Need Advice on getting started

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wfeagin3

I am very new to all of trading. I currently have a thinkorswim account and am doing some daytrading. I would like to move to automated trading, but I don't really know what direction to go. Thinkorswim does not have any automated trading capabilities built-in, plus I don't like their high commissions.

I was thinking of getting a data feed, charting software, and different broker with low fees. I am aware of IQfeed, Esignal, ninjatrader, amibroker, multicharts, and the like.

I do not know anyone personally that does this type of trading, but from reading online, this looks like the direction I should go to do automated trading. I am an engineer and have used programming software like Mathcad and Matlab. So I know how to do some programming, but I do not know the syntax of c, c++, and the other popular languages. But I feel confident that I would be able to figure out existing code and modify it to my liking.

I want to be able to backtest strategies and develop a solid system, and eventually automate it. I can use any and all advice or criticism.

Thanks in advance!
 
If you want to test and manually develop strategies, Ninjatrader could be enough for you. However, if you ever need to run more than 3 or 4 automated strategies, Ninja will be very slow since it is single-threaded and you may run into difficulties. Also eSignal has a backtesting capability, via their efs scripts. Many, if not all, of these platforms can produce slightly unrealistic results because they don't take into account liquidity and execution costs among other things, so any strategy you develop you will need to make sure it is absolutely amazing before trying to use it live. When I started i used IB (Interactive Brokers) and NinjaTrader, that was a good learning experience. I'd also recommend IQFeed or eSignal for your feed. eSignal is better if you want to look at the charts from their application which I really like to this day, but IQFeed is probably a better live feed (eSignal is better for historical data too).
 
Quote from braincell:

If you want to test and manually develop strategies, Ninjatrader could be enough for you. However, if you ever need to run more than 3 or 4 automated strategies, Ninja will be very slow since it is single-threaded and you may run into difficulties. Also eSignal has a backtesting capability, via their efs scripts. Many, if not all, of these platforms can produce slightly unrealistic results because they don't take into account liquidity and execution costs among other things, so any strategy you develop you will need to make sure it is absolutely amazing before trying to use it live. When I started i used IB (Interactive Brokers) and NinjaTrader, that was a good learning experience. I'd also recommend IQFeed or eSignal for your feed. eSignal is better if you want to look at the charts from their application which I really like to this day, but IQFeed is probably a better live feed (eSignal is better for historical data too).
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Thanks for the post!

For backtesting and stategy development, I think I will use matlab. I've watched a webinar about matlab and algorithmic trading, and it looks like a great tool to use.

I'm not sure if matlab can be used to trade automation, but if it can't, from what I've read multicharts is the best program to use. That and tradestation, but I don't think I want to go the route of tradestation.

My plan right now is to continue trading with thinkorswim because they have a great platform with alot of technical tools. And start developing strategies with matlab. When I am ready for automation, I will need to translate my code to whatever code the program I chose uses. Thats if matlab is not a good tool for automation. I need to look further into that.

Currently, I'm in a situation where I have a full-time job which doesn't allow me to do much trading. I trade with a paper account during the day for fun. And do pretty well the days that I have enough time to focus on a few trades. I am debating of quitting my job and trading full time. This would allow me more time to develop trading strategies for automation. I have alot of ideas and effort, but not alot of time with the current job I have.
Any thoughts/advice for my situation?

Thanks!
 
Quote from wfeagin3:


Currently, I'm in a situation where I have a full-time job which doesn't allow me to do much trading. I trade with a paper account during the day for fun. And do pretty well the days that I have enough time to focus on a few trades. I am debating of quitting my job and trading full time. This would allow me more time to develop trading strategies for automation. I have alot of ideas and effort, but not alot of time with the current job I have.
Any thoughts/advice for my situation?

Thanks!
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Leaving a full time job to trade when you have so little exposure to the markets would be a very, very foolish move.

You don't need to monitor the markets full time in order to start learning how and what to trade. You should spend at least a year with a good backtesting platform to help define a strategy you can have some confidence in. And understand that your actual results may vary greatly from your backtested results.

And until you have a considerable amount of consistently profitable trading experience, automation will simply accelerate your losses.
 
Quote from lindq:

Leaving a full time job to trade when you have so little exposure to the markets would be a very, very foolish move.

You don't need to monitor the markets full time in order to start learning how and what to trade. You should spend at least a year with a good backtesting platform to help define a strategy you can have some confidence in. And understand that your actual results may vary greatly from your backtested results.

And until you have a considerable amount of consistently profitable trading experience, automation will simply accelerate your losses.
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I agree. Leaving a full time job does sound foolish to me. I only toy with the idea because I don't have any huge responsibilities besides providing for myself. That, and I want to work on my algorithms full-time.

My discretionary trades are made with the help of the John Carter ttm squeeze, wave, and indicator in which I've had good success. Ideally, I would love to trade during the day and work on an automation system. I just don't have the time to do that with a full-time job. And I know I would be able to progress much faster if I could dedicate more time.

Also, I'm having to decide between pursing this or entering law school this fall. I have to make that decision very soon, and right now I'm leaning towards automation development. And postponing my law school aspirations atleast for a year.
 
Quote from wfeagin3:


Also, I'm having to decide between pursing this or entering law school this fall. I have to make that decision very soon, and right now I'm leaning towards automation development. And postponing my law school aspirations atleast for a year.
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If trading is an itch you must scratch, I advise that you mark a cutoff date and stick to it. Don't spend years trying to beat the markets and find yourself later without employable skills. Hope springs eternal but profits can take even longer.
 
You say you are trading now. Do you have profitable systems (based on technical analysis?) which you would like to try to automate? If so, just jump into NinjaTrader and start prototyping your strategies right away. If not then you probably need more "screen time" and finding which systems speak to you. This can take years depending on how much time you can dedicate.

Matlab is for quant trading and overkill for trading based on technical analysis. Its also expensive, has higher learning curve, and not tailored to retail traders.

Setup a 24x7 NinjaTrader machine and prototype using the Sim/Market Replay accounts AND go to school.
 
Well, I decided to postpone law school for a year. I will soon start a new job that is not as demanding as the one I currently have. So I hope to have more time available.

I've began strategy development using excel for now. Once I have a strategy begun, I will then impliment that strategy in Matlab for extensive backtesting and refining. Once I am pleased with the strategy, my next move is one I have not come to a decision yet. Right now, I think I would then translate my strategy to Ninjatrader and work with a paper account. Then once I'm pleased, use it with real money.

I think its time for a computer upgrade. My laptop will not cut it for the work I want to do. I am considering a Dell T3600. However, I do not have any idea what all the bells and whistles I should get. The base T3600 starts with the following:

Intel® Xeon E5-1603 processor (four core), Genuine Windows® 7 Professional, 2GB Memory, 250GB HDD, 512MB AMD FirePro™ 2270

What I am trying to get out of this computer is:
2 monitor usage
backtesting
live automated trading (not a current need, but will be one in the future)

I need to buy a computer now, but I also want to be able to use it in the future when I hopefully will be doing heavy automated trading.

All thoughts and opinions are appreciated!

Thanks!
 
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