3 - Overview of the Trading/Investment System Development Methodology

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This chapter presents an incremental development methodology of trading and investment system, which would ensure a rapid development cycle with quick deliverables and consistent quality standards. However, before the beginning of development methodology, the product team has to raise money to fund the development and to raise money, a product team needs a Money Document. Trading and money management is a business and in order to succeed, product teams need to raise research and development capital as well as trading capital, from either inside the firm or outside it. A well-done Money Document serves as a Vision and Scope Document by outlining the business goals of a proposed trading/investment system in a clear and concise fashion in order to persuade management or outside investors to provide the initial capital needed for research and subsequently for development of a trading/investment system according to the four-stage methodology. The resources allocated to a project, subsequent to the delivery of a Money Document and management approval, enables the process of development methodology. The methodology combines the various aspects of well-known methodologies such as the traditional waterfall of Royce and spiral methodology of Boehm from software, the Stage-Gate ® methodology of Cooper from new product development, and Lean, Six Sigma, and Agile development. The Royce's traditional waterfall methodology for software development consists of four stages that include analysis, design, implementation, and testing that vaguely map to the four stages of the methodology. By using the waterfall methodology, the teams avoid the pitfalls of creating systems before project plans are precisely defined and approved. In the spiral methodology, a smaller amount of time is initially devoted to the four stages that include research, planning, implementation, and testing, which are followed by several iterations or loops over each.