Algorithmic trading seeks to use mathematical algorithms to automate trading decisions. In South Africa, algorithmic trading is used extensively on the buy-side, where it is used to exploit market movements in order to maximise returns, as well as the sell-side, where it is used to manage trading volumes. Algorithmic trading forms the basis of high-frequency trading. Algorithmic traders use MATLAB® to:
- Access historical and real-time data from data feeds such as Bloomberg, Reuters and Factset
- Quickly prototype trading ideas and backtest them on historical data
- Create trading rules using a range of statistical techniques
- Estimate parameters and combine trading rules optimally using global optimisation algorithms
- Implement strategies directly in the market by integrating with third-party trading systems, such as Bloomberg EMSX
MATLAB’s flexibility and the ease with which it integrates with other systems is what makes it an ideal tool for algorithmic traders. In addition to this, MATLAB’s toolboxes offer techniques ranging from the realm of statistical methods and machine learning, to time series modelling, and even global optimisation, all of which can be used to construct sophisticated and effective trading rules. Our consulting team can help you to build an end-to-end trading system in MATLAB.