Algorithmic Trading Engine Fast Switching Safe Mode

Resolve Bottlenecks,
Find Innovative SolutionsGenerate Solutions

Solution Overview

Problem

Algorithmic trading systems lack intuitive interfaces for traders to manage and evaluate complex trading strategies, leading to inadequate performance and loss of control, as traders are not provided with real-time feedback on market dynamics and order executions, and face high costs and delays when switching between algorithms.

Innovation Solution

A graphical user interface with automated algorithm selection and real-time feedback capabilities, allowing traders to initiate and manage multi-algorithm trading strategies through drag and drop motions, monitor market impact, and switch between algorithms quickly to minimize costs and risks.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Productivity

If traders use complex algorithms to automate trading strategies, then trading efficiency and execution quality improve, but traders lose control and transparency of the trading process

Engineering Contradiction:

Improvetrading efficiencyVSAvoidtrader control

Core Design Contradiction:

ProductivityVSEase of operation

Solution Approach 1:

The system implements real-time feedback mechanisms that provide traders with transparent visibility into algorithmic trading operations. The feedback includes current algorithm performance, market conditions, execution quality metrics, and performance against benchmarks. This allows traders to maintain control by monitoring and understanding what the algorithms are doing, while still benefiting from automated trading efficiency.

Inventive Principle:

Principle #23Feedback

2Adaptability or versatility

If traders switch between algorithms quickly to adapt to market conditions, then trading adaptability improves, but switching costs and delays increase

Engineering Contradiction:

Improvetrading adaptabilityVSAvoidswitching delay

Core Design Contradiction:

Adaptability or versatilityVSLoss of time

Solution Approach 1:

The system performs preliminary actions by pre-configuring multiple algorithms with different trading strategies and characteristics before market conditions change. When a switch is needed, the system can rapidly activate a pre-configured algorithm without the delay of creating or configuring a new one. This reduces switching time and costs while maintaining high adaptability to changing market conditions.

Inventive Principle:

Principle #10Preliminary action

3Reliability

If traders manually manage and evaluate multiple algorithms, then algorithm performance improves, but time consumption and operational complexity increase

Engineering Contradiction:

Improvealgorithm performanceVSAvoidmanagement time

Core Design Contradiction:

ReliabilityVSLoss of time

Solution Approach 1:

The system implements self-service capabilities where algorithms automatically manage and evaluate themselves. The system monitors algorithm performance, compares it against benchmarks, identifies underperforming algorithms, and can automatically switch between algorithms based on predefined criteria. This eliminates the need for manual management while maintaining high performance through automated oversight and evaluation.

Inventive Principle:

Principle #25Self-service

Data Source

PatentUS7870062B2Coordination of algorithms in algorithmic trading engine with fast switching and safe mode

Publication Date: 2011.01.11 PORTWARE LLC

AI summary

A graphical user interface is used along with an automated algorithm selection function to enable market participants to initiate automated, multi-algorithm trading strategies through a single drag and drop motion. A symbol representing a security can be dragged and dropped onto an icon representing a tactical or strategic algorithm. Other features of the graphical user interface show information such as the progress of the algorithms. Fast switching and safe mode are used to minimize a cost associated with algorithm switching.