Wall Street Presents: Algo Trading From the Comfort of Your Living Room

When you hear algo trading you assume a programming wunderkind with 3 PhDs glued to eight monitors. What if we told you that the latest lucrative play of Wall Street is coming straight to your laptop as you're planted on the couch? Call our bluff and you'll discover the Manhattan-based startup EquaMetrics. The brains behind the operation belong to co-founder Chris Ivey, 26, a Harvard graduate, along with several former masters of Wall Street.

As CNN Money put it:
EquaMetrics' app is simply designed and since its software firepower comes from the cloud, it doesn't require anything more than the typical PC. You can drag and drop colored tiles to assemble your own algorithm. Day traders can choose between 30 variables to build their formulas. The options are built on so-called technical indicators, metrics that reflect trading patterns as opposed to stock fundamentals such as the price-earnings ratio. After you're done, you run the program to buy and sell stocks and currencies.

Some might say, “Are they seriously trying to mass-produce the newest Wall Street WMD?”

Nope, they answer. Their conscience is clear. The strategies created via EquaMetrics can scan stocks or currencies at most once a minute. Plus, it's not like they're targeting those who've save their pennies for a rainy day. It's quite simple; they're not offering high frequency trading to the individual. You're not going to be the catalyst for unpredictable market volatility or full-scale financial meltdowns. You'll simply be using the timing and discipline of the platform rather than your own.

It's a profitable game of Tetris for those who are already quite familiar with market dynamics. We're talking about institutional investors in pursuit of automated trading minus the costly programmer or just independent traders who are long timers when it comes to trading on technicals. They can craft a strategy for their needs for only $99-$200 a month, depending on the number of algorithms they want to use.

Create you portfolio, construct a strategy, backtest said strategy, and go live. Congrats, you're a quant! For instance, you could use a technical trading pattern like the Golden Cross. Ivey backtested this strategy with a Google stock. Instantly, he saw that this strategy traded 3 times in the last 2 years, but nonetheless raked in a rather impressive $73,000 if you were trading 1,000 shares. A swarm of currency traders will most likely buy up this hot new tool since trading in FX markets is heavily dependent on technical indicators.

How does it move from point A (your computer) to point B (the market)? While the company is not a broker, it does partner with brokerages FXCM and Interactive Brokers to execute the trades.

The cascade of invention goes on: EquaMetrics wants to develop algorithms based on fundamental analysis. Novice and expert traders alike could set up their own hybrid algorithms.

Just think, if you've got a laptop, then algo trading is much closer to home than you thought.