Platform & Broker; Algorithmic Trading

[mindset]

Hi Guys,

I have a contact who is a world class mathematician who is working on creating a trading algorithm, so far he has managed to test it and it has been running very well using his high level statistics.

MY QUESTION IS;

Could somebody advise me to the best way of implementing his mathematical trading algorithm so he can trade from home with the view to progressing to setting up a hedge fund once people realise his potential.

What brokerage should he use and what platform should he use to implement his strategy?

I was thinking of getting the strategy coded up in C++ then API to a platform or broker?

Does any body have any ideas?

Thank you,

James

 

[rnicoll]

I use Interactive Brokers for my trading, and they seem fairly good. Big fan of the Linux support, myself, and the paper trading account is invaluable for forward testing the strategy before you use real money with it. For platform... JBookTrader is probably your best bet. I've got my own, but it's not in any state for others to use yet. There's NinjaTrader, but personally I like my code open source...

 

[Adamus]

James, why a hedge fund?

If your algorithm works and if this guy's the statistician he says he is, you should be able to work out quite easily how much money you need to win in your first year of trading your own account, then you compound it and within 5 to 10 years you can retire.

Probably £30 to 50 K will be enough.

In your first year, you need enough to live off personally - possibly £30K? - plus your trading capital. Unless you're a spotty teenager it shouldn't be difficult to get that kind of money from somewhere. Oh hold on I forgot about the credit crunch - but you get my drift. Using your own money will be a hell of a lot easier than trying to persuade strangers to invest in a hedge fund.

But as rnicol said, IB. Plus NinjaTrader. NinjaTrader can plug into the IB API and uses some sort of C# based script. Don't know jbooktrader.

I've also heard TradeStation works fine.

Programming it yourself with C++ is overkill unless you happen to know and love C++ already.

Java would be a better choice than C++ if you have to pay for a developer or learn it yourself.

 

[Hotch]

James, why a hedge fund?

Greed 'n' Speed.

If you've got a system which makes even 100% a year, the average joe can probably retire, but you can't solve the worlds problems and build a underground lair from your starting capital before you're too old not to want to anymore.

If you can make more money quicker, why not?

I'm sort of in the same quandry, current system pays the beer money, but think I've got something special if i can program it (and fill out my house with blades).

IF a system works just send out your results, somebody will go for it, and interest will shoot up expodentially, if it works they'll be plenty of help

To conclude: run it for however long you deem a reasonable length of time, bung all your data together, wite up a report etc, put it into a nice folder and ship it out to the powers that be, if it's decent you'll be rich in no time.