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MicroTrends Algorithmic Trading Systems Methodology Overview

Excuse my analogies:   I feel it’s true it’s a little bit like “The Sword in the Stone” when it comes to traders and systems 🙂  but the difference is many traders can make it work not just 1 trader, yet few will ever succeed even with a robot that even won each month for a 2 year period- they will soon reach for the plug and switch it off likely taking all the losers missing all the winners and jumping to another system to do the same thing…as they don’t have the confidence or required insight of the system expected behavior based on hands on in depth experience & statistical evidence that will enable them to stick with a system during a draw down period – why is that? Essentially as they need to have done the journey…with hands on experience, back-test, walk through every trade, over years of data, watched in real-time and seen it in multiple market conditions, with their own eyes over a longer enough period of time to really program their mind to create empirically based belief with the statistical evidence and caveats/suitability, consecutive winners, losers, win ratio, risk reward avg, expectancy , max draw down to name a few. Most trader 99.9% will not follow a valid trading approach or plan as  their financial desires are emotions are in control, they are fixated like a slot machine gambler going in circles of recency bias – jumping from 1 epiphany to the next fear and greed their master.

There is no short cut to this.  Fully Automated algorithmic futures trading is an in depth medium term process, Imagine the fallacy you can jump in the back of a driver-less car and let it go all out without panicking and hitting the brake or emergency exit and going back to safety-  if you took time and got to know all its caveats it may be tenable..and that is the journey.

So with that in all our systems are 100% free for demo/sim trading and there is no hidden catch take as long as you want – for those who want in depth support, models settings assistance to suit their trade plan or to live trade: lifetime licenses &  trade system lease plans offer a way to accelerate the trading/ knowledge learning curve and advice on an approach, only the elite will make it or those want to pay the entry price for a backseat on it.

For traders who want to accelerate their trading – N.B. for Gold Membership Fully Auto Trader Lease Plan & Platinum Membership Pro Auto Trader Lease Plan – see MicroTrends Trading System Lease Plans we provide real-time tests and stats and templates ongoing so that can accelerate the process, we simply copy an xls read out to Google Drive/Drop Box shared folders and we can work on templates and supply solutions so we take a “pit crew stance” for testing & assistance etc.

So here is a peek at some of the methods I use for algorithmic trading that can be used by you. So at least if anything a systematic approach can be learned  if no systems are suitable here from MicroTrends for you 🙂

Trading Truth: Its not the system that is most important or at fault

There is no need to go in circles and lose track and keep information in your brain, instead slow down a bit and get a routine and approach that allows any system any platform to be listed, tested, measured, controlled, understood and cataloged and this allows a faster rate of progress and  more importantly provides a sustainable viable professional approach, the approach is the key to success not a system, the system can be 1 of many…which can be accepted and rejected in all phases of testing & trading.

MicroTrends Algorithmic Trading Systems are best used with simple systematic trading Methodologies which enforce a trader to use statistical evidence not emotions and recency bias/ fear and greed to guide trading. Using a 3 Tiered Approach for fully Auto trading and semi auto trading, with mixture of hypothetical, sim and real-time live trading.

He who doesn’t buy historical data is lost

You must Procure Reputable Historical Data: https://www.tickdata.com/product/historical-futures-data/ if you are to stand any chance of avoiding curve fitting and recency bias.  Instrument selection is a key factor, liquidity, range, trending frequency etc ad you are advised to study instruments on daily basis and intra-day for this information.

Algorithmic Trading 3 Tier approach 

The hands on routine of this 3 tier process and understanding of all the caveats will provide the real deal trading knowledge if its recorded – providing the combined trading ability of the user and combination of instruments/ dataseries/ system/s and parameter sets.

1. System back tests:  –  Sept 2009 onwards to Sept 2016 etc  – 5 years of tick data
2. system out of sample –   Oct 2016 1 year or as much as you can 90 days Lookback or 1 year of tick data
3. Real time production  –  3months to 6 months  realtime trading on segregated Sim accounts

Excel and Control systems

Excel is the tool of choice for trading professionals and even much trading is executed via Excel directly – but also for statistics and data/ analysis. keep it all in a database/excel and use statistical evidence and a scientific ambivalence and then the system are almost unimportant, the approach is the key 80% of it… – avoid jumping from 1 system to another with no data/no history/no records all in the mind.. all lost in an instant when you pull the lever and gamble the next lot – take time to learn in depth over the correct amount of time to subconsciously embed the real system and proof to allow you to stick with a trading system in drawdown or avoid drawdowns with realtime interactive controls with confidence based on facts not guess work based on recency bias.

The Screenshots show the NinjaTrader Algorithmic Trading System control structure and how daily stats are exported from NinjaTrader Control Center to weekly folders and then collated to the Weekly XLS View.

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Excel Tools

Tools to help  these are found in that above screenshots in the “folder 04”
https://s3.amazonaws.com/microtrends/docs/MicroTrends+NinjaTrader+Approaches+and+Tools+for+Automated+Trading+success.pdf

Resources
This is an attempt to relay how i manage it:-  statistical evidence fact driven trading:
https://blog.microtrends.co/2017/08/algorithmic-trading-futures-forex-stocks-etfs-cfds-edge-ninjatrader/

GET STARTED with MTDS7

Robots: Still today I use this and I recommend the MTDS7 SDK USAR – people sell less able versions of it selling for $4K+ the point is it can work and it offers  the easiest learning path.

http://microtrends.co/ninjatrader-downloads#MTDS
https://microtrends.zendesk.com/hc/en-us/articles/217164386-MTDS7-New-User-Orientation
https://s3.amazonaws.com/microtrends/docs/MTDS7+SDK+USAR+Trader+Modes.pdf

 

 

 

 

 

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Disclaimer Trading & investment carry a high level of risk & MicroTrends® does not make any recommendations for buying or selling any financial instruments. We do not offer trading or investment advice. We are a software company & we only offer educational information on ways to use our sophisticated MicroTrends trading tools. It is up to our customers & other readers to make their own trading & investment decisions or to consult with a registered investment advisor.

Risk Disclosure Futures, CFDs & forex trading contains substantial risk & is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading & only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. Please read the full risk disclosure here.

Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results & the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, & no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results & all which can adversely affect trading results.

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