{T³} 0. Trading Technology Trends – Preface

Palyi.com holds contents of various types, ranging from major trips, through good food, all the way to extreme experiences, and so on. And there might come various others, but current work and politics are two things that surely won’t appear here. As decided sometime during late last year, 2015 is not about trips, at least not the way 2014 was. I’ll discover some of Portugal as the 32nd country to visit and maybe go back to some of the already known ones. But what I feel like – at the moment – is more about creating original, professional content and that is intended to be this year’s highlight. I don’t foresee myself authoring any groundbreaking articles. Instead, I’ll do my best in demonstrating how one can build an amazing, totally custom finance solution – from scratch – trading technology series follow:

To fulfill my aim of being absolutely inclusive, this first part of the series will come with many basic explanations, definitions, maybe stories even. Seasoned investors can skip this for sure.

Major sections:
– Why finance?
– From finance to investments
– Markets, asset types, providers
– Platforms
– Why going custom?
– Features
– What to expect

Why finance?

On the one hand, back in 2008, I started building custom IT solutions for a major booze company. It was one of the few opportunities to unleash my fantasy and create extremely innovative, integrated solutions for basically any kind of corporate finance related business demands. At that time, when asked about the degree of automation I could realize, I used to answer: “We can make computers sing”. But singing is more of a side effect to booze than a corporate asset to build.

On the other hand, despite all the career changes, I kept this kind of knowledge alive and improved that a big deal in the domain of financial investments.

Thirdly, you don’t need anything special to start out. No logistics, no overwhelming arrangements, just pure fun.

So, in short, the Trading Technology Tutorial will be my first endeavour to deliver high tech investment related content for the sake of fun, networking, or competing even. At the time I start writing this series (May 17, 2015) a working solution is in place already – I only need to figure out how to describe all that in an entertaining way. As promised – from scratch.

From finance to investments

Firstly, how does someone come across the topic of financial investments? In my case, this happened in 2001, close to my graduation. At that time, just like most of my peers heavily preoccupied with partying, I was convinced that the key to success is buying low and selling high – simple as that. To make that happen, I opened a brokerage account at an early stage provider and started trading by pure intuition. 14 years have passed.

So, to build my own, totally custom, automated trading system I had to take the following steps:

• Build an understanding of drivers behind economic change in corporate and macro environments
• Study accessible investment markets and products
• Select the right brokerage providing API connections
• Design and implement a fit-to-purpose infrastructure:
  • Select operating system
  • Database solution / server
  • Application server
  • Web server
  • Mobile client
• Build the solution that can select, monitor and trade financial instruments of interest
• Test
• and finally deploy.

Styles

As described above, in parallel with the right technical background, you’ll have to build a proper understanding of financial markets. Working in functions of corporate finance (be it IT or business administration) will be most likely insufficient for this. But having that insight, is actually a huge plus. The way you select the elements of your investment knowledge base, should be in line with your desired approach in investing. Major directions would be:

• Value-based:
  • Finding out about fundamental characteristics of a given instrument and select the ones that are most likely to undergo a promising, favorable change through the desired time frame
• Speculation:
  • Applying principles of technical analysis, identifying trends, levels of resistance and support, etc…
    Equity trading: Financial “mechanics” or large corporations, financial reporting of such.
    Forex: Fundamental drivers of country economics.

, products, methods, tools and such. For the sake of this, I could improve my beyond the mere technical environmenThings to learn:
Major trading philosophies and attitudes:

Markets, asset types, providers
With a lot clearer focus now , I’m competing in the following:

Forex spot deals
Futures
Options
Equities
ETFs
CFDs
Bonds (T-bills)

Once you sign up for your brokerage account, you’ll be able to trade some (or all) of the above asset types in an instant. Providers either build their own, custom trading platforms (for desktop, mobile, etc.) or utilize some of the mainstream ones, like MetaTrader and such. These programs, in most of the cases, will give you a proper market oversight, charting tools and trading controls.