Automated Trading and Its Protocols

high frequency trading course

The initial stage marketers usually will go with a misunderstanding that electronic trading is nothing but automated trading. But on the other side, both may work on same medium, but has different meanings. The electronic medium is the one in which people will involve in trading via electronic medium, say computer. But an automated medium is the one in which the intervention of human is very less or almost absent in many processes. Instead of humans, the algorithms are used. These algorithms are capable of taking decisions and they follow certain protocols for successful trading. Some of those protocols are discussed in this article.

Protocols used in automated trading

  1. Request For Quote (RFQ) – this is one of the most commonly used protocol between the dealers and the customers. In the RFQ the investor can actually request for an offer or even bid from the marketers who were competing with him. The investors in this scenario are the hedge fund or the asset manager. The RFQ wants the investor to manually upload the request for the quote. This can be done through the electronic medium.
  2. Streaming Quotes – this is also a common protocol being used by many marketers all over the world. This is something which is basically used on the single-dealer platforms. In this the dealer market maker will be continuously streaming the offer quotes and also the bids. The quotes are two sided and are all executable. This literally means that the quotes are supported by the infrastructure. Both the price and quantity will be provided to the investors by the market and he can choose the one which he is willing to execute.
  3. Central limit order book – this is a very prominent feature in the inter-dealer market. The trading is usually conducted through an application programming interface (API) or a graphical user interface (GUI). In recent years significant shares on trading is conducted using this protocol.

Future of trading

There is no doubt that the future economic activities and trading are completely going to be based on the technological backed hedge funds. But to make it successful, the changes in the market should be understood by the computer engineers, mathematicians, physicists, economists and other technological supporters of trading. Their research needs to be used by market regulators and risk managers to boost the economic investment.

Days are not so long that the higher end data transfer technologies will be installed soon and the trading will be done in high speed. This will let the share markets to get more profits in the global scenario. The travel of data in speed of light or almost to the speed of light will be achieved by scientist soon. Installation of this technology in trading will pay back more to the investors as speed of data transfer is very important in trading. In order to learn more on HFT, it is better to choose a right HFT training institute to learn the technical aspects of HFT. There are so many trading academies available all over the world and are offering best high frequency trading course at right price. Hence it is better to choose the right place to learn the best. please follow us at


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