Building Automated Trading Strategies October 2018 | Seite 5

INTRODUCTION:
THE QUEST FOR THE HOLY GRAIL OF TRADING
As technology advances, so does the trading industry. Since the new
millennium, automated trading is witnessing a significant growth. The
implementation of automated trading strategies has become a common
practice for both professional and retail traders. Nowadays, retail traders have
access to hundreds of financial markets worldwide using a simple personal
computer and an internet connection. Furthermore, building an automated
trading system is easier and cheaper than ever.
Automated trading systems can automate the whole trading process, from the
trading decision to market execution. The enormous multi-tasking power of
these systems allows the simultaneous analysis of hundreds of financial
markets. Moreover, an automated system has no emotions and can trade
24/7 without feeling stress or fatigue. All these advantages make the creation
of a successful automated trading system the ‘holy grail’ for any ambitious
trader.
Institutional traders use a wide variety of sophisticated automated systems.
According to the Bank of England (2017), there are two mega-trends. On the
one side, there are large advances in data-driven modeling techniques that
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