Here is a quick checklist of all the things you need to take care of before starting your algo trading journey.
Algorithm Trading Checklist:
1) Strategy Checklist:
- A programmable strategy
- Stock screening & Entry/Exit rules
- Position Sizing rules
2) Software Checklist:
- Programming language or a tool to code the strategy rules
- Integrate the executable program the broker's terminal
- Backtest the strategy on historical data & optimize parameters
3) Hardware Checklist:
- Computer with at least 16GB RAM & Quad-Core CPU.
- High bandwidth internet connection
- Power & internet backup
4) Data Checklist:
- A reliable source of historical & real-time data for the stocks/commodities.
- Data backfill of at least 5 years for backtesting
- Live streaming of data into the algorithmic system
5) Execution Checklist:
- VPS server to deploy the algorithmic system
- Get exchange approvals if required
- Monitor generated trades and Optimize regularly
6) Miscellaneous Checklist:
- Scalable hardware & software with regular backups
- Update anti-virus & firewalls to prevent any security breach
- Optimize performance to reduce order latencies.