Application Programming Interface (API)

An Application Programming Interface (API) is a set of defined rules and protocols that enables different software applications to communicate and share data with each other. It serves as an intermediary layer that processes data transfers between various software systems.

Key Components

• Endpoints: Specific URLs where API requests are sent
• Methods: Standard HTTP operations (GET, POST, PUT, DELETE)
• Authentication: Security measures to control access
• Response Format: Usually JSON or XML

Types of APIs

1. REST APIs
   • Most common type
   • Uses standard HTTP methods
   • Stateless architecture
2. SOAP APIs
   • More structured protocol
   • Usually used in enterprise solutions
   • XML-based messaging
3. WebSocket APIs
   • Enables real-time data flow
   • Maintains persistent connection
   • Ideal for live data

Common Uses in Trading

• Market data retrieval
• Order execution
• Account management
• Portfolio tracking
• Historical data analysis

Related Terms

• REST
• SOAP
• WebSocket
• HTTP Methods
• Endpoint