Fidelity auto trading feature
Author: genelong
Creation Date: 3/19/2016 3:50 PM
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genelong

#1
My understanding from Fidelity is that I have to have so many trades per year in order for them to turn on the auto trading feature - otherwise I have to constantly watch the charts and do all trades manually.

This does not make sense to me. The restriction of so many trades per year will be met by day traders, but not swing traders or longer term traders. I assume the restriction is in place to prevent novices from messing up their own accounts with bad programming, but just because someone is a swing trader does not mean they don't know what they're doing. I tend to trade once or twice a week.

Am I missing the purpose for this restriction? Is anyone else frustrated at not being able to use the auto trade feature?
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boreland

#2
Hi I just thought I'd throw in my 2 cents as a somewhat frustrated user of WLP. First, It took me a while for Fidelity to grant auto trade permission. If I remember correctly they want to see something in the order 750 trades per year, then you have to apply and it goes before a review committee, which takes upwards of 5 or more business days to approve. On the plus side you will likely be able to negotiate a reduction in trade fees at that point. They do not give out much info on the number of people with these permissions but I got the impression that its not many.

The problem I have found though is the platform is just not reliable enough. It crashed twice on me today for no could reason. There are a multitude of other problems also that make this a pretty unworkable platform for real-time trading, and I would not trust it for low frequency swing trading either. WLP is great for back-testing, but if you by chance developed a kick-ass algorithm, you probably would not be able to run it in real-time, especially if you need limit or stop orders. There are a litany of issues which would be too exhausting to go through now.

I'd be very interested if there are others with autotrade permission who have successful implemented a reliable auto-trading system. For my part I manually enter my trades and try to use the auto trade feature to monitor and exit them. There are some work around tricks that allow me to do this, which I would be happy to share if anyone is interested. The big issue for me is WLP does not have a real time event handler, rather everything updates on the bar close, probably not a big issue for you. While the ghost bar updates in real-time there seems to be now way to create a trading decisions intra-bar so high frequency trading is very difficult to do and you will likely get a lot of slippage as a result.
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gkpost

#3
"There are some work around tricks that allow me to do this, which I would be happy to share if anyone is interested." Please share whatever information you think might be helpful on this subject. TIA.
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vk

#4
In regards to the various topics above I would like to say that I use Wealth-Lab Developer every day for my trading and the process is pretty much automated. However it is an end of day system. I agree that Wealth-Lab is not made for High Frequency Trading. But I would argue that most commercial software are not capable of doing it.

@gkpost
What exactly is the problem? Is it an issue with Wealth-Lab or do you have problems to get Fidelity to give you access to auto trading?
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gkpost

#5
vk, first let me say thanks for responding.

I just noticed Boreland say that he enters trades manually and lets Wealth Lab (WL) monitor and exit the positions. The time lag in waiting for Bar+1 sometimes can cause a lot of slippage in a fast-moving stock. On the other hand, WL seems to be easily capable of using sophisticated algorithms to exit under different circumstances when trading has calmed down and the price has stabilized somewhat. This approach seems to have merit and I was wishing to learn anything he had to say on the subject.
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Cone

#6
QUOTE:
The time lag in waiting for Bar+1 sometimes can cause a lot of slippage in a fast-moving stock
It sounds like you're a little confused about bar + 1.

Speaking in terms of the "bar loop", WLP processes signals at the end (close) of the current bar, bar. Practically immediately Alerts, if any, are generated to be executed on the next bar, which is bar + 1. Let me say that another way: orders are working in the market (with minimal delay) at the open of bar + 1. So, while bar + 1 is forming (the ghost bar on a streaming chart) Alerts/orders will be executed if they are marketable. Since WLP doesn't process until the end of the bar, you won't see the trade on the chart until the end of bar + 1.

Does that make sense?
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gkpost

#7
So with 1 minute data, if an alert is triggered immediately at or near the beginning of the current minute (bar) and conditions are right for a buy, the software must wait until the current minute is finished and the next minute begins (bar + 1) to send out an alert and trigger a trade. Please let me know if that does not sound correct to you. A lot can happen during that period of time which doesn't always work out in my favor, and sometimes I wish I was working a system that allowed me to try to do better manually.
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Eugene

#8
QUOTE:
if an alert is triggered immediately at or near the beginning of the current minute (bar)

No. Like Cone said, an alert is always triggered at the end of the current minute for the next minute (bar+1) and gets marketable. Virtually nothing happens within these (milli)seconds except when the market gets really fast.
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gkpost

#9
I think I see. The alert is always triggered at the end of the current minute. But the conditions that should cause the alert to be triggered may occur near the beginning of the minute. This lag is the "wait" which I am trying to find ways to minimize. Once again, I think I understand how it works, but if I am being thick, please don't stop trying to educate me! Tick data would be very helpful, but I don't believe that it is available. I can preload conditional orders in my Fidelity account which would trigger the instant that conditions were right, up to a minute sooner than Wealth Lab would alert me. Then I would like to set up WL to handle the exit and alert me when I should sell, or possibly actually do it for me. This conversation began with an attempt by me to learn whatever I could about ways to make that happen.
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Cone

#10
Alerts and executions are 2 different things.

Alert = a trading action to occur on a future bar (one that does not yet exist)

Alerts are created upon processing the last bar of the chart if the strategy executes a trading signal (BuyAt, SellAt, ShortAt, etc) on a future bar, i.e., bar + 1.

So, you process the last complete bar in the chart, generate an Alert, and Stage/Place it to the Orders tool, which creates the order. With a streaming chart and Auto-Trade, this will certainly occur all within 1 or 2 seconds.

QUOTE:
Tick data would be very helpful
Not really. Ticks are "bars" too. Every time a new tick would come into the chart, the strategy needs to execute again. For liquid stocks that have hundreds of thousands of trades per day, you pretty much need a supercomputer to keep up.

Personally I think that things happen too quickly even with 1-minute bars, and if you need a faster interval than that to make money, you probably won't be in this business too long. Again, my humble opinion.