An automated day trading strategy: for open discussion

Discussion in 'Automated Trading' started by tommaso, Jul 5, 2009.

  1. tommaso

    tommaso

    "hedging" may be an appropriate name, as it conveys the idea of using one account to "protect" the other one, while attempting to pursue a profit...

    A quick test on some past days on a few stocks/etfs "seems" to indicate that the "go Long signal" is more "reliable".

    In other words, an intraday price change (like a 1% drop) and a (significant) reversal seems more reliable if used to make a long entry.
    Besides, a much "stronger" signal seems needed for a short entry. (or vice versa in case of ultrashort etfs)

    That is, there is no indication of any "simmetry".

    Tommaso


    PS

    Some of you have pointed out some advantages of using a pair of accounts.

    Another way I have seen using this device by (profitable) users of mine, in several customized variants, is along the following idea.

    ---
    On one account you always either enter long or close.
    On the other account you always either enter short or close.
    Set up a strangle (before starting autotrading) and use appropriate position management.
    ---

    These strategies (do not know how you call them) are generally not based on "signals" and therefore their robustness can be determined with high precision.

    This is a powerful idea, if well implemented. Generates hundreds or thousands
    dollars commission per day (to IB heart's content) but also large profits. (Clearly, requires large capital.)

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    #21     Jul 14, 2009