Cloud Solution for AlphaHub Traders
We proudly announce the partnership of AlphaHub and ArcadeTrader.
AlphaHub features science and evidence-based algorithms to trade in the equity and crypto markets.
We already published a widely read article on Medium telling our story:
Our flagship algo the Optimizer has incredible performance with a Sharpe over 4 in a period of 3 years and a CAGR of 354 %.
To be able to use our algorithms members subscribe with a relatively inexpensive monthly fee of $100 (Medium readers price, use the code medium50 to access this discount) and then can read our signals on our platform (they are updated live every day) and also receive emails with the signals information. The signals are the only product from our company. But the execution of these signals is very important and a fundamental aspect of a successful trading experience.
Because there are different styles and preferences of trading we facilitate 4 different ways to execute the signals using different brokers' choices.
4 DIFFERENT WAYS TO EXECUTE THE ALPHAHUB SIGNALS
- Manual trading: once subscribed one can log in to our website and read the daily signals. We feature Opti, Mino, and Optimizer algos that are updated every day at 9:40 am, 10:30 am eastern for Opti and Mino. The Optimizer is either of these two times because it optimizes between the 2 algos and selects one or the other on different days. Given the strategies are based on a single stock per day it is relatively easy to place the orders manually. Slippage should be relatively low even with manual trading but it is not an optimal solution. Unfortunately until now is the main solution for traders in Europe or elsewhere in the world because we don’t have yet integration with a non-US broker such as Interactive Brokers (coming soon). Pro: a) it is free, b) by looking at the charts you can control better the entry and exits points of the trades suggested by the signals, c) you can use any broker (even outside the US). Con: a) it is slow, b) you need to be around when the signals come out (9:40 am and 10:30 am eastern) c) it is not easy to close and open positions at the same time.
- A fully automated Trader can be found here:
While AlphaHub main product is the signals we wanted to offer an additional tool to help with the execution. We created an app that can execute the trades automatically. While it is created by our company it should not be considered the official way to carry the execution of the trades rather it is a form of community contribution by our company. This is why we offer 4 different ways to execute the signals, all of them have different pro and cons. This solution is free to download and use (however you need a subscription to AlphaHub to be able to receive signals).
The Automated AlphaHub Automated Trader is a .exe app that can be run on any Windows OS machine. It has an easy-to-use GUI that connects, via encrypted keys, with our chosen broker Alpaca Markets that has a user-friendly, modern, and well-documented API. Users open an individual account on Alpaca (Quantonomy has no access to the fund or the API keys) and then connect the Trader to their account.
The Trader executes the signals posted on the AlphaHub platform without any human intervention and keeps track of its performance (i.e. real trades vs theoretical performance) and produces reports that measure slippage, the average time to execute a trade, and other algo behavioral parameters. Pro: a) it is free, b) it has a nice GUI with colorful graphs and several stats, c) fully automated (with a little supervision needed, to restart it if it stops for example). Con: a) it is relatively stable but it has the occasional connection problem and other bugs that we are trying to resolve, b) it has also the limitation to be integrated only with Alpaca brokers, c) it has a non-programmable execution strategy, and d) it needs to be run on a local machine or a rented server.
3. Community-created execution algos. Our members come from different backgrounds and a relatively large percentage is constituted by developers and programmers. Some of them have created scripts in different languages to connect to the AlphaHub API and WebSocket to fetch the signals and then connect to different brokers. Check out the community solutions:
We also launched few challenges with prices if you would like to participate.
Pro: a) several languages C#, python, Erlang, b) flexible execution strategies, c) different brokers, d) fully open source. Con: a) tested only by the members and not by AlphaHub (we don’t do validation of these community solutions and it is up to the members to validate them) b)suited mostly for people with coding skills.
4. New cloud solution in collaboration with ArcadeTrader.
This is a completely online platform that allows connection to 3 different brokers: Alpaca, Ameritrade, and Robinhood. The platform originally was designed for users that want to create their own trading and execution strategy.
But with this new collaboration traders don’t need to code but they can simply use directly the signals from AlphaHub as the default strategy. They can link the ArcadeTrader account with their AlphaHub account and then trade with a choice of 3 different brokers.
ArcadeTrader uses a simple but effective execution strategy. But this execution algorithm can be also modified by the more advanced user (it is just an option) both with Java, Python, or natural language.
Pro: a) Simple to use and probably the best choice for the trader that wants a fully and stable automated solution, b) it is on the cloud so there is nothing to download or run locally, c) you can access your account from anywhere, d) 3 different brokers, including the popular RobinHood, e) for the more advanced user there is flexibility in creating their own execution strategy. Con: a) it is inexpensive but not free (see below).
How to set up your ArcadeTrader account to use AlphaHub signals
You will need an AlphaHub subscription (use coupon MEDIUM50 for a 50 % discount) and also sign up for a premium ArcadeTrader account (AlphaHub members get a discount use ALPHAHUB2 to get a 20 % discount). It is also an inexpensive service at $29.99 per month (or $19.99 billed annually), without the discount.
As you go through the registration on ArcadeTrader you will be asked to sign in with your broker:
Each of them have some pro and cons, Alpaca has the additional advantage of having an API for paper trading (while Robinhood and Ameritrade don’t).
After sign up and mail verification, you can access the home page that has nice features, like a chart of your account, balances, open positions, and similar.
You can create your own strategies and backtest them but also you can use premade strategies. At the moment AlphaHub algos are the only already made strategies featured.
IMPORTANT: Please make sure to have an AlphaHub subscription and an Arcade Premium subscription before going through the next following steps.
STEP 1:
On the left side of the Home page, there is a menu panel. Then select Settings from the menu.
Then select Connectors on the top right tab.
Here is where you insert your information if you have an Alpaca account you can also get data so provide the keys information, the same thing if you have a Polygon account. If you don’t have either don’t worry about this part.
In the AlphaHub Signals panel, you will need to insert your Email and Password (the same credentials you use to register and log in on the AlphaHub platform). By the way, the email and pass in the example above are fake (we are nice, not stupid).
Don’t forget to Save your information (the red button on the left top side).
STEP 2 :
On the left side of the Home page, there is a menu panel. Select Investment Profile.
When you land on the page you will see a panel similar to this one:
- Make the “Can Begin Trading” active (click yes, and it will go from red to green)
- Make the “Can End Trading” active (click yes, and it will go from red to green)
- Decide the amount to trade. There is a couple of ways to do this
a) Select a Max Investing amount, this is the maximum amount you want to invest over the history of the investment period. Choose a smaller value of what you have in the portfolio if you want to do some live trading test or use a larger sum if you want to let the investment amount compound over time.
b) Alternatively, you are ready to trade the full amount in your account then you will need to use the margin in your Alpaca account (ArcadeTrader executes a buy and sell at the same time to minimize slippage so you will need to borrow using the margin for just a few minutes until both orders are executed) then you need to do this instead of step 3-a. Set Max Investing to 0 (default value) in Investment Profile.
Go back to the menu panel and choose Trading Accounts.
On the right side of this panel click on the relevant account Actions dropdown menu.
Then click Edit:
A pop-up window will show up that looks like this (make sure you don’t block up the pop-up window):
Set the Buying Power on and the other settings in the panel above (including Max Investing 0, that is the default). This will allow the margin to take place when necessary.
4. You can experiment with Max Day Loss and Max Day Profit but I would leave the default value untouched because our testing shows that any stop loss or taking profit impacts the performance of the algorithms negatively.
5. Adding a strategy. Click on Add Strategy and scroll down to the next panel.
Under strategy choose the strategy you prefer, our favorite is The Optimizer. But you can add other strategies if you like.
Our suggestion is to use 50 % for Max Investment per Trade but only if you have a 2x margin in your account. We need the 2x margin because we will place a buy and a sell order at the same time at trading time. We will borrow temporarily some amount of money if the buy order comes before the sell so we use margins only for a short amount of time (under the default execution strategy after 5 minutes we force both sell and buy orders with a market order).
Under Max Investment per Strategy, you can select the 0 % amount (default value that actually gives priority to Max Investment) if you use just 1 strategy or a preferred percentage if you want to try more than one AlphaHub strategy. Remember to save all your settings.
And you are done!
Happy Trading.
For Advanced Users only:
Step 3:
Again go to the menu on the left side and select Develop Strategies:
In this section, you find the default execution strategy for the AlphaHub signals (the trading strategy is proprietary and it is not available on the ArcadeTrader website). It is a simple but effective execution strategy, the same that is used in our automated trader. It places 2 limit orders, one buy and one sell for the open and close positions (or the opposite for a short). The limit orders are based on a percent added or subtracted to the ask and bid. After a 5 minutes timeout if the limits orders are not executed a market order is used instead to force the execution of any amount of the initial order that was not executed yet.
If you are an advanced user and know what you are doing you can modify this default execution strategy and use something more sophisticated. There are 3 language choices you can use to program your execution strategy, Java, Python, or natural language. On the ArcadeTrader website, there is a Manual that goes in-depth on how to set up this.
In the future, we will discuss in another Medium article and on the blog on our website different types of execution strategies that can improve trade performance but for now, you can devise your own or look into the vast literature under this topic, just google terms as arrival price or shortfall implementation:
Conclusion
We hope you find the right way to use our signals and contribute to our community with your own code or applications. We believe that the ArcadeTrader cloud solution is probably the best in particular for the members that want to focus on using the signals without becoming a programmer or spending too much time babysitting each trade or our not yet fully robust automated trader. Please as always send us feedback and suggestions at:
giovanni@quantonomy.fund
and remember Trust Math, not Emotions!