Understanding Automated Trade Execution

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After developing a strategy, the next step is to have the strategy actually send the orders. MultiCharts automated trading platform can automate the trading process and seamlessly integrate with any of the supported order execution infrastructures: Broker Profiles Overview.

Implementing automated trade execution involves using a program that serves as the order execution gateway on the computer and configuring the link between MultiCharts and the gateway program. Orders, generated by a trading strategy in MultiCharts, are passed to the gateway program for execution. The gateway program is also often used to provide the data feed for MultiCharts, although it is possible and sometimes advantageous to use a different data source.

Automated trading has two primary benefits: convenience and speed. The trader can let his strategy trade automatically without having to constantly monitor the strategy and enter the orders himself. Automated trading can also send the orders much quicker. Certain strategies require orders to be sent as quickly as possible without delay. With auto trading, the trader does not have to manually type the order into the gateway. The trades are submitted automatically and the chances of delay are reduced.

In addition to the obvious advantages of convenience, automated trading makes possible the execution of high-frequency trading strategies such as arbitrage, where the acceptable response time for placing orders is too quick for manual order entries.

Both, Synchronous and Asynchronous auto trading modes are deployed in MultiCharts. These two modes are profoundly different. Select the mode that better suits the strategy on the chart. Synchronous mode makes it possible to show a position on the chart that matches the actual filled position. However there is no guarantee that the order will get filled. When using the Asynchronous mode, not every order generated on the chart is filled and the actual execution time and price can be different from the time and price shown on the chart.


Synchronous Mode for Auto Trading

The synchronous auto trading mode (SA) is a mode where entry/exit arrows are plotted on the chart only after orders have been executed at the broker.

The synchronous auto trading mode ensures avoiding discrepancies between the market position on the chart and the market position at the broker. The following conditions must be met in order for the synchronous auto trading mode to work properly:

  1. The same symbol can be traded from more than one chart but it may cause a market position conflict between the charts. For more information see Trading from Multiple Charts on One Instrument section.
  2. The market position at the broker must be 0 at the time when auto trading is launched. If it is not 0, the possition should be assigned.
  3. A trader must not trade the symbol directly through the broker's platform while trading the same symbol through MultiCharts platform.
  4. At the moment of connection loss, the broker did not send notifications about complete order filling or cancellation.


Asynchronous Mode for Auto Trading

The asynchronous auto trading mode (AA) is the mode where entry/exit arrows are plotted on the chart when the price value meets the strategy conditions.

However, order execution by the broker is not guaranteed if the conversion of unexecuted limit/stop entry orders is disabled. It may cause a market position conflict between the chart and the broker.

Enabling order conversion guarantees that an order will be filled at the broker, although the executed order price value could be different from the order price plotted on the chart.


Comparison of Synchronous and Asynchronous Mode

Mode Pro Con
Synchronous Only orders filled at the broker will be displayed on the chart with the exact same price value as at the broker. Possibility of non‑execution of entry orders at the broker such as Limit or Stop as a result of not meeting theoretical conditions set on the chart.
Asynchronous An ability to convert entry orders such as Limit or Stop to Market orders if the defined price mark was not met within indicated amount of time. Market orders ensure that the order will be filled at the broker and market position will stay the same on the chart and the broker, but they don't guarantee the price at which the order will be executed. If order converting is disabled, then orders that will be generated on the chart may never be filled at the broker. Thus, the actual position at the broker may not be the same as the position shown on the chart.