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.

While each of these trading strategies can be traded stand-alone, they are best traded in a  broader collection of trading algorithms – as seen in one of our Automated Trading Systems such as Geronimo, Noble or Paladin.

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.

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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.

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Percentage of Trading Considered to be Traditional Stock Picking

Quantitative investing based on computer formulas and trading by machines directly are leaving the traditional stock picker in the dust and now dominating the equity markets, according to a new report from JPMorgan.

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 System

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

Don’t miss out. Join those already trading with AlgorithmicTrading.net. Get started today with one of our algorithmic trading packages.

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.

The FOX Group is an independent introducing brokerage firm located at the iconic Chicago Board of Trade building in the heart of the city’s financial district. They are registered with the NFA and are able to auto-execute our algorithms with best efforts.

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).

Questions?

Make sure you visit our Frequently Asked Questions page to see a list of common questions and answers. You can also click here to learn more about AlgorithmicTrading.net and it’s Lead Developer.



AlgorithmicTrading.net provides trading algorithms based on a computerized system, which is also available for use on a personal computer. All customers receive the same signals within any given algorithm package. All advice is impersonal and not tailored to any specific individual's unique situation. AlgorithmicTrading.net, and its principles, are not required to register with the NFA as a CTA and are publicly claiming this exemption. Information posted online or distributed through email has NOT been reviewed by any government agencies — this includes but is not limited to back-tested reports, statements and any other marketing materials. Carefully consider this prior to purchasing our algorithms. For more information on the exemption we are claiming, please visit the NFA website: http://www.nfa.futures.org/nfa-registration/cta/index.html. If you are in need of professional advice unique to your situation, please consult with a licensed broker/CTA.

DISCLAIMER: Commodity Futures Trading Commission Futures trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this website or on any reports. The past performance of any trading system or methodology is not necessarily indicative of future results.

Unless otherwise noted, all returns posted on this site and in our videos is considered Hypothetical Performance. HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.

With the exception of the statements posted from live accounts on Tradestation and/or Gain Capital, all results, graphs and claims made on this website and in any video blogs and/or newsletter emails are from the result of back-testing our algorithms during the dates indicated. These results are not from live accounts trading our algorithms. They are from hypothetical accounts which have limitations (see CFTC RULE 4.14 below and Hypothetical performance disclaimer above). Actual results do vary given that simulated results could under — or over — compensate the impact of certain market factors. Furthermore, our algorithms use back-testing to generate trade lists and reports which does have the benefit of hind-sight. While back-tested results might have spectacular returns, once slippage, commission and licensing fees are taken into account, actual returns will vary. Posted maximum draw downs are measured on a closing month to closing month basis. Furthermore, they are based on back-tested data (refer to limitations of back-testing below). Actual draw downs could exceed these levels when traded on live accounts.

CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under — or over — compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated 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 profit or losses similar to those shown.

Statements posted from our actual customers trading the algorithms (algos) include slippage and commission. Statements posted are not fully audited or verified and should be considered as customer testimonials. Individual results do vary. They are real statements from real people trading our algorithms on auto-pilot and as far as we know, do NOT include any discretionary trades. Tradelists posted on this site also include slippage and commission.

This strictly is for demonstration/educational purposes. AlgorithmicTrading.net does not make buy, sell or hold recommendations. Unique experiences and past performances do not guarantee future results. You should speak with your CTA or financial representative, broker dealer, or financial analyst to ensure that the software/strategy that you utilize is suitable for your investment profile before trading in a live brokerage account. All advice and/or suggestions given here are intended for running automated software in simulation mode only. Trading futures is not for everyone and does carry a high level of risk. AlgorithmicTrading.net, nor any of its principles, is NOT registered as an investment advisor. All advice given is impersonal and not tailored to any specific individual.

* Published percentage per month is based on back-tested results (see limitations on back-testing above) using the corresponding package. This includes reasonable slippage and commission. This does NOT include fees we charge for licensing the algorithms which varies based on account size. Refer to our license agreement for full risk disclosure.