The Algorithmic Trading Journey of a Senior Data Analyst from California

9 min read

A few years back only a few would have thought of doing algorithmic trading on their own. However, today, there are a lot more avenues and opportunities coming out for learning and implementing algorithmic trading.

Thomas Orgler hails from San Diego, US, and is an experienced and passionate Senior Data Analyst with a demonstrated history of working in fintech, public sector, financial services, and manufacturing.

Thomas has 10 years of work experience under his belt, hobby invests on the side and aspires to start his own capital management firm in the future. Thomas has learned a lot of programming languages like Visual Basic, Python, R, C++ and Matlab; has an Agile, Alteryx and Tableau certification, and learned from a lot of other courses to complement his profession.

Now a proud EPATian, he is applying his knowledge to algorithmic trading. We caught up with Thomas over a call and this is his story.

Hi Thomas, tell us about yourself!

I’m Thomas Orgler and live in the beautiful city of San Diego, California. I’ve moved around a lot and can easily call San Diego my true home as the natural beauty, the laidback vibe and ability to do countless outdoor activities is what makes me happy.

From hiking to mountain biking to paddle boarding to snowboarding, all can be done within a short car ride. I used to be an Industrial & Systems Engineer back in the day and also dual majored in Economics back in school. The Econometrics class is what got me really into statistics.

I ended up starting my career as an engineer and pivoted to IT. I currently work for a Fintech company, Intuit, and do Big Data ETL, dashboarding, Python scripting and A/B Testing.

I am always learning new topics and trying to apply what I have learned to increase the passive income I generate.

I have built a small boutique business in real estate with long-term and short-term rentals and algo trading seemed like a great addition to generating passive income.

Process Engineering to Business & Finance Analytics in 10 years - How did your journey incline towards Algorithmic Trading?

Even though I was always good in math and sciences and engineering seemed like the best fit, I truly did it because I wanted to go into investment banking, which probably sounds counterintuitive.

The reason for that is because I am originally from Brazil and an engineering degree in Brazil opens doors in different domains there. Reasoning for that is that if you can make it as an engineer in Brazil you have proven you are smart and highly qualified for a high-skill role in any domain and they will hire you.

I got a quasi-full-ride scholarship to come to the United States when I was 17 to study Industrial & Systems Engineering in Rensselaer Polytechnic Institute in NY.

I graduated and ended up going into the manufacturing route because I had a great offer to work for a great company, Procter & Gamble. It was the path of least resistance as an engineer and I wanted to see where that would take me.

Returning to the question however, I learned several interesting concepts like CAPM and statistical arbitrage in college via my minor in Finance and I have always wanted to combine all my learnings:

  • the automation and analytics from engineering,
  • the statistics from economics, and
  • the financial markets understanding.

Having to focus in my engineering career, I never ended up having a chance to do that.

Then, I read a book called “Rich Dad, Poor Dad” by Robert Kiyosaki that really opened my eyes.

The whole idea of passive income was something that was very attractive to me. I started hobby investing in real estate and it was remarkably successful. Soon, capital started flowing in and that is when trading really began for me.

I was working as a data/financial analyst at the time when I really got into algorithmic trading. The company was trading commodities and I saw myself as potentially taking over hedging responsibilities down the road which also involved futures trading.

I was very close to the CFO of the company, and I was telling him how we can have an algorithmic-based approach to mitigate risks through volume and data-intensive analysis instead of letting a human making those decisions. As I automated several functions in the company, that's when I turned my eyes to learning Python. I learned a lot of it on my own via Coursera and started playing with Quantopian (which recently shut down) to test the waters and knew I wanted to learn more.

That's when I came across ads for EPAT and decided to make some calls and find out more. I talked to some of the professors and other alumni, asked a lot of questions, and it seemed like a great fit.

I noticed quickly that there's a whole other level that I am not familiar with. It seemed like a great opportunity to learn something from the ground up.

EPAT is a very solid, strong programme. I put in a lot of effort. I kept getting in touch with professors and my support manager when I had questions. They were very helpful in building a strong foundation.

Right now I'm trading part-time because I like to stay in a job. I’m working on manual discretionary trading based on sentiment analysis of macro news and, so far, it's been paying off handsomely.

I eventually want to get into the statistical arbitrage side of things. Pairs trading, mean reversions strategies, and identifying stationarity were concepts I wanted to explore more. However, nowadays, where I truly see the power is in Natural Language Processing and am eager to take the Sentiment Analysis course with QuantInsti in the next couple months.

What has your experience with EPAT been like?

I have always trusted my gut feeling and my decision-making ability. I've proven to myself that I have what it takes to generate returns whether it's in real estate or trading.

2/3 of mutual funds do not beat the market and I have seen first-hand how several fund managers do not truly know what they are doing.

That's why I honestly believe that with the right tools, whoever takes the EPAT programme can apply the knowledge and generate returns through their own capacity. Especially in the zero-dollar commission environment we are in right now, a lot of doors opened for higher frequency trading using a typical broker such as TD Ameritrade and their Think or Swim platform (and API).

There's a huge amount of data out there you can tap into. You can leverage Python and its libraries to build ML algorithms with ONLY 10-20 lines of code. It is not as complicated as it was back in the day. You don’t have to write a crazy amount of code to be able to build something like that.

I've always been passionate about programming. It has never been about the user experience or user interface for me. It was always about automation.

Instead of having someone make a decision and use their own human insight, you can have a computer make that decision for them in less time and leveraging a ton more data for a quicker and more precise solution.

How has the pandemic affected your daily routine?

I have not really had a chance to truly build my algo trading business yet because of the COVID19. With the pandemic, it is tough to train models and backtest them since this new situation we find ourselves in is new making future price movements hard to predict.

But I did leverage a lot of the learnings into my real estate venture. EPAT taught me about infrastructure deployment and leveraging APIs.

I personally use TD Ameritrade and if you have to build algorithms, you obviously need to learn how to get data, manipulate it and send it back through an API. I used this skill to research APIs for Airbnb and MLS data, a multi-listing service, in order to analyze the best zip codes in the United States for short-term rental investments.

I started building and growing my business in the real-estate domain and it has been generating returns in excess of 60% ROI even through COVID-19. Once the COVID-19 pandemic subsides, I am going to put more emphasis on building my fund – particularly with focus in NLP.

I'm at a point now where I've finally shifted gears in my career towards data science and software development. I don’t necessarily want to work for a trading company.

I have the capital I need and I love the idea of generating passive income.

Which feature of EPAT do you like the most?

EPAT really focusses on serious data science and teaches a lot about financial markets. It was a very good journey, to be honest, and a very smooth transition for me.

I already knew Python, so that part wasn't hard. Learning about financial trading and concepts of roll returns and futures was completely new to me.

Actually, there are a couple of features that I really liked:

The infrastructure class was amazing!
It really taught me how to build the right infrastructure for a high-frequency trading fund. It also taught me how to apply these to low-frequency and medium-frequency trading. All you need is a cloud infrastructure and you're done. EPAT did a great job by adding very strong insights in every section of that huge elephant, ie. financial and algorithmic trading.

The Support Manager system
I have to say that the support manager system is excellent with EPAT. It didn't matter when I sent the message, Laxmi, my support manager, was always there for me and she was absolutely amazing. I would say that having that human touch where you can ask questions was immensely helpful. She would quickly put me in touch with the professor and help answer the question.

The time difference
There's always that human touch to help you if you get lost. Since I am in the United States, I could not watch the course since they are in IST, which ends up being 3 AM here. So I would always have to watch the recordings and ask my questions later. The support system was a pillar towards setting me up for success in the course – hands down.

Hands-on course
On the technical side, I really liked how hands-on the whole course was. It really forced me to dig in and get my hands dirty. I had to code and build a Turtle algorithm, Boolean bands or a some custom moving average algorithm and make it work. I honestly really enjoyed that because it allows you to learn by doing. That was a huge plus.

Any words that you’d like to share for the aspiring Quants out there?

I'll be very real with my advice. It is cautionary and motivating at the same time. There's a lot of hype in trading right now and trading as a human being can be very hard.

Much like discretionary or manually trading there will be gains and losses with algorithmic trading. In some ways, it is almost riskier because a line on the code could be pulling out all your capital on margin on one asset – as an example - because you didn't set a good risk profile. That is risky and could set you up to fail – hard.

Avoiding Pitfalls
There are a lot of caveats but if you know what you are doing, and that's a big IF, You can mitigate a lot of the risks. You need to know what you are doing and that is where the EPAT programme really helps you. In that sense, EPAT can be seen as an insurance policy. You learn what you need to do so you don't fall into the holes most people would fall into when they are getting started. Avoiding pitfalls will accelerate your ability to generate returns.

Getting rid of emotions
My biggest challenge, to be honest, was controlling my emotions. Trading by yourself manually is an emotionally stressful undertaking. You're taking a loss and the next thing you know, you're like, “Oh my God, I need to get out of this position now.” The moment you get out of that position, that's when the market turns and reaches new all-time highs – you know how it goes... If you had done exactly the opposite, you would have profited. It happens more often that I’d like to admit and, with emotional trading, you usually end up losing money, unless luck is on your side.

Go Algo
That's why I like algorithmic trading. You set the rules, you have a trading plan and you're supposed to follow that trading plan, like a robot. We can’t do it, but an algorithm built on the same trading rules can because it is a robot. That algorithm will follow the trading plan without emotion and you can really be able to measure that success.

Imagine yourself building 20, 30 different strategies through the robotic approach, without emotion. Now, you diversify your capital among all the strategies. Trading without emotion, to me, is the biggest power of algorithmic trading.

Long story short, there are always risks. EPAT will help you understand those risks and not fall into those traps and pitfalls. The biggest challenge in trading is controlling emotions and algorithmic trading will essentially eliminate the emotional pitfall.

It was great talking to you, Thomas. Please take care during this pandemic, keep learning and we hope you’ll rise even higher. Best wishes for your future.

The Executive Programme in Algorithmic Trading (EPAT) is a comprehensive course covering topics ranging from Statistics & Econometrics to Financial Computing & Technology including Machine Learning and more. Start your quest to upgrade your knowledge of Algorithmic Trading with EPAT. Check it out here.

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