Requirements for Algorithmic Trading

The first requirement for algorithmic trading is knowledge of computer programming languages that can allow you to create and run the algorithms. One alternative is to purchase software that has algorithms pre programmed into it. Another is to hire programmers yourself to develop the algorithms. Hiring your own program developers has customizability benefits at the downside of additional costs.

Another thing needed for algo trading is access to the live data from different markets, in which the algorithms can monitor. One way to gain access to the live data is through trading platforms in which you can execute the trades as well.

A critical part of implementing an algo trading strategy is to backtest the program using historical data. Access to all the historical data needed to test the program is thus another requirement to create a successful algo trading strategy.

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