Robo Futures Trader Process

Prorealtime Automated Trading Strategies And Training

Turn An Idea Into A Strategy

There are multiple sources of trading ideas, for algorithmic trading those that are taken forward are technical trades whereby a pattern within technical indicators has been shown to be profitable and repeatable.

EVALUATE AND UNDERSTAND THE CODING

If taking another persons code it is important to understand how it works, which indicators are used and to get to a point at which your are able to explain what it is trying to do to someone else.  By growing you knowledge of the code you will being to develop the ability to produce your own code from someone elses ideas.

BACKTEST ALGORITHMIC TRADING STRATEGIES

Backtesting is an important part of preparing an automated trading strategy, it allows for a strategy to be tested against historical data. It is also important to consider walkforward data that will use sample data from other time frames and randomised data (noise) to test the robustness of the strategy. It may look great for the last year but have performed poorly prior to this, proper back and forward testing allows such risks to be reduced. 

TESTING AGAINST MULTIPLE MARKETS AND TIMEFRAMES

A robust strategy should work in multiple markets and timeframes, otherwise it may be over optimised and not a good long term prospect. Having a portfolio of strategies that cover multiple products and time frames can also add a level of diversity that reduces risk of the overall portfolio.

LIVE TRADING IN A DEMO ACCOUNT

This is a very important step, different brokers will have varying rules regarding trailing stops, spreads, slippage and execution so for some systems the rules when dealing through your broker will be very different from those found in the back test. Setting the systems live in the demo account allows for the most accruate simulation of live trading and provides verification and confidence in a system that you are preparing to trade live. 

THE IMPORTANCE OF DIVERSIFICATION

Diversification between products and time frames allows for a portfolio to be produced with less volatility and systems cover both long term trends and capturing sharp movements such as news events. All systems will at some point have  stretch of losing tradings and over reliance on a small number of strategies increases the likelihood of losing your capital.

LIVE TRADING

Finally having conducted full testing, the systems can be taken live with capital as part of a trading systems portfolio.

MONITORING LIVE STRATEGIES

When taking systems live it is important to check that they are still producing the expected results. It may be that your system only makes a profit on 40% of trades so starting off losing money can happen but that can be the expected result. No system will make 100% of winning trades.

JOURNALING TRADES

Journaling trades is a vital part of both strategy creation and monitoring live strategies, with a portfolio of systems that are being started, revised and stopped it quickly becomes difficult to perform the necessary check to ensure that your systems are behaving as expected and are still profitable