To what extent is your systematic trading approach automated?

To what extent is your systematic trading approach automated

To what extent is your systematic trading approach automated?

To give an example, our U.S. mean reversion strategy is fully automated, we literally push a button and it will generate the buy and sell signals.

I put my account balance in my software, and I push the button, and it will generate the orders for me. It will do all the position sizing, generate the orders for me and then what we do is upload that via an API to my broker. Push another button and it will place those orders –it doesn’t matter if it’s one order or a hundred orders. It will place those orders instantly at the push of a button, and then that API will manage the positions during the night.

So I’m asleep, I’ve got exposure to the market, and the API will manage that exposure for me. I can say to the API that I only want to have twenty positions. I’ve just placed a hundred orders but I only want to be filled on twenty. So when I’m filled on twenty, cancel any pending orders so I’m only exposed to those twenty. Now, the API also has a functionality to exit any additional fills that might occur. Let’s say for example, I place a hundred orders and I only want twenty filled, but on the open the market gaps down 2%. In that situation you might get thirty fills –and you only want twenty. So automatically and instantly the API will cancel all remaining orders and then those ten additional fills that you’ve got, that you don’t want, it will automatically (and I’m talking within a second) turn around and exit those positions immediately. So it will always ensure that my exposure is managed through the night even though I’m sleeping.

So that’s about as automated as I am. I can actually manage the positions direct from my initial software but I don’t choose to do that. I manage it with the API.

 

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