API Request Throttling
API request throttling is the practice by which exchanges limit the number of requests a user can make to their trading API within a specific period. This is done to protect the exchange's infrastructure from overload and ensure fair access for all participants.
For algorithmic traders, hitting these limits can lead to rejected orders or data delays, which can be detrimental during fast-moving markets. Managing API usage is a key operational challenge, requiring efficient code that minimizes unnecessary requests while maintaining necessary data updates.
Strategies must be designed to respect these limits, often incorporating back-off mechanisms or prioritizing critical requests. Understanding how to navigate these constraints is vital for maintaining consistent connectivity and execution.
It is a practical necessity for anyone building automated trading systems that interact with external exchange APIs.