"Algorithmic trading" in the sense described in this article only makes sense if you have a customer who wants you to execute large trades and pay you a commission.
You can try some trading using algorithms to identify profitable trading opportunities. That would normally fall under "prop trading" instead. There are definitely people doing this in ways achievable by a home hobbyist, but don't expect any low hanging fruit. Find some niche in some less liquid instruments. Don't look for anything that relies on being fast - someone else will be there who measures latency in nanoseconds.
I spent a good few months building a system for fun/interest. Darwinex has an interesting business model - check it out - but it shows leaderboards of supposed profit-generating trading systems.
Thing is, one will be hard pressed to find solid, relevant, detailed and current information about legitimately profitable trading strategy. Once a strategy becomes widely used, the 'market inefficiencies' being exploited cease to be readily available, so there is a strong incentive to keep a good strategy private. I vaguely remember reading about HFT firms obscuring their trading activity for this reason. Additionally you will find the online world absolutely saturated with the grifter types. So good info is hard to come by. Be prepared to learn at least the fundamentals of both trading and statistics, do lots of testing, and basically figure it out on your own because nobody successful (and smart) is sharing their reliable, profitable strategies (that doesn't mean you can't learn from them - just don't copy paste).
It is a very interesting domain though and I thoroughly enjoyed learning about it all and building mine.
However, it became hard to maintain an opensource version. I would say its still not a bad way to get a head start (bias there, ofc)
I will say, its not something that can be done "on the side." I originally made a decent amount of $ by getting lucky in crypto. I figured I'd "just become a algo trader" and it was much more difficult than I could have imagined.
I actually _just_ started a series on how to build an equity trading system from scratch. I planned to put part 1 out later this week but eh, I'll post it now, it touches on it better than my comment here can :)
* the post assumes you already have alpha (a profitable strategy)
> Has anyone done this successfully?
Regarding this, I actually originally talked a bit with the (now infamous) SBF of FTX about this. I originally wanted to join Alameda Research... but at the time, I didn't want to move across the world. For years I regretted that decision (not so much now, lol) I started my own firm though and I have made a decent amount of $. Truth be told though, knowing what I know now, I might have put more energy into a start up. I enjoy the challenges of algotrading but doing some consulting work, I think I enjoy "building" more than running statistical tests, cleaning data, etc etc.
To sum up this comment though, _if_ you had a profitable strategy and _if_ you built a system that could reliably execute trades, you certainly could be successful. It is very difficult though.
For starters, open a brokerage account at a broker that provides an API. There are many currently available including Ally, Tradier, Alpaca, Think or Swim, Interactive Brokers etc.
Although, I think Think or Swim is currently not providing new keys due to their merger with Schwab.
Once you got that part setup, try to write a simple program that buys or sells an equity from the command line .
From their own you can start exploring trading algorithms. Some are pretty basic, like when the price crosses above a 200 DMA, then buy a stock as that usually signifies an upward run, while selling if the price falls below the 200DMA as that is bearish.
Then you can read some books on price action, fundamental or technical analysis and build your own algos.
There is litteraly 0 chance for you to be profitable in the medium to long term if you don't have years of experience in the industry.
Anyone claiming that is not the case is just misinterpreting his PnL.
The internet is full of people thinking they are market wizards just because they cannot residualize their idiosyncratic returns properly against beta, sector, country, size properly.
First, become a PDT (25k min to pattern day trade), meaning you can't execute more than 4 trades in a 5 business day time-period. So if you are serious, you have to get to that first... then realize that whatever broker you are using, they probably have an API.
I do raw api calls, but you have to be so very careful. You can do something wrong and totally, absolutely jack yourself up, so this way is only for the very brave, but I think it offers good opportunities to understand the markets better if you can stomach the extreme risk profile.
Check out https://algotrading101.com/learn/ for a good set of practical articles to give you some context. I wish I could still point to Quantopian, which is where I started my learning process on this, but it died.
I'd like to know how an individual can do this, 1) And avoid some code bug causing them to lose all their money, and 2) Not get lose all their money to some company's API fees...
For (1), test profusely beforehand, and apply your algos in paper trades first (demo APIs without real market execution). And of course, hedge your bets, don't put all your cash on one algo/instrument in one go, and do at least some DD.
For (2), there are zero-fee brokers (e.g. those mentioned by downvoteme1 earlier) that you can use, so you don't have to keep feeding the broker.
I suspect the biggest catch for 1, is that you do it from an account where losing all of the money is an acceptable outcome. Clearly not the preferred outcome. But will not destroy you financially.
Which leads in to 2. The idea is that you are aiming for algorithms that take into account the API fees. If you didn't account for that in the price of business, than this is the same as not accounting for taxes in how you pay for things. That is, you did it wrong.
Think of it like any active trading strategy, or day trading, just that you’re automating it. It’s possible, but it’s a lot of work, and it’s very risky.
Is a platform I experimented with and found pretty solid. I definitely learned some things however, I realised the amount of effort I needed to put in would be better used elsewhere.
as for has anyone, well, there's the infamous wallstbets on reddit but also the less infamous /r/algotrading where you may have better luck with the question
