Shouting in High-Frequency

And so the time is finally upon us! Apart from the rather grim weather forecast for Vancouver everything should be set for a couple of weeks of intense winter sports thrills!

Here in Norway we’re lucky enough that the time-zone difference provides for convenient Olympic evening-TV. I’m sure there will be a few late nights anxiously hoping for those Gold medals, and that probably means late starts at work in the next couple of weeks…

But that’s the wonderful thing now! I control my own work/life balance. And I’m fairly sure I’ll be disciplined enough to get the same amount of work done as any ordinary week. Ish.

I was thinking about this in the context of algo trading. A lot of us prime our models in the morning, and the rest of the day is pretty much on auto-pilot. We just need some basic monitoring and controls, and ability to tweak configuration parameters. I’d love to be able to use my smart-phone for this purpose. Then I could relax through the Olympic broadcast in my sofa and get the sports action while still being in control over my trading. Or when on the exercise bike at the gym. Or wherever!  A quick search on google shows that indeed many players already provide this for their manual trading platforms. Great! Because this means that we are set free from the strict need to being at the desk staring into our screens — and freedom always adds to quality of life!

We’ll definitely add mobile apps to our feature list.

Who knows? Maybe I can be found at the stands at Sochi in 4 years time, occasionally peeking at my phone!

Good luck Team Norway!

Having spent a couple of weeks in our office (which happens to be in the basement of my house) I am starting to realise that there are a few conveniences I just didn’t appreciate enough in my investment banking days.

Case in point: the other day we decided that we needed a flip-over chart for our brain-storming sessions. Back in the day, I would simply call the corporate help-line and someone would deliver it to my desk within half an hour. Ok, not a big deal I hear you say (and you’re right). But now being an entrepreneur, the process involved getting into my car, driving to Staples to pick one up, and then assembling it when I got back. The problem: it takes time (about 2 hrs to be exact)! And time, as we all know, is money. But even worse than that, it takes focus.

One thing I am really starting to appreciate about running my own business — more so than I had expected — is cost awareness. Fine, you learn about the impact of costs in business schools and such, but let’s be honest: when working for a big corporation the only time you really care about cost is when your company is slashing them and you feel the Big Fear. For the budding entrepreneur however, every pen, flip-chart, stapler or computer screen means making an important decision — because every item you pay for has a direct impact on your chances of succeeding.

We like airplanes, and we use the term ‘runway’ a lot as an analogy for our chances of making it. Right now, we know exactly how long our runway is, and we have a pretty good idea that it’s sufficient to bring us up to speed and give us take-off — but only just. That means we need to stay sharp and make sure we don’t make poor decisions that shortens the runway and leaves us heading into the gravel at full throttle.

For traders it’s the same story. All fixed and transaction costs have a direct impact on trading performance. Most trading models out there look profitable before you factor in cost. And most do not after you do. I am sure there are hoards of great models out there that retail traders have worked on but ended up scrapping because the cost of setting them up and/or running them rendered them unprofitable.

The sole aim of KolibriFX is to enable traders to build, test and run the models they need, without paying programmers or licencing-fees to get going. In the trading world, getting this extra runway means freeing up your capital to boost or diversify your portfolio.

And that’s the only way to fly.

—Einar

Hello world! Welcome to my blog!

I am one of the founding members of a small startup based in Oslo that works on building an online algorithmic trading platform for retail traders in the foreign exchange market.

Having spent the last year planning for this adventure it’s a great feeling to get going! Since we began working full-time on Monday we have been coding away and making good progress! We hope to have a basic version up and running within the next couple of months, and start trading with a select few clients by year-end.

I will use this space to discuss various topics relevant to algorithmic trading, and hope you will stop by every now and then as I plan to update weekly.

I won’t dwell into details about the project here, but you can visit our blog on www.kolibriFX.com to get an idea of who we are and what we’re doing. Nothing much there yet, but add @kolibrifx on twitter to get updates as they come!

Wishing you all a great weekend!

— Einar