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Tuesday, June 26, 2007

Terminating auto trading

Due to a series of technical problems experienced over the past months I have decided to limit myself in the future to systems that can be traded manually. A week ago Time Warner Cable had an internet outage resulting in a lost trade for extreme-os (that otherwise would have been profitable), and today the same happened again. Last Friday the C2 server lost its connection for multiple hours (although only partly during the stock trading session) and TradeBullet had occasional freezes on my PC over the past months. In sum, there are too many stages at which an error is possible. By continuing auto trading I would be taking a risk which is not necessary. I also think enough systems currently are available on C2 that do not require auto trading. All this means that pretty soon I will probably replace extreme-os by another system and adjust the portfolio weights.

6 comments:

Anonymous said...

Sorry to hear about your troubles with the technical stuff. As if trading isn't difficult enough by itself.

Science Trader said...

Thanks! I fully agree with you.

Anonymous said...

u gotta do what u gotta do, ST. Managing risks also include these anomalies that can be severe (worst things at worst times).

There are/these are factors. Key point: Try "engineering"/strategizing around MOST of these unknowns - I'm just speaking in general - to hopefully meet (within reason) your final/ultimate goals.

Stick to your original plan, tweak/hone it when necessary - all the while keeping your goal in view/focus!gA

Anonymous said...

Nice blog you've got there, ST. I read the whole thing.
Allow me to add a small contribution.

In this post you stumbled upon some of the problems of autotrading in one's own platform.
Indeed, lot's of stuff can go wrong!
- power issues (solution: ups or laptop)
- connectivity issues (solution: redundant internet connections provided by some firewalls)
- pc hardware failure (solution: online backup pc with full copy of environment + schyncronization/failover between pc's taken care of by using proprietary software under an internal lan)
- tradebullet freezes often, terminates tw unexpectedly and other anomalies (solution: custom software that monitors the state of tb and tw in the background, relaunching the whole thing if problems are encountered, with eventual reboot to refresh the system state)
- tb's licence server is down (soultion: negotiate an exclusive contrat with tb)
- c2/broker are down/fail to respond... ups! you got me there :)

no automated system is 100% safe, that's why I never actually went live with c2/tb/ib combo. Specially due to the problems with tb/c2 synch issues.

good luck with your trades!

SL

Anonymous said...

Of course, auto trading v2 has the same problems with reliability (of course!), but at least they (those sysadmins who run the servers) will never admit to it. And you'll likely never notice when problems happen.

Besides, the spreads/costs in autotrade2 are a total rip-off.
And you wil be dealing with market makers, adding to the losses.
I'm interested to see your demo account results, but I suspect real-life trades will give much diferent numbers.

SL

Science Trader said...

Hi SL,
Thanks for your kind words. Of course, contributions are much appreciated! Of the issues you indicated I never encountered power, pc hardware and licensing issues, but I can see them happening. My biggest concern was my internet connection, which somehow started to become quite unreliable. Because I was monitoring the setup a few times a day (through LogMeIn) I felt I could manage other problems (freezes etc.) reasonably well. It could be remarkably stable for prolonged periods. For example, I was once abroad for a week and things kept running without a glitch. This was when my provider was Comcast cable. When Comcast became Time Warner things got a lot worse. Unfortunately, DSL is not offered where I live, otherwise a redundant connection might have been a solution. I'll keep you updated on my experiences with "generation 2" auto trading.