Centauris Group

What is an Automated Trading System (ATS)?

An ATS, short for Automated Trading System, is the software translation of a trader's ideas, experience and overall strategy. An ATS can be as simple as watching resistance levels of a single instrument on a 5 minute timeframe to enter long term positions or be as complex as watching thousands of securities at the tick-level trying to be the first to trade arbitrage opportunities across exchanges.

An Automated Trading System can be summarized In four separate modules

1. Graphical User Interface (GUI)

A Graphical User Interface (GUI) allows for the visual configuration and monitoring of the ATS by its user(s). Centauris separates themselves from their competition by creating low load GUI's that do not interfere with the functionality and speed of the traders ATS. GUI's can be built to include complex charting of markets and securities, displays of positions in real time, orders and account information, etc. The final design of the GUI is usually a blend of Centauris tremendous experience and the individual needs/likes of the end user. This is where the trader creates live displays of his trading system where he/she can monitor the program signalling or executing trade decisions. Other examples of using the GUI function of the ATS is to monitor sensitive markets in a bar graph, coloured according to risk factors deemed important to the trader, while showing the historical performance of the strategy over a specified time frame. The trader can create a GUI to show multiple strategies with individual filters to sort information by sector, time and configuration.

2. Decision Process

Centauris Group specializes in taking the traders specific criteria of how and when to either show a signal or execute a trade into their programming by thorough consultation on just what rules the program MUST follow. Once the Centauris Decision Process includes thorough investigation from the actual logic making decisions, sending out orders, managing positions, hedging risk, calculating indicator inputs, determining take profits and stop losses and any other criteria that might be taken into account when trading.

3. Data Provider

The data provider can be a specialized provider or the broker of your choice. Each provider offers different data solutions. Some are slow and limited while others provide unlimited access to optimized data streams, allowing tick updates on thousands of securities at a time. That is where many limitations are first met when building an ATS making this a primary concern in the initial planning phases.

4. Brokerage

This is where your orders will be sent for execution. Not all brokers offer the required platform to support ATS' but many do. Their offerings vary a lot so that you might find that one broker supports only market and limit orders while others could provide OCO, trailing stops and bracket orders for example. You can see what options your broker offers ATS-wise by asking for their «API» documentation. «API» stands for Application Programming Interface and is essentially the set of tools available to the programmer for a given broker. The programmer needs to work according to these specifications which might limit what is possible or on the contrary provide advanced functionalities to empower the programmer.

An in-depth analysis of your planned ATS should reveal any limitations inherent to any of the 4 modules described above. The actual translation from a traders mind to concrete software is now ready to take place. It will be the role of the programmer to transpose human rules into exact machine actions balancing performance against simplicity, exactitude and risk management. A good analyst will need to understand your trading goals even more than the specific rules you write down for him since strict rules rarely account for every possible scenarios. This way the programmer can help you decide if your decision process will take place on individual ticks or every few seconds for example as well as suggest how to best execute the software considering your budget and possibly incremental goals for your ATS.

This is but an overview of all that underlies ATS building but I hope it might have somehow demystified the process involved.

Christian Blais