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

The power of leverage – how much do I need to trade it?

Finally, we are about to answer the main question of any investor: how much do I have to have in my trading account and how much can I expect from it?

Before we continue, let me draw your attention to the following important fact about FX trading.

Note

Do not confuse the return on investment as a performance metric with the actual return on actual investment!

To understand it, we should again recall the essence of margin trading and how it differs from regular investment and trading without margins.

When you invest or trade without margin, you can buy only that amount of assets (equities, commodities, whatever) that cost the amount of money in your account. For example, if you trade stocks, and a stock’s price is $100, and you have $10,000 in your account, then you can buy no more than 100 shares of the stock (actually a bit less because of trading costs).

However, if you trade on margin, then you...