Understanding Automated Trade Execution
Once a strategy for automated trading is developed, backtested and optimized, the next step is to have it actually send the orders to the broker. The orders are submitted to the selected broker through the auto trading broker plugin implemented in MultiCharts. As opposed to the purely brokerage programs MultiCharts has a capability of combining the data sources that are different from the desired broker during auto trading. This is realized through the Symbol Mapping functionality and provides additional possibilities and advantages for traders. Automated trading has two primary benefits: convenience and speed. A trader can let the strategy trade automatically without having to constantly monitor the strategy and enter the orders himself (though we don’t recommend leaving the strategy unattended at all!). Automated trading also allows for sending the orders much quicker compared to manual trading. The orders are submitted automatically and the chances of delay are reduced. MultiCharts offers 2 modes of automated trading: Synchronous and Asynchronous. The modes are fundamentally different. Here’s the overview of each mode.
Synchronous Mode of Auto Trading (SA)
The synchronous auto trading mode (SA) is the mode in which the trades are only reflected on the chart after the orders have actually been executed on the broker. SA always starts trading from Flat as if there were no previous historical trading results. The strategy is not recalculated on the start of auto trading. When it will be calculated depends on the chart resolution and the Intra-Bar Order Generation (IOG) setting. If there’s an open position on the broker one can tell the strategy to continue trading from this position. See how to assign the position here.
The SA mode should work properly and the auto trading and broker positions should match if the following aspects are avoided:
- trading on one and the same instrument/broker account from other charts;
- starting the trading from a non-flat broker position;
- trading the same instrument in the broker platform at the same time;
- losing the connection to the broker at the moments of order fillings/rejections.
Asynchronous Mode of Auto Trading (AA)
The asynchronous auto trading mode (AA) is the mode in which the trades are plotted on the chart when the order generation conditions are met with no respect to the real order executions on the broker. In this aspect auto trading in AA is more like backtesting with the only difference: the orders are actually sent to the broker. The AA mode continues trading from the current backtesting position. As with the SA mode it is possible to assign the starting position for auto trading, but this cannot guarantee that the broker and strategy position mismatches won’t happen later in the course of auto trading. One should not expect the order execution prices on the chart to coincide with the order execution prices on the broker because this mode is not synchronized with the broker as is suggested by the mode's name.
Comparison of Synchronous and Asynchronous Mode
|Synchronous||Chart/broker synchronization. Only the orders that were really executed by the broker are displayed on the chart. The prices of the trades coincide with the prices in the Order and Position Tracker.||Backtesting results are wiped out from the chart.|
|Asynchronous||Allows for viewing the backtesting results. Provides access to the historical trades info with the help of PosTrade keywords.||Not synchronized with the broker. Orders on the chart are executed with no respect to the real order execution on the broker, so this mode can be misleading.|