Archive for June, 2007
Automated Trading: Contd…
By Marek W. Stupka | June 28, 2007
In the May’s post, I expressed my views on automated trading. Since that time, I received dozens of emails from traders who say they’d like to try it anyway…
All right, ladies and gentlemen. You gave me no choice.
I have decided to publish the recommended software applications and plugins for the automated trading in today’s post, even despite I sincerely doubt they will help you reach consistent profits. But one of the important elements of a trader’s career development is the phase when he (or she) experiences an urgent need to try several approaches on his (or her) own, before actually taking the proven, conservative stand of the professionals.
Last warning: You should read my previous post carefully before you do any of this. You should also trade ON THE DEMO ACCOUNT ONLY while you’ll be actually back-testing your automated trading - minimum number of 200 demo trades (preferably 1,000 demo trades) recommended…
If you really want to check the behaviour of a trading robot, either with your own trading strategy, or with somebody else’s, find the most effective and sophisticated software tools you will need for it below. Note that I, too, have once been where you are now, and it took many, many hours of my active trading time before I have: 1. Found the software solutions I am presenting to you here; 2. Fully tested all of the trading strategies I knew of with them; 3. Found out that automated trading CANNOT bring consistent profits over the long haul.
OK, if you’re still not convinced, here’s the list of the 3 most recommended software applications designed for deploying the automated trading:
1. Trade Station® (www.tradestation.com)
Trade Station® is believed to be the benchmark charting tool for professional traders whatever it is they trade: FOREX, commodities, stocks, stock indexes, options, futures, etc.. It uses many sophisticated software modules facilitating the best of strategy trading available for the financial markets today. I know about many pro traders who use Trade Station® and would not swap it for anything in the world.
Anyway, in the context of trading automats, Trade Station® also uses its own proprietary EasyLanguage® - a fully comprehensive programming language allowing its users to program their own trading strategies (even the complicated ones) using just simple English terms. The whole idea behind designing the EasyLanguage® was to capture any trading strategy exploiting the technical tools available within the Trade Station® by the use of plain terms, as if one trader would explain his way of trading to another trader…
If you really want to make your trading automated, this is the right software for you!
2. eSignal (www.esignal.com)
eSignal is a precise, reliable charting software. It is used by professional brokerage houses as well as individual investors. Unlike the Trade Station®, it does not integrate selected brokers for the desired fields of trading, t.m. you can chose your broker yourself (with the Trade Station®, you have to partner with Gain Capital if you want to trade FX).
Anyway, in the context of trading automats, eSignal provides you with its own proprietary programming language which is, unfortunately a bit complicated, since it is directly derived from the JAVA™ language. In addition, there are optional modules you must subscribe to separately in order to facilitate your trading robot. The obvious disadvantage here is that eSignal does NOT provide for the whole software chain. This means that you have to buy external software plug-ins to actually make your trading automat up and running. OK, here’s what you need: eSignal Premier or Pro, FX Datafeed, Direct-X software plugin, and an external software module to actually make eSignal compatible with your trading platform (e.g. www.ninjatrader.com).
This is a reliable charting software, but it gets quite complicated when deploying the robots!
3. MetaTrader (www.metaquotes.net/metatrader)
MetaTrader from MetaQuotes is a reliable, integrated software solution for novice to mid-level traders. One great advantage of this software is that it is free (for its most parts), and is designed as a full trading software application cycle. This means that you can find literally everything you need in here, from the trading platform to the trading server, from the mobile charting to the programming language. The only disadvantage of this software is the lack of that professional precision that you’d get with paid applications.
Anyway, in the context of trading automats, MetaTrader provides you with its own proprietary MetaQuotes Language. Very comprehensive, and easy to understand.
This is a FREE, mid-level charting software. It has all you need to build your trading robot!
Nota Bene: there are many other trading software applications allowing for programming your trading strategies, but these are the ones I tested and can recommend to you. Many of the others would have some sort of “wrinkle” here or there (e.g. CMS - very simplified and thus limited strategy programming, non-stable trading platform, etc.).
All right, I’d like to end this post at where I started it. I sincerely doubt programming a trading robot will help you reach consistent profits. Want my attitude depicted? Here you go:
Topics: Automated Trading | No Comments »
How the Pros Do It!
By Marek W. Stupka | June 19, 2007
Lately, I’ve got the chance to interview one of my friends and pro traders, young sport named Chris Chelsea. Chris is 21 and works for Smart Investments.
I post this short interview here since I know there’s a good potential in it for learning by example. Just listen to what Chris has to say and compare his views on trading to yours.
Marek: Hallo Chris, how’s the investment business these days?
Chris: Hi, long time no see! Well, I have to say I am positively surprised with this company. Hey, they’re new in the business, but they’re doing great! I mean we’re doing great! You see, this is only my second month with Smart, and I’m still getting used to it.
Marek: All right, so where did you work before? You know that I know, but I’m asking so that the audience reading my web log knows too…
Chris: I used to work for Citibank, Offshore Investments. Gigantic bank, big responsibility, but little space to get creative.
Marek: OK, what exactly did you do before? And what do you do now?
Chris: Well, when I was with Citi, I was mostly responsible for filing the stock. A boring job, I must say. But I got the chance to meet with active traders there, doing mosty commodities, but also derivatives and currencies. That’s how I figured out I can trade on my own. See, I got all of the experience I have now by demo trading with Saxo (read Saxo Bank - Marek’s note) in my spare time. Mostly I traded during the nights I couldn’t sleep. I’ve just been learning how to trade. I traded corn, soyabeans, silver, oil. Mostly the commodity markets, in the beginning. Then I got into option trading. That’s a real killer! Anyways, options are great for slow, long trades. I still trade options, now and then, you know…
Marek: Great! How did you get into FOREX trading?
Chris: Yes, it was on that bloody day when we met in Vienna in 06, remember? You’ve spoken so passionately on the benefits of currency trading, that I just couldn’t resist. Before that, I thought FOREX to be sort of a kinky trading, you know. Buying and selling money, what a junk! Anyway, after we met over that beer in Vienna, you made me change my mind. I began to learn how to trade currencies, and I actually got real good at it.
Marek: So, is FOREX what you’re trading now with Smart?
Chris: Yes, it is. Besides other things, you know.
Marek: What are the other things?
Chris: Mostly commodities. And options. Commodity and stock index options.
Marek: All right, then. What brought you to switch, and how’d you do it?
Chris: Well, like I said, I felt bored and undervaluated in Citi. So, after I realized I really can trade, I sent my resume to about 20 investment companies I knew of at the time. Smart were the first to answer. They were opening a new branch and hiring new staff. I went to the interview. I liked them, they liked me, so we just clicked!
Marek: Last question. Could you tell us what trading techniques and strategies do you use when you trade FOREX?
Chris: Well, I wouldn’t call it strategy. I use a checklist. It has no more and no less than 10 points. If I’m able to positively answer all of the ten, I take the trade.
Marek: OK, the absolutely last one. What is in the checklist?
Chris: I’m not going to give you details, since I know that you wouldn’t do it either! (laughing, chucking). But, yeah, the basics, you know: MACD, Stochastics, and RSI. But mostly MACD. I like to check the signs from the MACD histogram. Those are real helpful. And I use the RSI too. Actually, RSI was the first indicator I had used when I got into trading. See, I still have to have it in my charts, although now I don’t refer to it as much as before. It makes the Nr. 5 in my chexklist. What else is in the checklist? Man, you’re breaking my heart! There’s some other technical stuff. And one point checks the fundamentals. But I’m not going to say more even if you called my ex! I swear!
As you can see, Chris has been honest, may be even more than he would wanted to! Anyway, I thought you might find this interview helpful for thinking about what to include in your own “checklist”. A propo, do you have one? With my students, we call it the Trading Plan. If you don’t have a short, comprehensive, written document, exactly capturing the proceedure of entering and exiting your trades, or if you think it is enough just to trade on your “inner impulse”, or “inspiration”, you are welcome to participate in the 1-on-1 Training course. You will start making your own money from trading. You will be taught how to produce solid, consistent profits. You will learn how the pros do it!
Topics: Interviewing Others | No Comments »
Packing for North Africa
By Marek W. Stupka | June 7, 2007
I’ve just made my reservation for the flight to Africa. I will be leaving on June, the latest, and I will be staying there for a large part of this Summer…
Africa is one of the most intriquing countries I know of! It is the continent full of possibilities, the land of the sun - and of many relatively poorly known areas. I’m going to explore few places, and I’m going to have lot’s and lot’s of fun…
At some spots I am about to visit, the internet connection might be be limited, if not unexisting. Anyway, I take my powerbook with me, and I’ll do my best to continue posting to this blog, as well as keeping in touch with every single one of my 1-on-1 Students.
There might be, however, time delays, till I get the chance to answer your emails. But, once again, EVERY email will be answered, EVERY question answered, and EVERY new or old student provided for with what he or she needs or is entitled to (in the field of trading), as is also stated in the Contract for Membership in the 1-on-1 Training.
Well, wish me luck, then. It’s going to be a really cool trip. If you are my student, and would like to see the pictures from it, just drop me an email…
Topics: Miscellanous | No Comments »