Algo Trading Hong Kong Guide | Free Software Trading Software Recommendation

What is Algo Trade?

Algo Trade, or Algorithmic Trading, known in Chinese as “program trading”, is a modern financial tool that automates and executes investment transactions 24 hours a day using advanced computer procedures and algorithmic technologies. With efficient computing and data processing capabilities, it can analyze a wide range of data such as market price, trade volume, transaction speed, and automatically complete trading operations based on preset trading strategies and rules, greatly improving the accuracy and efficiency of trading.

References: Wikipedia

The operation of program transactions can be divided into two core parts: policy creation and program execution.

• During the strategy creation phase, the system captures market data in real time and organizes and filters it to ensure the validity of the data and bring you smart metrics. Then design trading strategies based on these data, transform investment logic into programmatic rules and verify their feasibility and stability through historical feedback. At the same time, risk management mechanisms such as stop loss, stop profit, and position management are set up in the strategy to ensure that trading risk is always kept within a manageable range.

• Once strategy design is complete, the program goes into automatic execution, continuously monitoring the market and obtaining real-time quote data. When market conditions meet the programs' default logic, the system automatically generates trading signals and executes buy and sell trades, enabling efficient automation of the process from data analysis to trade execution, allowing you to trade at the best price without looking around.

In addition, program trading has a variety of strategic forms that can be applied to different market environments and investment objectives:

1. Trend Following Strategies: Use technical indicators to capture long-term market trends for markets with high volatility.

2. Market Making Strategies: Provide market liquidity through high-frequency trading techniques and profit from buying and selling spreads.

3. Niche strategy: Trade based on price differences between markets or assets.

4. Reversal strategy: Then overreact to market prices, predict a price pullback in order to make a profit.

5. High-frequency trading strategy: Relies on extremely high speed and data processing to achieve quick profits by capturing tiny price fluctuations.

Difference between Quantitative Trading and Programmatic Trading

Although allQuantitative TradingBoth can be considered part of program trading, but the two differ in focus and methodology, and here are their differences:

1. Program Trading

1. Focused on transaction execution automation and efficiency, its strategy is primarily based on technical analysis, fundamental analysis, or other default trading rules designed to reduce human intervention and avoid delays and errors due to artificial intervention.

2. Especially for scenarios where high frequency trading (HFT) requires extremely high execution efficiency, as the program can complete multiple trades in milliseconds or even microseconds.

2. Quantified trading

1. Focusing more on the analysis of market data and the prediction of market movements, in-depth analysis of the market based on statistics and machine learning techniques to develop and validate trading strategies.

2. Suitable for the development and evaluation of complex trading strategies with emphasis on mathematical and statistical models.

What are the advantages of Algo Trade?

• Transaction efficiency

  1. Highly automated, it is able to operate 24 hours a day, without the need for artificial intervention, achieving round-the-clock monitoring of the market.

  2. Implement high-frequency trading (HFT) to quickly seize instant market opportunities.

• Transaction Accuracy

  1. Use a variety of technical indicators and data analysis models to conduct in-depth quantitative analysis of market movements for more accurate trading decisions.

  2. SYSTEMATICALLY EXECUTE TRADES TO EFFECTIVELY CAPTURE SUBTLE PRICE FLUCTUATIONS IN MARKET MOVEMENTS.

  3. Algorithm optimization enables continuous feedback and selection of optimized data models to ensure the feasibility and accuracy of order execution.

• Trading objectivity

  1. Based on the default rules and algorithms, program trading avoids irrational trading behavior caused by human emotion, subjective judgment, or bias.

  2. Maintains consistency and stability in trading quality and reduces panic selling or greed driven by market volatility.

• Transaction cost

  1. The automation system saves a lot of man-time costs, reduces human resource expenditure, and significantly reduces the running costs of transactions.

  2. At the operational level, program trading avoids common mistakes in manual operations, such as pricing errors, missed order times, etc., which helps reduce potential losses.

How to do Algo Trade (Program Trading) in Hong Kong?

For Algo Trade in Hong Kong, you need to choose a suitable program trading platform, perform historical backtesting with the Algo Trade strategy, and finally run on the real counter.

Choose a free program trading software

A suitable Algo Trading platform that not only supports feedback and custom signal reminders for technical indicators, provides technical investors with powerful and convenient trading tools, while also being friendly to novice investors. The platform is designed to take into account the diverse needs of users, greatly increasing the flexibility, simplicity and efficiency of the trading process.

1. Low thresholds: Users do not need programming knowledge. The platform has free classic strategy templates to choose from, such as MACD strategy, Paulo-channel average return strategy, etc. The interface is simple and visual, with support for historical feedback and true store operation. Even beginners without a technical background can easily design and test their own trading strategies and get started quickly.

2. Low Cost: The platform eliminates the need for users to purchase expensive trading software or API market quote privileges separately, dramatically reducing entry thresholds and running costs, allowing more investors to enjoy a professional-level trading experience at low cost.

3. Stability: The platform enables 24/7 automated transaction execution, saving users time and energy without having to hang up for long periods of time or worry about network outages, power outages, computer shutdowns, etc.

Whether experienced tech investors or just starting out, they are able to effectively improve trading performance, free from the concerns of technology and cost constraints, and focus on improving strategy and execution.

Common Algo Trade Strategies

Grid Trading Strategy

In everyday stock investments, investors often make profits by buying high and low. We call “grid trading” a strategy of automatic multiple low and high trades when the market continues to fluctuate. IN VOLATILE MARKETS, GRID TRADING CAN HELP TRADERS TAKE ADVANTAGE OF MARKET VOLATILITY AND BE FLEXIBLE IN DEALING WITH RISK IN VOLATILITY.

Double-Aligned Strategy

A gold cross or a dead cross appears when the short-term moving average and the long-term average intersect. A gold cross indicates a rising stock price signal when the short-term moving average moves upward above the long-term moving average; on the contrary, a dead cross refers to a downward move of the short-term moving average over the long-term moving average, indicating a falling stock price. Combining two technical indicator crosses generate buy signals when gold crosses occur and sell or sell signals when dead crosses occur. The Dual Moving Averages Strategy automatically captures uptrends for you and keeps a close eye on the market.

MARTINGLE STRATEGY

A gambling-based trading method where investors need to double the amount of their investment after each loss, trying to turn the loss into a profit and ultimately make a profit. This high-risk strategy can effectively lower the average open price and increase returns.

Fiari Four-Price Strategy

It is an intraday futures trading strategy suitable for short-line investors. The Fiary Four price refers to yesterday's high (upper track), yesterday's low (lower track), yesterday's closing price, and today's open price. When the price breaks above, buy the opening position; on the contrary, when the price falls through the track, sell the opening position.

Historical Retention and Real Disk Operation

Futu supports cloud operation, customers can freely choose local operation while operating on the disk orCloud Running。

• Local operations are running on customer computers and customers need to ensure that Futubul/moomoo software is logged in status and cannot be disconnected from the network. This method is free.

• Cloud operations are based on the strategy of operating on Futubul/moooo's cloud servers, and after a customer initiates a policy, immediately disabling Futubul/moooo software, is not a strategic operation. This method has a cloud server cost and requires customers to purchase a cloud service solution at their own cost. A free 2-month trial is available to all customers in the upfront period.