If I woke up and had no memory of algorithmic trading with Python.
This is the Python Roadmap that I'd follow to get it back in a tenth of the time:
1. Build a Solid Python Foundation
Before diving into trading specifics, I'd get comfortable with Python basics—data types, control structures, functions, and OOP. Understanding these fundamentals will make it easier to grasp more advanced trading concepts later.
2. Master Data Handling with Pandas
Pandas is my go-to library for data manipulation and analysis. Learn how to load historical market data, clean it, and perform time-series analysis. This skill is crucial for testing and validating your trading ideas.
3. Visualize Your Data with Plotly
Effective visualization helps uncover trends and patterns. Plotly is excellent for creating interactive charts and dashboards. Practice plotting price movements, volume, and indicators to better understand market behavior.
4. Develop and Backtest Strategies Using Zipline Reloaded
Zipline Reloaded allows you to backtest trading strategies on historical data. I'd start by coding simple strategies, then gradually add complexity.
5. Implement Risk Management with Riskfolio
Risk management is key to long-term trading success. Explore Riskfolio, a powerful library for portfolio optimization and risk analysis. It helps you construct portfolios that balance return expectations with acceptable risk levels.
6. Connect to Real Markets via Interactive Brokers API
Once you’re confident in your strategies, learn how to execute them in a live environment using the Interactive Brokers API. This step involves transitioning from backtesting to paper trading, and eventually, live trading.
7. Want help getting started with algorithmic trading in Python?
I spent over 100 hours creating a free course and blueprint to get you started in under 5 days.
If I had to relearn algorithmic trading in Python starting from scratch, this is what I'd learn.
Complete 8-Step Roadmap:🧵
Step 1: Master Python Basics
Start with the fundamentals: data types, loops, functions, and OOP. Resources like YouTube Python courses are a great way to begin.
Step 2: Data Analysis with pandas & numpy
Learn how to manipulate and analyze data using pandas for DataFrames and numpy for numerical computations. Practice with financial datasets to get comfortable with data wrangling.
Top 15 Algorithmic Trading Strategies (and how they work) 🧵
1. Pairs Trading
Trades two correlated instruments simultaneously. It goes long on one asset and short on the other to profit from deviations from their historical relationship, expecting the correlation to eventually resume.
2. Scalping
Involves making numerous small trades to capture minimal price differences over a short time. For example, tape reading is used to analyze order flow and timing, enabling scalpers to profit from very brief price fluctuations.
160% return using a TOTALLY RANDOM stock picking strategy?
The importance of risk management.
A thread:
Have you ever heard of a totally random trading strategy?
It was tested on over 7 years of data on 14 different stocks—and got surprising results.
Here’s a quick breakdown of the experiment.
The core idea stems from hedge fund manager Tom Basso, who showed that random entries can be profitable when paired with robust risk management and position sizing.
Essentially, predicting price direction ≠ the main edge.