Algorithm – Financial Trading FAQ

Algorithm – Financial Trading FAQ

I get a lot of questions about Financial Trading algos, building black boxes, which is the best trading API, the list goes on. Not to sound to pretentious, but I try to help people, even when I possible, but I don’t always have time. So I’m just post some of the questions here in random order.

what is the preferred language for algorithmic trading? I wanted to use Java but I am not sure if that is the best language.

I used to use PHP. Now I use Python. I think Python is a good reasonable solution. If you are on Wall Street doing High Frequency trading you would probably use C# or C++ as it is supposedly the fastest.


Also, have you heard of finnhub.io and alpaca? If yes, which one in your opinion has a better API? I trade Futures, stocks and options. I don’t think either of those can do what I need.


Do you build trading algorithms for futures, stocks, options?

Based on my blog post I think the answer would be yes.

Hey, I read your blog on which api is the best and I have been doing research on TD Ameritrade for 2 days now and I have not made much progress. I am new to this and also was wondering If Interactive brokers is free to use for stocks and options?

You can start paper trading, this would allow you access to API paper trading account without putting money into the account. I think you have to $2000k to get really started. From my recollection, (but not perfect) but you can open an account, with no money and use the API and paper trading account. When you are ready to get started, I think 2000k is the min and they charge $10 service fee every month.

I would not recommend TD ameritrade and I think you have validated with your research. IB is for the most part free, well documented, python SDK and plenty of support groups. (Stocks, Options, Futures)

I need to up date this but here is starting point… https://github.com/chadhumphrey/stock_options_api

Hi I read a comment in which you mentioned that you wrote your own python code for options trading. That is currently my goal. I am very new to programming and am seeking some help in setting up my own backtesting environment. Would you mind helping me a little? I have access to historical stock data for as well as historical options data. All my options strategies are based on the underlying price and time. My stock data for one symbol is in one CSV file, while I have hundreds of CSV file each for a different option strike with different strike prices. How can I translate my simple option strategies into a python backtesting environment? For example, once XXXX reaches $XXX, buy a call that is +XX dollars ITM that expires in XX days?
I’ve been fairly successful in stock,options and futures trading and have done manual backtests looking at historical charts and such but python backtesting will bring me to a whole new level at a much faster rate.
Any tips or suggestions will be really appreciated.

I have written 3 algos (options, stocks, futures) For stock and futures I do use backtesting data. As for options I’m far to lazy and cheap to find option historical data. So I have developed my own strategy and write my code. Then I just paper test it on Interactive Brokers. Basically, forward testings and since my options algo can find trades in thousands of stocks I feel like I’m getting some good data to analyze. http://thebennyshow.us-east-1.elasticbeanstalk.com/spreads It’s still a work in progress, but this algo ran while I was at my day job. I would argue that with options you can save a lot of time just forward testing. Hope that helps…
not sure if you saw this as well… https://www.strategic-options.com/insight/2020/05/17/update-2020-the-best-and-worst-stock-futures-and-option-trading-apis/
Sorry I can’t write your algorithm for you, but will happy to do so if you want to pay me. 🙂

Many years ago I could have gone the NinjaTrader route, but I was to cheap. So I learned to code. Now I don’t have any problems that I can’t fix. 😉

Hello,
Interested in developing algorithms that will ingest data/analyze and make trades with options. Are these services something you provide?
Regards…….