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Technical trading systems are a favorite discussion topic amongst technical traders who use indicator based programs to backtest data using various indicator combinations to create canned or black box solutions. This approach is also utilized within the institutional ranks and is growing in importance in the United States and European financial districts. In fact, algorithmic trading is replacing manned trading desks as companies seek to employ Ph D types to create high frequency trading strategies that exploit short term market inefficiencies and anomalies. Complex mathematical and proprietary formulas are often used in this approach and firms such as Renaissance Technologies go to great lengths to protect their strategies. ETF trading secrets revealed by Ex Fund Manager There are many
different software packages used for the
design of mechanical trading systems. Popular software includes
Metastock and Wealthlab. These companies offer off the shelf solutions
with pre-programmed indicators and interfaces that provide the
versatility to code custom indicators. There are many programmed
Metastock trading systems available on the internet and circulating
within the Metastock community. This software is heavily utilized
within the retail community. Institutions often build their own
software from the ground up. Hedge funds and financial institutions
employ the services of programmers to create custom packages that
interface with clearing firms. These specialized packages need to be
robust enough to handle high frequency trading applications. The Wealthlab
(www.wealth-lab.com) site has many trend
trading systems and stock trading systems that have been developed by
individuals who share their work. The software has a built in download
manager that permits owners of the software to update via the internet
on a regular basis. This software is freely available to individuals in
the US who satisfy Fidelity Account requirements. Traders outside the
US can purchase the product separately. This site also has a free
account setup facility that permits monitoring a portfolio and using
chartscripts for analysis purposes. There are many
books written for technical trading
system enthusiasts. Traders Press (www.traderspress.com) and Amazon
(www.amazon.com) is a great place to prospect for publications that can
be used for strategy formulation and generating trading system ideas.
This includes books on software platforms such as Trade Station which
uses the Easy Language proprietary language for development. There are also
dedicated sites that sell or rent
technical trading systems. You can visit The Collective
(www.collective2.com) and Rockwell Trading (www.rockwelltrading.com) to
learn more. |
