20 Reasons why building algo trading with python is preferred
Benefits of Developing Algo Trading with Python
Contents of the Blog
Introduction to Python
Benefits of using python
Drawbacks of using python
Conclusion
Note
So, for now we all know what algo trading is, how it benefits the traders in making profits by avoiding losses, some myths associated with it, the evolution and growth of algo trading, its future, how it works, how can you set up one for yourself and some of the most worked in algo trading strategies (In case you haven’t read those blogs, you can scroll down and click on attached links.).
Next up here is we are going to talk about the advantages of building algo trading with the help of python.
Introduction to Python
Okay! So some of you may know python and some of you may not (who we are assuming does exist). Those of you who are unfamiliar with python, let us define it in simple words. Python is a very advanced level programming language that is usually assigned for machine learning. It was envisaged in the 1980s and has been on a growth path till now and still going up with new changes and more advancements.
Enough with python here. When we talk about automation of trading and developing a software that can receive signals and generate trade orders in real time we need a programming language that can do all of this with ease. Python not only brings ease in algo trading but also smartness and speed with which a software can function at its best. Also python offers a lot of varieties to developers.
Benefits of building Algo Trading with Python
Here is our list of reasons why you should prefer building or possessing an algo trading software with python:
As python is considered to be a functional programming language, it can calculate and evaluate mathematical patterns more swiftly.
When you develop or get your algo trading software developed through python, it becomes possible to make live changes to code and data.
Because python is a functional programming language, it simplifies the process to write and assess the structures of algo trading software.
The codes in python can be easily extended to dynamic algorithms for trading.
Python is loaded with inbuilt library functions to perform statistical techniques swiftly within a few minutes.
Python contains almost all APIs of trading brokers that also allows you to choose your broker without any restrictions.
For those who are new to the algo trading space, coding with python provides more ease in reading and more accessibility.
Python is the first choice for those who want to excel at a dynamic algo trading system.
When someone prefers algo trading over manual trading he/she expects to trade in real time and not miss out on opportunities. When you develop software in python, it quickly calculates the numbers as per the trading strategy in very less time in comparison to other programming languages.
As opposed to other programming languages, python requires less coding. And because it requires less coding it becomes easier for any developer to manually scan the whole code and detect a bug (if any).
Python has developed many great trading platforms and still preferred to develop more algo trading platforms because it's hassle-free and less time consuming than C++ or C.
There is a new function that is exclusive to python library and it is “PyAlgoTrade”. It is highly focused on paper trading, live trading, technical analysis and back-testing.
With python you also have an option to select for a better graphing package (matplotlib), simple GUI framework (TkInter), and scientific calculator (numpy).
As compared to other programming languages it is easier to fix new modules to python and convert it into a more comprehensive language.
Python allows developer and trader to run their strategy for trading, test the software with the backdated information and gauge the plan properly.
Python also works as a cost friendly programming language bringing down the maintenance cost of the trading system.
There are many facilities that comes with the python libraries which includes:
Highly Scalable
Technical Indicators
Performance metrics curation
TA-Lib integration
These facilities help in real-time technical analysis of trading happening in the market.
Because of the presence of a range of scientific libraries, python allows traders to have any type of data analysis within record time.
Python allows traders to develop or get developed an algo trading system that contains complex function like forests of decision trees, support vector machines, etc.
These were we would say a big list with reasons why you should either prefer to develop or choose an algo trading software provider (like us) who develops an algo trading system with python.
Drawbacks of using python
Now, we are not saying that developing algo trading with python comes with only pros and no cons but the pros of developing algo trading with python overshadows its cons because the pros are too many and the cons are only few. But with some honesty, let us list some of the disadvantages of using python for algo trading:
Python seems to assume every variable is an object and because of this it stores unnecessary information.
These unnecessary information if not managed timely and allowed to collect overtime can result in memory leaks.
There are new alternatives programming languages that are coming in the market and they provide better computational powers.
Conclusion
However these drawbacks don't really overpower the advantages that python provides in developing an algo trading software. There are many reasons to prefer python in building an algo trading system and that is why we at SMART ALGO also provide our clients Best Algorithmic Trading Software integrated with APIs, Auto Buy & Sell Indicators and Strategy Development Tools like MT4, TradingView, Python, etc.
Visit our website to know more about “Smart Algo - Best Algorithmic Trading Software Providers India”
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Note
We are not suggesting that python is the best language for algo trading systems and there are no other better languages. It all depends on what the algo trader in question prefers to develop his trading software with.
Every programming language comes with their own pros and cons. And these were the pros and cons of python in our point of view, others may prefer something else.
Choosing a programming language also depends on the requirement of the trading strategy of the trader.
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