After 100 hours of programming which lasted for three months Mike to Sula (Mike Soule) was ready to start of the project. At the same time, he did not know what to it to expect — if everything went as it is necessary, then in the future the financial success could wait for it. And if not, then he could lose all the accumulation.
It worked not on mobile application or the next online store. He created the program which has to buy and sell shares 24 hours a day 5 days a week.
Algorithmic trade at the exchange is a new measurement of the phenomenon of DIY. Pushed by own curiosity, scooping information from online courses and materials of the same fans as they, thousands of deytreyder write the trade software and enter with it the market.
"It is certain one of those things when you do not know whether everything will work" — says to Sula, the student of university of Nevada in the city Rino and a network admnistrator of Tahoe Forest hospital. "When the robot began to trade, it was just wow. I do not know whether I expected it, but I made it".
Broker companies actively attract the clients developing trade robots — articles about trading collect tens and hundreds of thousands of viewings training YouTub-video watch hundreds of thousands of people. One of such courses was created by professor of Technology university Georgia Tucker Balch (Tucker Balch) — video of its course were watched by more than 170 000 people. And in spite of the fact that only about 5% of the audience, on the action which took place in April in New York devoted to algorithmic trade reach its end, three persons asked its autograph. "Professors of university are very seldom asked about the autograph" — Balch says.
Video lectures of Balcha were watched by the Austrian project manager Alexander Sommer (Alexander Sommer) — he wanted to master bases of algorithmic trade. Now every morning before going to work, Sommers wakes up from a sound of the come email-message in which all forthcoming transactions of day are collected. The message is generated by the trading platform created by it which exposes the orders in the automatic mode by means of algorithms written to them and his three trade partners. Partners made $200 thousand own investments in this "joint venture" — they are used for trade in stocks of the S&P; list; 500 and Nasdaq Composite.
In the afternoon Sommers — the project manager of the European oil company OMV Group. From 9 in the evening and till midnight — it is a member, command which works on improvement of trade algorithms. Sommer has to recheck everything by that moment as the American exchanges will open — it in Vienna will already have by this time 15:00. After closing of the markets it checks whether all necessary transactions were performed. Sommer and his partners divide changes when it is necessary to monitor operation of robots, in turn.
The multimilliard hedge funds which are put in technologies drew attention of regulators and authorities of the different countries for a long time. Private traders got on a radar after in the spring of 2015 the trader working from the at home in the Western London was arrested and extradited to the USA. Its actions led to a collapse of the Dow Jones index on 1000 points in May, 2010.
There are also failures — when Mike to Sula in 2013 decided to go to Iceland and after several days almost without the Internet came back home and connected to a network, understood that something not so. Its account was much less, than to a trip.
"I understood that here not everything is all right. I almost lost everything".
To Sula updated the trade algorithm shortly before to sit down aboard the plane. And while it and five his friends went over the country, its software because of an error lost money. In total robot lost more than $6000 — about 60% of the deposit at that time. It became clear that the problem was in a typographical error which led to the fact that the program took twice more shares, than sold.
"When I returned and saw how simple was an error, I was very upset. But there was nobody to blame".
By means of algorithms traders can trace behavior of hundreds of events at the same time that cannot absolutely be made manually. Strategy can be difficult, consider the appearing news or even discussions on social networks, and can stake on quick response during movements of the prices.
The simple algorithm can work, for example, according to such scheme: if the trading volume defined events leaves below the minimum threshold, and the 50-day moving average of this event crosses 200-day up, then it is necessary to purchase events for $100. If the trading volume reaches the minimum threshold, and the 50-day moving average crosses 200-day in the direction down, then to sell events for $100.
The number of tools for creation of trade robots by private traders constantly increases. For example, the Quantopian platform allows traders to create free of charge the algorithms, and creators of the most productive get an award. Other company, Rizm, offers the tool for creation of robots in the simple graphics editor — thus even the people not familiar with programming can make it. In our blog on Habré we described 11 tools for creation of trade robots.
In search of trade ideas traders read books, blogs, browse discussions on Twitter and study the academic financial logs.
Some trade systems can be constructed with the help even of Microsoft Excel, it is quite simple to program some strategy. However it is always required to spend a lot of time on testirovaniy ideas — and here everything is already more difficult.
"Some strategy can be programmed two lines of a code — Sommer says. — And all other work can easily take and 5000 places".
After failure to Sula stopped the algorithm for half a year — it it spent time for development of new tools which check a code for existence of errors before the algorithm begins work with real money. Not so long ago, according to him, the trade systems created by it reached "comfortable profitability", and the number of profitable months moved number come to the end with a loss.
"It for me still a hobby. It would be exciting to gain once passive income which will exceed "active"" — Mike says. "But I especially do not hurry in this plan. I still like to have full work for every day".
Read also: Edition of the blog ITinvest on Habré communicated to the developer Andrey Gorkovenko who told how the knowledge of C# and C ++ helps to earn from stock market.
Links to materials on a subject:
- Stock market: How the exchanges and why they are necessary are arranged?
- Tools of stock market: what is futures and as they work
- Tools of stock market: what is options and as they work
- What is share indexes and why they are necessary
- Books and educational resources on algorithmic trade
- The algorithmic and automated trade: 13 books on a subject
- Educational ITinvest resources
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