What Brokerage Firm Would You Recommend For Automated Trading?

Discussion in 'Strategy Development' started by OrangeCat, Apr 17, 2006.

  1. To all system traders who automate their trade executions, what brokerage firm would you recommend?

    I have a strategy I developed in Tradestation 8.1 ELD and I would like to execute the orders from the brokers computers and NOT from my home computer.

    Ideally, I would like to e-mail them my protected ELD and have them run it on their computers with Tradestation.

    I have contacted Strategy Runner with the idea of having my strategy coded in C++ and running it on their servers. Although they will sign a disclosure form, it opens the code up to their developers. However, they cannot handle strategies that generate signals from data2. That is, if I trade ES (data1) and base my signals on NYSE TICK data(data2), they cannot implement the signal for the order. I discussed this issue with Orr Peles, the sales rep and he states the cost of using data from another exchange makes it difficult.

    So far I have contacted ProActive Futures, but they will need to use YOUR Tradestation platform and account to run your signals.
    Rather inconvenient if you want to use Tradestation yourself during market hours. To avoid this, their only suggestion was to code the strategy and put it on their platform . Off course, you would need to pay for the coding.

    I called Robins Trading, the firm that Larry Williams used. They have been doing this for over 10 years. They are willing to do this but I've noticed some negative comments about this broker on the Traderclub Forum in 2002. Among other things they have been accused of churning clients accounts.


    Finally, called Alaron Trading and their IB, Flash Futures. Talked with Jeff Roy, head of automated trading. He say it can be done but charges $20 per round turn.

    By the way, for my strategy I have seen commission rate of $10 to $20 per round turn.


    Suggestions for any other brokers? Can anybody share their experiences, good or bad, that are similar to what I would like to do? Do you think this is an unreliable way to execute your trading system? May be it's better to avoid a conflict of interest with your broker who may want to churn your account? So, are you're better off using something like Tradebullet and be subject to prolong power outages and surges as well as unreliable ISP?

    Thanks.
     
  2. Any helpful input would be appreciated:)
     
  3. Choad

    Choad

    My stock/option autotrade - order handler system has been running from my home every market day, using IB's TWS-API, for almost 4 years. I run it on a 5 year old Sony Vaio/XP.

    I haven't had more than a couple outages in all that time, even using shiitey satellite ISP.

    No need to run on the broker's servers if you use IB, IMHO.

    Good trading to all..
     
  4. Thanks Choad for your input!:D
     
  5. StrategyRunner

    StrategyRunner Strategy Runner, Ltd.

    Quoting you:

    "That is, if I trade ES (data1) and base my signals on NYSE TICK data(data2), they cannot implement the signal for the order"

    If you use data1 to send the signal, you can use Strategy Runner's Automation Station. This is regardless of which data (in your case, #2) you use in order to produce the signal.
    As long as the signal is sent from the ES, you can integrate it with SAS and send it to Strategy Runner's server for execution.

    Please contact support@strategyrunner.com and we will send you the proper instructions to download this software.
     
  6. JackR

    JackR

    OrangeCat:

    If the strategy is reasonably profitable I'd look at opening another account at TradeStation (if you are happy with them as a broker). If your system trades enough there should be no fees except data for only those inputs the autotrade system needs. You should be able to get a DSL line from your local telco for <$20/mo, or cable for $50 if you have DSL, a brand new dual processor pentium whatever from Dell, including monitor, for $800.

    Going outside:
    Let's assume your system trades once a week. There are 4.33 weeks per month so assume 5/mo. Alaron says $20 r/t. Attain used to charge more buts let's say any broker will give you the $20. That is $ 100/month.

    Staying home with second account:
    Cable $50. Add Account at TS - Free.. Data from TS $50. Computer over 5 years per IRS = $800/60 or $14/mo.
    (You could also expense it over the year at $67/mo but we'll go with the 5 year). TS commission (assume a futures contract) @ $5 R/T. Total = $50 + $50 + $14 + ($5 *5= $25) = $139 for 5 R/Ts
    There are 4.33 weeks per month. You'll won't hit the TS minimum so add $99 for a total of $238. This is $238/5 = $48 per R/T.

    Now double your contracts to 10/mo, the TS minimum for free platform. That is ($139+ another $25/)10 or $16 per R/T.....


    I have not added a dual feed router (DSL + cable) to provide auto switchover. The router and dual feeds benefit both your automated and discretionary trading.

    If you do go with a broker I don't see how they could churn you. They would trade automatically on the signals generated by your system. You could duplicate things at home using backfill data from TS if things did not look right.

    Jack
     
  7. what if your strategy is much faster, say round turns every five minutes to 30 minutes looking to take out just under a point in 5 mins or so to several over a half hour.
     
  8. qtip

    qtip

    Try Lime Brokerage...

    There website doesn't have too much information, however I am sure they can handle what you need.
     
  9. what kind of slippage is reasonable to expect in es and er2 trading?
     
  10. #10     Jun 15, 2006