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Benefits of Autotrading vs. Manually Trading
Auto Pilot Day Trading strategies are designed for short-term relatively small target trades and often take tens of trades a day.
- You can sit back and let the computer do the work for you, avoiding common execution errors.
- The quickest route to success is to find a good trading strategy and then follow the rules exactly. If you can avoid interfering with the strategy, you WILL follow the rules when you autotrade.
- In a fast-moving market, entry signals come very fast and it can be difficult to enter orders in quickly enough to get into a trade. With autotrading, this is no longer a concern.
- You can easily trade several strategies simultaneously, each on a different instrument (for example, ES, ER2 and YM). This would be quite a juggling act if you were trading manually.
Autotrading the Auto Pilot Day Trading Strategies
Rule number 1:
Do NOT turn on autotrade and leave your strategy to fend for itself while you are off shopping or playing golf. The power can go down; your computer can fail; TradeStation's servers can fail; you may lose Internet connectivity. If you get a partial fill, the strategy will not manage your trade properly. You can come home and find yourself in deep trouble.
Note: The strategies are set up to stop trading if the profit target for the day has been reached or the max loss for the day has been reached. The strategies also have a start time and end time for trading. If you prefer, you can set them to only trade during the Golden Trading Hours. Note that start time and end time in Auto Pilot Day Trading strategies are in Mountain Time, and the times are automatically converted to the time zone set in your license.
On this page you will find
If you are setting up autotrading for the intrabar ER, go to this page: Autotrading the Intrabar ER
Autotrading using TradeStation as the broker
Since the Auto Pilot Day Trading strategies are written in TradeStation's EasyLanguage, the most direct autotrading involves using TradeStation for both charting and brokerage functions. Strategies trigger on the charting platform and are directly executed by TradeStation brokerage. TradeStation brokerage offers competitive commissions and free use of TradeStation charting with minimal volume requirements. Check their site for details - www.tradestation.com. Be sure you call and get set up as a day trader with $1000 margin requirements. Initially they are likely to set you up with larger margin requirements.
When you receive your charts from Auto Pilot Day Trading, you will see two charts for each type of trade. The continuous chart (@ES, @ER2, @YM) is to watch, the specific contract chart (ESZ06, ER2Z06, YMZ06) is set up for you to autotrade. No charts can take trades on your account unless you specifically set them up to do so.
Note: When the cointinuous chart (@ES, @ER2, @YM) stops trading for the day because it has reached the profit target for the day or the loss maximum for the day, we recommend you also turn off the corresponding autotraded chart, even though the strategy on the autotraded chart may not have reached one of those limits. Our experience says that if you do this you will do better - the profit target and loss maxima have been optimized, and they were optimized on charts that did not have to deal with real life fills.
Beginning Autotraders
We highly recommend starting to autotrade with only one chart (ES Rangers is a good one - it takes trades seldom and each trade usually happens in slow motion, so you can easily follow what is happening and learn how it works) and with only one contract. Once you feel comfortable with the mechanics, then add another chart, one contract only. Or increase the Ranger chart to two contracts. Be careful about increasing trading size too dramatically too quickly — just like any other skill, it does take some practice and study to become proficient in trading, and in autotrading. Begin by setting up your workspace for autotrading, as described below. Also read Autotrading Realities at the bottom of this page.
Setting up a Workspace for Autotrading
Save the original workspace you received from Auto Pilot Day Trading in your "Mywork" folder. Never change anything in this original workspace. To set up for autotrading or for any changes in the parameters of the strategy, copy a window from the original workspace (right click on the chart and choose "copy window") and open a new workspace and paste the window into the new workspace (right click anywhere in the new workspace and chose "paste window"). Then make the changes to the new window in the new workspace. That way you will always have the originals to go back to if you need them.
Name your new workspace something appropriate, such as "ES500 Rangers 14 Oct 2006" for an ES autotrading workspace. You may want to copy both the @ES and the ESZ06 windows into this workspace — you would watch the @ES and autotrade the ESZ06 window. If you are going to be autotrading using TradeStation to autotrade your orders, you probably will want a Matrix window, and one or two Trade Manager windows in your workspace as well. The Matrix would be used to manually manage a trade in the very occasional times that the strategy cannot manage the trade for you. In the Trade Managers you would watch the Strategy Positions, and/or Strategy Orders, and/or Orders. Of course you may want to set your workspace up differently, but this is a way to set it up that works.
Setting the Chart to Show Your Trades
Right click on your chart, choose Format Account Orders & Positions/Data. Be sure that the "Status" box is checked. This will make the chart show open orders in your account on the chart as horizontal lines, red for sells and blue for buys. Your Format Account Orders & Positions/Data dialog box should look like this:
Number of contracts to trade
Set the strategy to trade the number of contracts you want to trade. Right click on the chart, choose Format Strategies, bringing up the "Format Analysis Techniques & Strategies" dialog box. Choose Format, set NumContractsTrade to the number of contracts you want to trade, then click OK.
Setting Autotrade Properties
Right click on the chart, choose Format Strategies, bringing up the "Format Analysis Techniques & Strategies" dialog box. Choose Properties/Automation. Under Strategy fill logic, choose the bottom radio button. Your Automation dialog box should look like this:
Click OK.
Set the Strategy to Autotrade
Right click on the chart, choose Format Strategies, bringing up the "Format Analysis Techniques & Strategies" dialog box. Click the box by "Generate strategy orders for display in TradeManager's Strategy Orders tab". Click the box by Automate execution using <your account number>. An "Enable Order Generation" box will pop up enumerating the risks of autotrading, to which you must click the "I Agree" button. Then change the word after confimation to "off". Another box will pop up titled "Disable Confirmation" enumerating the risks of turning confimation off, to which you must click the "I Agree" button. Now your "Format Analysis Techniques & Strategies" should look like the image below.
Click Close, and you are ready to watch trades happen.
As you are watching trades, be sure to see on your TradeManager that in the column for "Positions Match", it says "true". If you ever see "false" under Positions Match, you know that there is something wrong, and you need to take action to set things straight.
Be sure to read below about Autotrading Realities.
Autotrading using NinjaTrader as the trading platform
and any broker that supports NinjaTrader
TradeStation strategies are now able to communicate with NinjaTrader, allowing subscribers to use any brokerage that supports NinjaTrader as an entry platform. You can read about setting up NinjaTrader to autotrade with Auto Pilot Day Trading strategies on TradeStation by going to the NinjaTrader help guide page. From the menu on the left choose "Automated Trading Interface/Tradestation Integration".
Autotrading Realities
or
Why autotraded strategies don't get the same results as a strategy just running "bare" on TradeStation
Strategies running on TradeStation presume "filled if touched" and, in real life, limit orders are often delayed and may never fill. "Filled if touched " means if price touches a limit order price, the strategy assumes the order is filled. In real life, even contracts that fill quickly, such as ER and YM, take a while and may not fill unless the most of the contracts at the limit price are filled or price pierces the limit level. Often this makes no difference, and the autotraded strategy and the "bare" strategy show the same results. However, sometimes price may touch the specfied limit and then move away without filling the limit order. In this case, the strategy assumes a fill when, in real life, there was none.
As an example, the chart below is a "bare" strategy, which takes damage control ("Be Safe") when it looks like the trade is going against us.
Now examine the chart below, which is the same strategy, autotrading, with limit orders. It did not fill at the damage control target, and so ended up taking a loss at the trailing stop.
The same sort of difference can occur when the bare strategy exits at target with a profit, but the price only touches the target price then moves off in the other direction, and the autotraded strategy stops out.
So, why not tell Tradestation to put market orders in whenever a strategy says it is filled? You can do that, but you will probably lose a tick both at the entry and exit of a trade, and if the market is moving fast, you may lose several ticks.
Just realize that real life fills will seldom match results all day long that the "bare" strategy shows. Sometimes one will do better, sometimes the other.
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