Automated Strategies

An automated strategy is a software "loop" that runs continuously. It can be broken down into four essential components:

• Data Ingestion: The code continuously fetches the latest market data (price, volume) via your API.
• Signal Generation: The logic checks if current data matches your entry conditions (e.g., "Is the 50-day moving average above the 200-day?").
• Order Management: If conditions are met, the code calculates position size based on risk and sends an order request to your broker.
• Monitoring & Exit: Once in a trade, the code shifts focus to monitoring the exit conditions (Stop Loss, Take Profit, Trailing Stop) until the position is closed.

Automation is powerful, but it requires extreme caution:

• Fail-Safes: Always include "circuit breakers" in your code. If the API loses connection, your code should automatically cancel open orders or close positions.
• Logging: Your script must log every action it takes. If something goes wrong, you need a precise audit trail to diagnose the error.
• Separation of Concerns: Separate your strategy logic from your execution logic. This makes it easier to test your strategy without accidentally triggering live trades.