gbarber Member  Posts: 28 Joined: 2/26/2018 Location: PEARLAND, TX  User Profile | I thought i would give a very small snapshot of experience using ATM3 on the right edge. I did some manual paper trading at TDameritrade. At the time I didn't have a way of seeing the trades that ATM 3 generated. But I thought it would be useful to just use the symbols that ATM put a buy signal on and produce my own trade that closely mimicked what ATM 3 would do based on the trade plan in ATM3. So I generated buy to open calls with a strike price 1 or 2 steps out of the money (above the current price) and expiration 1 or 2 weeks away. I made them limit orders at the ask price. I used a standard quantity of 10 contracts for each order. There was a big drop in the market on Monday so I expected ATM3 would have a bundle of orders on Tuesday 2/25. It did. There were 11 symbols with an open green triangle. So I generated those 11 orders at about 9:30 our time. All but one of those orders filled. The result was a gain of about $3000 until the tsunami of selling hit the market. That dropped the result to a loss of about $9000. I ran ATM3 again with the new EOD option data. It generated 32 new forming signals and kept the original 11 open. The next day on 2/26 I entered those 32 new orders with the same form as described in paragraph above. Again at about 9:30 our time. All but one of those orders filled although slowly through the day. So with all the open orders the result was initially a gain of about $8000. But it turned down badly as the day progressed to a loss of about $45000. All but 2 of those symbols are now in a loss. Those 2 are ADSK with a gain of $778 and PFE with a gain of $77. The others are in at a loss in the range of $132 to $4033. There was one outlier loss. That was GOOG with a loss of $8000. So trading buy to open calls can be treacherous when done in the middle of a market panic. I have now revised the ATM3 tradeplan to use limits set at the middle of the bid-ask spread. I will try autotrade to paper with that. That will give a better picture of what ATM3 smart calls will do on the right edge. However, if the tsunami of selling is still going on, I would not consider this to be a fair test. I would just turn it off while the external event is ongoing. By the way Barry, I am not sure I was right to trade on the forming signal. Does ATM3 do that or wait for the solid green triangle? | |
