Trading and Discipline

JonnyT

Senior member
2,560 22
Hi folks,

From my own experiences I see discipline as being essential to successful trading.

I considered for a while how I could become disciplined enough to be successful. Then it hit me like a ton of bricks. Get a computer to do it for you.

As I already have an account with www.interactivebrokers.com it followed that I could use there API to trade totally automatically.

On and off I have spent time learning Java (was going to do this in Excel but thought what the hell, I can program in C/C++ why not Java) and developing apps to talk to TWS via the IB API.

Today is a watershed. I have had a trial PnF system running this week but without the trading hooks enabled. The system has had a wonderful week (today surprisingly it has done much better than yesterday +67 so far) and has backtested strongly.

The hooks are now enabled and the software has carried out a couple of trades. Short term there will probably be a few tweaks required but within weeks I'm hoping to be in a position whereby it pretty much is left alone. Then I code up another PnF system that backtests well for the S&P emini :)

I guess what I want to ask is does anyone think I'm mad? Is this a good way to enforce discipline?

JonnyT
 

FTSE Beater

Experienced member
1,518 4
I would second that, and it reinforces my belief that future traders will have to be technology wiz-kids.
 

JonnyT

Senior member
2,560 22
<i>I would second that, and it reinforces my belief that future traders will have to be technology wiz-kids.</i>

FTSE I hope you are right :eek:

JonnyT
 

TBS

Well-known member
385 0
Some down sides if you have data spikes etc..

But machines don't have 'bad days' - hangovers, PMT, colds, distractions etc...

Nice one JT
 

JonnyT

Senior member
2,560 22
<i>Some down sides if you have data spikes etc..</i>

Thats something I've coded for, or at least to stop me entering a position on one i.e using a realistic (I think) limit order. Time will tell if I've been successful or not!

I'm using market orders to get profits out and stops for stops.

JonnyT
 

Trader333

Moderator
8,590 922
Automated Trading

Hi JonyT,

Well done on your achievement and yes I think that your approach is by far the best to rid yourself of the emotional aspects of trading. The only thing I would say is make sure you periodically check that there are no technical problems with IB as this could really hamper your progress. Other than that well done and please keep letting us know how you are getting on as I find it very interesting.


Paul
 

JonnyT

Senior member
2,560 22
<i>The only thing I would say is make sure you periodically check that there are no technical problems with IB as this could really hamper your progress. </i>

Couldn't agree more, which is why my automated system places stops immediatly.

The only question I have is does LIFFE hold stops or do IB simulate them?

JonnyT
 

Trader333

Moderator
8,590 922
Liffe and Stops

A good question and one that I would also be interested in knowing the answer to. An email to them would maybe answer the question but rather than email the usual address try this as it is a technical question.

tac@interactivebrokers.com

I would be interested in the answer Jonny if you get one which in many cases can take days.


Paul
 

Henry

Active member
177 2
JonnyT said:
I guess what I want to ask is does anyone think I'm mad? Is this a good way to enforce discipline?

JonnyT
Not mad at all, it's exactly the same reason I built an Automatic mode into TSim+ :)

H.
 

FTSE Beater

Experienced member
1,518 4
JonnyT said:

The only question I have is does LIFFE hold stops or do IB simulate them?
Hi JT

The stops I believe are held at IB, as LIFFE can only hold limit orders. I don't believe any exchange holds stop orders - otherwise the order book would look very very weird.

HTH
 

GreyingSurfer

Active member
173 0
Hi, Jonny

JonnyT said:
The only question I have is does LIFFE hold stops or do IB simulate them?
Good luck with the automated trading system. I'm all with you on the need for discipline and automation, I'm just not sure I'd have the nerve to leave a system unattended, wondering if my I'd missed something that was going to jump up and bite me somewhere expensive :cool:

Regarding IB and LIFFE, the information you need is all on the Products/Exchanges page under Trading Information. In short, stops, stop limits and trailing stops are simulated (by IB), GTC, limit and market orders are native.
 

Henry

Active member
177 2
FTSE Beater said:
Hi JT

The stops I believe are held at IB, as LIFFE can only hold limit orders. I don't believe any exchange holds stop orders - otherwise the order book would look very very weird.

HTH
FB, beg to differ. From the TWS Manual :

----
A Stop order becomes a market order to buy or sell securities or commodities once the specified stop price is attained or penetrated. A Stop order is not guaranteed a specific execution price. [waffle cut]..... Some exchanges natively accept and process Stop orders according to the standard industry definition of the term. For those exchanges that do not natively executive stop orders, IB simulates such orders as follows:

Simulated Sell Stop Orders become market orders when the last traded price is less than or equal to the stop price. Additional sell stop order protection is provided for NASDAQ stocks and US Equity Options which are only triggered after two offer prices are less than or equal to the stop price.

Buy Simulated Stop Orders become market orders when the last traded price is greater than or equal to the stop price. Additional buy stop order protection is provided for NASDAQ stocks and US Equity Options which are only triggered after two bid prices are greater than or equal to the stop price.
---

Next time I place a stop order on LIFFE, I'll have to see if it goes green (native) or blue (simulated) :)

H.
 

FTSE Beater

Experienced member
1,518 4
Hi Henry et al

Please accept my deepest apologies.
For those exchanges that do not natively executive stop orders, IB simulates such orders as follows:
That's how I understood it for all exchanges.

I shall now crawl back under my shell, and not disturb you again :cry: ;)
 

jim_b

Newbie
4 0
Nice one Jonny! I am lurking on T2W while researching something similar. I am coding in Java as well... What size account are you entrusting to your bot? Also which index are you trading initially?


J.
 
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