Table of contents:
Trading Personal Assistant – A trader’s best friend
Basic & Advance parameters walkthrough
A brief explanation of each combination of strategies
There have been many instances where we form a strategy in our head, backtest it to see the success rate and after all the conditions are satisfied we implement it as our trading style. But even after finding a ‘perfect strategy’ there are a lot of hiccups in executing it step by step because of several following reasons:
- Emotions (One of the biggest reason)
- Lack of time to spot the opportunity in the market
- Low liquidity in our trading basket – Seed capital gets locked once we ‘limit order’ some trades
……..and the list goes on. Talking about the biggest money/opportunity killer i.e., Emotions, we often get taken for a ride by the market makers and unnecessary FUD (fear, uncertainty & doubt) that challenges our technical plan of execution and finally tweaks our mindset against the trade.
In 3rd Dimension, it is possible to remove all the above errors that come into the way of implementing & executing a strategy. Not only that, but the platform also helps you to determine certain ‘conditions’ that decreases your chances by almost 90% from being a victim of ‘Stop hunts’ by Market makers, makes your trades more profitable and also open gates to several trade opportunities by not locking your capital by limit orders.
These features are made possible by our flagship tool – TPA (Trading Personal Assistant).
Meet Trading Personal Assistant – A trader’s best friend
TPA – Trading Personal Assistant is a modern trading bot that helps you automate your strategy and eliminate all human errors. TPA is a high frequency running feature in the 3rd Dimension platform that has 4 entry parameters which are important for every trader, i.e., buy, sell, take profit and stop loss.
Taking a deep dive into each parameter
TPA provides these 4 parameters under two heads:
- Basic
- Advance
Basic
The basic parameters help the trader define their strategy by providing them with 3 following options:
- Resistance breakout
- Buy Support
- TPnSL
- Market Exit
Defining Buy Support & Resistance Breakout strategies:
Buy support iterates a condition where the trade gets executed only when the price reaches the level defined by the trader.
Resistance breakout iterates a condition where the trade gets executed only when the price breaks a certain level defined by the trader.
Both of these strategies are very useful when more conditions and variables are defined in Advanced Parameters.
Enhancing Resistance Breakout strategy in Advanced Parameters:
One of the major key parameter provided by TPA is defining the Buy event. Buy event provides the trader with the following conditions:
OnPriceHit
OnPriceHit under Resistance Breakout strategy is a parameter where the entry of the trade happens when the price hits the entry-level defined by the trader. It is a simple resistance breakout strategy.
OnBarClose
In this condition, the entry of the trade happens only when the bar breaks and closes on or above the entry-level defined by the trader. In T.A, a breakout is said to be valid only when the concerned timeframe bar closes above a certain level. There are many times when the price breaks above a certain technical level and retraces immediately back below the level, trapping most of the traders into the trade. This phenomenon is called Fake Breakout or fake-out.
OnBarClose eliminates the risk of getting trapped into the fake-outs and helps the traders to only enter valid resistance breakout trades.
OnBarRetest
This parameter lets the traders enter the trade only when the following condition is satisfied
- Price breaks the level defined by the trader
- Bar closes above the said level
- The bar goes back and retests the said level
According to T.A when the price breaks a resistance level, the said level now becomes the support. In the Resistance Breakout strategy, most of the traders feel comfortable to only enter the trade when the price converts a resistance into support and goes down to test the support resulting in the continuation of the trend.
Never miss opportunities by locking capital in ‘limit trades’
LocalLimit condition in the Buy Order Type parameter stands for facilitating trade in the local order book of 3rd dimension only and not in the actual order book of the exchange until all the other conditions are satisfied. The trades are only posted and executed in the actual market order book when the conditions defined by the trader happens.
While using the Limit condition in the Buy Order Type parameter, the trader can only post 10 trades in the system (if the capital allotted per trade is 10% of the portfolio), whereas if LocalLimit condition is used then the system allows the trader to post more than 10 trades (even if the capital allotted per trade is 10% of the portfolio). So the merit of using the LocalLimit condition is it doesn’t reserve your capital and only executes the trade when the conditions are satisfied.
Manage risk with Sell (Exit) Parameters
Another solution provided by TPA for risk management is SELL (EXIT) PARAMETERS. This parameter helps the traders to minimize their risk by defining the exit condition of the trade.
As mentioned above, a breakout becomes fake-out when the price retraces below the level which it originally broke out from. This is the time when the SELL (EXIT) PARAMETERS come into play, it automatically places a sell limit order at the entry price so that the trades exit the trade with zero loss.
Let’s explain this with a hypothetical example:
Without Sell (exit) parameter: A trader goes long (buy) on BTC/USDT at $7900 (resistance breakout), he puts the take profit level at $8500 and stop loss level at $7700. Now, the trade is running until any one of the two conditions are satisfied, i.e. either the take profit level gets hit, the trader books a profit of $600 or the stop loss level gets hit, the trader books a loss of $200.
With Sell (exit) parameter: A trader goes long (buy) on BTC/USDT at $7900 (resistance breakout), he puts the take profit level at $8500, sell (exit) parameter at $7900 and stop-loss at $7700. In this case, the trade is running until any one of the three conditions are satisfied, i.e. either the take profit level gets hit, the trader books a profit of $600 or the resistance breakout becomes invalid as the price retraces below the entry price(candle closing below) and the trader gets out of the trade with ZERO LOSS
Increase profitability with TP Event parameters
Traders must be familiar with certain events in the market where the price not only hits the take profit level defined by them but it also goes beyond that level. In these times, the traders either find themselves in a situation where they feel more profit could be taken out of the market and sometimes most traders often re-enter the trade in expectation of a continuation of the trend. This is a human error as a technically calculated trade is now dominated by the Emotions of the trader. As you know the answer, the trade always goes against the trader if emotions are involved.
TPA helps the trader to not only wipe the emotions out of the trade but also increase profitability in case the price goes beyond the tp level.
There two options in the ‘TP Event’ parameter, OnPriceHit & OnBarClose. OnPriceHit is just like any traditional take profit parameter where the profit is automatically booked when the price hits the tp level. Whereas, OnBarClose is a parameter where the profit is automatically booked when the defined bar not only hits the tp level but also closes above it.
No more Stop Hunts by Market Makers
The very common area to set a stop loss is either a support zone or a resistance zone, depending upon the direction of the trade. In the times of extreme volatility, the price often hits the sl first before continuing in the direction of the trade. In this event, the trader loses the opportunity to execute a successful trade and even incurs a loss as the sl level is hit.
To eliminate this issue of stop hunt, traders can select the option of OnBarClose in the SL Event parameter. OnBarClose is a condition where the loss only gets booked if the bar closes on or beyond the stop loss level defined the trader.
Bonus money management features in the Order Parameter section:
- Base quantity (applied): Base quantity is a simple and standard condition where one can specify the total amount of the selected asset they want to allot for the trade.
- Quote Percentage: This condition allows the trader to allot a certain percentage of his/her capital per trade. Say, a trader has $6789 in the trading account and he/wants to put 18% of his capital into a trade then he can simply put 18% as the Quote Percentage parameter and the assistant will automatically put the calculated amount of capital in the Base quantity (applied) parameter.
Happy Trading!!