Computer Trading Overview
CAN COMPUTERS REDUCE THE AMOUNT OF WORK AND DECISIONS A TRADER MAKES?
Computers can
definitely reduce the drudgery work and enhance
the charting and displaying of charts and
graphs. Computers will unquestionably reduce the
workload in this area. It will also reduce the
amount of time and effort spent solving these
problems. But there is another side the trader
must realize.
Computers, used properly and in the most effective manner, should
increase the amount of decisions the trader will
make and increase the amount of work. Computers
will advance the state of knowledge and level of
work by tremendous amounts. This will free the
user from mundane decisions, but place the
person at a much higher level in asking
questions and solving problems that could only
be speculated on a few years ago.
DISPLAYING MARKET INFORMATION
Many of the studies shown in the technical analysis section were
obtained from computer software packages. There
are all kinds of technical studies the trader
can perform and watch while actually trading.
The computer has come a long way from the
terminal that just flashes quotes.
TESTING MECHANICAL SYSTEMS
There are many programs that either allow you to test your trading
system, or provide one that you can optimize. The
decision is more one of whether you want to start
from scratch and build your own system (but possibly
reinvent the wheel), or use someone else's system and
try to improve upon it. Most of the mechanical
systems do not make money,
but some
do and should be considered by
the serious futures
trader. Various services rate the systems on
performance and the results may sometimes be
obtained through current periodicals.
OPTION ANALYSIS
Option analysis requires mathematical calculations to
determine theoretical prices for options. There are
many kinds of packages available depending on the
requirements of the user. Different packages use
different theoretical models which may affect the
calculations of the theoretical options price and
related information. The differences are usually minor,
but more often pale in comparison to using the
appropriate volatility.
SPREADSHEETS
Spreadsheets rank in
between calculators and languages in helping to
calculate data quickly. They can be especially
helpful in deriving trading results to see what the
performance of a system was. They may also be used
to test theories or do calculations on data. They do
not require a tremendous amount of time to learn,
and are relatively easy to get quick efficient
results from.
Another benefit of spreadsheets is that they allow the display of data
graphically, which allows the user to better
appreciate the information. Many spreadsheets have
databases included with them which allow the user to
organize and manipulate different kinds of data for
easier use. Spreadsheets are the choice of many
analysts for quick results and easy presentations,
but when the task becomes harder, due to large
amounts of data and involved calculations, a
procedural programming language is the next step.
Computer Trading Overview
