Algorithmic Trading

Microstructure, order books, perps, funding, and algorithmic execution.

Updated 2026 ж. 21 қаз.GaiaEx Academy Editorial

Бұл сабақта

What algorithmic trading is
Why backtesting matters

Негізгі тұжырымдар

1Algo trading executes pre-programmed rules
2Backtesting validates a strategy on past data
3Out-of-sample testing guards against overfitting

Сабақ қорытындысы

Algorithmic trading turns rules into execution.

Mental model

Getting algorithmic trading straight

Algorithmic trading turns rules into execution. The edge is not that a computer trades; the edge is whether the rules survive data, fees, latency, and changing markets.

What algorithmic trading is
Why backtesting matters

Mechanics

How to reason about algorithmic trading

A strategy defines signals, sizing, execution, exits, and risk controls.

Backtests check historical behavior, but assumptions decide whether the test is useful.

Paper trading and small live tests expose operational issues.

Algo trading executes pre-programmed rules
Backtesting validates a strategy on past data
Out-of-sample testing guards against overfitting

Example

A concrete algorithmic trading example

A momentum bot may look profitable on candle closes, then fail live because entries slip and fees eat the edge.

Есте сақтаңызDecision rule: Do not automate a rule you cannot explain, test out of sample, and stop safely.

Common mistakes

The usual algorithmic trading trap

Overfitting is the classic trap: a strategy is tuned to past noise and looks impressive until conditions change.

Risk notes

Before you rely on algorithmic trading

Bad data, look-ahead bias, latency, API errors, hidden leverage, and kill-switch failures can break automated systems.

Define the rule clearly enough to audit.
Include fees and slippage.
Set a kill switch and max loss.

Practice

Practise algorithmic trading before moving on

Define the rule clearly enough to audit.
Include fees and slippage.
Set a kill switch and max loss.

Қайталау

Негізгі терминдер

Algorithmic Trading: Using pre-programmed rules to automatically place and manage trades, removing emotion and enabling speed.
Leverage: Borrowed capital used to amplify a position — magnifying both gains and losses.
Slippage: The difference between expected and executed price, common in low-liquidity or fast markets.
Latency: The delay between an action and its effect — critical in fast trading.
Backtesting: Testing a strategy on historical data before risking real capital.

Дерек көздері