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Joseph

Question: Which Broker Company You Advice for Automated Trading?

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Hello there,

 

I would need some advice from you guys:

 

Briefly about me beeing new in TL (recently signed up):

I'm studing trading for a year already and practice on live account to for half a year ... I'm looking forward to do some automated trading (first lot's of backtests of course) ...

 

Question:

1.Wich broker company do you advice for automated trading?

Broker comany: one that gives data I could make backtests on and also make trades based on same data through the same broker comany, data is as much as posible accurate, customer service can be more or less used (I could ad things like thight and low speads, or mini account possibility ... but know that compromise must be made at some point...)

 

If there is more than one you think I might look at please let me know all.

 

Thank you in advance.

 

 

Joseph

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Have you looked at Tradestation yet?

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Forsearch ... the TL's Broker review:

 

http://www.traderslaboratory.com/forums/broker.php?do=show&did=2

 

makes me believe that it is not the one I'm looking for. Data in not so reliable, and the slippage (noted and posted by MC On 03-08-2008) does make me fill unsure regarding if it is a good choise for autotrading ...

 

Do you know something regarding this slippage? I see from your posts that you use TradeStation (05-20-2008, 08:07 PM). Does it realy makes your stop position move from the appointed position?

 

An other question ... I read on there page that minimum daily equity balance of $25.000 is required for autotrading (4 or more trades in 5 day period ) so I need $30.000 if like to trade for $5000 ... do I understand it corectly?

 

Thanks in advance.

 

Joseph

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Actually the data is OK. Can't comment upon the autotrading or the DOM as I don't trade thru TS, just use them for charting.

 

As for your other question, for equities (stocks) I believe there is a $25K pattern day-trading minimum at most brokerages. This restriction does not exist for trading commodities/futures.

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1. DOM?

 

2. Which broker do you use then for trading? :-) Do you have more accounts at different brokers for trading?

 

3. Does it worth for you to open an account for $5K and use their data for charting purpose? I suppose they should have a good charting package then ... do you use Tradestation service for supply of data also, or you get the data from somewere else?

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1. DOM?

 

2. Which broker do you use then for trading? :-) Do you have more accounts at different brokers for trading?

 

3. Does it worth for you to open an account for $5K and use their data for charting purpose? I suppose they should have a good charting package then ... do you use Tradestation service for supply of data also, or you get the data from somewere else?

 

a. DOM -> Depth of Market screens. The trading matrix of bid and ask orders for your trading platform.

 

b. All traders should have more than one account at more than one brokers. Why? Cause $h!t happens :evil tongue:

 

c. TS is OK for data. If you feel you can trade the monthly minimum to have the fees waived, then by all means, go for it.

 

-fs

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If you have a profitable automated system, I'd highly recommend at least contacting a few prop. firms to see if they are interested.

 

What are the most important factors for system traders? Slippage, Speed, and ability to survive draw downs.

 

Worst case scenario for you - your system doesn't work, and you leave the firm, and you're back to where you are right now.

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If you have a profitable automated system, I'd highly recommend at least contacting a few prop. firms to see if they are interested.

 

You mean to sell it to a firm?

 

What are the most important factors for system traders? Slippage, Speed, and ability to survive draw downs.

 

Slippage? How does this manifest? Does it mean: I have a stop placed at a trade and then I loose more then I calculated by placing the stop ... because the stop goes by an unknown fact in the not desired direction?

 

Draw down? Does this mean loss from balance?

 

Worst case scenario for you - your system doesn't work, and you leave the firm, and you're back to where you are right now.

 

You mean I get hired because of my strategy ... and later on if not works got to go? ... I think better then make an own firm if you wish to do it through a firm

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You mean to sell it to a firm?

No. . . to be honest my point was almost sarcastic.

 

With respect Jo, it sounds like your still reasonably new to trading. Many of your questions are very simple things, that you REALLY need to know before you start churning out an automated trading system.

 

Slippage? How does this manifest? Does it mean: I have a stop placed at a trade and then I loose more then I calculated by placing the stop ... because the stop goes by an unknown fact in the not desired direction?

 

Slippage can refer to two things:

 

1) As you said, you have a stop (let's say a buy stop market order) placed at a price, and the market sweeps down, and you get out 4 ticks lower. That is slippage.

 

Or, sometimes people refer to slippage in the same context as realistic fills.

 

2) Say you have a system which was taking 1 tick profit 1000's of times a day in the S&P. Often people backtesting forget that price needs to trade through a price for you to get filled, as often you're near last in que. Hence, to take a 1 tick profit, you require a 2 tick move

 

 

Draw down? Does this mean loss from balance?

 

Let's say you have you a system which is 70% profitable, av. win 1,000, av loss 1,500.

 

Your system's expectancy is positive, so in the long run you make money with these stats and live happily ever after.

 

So you open a $4,000 account, and get hit with 3 losses in a row, as you would expect with this system, and you go broke. Happens more often than you would think.

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With respect Jo, it sounds like your still reasonably new to trading.

True, I trade only for 1 year ... around first half of it on demo account the rest on live mini account, but spent lots of time learning to think as a trader from a good source, by means mostly through technical analises of course also some basics regarding fundamnetal part to.

Many of your questions are very simple things, that you REALLY need to know before you start churning out an automated trading system.

That is the reason why I ask it, but can assure you that these are mostly terminological, do not wish to use them wrong in TL ... thanks for your time for explaining the means.

 

Slippage can refer to two things:

1) As you said, you have a stop (let's say a buy stop market order) placed at a price, and the market sweeps down, and you get out 4 ticks lower. That is slippage.

... suppose this tipe is mostly at equities (shares) for instance where you have to count also on gaps between candles = slippage.

At currencies (forex) more or less slippage involves then the modification of spread, am I right?

2) Say you have a system which was taking 1 tick profit 1000's of times a day in the S&P. Often people backtesting forget that price needs to trade through a price for you to get filled, as often you're near last in que. Hence, to take a 1 tick profit, you require a 2 tick move

Here you also refer to broker fees to:

- at forex slippage is included in spread

- a shares there is beside broker fee also gaps that can make stop orders to be jumped over ... so in a forst case you lose more than the risk you were counting on

 

 

Let's say you have you a system which is 70% profitable, av. win 1,000, av loss 1,500.

 

Your system's expectancy is positive, so in the long run you make money with these stats and live happily ever after.

 

So you open a $4,000 account, and get hit with 3 losses in a row, as you would expect with this system, and you go broke. Happens more often than you would think.

 

True, but I suppose you do not make things like that, having a money management, for example is we consider equities(shares):

- 1% risk of your balance / each trade you make

- risk/reward ration to be no less than 1/2 (win two times more than you expect to loose) ... of course positioning the stop in right place is a must

 

By doing this you won't loose only 3% of your balance if you catch first three to be losses ... and if I mention losses ... that is why I think on doing automated trade in time ... to reduse the probability of losses ... test and optimise strategy for specific share of currency pair ... but want to find a broker that also gives data I can use for backtest and also for trading ... I heared that there are traders that are using data from one surce and trade through other source ... these need lots of care ... and with all this care I do question if they are right ... :missy:

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If it where me I would look at brokerages that can run your strategy on there servers. Strategy runner is good for this I hear.

 

Thanks will check it out. Did not know about it.

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Today my broker OptionsXpress (owned by Schwab) cancelled my autotrade account, and ALL autotrade accounts!

I use auto-trade to follow OptionSpreadStrategies.com's trade alerts. I guess Schwab is forcing OptionsXpress to totally stop doing autotrading all together...lame huh!

 

Anyway, now I will need a new broker for auto-trade. Any suggestions would be great.

 

I am pretty happy with Option Spread Strategies (Successful Options Trading Strategies) so I am pretty bummed that I will have to enter trades on my own now! :(

 

Schwab sucks in my opinion. :(

 

Thnx.

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If you have an automated script that you want to run (futures only) I would be more than happy to assist you. We run scripts on NinjaTrader, MultiCharts and TradeStation for customers. If you are interested, simply PM me or email me Matt (AT SIGN) optimusfutures.com

 

Matt

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