Power of Bots

Bots are powerful tools that give you the ability to automate any stock or options trading strategy in your portfolio. Here is how you can leverage the power of bots.

Bots are powerful tools that give you the ability to automate any stock or options trading strategy in your portfolio. You can run multiple bots, with each bot trading different strategies for different securities. You are in complete control of your bots. You tell the bot how and when to enter, exit, and manage positions.

Bots run micro strategies inside your account. Bots behave like portfolio managers that you deploy inside your account, but they do not have to control all of your positions or use all of your account’s capital. You set position and capital allocation limits.

Why use bots?

  1. Bots automate repetitive actions, so you no longer have to spend valuable time manually entering orders for your stock and options strategies. 
  2. Bots don’t get tired, distracted, frustrated, emotional, or any other biases that affect traders. Bots simply respond to a series of decision “recipes” that you create. This requires you to think through a trading plan thoroughly. Once your plan is in place, the bot will not deviate from the framework you created or be influenced by behavioral biases.
  3. Bots allow you to predefine your universe of tickers and create actionable strategies when certain criteria is met. One of the most difficult things for traders is tracking multiple tickers and positions. Bots continuously work for you to look for opportunities across as many strategies and tickers as you decide. Bots do not have to be used for your entire portfolio. You can use bots to trade part of your portfolio while still trading manually.

Bot use cases

Automated trading bots are a natural bridge between your trading strategy and execution. There are many different ways bots can automate your current trading strategy. If you can define your strategy, the bots can execute your plan. You become the manager and strategist of your collection of bots. Each bot can execute different strategies simultaneously across many different tickers.

There are so many use cases for bots. The three main use cases for bots can be broken down as core position bots, tactical bots, and hedging bots.

  • Core position bots trade repetitive core strategies.
  • Tactical bots can be deployed to implement specific trading strategies based on market conditions.
  • Hedging bots provide protection for your account.

Here are a few examples:

  1. One of the most powerful ways to use bots is to create a consistent, systematic trading strategy that operates on predetermined inputs every single day, week, or month--whatever timeframe you define. For example, you could create a bot to sell a put credit spread every week, with detailed exit parameters based on the spread’s premium, days until expiration, or the underlying’s stock price.
  2. Trend following, mean reversion, and momentum strategies can be implemented with a bot and customized to fit your trading style. With automation scanners and monitors, you tell the bot when to enter or exit a position based on your inputs. The ability to delegate repetitive processes like tracking the price fluctuations of multiple ticker symbols is one of the bots’ key components.
  3. Technical indicators such as moving averages, RSI, and divergences are popular choices for traders. With automation, these can be programmed into the bot to enter or exit a trade when specific levels are breached. For example, you could sell a put credit spread anytime a ticker triggers an oversold reading.
  4. An unexpected market crash is a fear of many traders. Before bots, it may have been difficult to track sudden, unpredictable black swan events and even more difficult to react in a timely manner. Bots can now automate a hedging strategy so your account has a layer of protection should a flash crash scenario occur. For example, a bot automation may consist of buying puts in a major index and/or buying calls in VIX should the market decline by a predetermined amount.
  5. And many more...

The possibilities are endless! Bot Examples and Tutorials demonstrate many more use cases highlighting just a sample of the power of bots.

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FAQs

Do I need to have my browser open and running for the bots to work?

No. Bots run on a cloud server. Once a bot is turned on, you do not need to log back into your computer or have your browser open. The bot will run automations at their scheduled intervals.

How many bots can I build and run at the same time?

Your bot allocation will depend on your subscription level.

How often do my bots run automations?

Automations run every 15 minutes beginning at 9:45 EST and stop running at 3:45 PM EST.

Do my bots run during normal market hours?

Bots are active between 9:45 AM and 3:45 PM EST and do not run in pre-market after-hours trading.

Can bots automate an entire strategy from start to finish?

Yes. Scanner automations look for opportunities to open new positions and monitor automations manage and close positions so your strategy can be automated from entry to exit.

Can bots filter trading opportunities?

Yes, bots filter for specific market conditions to scan for trading opportunities based on your decision recipes.

Can bots make decisions based on technical indicators?

Yes, there is currently a wide range of technical indicators provided in the platform, and more continue to be added. Your bots can reference these indicators and perform certain actions based on their values.

Can bots be used to trade different options strategies?

Yes. Bots can trade a wide variety of risk-defined positions.

How much control do I have over the automations in a bot?

You have complete control over all automations within a bot, including the ticker symbol, decision recipes, and position and allocation limits.

Can I still place manual trades with bots?

Yes, there are multiple ways that you can open and close positions manually within your bots. You can also manually override an open bot position and manage the position in your brokerage account.

Can bots trade both stock and options?

Yes. Bots can trade stocks, options, and combinations of stock and options in the same bot.

Can bots trade multi-leg/complex options spreads?

Yes. Bots can open, manage, and close a position with up to four legs, but the position must be risk-defined.

Can bots search for a specific set of criteria to be met before entering a trade?

Yes. Automations use decision recipes to scan for specific market conditions and will only open a new position if your criteria are met.

What is the advantage of trading with a bot?

Bots automate your stock and options trading strategies. Bots enable you to offload the tedious processes that are time-consuming, such as scanning for opportunities and managing positions. Bots are emotionless and run on a set of decision recipes. Bots allow you to input allocation and position limits so you don’t risk more than you want.

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