The Application Of Program Trading In China’s Futures Market

As the market of futures is a "zero-sum game", and the volatility of the future price is filled with a high degree of randomness, so for an investor, if you want to have profit in this market, you must hold the attitude of investment rather than the attitude of gambling.The attitude of the so-called investment is that you must be in accordance with the prior well-designed game plan with a positive expectation of profitability.Program trading originated in the1980s, the United States, its original definition refers to the sale of over15stock portfolio in the New York Stock Exchange at the same time, therefore, sometimes it is also known as basket trading; with the rapid development of computer technology, the program trading has become the best combination of IT technology and the investment management industry. Now the program trading refers to the use of computer technology to specify trading strategies, automated trading, the implementation of risk control, and so on.Program Trading that this paper will study belongs to the category of financial technology’s innovation. Because compared with the subjective trading, program trading can not only overcome the weaknesses of human nature but also quantitatively analyze the return and risk. So the program trading is slowly recognized by the trader and it is in a continuous development and improvement and gradually maturing stage.First, this paper gives a detailed description of program trading and the design of trading system. Second, it gives our simple trading system in order to illustrate how the trading system is designed. Finally, it gives an overnight system and a day trading system, it also gives a comprehensive introduction from the thinking of systems, test reports, the analysis of systems. It eventually proves that this trading system is indeed effective and it also gives some visions about the improvement of the systems.