Making a trading Gameboy: A pocket exchange and algo trading platform
questdb.io
questdb.io
I’m really interested in feedback and ideas on things I could improve and add. I found this really inspiring as it got me more into programming, discovering electronics, and 3d printing.
I have no desire to ever make this project commercial, but it’s been a great platform for me to learn and experiment new things so I’ll take any idea be it for the gameplay or purely technical. Some features I have in mind are:
- Multiplayer over bluetooth where one device is the ‘game-master’ running the exchange and can monitor and guide players while injecting events.
- Additional quoting algos such as pegging one side of the order book and fighting for position
- A tutorial and better UI. The game is hard to pick up for the first time and probably needs to be made more intuitive etc.
While all of this was made with no practical use in mind (there are a lot of markets and products, and you’d trade them in different ways, so you’d need a different game to speak to a volatility trader for example), some people I work with at various trading desks found it useful for interviews or as an introduction to the idea of market-making for junior people.
I would say it starts with knowing the product you trade and their dynamics inside out. How to make a price for it, what dynamics can change that price etc. It's also a good idea to understand related instruments as typically you would use them for price formation and hedging [1][2].
The second bit is to understand electronic trading infrastructure and the market microstructure such as how orderbooks work, and some trading algos [3]
If you're also interested in the infrastructure behind related to low latency, you can read about FPGAs, Exchange co-location etc. There is a fascinating blog on the network infrastructure [4] and the author (Alexandre Laumonier) also wrote a few books on that topic.
A lot of market-making is bespoke and proprietary. For example your pricing model, hedging model, etc. It's also constantly changing depending on events (e.g. the elections) or market conditions (correlations changing). But a good place to start is to use some simple pricing model such as making a blend of other prices in other venues, or for derivatives making up the price based on the underlying price and other elements which vary depending on what the derivative is.
While you would not be able to gain direct market access to, say, the NYSE, a lot of crypto platforms offer APIs for users to build trading bots as a training ground. For example Bitmex, or Deribit. But before doing this I recommend understanding the contract mechanics inside out. For example, the perpetual futures have a very particular mechanism which means they are priced and traded differently than normal futures you'd read about in the Hull book.
I have a few friends who built bots and make small markets on random cryptos for fun. In this particular case, you'd have to think a bit harder on how you hedge your positions (e.g. can you sell an illiquid coin and hedge with a liquid one for cheap?). One way of doing this may be to look at correlations between coins to find the best hedge. Another consideration for crypto is the fee structure which you'd need to account for in your price.
I don't know if it's a good idea to start doing this in crypto besides for fun though, mostly because it's a business that requires scale to derive a meaningful profit. But as an exercise it's definitely fun.
[1]Options, Futures, and Other Derivatives (J. Hull)
[2]The handbook of fixed income securities (Frank J. Fabozzi, Mc Graw-Hill Gb)
[3]Algorithmic Trading & DMA (B. Johnson)
The UI is a bunch of elements you would see on various trading systems (orderbook, trade blotter, market depth chart, intraday rolling chart, scrolling news ticker etc). But they had to be implemented from scratch using these primitive shapes and coordinates on screen.
For example, the chart element is rendered by looping over the recent prices, calculating the min/max values to derive a range and adding a buffer on either side. Then calculating the price interval of each pixel (difference min-max divided by the number of pixels of my chart area). I then iterate over the prices, calculate their positions on the display in pixels, and draw series of lines between consecutive prices.
[1] https://github.com/pimoroni/pimoroni-pico/blob/main/micropyt...
Also around the time the was a company called Trading Technologies that had a patent for click to trade on a GUI grid/order book and was suing everyone.
This seemed to be why you had to organise it yourself to show it the "TT way" on any other system instead of having it out of the box.
I recently started another version which runs on desktop using python/PyGame which I could package up and share and has very similar mechanics except it's faster-paced and intended to look and feel like a sensory-overload arcade game (sounds, lights, music, flashes, announcer voice etc). It's also a 2-player 'versus' game which can be played locally. The intent behind this was to build an arcade station around it, but it can be played on the computer directly using a keyboard.
It looks like this [1] but it's not yet in a playable state and would be hard to pick up as is. I'll continue working on it and then post a link to the github.
Can you post on this thread when you’ve posted the github link, and/or link to your github already so I can star and watch?
On another note, would you happen to live in London? If you really want to try this I could hand you one which will save you plenty of time finding the parts, printing the case, ordering PCBs, and soldering. You can reach me on first_name dot last_name hat gmail dot come. The name is at the top of the original post.
I built a full econsim for fun a while back with working markets based on order books and would absolutely love to chat to you if you're interested?
None of this is typically relevant, even if it gets you a callback, passing subjective technical interviews is more important. No matter how fascinating your lead is, such as the hiring manager, or recruiter, or whatever nepotism you think is so great, you still have to pass that. Other things can get you the callback you need to get that far, such as simple buzzwords on your resume.
If being at entry level is the issue, then don’t be at entry level. Make a contracting company and contract. Use that as experience in your resume.
The trading game did not capture their interest further than watching colourful flashes for a few minutes. It's probably too complicated for their age and hard to understand without knowing some basic financial markets knowledge.
However I used the same device to make other more appropriate games and keep them involved. I could ask them what game they would want, and I would make most of it but involve them in the parts of the code that can be meaningful to them. I found that while they like understanding how it works when I walk them through some small bits of code, writing code (even heavily assisted) is still daunting at their age so they prefer tools like MIT scratch.
I drafted another version of this game which is more arcade-based (and does not run on handheld but a computer or arcade box) and the game is essentially about fighting over an orderbook to (a) be in the best position possible to capture the flow that you want, (b) monitoring for orders with a positive edge and sniping them faster than the other player (or even pick off the other player before they have a chance to move). The values next to the bid and ask quantities are the edge in basis points relative to faire value. If you see some positive edge somewhere you want to go and cross the book to pick out the price.
But the last thing I want for my kid is for them to learn that active trading is fun, lest they try doing it with real money.
Some of the games we made were a quizz platform (times tables, French words etc.), a version of etch-a-sketch where they can move a cursor around, draw, and change the color, and a 2d space shooter game.
It was a good platform to introduce them to code on some of the more tangible bits such as explaining that the screen is a grid of pixels, and that hitting the move button means incrementing your position variable by a few pixels. It's also quite cool for them to be able to bring this to school and to explain how it works, both from an electrical standpoint, and for some of the simple software bits.