I don't know automated trading

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dvshucks

I am about as far as you can get from being an automated trader. A friend of mine is a research director for a fund so he knows programming and all that. He's starting a little fund of his own and wants my advice. His stock selections are all based on fundamentals so he wants help with entries and stops and exits. Can anyone offer some advice on a simple way to program for a fundamental trading plan? He has the stock selection all programed, he just needs a way to get in and out.

I didn't know, I told him he wants to do at least something as simple as a 20 day high for his entries. I'd assume his targets will be something to do with fair value as he determines them but what kind of stops do you use on a fundament plan. He hopes to hold some stocks up to several months so its got to be wide but I don't know what to say. I'm just a day trader so I don't have experience with anything like this.

If someone could offer a good place to start or a good book, I'd really appreciate it Thanks
 
a stop is a stop. if you use an automated system to manage execution of fundamental investment ideas, you just need to take whatever fair pricing for your exists is which comes from your fundamental analysis and whatever money management technique's he's using.

I can't tell exactly if you're looking for software to help you get this setup, or a book to tell your friend how to generate price targets for his analysis?

for autotrading stuff, I can recommend tradelink which is free/open-source and supports major brokers. I have a client that used it to do something similiar to what your friend is attempting. http://tradelink.googlecode.com
 
I was mostly asking for an idea or two on what would make for a odds-improving entry for a longer term trade based on fundamentals. I guess I didn't need to post it in the automated trading section but in a strategy page instead.
 
The CoolTrade system is all point and click, so there is no programming involved.

All you do is set your entry rules (including fundamentals), and your stop loss goals, and profit goals, and the system automatically opens the positions when the entry conditions are met. It then automatically calculates the entry/exit prices based on your goals. So you don't have to set fixed prices for any positions as the system does all of that based on your established goals.

For example, if it bought a stock at 20.00 and you have a 1.00 goal, the system will automatically establish a profit goal/limit for 21.00. And, if you had a 1.00 stop loss, the system would automatically create a stop loss for 19.00. So you don't have to micro-manage each open position.

The CoolTrade system was designed for 100% unattended robotic trading from the ground up, so you just simply answer the questions on 6 tabs in the Strategy Wizard, run the Automated Trader, and your done. Just turn it on in the morning, and if you want, walk away, as it has everything it needs to trade all day unattended.

Ed
 
Quote from dvshucks:

I was mostly asking for an idea or two on what would make for a odds-improving entry for a longer term trade based on fundamentals. I guess I didn't need to post it in the automated trading section but in a strategy page instead.
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Find a stock that has broken out and is trending higher. Look at the 10 and the 20 period MA and see if can get good entry's when they pull back to these levels. Up to now. buying 20 day highs probably has not been the best strat.

ENTRY POINT is key. use those areas for pullbacks.
 
I write nothing but automated trading software for the last 10 years. Mines coming to market in about 9 months. There are a number of considerations:
- Direction and volatility. You need a mix of these two to trade both trends and congestion.
- Order types. Market, stop and limit orders each make the software perform differently.
- Variety in setups. Some use only one variable type like breakouts, support and resistance. channnel break out or indicator overslod or over bought. Others mixed these together.
- Variety in stops. Like ATR trailing stops, fixed dollar, Percent risk Trailing, break even, dollar trailing, Parbolic or Profit Target
- Type of trading. Some use reversals (always In) or trading in one direction.

These are the key areas to consider.
:)
 
Quote from dvshucks:

I am about as far as you can get from being an automated trader. A friend of mine is a research director for a fund so he knows programming and all that. He's starting a little fund of his own and wants my advice. His stock selections are all based on fundamentals so he wants help with entries and stops and exits. Can anyone offer some advice on a simple way to program for a fundamental trading plan? He has the stock selection all programed, he just needs a way to get in and out.

I didn't know, I told him he wants to do at least something as simple as a 20 day high for his entries. I'd assume his targets will be something to do with fair value as he determines them but what kind of stops do you use on a fundament plan. He hopes to hold some stocks up to several months so its got to be wide but I don't know what to say. I'm just a day trader so I don't have experience with anything like this.

If someone could offer a good place to start or a good book, I'd really appreciate it Thanks
More...


If he is a fundamentals guy then he should know himself what he thinks is a fair price for a stock. I don't see what automated trading would even buy him. Fundamental traders do not hold positions short term - they hold positions for the long term until the fundamentals change or some price object has been hit.

He's better off just setting manually limit orders and when they get filled setting stops. Its not like he needs to constant monitoring of his positions.

Hope this makes sense.
 
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