Best way to trade multiple ES sytems.

[blackbeard]

I have always traded with 1 system only. I am looking to add another trading system. Sometimes they conflict in direction (thus they cancel each other out).

What is the best way to trade multiple systems? Do you set up 2 different accounts with the same broker?

Or- if long 10 contracts and your other system says short, do you close the 10 contracts instead?

What about margin? If you are technically neutral (2 different accounts but long in one and short in another), but one account shows a profit of lets say $10,000 and the other a loss of $8,000 (does the brokerage house automatically shut off buying power of the negative account? Or do their systems realize you are still in the green in other account?

I am using Tradestation as my brokerage.

 

[Handle123]

I run automated methods at one brokerage, and manual trading at different brokerage. So there will be times when one method will be long and others short, but cause the duration of the trades are different, I just let them be, it be too confusing to be offsetting one position to reverse into another position, plus if some are not filled, I would have other problems.

I use three different brokers, it for anything, if cable connection goes down, DSL backup or satelite as last resort.

 

[kcgoogler]

Quote from Handle123:

I run automated methods at one brokerage, and manual trading at different brokerage. So there will be times when one method will be long and others short, but cause the duration of the trades are different, I just let them be, it be too confusing to be offsetting one position to reverse into another position, plus if some are not filled, I would have other problems.

I use three different brokers, it for anything, if cable connection goes down, DSL backup or satelite as last resort.

I do pretty much the same. EOD ES and option trades at one firm; intraday ES at a couple of firms - just for redundancy etc. But now that the two brokers i am with for intraday (Mirus and Velocity) are putting in monthly volume minimums, i am closing out the Mirus account. Velocity is slightly cheaper and has better tools online.

Also, for me its usually not a problem if multiple systems give opposite orders; if they happen on the same bar i dont put the trade. If they happen on different bars i just trade them as they come and keep track on a spread sheet. Things that dont get filled etc are all tracked separately.

One of the trickiest things that happens is when you have multiple systems with trades on and if you try to over think and over smart the system and try to take a tick here a tick there.. soon you get into a position where your system is out and you are still in.. or the opposite. Speaking from experience.. but i still do it from time to time; in general over the past year i have marginally did better than systems by tying to scalp inside system trades but for the additional energy spent its not worth it. I could do better spending that time developing new systems - but i still do it. crap..


HTH.
-gariki

 

[Lucias]

If systems are different time frames.. I'd think the 2 brokers makes sense. If you had several systems and have the source code, you could create a virtualization module.

Lets think.. how many cases for trade opens?

Case 1 No position open
Open trade normally

Case 2 Open position already exist same direction
Options.. A. dont open, B. open double leverage

Case 3 Open position opposite direction
Options A. dont open, B. close open position, C. Close open and open new D. Close all... but track both systems. When one closes then open other.

The only tricky part is Case 3. Even case 3 is not tricky..

All you need to do is spit out the number of contracts at all times that the system should have open/close and track the changes

A: +5
B: -5
S: 0

This is the opposite condition (sum operation). Now what happens, if we get this order +5

A:+5
B:0 (+5)
S: +5

So, you need to track the differences then its a simple matter and you can operate many systems in this way.

Quote from blackbeard:

I have always traded with 1 system only. I am looking to add another trading system. Sometimes they conflict in direction (thus they cancel each other out).

What is the best way to trade multiple systems? Do you set up 2 different accounts with the same broker?

Or- if long 10 contracts and your other system says short, do you close the 10 contracts instead?

What about margin? If you are technically neutral (2 different accounts but long in one and short in another), but one account shows a profit of lets say $10,000 and the other a loss of $8,000 (does the brokerage house automatically shut off buying power of the negative account? Or do their systems realize you are still in the green in other account?

I am using Tradestation as my brokerage.

 

[oldtime]

it's an interesting question. If you run two systems, even at the same broker there is no sharing of margin, they are treated as two seperate accounts, how could it be otherwise? But you have the option of moving funds between accounts to cover margin.

Lucias is right, if you are really serious you need a master program that will run seperate systems all in one account, then you get the true power of margin.

I run one real and one paper account at IB and it is simple. They are the same systems but because they have different starting points sometimes one will be long before the other goes long or flat.

Cancelling is the least of your problems. The one you have to watch out for is when they both go the same way and you are doubled up, twice as much as you would have been running just the one system.

good luck