If you’ve followed me for a long-time, you already know my opinion about Large Language Models (LLMs). It completely eliminated the barrier of entry for algorithmic trading, and made it accessible to everybody. Most traders aren’t technical, and so LLMs gave these people access to technology that they’ve never had before. By interacting with a chat assistant, they can literally bring their trading ideas to life.
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This article will describe how LLMs allow users to create highly configurable, automated trading strategies. I will discuss NexusTrade, the most powerful no-code automated trading platform, and explain how the system is architected to express any trading idea.
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What is an algorithmic trading strategy?
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Algorithmic traders tend to have a certain level of smugness and secrecy that makes it hard for beginners to feel welcome. Like many challenging fields, they like to use complex terminology to specifically make their club sound more difficult than it actually is. My job is to demystify it for that the average person can understand.
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To start, I will discuss with explaining what is an “algorithmic trading strategy”. Let’s break this down into its components.
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An algorithm is simply a series of steps. If you’re following a recipe to bake a cake, then you are following an algorithm. In the context of computers, most algorithms are fully automated, but we don’t have to complicate it. Just think of “a series of steps”.
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A trading strategy is simply a plan for when you will execute your trades. Trading strategies can be as simple or complex as you’d like. For example, many brokerages allow you to perform automated purchases such as “Buy $1,000 of VOO every two weeks”. This qualifies as a trading strategy.
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Putting it all together, an algorithmic trading strategy is an automated set of rules for executing trades. We can buy a stock when its price is low compared to what it is usually priced at. Or, we can buy a stock when its price is starting to increase rapidly. We can configure these rules on a computer, so that it automatically buys and sells a stock whenever the rules are triggered.
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