Quote from Epic:
I realize this is a slightly old thread, but this topic has affected my operation a lot lately and rather than start a new thread I thought I would share my experiences and opinions on this one.
It seemed like just the point that the most correct answer started coming out of this thread, everyone stopped posting. Tenthousandmen and Equalizer just started to touch on it, and I was waiting for more discussion and then it stopped.
I tried for a long time to discover an off-the-shelf analysis/automation program that would both do the numerical/stat analysis and then allow me to develop trading signals and automated triggers based on the results. In the end, there was no such program, even for $$$$. The retail programs really just provided tools to backtest the same types of strats that everyone loses money with. Like Tenthousandmen suggested, these programs are incapable of developing an automated system better than discretionary.
In the end, I discovered the real solution is something like the following.
- SQL server (or cheap/free variant) for flat form data storage/retrieval
- MatLab if numerical in nature, or R/S-Plus if more stats based, for data processing, analysis, and presentation.
- Proprietary app for indicators/alerts/triggers, in my case C# based but can be C++ or Java too.
- X-Trader, T4, or Ninja for direct access automated trade execution. I prefer X-Trader (or T4 for less expense), but I'm not as familiar with Ninja.
Basically, no retail software is going to have a packaged analysis platform that will provide an edge in trading. Every Joe out there is running MAs, bands, channels, S&R, Stochs, with these retail apps. There is no edge there. If you want an edge you must be more creative and determined than that, and this means using tools without built in boundaries. Any app offering built-in scanners and analysis packs is imposing the exact boundaries that you must avoid.
Good post and apparently I agree with everything you said
IMO, multicharts is a good platform to start basic strategy work. Other good starter level tool is excel. Tradingblox is another good platform. Once you start to push the boundaries of these platforms, you graduate to Matlab. IMO, Bloomberg is a very good tool for real time data + news feed + analytics. But Bloomberg is not really suitable for strategy development. Does anyone want to contest this point ??!!
The above approach as Epic has mentioned is not feasible for every retail trader. Some retail traders will want to move to next level after Multicharts for strategy development purposes - without getting their custom software + database + order execution built up. For example, they might just want a better backtesting platform than Multicharts. Currently, apparent limitations of MC are:
1) No pairs trading, no baskets, no spreading capabilities
2) No vol specific analysis, vol trading capabilities
3) No order fill, no market making capabilities.
So, as a trader evolves, he needs a tool that will serve this purpose. So, my question is following:
Consider a successful retail trader (call him Mr. X) developing systems in Multicharts and trading them.
1) What is his next step? More professional software like RTS or ORC or some other software?
2) How much difference (qualitative, quantitative) would it make to the strategy development process for a retail trader if he does decide to spend 10k or more to get a professional development software license?
3) What are the other options similar to RTS/ORC out there?
Let us answer above just from the point of backtesting capabilities. We will assume if some strategy proves profitable in backtesting, Mr. X can get done custom programming for automatic order handling.
