As it seems, cut-throat sharks in the financial industry require high level trading tools that are embeddable straight into the algorithms. And, cloud based Quantitative Trading platforms tend to be the go-to solutions for such traders who want to get more value in their algorithms. One such platform, QuantConnect, was launched back in 2011 and has grown to be one of the most sought platforms for algorithm trading using multiple assets.
In this article, we will go through the platform’s features and cater towards How quantconnect aids both, a beginner as well as a seasoned trader, and its importance in quantitative trading.
So, What is this QuantConnect?
What QuantConnect does is quite simple, it provides…well..every! It Empowers quantitatively inclined traders as well as scientists from one single platform where algorithms can be built and strategies can be shortlisted to be executed in real time using historical data.
Key Features of QuantConnect
1. Lean Algorithmic Trading Engine:
Running an open source algorithmic trading engine, the LEAN at QuantConnect easily integrates with multiple of programming languages including C#, Python, and F#. All of the languages then aid in developing a horde of never ending possibilities and strategies that can be formulated, backtested, and be traded through.
All of the algorithms designed are able to run on various hundred instruments that quantconnect allows seamless trade of, from Forex, cryptocurrencies, shares and even options. Quantconnect allows for back configured trading that allows strategies to be tailored for the best performance over the long run.
2. The Necessity of Hardware
Through the architecture of their application, the strategies can be created and tested with supercomputers scalability as there is no need for overhead spending on hardware for the traders.
3. Algorithmic Backtesting
Traders of QuantConnect have access to state-of-the-art resources that allow them to simulate macroeconomic phenomenon of interest irrespective of its time such as different strategies using historical data of currencies and commodities.
4. QuantConnect Assets
QuantConnect supports trading for a large array of assets, these include but are not limited to:
Equities
Futures Forex
Options Forex
Cryptocurrencies
5. Integrated Brokerage Accounts
QuantConnect works with several brokers including Interactive Brokers, Alpaca, and Coinbase among others, hence once the strategies mature into perfection, live trading can easily be done.
6. Ideas, And Inspirations
The best thing about QuantConnect is that they have head seeker communities like traders who are rarely turned away if they ever needed assistance, and developers who inspire all this to come true. The clientele is able to offer each other supportive ideas, devise projects together, and gain useful knowledge from one another.
Advantages of Using QuantConnect
1. Absolute Ease of Using QuantConnect
The joy of quantitative trading has been offered to all, from beginners to experts. All the users have to do is read the documentation, watch numerous tutorials as well as sample strategies that would help them in starting off.
2. Accessibility through the App
Hardware or the expenditures on data subscriptions is not a forex trader’s concern thanks to the model of QuantConnect.
3. Efficient in Time
The developers can concentrate solely on strategy-building as platform deals with the complexities of data preprocessing, infrastructure, and brokerage integrations.
4. Scalable IT Systems
The infrastructure of QuantConnect is strong enough to sustain strategies that require a lot of resources, for instance, high frequency trading or large scale backtesting.
5. Freedom
As LEAN is open-source, traders are able to modify and change the platform as per their special requirements, in order to have free scope in strategy creation.
How to Use QuantConnect
- First Create an Account
To get the platforms benefits, you would have to register for a free quant connect account here.
- Choose The Preferred Language
If coding isn’t a strong suit use the easy to use python programing language.
- The Available Data Sets
QuantConnect has a niche wide data selections that you can compile with video on the trading strategy you are utilizing.
- Developing a Strategy
Utilize the cloud-based IDE to create and edit trading algorithms.
- Testing the system
Backtesting is one of the steps in the trading’s testing process, where historical data is available to check how the trades performed.
- Making Your Strategy Operational
Integrating with a brokerage should achieve that.
How is QuantConnect Effective
Retail Traders: Individual traders are able to use the platform and try algorithmic trading with the minimum costs.
Hedge Funds: Apart from offering a scalable and secure ecosystem, QuantConnect also allows for the development of institutional grade strategies.
Researchers: The platform can be used by academics as well as researchers for conducting research in the financial markets and for testing economic theories.
Developers: Those who are programmers and want to get into algorithmic trading can use QuantConnect for practical exposure.
Issues Associated With QuantConnect
Difficulty in Understanding the System
There are a lot of the features that are intuitive but for first-time users, they might struggle through a bit of a learning curve when it comes to advanced features, complex strategies.
Brokerage Constraints
This might be an issue for traders that are using niche platforms since not all brokers are supported.
Cost of Data
This can be an issue particularly for premium or realtime datasets since accessing certain datasets could potentially involve extra costs even though there is a lot of coverage.
Dependency on the Internet
As QuantConnect is a Cloud based platform, there is a requirement of an internet connection to ensure that the platform performs well.
QuantConnect vs Competitors
Feature QuantConnect Defunct Quantopian Meta Trader Ninja Trader
Open Source Engine Yes (LEAN) NO No No
Multi Asset Support Yes Yes Limited Limited
Cloud Based yes Yes NO NO
Programming Flexibility Python, C#, F# Python MQL4/5 C#
In a unique direction that sets them apart, QuantConnect has a mixture of being cloud-based along with comprehensive breadth found across assets due to being open-source.
What’s Next For QuantConnect?
With QuantConnect’s Systems getting broader attention it is only a matter of time before all that attention gets accrued on Algorithmic Trading as a whole, and emerging platforms such as QuantConnect will single-handedly popularize the derivatives market. This is arguably a solid prediction considering the scope of improvements that exist, rollout of new data sets, and the consistent active involvement of developers who will likely keep QuantConnect as their first preference.
Final Remarks
For quant traders, portfolio analysers or algorithm developers QuantConnect is an extremely potent and feature rich platform providing sub par algorithmic trading. The features that it has outdoes its cloud infrastructure, interfaces, community and even the tools themselves Quants of all kinds will appreciate the thoughtfully crafted features. Because with QuantConnect you can simulate, test and execute algorithms across any trading strategy you have meaning you will have every necessary functionality for Quants that exist in this fast moving world.
To avail our algo tools or for custom algo requirements, visit our parent site Bluechipalgos.com
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