AutoUFOs User Guide - TS9.x v9€¦ · Title: Microsoft Word - AutoUFOs User Guide - TS9.x v9 Author: perso Created Date: 8/6/2018 7:05:49 PM

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AutoUFOs™ – User Guide [ TS9.5 | v9 ]

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AutoUFOs™ for

Version 9.5

Analysis Technique

User Guide

[email protected]



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Legal Considerations Disclaimer: When using this App you understand and acknowledge that the risk of trading can be substantial and that each investor and/or trader must personally consider whether this is a suitable investment. Past performance, whether actual, or indicated by simulated historical tests of indicators, is not indicative and in no way a guarantee of future results. Your actual trading may result in profits or losses as no trading system is, or can be, guaranteed. By using this app, you accept full responsibility for your actions, the trades taken and any profits and losses made. You also agree not to hold the developer of this app responsible for any outcome arising out of your use of this app. No Service Guarantee: You understand and agree that the developer of this app makes no representation, warranty or condition that: (a) the TradeStation® indicators and services will be uninterrupted, timely, secure, reliable, accurate or error-free; (b) the indicators and services will meet your requirements; (c) the market data obtained through the services taken will meet your expectations, be suitable for any purpose, be accurate, complete, reliable, current, timely, adequate, or error-free. The developer of this app cannot be held liable for the use or interpretation of the market data. You understand and accept that the market data may be delayed, inaccurate, contain errors or omissions and the developer of this app will have no liability with respect thereto. You further acknowledge that the developer of this app does not endorse nor is responsible for the market data of any third party supplier. To summarise: the TradeStation® indicator could malfunction, the data that is provided may contain errors and the developer of this app cannot guarantee error-free usage at all times. Calibration: You understand and agree that the user of this app is responsible for the calibration of the indicator and that different calibration parameters input by the user could produce completely different outcomes. The default calibration parameter is set at ’0.50’ on the first installation of this app. However, this is simply a default calibration and the setting does not imply that this is a valid input for its use. As previously stated above, the user is solely responsible to adjust the calibration input to meet their requirements hence the user will be liable for the ultimate results obtained when using this app for any application. Testimonials: The testimonials we have received are the purely subjective opinions of the people who have given the testimonials. User experiences have not been verified by our company or independently verified through any other organisation. These results may not be typical and individual results will vary and may not be representative of the experience of other clients.

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What does this app do?

This app aims to plot Price regions in a chart where potential BUY and/or SELL Orders are in a pending state. Those potential Orders are expected to be in waiting mode and could be executed once that market revisits or returns to those Price regions.

The above concept is the reason for the name of this indicator: Un-Filled Orders (UFOs).

Once those potential Un-Filled Orders are filled, a bounce or movement is likely to happen and therefore those UFO areas could be selected for Entries and/or Exits for any type of trade or investment. This may include but is not limited to long-term, intermediate-term, short-term or hedging.

The desired trade duration (position, swing or intraday trades) would depend on the time interval (time frame) selected when applying the indicator. For example; by applying the indicator to a chart selected with a daily time interval this is likely to produce trades that could potentially last multiple days or applying it using a 60 minute time interval would likely produce trades that could last a few hours and so on.

Note: Those Price regions identified are referred to as UFOs and are automatically plotted in the form of oval shapes in the charts which are also known as “Flying Saucers”.

Note: This app can be applied to any time interval based on Time (Second, Minute, Daily, Weekly and Monthly Bars), Volume (Share Bars) and Activity (Ticks Bars).

The following visual example displays Green and Red UFO Price areas in a chart where Green would suggest that BUY Un-Filled orders may be waiting and Red would suggest that SELL Un-Filled orders may be waiting to be filled. A trader could decide to buy when Price enters the Green UFO and sell when Price enters the Red UFO.

Based on that concept, those coloured UFOs could be selected to plan trades where a trader, investor or a hedger;

- is planning to catch and ride a Market move and profit from it (Directional Strategies: Enter or Exit Long or Short Positions). They are expecting that the market will move in a certain direction after hitting and reacting to those Un-Filled Orders (coloured areas in the chart) and later reach a certain Exit Price.

- is planning to profit from selling Out of The Money (OTM) options and collect time decay as these traders are hoping that they will expire OTM (Non-Directional Options Strategies such as Iron Condors, Credit Spreads, Strangles, Straddles, etc.: Profit from time passing while a Market trades within a Range or sideways). They are expecting that a market will not reach a certain point in the chart before a certain date and sell or write options to collect premium waiting for their expiration date while price stays within certain limits without surpassing the Strike Price of the Options sold.

[email protected]



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How to subscribe to this app?

- Step 1a.: Within TradeStation® launch the TradingApp® Store by clicking on the “TradingApps” button and then clicking on “TradingApp® Store” (if this is not shown go to View on the main menu bar)

Red UFOs = Red Flying

Saucers

Green UFOs = Green Flying

Saucers

Screenshot produced using TradeStation®


“TradingApps” button

“TradingApp® Store” button

[email protected]



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- or Step 1b.: Connect with the TradeStation® TradingApp® Store via a web browser such as Google Chrome, Safari, Microsoft Internet Explorer, Microsoft Edge or Firefox Mozilla, etc.:

https://tradestation.tradingappstore.com

- Step 2: Use the Search box (normally located on the top of the webpage) and type “autoufos” and then press “Enter” or click on the search button

- Step 3: Select the AutoUFOs™ app and click “Subscribe”

Note: Once the subscription process has been completed, TradeStation® will automatically download the indicator and make it available within TradeStation® for the user to insert in a chart.

How to make sure that your TradeStation® is ready for the app?

- Step 1: Make sure that you are logging in by using the same username and password you used when you subscribed to the app and allow TradeStation® to download the TradingApp® Store products

- Step 2: To be performed on the first use of this indicator. To be skipped otherwise. Go to View / Chart Analysis Preference and Click on the Symbol Tab and ensure “Show empty daily trading periods for traditional chart types” and “Show empty intraday session periods for traditional chart types” are unchecked in the Chart Analysis Preferences window, if not, Uncheck the two options and click “OK”.

- Step 3: Make sure that you are using the right TradeStation® update version (Update 22 or higher; Check by clicking on Help – About TradeStation…) and go through the update process if that is not the case by Clicking on Help – Update Manager


Click “OK” as these two

options are unchecked

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Note: The TradingApp® Store will not allow you to click on the “launch” button when using outdated versions of TradeStation® and it will show a light orange button

How to launch a ready-to-use workspace with the app in it?

- Step 1: You may have the TradingApp® Store Dashboard open automatically, if not, launch it manually by clicking on the “TradingApps” button and then clicking on “TradingApp® Store Updates” (if this is not shown go to View on the main menu bar)

- Step 2: Click on the “launch” button and enjoy the “AutoUFOs” workspace

Light Orange means that

TradeStation® is running an

outdated version

Dark Orange means that

TradeStation® is ready for the app

Screenshots produced using TradeStation®


“TradingApps” button

“TradingApp® Store Updates”

button

Click on the “launch” button

[email protected]



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Note: The “AutoUFOs” workspace allows you to easily use 2 different charts with the app active in them as well as a Matrix to be able to execute trades easily. This workspace can be customized and saved by the user as well as the app can be inserted in other charts located in other workspaces or other desktops. Check the next section to learn how to do that.

How to manually insert this indicator into a TradeStation® chart?

- Step 1: Right-click anywhere on the chart background and select “Insert Analysis Technique”


Option to be selected

Charts

UFO Bands and Flying Saucers

Matrix


[email protected]



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- Step 2: Look at the Tabs at the top of the menu bar for the Tab named “Indicator”

- Step 3: Look and find “AutoUFOs”

- Step 4: Select “AutoUFOs” by left-clicking on it and the then click “OK”

Note: If “Prompt for Format” was selected you will be provided with an additional settings screen. Ignore it for now by clicking “OK” and refer to the Section on Settings to understand your options in more detail.

Note: Once this app is inserted in a chart it then needs to be calibrated. Please refer to the Section on Calibration to understand how to perform this process.


Make sure you are

looking at this Tab

Option to be selected

Click “OK” as the right

option is highlighted

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Which components are displayed?

The example illustrates the various components available when using AutoUFOs™:


UFO Efficiency Stats

Flying Saucers

Darker UFO

UFO Price

Labels

Flying Saucers

UFO Bands

Lighter UFO

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UFO Bands Are a visual representation of Price regions in a chart where BUY and/or SELL Orders are potentially still in a pending state: Un-Filled Orders (UFOs).

Darker/Lighter UFOs Green UFOs would suggest that BUY Un-Filled Orders may be available and Red UFOs would suggest that SELL Un-Filled Orders may be available and waiting to be filled. The app assumes that the darker the colour the greater the potential for a larger amount of Un-Filled Orders.

Flying Saucers The round Flying Saucers have the very same height as the UFO Bands but add an additional inner circle. The app highlights where the greatest concentration of Un-Filled Orders is potentially found by plotting inner circles.

UFO Price Labels The two figures displayed have a different meaning depending on the UFO colour: In the case of a Green UFO, the figures point at the upper part of the inner circle within the Flying Saucer and the lower part of the UFO Band; in the case of a Red UFO, the figures point at the lower part of the inner circle within the Flying Saucer and the upper part of the UFO Band.

UFO Efficiency Stats Are a statistical measurement showing how often (percentage-wise) the Market chosen by the user bounces from UFO to UFO (Green-to-Red or Red-to-Green) in a selected time interval. This measurement can vary greatly depending on the Calibration Inputs and the amount of data loaded.

Flying Saucers


Inner Circles

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Which settings are available?

There are two types of settings available to customise this app:

- Settings that impact the calibration of this app - Settings that vary the way on how the information is displayed on the screen

Accessing the Settings Menu To access the settings menu after the indicator has been inserted into a chart we need to:

- Step 1: Right-click anywhere on the chart background and left-click on “Format Analysis Techniques…”

- Step 2: Select “AutoUFOs” by left-clicking on it and then click “Format”

- Step 3: Select the “Inputs” Tab to show all customizable parameters for user inputs

Note: The two upper input fields are related to calibrating this app. Remember that this app must be calibrated. These calibration-related inputs will be covered in the Section on Calibration…

Click “Format”

as the right option is

highlighted




[email protected]



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Once the settings menu has been accessed we can act on the following 5 different display parameters. Notice the visual difference when using different inputs below…

- ShowFlyingSaucers - ShowUFOBands - HideHitUFOs - ShowLabels - FontSize

ShowFlyingSaucers This input can be set as “True” or “False”; then click “OK”

True

False

Calibration parameters

Display parameters


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ShowUFOBands This input can be set as “True” or “False”; then click “OK”

True

False

HideHitUFOs This input can be set as “True” or “False”; then click “OK”

True

False



[email protected]



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ShowLabels This input can be set as “True” or “False”; then click “OK”

True

False

FontSize This input changes the size of the fonts within this indicator. It can be set as any number where the greater the number the greater the size of the font and vice versa; then click “OK”

Important Additional Window Settings This app needs some space on the right side of the chart to be able to plot and display written data. Access the Chart Window settings and set the Chart Properties with the suggested values displayed below by:

- Step 1: Right-click anywhere on the chart background and left-click on “Format Window…”



[email protected]



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- Step 2: Locate the “Chart Properties” section, input the desired values and then click “OK”

How to calibrate this app?

Calibration is a key process in defining how the analysis is carried out and will impact the potential results obtained by the user using this app. The calibration input is down to the user’s personal judgement and is at their own risk.

To calibrate first access the settings menu and then follow the series of steps as described below:

Accessing the Settings Menu To access the settings menu after the indicator has been inserted into a chart we need to:

- Step 1: Right-click anywhere on the chart background and left-click on “Format Analysis Techniques…”

- Step 2: Select “AutoUFOs” by left-clicking on it and the then click “Format”

Click “Format”

as the right option is

highlighted




[email protected]



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- Step 3: Select the “Inputs” Tab to show all customizable parameters for user inputs. In this section we will exclusively focus on the two upper input fields.

Performing the calibration process

- Step 1: Locate “ShowUFOStats” from the list, type “True” and then click “OK”

Note: This setting will make the app display the current Stats on a specific market based on the Calibration value, the chosen time interval and the Data Range selected

Calibration parameters

“True” input



[email protected]



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- Step 2: Re-access the settings menu (as described above) and change the Calibration input to a different desired value (between 0 and 1) and then click “OK”

Note: Notice how the resulting Stats change as different parameters are input

- Step 3: Repeat Step 2 until the Stats are satisfactory to the user of this app

Note: Once the app is calibrated according to the user preferences, the UFO Efficiency Stats could optionally be turned off by re-accessing the settings menu (as described above) and changing the “ShowUFOStats” parameter to “False” and then clicking “OK”

Note: Continuous Contract Ticker Symbols using the ‘@’ should work better when calibrating Futures Markets (for example: “@es” instead of “esu18” or “@cl” instead of “clu18”)

Stats

Type the desired calibration input here



[email protected]



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Examples on how to use this app?

The following examples describe two different ways on how a trader, investor or a hedger could use this app. There probably are many other ways to make this app useful and we would love to receive your suggestions and know more about your experiences as well. Please treat the following examples for demonstration purposes and feel free to use [email protected] to connect with us and share your experiences and ideas.

Going Long (by Buying Low and Selling High in order to profit from a rising market) or Going Short (by Selling High and Buying Low in order to profit from a falling market)

The thought behind Going Long or Going Short is to enter a market ready to catch and ride a market move in a given direction and profit from it: Going Long would profit from an upwards move, where Going Short would profit from a downwards move.

In order to do so, the opening and closing time of the trade is critical since entering or exiting too soon or too late would end up in a problematic situation. The Un-Filled Orders (UFOs) concept behind the AutoUFOs™ app could certainly be useful when aiming to identify the best moment to initiate a trade and when to finalise it and collect any profit that may have been produced.

Going Long Example: Buy within a Green UFO (to initiate) and Sell within a Red UFO (to finalise)

Pre-

Plan

ning

the

Trad

e

Step 2: Selling Price

where to realise profits

Available Price

The

End

Resu

lt Step 2: Sold at 183.24

(Not the right time to BUY yet)

Step 1: Buying

Price if the market reaches this UFO

Step 1: Bought at

157.99


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Going Short Example: Sell within a Red UFO (to initiate) and Buy within a Green UFO (to finalise)

Selling Options and keep the Premium collected

The thought behind Selling Options and keep the Premium collected is based on identifying certain places on a price chart that are not likely to be reached and Sell Options with strike prices beyond those places.

The Options contracts sold would be Out of the Money (OTM) and they would remain OTM until their expiration date as long as the Market price does not reach the Strike price of the Options sold within that given period of time.

If all of the above was true, the trader would have collected the Premium for selling those Options that would expire worthless, allowing the trader to keep that previously collected Premium.

The Un-Filled Orders (UFOs) concept behind the AutoUFOs™ app could be useful to theoretically identify certain places on a chart that are likely or unlikely to be reached anytime soon.

Keeping in mind the concept that when a market enters a UFO the expectation would be to see a reaction or a bounce from that price region adding duration to a trade. Think of a case where those UFOs are quite far from the current available price or cases where there are multiple UFOs upon UFOs. In this instance it would be reasonable to expect that a market with these characteristics is unlikely to surpass any of those UFOs anytime soon and therefore an Options trader could capitalise on a setup like this by Selling Options where price is unlikely to reach.

In addition to this, time passing would lead to a decay of the Options Premiums helping this type of trade to accumulate profitability little by little, keeping in mind that nothing stops time from passing.

Available Price

Step 1: Selling

Price if the market reaches this UFO

(Not the right time to SELL yet)

Step 2: Buying Price

where to realise profits

Pre-

Plan

ning

the

Trad

e

The

End

Resu

lt Step 2:

Bought at 2667.25


Step 1: Sold at

2685.25

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Furthermore, think in terms of probability and ask yourself the following question: what is of a higher probability? To determine with precision where a market is going to turn and where it is headed to, or to determine where a market is not likely to go within a certain amount of time?

If you would rather choose the second case you may be interested in observing the following illustration that shows an advanced Options Strategy commonly known as Iron Condor where a profit would be produced from time passing while a Market trades within a Range or sideways. In other words while a Market remains trading within a Range defined by Red UFOs and Green UFOs causing its price to remain range bound during a given period of time as a consequence of the potential bounces produced when its price travels from UFO to UFO (Green-to-Red or Red-to-Green).

Non-Directional Options Trade Example

Note: In all cases described in this user guide, it would be advisable to have a contingency plan on what to do in case a market moves against the trader, investor or the hedger. The use of Stop Market Orders, Protective Long Options Contracts or any other type of risk management technique could be useful. These sort of decisions are to be taken by the user of this app.

Not likely to

reach this

place on the chart

anytime soon

Price travelled

within the expected

range staying

between UFOs


Step 1: Entered a

Non-Directional Options Strategy

Step 2: Allowed

Options to expire

worthless

Pre-

Plan

ning

the

Trad

e

The

End

Resu

lt

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AutoUFOs User Guide - TS9.x v9€¦ · Title: Microsoft Word - AutoUFOs User Guide - TS9.x v9 Author: perso Created Date: 8/6/2018 7:05:49 PM