Using a Python library called “tda-api”, I have written a trading bot in Python. It is live and it trades with real money every trading day. It trades one of the following stock symbols: AAPL, AMD, NVDA, META, TSLA, or MSFT.
The tda-api library is written and maintained by ‘Alexgolec’ and can be found at: https://github.com/alexgolec/tda-api
The trading bot also uses the Python pandas library, the pandas-ta library, and MQTT to post status messages concerning the current trades that it is in.
This trading bot has been running since September of 2022.
Python is a popular programming language that is widely used in the financial industry for a variety of tasks, including the development of trading bots. There are several reasons why Python is the best choice for writing a trading bot.
First and foremost, Python is an open-source language, which means that it is free to use and has a large and active community of developers. This community has created a wide variety of libraries and frameworks that can be used to develop a trading bot. Some popular libraries include NumPy, Pandas, and Scikit-learn, which provide powerful data manipulation and analysis tools, and libraries such as TDA-API and Backtrader, which provide easy-to-use interfaces for interacting with trading platforms.
Another reason Python is a good choice for trading bots is its simplicity and readability. Python has a simple and straightforward syntax, which makes it easy to learn and write code. This is particularly important when developing a trading bot, as the code must be easy to understand and maintain in order to ensure that it works correctly and stays up to date.
Python also has a wide range of built-in libraries that can be used for data analysis, visualization and machine learning which makes it a very suitable language for trading bots. Trading bots typically need to analyze a large amount of data and make decisions based on this data. Python’s powerful data analysis and machine learning libraries make it easy to work with and analyze data, which is essential for a trading bot.
Python is also a very versatile language and can be used for a wide range of tasks. It can be used for backtesting, data analysis and visualization, web scraping and even connecting to various platforms and exchanges. This makes Python a good choice for trading bots as it allows to include a lot of different functionalities in one single script.
I use the tda-api python library to interface my trading bot to TD Ameritrade via the TD Ameritrade API.
The tda-api python library is a wrapper library for the TD Ameritrade API. It allows developers to easily access and interact with the TD Ameritrade API using Python.
The TD Ameritrade API allows developers to access various services offered by TD Ameritrade, such as account information, market data, and trading services. The API is based on REST principles and uses OAuth 2.0 for authentication.
The tda-api library provides a simple and easy-to-use interface for accessing the TD Ameritrade API. It abstracts away the complexities of working with the API and provides a set of Python classes and methods that correspond to the API endpoints. This makes it easy to get started with the API and allows developers to focus on the functionality they want to implement.
One of the key features of the tda-api library is its support for both OAuth 2.0 and API key authentication. This allows developers to use the library with both personal and institutional accounts. It also provides support for token refresh which allows to keep the access token fresh.
The library also provides a wide range of functionality, including:
- Account information, such as account balances and positions
- Market data, such as stock quotes and historical data
- Trading services, such as placing orders and managing positions
- Additional functionalities as options chains and news
The tda-api library is actively maintained and well-documented, making it easy to get started and implement your desired functionality. It also provides a wide range of functionalities, allowing developers to access a wide range of TD Ameritrade services.
I use the Python pandas library in my trading bot.
The pandas library is an open-source library for data manipulation and analysis in Python. It provides powerful data structures and data analysis tools that make it easy to work with and manipulate large datasets.
The two main data structures in pandas are the Series and DataFrame. A Series is a one-dimensional array-like object that can hold any data type. A DataFrame, on the other hand, is a two-dimensional table of data with rows and columns. It is similar to a spreadsheet or a SQL table.
One of the most powerful features of pandas is its ability to handle missing data. It provides various methods to deal with missing data, such as filling in missing values with a specific value or interpolation. This is particularly useful when working with real-world datasets that often contain missing or incomplete data.
Pandas also provides powerful tools for data cleaning and preprocessing. This includes functions for removing duplicate rows, renaming columns, and converting data types. Additionally, it has built-in support for handling categorical data, which is often found in real-world datasets.
Another key feature of pandas is its ability to perform advanced data analysis and modeling. It has built-in support for various statistical operations and machine learning algorithms, such as linear regression, k-means clustering, and decision trees. This makes it a valuable tool for data scientists and analysts.
Pandas also provides a wide range of visualization tools through its integration with Matplotlib. This allows you to easily create plots, charts, and other visualizations of your data to help you understand and communicate your findings.
Algorithmic trading, also known as algo trading or black box trading, is the use of computer programs and algorithms to execute trades in financial markets. These algorithms are designed to analyze data and make trades based on specific market conditions or criteria.
The process of algorithmic trading begins with the development of a trading strategy. This strategy is based on a set of rules or criteria that the algorithm will use to make trades. For example, a strategy might be to buy a stock when its price drops below a certain level and sell it when the price rises above a certain level.
Once the strategy is developed, the algorithm is programmed and tested using historical market data. This allows the algorithm to be fine-tuned and optimized for performance. Once the algorithm is ready, it is deployed in the live market and begins making trades.
One of the main benefits of algorithmic trading is that it allows traders to make trades at a much faster pace than would be possible manually. Algorithms can analyze vast amounts of data and make trades in milliseconds, which is much faster than a human trader could possibly manage. This allows traders to take advantage of market movements and opportunities that would otherwise be missed.
Another benefit is that algorithmic trading can help to reduce the risk of human emotion affecting trades. As the trades are executed by a computer program, the risk of a trader making a mistake or getting emotional is reduced. This can lead to more consistent and profitable trading.
Algorithmic trading is also increasingly being used by institutional investors such as hedge funds and investment banks. It is also used in high-frequency trading, which is a type of algorithmic trading that makes use of high-speed trading systems and low-latency networks to execute trades at extremely high speeds.