Automated Trading With MultiCharts: Automated Trading with MultiCharts
MultiCharts supports automated trading (see Figure 1), including backtesting on historical data, strategy optimization and walk-forward testing. MultiCharts comes with more than 100 preprogrammed studies based on many popular trading concepts. Traders can access the code to modify any study to match their exact needs. In addition, traders can either write their own code in the PowerLanguage environment, or work with a qualified programmer to develop custom indicators and strategies.
|Figure 1: An example of an automated strategy in MultiCharts.|
In MultiCharts, a signal is considered a mechanical technical analysis tool that is used to specify market entry and exit points according to a set of trading rules. Signals are the basic building blocks of strategies, and more than 100 pre-built, customizable signals are included with the MultiCharts platform. A strategy can be constructed by applying a set of these signals to a chart without having to write any code. The signals can be used to send orders directly to a broker, thereby automating the trading process. To access the pre-built signals, from the main menu, click Insert > Study and select the "Signals" tab, as shown in Figure 2. To select a signal, highlight the appropriate signal and click "OK." To select multiple signals, hold the Ctrl button on the keyboard and click to select the appropriate signals, and then click "OK" to apply the signals to the chart.
|Study and select the "Signals" tab to view a list of pre-built signals.\' src="http://i.investopedia.com/inv/articles/site/Automated_Trading_With_Multicharts_Figure_2.gif" width=475 height=555 src_cetemp="http://i.investopedia.com/inv/articles/site/Automated_Trading_With_Multicharts_Figure_2.gif">|
|Figure 2: From the main menu, click Insert > Study and select the "Signals" tab to view a list of pre-built signals. Image created with MultiCharts.|
Figure 3 shows a daily chart of MHP with two signals applied: the MovAvg Cross LE and MovAvg Cross LX. The blue arrows indicate trade entries, and the green dotted lines show the outcome of the trade.
|Figure 3: A simple strategy based on a moving average crossover created by applying two signals to a chart.|
Traders can customize signals by right-clicking on the active chart and selecting "Format Signals…" This opens the Format Objects window. Select the "Signals" tab, highlight the appropriate signal, and click "Format." This opens the signal-specific formatting window, shown in Figure 4 where traders can customize input variables, properties, and the appearance of trade entries, exits and the connecting lines (which connect each trade's entry and exit points on the chart).
|Figure 4: The signal-specific formatting window is used to define input variables, how the trade entries and exits appear on the chart, and other properties.|
The PowerLanguage programming environment, called the PowerLanguage Editor, is a development tool for creating and managing PowerLanguage studies. The PowerLanguage Editor is used to perform a variety of functions, including:
- Creating studies
- Importing and exporting studies
- Protecting studies (saving as closed-source, for example)
- Editing the study code and settings
- Editing data
- Compiling (or verifying) studies
- Click the Run PowerLanguage Editor icon on the MultiCharts Main toolbar (see Figure 5); or
|Figure 5: From the Main Toolbar, click the "New PowerLanguage Editor" icon to open the programming environment.|
- Click the PowerLanguage Editor icon on the Quick Launch bar; or
- Click the PowerLanguage Editor icon on the desktop.
The PowerLanguage Editor opens. Figure 6 shows the PowerLanguage Editor with the two signals that we had applied earlier to a chart.
|Figure 6: Code from the MovAvg Cross LE and MovAvg Cross LX signals in the PowerLanguage Editor.|
To create a new study, in the main menu click File > New. This opens the New window, shown in Figure 7, where users can select a new Function, Indicator or Signal.
|Figure 7: From the main menu, click File > New to create a new function, indicator or signal.|
Becoming proficient in any programming language takes considerable time and effort. Writing code - whether for functions, indicators or signals - in MultiCharts is no exception. Specific details and help for programming in the PowerLanguage environment can be found in the MultiCharts User Guide by clicking Help > MultiCharts Help in the main menu, and by visiting the MultiCharts forum by clicking Help > Discussion Forum. Additional information can be found through the MultiCharts MCWiki. To access the Web portal on the MultiCharts home page mouse over "Support" in the top menu and click "Online Help and Wiki."
Some traders may have specific ideas for automated strategies but are unable to customize the pre-built signals to suit their needs and do not have the expertise or desire to learn the required programming skills to write their own code. There are numerous add-ons from third-party vendors that offer commercial indicators and strategies, as well as custom programming services to help traders develop automated trading systems. A partial list of these third-party vendors is available on the MultiCharts Web site; from the home page mouse over "MultiCharts" in the top menu and click "Add-ons" from the drop-down menu. Automated Trading With MultiCharts: Conclusion
Fintech is a portmanteau of financial technology that describes ...
Indicators are statistics used to measure current conditions ...
A technical indicator that combines aspects of candlestick analysis ...
The excess of the market value of an asset over its book value. ...
A process that establishes an estimate of the value of a failed ...
A valuation methodology used to calculate the present value of ...
Understand the three components of the cash conversion cycle. Learn how each of those components work to capture the liquidity ...
Understand the steps necessary for a small business to secure equity financing for working capital, financing expansion or ...
Take a look at the important debt-to-equity ratio, a key metric of financial leverage, and learn what the average debt/equity ...
Learn what the average profit margin is for companies in the banking sector, along with other evaluation metrics often used ...