Symbol to trade, # shares and/or $ to trade, gap amount, retrace amount, profit target amount, time price is above profit target/stop loss, stop loss amount, and exchange.
Once in a trade, the user can override the program to exit using discretion (for better or worse).
So far, I've been trading small shares on AAPL, RIMM, GOOG, and GS. I traded 100 shares to start, but that cost me a lot of money working out the bugs in the program.
The program will enter on a market order once the BuyZone as we know it is entered, and create a stop limit order for exit.
I've spent a lot of time backtesting/scanning for symbols that show historical profitability using the method. A few observations:
1. Backtesting/optimizing can show a high win% just waiting for the profit target to get hit for the day, but once in a while, you get those days where you loose 10-20 days worth of profits. Having a stop loss can sometimes improve the backtested results.
2. Avoid trading a symbol if there is significant news (earnings, up/downgrades, etc.) about that stock or market sector that will disrupt the "normal" price movement. RIMM was a good example today. Downgraded, gapped down for a long entry, entered buy zone long, but wouldn't have hit my profit target.
3. I backtest/optimize using TS and their data. My prop. firm uses esignal data which usually results in different opening prices between the two. TRO also mentioned this problem on another thread the other day. So, I'm lowering the profit target number from what is shown as optimal over the past 1-3 months.
4. I enter on a market order which sometimes results in negative slippage, but my profit target price is calculated from my actual entry price. Another reason to lower the profit target amount from what was optimal historically.
Today's results were 70 shares traded, $32.50 profit before comm. A nice profit/share ratio. I'll be scaling up sloooowly and adding more symbols accordingly.
My next step is to modify one of TRO's plotting indicators to make is faster to scan for trading candidates to spread the risk across many symbols.
This strategy is capital intensive, so trading with a prop. firm and getting 20+:1 leverage helps. Lower than retail commissions helps too.
I'll post my progress and results going forward so others may learn from my ATS project.
Good trading to all.
