Gen 2 Autotrading Question

MK … I’ve opened an account at Open E Cry to try the Gen 2 autotrading and have two questions:



1) They told me a “letter of direction” would be presented by C2 once the autotrading details are set up here, and this must be faxed to Open E Cry before autotrading could commence. I did not see any such “letter” offered once I set up my system on C2. Can you describe what this “letter of direction is” and how to get it?



2) In the autotrading setup the scaling factor appears to be calculated from a dollar number entered. In my case the dollar amount needed for 50% scaling is considerably more than the deposit I made into Open E Cry (but my deposit equals the recommended amount by the vendor for the number of contracts traded). Is this dollar amount that is used to calculate scaling used at all at the broker side (ie. is there any check that this much is in the account)? Or is it used only by C2 to get a percentage?

Hi, Randy. The “letter of direction” is presented on the screen when you set up your OEC account. There will come a moment when C2 says, “Please click this link to download the LOD” (or something like that). It’s hard to miss, I think. The main point is: just begin the process of turning on your account at C2, and the LOD will be presented to you when the time is ripe.



2) The dollar value you enter on the C2 AutoTrading setup page basically means: “If the trading system blows up tomorrow and loses everything, how much of my real brokerage account will I lose?” (Legal disclaimer: it’s impossible to guarantee that your loss will be capped at this amount, but this is the design goal of the software.) So, entering a number that is greater than the cash in your account has a risk associated with it: if the system blows up and loses everything, you will empty your account completely. That said, if you know what you are doing (and I think you are an experienced trader, so you surely do), then I can tell you this: that we do not transmit what you type in that space to Open E Cry. We simply use the number to help us calculate how to scale the trade signals that get sent to Open E Cry. Example: system recommends Buy 100 @ES. If you have 50% scaling, you will Buy 50. That you need to type some fantasy number into the space in order to achieve 50% scaling is not revealed to the broker.



Now, all that said, it does raise an issue. The system vendor (I have no idea which system you are talking about) probably needs to “rescale” his system so that he doesn’t have all that extra cash lying around in his account. It sounds like what he is doing is placing relatively small trades (relative to the size of his C2 account). If he “rescaled” his system (and gave up the extra cash), he could continue to place small trades, but you could use a realistic scaling factor.



It’s obviously up to you and the system vendor. If you want me to contact him or her, drop me a line and I will gently remind him about the “rescale” feature that all system vendors have available to them (under the “admin” menu, on the system page).



MK

Thanks, and we’ve talked separately about the LoD issue that is being sorted out. My autotrading page on C2 does show the system as being set up, even though no LoD option was presented during the initial process.



On the system scaling issue, this is Eternal Return SwingNQ which is trading 10 contracts at a time now with something like $220K in his C2 account (ie. $22K/contract). He recommends $10K/contract (about 3x typical initial overnight margin) and I have opened the Open E Cry account with $50K to trade 5 contracts at a time (ie. 50% scaling). But I had to enter about $110K into the setup screen to get 50%. All I care about is the 50% number … regardless of the vendor’s C2 account size at any given time, I want to trade at 50% scaling factor.

Thanks, and we’ve talked separately about the LoD issue that is being sorted out. My autotrading page on C2 does show the system as being set up, even though no LoD option was presented during the initial process.



On the system scaling issue, this is Eternal Return SwingNQ which is trading 10 contracts at a time now with something like $220K in his C2 account (ie. $22K/contract). He recommends $10K/contract (about 3x typical initial overnight margin) and I have opened the Open E Cry account with $50K to trade 5 contracts at a time (ie. 50% scaling). But I had to enter about $110K into the setup screen to get 50%. All I care about is the 50% number … regardless of the vendor’s C2 account size at any given time, I want to trade at 50% scaling factor.

Whoops … IE croaked (“can’t display page”) and my reply appeared twice when I reloaded.