How quickly can your developers create a trading system to meet your needs?
The creation of software is a task that is almost always underestimated. It can take weeks to make simple changes. Because many strategies are time sensitive - it doesn't do any good to be the second in line to a one-time opportunity - it’s important to be able to get to market quickly.
Working with new technologies always reduces a developer's initial productivity. This ramp-up time can mean that somebody else is beating your strategy to market. Working with a team of experts, who have deployed and customized trading software before is almost always going to be the most time-sensitive manner to create a new automated trading strategy.
There are plenty of reasons to consider purchasing an off-the-shelf or customizable platform. For instance, personnel turnover can have an impact. What do you do when you've hired a developer that works on your system for 6 months, and then leaves you because he's now got a more attractive skill set? You might have to offer partnership, ownership incentives, or high bonuses to keep a good developer. When you buy a trading system, you take this concern off the table. If a software company's developer leaves, they will replace him. As a customer, it's not your problem and not your concern – essentially, the responsibility has been shifted.
Another problem is maintenance - exchanges and other venues can release API / protocol updates frequently. Are you prepared to keep somebody on staff to constantly update the software to adhere to the updates? When connecting to multiple markets, these updates can be very difficult to manage, especially for small development teams. This is another area where the responsibility is shifted when working with an established product. If the venues change the way they accept orders and deliver pricing data, then the software vendor will handle the updates – which allows you to concentrate on more important matters.
The real question to ask yourself is, "Who do I want to be?" If it's your strategy and your trading that bring in money, should you spend time hiring and managing developers?
Of course, the flip side to this is that you actually do want to hire and manage developers. A purpose-built solution, implemented well, may have performance advantages over a general-purpose solution. There may be issues of secrecy - though NDAs offer some protection, traders may not be comfortable sharing some things with a larger company. In some cases, the traders know how to program and may want complete control over the technology.
All in all - even though it's never a simple question - understanding what you're hoping to get out of a purchased system, understanding what is available, and determining if those sets match up acceptably can go a long way to the final answer.
The creation of software is a task that is almost always underestimated. It can take weeks to make simple changes. Because many strategies are time sensitive - it doesn't do any good to be the second in line to a one-time opportunity - it’s important to be able to get to market quickly.
Working with new technologies always reduces a developer's initial productivity. This ramp-up time can mean that somebody else is beating your strategy to market. Working with a team of experts, who have deployed and customized trading software before is almost always going to be the most time-sensitive manner to create a new automated trading strategy.
There are plenty of reasons to consider purchasing an off-the-shelf or customizable platform. For instance, personnel turnover can have an impact. What do you do when you've hired a developer that works on your system for 6 months, and then leaves you because he's now got a more attractive skill set? You might have to offer partnership, ownership incentives, or high bonuses to keep a good developer. When you buy a trading system, you take this concern off the table. If a software company's developer leaves, they will replace him. As a customer, it's not your problem and not your concern – essentially, the responsibility has been shifted.
Another problem is maintenance - exchanges and other venues can release API / protocol updates frequently. Are you prepared to keep somebody on staff to constantly update the software to adhere to the updates? When connecting to multiple markets, these updates can be very difficult to manage, especially for small development teams. This is another area where the responsibility is shifted when working with an established product. If the venues change the way they accept orders and deliver pricing data, then the software vendor will handle the updates – which allows you to concentrate on more important matters.
The real question to ask yourself is, "Who do I want to be?" If it's your strategy and your trading that bring in money, should you spend time hiring and managing developers?
Of course, the flip side to this is that you actually do want to hire and manage developers. A purpose-built solution, implemented well, may have performance advantages over a general-purpose solution. There may be issues of secrecy - though NDAs offer some protection, traders may not be comfortable sharing some things with a larger company. In some cases, the traders know how to program and may want complete control over the technology.
All in all - even though it's never a simple question - understanding what you're hoping to get out of a purchased system, understanding what is available, and determining if those sets match up acceptably can go a long way to the final answer.
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