data, it is also an efficient process. 

The biggest firms and investors in the world rely on these techniques and hire experts to help them plan such a trading strategy. Even on choosing a single backrest strategy, the concerned investors put in way too much research! 

Backtesting Is An Ease

Backtesting allows traders to look at their algorithm at any point in time and test it. When you have been following one of the customized backtesting strategies, you can carry it forward and make further edits to the code based on it. 

This gives many traders and algorithm writers a benefit since they have an automated dry-run method. 

Platforms For All Types Of Traders

The Strategy Engines we discuss below are crucial to carrying out algorithm trading the right way. Several engines suit the needs of each type of programming and coding expert. 

Now, if you’re a beginner, you can use platforms that don’t require much coding effort and are automated. However, if you’re an expert and don’t mind coding from scratch, making an original piece purely out of imagination is your call! 

There are API platforms that provide you with many easy options, and there are platforms like the AMIBroker that are more pro-type. 

How To Choose The Best Trading Platform

  • Trality: Here, the users and traders can create bots and then can carry out customized backtest strategies on them. Mostly the information related to Crypto is a deal here. 

Therefore, more traders talk about Bitcoins and other currencies, so the bots are customized for that. Moreover, Reality is one of the best platforms for Python developers who wish to master their skills.

  • QuantConnect: Quant is a cheap and affordable platform for students to code in any language they like. This platform isn’t used very much for professional and high-end purposes but is undoubtedly a masterpiece. 

This platform is good for intermediate-level engineers. You can practice algorithm coding here as a student or CS fresh grad. The best perk is that you can code in any language you are most comfortable with at just $8 per month. 

  • MetaTrader 4: This is one of the most famous and easy-to-use platforms. You can get in contact with many brokerage firms that can give you good work. In short, whether you’re a student or a pro in the field, MT 4 will benefit you in many ways. 

The best part of MT-4 is that it connects you with the relevant firms, and you can make a deal there and then! You can also make customized backtest strategies here, which makes it an even more cool option for newbie traders. 

The biggest perk of using MetaTrader 4 is that it’s free. You can use it anytime without registration, and it even has a mobile app. So you can easily work on the go as well! 

Strategies You Should Know About

There are several customized or ready-made backtesting strategies that you can opt for when employing an algorithm trader. Backtesting enables your process to become more error-free and smooth. You can then carry it out in more practical situations. 

It is just like dry-running a code to check any errors that might lead to a waste of time. Almost every trader wishes to become proficient at customized backtest strategies. They mean to offer clients a more smooth and fluent code. 

The clients, after all, need work that is polished and finished rather than one that needs more effort. They expect you to submit everything on time and not make any revisions in the code, backtest technique, or anything else. 

Now sometimes, your client will specify what type of customized backtest strategy they need, but many times they won’t. You’ll have to decide for yourself the strategy would suit you best. 

And the process of getting better at this judgment is not so easy. Since no one has enough time to try more than one strategy, you shouldn’t think twice. Once you have made the evaluation, just go ahead! Remember, only a bad experience can give you a good lesson. 

This isn’t something that should daunt you, but it should make you more willing to learn! Some common but customized backtest strategies are listed here: 

  1. Technical Analysis
  2. Combination Strategy
  3. Price Strategy (Also called Price Action Strategy)


Getting to know your perfect algorithm trading plans is easier with Belov Consulting. You can sign up any day and learn from experts! 


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