Unattended Automated Trading

C

CPTrader

Hello,

Could people share their experiences with unattended automated trading (24/7).

Are people actually trading 24/7 in unattended fashion?

What are the risks here?

What fail-safes are incorporated into the ATS to prevent losses or mishaps?

What fail-safes are incorporated into the ATS infrastructure to prevent losses or mishaps.

Please share any useful experiences or insights.

Hopefully this thread can help all - the inexperienced and experienced alike.

Thank you for contributing and sharing.
 
IMHO anyone who runs software unmonitored is insane. The no. 1 rule about the markets is that anything can happen at any time. There will always be unforeseen scenarios against which the software has not been tested.
 
The minimum I would use for that is:

* A computer trading
* A second computer "checking" the first computer, having a trading login and the authority to turn off the first computer AND CLOSE ALL POSITIONS AND ORDERS.
* A backup mechanism for the computers to ask for help, NOT using the internet, for example if internet is down (so an operator can close the positions / open orders and disable the accounts until control is reestablished).

Even if you have no bad market condition (strong advice: NEVER trade unattended) there is a lot that can go wrong on a pure technical level. Finding out you where long in a falling market because your trading computer sort of takes a holiday.
 
Given this viewpoint, how do you explain the numerous quant funds and shops that trade on a 24/7 automated basis. yes, I know some of them have night desks with staff monitoring the ATS, but many others do not have a dedicated night trader/desk.

Of course anything can go wrong at any time; but I would think for a mission critical system there is a reasonable protocol to follow to greatly reduce the risk of a mishap: dedicated server with a reliable provider guaranteeing 100% uptime, periodic status reports sent by the ATS, error alerts sent automatically, etc.

Your thoughts and ideas.

Good dialogue so far. Thanks to all.


Quote from NetTecture:

The minimum I would use for that is:

* A computer trading
* A second computer "checking" the first computer, having a trading login and the authority to turn off the first computer AND CLOSE ALL POSITIONS AND ORDERS.
* A backup mechanism for the computers to ask for help, NOT using the internet, for example if internet is down (so an operator can close the positions / open orders and disable the accounts until control is reestablished).

Even if you have no bad market condition (strong advice: NEVER trade unattended) there is a lot that can go wrong on a pure technical level. Finding out you where long in a falling market because your trading computer sort of takes a holiday.
More...
 
dedicated server with a reliable provider guaranteeing 100% uptime, periodic status reports sent by the ATS, error alerts sent automatically, etc.
More...

NO (!) provider / server GUARNATEEES 100% uptime.

And you do not need another person. Have a couple of external systems monitor - one local, one on another data center (small cloud), alerting you through other means if something goes wrong.

The risk is "manageable; but MUST be managed. And anyone running seerious funds WILL have a night desk running. Maybe sahred with some others, but yes. They will have someone watching.
 
I do have an ATS that runs unattended trading equities only, during US Exchange hours.

I monitor the state of things with iPhone web-browser account access.

Assuming that your ATS is well tested (ie free of logic errors) , and your leverage is not insane, I think unattended ATS trading is possible, provided you can monitor it and close out positions if the connection to your broker is lost.
 
Quote from Aitch Eff Tee:

Which serious algo shops run without human cover? I know of none.
More...

Of course a "serious algo shop" would have a night desk because they can afford it. So my question is; what does the serious independent trader without the resources for a dedicated night desk do to mitigate the risks of unattended trading?
 
Having a non-trading full time job, I traded unattended fully automated both equities and futures for about 3 years. This is during market hours 9:30AM - 4PM EST. Overtime I greatly imporved the trading logic to handle most issues. I had logic built in to send emails when orders were filled, position mismatch alerts etc.

Despite my best efforts 'unattended' trading cost me money, I would say as much as 15-20% of my profits. So it can be done, but it will cost you. Just the cost of doing bussiness.
 
Could you please give examples of things that cost you money while trading "unattended"?

What would you differently now to address those issues?

What do you mean by "position mismatch"?

Thanks for sharing.


Quote from bearmountain:

Having a non-trading full time job, I traded unattended fully automated both equities and futures for about 3 years. This is during market hours 9:30AM - 4PM EST. Overtime I greatly imporved the trading logic to handle most issues. I had logic built in to send emails when orders were filled, position mismatch alerts etc.

Despite my best efforts 'unattended' trading cost me money, I would say as much as 15-20% of my profits. So it can be done, but it will cost you. Just the cost of doing bussiness.
More...
 
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