Is it more important to be a Trader or a Programmer to be a Systematic Trader?
In this article we will try to answer this curious question 😊 But to do this we must first understand what a Trader is and what a Programmer is!
Trader
The Trader is a Public or Private subject with knowledge of the market and its actions, carries out short-term transactions on one or more markets in order to profit from them.
Programmer
The Programmer is a subject or a group of subjects with a very advanced knowledge of the programming languages which he uses for personal / professional purposes.
Algorithmic Trading
In recent years we have heard more and more of algorithmic trading, but what is it?
In practice, a developer / trader creates algorithms based on his ideas or ideas teased, with these algorithms he sells and buys on the market without necessarily being on the PC as the algorithm should do everything alone.
I say should because unfortunately algorithmic trading has more advanced complexities than normal trading, it may happen that the algorithm does not go as it should and behave differently on the market, it may happen that there is a communication problem between broker and platform, a network disconnection can happen etc .. Etc .. But we will talk about this in another article.
There are several ways to be an algorithmic trader (I know them because I have tried them all) and basically I am not a good quality programmer but I still manage to artificial with the codes.
1) WAY: Programmer
The systems programmer uses different programming languages, the most used is Python which is also very versatile for data analysis. But let’s see the Advantages and Disadvantages of using these programming languages:
BENEFITS
Python is the programming language par excellence for this type of thing, if you want to use it you will have access to countless libraries with which you can work and use completely or almost for free. It is a very flexible programming language so if you know how to use it you can do almost anything! You will have complete control over the code but that is where most of your time will take.
DISADVANTAGES
Being a complex programming language it is not suitable for everyone and especially for those who want to approach algorithmic trading and do not know anything about programming. Why?
Because not only do you have to learn to program in Python but you have to find a broker that is right for your strategies (not all brokers allow you all types of orders), a broker that gives you easy access to their APIs, has good data and sufficient liquidity to open positions, a certified broker and above all the most important thing that Python does not allow you to do is a management of the open positions for possible and frequent misalignments of the strategies with the broker (ex: strategy opens short position but the order for route of insufficient liquidity is not performed); furthermore, as mentioned above, you will have to be a programmer, so you will waste a lot of time writing lines and lines of code precisely because python or other “traditional” programming languages were not born for this purpose.
2) WAY: Trader
The trader who wants to approach the systematic world does not need to learn complex programming languages because his focus is not to program but to create systems that constantly beat the markets. They are always focused on ways to beat the markets and to do so they have to try, do, create, destroy, try again, and all of this has to be done in seconds!
For this reason, new programming languages and platforms have emerged that allow you to do this!
BENEFITS
You have many more possibilities, you can write many more trading systems in no time, the code is very flexible so you can practically do what you want, you have control over Money Management and the alignment of positions between Broker and Platform. Furthermore, platforms such as Tradestation or MultiCharts allow you to optimize the code you write to find the best and most performing parameters, not all trading systems are good with a 14 period moving average 😉
You will also have the opportunity to test and optimize your strategies on different baskets in a very simple and intuitive way! In practice you will not concentrate on writing thousands of lines of code but you will concentrate on creating many profitable systems, you will study markets and indicators, programming will be a secondary thing.
DISADVANTAGES
Being linked to platforms of course you will have to stick to them and this could be a problem for you, there are platforms like Tradestation that are also brokers so it may be that the instrument you are looking for or the market you are looking for is not present in the broker or platforms like MultiCharts which only provide you with the tools, so you will be free to choose the broker and the data source, of course there is a difference: Tradestation is free while MultiCharts has a fairly high cost.
Practical example
Now let’s see a practical example of the two ways, I show you a code that does both the same things written with both ways.
The code is very simple to buy / sell when the exponential moving averages change direction..
Mode 1: Programmer
Ok in total there are 85 lines of code and we haven’t finished writing it yet!
Mode 2: Trader
In total we have 15 lines of code ..
Conclusions
As you understand in the example above the difference is clear, I also started with python, having programming basics seemed to me the right choice, going deeper and deeper but I found too great complexities that took too long to be solved , by chance I came across the platforms I mentioned above and since I discovered them I have never abandoned them. I understood a fundamental thing: WE are TRADERS not programmers, our aim is to make money not to learn to code and if there are ways to do it in half to half the time it is essential to use them. I went from writing 1 system per month with Python to writing an average of 15 systems per month ready and operational to go to market, now I have more than 150 systems in my portfolio and every month I can choose the best one to put live.
Of course these are just tips and do your own assessments. See you in the next article!🖖
If you are interested in the platform I use to do Algorithmic Trading and create my strategies, look here MultiCharts
If you want discounts for the platform I use contact me privately or buy via this 👉 Multicharts