Learning the platform
While I have not solved my initial frustration with the TradeStation platform, I have learned my way around the platform well enough to begin generating Strategy Performance Reports and backtesting strategies on baskets of stocks using Portfolio Maestro.
The basis for my swing trading I learned from Ken Long of Tortoise Capital Management, initially through a workshop at the Van Tharp Institute. Bill Brower of insideedge.net programmed Ken’s systems for TradeStation and I have installed the first bundle to begin my testing. Just seeing the inputs and variables Bill Brower offers for the systems has helped me understand the platform better.
There are several questions to answer in evaluating backtests. The first one for me is to decided what is the universe of stocks that I wish to test. Should I use the Dow 30? S&P 100? S&P 500? A set of ETFs? A personalized list of targets? The trading universe will be the first determinant in how many trade signals I have to take. More stocks will yield more signals, but will also likely yield more losing trades. How many different targets can I trade based upon my current account size?
The next important question to settle is how far back I should test. Until early 2018, we were in a long slow-grinding up market. If I only look at the last couple of years, the results will likely be biased by the market condition. What period of time do I need to test in order to make sure I have representation for different market conditions?
The bundle of Ken Long’s systems provided by Bill Bower offers a bet sizing algorithm and an exit plan as part of each strategy. While useful and necessary in order to have a complete system, I am interested in other options than what are included. This will likely mean I end up coding my own version of the systems to meet my specifications. I believe Portfolio Maestro will override the money management (bet sizing) setting from the strategy, but I’m not really happy with the options it offers either. This may be one of the more difficult items for me to sort out.
The exit strategy seems to be a little easier to work around. There is an initial stop that becomes a trailing stop a a multiple of the initial risk. By setting this multiple to a large number, I can create the space for some other exit strategy to step in and exit the trade in a way other than that specified by the original Ken Long strategy. I have already identified and coded a second exit based upon the PSAR that I will be testing.
I have already run over 100 tests with the different systems, using different groups of stocks and assorted options for the strategies. I am generally pleased with what I am seeing, but I will need to dig a little further into the results and do some other calculations within Excel with the trades before I have anything definitive. I still have a lot to learn about the platform, but each day I’m getting more comfortable with the platform and the tools I now have at my disposal to become a better trader.
After the bumps I encountered with TradeStation, I was delighted to consult with some of my colleagues today about other trading platforms and options for automation. The one that caught my eye today was MultiCharts. One of my frustrations with TradeStation was being able to find information and details on their website about how the platform works. Their “University” only references a small number of videos and didn’t seem to offer any simple text support. MultiCharts gained some immediate brownie points with me because they have a wiki with detailed instructions. They may or may not be complete – I haven’t explored them too much yet – but it’s certainly more than I spotted with TradeStation. Yes, TradeStation offers a help guide from within the platform, but I find it odd that that information is not on their website…
Another item I like about MultiCharts is that it will work with my current IB accounts. I still have some questions about how that will work since I have three accounts linked together at IB. I have downloaded the platform and expect to start my free 30-day trial soon, perhaps tomorrow. When I started using TC2000 earlier this year, I found it very intuitive. I hope MultiCharts will be as intuitive as the website makes it appear.
NinjaTrader was also mentioned as an option. I used the platform briefly several years ago, especially for its replay function. A quick scan through the NinjaTrader website shows it may still be useful for me, but the website seems geared to selling the platform first and foremost. I did discover a seemingly comprehensive help guide, so they might still be a possible contender.
Choosing a platform is much like choosing a broker. There are a multitude of brokers because there are a multitude of individual needs and expectations. As I explore these options over the next few days, I hope to become more precise about what I need from a platform and what are simply my preferences or habits in trading. Learning requires an encounter with the unknown. Only when we step outside our comfort zone do we truly realize what the boundaries look like. Looking at my trading through the lens of these three different platforms will help clarify my vision of trading and should enable me to choose one as the next step forward on my path to trading automation.
One new position was added today (on both platforms) – a second position in WYNN. Currently holding 9 positions showing a total of +1.92R
Long: AEM, CVX, INTC(2), OKTA, TLT, WYNN(2).
Last night I experienced some frustration getting started on TradeStation. I have become accustomed to entering all my orders in the evening for any trades I frame for the next day. Unless there is some box for me to check or uncheck somewhere within the TradeStation platform, that does not seem to be an option. I was able to enter the orders this morning before the market opened, but the frustration definitely moved me out of the zero-state last night. There are some other order entry options available that will expedite placing orders and some of the day-trading systems, so I’m not giving up on TradeStation yet. IB had a learning curve until I became familiar with the platform. I should be prepared for the same set of obstacles with TradeStation. The journey is not about the speed of implementation. It’s about the process and continuing to move forward.
Two new positions were added today (on both platforms). Currently holding 8 positions showing a total of +.7R
Long: AEM, CVX, INTC(2), OKTA, TLT, WYNN.
My trading win for today was downloading and getting the TradeStation platform running. I was able to attend the Tuesday webinar introduction to the platform. While I’m not sure it was the most useful webinar I have attended, I learned enough to start playing around on the platform on my own. I have downloaded a couple of their EasyLanguage books and will start figuring out how to code and backtest ideas on the platform. The platform is comprehensive, so this slow start is not just a reference to rebuilding a portfolio from yesterday, but also the amount of time it will take for me to master all that I need to learn about the TradeStation platform. All trades framed for the next month will be entered on both my current IB platform and the TradeStation one.
For the swing trades today, I added a second position in INTC. Currently holding 6 positions showing a total of +1.0R
Long: AEM, CVX, INTC(2), OKTA, WYNN.