A Complete Guide To Python For Finance And Algorithmic Trading

A Complete Guide To Python For Finance And Algorithmic Trading

With each passing day, new technologies have been emerging in the market that has led the traditional financial market to evolve into fintech firms. Mathematical algorithms are now used in the finance world to speed up the problem-solving process. Algorithmic trading, also known as “Quantitative Trading” helps in designing trading strategies that are based on mathematical and statistical analysis in the finance market. Different programming languages like Java and C++ are used but out of all these, Python is the best language for financial analysis. 

Newbies who are interested in the finance industry and algorithmic trading are advised to rely heavily on Python which can be used for testing, prototyping, quantitative research, and execution of these algorithms. These processes are mostly used by big players but are not restricted to them. In this article, we will talk about how Python can be used for financial and algorithmic trading. 

A Step-By-Step Guide To Using Python For Financial and Algorithmic Trading

#1. Create An Account With Any Brokerage Platform ( Preferably Commission Free)

First, you need to sign up with a brokerage platform that will allow you to trade through an Application Programming Interface. You will get a private key and API key ID that will be used in the Python script. This automates all your trading strategies by filling in the gap.

#2. Purchase A Cloud Service

A cloud platform like the Google Cloud Platform or GCP offers an effective cloud computing service offering various cloud products. Making use of a cloud service does not necessarily require you to fret about your desktop staying on at the right times or manually maintaining your script every single time.

#3. Structuring Your Python Script

You need to now attach your API to the newly arranged Python script. This script needs to be automated and have one function that will be called in the cloud service you are using after which you can access and connect your API.

#4. Connecting Your API and Create A New Mail Account

API makes things easier for you, for example, if you want to access the Alpaca trade platform but do not know how to write the code, then you will have to create an account on the Alpaca brokerage platform and they will generate an API key for you which is a special code that can be used to access the Alpaca trade platform. You can now use this in the Python code and enter this code of the Alpaca platform and can easily access it. 

After this, you need to create a new email account and add the mail notifications to your trading script. It is beneficial in two ways: you get to know the outcomes based on your trading strategy and you also get to know when the Python script is running. This new mail is made for making the entire process more secure and allows you to run multiple strategies regarding your trading. 

#5. Building The Trading Strategy Into The Python Script

Now you need to design and strategize your trading structure with the text for the mail. This is important for the algorithm logic in trading and the variability in the portfolio exists to check your latest position. The mail text has to be written through the trading algo so that it seizes the occurring of the day. Now, use a Google cloud function to carry out the process and create a Google scheduler to fix a time after the market resumes, and it should run as specified. 


With the digital world taking all the industries by storm, it is important to keep up with all the new technologies and make use of all the latest software and tech available to reap maximum benefits. Most of the biggest enterprises are attracted to the speed and efficiency of Python for the financial and processing of large volumes of data. 


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