Trading
Trading the financial markets is a very broad topic that encompasses all activities that lead to taking a trade in the financial markets. The motivations are very different depending on the actors. Some typical activities include:
- Arbitrage
- Speculation
- Market Making
When I talk about trading, I refer to the activity of speculating on the evolution of price. The other kind of activities tend to have an economical use case, but are at the same time exercised by bigger players. I, as a retail trader, I prefer to focus on speculation as it is both what I have most experience on, and what I enjoy the most.
Algorithmic Trading
Algorithmic trading is the art of writing code that executes trade, often using technical analysis. Other methods not using the price can be used such sentiment, or fundamental. However, I never expressed an interest in that.
The core of algo trading are:
- Creating a trading strategy
- Backtesting the trading strategy
- Deploying the strategy