ALGORITHMIC TRADING SYSTEM DESIGN & IMPLEMENTATION
Trading futures and options involve a substantial risk of loss and are not suitable for all investors.
AlgorithmicTrading.net is a third-party trading system developer specializing in automated trading systems, algorithmic trading strategies, trading algorithm design, and quantitative trading analysis. We offer three fully automated black-box trading systems that allows both retail and professional investors to take advantage of market inefficiencies by placing high-probability trades while minimizing risk.
ALGORITHMIC TRADING SYSTEMS OFFERED
Our Algorithmic Trading Strategies trade futures and daily option spreads, on the S&P Emini (ES). They are 100% automated trading systems that can be auto-executed by multiple NFA Registered Brokers under a Letter of Direction. The simplest way to determine which system is for you, is determine the amount of risk capital you have, and then pair that with the largest unit size you can. For example, if you have $120,000 available, then you should consider trading 2 units on the Paladin (instead of 6 on Geronimo). If you have $40,000 available, then trading 1 unit on Noble is preferable to trading 2 units on Geronimo. For those of you with account size of $20,000 or less, you would trade Geronimo with 1 unit.
CFTC RULE 4.41: Results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results shown in an actual performance record, these results do not represent actual trading. Also, because these trades have not actually been executed, these results may have under-or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown. Trading futures involves substantial risk of loss and is not appropriate for all investors.
OPTIONS DISCLAIMER: Back testing an options algorithm poses many challenges due to the unknown estimates for premium collected. Depending on (among other things) market volatility, the premium collected when selling an option can vary greatly. In general, the higher the volatility, the more premium we might expect to collect. In addition, the daily options were not available to trade for the entire back-tested period. In order to provide our customers with the most accurate back-tested performance results that we can, we have created a look-up-table to model the profit/loss for past options trade. Please note, these estimates have significant limitations and the corresponding reports which use these estimates should be considered to be much less than perfect. All back-testing has limitations, however back-tested options algorithms have even more in our opinion due to the potential inaccuracies used in determining premium collected estimates.
ACCESS CLIENT ONLY TRADE REVIEW VIDEOS
As a customer utilizing one of our Trading Systems, you will receive access to our periodic trade review videos. The following video is an example, providing a recap of all trades placed between 3/19/2022 – 3/25/2022.
BEGIN AUTO-TRADING TODAY
Each of our trading systems trades multiple uncorrelated strategies. Here is a play list showing some of the different trades we have taken. These are the individual strategies that are traded within a trading system such as Geronimo, Noble or Paladin.
Multiple Types of Trading Strategies Are Used in Our Automated Trading Software
Each trading system (Geronimo, Noble & Paladin) utilizes a different set of trading algorithms. These different strategies can take long/short day trades, swing trades and option spread trades that can last 1-2 days. Each of the individual trading strategies is listed below, along with a brief description of it and what Trading Systems (Geronimo, Noble and/or Paladin) use it.
Options Day Trading Algorithm
The Options Day Trading Strategy is one of the most advanced algorithms developed at AlgorithmicTrading.net. This algorithm uses a proprietary walk-forward analysis, that will analyze the current day and compare it to every single other day in the back-test. At that point, it will decide if the market will close higher or lower than the current price, and if a certain threshold is met, it will sell a 20-25 point put spread, that will expire the same day (making this a day trade). It will hold for the remainder of the day.
This algorithm has a contained risk on each spread it sells, and assuming the market goes higher, stays the same or even sells off some, it can still be profitable.
This trading algorithm is used in the Noble & Paladin Trading Systems. In the Noble Trading System, it will take the first 2 generated trades, while in Paladin it will take the first 8 trades generated.
Geronimo Options Trading Algorithm
The Geronimo Options Trading Strategy places directional trades on the Emini S&P Futures, taking advantage of market conditions that suggest a short-term move higher. When the algorithm generates a trade signal, it will Sell an At-The-Money put with the nearest expiration (Monday, Wednesday, or Friday), usually collecting between 7-12 points of premium ($350-$600). It will also buy a put that is 35 points out of the money. This creates a 35 point Bullish Put Spread where our maximum loss is defined as the spread width minus the premium collected.
This trading algorithm is used in the Geronimo Trading System.
Breakout Day Trading Algorithm
The Breakout Day Trading Strategy places day trades on the Emini-S&P Futures when the market shows strength in the morning. It utilizes a very tight stop while also trying to maximize the gains seen on winning trades.
Here’s a video recording of a day trade short that triggered on 13 May 2022. This trade resulted in a gain of approximately 15.3%. Just remember, past performance is not indicative of future performance.
This trading algorithm is used in the Geronimo, Noble & Paladin Trading Systems. It is also used in our legacy Phoenix V2 Trading System.
Day Trade Short Algorithm
The Short Day Trading Strategy places day trades on the Emini S&P Futures when the market shows weakness in the morning (prefers a large gap down).
Here’s a video recording of a day trade short that triggered on 18 May 2022. This trade resulted in a gain of approximately 16.6%. Just remember, past performance is not indicative of future performance.
This trading algorithm is used in the Geronimo Trading System. It is also used in our legacy Phoenix V2 Trading System.
Emerald Day Trading Algorithm
The Emerald Day Trading Strategy places both Long and Short day trades on the Emini-S&P Futures at various times throughout the day. It utilizes a larger “crash” stop and can hold the entire day or exit early based on the predictive exit logic. This trading system keys off of two different market states: Strong Up & Strong Down.
This trading algorithm is used in the Noble & Paladin Trading Systems.
Bull Fire ES Trading Algorithm
The Bull-Fire ES Trading Strategy places long trades on the Emini-S&P Futures as equity markets are closing. It utilizes a larger “crash” stop during the overnight session and will either continue holding overnight (creating a swing trade) or exit the same day if a certain profit target is hit.
This trading algorithm is used in the Paladin Trading Systems as well as in our legacy Phoenix V2 Trading System.
Are Machines Really Taking Over The Markets?
It depends on who you ask, but recent articles and investment letters put out by top rated brokers such as Goldman Sachs seem to suggest that machines and trading algorithms are in fact taking over. Large Hedge Funds such as Blackrock have recently begun investing heavily in Stock Picking Strategies which are driven by Algos. Have you considered deploying an Algorithmic Trading System to take advantage of this new trend? You don’t have to invest in a Hedge Fund, Family Office or Commodity Trading Pool to take advantage of this change in investment styles. You can actually deploy an Algorithmic Trading Solution through an NFA Registered Broker, utilizing one of our Trading Algorithms.
Percentage of Trades Placed by Automated Trading Systems
According to MacGregor, as of 2014 more than 75 percent of the stock shares traded on United States exchanges (including the New York Stock Exchange and NASDAQ) originate from automated trading system orders.
Percentage of Trading Considered to be Traditional Stock Picking
The Basics of Algorithmic Trading
Algorithmic Trading, also known as Quant Trading is a trading style which utilizes market prediction algorithms in order to find potential trades. There are various sub categories of quantitative trading to include High Frequency Trading (HFT), Statistical Arbitrage and Market Prediction Analysis. At AlgorithmicTrading.net, we focus on developing automated trading systems that place swing, day and options trades in order to take advantage of various market inefficiencies.
We are currently offering three Futures & Options Trading Systems which trade the S&P Emini (ES) futures along with same day expiring options on the ES.
Algorithmic Trading Example
Ready To Join The Automated/Algorithmic Trading Revolution?
Covering the Essentials of Automated Trading System Design
VERY HIGH AVERAGE GAIN PER MONTH
Our black-box trading systems are fully automated, designed to help remove the emotions from trading. In the hypothetical account trading Paladin, we were able to generate 8.65% per month, while Noble generated 5.59% and Geronimo 4.75% on average **.
MULTIPLE TRADING ALGORITHMS WORKING TOGETHER
Our quant trading methodology has us employing multiple algo trading strategies in order to better diversify your auto trading account. Learn more by visiting our trading strategies design methodology page. As an example, Paladin is trading 12 strategies at once, while Noble is trading 5 and Geronimo 3.
TRADES DURING BULL & BEAR MARKETS
In our opinion, the key to developing an algorithmic trading system that actually works is to account for multiple market conditions. At any time, the market could transition from a bull to a bear market. By taking a market direction agnostic position we are attempting to outperform in both Bull & Bear market conditions. This is accomplished by taking both Long and Short positions on the Eminis.
FULLY AUTOMATED TRADING SYSTEM
You can auto trade our algorithmic trading systems using an auto-execution broker (with best-efforts). We have multiple brokers for you to choose from. Remove emotional based decisions from your trading by using our automated trading system. Follow along in real time on your smart phone.
FOLLOW ALONG IN REAL TIME
Track the daily progress of our quantitative trading algorithms with the OEC broker app. You will also receive daily statements from the NFA Registered clearing firm.
EMPHASIS ON RISK MANAGEMENT
Our Automated Trading Systems will place directional Put Spread trades and both Long & Short day trades. These 100% Quantitative Strategies are based purely on technical indicators and pattern recognition algorithms. Overnight risk is minimized since the Put Spreads have a defined risk and day trades will not hold overnight. The Paladin trading system can hold overnight, however it uses a stop for added protection. Just remember, trading futures & options does involve a substantial risk of loss and is not appropriate for all investors.
**CFTC RULE 4.41: Results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results shown in an actual performance record, these results do not represent actual trading. Also, because these trades have not actually been executed, these results may have under-or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs, in general, are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown. Trading futures involves a substantial risk of loss and is not appropriate for all investors.
What Separates Algorithmic Trading From Other Technical Trading Techniques?
These days, it seems like everyone has an opinion on Technical Trading techniques. Head & Shoulders patterns, MACD Bullish Crosses, VWAP Divergences, the list goes on and on. In these video blogs, our lead design engineer analyzes a few examples of trading strategies found online. He takes their Trading Tips, codes it up and runs a simple back-test to see how effective they really are. After analyzing their initial results, he optimizes the code to see if a quantitative approach to trading can improve the initial findings. If you are new to algorithmic trading, these video blogs will be quite interesting. Our designer utilizes finite state machines to code up these basic trading tips. How does Algorithmic Trading differ from traditional technical trading? Simply put, Algorithmic Trading requires precision and gives a window into an algorithms potential based on back-testing which does have limitations.
Looking For Free Algorithmic Trading Tutorial & How To Videos?
Watch multiple educational video presentations by our lead designer on algorithmic trading to include a video covering our Quant Trading Design Methodology and an Algorithmic Trading Tutorial. These trading strategy videos provide algorithmic trading coding examples and introduce you to our approach of trading the markets using quantitative analysis. In these videos you will see many reasons why automated trading is taking off to include helping to remove your emotions from trading. Visit our Educational Trading Videos page to see a full list of educational media.
Start Using One Of Our Automated Trading Systems Today
Multiple Automated Trade Execution Options Are Available
Our trading algorithms can be auto-executed with best-efforts under a Letter of Direction (LOD) using one of the following NFA registered auto-execution brokers.
Capital Trading Group is an NFA registered broker who can auto-execute our algorithms with best efforts. They are part of our newest addition of supported brokers and are able to support customers worldwide (including Canadian).