Trading strategies for multiple accounts

In this post, we are going to look at the design approaches one should follow to run a trading strategy across multiple accounts.

Design Approaches

One Strategy Instance Per Account

In this approach, you build a trading strategy that is designed to run on a single account. So in order to run it across multiple accounts, you need to run multiple instances of this strategy (one instance per account).

One Strategy for All Accounts

In this approach, you build your trading strategy in such a way that it can handle multiple accounts.

How to choose a correct design approach?

There are pros and cons of each approach. And the one you should choose really depends on your specific scenario.

One Strategy Instance Per Account

Pros

  • Helps reduce complexity (as the code becomes simple)
  • High scalability (You can easily run it across multiple accounts)
    • For high level programming languages like C# or Java
    • Not for charting software like AmiBroker or MetaTrader etc.

Cons

  • Novice programmers find this approach difficult
  • Does not scale well on charting software
    • The major reason for this is that the charting software are hardware intensive. Understandably so as any graphics processing tasks require a high CPU.
    • Users should use stuff like scanners which process faster
  • Starting multiple strategy instances on a lot of accounts can be tiring job
    • Another limitation primarily for charting software as they are not really a trading system
    • An ideal trading system just has a single start button (most of these are custom made)

One Strategy for All Accounts

Pros

  • Novice programmers find it easy to code (say if there is a feature like group account which internally maps to multiple trading accounts)
    • It is easy, but only for very simple trading strategies that mostly just require placing an order
  • Quite easy to manage on charting software as users do not have to start multiple charts (reduces the burden of setting each chart’s strategy parameters)
  • Hardware requirement is small (which is helpful in case of charting software)

Cons

  • Difficulty increases when it comes to debugging and investigating issues
  • Not at all easy when your strategy is complex and involves (order modification/cancellation, fund management etc.)

Conclusion

Based on the explanation given above, you need to evaluate your use case and make the correct choice.

If we are to recommend, we will always say go with (One strategy instance per account) design approach.

After spending more than 12 years developing Financial Software, I took a break from my career to start my own algorithmic trading setup. This new journey started well and along with my own proprietary trading systems, I also started building automation systems for retail traders, fund managers and HNIs. I was employed with firms like Morgan Stanley, HSBC & SunGard. I work on various technologies, but my strengths are building server side cloud based algorithmic trading systems built primarily using Java programming language. Apart from all of this, I am a big fan of Formula 1 racing :-)

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