Amazon EC2 Quick Start Guide

Amazon EC2 Quick Start Guide

• Amazon Web Services (AWS) offers a wide variety of computing tools that allow users to select the tools that fit their needs.
• Amazon Elastic Compute Cloud (Amazon EC2) is a web service that provides resizable computing capacity in the cloud.
• Amazon EC2 lets you acquire and configure virtual servers in the cloud and offers a selection of instance types varying in CPU, memory, storage, and networking capacity.
• Users only pay for the capacity they use when using Amazon EC2.
• This guide will walk through launching an Amazon EC2 instance using the AWS Management Console.

Before Starting Your EC2 Instance

• An AWS account is needed, which can be created at the aws web address.
• An Amazon EC2 key pair ensuring secure access to the Amazon EC2 instance is also required.

Launching the Instance

• First, log into the AWS Management Console and open the Amazon EC2 console at EC2.
• Choose Launch Instance on the Amazon EC2 dashboard.
• On the Choose an Amazon Machine Image (AMI) page, select an AMI containing the necessary info to launch an instance.
• In the Quick Start section, choose Amazon Linux 2 AMI (HVM), SSD Volume Type, then select Select.
• On the Choose an Instance Type page, the hardware for the instance is selected.
• For this guide, the t2.micro instance type will be used.
• On the Configure Instance Details page, details such as the number of instances, network, subnet, public IP, security group, IAM role, and user data script, can be configured.
• For this guide, the default values will be used.
• On the Add Storage page, storage for the instance can be configured by adding volumes and changing the size, type, and IOPS volume.
• For this guide, the default values will be used.
• On the Add Tags page, tags can be added to organize and find your instances.
• For this guide, no tags will be added.
• On the Configure Security Group page, the security group acting as a virtual firewall can be configured.
• In this guide, a rule allowing SSH traffic from any location is added.
• This is done by, selecting Add Rule, then choosing SSH from the Type list, and finally selecting Anywhere from the Source list.
• On the Review Instance Launch page the details for the instance are reviewed.
• On the Select an existing key pair or create a new key pair dialog box, an esisting pair key can be selected or a new one can be created.
• This guide involves creating a new key pair by selecting Create a new key pair, entering a name in the Key pair name field, and selecting Download Key Pair.
• After saving the key pair file, select Launch Instances.
• On the Launch Status page the instance launching status is shown.

Connecting to the Instance

• Open a terminal.
• Use the ssh command to connect to the instance: ssh -i @
• Replace `` with the path to the key pair file.
• Replace `` with the instance's username.
• For Amazon Linux AMIs, the username is ec2-user.
• Replace `` with the instance's public IP address.
• To continue past any warning, type yes.

Cleaning Up the Instance

• After the instance is no longer needed, it should be stopped or terminated, if stopped, it can be restarted at any time.
• Terminating the instance deletes it, and it cannot be restarted.
• You are not charged for stopped instances, other than storage usage, but you are charged for running instances.

Stopping an Instance

• Log into the AWS Management Console and open the Amazon EC2 console.
• In the Amazon EC2 dashboard, select Instances.
• Select the instance to stop.
• Choose Actions, Instance State, Stop.
• Select Yes, Stop to confirm.

Terminating an Instance

• Log into the AWS Management Console and open the Amazon EC2 console.
• In the Amazon EC2 dashboard, select Instances.
• Select the instance to terminate.
• Choose Actions, Instance State, Terminate.
• Select Yes, Terminate to confirm.

Static Electricity

• Focus is centred around the buildup of electric charge on the surface of objects, and the phenomena associated with it.

Charging Methods

• Charging is achieved through various methods affecting the balance of electrons within a material.

Friction (Triboelectric Effect)

• Involves the transfer of electrons between two materials when they are rubbed together.
• Materials have differing affinities for electrons, leading to one gaining electrons (becoming negatively charged) and the other losing electrons (becoming positively charged).
• The triboelectric series ranks materials based on their tendency to gain or lose electrons.
• This method is known as charging by friction.

Conduction

• Direct contact between charged and neutral objects allows electron transfer, resulting in charge redistribution.

Induction

• Involves charge polarization where charges within an object redistribute without direct contact.
• No direct contact is required for this method.
• Grounding further facilitates charge separation or neutralization, influencing the overall charge state.

Electric Force

• The fundamental force governing interaction between charged objects.

Coulomb's Law

$$ F_e=k\frac{q_1q_2}{r^2} $$

• Describes the electric force ($F_e$) between point charges.
• $k = 8.99 x 10^9 \frac{Nm^2}{C^2}$ is Coulomb's constant.
• $q_1$ and $q_2$ represent the magnitudes of charges.
• $r$ is the distance between charges.
• $e = 1.60 x 10^{-19} C$ is the elementary charge.
• Superposition principle states that the net force on a charge due to multiple charges is the vector sum of individual forces.

Electric Field

$$ E = \frac{F_e}{q} $$

• The electric field (E) is the force per unit charge, measured in N/C.
• Its direction aligns with the force on a positive test charge, indicating the field's influence.

Electric Field Lines

• Visual representations of electric fields that point in the direction of the electric field.
• These lines originate from positive charges and terminate on negative charges.
• The density of lines indicates the strength of the field.

Electric Potential Energy

$$ \Delta U = -W = -qEd $$

• The change in electric potential energy ($\Delta U$) relates to the work done (W) by the electric field on a charge (q) over a distance (d).

Electric Potential (Voltage)

$$ V = \frac{U}{q} $$

• Electric potential (V) is the electric potential energy per unit charge, is measured in Volts (V).
• $1 V = 1 J/C$

Potential Difference

$$ \Delta V = -Ed $$

• The potential difference ($\Delta V$) relates to the electric field (E) and the distance (d) over which the potential changes.
• Equipotential lines represent lines of constant voltage, indicating regions with equal electric potential.
• Electric field lines are always perpendicular to equipotential lines.

Capacitance

$$ C = \frac{Q}{V} $$

• Capacitance (C) measures a capacitor's ability to store electric charge, and is measured in Farads (F).
• $1 F = 1 C/V$

Parallel Plate Capacitor

$$ C = \epsilon_0 \frac{A}{d} $$

• The capacitance of a parallel plate capacitor depends on the plate area (A), the distance between plates (d), and the permittivity of free space ($\epsilon_0$).
• $\epsilon_0 = 8.85 x 10^{-12} \frac{C^2}{Nm^2}$

Dielectrics

• Materials placed between capacitor plates to increase capacitance and reduce voltage.
• $$ C' = \kappa C $$
• $\kappa$ represents the dielectric constant.

Energy Stored in a Capacitor

$$ U = \frac{1}{2}QV = \frac{1}{2}CV^2 = \frac{1}{2}\frac{Q^2}{C} $$

• The energy (U) stored in a capacitor is determined by charge (Q), voltage (V), and capacitance (C).

Circuits

• Circuits involve the flow of electric charge through a closed path, enabling various electrical functionalities.

Current

$$ I = \frac{\Delta Q}{\Delta t} $$

• Current (I) measures the rate of flow of electric charge, is measured in Amperes (A).
• $1 A = 1 C/s$
• Conventional current assumes the flow of positive charge.

Resistance

$$ R = \frac{V}{I} $$

• Resistance (R) opposes the flow of current, is measured in Ohms $(\Omega)$.
• $1 \Omega = 1 V/A$

Resistivity

$$ R = \rho \frac{L}{A} $$

• The resistivity ($\rho$) of the material reflects its inherent opposition to current flow and depends on the material's properties, length (L), and cross-sectional area (A).

Power

$$ P = IV = I^2R = \frac{V^2}{R} $$

• Power (P) is the rate at which electrical energy is transferred in a circuit, is measured in Watts (W).
• $1 W = 1 J/s$

Series Circuits

• Have the same current through all resistors.
• Voltage drops across resistors add up to make the total voltage across the circuit.
• Resistors add: $R_{eq} = R_1 + R_2 +...$

Parallel Circuits

• Have the same voltage across all resistors.
• Current splits between resistors.
• Resistors add inversely: $\frac{1}{R_{eq}} = \frac{1}{R_1} + \frac{1}{R_2} +...$

Chemical Kinetics

• The area of chemistry concerned with the rates of chemical reactions.

Reaction Rate

$A + B \rightarrow C + D$

• The rate of a chemical reaction is the measure of how quickly reactants are converted into products.

Rate Law

$aA + bB \rightarrow cC + dD$

$Rate = k[A]^x[B]^y$

• $k$ is the rate constant, specific to the reaction.
• $x$ is the order of reaction with respect to reactant A.
• $y$ is the order of reaction with respect to reactant B.
• $x + y$ is the overall order of the reaction.

Integrated Rate Laws

Helps determine the concentration of reactants over time.

Half-Life

The half-life ($t_{1/2}$) of a reaction is the time required for the concentration of a reactant to decrease to one-half of its initial value.

Collision Theory

States that for a chemical reaction to occur, reactant molecules must collide with sufficient energy and correct orientation.

Arrhenius Equation

$k = Ae^{-E_a/RT}$

• $k$ is the rate constant.
• $A$ is the frequency factor, related to the frequency of collisions and orientation.
• $E_a$ is the activation energy.
• $R$ is the gas constant (8.314 J/mol·K).
• $T$ is the temperature in Kelvin.

Factors Affecting Reaction Rate

• Temperature: Increasing temperature usually increases the reaction rate.
• Concentration: Increasing the concentration of reactants usually increases the reaction rate.
• Catalysts: Catalysts speed up reactions by lowering the activation energy.

Reaction Mechanisms

• A detailed, step-by-step view of how a reaction occurs.

Elementary Steps

Elementary steps are single-step reactions that make up a reaction mechanism.

Rate-Determining Step

The rate-determining step is the slowest step in a reaction mechanism and determines the overall rate of the reaction.

Catalysis

Catalysts provide an alternative reaction pathway with a lower activation energy, thereby increasing the reaction rate.

Types of Catalysis

• Homogeneous Catalysis: The catalyst is in the same phase as the reactants.
• Heterogeneous Catalysis: The catalyst is in a different phase from the reactants.

Calculus Maximus: Related Rates

• Focus on the use of calculus to determine the rate at which a quantity changes in relation to other changing quantities.

Gravel and Conical Pile

• Gravel is dumped at a rate of $10 ft^3/min$, forming a conical pile.
• The height of the cone is always twice the radius ($h = 2r$).
• To find how fast the height increases ($\frac{dh}{dt}$), use the volume formula $V = \frac{1}{3} \pi r^2 h$ and substitute $r = \frac{h}{2}$ to get $V = \frac{\pi}{12} h^3$.
• After differentiating with respect to time, $\frac{dV}{dt} = \frac{\pi}{4} h^2 \frac{dh}{dt}$.
• The rate at which the height increases is $\frac{dh}{dt} = \frac{40}{\pi h^2} ft/min$.

Ladder Sliding Against a Wall

• A 10 ft ladder is sliding down a wall as its base moves away at 1 ft/s.
• To find how fast the top slides down ($\frac{dy}{dt}$), the Pythagorean theorem is used: $x^2 + y^2 = L^2$.
• Differentiating with respect to time gives $2x \frac{dx}{dt} + 2y \frac{dy}{dt} = 0$.
• When the base is 6 ft from the wall ($x = 6$), the height is 8 ft ($y = 8$), so the top slides down at $-\frac{3}{4} ft/sec$.

Water Tank Conical Shape

• Water is pumped into an inverted conical tank at $2 m^3/min$.
• The tank has a base radius of 2 m and a height of 4 m.
• To find how fast the water level rises ($\frac{dh}{dt}$), the volume formula $V = \frac{1}{3} \pi r^2 h$ is again used.
• The relationship between radius and height is $r = \frac{h}{2}$, so the equation simplifies to $V = \frac{\pi}{12} h^3$.
• Differentiating with respect to time yields $\frac{dV}{dt} = \frac{\pi}{4} h^2 \frac{dh}{dt}$.
• The water level rises at $\frac{dh}{dt} = \frac{8}{9 \pi} m/min$ when the water is 3 m deep.

Searchlight on a Man Walking

• A man walks at 4 ft/s on a path 20 ft from a searchlight.
• To find how fast the searchlight rotates ($\frac{d \theta}{dt}$), the tangent function is used: $\tan \theta = \frac{x}{20}$.
• Differentiating with respect to time gives $\sec^2 \theta \frac{d \theta}{dt} = \frac{1}{20} \frac{dx}{dt}$.
• At 15 ft from the nearest point ($x = 15$), the searchlight rotates at $\frac{16}{125} rad/sec$.

Plane Flying Over Radar Station

• A plane flies at 500 mi/h at an altitude of 1 mile directly over a radar station.
• To find how quickly the distance from the plane to the station increases ($\frac{dz}{dt}$), the Pythagorean theorem is used: $z^2 = x^2 + y^2$.
• Differentiating with respect to time gives $2z \frac{dz}{dt} = 2x \frac{dx}{dt} + 2y \frac{dy}{dt}$.
• When the plane is 2 miles away ($z = 2$), the distance is increasing at $250 \sqrt{3} mi/h$.

Cars Moving from the Same Point

• Two cars start from the same point, one going south at 60 mi/h, and the other west at 25 mi/h.
• To find the rate at which the distance between them increases ($\frac{dz}{dt}$), the Pythagorean theorem is used: $z^2 = x^2 + y^2$.
• Differentiating with respect to time gives $2z \frac{dz}{dt} = 2x \frac{dx}{dt} + 2y \frac{dy}{dt}$.
• After two hours, the distance between them is increasing at a rate of $65 mi/h$.

Spotlight and a Walking Man

• A 2 m tall man walks from a spotlight toward a building 12 m away at a rate of 1.6 m/s.
• To find how fast his shadow decreases ($\frac{dy}{dt}$), similar triangles are used: $\frac{12}{2} = \frac{x}{y}$.
• After rewriting the relationship and differentiating with respect to time, the length of the shadow is decreasing at $\frac{4}{15} m/s$.

Boat Pulled into a Dock

• A boat is pulled to a dock by a rope through a pulley 1 m above the boat.
• If the rope is pulled at 1 m/s, how fast does the boat approach the dock ($\frac{dx}{dt}$)?
• The Pythagorean theorem is applied: $x^2 + 1^2 = z^2$.
• Differentiating with respect to time gives the rate at which the boat approaches the dock.

Algorithmic Trading

• Involves using automated computer programs to execute buy or sell orders.
• Alternative names include automated trading, black-box trading, and systematic trading.
• Regulation varies but in the United States, the SEC oversees this.
• Reduces transaction costs, improves order execution, increases trading capacity and access to market liquidity, and reduces error.

High-Frequency Trading (HFT) Characteristics

• Extremely short-term investment horizons
• High turnover rates
• High order-to-trade ratios
• The location needs to be close to exchanges (co-location)

Use Cases

• Market making
• Index arbitrage
• Statistical arbitrage
• Event arbitrage

Algorithmic Trading Strategies

• Trend Following: Using moving averages, channel breakouts, and relative strength index (RSI) to set buy and sell triggers based on the trend.
• Mean Reversion: Identifying range-bound trading to place buy orders at the bottom and sell at the top of the ragne.
• Arbitrage: Exploiting the price differences of identical or similar assets.
• Machine Learning: Using algorithms such as neural networks, to identify asset prices on trained models.

Algorithmic Trading Process

1. Define the Strategy
2. Backtest
3. Paper Trade
4. Live Trade

Performance Evaluation Metrics

• Sharpe Ratio: $\dfrac{R_p - R_f}{\sigma_p}$, measures risk-adjusted return.
• Information Ratio: $\dfrac{R_p - R_b}{\sigma_{p-b}}$, measures a portfolio's returns relative to a benchmark.
• Sortino Ratio: $\dfrac{R_p - R_f}{\sigma_d}$, measures risk-adjusted return by only considering downside deviation.