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

From trading ideas to implementation – another sample strategy using limit and stop orders

Let’s consider a practical application of the limit and stop orders that we have just implemented. I like using this example because it illustrates the importance of having a trading idea before writing the code and shows that trading ideas do not have to be complex. In practice, the simpler the trading idea, the greater the chance that it will work in production.

As you may remember from Chapter 3, FX Market Overview from a Developer’s Standpoint, most FX markets undergo a bank settlement procedure, which happens at 5 p.m. New York time. The price at the settlement is very important because it’s used to evaluate many other financial instruments and is used for settlement in all cash trades between any parties. So, comparing an intraday price to the last settlement price may give us an idea about the overall sentiment in this market: if it’s greater than...