Bertrand Rassat, managing director - EU salesat FlexTrade, examines the importance of choosing a trading technology system that will best suit your trading strategies
Choosing a trading system is often a difficult task for many hedge funds, because there are many software vendors touting similar claims about the strengths of their respective systems. So how do you see the wood from the trees?
In many cases, it is the trading strategies which will determine the technology required to support them. The execution process is as equally important as the validity or performance of a model to generate alpha.
The following questions you should consider asking when electing a system include:
Are my strategies high frequency?
Are my average orders small or large?
Are my strategies time-sensitive?
Are some of my orders contingent?
Is slippage a critical factor in my performance?
How much market impact is tolerable?
How much control/transparency do I want over the execution process?