Robot Trader

Prototype Product Research

Roundup

TickerBase

BackBase

CandBase

BullSector

Yahoo

TadaFilter

UserScripts

OptionMaker

TzoneWebSite

6000+tickers

1000+tickers & open-int

1000+stock histories

50+candidate stocks

1:30pm

2:00pm

2:30pm

CandBase

Orders

5:30am

OXStrategy

Yahoo

6000+option chains

CandBase

OXOrders

OXPositions

Yahoo

EDWebGen4:30pm

EDWebAgents6:30pm

OpenMan

6:30am

User Shell Scripts

Perl Driver Scripts

TZ API Modules

External Websites

VPN Internal Website

Pgsql Databases

Tzone Trading Cycle & Simulation Architecture

150+candidate options

Review of 150+candidate options Selection of 20+

candidate trades

Simulation Control

Replay and Backtesting

Selection List

Intraday Stock &Option Chains OptionsFeed

6:30amStockBarsFeed6:30am

CandBase

DayTrader6:30am

(Remote Procedures)

OX Agent

Broker

TZSimWebSite

BackBase

SimulatorAnytime

TZSim Modules

TZSim Website

Manual Approval Meeting Realtime

NonSim

NonSim

Phase 1 Prototype

“Tada” Theory• Technical Analysis of Daily Action (Tada - Holon)

– Stock History (starting 6 months prior to trade date)– Selection - GT Buy/Sell signal on trade date– Tada Assemblies (Bottom up Hierarchies – Holons)

• Various Indicators (MACD, MFI,RSI)• Various Signals (Indicator Combinations, eg. MACD-MFI)• Various Vanes (Buy/Sell Decision Makers – GT “systems”)

• Tada 13 Theory – ZigZag Swing Trading– Focus on Stock Cycle Channel (Range)– De-trended Channel for Trending Stocks– Re-trade on closing to catch swing

• Confirm with Rocket Science (Ehlers)– Hilbert Frequency Domain Analysis (Future)

ZigZag Swing Theory (early version without de-trending)

Average of bottom peaks

Average down angleAverage of top peaks

EDT*

* EDT: Estimated Days to Target

BTF-WID (Weekly-Intraday)

Back to the future (Daily)

BTF-D

Bullish-Bearish Degrees

• Wide Trades – Coded ‘B’ or ‘S’ (BUY or SELL)– ‘B’ – Below average-bottom line on upslope or up day

– ‘S’ – Above average-top line on downslope or down day

• Edge Trades – Coded ‘b’ or ‘s’ (buy or sell)– ‘b’ – At or near-above average-bottom line, etc.

– ‘s’ – At or near-below average-top line, etc.

• Mid Trades – Coded ‘bs’ or ‘sb’ (buy-sell or sell-buy)– ‘bs’ – Below mid-point between avg-bottom & avg-top

– ‘sb’ – Above mid-point between avg-bottom & avg-top

Filtering with Tandem Tadas

Tada Rating: GainRate = TradeGain * PeakRate ($/month) ($/swing) (swings/month)

Merging of tandem tada

ratingsAveraging of 2 tandem tadasDifferent according to gainparameter of ZigZag Indicator

Edge trade (s)

Wide trade (S)

Wide trade (B)

CandBase

Tadamon Daemon

Tada15 50+candidate stocks

Orders

TradeBase

Simulation Architecture Re-factoring

OpenMan

Selection List

EDWebAgents

EDWebGen

CandBase

BackBaseOXBroker

Clock Simulator

TzoneWebSite

Review of 150+candidate options Selection of 20+

candidate trades

Manual Approval Meeting

Simulation Control

Replay and Backtesting

TZSimWebSite

DayTrader

Intraday Profiles

HistBase

Roundup

TickerBase

16000+tickers

1000+tickers & open-int

OptionMaker3

CandBase

150+candidate options

BackBase

TadaFilter4 Spliced Intraday histories

Updated Daily—Comprehensive daily data up to yesterday

Tada14

TadaFleshout

Tada Daily Price histories 2000+

option chains

CandBase

TadaFleshout

Tada Daily Price histories

Machine-Gun & Re-Order Requests

TradeBase

Machine-Gun (MG) Simulation Architecture

EDWebGen

OXBroker

Clock SimulatorDaily Pause Triggering

(Semi-Automatic Firing)

Interactive Simulation Control

Replay and Backtesting

TZSimWebSite

DayTrader

HistBase

Roundup

TickerBase

16000+tickers

1000+tickers & open-int

2000+option chains

BackBase

Tadamon

Tada15

Tada14

EDWebAgents

Orders

30sec-Day Reply Cycle

30sec-Day Request Cycle

CandBase

TickerBase

TadaJobTada14

Tada15

OpenMan

BrokerSimulator

Phase 2 Prototype

Simulator Run Modes & Objectives

• Single-Shot Shotgun Mode (Each pellet is a trade)– Tracks the trajectory of one-day’s trade launch

– Re-trades on swings qualified by TadaMon daemon• Request-reply cycle through TickerBase feeds work from DayTrader

• Current positions only, TadaMon generates new trades

• Machine-Gun Mode – Fires Shotgun each day– New OpenMan Cycle for each day (new batch of trades into the mix)

– Deals with aggregate of all trades (easily 500-1000 active trades)

• Primary Objective – Test & Validate DayTrader– Single shot shotgun (now) can test position management

– Machine shotgun needed to validate portfolio management.

• Secondary Objective – Optimize Trading Strategy– Single shot is adequate for this, mostly

• Current Status – Machine-Gun Not Yet Operational

Re-Trading Simulations• Next slides illustrate re-trading simulation

– Used to validate TadaMon daemon

• Re-trading focused on Puts & Calls only– A move away from combination trades (e.g. spreads)

– But Straddles/Strangles (mid-trades) were openers• According to a naïve pairing strategy, subsequently discarded

• TadaMon results initially accepted for wide date intervals– Exact date of closing trade might not have new opener

– Any TadaMon opener within -2 days to +5 days was accepted• To check out the re-trading logic

– Only some closings could catch a new opener• Wide intervals accepted less than optimum re-trades

Retrade

Retrade

Retrade

What Has Been Achieved

• Development of Fully Automatic Trading Software– Proof of automatic factory trading of options

• Reliable sifting of best trades each day– From all stocks in US markets– Optimization of option trades for those stocks

• Automatic opening of best trades through broker website• Automatic position management through broker website

– Automatic day-trading with intraday feeds– Automatic re-trading after profit-taking

– Proof of swing trading factory strategy• Automatic selection of best batch of trades daily• Continuous profit taking to maximize revenue

• A Basis for revolutionary wealth generation

Work Still to be Done

• Hilbert Tadas – To Confirm ZigZag Tadas– Available in TA-LIB, a C-library

• We converted to a Perl Extension – not yet applied

– Important for TadaMon Dynamic Control

• Implementation of Dynamic Control– TadaMon Daily Updates of Active Positions

• Check if trades behaving as forecast

• If not, switch to exit lane strategies

– Strip Mining – Multi-Lane Closing Strategies• Dynamic Lane Changing is Control Mode

Strip Mining

• Fast Lane – Highest Rated Swingers– High GainRate, High Peakrate– High pumpers, up-stroke & down-stroke– High threshold trailing stop strategies

• Slow Lane – Change-Up Situations– Not Meeting expectations, but not losers– Low theshold trailing stop strategies

• Exit Lane – Suspected Losers– Minimum loss strategies:

• Timestops, TimeTrailStops, etc.

– Aim: Cut losses early

EDTBTF-D

Key to Strip Mining: TadaMon Monitoring of Positions

Check if EDT and ZigZag angle is accurate (+- 50%) If yes, set trailing stop when target is crossed If no, switch lanes to slow or exit lanes

Re-trade

Trade Date

TadaJob HistoricalTechnical Analysis Trade Selection

TadaMon ActivePosition Management Trade Selection