Digital Markets: 3 Key Advantages Of Using Trading APIs

Digital Markets: 3 Key Advantages Of Using Trading APIs

By Chioma Iwunze-Ibiam | Contributor on December 6, 2017
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advantages

An API is an interface which allows a program to interact with other software solutions. It is applicable to many industries and it is particularly useful in the trading world because it allows a trading platform to interact with the market.

There are many APIs that you can use, each one with specific features meant to make information sharing easier, to display real time quotes, as well as trade executions and confirmations.

These types of interfaces are essential in the online trading world, and they should be used by any respectable trading firm, online trader or even robo advisors. If you want to learn more about this type of interface, here are its major advantages:

1. Stable trades

Manual trading requires a lot of effort, and due to its human nature, it leaves a lot of room for errors, not to mention delays that can cost you a lot of money. On the other hand, automated trading can ensure a stable operation and execution of trades, provided that you use a reliable API. In most cases, quotations received through APIs are the most relevant and accurate. However, you should know that as an individual who is working with a broker, you need to ask for permission before using a trading application programing interface. While these interfaces are allowed in the trading world, prior permission is required in most situations.

2. Fast executions

When using a trading API, the transactions that you choose are executed in real time, with delays smaller than a fraction of a second. Delayed transactions are one of the major problems of most brokers, so you can imagine that the smaller a delay is, the smaller your transaction risk will be. A small delay indicator will always increase the profitability of the trading algorithm.

3. Equal chances for everyone

Sophisticated trading software solutions used to be very expensive, which is why they were mainly used by big trading companies. However, trading APIs have made it possible for everyone to have access to a state of the art trading solution, at an affordable price. Usually, when using these solutions, you pay according to how much you use them. Thus, big corporations that share large amounts of information will pay more, while smaller trading firms and private online traders will pay an affordable price, according to how much information they are sharing. This gives all traders the same opportunities, and encourages a fair competition in the stock market.

Chioma Iwunze-Ibiam writes creative non-fiction and prose fiction. Her works have appeared in Romance Meets Life, Flash Fiction Press, MTLS, Saraba Magazine, Sentinel Magazine and others. Her first novel, Finding Love Again, was published by Ankara Press. She owns and manages Creative Writing News.



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