Composer is a piece of financial software that allows retail traders to automatically manage their portfolios. Traders can set conditions on trades that are otherwise unavailable through traditional stock brokerages, allowing them to run algorithmic trading strategies from the comfort of their own laptops. The platform uses a no-code approach to construct trading algorithms, instead opting to use building blocks, or commands, that are infinitely stackable. The platform also allows traders to backtest their strategies before committing their funds. 

Composer’s strategy-building features are free to use and the paid Pro account costs $24/month. The Pro account includes additional features, such as real-time portfolio metrics, automated trading, as well as weekly market and performance updates via email, and so on. 

Composer uses the Alpaca trading platform to give clients access to direct trading, which greatly increases implementation speed.

When using Composer, users build a strategy using blocks that represent different constraints and conditions. Users select a condition, such as the stock price reaching a certain level, assign a weighting to the strategy, and select the relevant stocks or ETFs they would like to buy if the predefined conditions are met. Users can create anything from simplistic “if - else” scenarios to complex, multivariable strategies that span multiple assets. 

Users based in the United States can also use Composer to directly execute the strategy from the platform. Additionally, users can also backtest their strategies to see how they might have performed during prior periods. 

As a rule of thumb, traders can follow these steps when setting up a stock trading strategy using Composer:

• Select the weighting to be assigned for the block (weights can be equal, or manually input)
• Choose the relevant conditions you would like to assign (such as an “if-else” scenario)
• Add the stocks or ETFs you would like to assign the conditions to 
• Repeat and combine the process as many times as desired (users can also group commands to declutter their strategies)
• Backtest your strategy to check how it might have performed in the past (Composer can backtest using up to three years worth of price data)
• Put your strategy to the test by linking your account and funding your algorithm 

To see how Composer works in action, let’s consider an example of a simple trading strategy for a trader who wants to buy Coca-Cola stock (NYSE:KO) anytime the 20-day exponential moving average (EMA) is greater than the 50-day exponential moving average (EMA). However, the trader is only content with these specific conditions, and would otherwise want to put their money in an S&P 500 index fund. 

First, we must select the weighting for the strategy (for this example, we will assume that the desired weightings are equal for both options). After that, we can input the “if-else” condition into the symphony and select the EMA condition in the “if” section of the symphony. Afterward, we will select Coca-Cola stock (NYSE:KO), which is to be bought anytime the 20-day EMA is greater than the 50-day EMA. As for the “else” condition, we will select the SPDR 500 ETF Trust (SPY) and instruct the algorithm to buy the index fund if the aforementioned conditions are not met. 

The resulting strategy should look something like the image below:

Before we start the backtest, we can select the desired amount of simulated funds invested in the strategy, as well as the benchmark to measure the curve against. In this case, we will be using the SPY index to see how our returns stack up against the broader market:

Now that we have your symphony set up, we can go on to backtest the strategy and see how much it would have returned over a particular period of time. For this example, let’s select a three-year time frame:

As we can see, an investment of $20,000 in the strategy three years ago would have gained over $11,600 by today, which is a 58% return over three years. We can also see how the SPY index fund performed over the same period of time, as well as the average annual returns for both investments. 

The example clearly shows that using Composer can be a great way of simplifying complex trading strategies and requires very basic technical knowledge from traders to see substantial returns in the long run. 

Readily Available Stock Trading Strategies On Composer

Composer also offers a number of useful template strategies that are geared toward traders of different backgrounds and interests. From stocks to ETFs of commodities, real estate, bonds, etc., users can gain exposure to everything the stock market has to offer. 

Some of the ready-to-use strategies available on Composer include:

• Getting Defensive - best for market downturns and bearish trends, low volatility stocks, and ETFs
• Grow Your Portfolio - composed of high-growth stocks from the technology industry
• Classic - the 60/40 portfolio of stocks and bond ETFs, strategies modeled on successful traders and investors
• Living With High Inflation - stocks and ETFs that are good inflation hedges, commodities

Composer also offers a variety of trading strategies for different market conditions, as well as strategies that are modeled after the portfolios of renowned investors and hedge fund managers. For example, traders can emulate the strategies of Warren Buffett, Bill Gates, Ray Dalio, etc. 

The template strategies are divided into groups based on their Sharpe Ratio and annual returns. This makes it easy for inexperienced traders to emulate successful ones and navigate the market one step at a time. Users can view the fact sheets of each strategy, as well as detailed performance data and key metrics to help them choose which strategy to implement.

Furthermore, the template strategies are infinitely customizable, similar to the symphonies users can build from scratch. 

While a handy platform most traders can get behind, Composer is still a relatively new platform with lots of changes still underway. Traders need to weigh up the advantages and disadvantages of using Composer for stock trading before they take the leap and deploy their capital to one of Composer’s trading strategies. 

Pros

• No-code - Composer is a platform that offers a no-code algorithm alternative to traders that may not be as well-versed in the technical aspects of trading
• Easy to use - Composer’s symphonies are fairly simple to grasp and easy to build once the user knows what conditions they would like to set 
• Automated trading - users can automate their trading strategies using Composer, which is a fairly easy process
• Pre-made strategies - Composer offers a number of ready-to-use strategies for different market conditions that are fully customizable 

Cons

• Trading is only available using one broker, as executing trading strategies on Composer only uses Alpaca as its broker
• Strategies can be somewhat difficult to grasp for inexperienced traders 
• Trading via Composer is not available for international clients
• The platform is relatively new and still in the beta stage

• Composer is a novel platform that allows traders to construct stock trading algorithms without the need to use coding languages
• Composer strategies work like symphonies that consist of multiple blocks with various commands for the trading algorithms
• Composer Trade can be especially effective for routine trades that can be automated to remove the need for continuous human input
• Users can easily set up their trading strategies on Composer for free or could update to the paid version of the platform at $24/month, which comes with extra features
• Composer also offers readily available trading strategies users can directly copy or customize to their liking
• Using Composer can greatly simplify the process of automated trading for millions of traders