Track 'n Trade Autopilot Plug-in
Set it and Forget it
When most traders think of an auto-trader, this is the method they’re thinking of.
A system designed, and back tested to trade over the long-haul. Set it, and let it run, take signals, place entry orders, trailing stop orders, and, or limit orders, exiting the trade automatically, cutting losers short, letting winners run, and then repeating the cycle over and over again all without any human intervention, or supervision.
The key to this methodology is to create a very simple system that works across all kinds of markets, bullish, and bearish trending markets, as well as stagnant sideways markets, as a system like this is sure to experience it all.
Over optimizing our system to any one type of market, either trending, or stagnated, is the most difficult part of this strategy.
The wise auto-trader will actually create and manage multiple trading systems, designed and optimized to trade different markets, as well as during different market timeframes.
The wise trader will create one strategy for stagnated markets, while creating another optimized for volatile times, and trending markets, and then use their own personal judgement as to when to implement each trading strategy.
The Track ‘n Trade Autopilot does have the capability to self-judge the markets, and make these determinations to some degree, but those advanced strategies are discussed in other videos, and beyond the scope of this video.
Let’s start by first creating a quick and easy swing trading strategy. This is a strategy that does very well in volatile fast moving, trending markets, and then we’ll create a quick and easy strategy for stagnated or sideways markets.
In the Autopilot, let’s first give this strategy a name; let’s simply call it Swing Trade.
Now my definition of a swing trade is to enter and then reverse my position in the market with each new buy/sell signal from our chosen indicator, so here I’m going to choose the Bulls ‘n Bears, and use the Bullish Bearish arrows as our buy and sell signals.
To keep this simple, I’m going to skip all the conditional filters, and time restraints, and simply trade the market with a single contract.
I’m going to then drop down to the Entry Strategy, and select Market order on signal.
So once we get our trigger, we’re in.
Now technically, in a true swing trading system, we would not use a stop order, since our opposing arrow will be our signal for exit and re-entry, but for safety purposes, I always want to drop a parachute stop just in case we lose power, or Internet connectivity. It’s never really ever intended to be hit. It’s only there for safety purposes.
So let’s set our Parachute stop, and I’m going to put it at 20 tics behind the market, we can always adjust this later, or even ask the Q-Calc system to help us make this determination, but for now, we’ll just drop it at 20 tics behind the market.
Now I don’t want this parachute stop to get in the way of my swing trading strategy, so I’m not going to ask it to trail behind the market at all. Again it’s just there in case of a loss of power, or Internet. So let’s select No Trailing Stop.
Now, let’s slide down to the very bottom, skipping all the other filters, and just select Exit on Signal.
And there we have our very first Set-it and Forget-it swing trading system.
Now to optimize this strategy, we can open up the Autopilot Monti-Carlo accounting window, and begin our historical back testing to optimize our indicator settings to give us the best results.
Now, this is a basic boiler plate strategy. At this point, you can move back down through the Autopilot settings, adding and taking away additional features in an attempt to make this system more robust and powerful, in an effort to handle additional market conditions.
As is, this system works very well in strong trending markets, by catching each long-term trend, cutting losing trades short by quickly reversing positions, and letting winning trades run, by staying in the market as long as the market continues to trend.
Now let’s create another very simple trading system that works well within stagnated markets, or markets that are more or less trending sideways.
Let’s call this strategy; Scalp
I’m calling it scalp, because with this strategy we’re going to ask the Autopilot to take a lot of quick, small profits, by putting the odds of mathematics and statistics in our favor.
This time, let’s use the Bulls ‘n Bears Advantage Lines as our indicator. Other indicators that work well with this strategy are indicators that point out high and low turning points, during slow markets, such as Stochastics, RSI, or %R.
You’ll want to experiment with different indicators in different markets, on different time-frames when working through setting up your own strategy, taking into account your own personal risk tolerances, account size, and margin requirements.
Next, we’re going to just start off by again, trading quantity one contract.
We’re going to trade continuously, but this time, let’s use some time restraints, let’s use our favorite trading times, 3:00am, to 12:00pm, Eastern Time. This will start the Autopilot at the beginning of the London session, and stop trading at lunch-time New York.
Again, this is just a starting point, and a boiler plate for you to work from, I like to create very minimal systems at first, and then add additional features and filters as we go, or as I feel they are needed. The key here is to start simple, then expand.
Okay, how are we to enter the market? Again, I’m going to just keep it simple, and use a Market order.
Now, because I’m using a Range Bar chart, I’m not worried about thrust bar filters, since that’s already accounted for within my price bars themselves. If you create a system using time bars, such as five minute or 10 minute bars, you might want to take these filters into consideration.
As far as my trend goes, we’re going to set this to both, so that our system will take both long and short positions. Remember, we plan on running this strategy during quite market times, where the market is not expected to make large trends, so I want to take both long and short trades equally.
Now for the exit strategy; this is where the rubber meets the road. We’re going to use both a stop order as well as a limit order, and at this point, no trailing stop. We’re also going to turn off all the other exit filters as well.
For our Stop, we’re going to put 25, and for our limit, we’re going to put the same, 25.
Now, think about the probabilities of this trade, all things being equal, the probability that our limit order should get hit before our stop order is basically the same, right, 50/50.
But, of course, not all things are equal, because we’re also using an oscillating indicator, which has been mathematically calibrated to put the odds further in our favor, and to calculate which direction the market is currently moving.
This is a simple and very popular scalping strategy, used by many day traders. What we’ve done is taken this very popular strategy and automated it, so the Autopilot can handle the heavy lifting of watching, and executing this trading strategy for us.
The final step of our setup is to Monti-Carlo back test it and optimize the settings. First, I’m going to click the Q-Calc for the Advantage Lines, let’s let Track ‘n Trade Optimize that first. Once that’s done, I’ll come down and click the Stop Q-Calc, then the Limit Q-Calc.
If I’m not getting the results I’m looking for, I can right click on the Q-Calc buttons, and change the scan parameters, and try again.
Once I’m happy with the settings, I simply click Start Trading, and let the Autopilot take over.
Now, if you’ve learned nothing else during these videos, you’ve learned that first and foremost, to use the Autopilot, you must first be familiar with trading, you must first have a working knowledge of what being a trader is, you must have a working knowledge of trading strategies, and you must be able to think through each strategy and think how each setting within the Autopilot might help or hinder the effectiveness of that strategy.
The Autopilot is not a trading system in itself; it is simply a means of creating and testing your own trading strategies. Many would-be traders believe that just because they have the Autopilot Plug-in, that they don’t need to learn and understand how to trade the financial markets—“I’ll just let the Autopilot do it for me!”
Of course, this is just not true, that would be a kin to saying, “Well, this shiny new airplane has an Autopilot, so I think I’ll just jump in and fly off to New York City, even though I’ve never taken the time to earn my wings, and get my pilots license. I’ll just have the Autopilot take me there.”
Nobody in their right mind would do that with an airplane, therefore I would not expect anyone to think they could fly the Track ‘n Trade Autopilot without first learning how to trade.
Learn the concepts behind trading first, and then use the Autopilot to automate and optimize your many different trading strategies.
As you can see, there are just way too many variables for me to cover here in this video, or even in a dozen videos. This is where you come in, we’ve designed and given you the India 500 car of your dreams, now it’s your turn to sit in the driver’s seat and see how fast you can make it go.
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