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Auto trading is only thing that conquered my darkside
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Auto trading is only thing that conquered my darkside

  #261 (permalink)
Elite Member
Austin, TX
 
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liquidcci's Avatar
 
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These are some great comments on managing risks with an auto trader. I think like designing a plane you have to take a hard look at what can go wrong and design for worst case. I have extensively looked at this on my system and can't say it is fail safe but have things in place that give me a good amount of confidence. Even so if I go leave my system unattended I keep laptop with me at all times so can access my server. Autopilot works great but still want a pilot close by just in case.

A few things I do to protect my system.

I recently went to a dedicated server close to the exchanges. This gives me speed but also gives me redundant internet connections power backup etc.. My provider guarantees 100% uptime but even so I still believe there is always risk of going down. Not only can internet connections be lost but no way to mitigate risk of hardware failure. I feel like dedicated server in a data center minimizes risk in this area but does not negate it completely.

As it has been discussed here with most brokers Ninjatrader places stops at the exchange but any OCO orders are managed on your local machine. Meaning any targets, break even moves, trailing stops etc sit on your machine. If your machine goes down these things will not be managed while down. But you will still have a stop at the exchange that protects you.

One of my worst fears because of OCO targets being on local machine has always been what happens if in a trade I lose internet connection the stop gets filled while connection is down. Connection then comes back up and NT does not realize stop has been filled so it keeps managing targets. Target gets filled and is now a rogue trade with no stop because stop at exchange was filled. In essence the trade was over with stop being filled so target getting filled would not end trade but just leave a floater on the market with no protection.

Under this scenario would be better if connection never came back up and stop filled ending the trade. What I do to protect my system in this scenario is when the connection comes back up I have auto trade strategy immediately close any open orders if stop was not filled and close all pendings like targets etc. I also have it stop taking any new trades and notify me that connection was lost but came back up. I essentially have it reset itself and do nothing until I can take a look at it see what went wrong.

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
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  #262 (permalink)
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RM99 View Post
To veer back toward the original thread intent.....

For all you discretionary guys....

How many times have you said to yourself..."Man I wish I could have gotten in earlier" or "I sure wish I could have gotten out when the signals told me to."

My experience with discretionary was that by the time I had checked, rechecked, TRIPLE checked to ensure my entry criteria were met, the opportunity was either diminished or gone altogether.

The same was true for anything other than basic bracket exits. If I had exit signals based off market action or anything other than a simple OCO.....I always ended up saying....man I wish I'd have gotten out sooner, I'd have kept more profit (or reduced my loss).

If you multiply that concept by the incident rate, times the number of trades, the concept quickly adds up.

My saying is, if you find yourself regularly saying "I should have..." regarding your trades, you are not going to last long in this business.

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  #263 (permalink)
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Xeno View Post
By the way, is there any support for asking Big Mike to create a forum called something like

"Automated systems and testing"

I've created a thread for this in Feedback. Discussion and messages of support would be very welcome there

https://futures.io/feedback-announcements/11783-automated-trading-testing-forum.html#post131760

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  #264 (permalink)
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if you dont mind me asking, who do use for the dedicated server?

SD


liquidcci View Post
These are some great comments on managing risks with an auto trader. I think like designing a plane you have to take a hard look at what can go wrong and design for worst case. I have extensively looked at this on my system and can't say it is fail safe but have things in place that give me a good amount of confidence. Even so if I go leave my system unattended I keep laptop with me at all times so can access my server. Autopilot works great but still want a pilot close by just in case.

A few things I do to protect my system.

I recently went to a dedicated server close to the exchanges. This gives me speed but also gives me redundant internet connections power backup etc.. My provider guarantees 100% uptime but even so I still believe there is always risk of going down. Not only can internet connections be lost but no way to mitigate risk of hardware failure. I feel like dedicated server in a data center minimizes risk in this area but does not negate it completely.

As it has been discussed here with most brokers Ninjatrader places stops at the exchange but any OCO orders are managed on your local machine. Meaning any targets, break even moves, trailing stops etc sit on your machine. If your machine goes down these things will not be managed while down. But you will still have a stop at the exchange that protects you.

One of my worst fears because of OCO targets being on local machine has always been what happens if in a trade I lose internet connection the stop gets filled while connection is down. Connection then comes back up and NT does not realize stop has been filled so it keeps managing targets. Target gets filled and is now a rogue trade with no stop because stop at exchange was filled. In essence the trade was over with stop being filled so target getting filled would not end trade but just leave a floater on the market with no protection.

Under this scenario would be better if connection never came back up and stop filled ending the trade. What I do to protect my system in this scenario is when the connection comes back up I have auto trade strategy immediately close any open orders if stop was not filled and close all pendings like targets etc. I also have it stop taking any new trades and notify me that connection was lost but came back up. I essentially have it reset itself and do nothing until I can take a look at it see what went wrong.


nosce te ipsum

You make your own opportunities in life.
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  #265 (permalink)
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Silver Dragon View Post
if you dont mind me asking, who do use for the dedicated server?

SD


Don't mind at all. I am using steadfast networks. So far they have been good and I am getting less than 1ms latency to the rithmic servers. I wrote a up a post about my experience so far here

https://futures.io/brokers-data-feeds/11342-setup-dedicated-machine-chicago-my-experience.html

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
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  #266 (permalink)
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Lornz View Post
What I would like to know is why someone would want to use NT at all, much less for automated trading?

Aside from being underfunded, I guess? (I am not trying to be offensive)

Unless the program specifically has it in for me and my experience deviates from the norm, I would argue that it's far too unstable to use for any serious trading. Especially automated!

NT 6.5 had some problems but I find NT7 works quite well. Couple it with a zenfire or rithmic feed and it is very fast and quite stable. I think it depends what you are doing. I don't know if I would use it for a scalp type strategy where trades were going off every few seconds or minutes. It might work fine for that I have never tried but it might tax it. I think every platform has it's advantages and disadvantages. Just have to make sure the strategy being used works well within the limitations of the platform.

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
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  #267 (permalink)
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Xeno View Post
I've created a thread for this in Feedback. Discussion and messages of support would be very welcome there

https://futures.io/feedback-announcements/11783-automated-trading-testing-forum.html#post131760

I would suggest anyone who is an autotrader or interested go to thread Xeno posted above and put up a post saying you would support a forum for autotrading. There are so many topics to discuss around autotrading that have a dedicated forum where multiple threads can run on the subject in one place would be beneficial. His thread is a request for the forum to be created on Big Mikes.

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
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  #268 (permalink)
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Silver Dragon View Post
if you dont mind me asking, who do use for the dedicated server?

SD

FYI I updated this thread with info on why I no longer recommend Steadfast networks. See bottom of first post

https://futures.io/brokers-data-feeds/11342-setup-dedicated-machine-chicago-my-experience.html

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
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  #269 (permalink)
Membership Revoked
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monpere View Post
I've found NT7 to be much more stable then NT6.5. Where I use to get daily crashes and hangs in NT6.5, in NT7 this occurs less then once a month now. Hopefully it will get continually better with future releases. My main draw to NT is because of the power of C#, and the fact I was able to user the platform for free while developing and proofing my concepts. What platform do you use for automation?

CQG IC


RM99 View Post
To veer back toward the original thread intent.....

For all you discretionary guys....

How many times have you said to yourself..."Man I wish I could have gotten in earlier" or "I sure wish I could have gotten out when the signals told me to."

My experience with discretionary was that by the time I had checked, rechecked, TRIPLE checked to ensure my entry criteria were met, the opportunity was either diminished or gone altogether.


I can't think of anything more stressful than reacting to signals manually. The power of discretionary trading lies in placing limit orders in advance...

The whole point is to anticipate likely scenarios and places your orders accordingly...

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  #270 (permalink)
Elite Member
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Massive l's Avatar
 
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RM99 View Post
To veer back toward the original thread intent.....

For all you discretionary guys....

How many times have you said to yourself..."Man I wish I could have gotten in earlier" or "I sure wish I could have gotten out when the signals told me to."

My experience with discretionary was that by the time I had checked, rechecked, TRIPLE checked to ensure my entry criteria were met, the opportunity was either diminished or gone altogether.

The same was true for anything other than basic bracket exits. If I had exit signals based off market action or anything other than a simple OCO.....I always ended up saying....man I wish I'd have gotten out sooner, I'd have kept more profit (or reduced my loss).

If you multiply that concept by the incident rate, times the number of trades, the concept quickly adds up.

When you're learning, that's pretty normal.

After thousands of hours of screen time you should have a well enough developed method
where you are not saying that.

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