Algorithmic Trading â€” FBW Capital

Algorithmic Trading

Rules-Based. Systematic. Technology-Driven.

Financial markets move quickly. Human decision-making can be affected by emotion, fatigue, hesitation, and inconsistency. Algorithmic trading allows predefined rules to be evaluated systematically.

Strategy Logic

Developed Around Defined Market Conditions

Our strategies are developed around specific market conditions and trading logic. Rules are written in advance, then evaluated the same way on every occasion they are met.

Depending on the strategy, systems may consider a combination of the inputs listed here. Which inputs apply, and how they are weighted, depends entirely on the individual strategy and its documented parameters.

Systems may consider

Market trends
Price action
Technical indicators
Volatility
Entry conditions
Exit conditions
Position sizing
Stop-loss parameters
Take-profit parameters
Other predefined strategy rules

Why Systematic

Consistency Is the Point

An algorithm does not remove risk. What it can do is apply the same rules, in the same way, every time the conditions it was written for appear.

Predefined Rules

Conditions for entry, exit and sizing are set before the trade, not decided in the middle of a moving market.

Reduced Emotional Intervention

Hesitation, fatigue and impulse are removed from the execution step, though not from the decision to participate in the first place.

Repeatable Execution

Repetitive processes run the same way each time, which makes strategy behavior easier to observe and review.

Defined Risk Parameters

Stop-loss and take-profit levels are part of the strategy definition rather than an afterthought.

Observable Behavior

Because rules are explicit, strategy behavior can be monitored and compared against what was expected.

Historical Analysis

Historical data can be analyzed, though backtested results may differ materially from actual live trading.

What algorithmic trading does not do. An algorithm cannot predict markets and cannot eliminate market risk. Automated systems can produce losses as well as gains, and may be affected by spreads, commissions, slippage, liquidity, leverage, execution conditions, market volatility and technology interruptions.

No strategy, algorithm, signal, indicator, trader, or company can guarantee profits.

Trading involves significant risk. Past performance does not guarantee future results. All products and services are subject to eligibility, jurisdictional and applicable terms.

Understand the Strategy Before You Participate

We would rather you understood the rules, the fees and the risks first. Talk to our team about which solutions are appropriate for your objectives and jurisdiction.