A Powerful Financial Tool: Application Programming Interface (API)

 According to Wikipedia an “API is an interface in computer science that defines the ways by which an application program may request services from libraries and/or operating systems. An API determines the vocabulary and calling conventions the programmer should employ to use the services. It may include specifications for routines, data structures, object classes and protocols used to communicate between the requesting software and the library.” (http://tiny.cc/F4NXG)

If computer science is not your forte, relax and don’t let this definition intimidate you. I use APIs on a daily basis, and I can’t code my way out of a paper bag. I will introduce you to simple tools that will make APIs work for YOU!

At Bigger Capital we use APIs to integrate our trading platform by incorporating market data feeds, the algorithm, electronic order generation, risk management, and trade capture. The end result is consistency, efficiency, effectiveness, flexibility, integration, reliability, scalability, speed, and, ultimately, money.

Some brokerage firms have done a great job of expanding their API menus to facilitate quick and easy implementation of trading strategies using APIs.

Interactive Brokers (IB), the electronic broker Bigger Capital uses, offers several alternatives for connecting directly to its trading system. Its APIs are available for DDE for Excel, Java, C++, and ActiveX. “For traders with little or no programming experience, Interactive Brokers recommends the DDE for Excel platform, as Excel offers a familiar and user-friendly interface and the DDE API is seamlessly integrated into the Excel application.”  (http://bit.ly/DBKmK) To help you get started with the Trader Workstation (TWS) APIs, you can attend IB’s live API for Beginners webinar.

We use both the DDE for Excel platform and ActiveX.

Take a big step today. If you want to learn more about APIs, get your hands dirty. Start using a DDE for Excel platform operating over a trading sandbox. 

Implement your strategy via the API, experiment, and above all, have fun doing it while you are on your way to becoming an expert!

If you need some help with APIs, send me an e-mail at biggercapital@gmail.com. I will be happy to lead you in the right direction.