Algorithm-based trading technology, already established in financial markets, is now making its way into the world of energy trading. But uniting the requirements of trading automation with the special demands of the energy industry is no easy task. In a four-part series Wolfgang Eichberger, Co-Founder of VisoTech, shares the challenges of developing a fully automated solution for intraday power and gas trading. If you’re considering developing your own algo-trading solution, read on and get some helpful tips. In part one, Wolfgang gave a brief history of trading technology. Parts two and three covered the major challenges of developing an automated energy trading solution. In this final instalment Wolfgang reveals an important secret to success.
Learning from each other: the importance of community
Probably the single biggest contribution to the success of autoTRADER development has come from strong relationships with customers and partners. We have learned so much from our customers! Without their demanding ideas, requirements and wishes, we certainly wouldn’t be as far as we are today.
The close relationship with our customers has allowed us to build a strong, smart product incorporating hundreds of years of combined energy trading experience.
In the early days of the product, customers put traders in front of screens to monitor autoTRADER activity. Sometimes they would notice a behaviour that could be better solved in a different way and would share these observations with us. Just recently, a trader excitedly told us he realised that his suggestion had been implemented, because he saw it live on screen. And customer inspiration goes beyond incremental improvements. Many components and features originated from the requests of individual customers.
This close relationship with our customers, and their willingness to allow other customers to profit from their expertise and ideas, has allowed us to build a strong, smart product incorporating literally hundreds of years of combined energy trading experience from a wide variety of companies with different business models and strategies.
A trader excitedly told us he realised that his suggestion had been implemented, because he saw it live on screen.
The customers who had first tried creating their own algo-traders found that, using our solution, the developer capacity they had previously needed to support interface updates could instead be focused on advanced activities such as algorithm development, system interfaces and data mining, in order to further improve the quality of trading. But naturally this knowledge is not shared! Because whoever has the better trading strategy, the better algorithm, wins in the market and achieves higher profit.
An atmosphere of cooperation
We’ve also built up contacts with our exchange partners and their development teams. In this way we have learned about potential changes early, and have gotten suggestions for how new features could be implemented. Through personal relationships we can discuss problems and solutions directly with the developers. Naturally these relationships also benefit our customers.
Our customers regularly and openly share how they connect their systems, how they develop and test algorithms, how their developer teams work.
Perhaps the most pleasant surprise of the entire process is how closely our customers have begun to work with each other. They regularly and openly share how they connect their systems, interfaces they’ve developed, how they develop and test algorithms, how their developer teams work. This happens at events we sponsor, such as our annual User Forum, where last year 60 visitors came together to share how they use the system: round the clock position closing, marketing flexibilities, demand response, prop trading… But our customers also connect on their own online and offline, for instance at E-world. All of our customers have useful experience, and everyone profits from the information exchange.
With the combined expertise of our “village” of customers and partners, we look forward to continue improving the autoTRADER, building in more advanced technologies, deeper process integration and further intelligence.
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