Automated Trading Systems – Small Differences Make Big Impacts

In a market dominated by Automated Trading Systems, humans really stand no chance. Their emotions get the best of them almost every time, and when the don’t, the raw speed of an ATS simply leaves human traders in the dust. An ATS can capitalize on an emerging market pattern before a human can finish dialing his broker, even if the broker in question is on speed dial.

Things get a bit more interesting, however, when you’re talking about two different automated trading systems in the same market. In a case like that, it’s the little things that can make all the difference in the world. This is important because when an investor is evaluating your company to decide whether or not he’s going to put his money with you and use your platform, he’s going to invariably, and by definition, be comparing your offer to the offers of other Automated algorithm Platforms. You obviously want to make sure that the investor picks you over your competition, but to do that, you’ve got to be doing everything right. For instance:


Proven Track Record for Automated Trading Systems

You need to be able to demonstrate results. It doesn’t matter if your ATS is always on, or has a very small amount of latency if you don’t produce good returns. At the end of the day, it’s all about getting the good returns. That is your first, biggest priority. If you can’t do that, you’re not going to get the business.


Constant Trading Algorithm Back-Testing

Here’s another way to distinguish yourself. Your level of back-testing. You need to be doing this constantly and when you’re not, you need to be collecting results from your last round of back-testing so you can measure how successful you were. This step is necessary in order to create an ever more accurate, ever more reliable model. Done well and consistently, it can turn into a powerful strategic advantage over your competition.


Latency of Automated Trading Software

Less is more in this department. You want to have as little latency as you possibly can. That means squeezing every last drop of efficiency out of your system and bandwidth, then squeezing some more. You’ve got to be absolutely relentless about this, because you can bet that your competition is doing the same!


Automated Trading System Service and Support is VITAL

This one oftentimes gets overlooked. When you refer to an “automated trading system”, people get hung up on the “automated” part and forget the customer service aspect, but that can be important too. Never forget that while your system is automated, the people using it are flesh and blood human beings, and they will have the occasional question or concern. You want to be the company known for speaking with them directly, addressing their concerns with lighting speed, and offering “high touch” customer service.

The market is increasingly filling up with algorithmic trading systems. As it does, it’s going to be increasingly important to set yourself apart from the crowd. There are ways to do that, and even if the differences may be small ones, you can bet that they will have big impacts and leave big impressions in the minds of your customers!

Chris Vermeulen