Order types in CMC MarketMaker

[ithomas21]

Hi,

Has anyone figured out a way of linking three orders in D4F's MarketMaker?

Past posts have suggested setting the email order alerts and then placing more orders, but with a full time job I would like to set my entries, profit limits and stop losses at the same time.

This is easy with Etrade and I'm sure it is with other brokers' software. Do you know of any way round this limitation?

Cheers,

Ian

 

[Vaco]

Short answer is you cant, the software will only allow one contingent order to be linked to a pending order and no further orders linked to that, but tell us why you would need 3 linked orders and maybe we can figure something else out for you.

 

[Orion]

There is a very real requirement amongst traders for an “If Done” facility, where the “If Done” element is in fact an “OCO” (one cancels the other) order. For example, I want to go long on the FTSE if it rises to 4500 so I place an Entry Buy Stop order. But, because I won’t be able to monitor the trade as I will be in a meeting all day, I want the ability - should my entry stop be hit - to then automatically activate a stop loss Sell order (in case the market falls away) at say 4450, and also activate a linked profit target Sell order at say 4550, this of course being the OCO element.
If the market rises to 4500 I am stopped in and the “If Done” element now comes into force. If the market then rises to 4550 the “Limit” element of the OCO will exit the trade and the associated stop loss order at 4450 will automatically be cancelled, and vice versa.
I am given to understand that d4f operate "If Done" orders on CFD trades but not on Spreadbets, or at least not yet. There has been some discussion on these boards recently on this subject and I am pleased to see that Capital Spreads have reacted positively and are planning to introduce OCOs in the coming months when they have developed their software. Well done CS. Now, what about the other SB firms…?

 

[Vaco]

ok so y not just place your buy order at 4500 an oco or if done at 4450 and then a new limit order to sell at 4550. as this sell order is above the limit buy you do not need to link it, u only need to link the stop loss order as you only want it to go live after your buy order has been activated.

 

[JonnyT]

And any decent Direct Access brokers gives you all these orders and more..

I wonder why Spreadbet Co's dont...

JonnyT

 

[ithomas21]

Jonny T - you are right. I am trading CFD's with D4F but there's no getting around the fact that i need to go direct access.

(Even just having the API would solve these sort of problems, never mind the order types provided by the broker.)

Elefteros - in the situation you describe you would still have a pending order that leaves you exposed in the market. Say you initially set those three orders before the market opens (when the price is below 4450):

1. A "Stop" to buy at 4500 (entry)
2. An "If Done" to sell at 4450, linked to the entry order.(stop loss)
3. A separate "Limit" to sell at 4550 (profit)

If the trade is entered and then eventually exited (from either the limit or the stop) you would still have an order with the broker that could be activated should the market cross back through that price. All I want to do is link the two exit orders so that when one is activated it will cancel the other.

This is easy once a trade is entered but I can't predict when a trade will be entered and cannot watch the screen all day.

I have experimented with VNC'ing to my home computer and using a laptop with a 3G phone but I think the only alternative is to get a proper US direct access account where I can set my orders at the start of the day and check the results at the end.

 

[JonnyT]

Use RDP instead of VNC as its more responsive and also free like VNC ;o)

If you work for a living there are also ways of exploiting your Compnays firewall if they have a nice juicy connection to the internet. For instance Socks Proxies.

JonnyT

 

[ithomas21]

JonnyT - will check out RDP, cheers

As for proxies, I just use WinSock at the moment to pass the VNC packets out of my company firewall. The D4F software can use proxies but I'm a bit scared of installing it at work.

Mind you, it uses port 80 and it must be encrypted so it would look to the IT boys that it was just SSL web browsing traffic.

Just had a thought - do you think you could code an interface to the IB API that could work on a separate PC? You could run TWS at home and the API interface at work. A possibility?

 

[JonnyT]

Whilst you could do this I wouldn't recommend it. It means all events, price updates etc will be sent over the Internet to your PC at work.

Just use RDP and access when you require.

My Spot On software also emails any trades etc to work so I know whats happening.

JonnyT

 

[Vaco]

Whilst you are still trading with deal4free there is still a way around your problem, set an alert at the entry stop loss and target price with an email been sent to you at work then you could call deal4free and cancel the third pending order when the trade has completed the round trip.

One last thing, I know everyone likes to beat up spread betting/cfds but if your only placing 1 trade a day cfds do have advantages over direct access, for a start the spreads are very similar usually the same as the outer bid/ask there is no commission and you dont need $25k to start.

when the difference in the spread is only a couple of cents you need to be trading about 2000 shares before you start worrying about commissions been cheaper by which point if your using good money management you should have the $25000 and be ready for direct access.

To get to the point I believe You have to use the right tool for the particular job, direct access is the only way if your really day trading(more then 1 trade a day in my opinion) but can be an unnecessary expense if your not.

 

[ithomas21]

Elefteros - I agree with what you are saying about the financial advantages of CMC, but the limitations of MarketMaker are too much of a problem.

Some days I can't check my emails for order alerts or find the time to phone to cancel orders, which is a real problem.

However, the other problem with direct access is margin. Although I only place one trade per day I place stops on a lot of stocks. CMC margin is at 5% on US stocks, compared to the 25% for direct access.

 

[Vaco]

I understand what you are getting at but its only really a problem if you have a very tight stop loss and small profit target, otherwise it would take a very volatile day indeed to trigger your trade, move to your stop loss then move back up to hit your profit target order and create a new trade.

As for the leverage available, well thats the sharpest double edged sword thats ever cut me.