When algorithmic trading (or algo trading) arises in a conversation, you are likely picturing a programming genius with three PhDs glued to six monitors. But that is far from the truth. Almost anyone with a deep understanding of the markets and a technical analysis background can produce their own algorithm to invest their money for them.
Several new online businesses have popped up in the last year that allows you to create, test, automate, and turn your rough idea into a true algorithmic trading system. This is a new booming segment of the market, and it is nowhere near maturity. But most fail to recognize that you, the user, must thoroughly understand how the market works before you can slap together ideas, backtest, and start running your algo trading system.
Flaws Of Algorithmic Trading For Retail Investors
There are many flaws in making algorithmic trading for retail investors (the masses), but one I would like to point out in this article is backtesting.
Backtesting algo systems is not as simple as one may think. Sure, you can click the backtest now button, and it will spit out results, but can you really trust those results? The answer is – sometimes.
If you are backtesting a daily, weekly, or monthly chart strategy, you can bet those results will be nothing like how the system will trade in real-time with your money. The shorter the intraday duration you focus on using, the more accurate your results will be as you are not scalping the market for pennies, trading low volume stocks, or trading 3+ times a day.
If you fall into one of these categories, then be sure you research backtesting thoroughly and contact your software provider to learn about that specific system limitations.
Another catch with trying to build your own algorithmic strategy is that it will likely take you months, quarters, or even a year to build something that is actually tradable. With that comes industry-standard monthly fees, starting around $99 and going up to $250 per month depending on the number of backtests and algorithms you want to run.
With that being said, Equametrics.com is one company that is leading this market niche and has a solid platform built on the cloud so you can build and test from anywhere in the world.
But what if it was that the newest and most lucrative investing strategy of Wall Street was to have your money automatically invested in your brokerage account using some of the top trading strategies available without knowing anything about algorithmic trading or investing.
If you do not believe us, then look at our Canadian-based startup AlgoTrades.net. The brains behind the operation belong to founder Chris Vermeulen, a trader since the age of 16, has a deep understanding of how the financial markets move, and runs five successful investing and trading newsletters.
AlgoTrades is simply designed, and since its program is fully automated, it doesn’t require anything more than an internet-connected device to set up your account and have AlgoTrades algorithmic system trading live in your brokerage account. All a user has to do is select the type of algorithmic trading system they are comfortable having with (futures, Funds, or forex), select the percent of their investing account which they would like automatically invested /traded with the algorithmic trading system, and click the automated trading start button.
Each of the algo systems trades only the S&P 500 index. And because they only trade this low volatility index, your portfolio volatility is kept to a minimum which means you do not need to ride the stock market roller coaster again. Our long and short systems allow your money to grow in both up and down market conditions. A bonus to our service is that you get diversification because our algorithmic trading system invests (buying and selling) the top 500 corporations in the world, covering most sectors within the financial marketplace at the same time.
The strategies used via AlgoTrades use common sense logic and money management rules that fit the wants and needs of most investors.
Minimal drawdowns, a winning ratio of 80+%, and a low position turnover of only 1-3 trades per month, users get the best of all three worlds: Trading, Investing, and proper money/position management.
While the company is not a broker, it has partnered with 17+ brokerages to execute the trades for its clients.
Just think, if you’ve got investment capital not making you much money or sitting in a savings account, then algorithmic trading may be much easier than you thought.
ALGOTRADES – ALGORITHMIC TRADING FOR INDIVIDUAL INVESTORS!
Technical Traders Ltd.