Robot Trader

1

TZONE

• Robot Trader

Sell
Buy
Prototype Product Research
2
Tzone Trading Cycle Simulation Architecture
TZSim Modules
User Shell Scripts
BullSector
Yahoo
TZSim Website
Perl Driver Scripts
130pm
Roundup
6000tickers
TZ API Modules
6000option chains
Non Sim
Yahoo
External Websites
(Remote Procedures)
1000stock histories
200pm
VPN Internal Website
TadaFilter
1000tickers open-int
OXStrategy
Pgsql Databases
230pm
OptionMaker
TickerBase
UserScripts
OXPositions
Non Sim
Broker
OXOrders
50candidate stocks
430pm
630am
EDWebGen
OX Agent
CandBase
630pm
150candidate options
EDWebAgents
Anytime
Simulator
CandBase
Simulation Control
530am
OpenMan
BackBase
TZSimWebSite
TzoneWebSite
Orders
Selection List
CandBase
CandBase
630am
Replay and Backtesting
StockBarsFeed
630am
Yahoo
Intraday Stock Option Chains
630am
DayTrader
Review of 150candidate options
OptionsFeed
Selection of 20candidate trades
BackBase
Manual Approval Meeting
Realtime
Phase 1 Prototype
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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)

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ZigZag Swing Theory (early version without
de-trending)
BTF-WID (Weekly-Intraday)
Average down angle
Average of top peaks
EDT
Average of bottom peaks
BTF-D
Back to the future (Daily)
EDT Estimated Days to Target
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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

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Filtering with Tandem Tadas
Edge trade (s)
Merging of tandem tada ratings
Averaging of 2 tandem tadas Different according
to gainparameter of ZigZag Indicator
Tada Rating GainRate TradeGain
PeakRate (/month)
(/swing) (swings/month)
7
Wide trade (S)
8
Wide trade (B)
9
Simulation Architecture Re-factoring
Updated DailyComprehensive daily data up to
yesterday
HistBase
Tadamon Daemon
Roundup
16000tickers
Tada Daily Price histories
2000option chains
TadaFleshout
Integration
Spliced Intraday histories
TadaFilter4
1000tickers open-int
BackBase
Intraday Profiles
Tada14
OptionMaker3
TickerBase
Tada15
50candidate stocks
BackBase
EDWebGen
OXBroker
CandBase
150candidate options
EDWebAgents
CandBase
OpenMan
TzoneWebSite
Orders
Selection List
CandBase
TradeBase
DayTrader
Review of 150candidate options
Selection of 20candidate trades
Manual Approval Meeting
Clock Simulator
10
Machine-Gun (MG) Simulation Architecture
30sec-Day Reply Cycle
HistBase
1000tickers open-int
OXBroker
OpenMan
Roundup
16000tickers
Tada Daily Price histories
2000option chains
BrokerSimulator
TickerBase
TadaJob
TadaFleshout
Tada14
Orders
BackBase
Tada15
TickerBase
TradeBase
CandBase
CandBase
DayTrader
EDWebGen
Machine-Gun Re-Order Requests
Interactive Simulation Control
EDWebAgents
Daily Pause Triggering (Semi-Automatic Firing)
Clock Simulator
TZSimWebSite
Replay and Backtesting
30sec-Day Request Cycle
Phase 2 Prototype
11
Simulator Run Modes Objectives

• Single-Shot Shotgun Mode (Each pellet is a trade)
• Tracks the trajectory of one-days 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

12
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

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Retrade
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Retrade
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Retrade
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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

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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

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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

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Key to Strip Mining TadaMon Monitoring of
Positions
TadaJob HistoricalTechnical Analysis Trade
Selection
TadaMon ActivePosition Management Trade
Selection
BTF-D
Re-trade
EDT
Trade Date
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