Unattended Automated Trading

I think he is using TradeStations chart automation.

I also trade using TS as well as IB, but avoid the TS automation. I prefer the lower level PlaceOrder macros, in part to avoid problems with the TS logic.

Tradestation is marketed as a automated system, but at the heart is designed as a interactive program and assumes a human hovering over the keyboard.

There are countless server based systems running that impact every part of our life, many with minimal direct human monitoring.

I run my system out of my basement for the last 3 years, using remote monitoring software. The biggest problems I have had are power, fios outages and the clock on the computer drifting.

It has grown to the point where I really do need to move it out of my basement and to a colo with more reliable network and power.

There are tricks, like setting orders to expire rather than require active cancel, or using trigger features on orders so that the system can go down with out undo risk. This also reduces the impact of nework latency.
 
Yes, that is correct, I use tradestation. I am what BP chairman calls 'small people', a small retail trader.

A position mismatch in TS is when the stratergy says I should be long but I am either flat or at worse short.

Over a three year period I ran into all sorts of issues, from hardware issues, trading platform issues, connectivity issues, other inexplainable issues. What cost me money is, so trading unattended a position mismatch happens and I am not able to fix/resolve the issue in a timely manner. Like the example I gave above, the stratergy triggered a reversal from short to long, but actual position stayed short, I was able to login 40 minutes later, but by that time that mkt moved away from the entry price.

One other example would be in equity trading, the strategy gave a short sell order, but the stock during the day was moved to 'hard to borrow' list, so not able to short sell it.

Looking back at it now sounds quite comical, I remember sitting in long meetings and my blackberry recieving one of those position mismatch emails and not being able to do anything for the next hour....and so it went, i stayed with it because it was net profitable for me. I think other more serious traders maybe able to fix some of the issues I went through.

May-6, 2010 was very unsettling for the unattended automated trader.
 
Thanks for sharing bearmountain.

It seems like a lot of your positions were TS specific. TS not executing as per the strategy's defined logic.

It also seems that some of the other issues: " hardware issues, trading platform issues, connectivity issues" could be addressed by a dedicated server.

But yes, ultimately we must admit that as with all things in life, there will always be some element of risk in unattended trading and...in "fully attended" trading.

Thanks again for sharing.

Quote from bearmountain:

Yes, that is correct, I use tradestation. I am what BP chairman calls 'small people', a small retail trader.

A position mismatch in TS is when the stratergy says I should be long but I am either flat or at worse short.

Over a three year period I ran into all sorts of issues, from hardware issues, trading platform issues, connectivity issues, other inexplainable issues. What cost me money is, so trading unattended a position mismatch happens and I am not able to fix/resolve the issue in a timely manner. Like the example I gave above, the stratergy triggered a reversal from short to long, but actual position stayed short, I was able to login 40 minutes later, but by that time that mkt moved away from the entry price.

One other example would be in equity trading, the strategy gave a short sell order, but the stock during the day was moved to 'hard to borrow' list, so not able to short sell it.

Looking back at it now sounds quite comical, I remember sitting in long meetings and my blackberry recieving one of those position mismatch emails and not being able to do anything for the next hour....and so it went, i stayed with it because it was net profitable for me. I think other more serious traders maybe able to fix some of the issues I went through.

May-6, 2010 was very unsettling for the unattended automated trader.
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I completly agree.

I had problems with TS poping "Are you sure?" messages, or "Order failed Ok?", then freezing all processing for all symbols until responded to. The placeorder macros work much better, but still have some odd issues, mainly if you are trading more than one system, there is no way to know which orders filled. Most of the time, it can be worked out, but somtimes the logic gets hard.

Still have problems with TS at the open and have to keep an eye on it at 9:30am every morning. Somtimes I pull over on the way to work and check on it with my iPad, just to respond to a error message "Ok?" prompt. I missed a lot of trades this way.

I finally opened an account with IB and built my own automation in Java. The trading costs on IB are less than half TS. So far, I have not had execution problems with IB.

The flash crash was a wild ride. I checked on it and caught it near the bottom, saw lots of red, but everything was running as it should. Nothing that I could do but close my eyes and walk away. I ended with a small profit, but I know a lot of people, including long term traders with stop orders got hurt badly. A good friend of mine is a buy and hold invester in AAPL. He got shaken out on a stop order and it cost him big. Shame. He is more than a little bitter and blames "you trading guys".

You are right about the hard to sell list. I cant trade short any more because I have no way to model what is hard to borrow and not. The best short trades get rejected, but loosing trades get filled. It got really bad after the crack down on short selling. The short side is just not as profitable as long trades for my system anyway.

The most tramatic time was the week in Oct 08 during the melt down. Every day the trades got more and more extream. During the day, I would have massive swings against me, only to revert back and end wildly profitable. It was a good week, with multiple 30% wins and losses, but I was badly shaken. It was new to me at the time and I got lucky.

Verizon fios rocks when it works. But problems take days to resolve.
 
I have been trading unattended 24/5 w NT 6.5 and IB w forex. Just crossed the 6 month mark, works fine. Use a battery backup for brief power outages. Some early snags were PC related, automatic updates from MS once rebooted my machine while I slept. Flash crash my screencapture software snagit went berserk, but NT and IB were fine. This is not high frequency and every position has a stop @ broker. For me the main risk is missing a new signal .
 
I've a day job so I run unattended during the day (no backup, no 2nd computer checking my first one). However unattended may need some further clarification. There are very view days when I have no connectivity, so usually I get blackberry confirmations of trades as well as account balance updates every other hour. To be quite frank unless I've a serious programming bug my systems run fairly well and don't need manual intervention. So far I've had one major bug in over three years where the systems "went wild" and bought until the buying power was @ 0. Other than that I've had a handful of times where my broker (IB) had strange responses but that's less than 0.5% of my trades. And while those days are painful, they don't jeopardize my total account value significantly (e.g. make it drop 10 % within a day). I check my systems and account every night to make sure nothing "strange" has happened. I manually kick them off in the morning, so it's 24x1 unattended or better 6.5x1, not 24x5. Even if a day goes south, the systems stay within their boundaries. The biggest losing day in my trading (may 6th/ aka flash crash) I was actually working from home and could have interfered, however I didn't (long story but monitoring in my case doesn't really add safety to my systems). So I think this all depends on the leverage you use, your trading strategy, your timeframe, instruments ..... like I said, I feel very comfortable with my systems. Last week I was on an international trip (europe -> us) and didn't have market access all day and still didn't sweat it, knowing that everything stays within the defined limits. Now that being said, I also don't trade millions worth of $$$, so my trading is options based and focuses on 1-2 month average hold time. hope that helps.

you can follow my trading @
http://www.elitetrader.com/vb/showthread.php?s=&threadid=200655
 
Quote from Engine99:

so my trading is options based and focuses on 1-2 month average hold time. hope that helps.
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hmm, interesting. May I ask others who trade unattended automated what is the frequency of your trading?

I traded stock index futures on a day trade basis, generating 2-3 RT trades a day. Swing traded 4 stocks, holding period of 1-3 days, the swing trading would generate about a dozen RT trades a week.

Over the three year period, I had to manually fix/resolve issues about 1-3 times a month.
 
I truly believe that the only way to make money in the market is by using automated traders.

In today's market, individual daytraders are competing with large organizations, like Goldman Sachs, who are able to sway the market BECAUSE they use automated traders. There are too many factors all happening at once in the market for one daytrader to even be able to compete against companies like that.

There's multiple companies out there that claim their product is fully automated, but I've found that most of them are limited to charting tools and backtesters, or that they lack enough indicators. I also don't have any programming experience, so TradeStation isn't really for me.

I've been using CoolTrade. I downloaded a strategy right off the website (but you can put your own strategy too) and it's been really profitable.

To address your risk concern, trading WITHOUT automated traders is the real risk. If you do that then you're essentially guessing and hoping that you're stock will magically go up so you can sell at a profit. But in reality, the market isn't a straight line, it is a zig-zag consisting of "up" and "down" days. Automated traders analyze thousands of factors and they profit simply by buying and selling with the stock reaches every "low peak" and every "high peak," buying when a stock is down, and selling when a stock goes up. It's the same age-old saying: buy low, sell high. All that automated traders do is provide you the speed and the tools to do it. It's actually not that risky at all.

I was concerned about the risk factor of auto traders too when I first started, but I ran CoolTrade's simulator (the present market with play money) and just watched and understood what auto traders do. When I felt comfortable with the software i began running it in "Real-Time Mode."
 
While GS never runs their models unattended... retail people dream of unattended automated trading.

Funny.

Quote from Josette:

I truly believe that the only way to make money in the market is by using automated traders.

In today's market, individual daytraders are competing with large organizations, like Goldman Sachs, who are able to sway the market BECAUSE they use automated traders. There are too many factors all happening at once in the market for one daytrader to even be able to compete against companies like that.

There's multiple companies out there that claim their product is fully automated, but I've found that most of them are limited to charting tools and backtesters, or that they lack enough indicators. I also don't have any programming experience, so TradeStation isn't really for me.

I've been using CoolTrade. I downloaded a strategy right off the website (but you can put your own strategy too) and it's been really profitable.

To address your risk concern, trading WITHOUT automated traders is the real risk. If you do that then you're essentially guessing and hoping that you're stock will magically go up so you can sell at a profit. But in reality, the market isn't a straight line, it is a zig-zag consisting of "up" and "down" days. Automated traders analyze thousands of factors and they profit simply by buying and selling with the stock reaches every "low peak" and every "high peak," buying when a stock is down, and selling when a stock goes up. It's the same age-old saying: buy low, sell high. All that automated traders do is provide you the speed and the tools to do it. It's actually not that risky at all.

I was concerned about the risk factor of auto traders too when I first started, but I ran CoolTrade's simulator (the present market with play money) and just watched and understood what auto traders do. When I felt comfortable with the software i began running it in "Real-Time Mode."
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Quote from 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.
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I run a couple of automated trading systems through NinjaTrader 6.5. I trade once per day per market and I trade the US, Hong Kong, and German markets. I wish I could fully automate it, because it would mean that I wouldn't have to rush home from work, or I could get more than 5 hrs sleep during the week. Also because me messing around with the system while watching it seriously has lost me a lot of money, when if I had just let it be I would have been pretty profitable YTD, but instead I have a bad loss (but that's beside the point).

I can't run fully automated, even though I want to, because I've run into too many unexpected issues to the point where I'm not fully comfortable leaving it to run alone. My routine is to set up the DAX and US markets trade at night in case I accidentally fall asleep. The next morning, if I can wake up before the markets open, then I will shut off the DAX trade, and before I go to work, I will shut off the US trade and set up the Hong Kong market trade. Then, after work I will rush home and monitor the HK trade, and the whole cycle starts again.

My trade is such that once it gets triggered, it will set a stop loss and a target. However, twice since January, it has not set the stop and target, and I don't understand how that's possible. Both times I got lucky and closed out the trade with a profit, but it was a close call.

2 weeks ago, in the middle of the night, while in the middle of a DAX trade, my home internet connection dropped for what turned out to be the rest of the night until the US markets opened. Ninjatrader holds its OCO orders locally and doesn't send it to the exchange, which meant that my stop sell order and my target sell orders were active and wouldn't get cancelled. I was able to get connected via a wireless Internet card and close out my positions, but had I been asleep I would have lost about $3000 on 1 contract because I had an open order to essentially short.

As well, today, zenfire died, so I wasn't able to connect up and place orders.

Then, there are the unexpected bugs that you can only seem to recreate in real life, not through simulations. When my trade retraces back to my trigger, I used to use buy stops to ensure that I would always get filled, but the last 3 weeks I've moved to using buy limit orders because the slippage was so bad with IB. I put in place some limits so that if the markets moved past me by a certain amount, I would cancel the trade. However, I recently moved up to 2 contracts instead of 1, and today I experienced the situation where it would fill 1 contract, but not 2. What would happen if I had 1 contract and I tried to cancel the order? I need to add some more parameters to handle this situation as well.

Little problems like these are the reasons why I don't feel comfortable. I would really love to be able to fully automate it, but it would take a lot more code to double check my stuff. As someone else pointed out, I would need a second process to monitor this process, etc, etc.
 
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