TRADING BLOG

by Wissam Martin Leidgen

Welcome to my trading blog. I am a motivated mathematician who has been interested in day trading for several years. During my studies I attended a finance lecture by a professor who worked on the trading floor of a well-known bank. His learning content very often followed his old activity on the trading floor. The Black Scholes option pricing model, the capital asset pricing model and portfolio optimization are just a few examples of his attached themes. I attended every lecture from him. He always maintained a hands-on mentality so that we students always analyzed the theoretical influences of the subject areas. This includes the impact of fundamental information on soccer club stock prices, programming a neural network, replicating stock Indices.

Furthermore, I was interested in stochastics during my studies. Therefore, I have in-depth knowledge of topics such as markov chains, brownian motion, wiener processes, percolation and renewal theory. All of these examples can be a powerful tool when trading derivatives (CFDs, futures, options, swaps).

I always wanted to take advantage of the fact that I dealt with complex theories. In order to be able to implement these theories, computer-oriented problem-solving skills are essential. I have average to good skills in the programming languages like python, matlab, R, C ++, Java and VBA. Since I switched to the MetaTrader5 trading platform, I have acquired the mql5 programming language, which is based on C ++. Unfortunately, there is very little reading that brings you closer to the programming language.
 
Over time, I realized that algorithmic and quantitative trading with derivatives has only advantages compared to conventional trading:

• Subjective emotions that result from previous trades (winning streak, losing streak) are fully switched off.

• Algorithmic trading strategies follow a rule-based system. There is no room for subjective Interpretation.

• Humans can only research and monitor a limited number of markets. Algorithmic and quantitative trading systems are able to cover a very large number.

• Opportunities that only exist for a fraction of a second can be seized and there is little chance that a trade will be missed. Humans need much more time in terms of reaction, reserach, identification, calculation, positioning and executing.

 
It is therefore likely that algorithmic trading will dominate the financial market even more in the future. And even faster than in other industries.
The aim of this blog is to share my experiences that I gained through trading in MetaTrader5. The creation of an algorithm needs to be practiced. First of all, there must be a good foundation of programming knowledge. Then you need a detailed plan that the algorithm should follow. When should a position be opened? In which direction? Which lotsize? How much money should be tied up in a trade? When should the trade be closed? Which symbol anyway? Are several open trades allowed or should the position only ever contain one trade?
All of these questions must be answered before you sit down on the computer and program the algorithm or hire a freelancer.