In the first part of this two-part series we covered the basic offerings by trading softwares and platforms for retail traders. Of course, not everyone is a beginner and there are plenty of services and tools offered to the more advanced trader, and those more advanced beginning traders. So, here we will delve into some of the more advanced features a few software companies and brokers offer. With the demand for automated algorithms growing in the industry, we focused on that. This is just a sampling, as it’s impossible to cover all platforms in this limited space. Traders should do more research to find the platform or software that best suits their own needs.
TradeStation (TS) started out as a software company. The founders realized there were three main aspects to a total package trading platform: the front-end, real-time streaming data and execution capabilities. In 2001 TS became a broker, TradeStation Securities, and now has brokerage offerings with the software. “The foundation of the company is the idea that a trader has to have a tested trading strategy: you need to have a trading plan and then follow it,” says Janette Perez, vice president of strategic relations at TS.
With TS you can trade equities, options, futures, and forex was recently added. TradeStation 8.3, the latest version, integrates automated forex trading and has additional indicators and strategies for fundamental traders. Also, TS’s forex trading is integrated through the Order Bar, Matrix, Market Depth, Macros and Strategy Automation.
One capability more advanced traders are working on is automation. Once they’ve got a trading strategy that works, they can set up a system that will show the entries and exits, and in some cases, if they can afford it, they can to an Application Programming Interface (API), where they can set the program to run and trade on its own.
An API connection allows the trader to connect their automated trading system to a broker that offers access to an exchange API and the trader’s system sends in orders as they are generated by their program and the orders are executed by the brokerage.
TS’s Easy Language scripting language needs to be learned for algorithmic trading. When backtesting, TS offers intra-day and end of day testing. End-of-data testing is usually enough if you’re only trading once a day, but if you want to trade multiple time frames you would need intra-day data.
As for charting, TS offers an extensive historical data base for charting with order-entry capabilities, and Perez emphasizes charting is only as good as your data. In equities, TS offers more than 15 years of intra-day data and 38 years of end-of-day data; for futures there’s more than 23 years of intra-day and 46 years of daily data; and in forex there’s more than three years of intraday and 35 of daily.
Another custom feature is that you can create your own indicator. “TS has more than 100 studies, and what makes them unique is that they’re not canned, as they are in other softwares,” Perez says. With TS’s EasyLanguage, users can write their own studies or take the ones included and modify them.
While it costs $100 per month to access the platform, you can use it for free if you open an account with them, and it is extra for the exchange data.
Trading Technologies International Inc. (TT) develops high-performance trading software for institutional traders that include derivatives professionals, including the world’s major exchanges, money-center banks, proprietary traders, hedge fund traders, securities brokers, futures commission merchants and other trading institutions.
X_TRADER, TT’s flagship order entry product, is a front-end screen for professional derivatives traders, brokers and market makers. It incorporates single-click trade execution, high-speed connection to the world’s largest futures exchanges, real-time fill and position details and the patented MD Trader, a patented vertical market depth display. The TT platform can only be used if you open a trading account with TT and is mainly used by institutional traders.
X_TRADER 7, TT’s latest version of its order entry software, encompasses many features for advanced traders. X_TRADER 7 has more exchange connections including BrokerTec and Sydney Futures Exchange, and more advanced tools to further optimize your trading performance. The supported order types in X_TRADER 7 include Stop Markets and Stop Limits with trigger quantities, timed orders, Market on Open, Market if Touched, Limit if Touched, Trailing Stops and One- Cancels-Other.
TT offers advanced traders its autospreader tool. It helps create, manage and execute inter-product and cross-exchange spread trading strategies. Autospreader’s multi-legged functionality lets you easily generate multiple spreads with up to 10 legs and simultaneously quote up to three legs. Autospreader works the legs in the outright markets to match the desired spread price. Other capabilities include the ability to choose between implied price, net change and ratio spreads, and you can configure and trade a variety of strategies including butterflies and crack spreads.
Patsystems caters to such professional customers as numerous leading banks, trading houses, hedge funds and individual professional traders around the world who trade derivatives, forex, energy and other asset classes. Its premium front-end, Pro-Mark, offers advanced trading functionality including the ability to create cross-market spreads using the sophisticated auto-spreading tool, Prism, and the flexible spread matrix, Grid.
Patsystems also offers integrated, advanced charting functionality with more than 70 technical indicators, backtesting and flexible representations including candlesticks, bar charts and Market Profile. With this platform you also have access to electronic trading tools that provide pretrade risk management, customer support, order routing to electronic and open outcry exchanges and risk solutions.
If you want to make advanced spread trades with Patsystems, its IQ-Trader Premier platform offers chart and trade spreads with automated order entries and exits. You can use the intuitive Express language to create custom indicators or strategies and to backtest and optimize your strategies.
If you’re into building your own trading strategies, IQ-Trader Advanced is the platform that focuses on automating your order entries and exits based on trading signals, and you can backtest and optimize strategies as well.
IQ-Trader offers combined charting and trading with direct order entry from charts, and sophisticated functionality including brackets and trailing stops. It also gives you the tools to create trading signals directly from analytical studies.
Also available is a proprietary API library for futures and options which provides direct access to real-time market data and delivers advanced strategy support. “Patsystems provides expert support to traders planning to write to Patsystems’ API,” says David Webber, CEO at Patsystems. “We offer a highly scalable, white-label solution with open interfaces that is easy to integrate, deploy and support.
Customers can create their own front-end or integrate order routing systems using our application program interface.”
They offer multiple indicators with more than 70 fully-customizable technical indicators, easy-to-use drawing capabilities and fully-customizable scales and the ability to save indicator parameters, charting analysis and templates. Also available are backtesting functionality, customizable data with intra-day and historical data, automatic screen and sound alerts and an intuitive programming language.
eTrade came out with a limited futures offering three years ago and when they were ready to expand they launched a high-end trading package at the end of last year by connecting to TT_Trader, so all the functionality available through the TT_Trader is available to eTrades customers.
“It’s a great way to get advanced institutional tools to retail traders in a platform that’s easy to use. It made for an easy transition for retail traders trying to get other asset classes and into more advanced trading,” says Chris Larken, vice president of active services at eTrade.
eTrade’s platform also offers many advanced orders electronically, but spread orders are only taken over the phone. Also its API ability is not yet offered to customers.
The platform with data is free to customers. However, expect that commissions and exchange fees are passed down to the customer.
CQG 7.4 introduces the CQG API, which makes CQG data and functionality available to customer applications. CQG’s API can combine with Visual Basic, C#, C++, and any other language that supports automation technology for Microsoft Excel object models, Web sites External analytics, automated trading and third-party applications. To access CQG’s professional level trading platform without charting or analytics, CQG offers CQG Trader.
Order entry and execution is available through NinjaTrader, which was one of the first software companies to work on the concept of Advanced Trade Management (ATM) strategies. ATM allows a trader to predefine rules and conditions for how orders behave during the lifetime of a trade. “Traders can enter a single order that when filled, will automatically submit multiple stop loss and profit target orders. Traders can also define multi-level automatic trail stops which add additional protection of profits as a trade moves in their favor,” says Raymond Deux, president and CEO of NinjaTrader.
NinjaTrader also manages the relationships between these protective orders. If a profit target is filled, the associated stop loss is cancelled. If a trader increases their position size, the protective orders are increased to reflect their new position size.
“Our approach to order entry and trade management promotes consistency and removes emotions and stress,” he says. And traders can choose to place orders that are independent of an ATM strategy.
NinjaTrader provides a full tool set for the development, backtesting, real-time simulation test and live deployment of automated trading strategies, C#. Also, NinjaTrader supports all leading brokerage technologies with hundred’s of supported brokers worldwide.
With TradersStudio, developed by Futures contributing author Murray Ruggiero, you can creating custom portfolios and test them on large baskets of markets. If you don’t program, TradersStudio offers a drag and drop programming wizard, which automatically writes not only systems, but user functions, indicators, trade plans and global macros with TradersStudio Basic without any programming skills required. When creating your own automated system you can use any data vendor you choose in ASCII, CSI or MetaStock format.
TradersStudio also includes advance stock screening and money management, complete walk-forward analysis both back testing and real trading including active orders for tomorrow and you can optimize money management strategies using Sharpe Ratio.
Its new Quick Charts creates charts across any symbols you’d like and even creates a visual map of trend, relative strength or any measure you want using TradersStudio’s new Color Reports. More than 800 functions are available.
Sample data included in the software is up-to-date of purchase, then you have to purchase data from that date forward from another data vendor, or you can pay for additional yearly updates.
You also can develop and backtest forex trading systems with TradersStudio. Although it is a complete trading package, it does not offer real-time trading. Its strength is in its system-testing capabilities.
Correction: There was a mistake in the previous article regarding CQG’s pricing. The CQG Integrated Client is $545/month plus exchange fees. There is no charge for order routing. The CQG Trader is $295/month plus exchange fees or the rate charged depending on the futures commission merchant.