Markets, Algo Trading and More!

For those who are unfamiliar with the markets, trading may appear to be a trap. Even individuals who are well-versed in the markets must avoid certain pitfalls. A bear trap is one of the most common market traps that a trader should be aware of.

The Sharpe ratio is a metric for determining risk-adjusted return. It is the ratio of the investment's excess expected return (above the risk-free rate) to the volatility or standard deviation of the investment's returns. The Sharpe Ratio is a tool that allows you to analyse multiple portfolios and determine which one is the most practicable.

The asset's relative strength is determined by the Relative Strength Index (RSI) indicator. To put it another way, the RSI informs us how well (or poorly) a stock is performing in relation to itself.

The Volume Weighted Average Price (VWAP) is a useful metric that is straightforward to calculate. While a Hedge Fund or Mutual Fund might use it to help them decide whether or not to buy a large number of shares, a retail trader might use it to see if the price at which he traded was good.

A heatmap is a matrix representation of the variables that is coloured according to the value's intensity. As a result, it's a great visual tool for comparing different entities. Seaborn is a simple-to-use library that gives us powerful tools for creating more appealing visualisations. For various use situations, one can alter the Seaborn plots to fit one's needs and create heatmaps using Python.

Tick by tick data, where each tick indicates a trade, is what trade data is in its purest form. It's quite handy, but there's a lot of noise in it. Using the Pandas library's resample function, you may transform this TBT data to an OHLC (Open, High, Low, and Close) format.

Mean reversion theory posits that security prices and economic indicators like interest rates will tend to revert to historical mean prices in finance.

Price action is a trading strategy that has been around for a long time and has a large following among the ever-growing trading community. Many individual and institutional traders utilise price action trading strategies to forecast and evaluate short-term price movements of financial assets by analysing historical price behaviour and trends.

LEAPS (Long-Term Equity AnticiPation Securities) are a special type of options which were born out of demand for investors who were looking for a long term investment but did not want to lock in their investment for that amount of time.

A variety of technical indicators are employed to analyse and determine the price's direction of movement. For instance, mean reversion trading, momentum trading, etc. Indicators are frequently used by traders to forecast future price peaks.

In today’s ever-changing markets, market participants play an extremely imperative role. In Market Making, a key market participant in an exchange’s trading structure is the Market Maker.

One of the most well-liked trading industries is proprietary trading. Many are interested in learning more about what proprietary trading businesses are and how they operate, and many others are setting up their own proprietary trading desk.

This article will examine both free and paid options, all of which include a simple Python Stock API wrapper to make it easy to use their services. We will examine which asset class—stocks, ETFs, FX, commodity futures, options, treasury, and even cryptocurrency—fits each solution type. These resources offer information and instructions on how to retrieve it in a number of methods, naturally with an example in Python code.

Given that it has a restricted range of risk alternatives and a restricted possibility for profit, the butterfly options strategy is a hybrid of the bull spread and the bear spread. It is tested on stocks whose underlying price is anticipated to fluctuate minimally during the course of the investment.

Swing trading is the skill of taking a position in the market after determining these swing highs and swing lows. Finding a wider trend and capitalising on it is the objective.

It might surprise you to learn that the suitable applicant might easily receive a Quant salary of $100,000 from a financial institution in the United States. You might even realise as we go deeper into this topic that this quant compensation is actually on the lower end.

It is effective to determine market sentiment using the TRIN index. Additionally, TRIN predicts future price movements by generating overbought and oversold levels to determine when the price index may change course.

Many people have a fondness for algorithmic trading, so when a fantastic film features sequences from it or uses it as the basis of its plot, it can be a real delight. Since the algorithms' decision-making is quick, precise, and produces favourable outcomes, coding them makes life easier. Thisarticle will walk you through a list of my personal favourite films featuring fantastic scenes about algorithmic trading.

You’ve probably heard about various types of trading strategies, each unique in it’s own way. With this detailed list, you get introduced and learn how to use several types of trading strategies in the algorithmic trading domain.

Direct market access (DMA) is the quick and easy access to the order books of the stock exchanges that facilitates daily securities transactions. Direct market access is typically owned by businesses like investment banks (CitiGroup, J.P. Morgan), hedge funds, etc.