While using algo trading, traders invest considerable amount of money on trading software they use. To ensure efficient and accurate execution of trade order, the right piece of software is vital. Faulty software, on other hand, may lead to huge losses. So, here we are some of the key features you should look for in an algorithm trading software.
Market and Company Data
All trading algorithms are designed to take account of real-time market data and price quotes. Some programs are also customized to act on company’s fundamental data like EPS and PE ratio. Any algorithmic trading software is meant to have real-time market data feed, and company data feed. The software should be capable to easily integrate from alternate sources.
Connectivity to Markets
Traders who are wishing to work across multiple markets should know that each exchange may provide data feed in different format like multicase, fix, etc. Therefore, software should be well advanced to accept feeds in different formats. Another solution to work across multiple markets is to take assistance from third party data vendors which combine market data from different exchanges and make it available to end clients in uniform formats. The algorithm trading software should be efficient enough to process these aggregated feeds when needed.
Customization
Most algorithmic trading software provides standard built-in algorithm which helps traders to experiment new things. Without customization, trader may be constrained within the built-ins functionality. Be it buying or building, the software should have high degree of configurability and customization.
Custom Programs
Python, C++, JAVA are common programming languages used in trading software. Majority of algorithmic trading software, sold by third party vendors, offer ability to write own programs within it. It allows a trader to try and develop any trading concept in programming language of their choice.
Platform-Independent Programming
Some programming languages function on dedicated platforms, like certain versions of C++ run on only selective OS. While building or buying algo trading software, give preference to that one which is platform independent and supports such languages.
Backtesting Feature
Backtesting simulation refers to testing a trading strategy on historical data. It access practicality and profitability on past data verifying it for either success or failure. This mandatory feature needs availability of historical data so that backtesting can be performed.
Algorithmic trading software is expensive to purchase and tricky to build on your own, so purchasing is a right option.
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