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  • #2634

    stalflare
    Teilnehmer

    Google Translate works wonders with German, but sometimes the translations are terrible, so I am starting an english post too about the automatic trading idea that Chris launched.

    I believe that the first step to decide is the “system” that the bot has to follow, i.e. which are the parameters that we want to look, both in company fundamentals, greeks and volatility.

    Chris mentioned in the post that the bot doesn’t have to do “high speed trades” like other automated systems do, I tend to agree with this point of view.

    Ideally I would like a system that checks the companies first, then gets into checking the option chains. This is how I trade at least.
    We can create a shortlist of the “worthy companies” (maybe each user can have its own, or we keep a communal one), and then the system can check the option chains, using greeks and parameters that we all “like” (I use MACD and RSI and BB to evaluate some put plays for example).

    My feeling is that we need to define which companies we want to target first, then it might be easier to come up with a strategy on the options.

    #2637

    Chri
    Keymaster

    Hey Stal,

    Agree with you in most things.
    I think we need the data from the option chain, using the greeks and pull the trigger through the indicators. also the fundamentals should be checked through the system. I like the idea of such a automation.
    But i think we should do this in 2 steps.
    At first we have to check if the data from option chain and so on can be implemented in the system. We need this for every strategy we want to use.

    At the next step i would start with a little easier strategy, maybe on one underlying.
    in the next step, if everything works fine, we could make the strategy as you described.

    that would be my suggestion.

    best regards
    Chri

    • Diese Antwort wurde geändert vor 1 Jahr, 11 Monate von  Chri.
    #2640

    stalflare
    Teilnehmer

    Makes sense… You want to test the trading part, I didn’t think about it actually! :)

    First of all we should decide if the bot needs to trade puts, calls or only one of them. I think that it might be easier to start with puts first, as normally they are the “entrance” for a trade.

    Maybe at first it would be good to trade put spread to lower capital requirements and potential losses. The strategy would be NOT to be assigned of course. We should chose an “easy underlying”, with weeklies, I’d suggest something like MO, DIS or IBM. There is not much volatility at the moment so premiums are really low, but they are “good classic companies” on which I’d take assignment if that is the case…

    how to decide the rest it’s a bit harder for me as I would evaluate different parameters, but we could stick to a -0.2 delta (or less) and a 50% profit closing rule. Assignment if between strikes, if lower than the long put you take the loss and no stock.

    Or did you have other ideas for it?

    #2644

    paramedic1978
    Teilnehmer

    Hi Stal,

    I’m Swen, the creator of the initial thread about the topic.
    Chri and me will start to build up that project.

    Thanks for your idea. As Chris already wrote yesterday, we will create
    a prototype first with a very simple strategy. Your suggestion could
    be the base for a test-strategy using weeklies. I will discuss that with Chri.

    According the generating of order-signals (based on indcators or anything),
    we probably will not force anything there.
    The reason for that decision is, we have some webpages out there, that can be used for that features.
    For an example, you can see //www.stockfetcher.com.
    There you can code any filter for stock-screening. I think, the best plan would be,
    that a user creates an account there, set his filter-rules and then the results
    are the triggers for our optionstrading-autobot ;-)
    They have many preset already, a huge community helping each other.

    Of course, we could give support also at a later time. But at the moment, our main focus
    will be in creating the prototype and then we will go further stocks

    Please feel free, to write any new idea or suggestion here.

    Best regards,
    Swen

    • Diese Antwort wurde geändert vor 1 Jahr, 11 Monate von  paramedic1978.
    #2646

    stalflare
    Teilnehmer

    Ciao Swen,

    Wow I didn’t know this site, must check it in depth because it looks pretty cool! :) Ok I agree the stock screening decisions can happen “later”, so the real focus is on the trading system now, did you have already something in mind?
    So that I know where to give my contribution :)

    ciaociao
    Stal

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