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Getting Started with Forex Trading Using Python

Getting Started with Forex Trading Using Python

By : Alex Krishtop
4.3 (3)
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Getting Started with Forex Trading Using Python

Getting Started with Forex Trading Using Python

4.3 (3)
By: Alex Krishtop

Overview of this book

Algorithm-based trading is a popular choice for Python programmers due to its apparent simplicity. However, very few traders get the results they want, partly because they aren’t able to capture the complexity of the factors that influence the market. Getting Started with Forex Trading Using Python helps you understand the market and build an application that reaps desirable results. The book is a comprehensive guide to everything that is market-related: data, orders, trading venues, and risk. From the programming side, you’ll learn the general architecture of trading applications, systemic risk management, de-facto industry standards such as FIX protocol, and practical examples of using simple Python codes. You’ll gain an understanding of how to connect to data sources and brokers, implement trading logic, and perform realistic tests. Throughout the book, you’ll be encouraged to further study the intricacies of algo trading with the help of code snippets. By the end of this book, you’ll have a deep understanding of the fx market from the perspective of a professional trader. You’ll learn to retrieve market data, clean it, filter it, compress it into various formats, apply trading logic, emulate the execution of orders, and test the trading app before trading live.
Table of Contents (21 chapters)
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1
Part 1: Introduction to FX Trading Strategy Development
5
Part 2: General Architecture of a Trading Application and A Detailed Study of Its Components
11
Part 3: Orders, Trading Strategies, and Their Performance
15
Part 4: Strategies, Performance Analysis, and Vistas

Ordering – transactional risk

Transactional risks are the real problem in the first place for arbitrage, but they also affect directional strategies. In simple terms, this is a risk of the following:

  • Entering or exiting the market at a wrong price
  • Entering or exiting the market at a wrong time
  • Entering or exiting the market with a wrong trading size
  • Not entering or exiting the market at all

All four situations are more than possible in all markets and are even quite frequent during periods of insufficient liquidity (see Chapter 3, FX Market Overview from a Developer’s Standpoint, for a more detailed discussion of liquidity issues).

Key takeaway

Transactional risks are managed by a set of algorithms that are also an essential part of any trading application.

Well, it’s been quite a trip across the various risks, and we now understand that the initial idea of a trading application with a simple and straightforward linear logic definitely won’t work in real life. Now, we can suggest something (unfortunately) more complex, but (fortunately) more realistic.

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