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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

Risk management – your safety belt

After your algorithm has generated a trading signal, it should go past risk management. While trading logic answers the question to trade or not to trade, risk management answers another question: how much should be put at stake?

In basic terms, risk management involves analysis of the potential maximum adverse excursion per trade, account size, leverage and margin as financial components of risk, and macro-economic factors and political events as external and non-market risk. Just to give you an example, it would be wise to just switch off trading before the Swiss National Bank decision in January 2015 or the presidential elections in the US in 2016.

The topic of risk management is really vast and we will go into detail on this later in Chapter 10, Types of Orders and Their Simulation in Python, after we have learned more about types of trading strategies and orders.

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