Thursday, December 6, 2012

Introduction

Trading robots are all the rage nowadays. Almost every institutional trader or hedge fund uses them daily. The trading robots are helping institutions to automate their daily routines, manage their portfolios, achieve better executions, implement sophisticated trading strategies, find and exploit market inefficiencies. Proprietary code of these trading robots is a highly guarded secret that the institutions protect at all costs. 

Can an individual/retail investor, with limited resources, computer power and programming skills create his own trading robot? Is it possible to train a robot to perform your daily chores, execute your trading strategies, monitor your portfolio/positions and alert you of exceptions while you're away? What if you're a part-time trader, is it possible for you to more effectively combine your full time job with trading with a help of a trading robot?

As an individual trader, I use a number of strategies to trade stocks, ETFs, futures, currencies and options. I enjoy developing, testing and executing trading strategies, but trading-related activities take a lot of time and sometimes require a lot of repetitive manual steps. Also, I have a day job, so it is difficult for me to monitor my portfolio and execute my trading strategies during market hours. My intention is to create a computer program that will automate my trading-related activities as much as possible, as well as execute my trading strategies while I'm away. Trading strategies that I use are systematic (that is, all the steps are well defined), so it should be possible to let a program monitor and execute these trades for me. 

My plan is to combine the power of Ruby, an expressive and easy-to-use programming language, with the flexibility of Interactive Brokers API (the best trading API available to retail investors) to build a trading robot that would make my life easier and help me to achieve my goals. 

While I was searching the web for inspiration, I came across this blog documenting a project very similar to what I have in mind. Unfortunately, it is currently on hold, and the technologies described are a bit out-of-date, but it's still a good start. As an initial phase of my development, I want to reproduce the steps of System Trader's project using the most up-to-date technologies and instruments. I will further build upon it to create a fully functional trading robot. My development will be documented in this blog, so subscribe to it and stay tuned. I will also appreciate your comments with questions and ideas to help my development.

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