There are hundreds of strategies and autotraders available on Ninjatrader platform.
It’s important to carefully select which one to work with to ensure your money and time are both well spent.
Here are some tips to help you make the right decision.
1. Ignore Ads and attractive performance.
You are buying a strategy to make money. When you see a strategy generates a stellar performance, you may not be able to resist your urge to make the purchase.
Company will not show you drawbacks on their frontpage. Most content you see will be about how good they are. I’m not saying they are not as good as they described, but nothing is perfect, sometimes you need to know more about the NOT so good part.
Pay attention to backtest results
I will not say the backtest is totally useless, but there will be a significant difference between backtest and real-time test results because historical trades are not matching real time trades. This is due to the fact that historical data only have the Open, High, Low, and Close prices , not intra-bar tick information.
2. Face Reality
There is no autotrader can continuously make money for you, even if there is one, will you sell it to others? The reason developers sell strategy instead of using it is simply because it’s not very profitable. Please treat an autotrader as a tool not a goose that laid the golden egg.
3. Understand the mechanism
Autotrader is a combination of orders and conditions.
Orders include: enter long and short, exit long and short, profit target and stop loss target. You also need to think about what order type (Limit, Market, Stop, StopLimit) best suits your strategy.
Conditions are where and when the orders should be sent out. It can be a indicator’s signal, a chart pattern or a specific price movement. Variety in combination results each autotrader to be different.
Before you pay, make sure you completely understand how it works.
4. Simple is good.
I saw a lot of autotraders have toolbar or panel with many buttons.
Do you know that these features are not officially supported by Ninjatrader? Why? Probably because these functions may cause some unexpected issues.
Ask yourself, do those additional functions really matter to you?
Apple beats Blckberry with just one button. Bear in mind, you are not buying a multimedia keyboard.
5. Issue you may encounter
Ninjatrader is a good platform, but its order handling is not very friendly.
The most common problem you may have is overfill, which is caused by either one of the following two conditions;
a.Both Stop Loss and Exit order are filled at the same time;
b.A reversal entry with either Stop Loss or Exit order are filled at the same time;
Reversal entry will generate an Exit order for the previous position in addition to existing Stop Loss or Exist order, overfill is resulted as any two or all of these orders filled within one second with no cancellation on each other. Sometimes too fast is not too good.
Take a look at how many people having this issue: https://www.google.ca/search?
q=overfill+site%3Ahttp%3A%2F%2Fwww.ninjatrader.com
6. Features you need
Make a checklist of all features you need, such as email notification when an order is filled, or display PnL on chart, etc. Be sure the autotrader you are buying comes with those features. Once the purchase is made, no one else can add additional features for you as the files you received are encrypted. Only the owner can modify it and most vendors do not take on custom project.
Using these tips as a filter, a lot of unqualified strategies/autotraders will be ruled out.
If you have a great trading idea in mind but can’t find any autotrader to fit, it is time for a custom built. If programming is not your expertise, I’m willing to help if I’m not occupied.
Feel free to contact me: patternsmart@gmail.com if you need any help with Ninjascript or Thinkscript.