Auto trading questions

After devising a couple of hourly mechanical strategies on the EUR/USD pair, I am now planning to start autotrading them on Multicharts, using Interactive Brokers as the broker (and TS as the data feed).

I have a few questions to point me to the right direction, I would really appreciate anyone's feedback on these. I'd also love to hear about any other issues that you believe are important for a beginner auto-trader to be aware of.


1. As regards synchronous and asynchronous mode in autotrading in Multicharts, is there a commonly acceptable best mode? I did go through the wiki and the relevant forum posts, but I have to admit I am not yet quite clear on what it best for me.


2. My strategies use the built-in functions of powerlanguage of 'setprofittarget', 'setstoploss' etc. Are these functions reliable for autotrading?


3. When a position is opened, I see (when doing my tests) that the stop loss and profit target orders also seem to be sent to IB at the same time. Is this observation correct, or are these orders held locally within MC and sent when the conditions are fulfilled? If indeed the exit orders are sent to the broker upon entry, does this mean that if I lose internet connection at any point while having an open position, this will not affect the exit orders, since they are already at the broker's servers?


4. For interfacing the broker (IB) with Multicharts, I have to choose between using the Interactive Brokers gateway, or the Interactive Brokers TWS. As I understand, the TWS, by design, times out once or twice a day, so a lot of people choose the gateway. Is this correct? Are there some other pros/cons between using either?


5. I am wondering which data feed I should be using on my real-time chart that auto-trades. The TS feed seems more reliable than Interactive Brokers (which seems to have some real-time spikes that are way off - isn't that very strange and worrying for a supposedly good broker?). On the other hand, I am wondering if, for the sake of consistency, it's better to use the broker's feed.


6. Any suggestions on how an auto-trade system should be monitored? My main concerns are to make sure that:
a. The system opens and closes the correct position sizes, at the correct times
b. The system has continuous internet connection


Thank you very much for any feedback
Andreas

1. As regards synchronous and asynchronous mode in autotrading in Multicharts, is there a commonly acceptable best mode? I did go through the wiki and the relevant forum posts, but I have to admit I am not yet quite clear on what it best for me.

Hello Andreas,

It depends on how your trading strategy is designed and your trading style. Are you going to trade multiple separate strategies on the same symbol? Do you want your strategy to continue trading current backtesting position you have on the chart or should it manage the current open position you have at broker?

2. My strategies use the built-in functions of powerlanguage of 'setprofittarget', 'setstoploss' etc. Are these functions reliable for autotrading?

They work ok, as they are designed to work. Have you encountered any particular issue?

3. When a position is opened, I see (when doing my tests) that the stop loss and profit target orders also seem to be sent to IB at the same time. Is this observation correct, or are these orders held locally within MC and sent when the conditions are fulfilled?

This observation is correct. The orders are not kept on MultiCharts side. Depending on the settings they are sent either to the broker or directly to the exchange.

If indeed the exit orders are sent to the broker upon entry, does this mean that if I lose internet connection at any point while having an open position, this will not affect the exit orders, since they are already at the broker's servers?

That is correct. If you use Native OCO group then once one order is executed - the other orders in this OCO are cancelled (even when MultiCharts is not running). If OCO is emulated by MultiCharts then when MultiCharts loses conenction to the broker all orders become separate orders and overfill is possible.

4. For interfacing the broker (IB) with Multicharts, I have to choose between using the Interactive Brokers gateway, or the Interactive Brokers TWS. As I understand, the TWS, by design, times out once or twice a day, so a lot of people choose the gateway. Is this correct? Are there some other pros/cons between using either?

That is correct. There are tools to keep TWS open. You can search for it over the Internet, I believe it has been also mentioned on our forum. Here is what you can do manually to keep it open.With TWS you can monitor your orders, manually manage them. Gateway just supplies data and broker connection, uses less memory, no such GUI and functionality as TWS has.

5. I am wondering which data feed I should be using on my real-time chart that auto-trades. The TS feed seems more reliable than Interactive Brokers (which seems to have some real-time spikes that are way off - isn't that very strange and worrying for a supposedly good broker?). On the other hand, I am wondering if, for the sake of consistency, it's better to use the broker's feed.

Make sure you are using the latest version of MultiCharts (8.5 build 6850/6851or 8.7) and “Generate new tick if total volume changes” is enabled in QuoteManager->Tools->DataSources->IB->Settings in order to avoid spikes. TS and IB data can mismatch, so it is up to you to decide which one to use for realtime strategy running.

6. Any suggestions on how an auto-trade system should be monitored? My main concerns are to make sure that:
a. The system opens and closes the correct position sizes, at the correct times

Perform backtesting and run your strategy autotrading on a paper trading account to polish everything.

Henry, thanks a lot for the fast and informative reply.
I'm sure I would have to spend a few more weeks to understand by myself all of these points you mention below!

To answer your questions, I am indeed planning to use multiple strategies on the same symbol, and I would like my setup to manage the open positions at broker.

I didn't encounter any problems with MC's built-in functions, I was just checking to make sure!