Book Image

Getting Started with Forex Trading Using Python

By : Alex Krishtop
Book Image

Getting Started with Forex Trading Using Python

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)
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

Alpha and beta – widely used, widely confused

If you have ever read any article or book on algo or systematic trading or just ever listened to CNBC, most likely you have already heard about alpha- and beta-generating programs (strategies, systems, funds, you name it). And as is quite often the case with heavily used terms, not everyone who uses them really understand their meaning. Let’s shed some light on this terminology, as understanding it will really help sort out the kaleidoscopic variety of trading strategies.

Alpha – earn from changes in price

According to the general definition of alpha (which you can find, for example, at InvestmentU – https://investmentu.com/what-is-alpha-investing/), alpha (α) “is a specific measurement of the worth of an investment based on its performance relative to the market. Specifically, alpha measures the ability of an investment to beat market returns.

Sounds familiar? Most likely yes if...