The trading industry is constantly evolving, and automation is at the forefront of this evolution. Automation offers several benefits, including reduced risk, measurable outcomes, and lower costs and hence it has become an integral part of many businesses across financial services. Due to the adoption of new technologies, the role of a trader is also evolving. In this article, we discuss the benefits of automation in trading, and the necessary skills for traders of the future.
Evolution of the Trading Role
The trading profession has undergone a remarkable transformation, as it evolved from salespersons to tech-savvy interpreters with a keen focus on data. With the emergence of automation and trade expectation management, traders are now able to dedicate their time and expertise to more complex and demanding orders, while also ensuring that any bias is eliminated from the trading activity. With the power of automation, traders are now able to perform their duties in a more predictable and efficient manner, leading to quicker and more informed decisions that create minimal disruption to the market. This new reality has allowed traders to develop new skill sets, including Python scripting and data analytics, and adapt to the ever-evolving landscape of the trading industry.
Benefits of Automation in Trading
One of the benefits of automation in trading is improved performance measurement and trade performance analysis. Automation is only possible to apply to concepts that are measurable; hence, machine learning plays a big role in enabling that transition. Nowadays, machine learning is a key tool applied to capturing and measuring the large amounts of available data. What differentiates Quod Financial is our expertise in leveraging machine learning techniques in providing better outcomes for the clients. For instance, our team has developed a new generation of The Peg algorithm that follows market trends and matches price orders to be as passive as possible. The Peg algorithm is now a fully automated strategy supported with machine learning and artificial intelligence.
Another benefit of automation in trading is trade exception management. Automation has been a key focus for Quod from the start. By integrating technological developments at the trading desk, traders are able to not only enhance performance of the existing processes, but also save time and money for clients.
Necessary Skills for Traders of the Future
The future of trading is going to be heavily impacted by AI, and thus traders must equip themselves with the necessary skills to keep up with the rapidly changing landscape. While automation can aid decision-making and accelerate career growth, traders must also possess the ability to choose the right strategy. This can be accomplished through the use of an algo wheel, which allows traders to select the appropriate algorithm at the right moment. Likewise, utilising data effectively can provide valuable insights into the evaluation of previous trades, which can inform future decision-making processes.
At Quod Financial, automation is now fundamental to every part of the technology that we are developing. Whether it is pre- or post-trade, OMS or algos, we understand that there is no part of the O/EMS technology that does not need to benefit from automation. For us, it is about the whole business focusing on bringing automated workflows, whether it is in the middle office or in trading. – Medan Gabbay, Chief Revenue Officer at Quod Financial
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About Quod Financial
Quod Financial is a multi-asset OMS/EMS trading technology provider focused on automation and innovation – specialising in software and services such as Algorithmic Trading, Smart Order Routing (SOR), and Internalisation of Liquidity. Quod leverages the use of its data-driven architecture to support the demands of e-trading markets by combining AI/ML-enabled decision-making tools and dynamic market access with a non-disruptive approach to deployment. For more information visit: www.quodfinancial.com
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