As the world grows increasingly computerized, technologies that distribute wealth, knowledge, and power prosper. That’s especially true of the financial industry, where certain markets and trades can still be prohibitively expensive or restricted. To solve this, projects like Robinhood, Betterment, and Wealthfront work to level the playing field, giving everyone an equal shot at cheaper and faster investing. If you have the coding chops, platforms like Quantopian and QuantConnect take trading to the next level by democratizing access to sophisticated automation tools. They work in tandem to empower anyone to thrive in traditional financial markets.
And there’s plenty of room to expand this vision. The beauty of cryptocurrency and blockchain is that they put you in control of your financial destiny. That’s why at The Ocean, our ethos is the same — we empower traders with the all the best possible tools to drive success. Part of this toolkit is our upcoming dedicated Algorithmic Trading series to provide the ideas, strategies, and code for a computerized system that trades for you. Our API is strategically built for easy use by developers but is also documented for beginners as well. We ensure that anyone with some coding experience — or just those eager to learn more trading strategies — can maximize their use of and returns on The Ocean.
So, what are the benefits of algorithmic trading then?
Liquidity
Studies reveal that more algorithmic traders in a marketplace smooth inefficiencies, narrows spreads, and improves order book depth. In the crypto market especially, algorithmic trading will make trading cheaper, easier, and more accessible for all traders, not only those deploying bots.
Costs
When and how you enter the market, especially if you are placing large trades, can make a big difference in your execution price. Algorithms can help determine when it’s most cost-effective to enter the market, saving you money.
Speed
If you want to buy or sell at a particular price, it’s much faster for a computer to automatically enter a market or limit order than to do it manually. This is crucial when crypto is prone to large movements based on breaking news and events.
Accuracy
It’s easy for human beings to make mistakes when placing orders — much less so for computers. Not only can algorithmic trading ensure your strategy is executed to its full potential, but more sophisticated strategies can typically only be implemented via algorithm.
Backtesting
If you have a strategy in mind, you can test it against old data to determine its profitability. This means you can safely play with parameters until you come up with a winning formula.
Time
If you’re running an algorithm, you don’t have to stay glued to your screen. You can program your strategy, let it run, and spend that time researching even better approaches. Plus, you can even trade while you sleep!
Discipline
Anyone can get caught up in the highs and lows of trading, even the best fund managers. It’s difficult for your emotions to override logic when you’re following computerized rules.
Enticed? We’ll be announcing an Algorithmic Trading Challenge for those who write and share automated strategies and for those who perform the best on The Ocean. Details here!
This doesn’t mean that The Ocean is only for algorithmic traders. We’ve been cooking up our cutting-edge dashboard that’s usable by any kind of trader, bot or not. As well as hashing out our user onboarding and penalization structure to ensure a safe and secure trading experience for all.
Algorithmic traders are just one piece, although a crucial one, of the equation to create a liquid, cheap market with plenty of opportunities to make a splash. By offering everyone the tools to make smarter, more impactful financial decisions, we’re steering our crypto in the right direction for mainstream adoption.
That’s because we consider ourselves stewards and pioneers of the crypto marketplace — and this is step one of our design decisions and considerations towards shaping a decentralized future. Come join us next week as we announce our Algorithmic Trading Challenge and explore the next puzzle piece, regulation and compliance, of our whole vision.
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Want to prepare for our challenge? Say ‘hello’ to our API here and stay tuned for our first article in our Algorithmic Trading series.
