Best Automated Order Execution and Money Management
Post Number: 1232
|Sunday, August 07, 2011 - 05:20 am:||
Question received from a new subscriber in the US:
Dear Admin , I just order the PRO version . Incredible Charts offers the charts with TA , but not the (automated) trading orders execution , trading strategies , money and risk management etc... What software package , if any , do you recommend for the concurrent (automated) execution of the trades ?
Thank you very much, DN.
I would appreciate readers opinions as to who provides the best automated order execution and money management software, whether a broker or independent software provider.
Post Number: 978
|Sunday, August 07, 2011 - 10:20 am:||
I am using Interactive Brokers for my US trades.....a very complete package of tools to use which might partially respond to the query?
The base set of Trading Tools consisting of Trader Workstation, Mobile Trader, WebTrader, & API Software along with the 3rd party 'add ons' gives a very complete package
I am still on my "L Plates" using the system, so any queries best directed to IB.
"Interactive Brokers Review by Active Stock and Futures Trader
IB's Trader Workstation (TWS)
Before you choose an online broker for trading, you must read this highly informative article How Active Traders Choose an Online Discount Broker, to help you make a more informed comparison and choice.
Interactive Brokers LLC, or better known as IB in active trading circles, is an online discount broker which consistently gets high marks as a software based broker, and also one with very competitive trade costs by Barron's. Interactive Brokers' subsidiary, Timber Hill LLC, is one of the top market makers of exchange listed equity and index options around the world. IB is now listed at the NASDAQ stock exchange under the symbol IBKR.
Popular With Retail and Professional Traders
IB is one of the most popular brokers among active traders and investors. The primary reason for this is because IB provides an excellent, no-nonsense trading platform at hard-to-beat commission rates. The availability of the Universal account alone is reason enough to give IB high marks as it saves the trader from messing with different account types for different financial instruments like stocks, futures & options. A new trader may be intimidated by IB's Trader Workstation (TWS) trading interface and lack of hand-holding, but this is only temporary. When the trader learns how to use the TWS system and gets the hang of it, there is hardly anything better for quickly getting in and out of volatile markets. IB has also introduced mobileTWS for Android and Apple iPhone/iPad (read review). This mobile app allows basic functionality without an IB account but to use the full functionality, an IB account is mandatory. mobileTWS is a must-have for traders who have to be away from their workstations and who have orders working in the market.
For those wanting to try out and get familiar with the various features of TWS, IB also offers a complete functional demo version called Live Workstation Demo. They also allow opening a papertrading account using TWS prior to going "live" in the real markets, so that one has the chance to fine-tune their trading strategy using IB's PaperTrader.
Key Feature - Availability of the Universal Account
Interactive Brokers allows you to trade equities, exchange-traded funds (ETFs), options, futures, foreign exchange and bonds on global markets all from a single account in a single currency. You have a choice of which currency to use as your base currency when you sign up. All this is available from a powerful single interface on IB's Trader Workstation (TWS). Some of IB's competitors, including optionsXpress and MB Trading, have also started to provide similar accounts. Many other brokers would require a trader to maintain separate accounts for stocks, futures and options.
Application Programming Interface
Due to IB's extensive opening up of their Application Programming Interface (API), a trader using TWS has many 3rd party add-ons and applications which can connect directly to TWS and provide additional functionality.
Medved Quotetracker is an excellent example of a 3rd party charting program which can integrate with TWS and use IB's excellent data-feed to chart the markets. IB's API are also available for DDE for Excel, Java, C++, and ActiveX.
Robust Data-Feed in Fast Markets
It must be noted that IB's data-feed is one of the very few low cost data-feeds available which is robust enough to not be significantly affected during "fast markets" created by market-moving news days like FOMC meetings, etc. This is the time when other popular traditional data vendors like eSignal, QCharts and IQFeed will tend to lag badly. IB's data is not 100% perfect as there are times when it will also suffer some downtime like the rest, but in general, it is a pretty hardy data-feed suitable for day trading fast instruments like ES (e-mini S&P 500 Futures). One of the key differences however between IB's data feed and providers like IQFeed is that IB's data feed is not true tick data. IB consolidates its data every few milliseconds and then sends it out to users. This is of little or no issue if you are not using tick charts but only displaying charts of higher timeframes like 5, 10 and 60 mins.
Third-Party Applications Make Trading With IB Easier
Some other 3rd party add-ons which add value to IB's TWS include ButtonTrader, Ninja Trader and Bracket-Trader, to name a few. These automated order entry tools are indispensable when day trading futures and stocks with very high liquidity as they can immensely improve one's order entry speed and accuracy. These software automatically generate your profit target and stop loss orders as soon as you are filled on your initiating order, based on preset parameters set by you, the trader. In response to the popularity of such tools, IB has recently improved its BookTrader and Depth of Market (DOM) features which allow greater functionality and ease when day-trading stocks and futures. IB's BookTrader allows traders to visually see the market depth, in relation to their stop loss orders and profit targets. BookTrader can easily be configured to enter, exit or reverse positions quickly with just a click of the mouse.
* Mutual Funds
* Exchange Traded Funds (ETFs)
* Stocks - $0.01 per share up to 500 shares. $0.005 thereafter.
* Futures - $4.80 RT
* Options - $1.00 per contract (for premium => $0.10)
*Note - Refer to IB's site for the latest rates
* Trader Workstation
* Mobile Trader
* API Software"
Post Number: 573
|Sunday, August 07, 2011 - 04:06 pm:||
Or for a lot less money BUT assumes you will want to write and back test your own trading system:
www.amibroker.com (AB) and add the free IB Broker plugin for direct orders into an IB account. IB seems to be extremely popular with AB users.
as a sound starting point for the automated trading interface for Amibroker. You can then modify for your own trading system.
Both are well recommended and reviewed.
I don't use IB but this is where I would start if I was to automate a trading system on the US.
I used Amibroker extensively in 2005-2006 exclusively for ASX and am just starting to set things up again. It appears to be the fastest back tester on the market. Now multi-threaded so even faster. e.g. market scan the entire ASX in 11 seconds!
For the Aussie market I am very interested in replacing the old MarketCast data feed. Iguana2 has the Spark API and appears to be the only Australian supplier that includes full market depths for the entire market in real time. Rather expensive. You need their software or write your own. My aim (or dream) is to write a programme to replace the old manual market depth analysis I was doing.
For international markets, indexes I use CMC MarketMaker but it does not have an automated trading interface (for retail users).
It is a brave man that automates their trading system. Many don't even have a system, few have back tested it, and it is even harder to stick to it. Automation can help stick to your system particularly stops and fallback strategies. I like the tipster-trendline approach for this.
All the best.
Forewarned is Forearmed
Divergences on Twiggs Money Flow give early warning of trend changes, combining price & volume to reflect buying & selling pressure.
Available on Incredible Charts free software.
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