There is no area of life that has remained untouched by technology. One of its rather new offerings is algorithmic slash automated trading which is conducted through auto trading systems. It means letting a machine do all the work for a human trader such as collecting, analyzing and interpreting the financial data and using it to find out most viable trade option.
At first it may sound how can a machine do all that. But it is true! Before an auto trading system or software is launched it is tested for its efficiency via back testing.
Back testing implies to trading uses associated with historical market data in order to determine how viable the idea would be. For a system that is supposed to do something as critical as place financial trade orders, all the rules must be established in an absolute way, meaning the program cannot go to make guesses.
It must be fed with precise instructions telling it exactly how to do and what to do. To make sure whether the designed system is capable of making sound decisions, programs are fed with historical data on which the set rules are implemented. This way a trader can figure out the efficiency of the system before risking his money. Careful back testing is essential to fine tune the system for trading ideas.
Dragon Holdings AG:
This German company owned by Niraj Goel, is known for devising auto trading systems, after careful back testing.