Capital needed for algorithmic trading at the retail level

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nightmarish

How much capital is needed for someone who is new to algorithmic trading (but has the expertise to develop his own trading infrastructure) to begin trading?

Is 20,000 dollars a far too small amount to begin trading?
 
nightmarish said:
How much capital is needed for someone who is new to algorithmic trading (but has the expertise to develop his own trading infrastructure) to begin trading?

Is 20,000 dollars a far too small amount to begin trading?
More...

Depends how you're defining algorithmic trading. $20K could be enough for low-medium frequency trading but you wont know until you're well on your way with developing your system, running back-tests and analyzing the results (e.g max draw-down)
 
Robert Morse said:
I would say no, that is not enough.

Pattern Day Trading requires $25,000+.
If you are not going to DT and it will not be a large portfolio, why automate it just because you can?

Bob
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I'm guessing, if the trading is automated, I could spend my day doing my day job and spend the night doing research on new trading strategies.
 
nightmarish said:
How much capital is needed for someone who is new to algorithmic trading (but has the expertise to develop his own trading infrastructure) to begin trading?

Is 20,000 dollars a far too small amount to begin trading?
More...

That will depend on the what you will be trading on and how you will be trading with your algorithmic trading. For some trading style and/or the investment instrument, $20K is more than enough. For some, it would not be nearly enough.
 
Focus on developing algos for the daily, weekly or monthly timeframes. That way, you can keep your day job and orders can be placed in the evening. Also, you can get up and running much faster since you will not have to worry about building an automated trading system.

fan27
 
fan27 said:
Focus on developing algos for the daily, weekly or monthly timeframes. That way, you can keep your day job and orders can be placed in the evening. Also, you can get up and running much faster since you will not have to worry about building an automated trading system.

fan27
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Actually, I am a grad student, so I am free all day everyday except for my supervisor's weekly group meetings.

I would like to write software for intraday trading algorithms, but I am not sure why I won't have to build an automated trading system.
 
nightmarish said:
Actually, I am a grad student, so I am free all day everyday except for my supervisor's weekly group meetings.

I would like to write software for intraday trading algorithms, but I am not sure why I won't have to build an automated trading system.
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For an intra-day system, you will certainly need an ATS.
 
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