What vital few nuggets of wisdom would you pass along related to automated trading?
Some random items which come to mind:
(*) The software you use is only a tool to reach a higher goal. There are endless discussions about which language is "best" etc. The language does not make money, so I consider these discussions not important. So I don't care that people laugh at me for using Java and not using Python. Java is the language I feel most comfortable with and is the language in which I can describe best the functionality which I want to implement.
(*) Money management and risk management are most important. This is what keeps you in business when things move against you.
(*) Understanding the instruments you trade and their quirks are important. And these quirks need to be properly handled in software. To avoid things going haywire. Instruments expire (e.g. futures, options), some futures "expire before they expire" (e.g. IB's futures close-out policy for instruments with physical delivery). Exchanges have holidays which differ per country; sometimes they have shortened trading days. Instruments may use a foreign currency, so you'll also need the exchange rate. Instruments have certain trading hours during which they are liquid and others where there is hardly any trading. Which makes that handling time zones properly may become important as well. And so on.
(*) Understanding how your broker behaves, and the rules they use, is important. Make sure that you never get close to the boundaries, to ensure that the broker is not stepping in and doing things (e.g. liquidate positions) as those interventions will be unpredictable. Example: I keep close track of my account value and the margin requirements and make sure that I always have a large buffer.
(*) When implementing a trading system in software you have to stop at each step and ask yourself the question "what if this step fails?" How should the program behave? Should it stop? Should it take an alternative action? Can it continue? Which failure is minor and only needs to be logged in a logfile? Which failure is that important that it needs to send me a warning email message?
As you see: nothing of the above involves the actual trading rules: when to enter and when to exit a position. Each person will have their own preferred trading strategy/ies.
