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

ECN – looks like a fair game, but is it?

When I speak about the structure of OTC markets, especially the fact that prices in them are offered by just select market participants and can vary significantly for different buy-side clients, many traders say, “This is not fair! Why won’t FX work in the same manner as other regulated markets with centralized exchanges where anyone can improve the price?”

There is no single and simple answer to this question.

First, the FX market trades money for money and not any asset for money. Its original purpose was to facilitate currency exchange rather than speculative trading with various financial instruments. And (fortunately!) we don’t have to go to an exchange to just get some British pounds for euros or Indian rupees for US dollars. Therefore, OTC trades are quite natural for this purpose and a currency exchange shop is an excellent example of trading OTC.

Second, the FX market consists of multiple...