The financial crisis may have turned much of Wall Street's wealth into dross, but a select group of hedge fund managers has managed to maintain a golden touch. According to an annual reports of top hedge fund earners by Institutional Investor's Alpha magazine as major markets and economies careened downward last year, 25 top managers reaped a total of $11.6 billion in pay by trading above the pain in the markets. Four hedge fund managers took home more than $1 billion each. Mr. James H. Simons, a former mathematic professor who has made billions year after year for the hedge fund Renaissance Technologies, earned $2.5 billion running computer-driven trading systems. John A.Paulson, who rode to riches by betting against the housing market, came in second with reported gains of $2 billion.
However, how following information may help an average investor or trader without deep pocket to achieve better then average results? In regard of Lev Letvinski systems supports analyst at EminiWorld.com computer-driving strategies or algorithm based (quantitative) systems may helpin this dark times.
Quantitative finance started in the United States in the 1930s as some astute investors began using mathematical formulas to price stocks and bonds. Harry Markowitz's 1952 PhD thesis "Portfolio Selection" was one of the first papers to formally adapt mathematical concepts to finance. Quants usually come from physics or mathematics backgrounds rather than finance related fields, and quants are a major source of employment for people with physics and mathematics PhD’s. Usually a quant will also need extensive skills in computer programming. In today financial markets, algo system, also known as algorithmic trading, is the use of computer programs for entering trading with the computer algorithm deciding on certain aspects of the order such as the timing, price, quantity of order ,.
"Last years have seen a surge in the growth of automated trading systems because global electronic markets continue to grow, as firms worldwide utilize trading automation at an increasing rate," Mr. Letvinski told. Technologies devised for automated trading are making markets more independent. As bigger data pipes and faster computers are increasingly deployed by trading firms to monitor real-time prices across multiple instruments , the window of time required to capture inter-market arbitrage opportunities is diminishing. Unfortunatelly an investor opening an account with a brokerage firm simply cannot simultaneously manage the real time analysis and trade in more than 4-6 financial instruments in different markets 24 hours 7 days a week. This brings about the need to employ PC trading systems (strategies) in the form of runtime environment with client and server parts and the programs to control these systems (scripts).
TradeStation is a Windows-based application, designed, sold and distributed by TradeStation Securities broker. Technical analysis software is used for analyzing and trading the financial markets.
TradeStation is a professional trading tool for financial market traders.
It is used mainly by retail and relatively small investment operations as large financial institutions tend to have their own in-house solutions. It provides great functionality for receiving real time data, displaying charts, and entering trading positions. Trading strategies can be back-tested and refined agains tlong history data before trading live. A large number of third-party developers sell add-on extensions for TradeStation. Unfortunately, full automated systems require extensive experience and skills in mathematics, statistics together with skills in programming and finance.
Emini-systems.com (http://www.emini-systems.com ) is top online service which mission is to deliver high quality trading systemto traders. For their customers company provides system-ranking service. This service is an ideal way to ensure that system they are willing to buy is complying with high quality requirements. Service is a great place for average investor who would like to gain in this scientific quantative world but do not have degree in finance. For small private family funds, Emini-systems.com may be a solution too. Usually ir is very expensive to hire two or free scientists to research and develop good trading strategy. In this case, trading system can be buying or lease regarding rules system developers provides.
"By obtaining a trading system you will be able to back test system using your own data, your own criteria and preferred market. Situation control, no management fees, ability to use your own inputs, responsibility from your decisions, learning - these are the reasons which makes automated trading systems very popular" Dr. Letvinski says.
EminiOnline.net ( http://www.eminiOnline.net ) branch Company of EminiWorld.com may help algo developers to sell there algorithm models. Why vendors are selling systems if systems profitable? "Why do not earn extra money and use it for own trading?" Mr. Letvinski asked.
In conclusion: for average investors, financial services on the web offer great benefits. It may help to find safe place and stay in front in this scientific age.