Algorithmic trading can be complex, and learning to master the concepts can be challenging. However, with the right resources, even novice traders can leverage the speed and precision of a computer program to implement a strategy based on quantitative analysis. In this article, investor Dan Calugar shares some of the best resources for learning algorithmic trading.
Algorithmic trading (also called automated trading, black-box trading, or algo-trading) utilizes computer software that follows a defined set of instructions (an algorithm) to place a financial trade. In theory, this trading method can generate profits at a speed and frequency that is impossible for humans.
The instruction sets are based on timing, price, quantity, or other mathematical models. The algorithm will ensure that trades are executed at the best possible price. Algorithmic trading eliminates the impact of human emotions and makes the markets more liquid and trading more systematic. Speed and precision are the hallmarks of systematic trades, and placement is instantaneous and accurate.
Algorithmic trading is growing in popularity across the world. Over the last decade, it has become common with major exchanges and even in developing countries. Before you wade in, however, it is essential to learn how to use algorithmic trading profitably. A beginner should not expect to learn how to create algorithms and design models overnight, but in time anyone can learn to adapt these principles.
Books
1. Quantitative Trading by Ernest P. Chan
2. Inside the Black Box by Rishi K. Narang
3. Algorithmic Trading & DMA by Barry Johnson
4. Algorithmic Trading by Ernest P. Chan
5. Trading and Exchanges by Larry Harris
6. Schaum’s Outline of Statistics and Econometrics by Dominick Salvatore and Derrick Reagle
7. Analysis of Financial Time Series by Ruey S.Tsay
8. Technical Analysis of the Financial Markets by John J. Murphy
eBooks
1. Algorithmic Trading – A Rough & Ready Guide
Courses
1. Algorithmic Trading 101 by AlgoTrading101
2. Algorithmic Trading Strategies by Experfy
3. Learn Algorithmic Trading by QuantInsti
Blogs
3. QuantStart
4. Quantocracy
5. Quantpedia
6. Getting Started in Algorithmic Trading Includes Overcoming Common Problems
7. Skills That Can Transform You Into A Skilled Algorithmic Trader
8. Intro to Algorithmic Trading – An Algorithmic Trading System
10. Basics of Algorithmic Trading: Concepts and Examples
11. Quora – What are good online tutorials on beginning algorithmic trading?
12. How to Identify Algorithmic Trading Strategies
YouTube
1. QuantInsti Quantitative Learning
2. Algorithmic Trading Strategies
Inclusion in this list does not indicate an endorsement of these resources, nor does being excluded from this list constitute an inferior resource. These are resources that will help anyone, beginner to expert, understand how to grow in the field of algorithmic and quantitative trading.
Enjoy your journey into automated trading. It’s not for everyone, but those who embrace it benefit from reduced transaction costs, reduced risk of manual error, and the elimination of emotional trades going bad.
About Dan Calugar
Dan Calugar is a versatile and experienced investor with a background in computer science, business, and law. He developed a passion for investing while working as a pension lawyer and leveraged his technical capabilities to write computer programs that helped him identify more profitable investment strategies. When Dan Calugar is not working, he enjoys spending time working out and being with friends and family, and volunteering with Angel Flight.