In this guide, we'll walk you through the steps for setting up your broker account and creating your first auto-trader bot. This is the foundational process for using our platform to automate your options trading strategy.
This was originally intended as a training for my team, but I thought I would share it with you. Hope you enjoy :)
Step 1: Setting Up Your Broker Account
Log In to Your Account
Start by logging into the platform. Click on your profile image to access the main menu.
Connect Your Broker Account
Select the option to “Connect Your Broker.” You'll be shown a list of supported brokers.
Our recommended broker is TastyTrade because they support futures options, which offer the best returns with minimal risk. However, you can also connect with Charles Schwab, ThinkOrSwim, Tradeier, or TradeStation, depending on your preferences.
Security and Compliance
We take security seriously. Each broker undergoes a security audit to ensure the platform is compliant and secure.
When connecting your broker account, you'll enter your credentials directly on the broker's website—our system never sees them.
Managing Broker Connections
After connecting, you can view your broker connections by clicking on the dropdown menu at the top left corner of your dashboard.
If you have multiple accounts with the same broker, you can easily rename them for better organization under your Profile > Broker Connections section.
Paper Trading
If you want to practice before using live funds, you can use paper trading.
Note: You must have a live broker account connected for paper trading to pull live data and simulate realistic trades.
Re-Authentication (Charles Schwab & ThinkOrSwim)
Charles Schwab requires re-authentication every seven days for security purposes. You’ll receive email reminders to reconnect your account.
Step 2: Creating Your First Auto Trader Bot
Choosing Paper Trading for Testing
It’s always a good idea to start with paper trading before moving to a live account. Paper trading mimics the real-world performance of your bot and allows you to test your strategy without financial risk.
Creating an Auto-Trader Bot
From the dashboard, click on Create Auto-Trader. You will be presented with two options:
Pick an Auto-Trader: Use pre-configured bots with proven strategies.
Create Your Own Auto-Trader: If you have an existing strategy, you can automate it with this option.
Selecting a Pre-Configured Bot
For those new to automated trading, we recommend starting with one of the Starter Bots like the Ready City Retire, Bi-Weekly Rainmaker, or 0-DTE Iron Condor. These bots have been successful for many members and work well with most account sizes.
If you want to customize your experience, you can view detailed information on each bot’s settings and backtesting data.
Creating a Custom Bot
If you have a trading strategy that works for you, but want to automate it, select Create Auto-Trader and proceed to the strategy setup.
You will define the strategy, asset types (stocks, options, etc.), and other parameters like strike prices, delta values, and target price.
Setting Entry Frequency
Define how often you want to enter a trade:
Once a week
Multiple times per week
Multiple times per day (custom times like 9 a.m., 11 a.m., etc.)
You can also specify the day of the week for entry if preferred.
Adjusting Session Times
We offer three trading sessions: Morning, Lunch, and Afternoon. Adjust the session time according to your trading preferences.
Remember that times are based on New York Stock Exchange (ES) hours, but you can modify the timezone settings in your profile for your convenience.
Advanced Settings
For advanced users, you can tweak additional settings like strike offsets, entry timing, and target prices. Most members will not need these advanced settings, but they provide more control over trade execution.
Advanced Exit Conditions for Options Trading
In this section, we'll dive deeper into the advanced features available for setting exit conditions for options trades, which are vital for managing your trades effectively and minimizing risks.
Webhook API System
One of the most powerful features to be aware of, especially for advanced users, is the Webhook API system. This system allows you to connect with third-party services like TradingView, Transpider, or Zapier. Through these integrations, you can set up automated triggers that will activate trade entries or exits based on specific criteria such as indicators or trend lines.
This is ideal for traders who want to automate their trading strategies further, although it's worth noting that around 90% of users won't need this level of complexity. However, it can be beneficial for advanced strategies or custom-coded trades.
Setting Exit Conditions
Take Profit Percentage
This condition allows you to automatically close a trade once it reaches a specified percentage of profit. For example, if you set a 25% take profit, the system will close the trade once you've earned 25% from the position. This is an essential tool for locking in profits without needing to constantly monitor your trades.Loss Percentage
Similarly, you can set a percentage at which the trade will automatically close if it reaches a certain loss. For example, setting it to 100% will close the trade if the loss exceeds the initial investment.Early Management and DTE (Days to Expiration)
Early management refers to setting a closing time based on how many days remain before the option expires. For example, if you set it to close when there are 21 days remaining (DTE), the system will automatically close the position once it reaches that threshold.If you have an option that expires in 45 days and set a 21-day early management rule, the trade will close 24 days before expiration. However, it's crucial to ensure this setting is accurate, especially for zero DTE (days to expiration) trades, where setting it incorrectly (e.g., to 0 days) could cause the trade to close immediately after opening.
Advanced Take Profit and Stop Loss Settings
Advanced Take Profit Options
In addition to percentage-based take profit, you can set the system to close trades based on profit amounts or specific trade prices. For instance, you might configure it to close a trade once you reach a specific dollar amount, such as $100. Additionally, you can set a trailing stop, allowing the system to track the trade’s price and lock in profits as the trade moves in your favor. This is useful for maximizing gains if the market continues in your favor after reaching an initial profit threshold.Advanced Stop Loss Rules
Advanced stop-loss settings include a trailing percentage, where the system will automatically adjust the stop loss as the trade price moves in your favor. This strategy allows you to lock in profits while giving your trade room to breathe in case it moves further in your favor.
Time-Based Exit Conditions
Exit Times
If you're trading options with short expiration periods (such as zero DTE trades), you can specify an exact time at which to close the trade, regardless of the current market conditions. For instance, you could set the trade to close at 2:45 PM on the last day before expiration, ensuring that the position is closed at your desired time.Managing Trade Risk Based on Strike Price
Another advanced feature is managing the trade if your short strike price is hit. This is particularly useful for managing options with assignment risk, where the trade moves into the money, and there's a potential for assignment. By setting up rules to close or reduce the position if the short strike is hit, you can mitigate the risk of assignment and manage your trade’s exposure more effectively.
Mid-Price vs. Guaranteed Price
When managing trades, you typically base decisions on the mid-price (the average between the bid and ask). However, there can be fluctuations in price due to factors like low volume or volatility. In such cases, you can opt for a guaranteed price, which ensures that the system will only close the trade once it achieves the specified bid or ask price. While this can prevent slippage, it may result in the trade taking longer to close. For most traders, the mid-price option will suffice.
Best Practices for Advanced Trade Management
Avoid Overcomplicating with Too Many Settings: While it’s tempting to dive into the advanced settings, it’s essential to remember that the majority of users will find the basic take profit and loss percentage settings sufficient. The advanced settings should only be used when you have a clear reason to optimize your trade management further.
Regularly Review DTE Settings: Be cautious when setting DTE-based exit conditions, especially for zero DTE trades. Incorrect settings here can lead to unwanted trade closures.
Ensure Appropriate Use of Webhooks: Webhooks are powerful tools for automating trades, but they should only be used if you’re comfortable with integrating third-party services. Beginners or casual traders might find manual trade management more straightforward.
By understanding and utilizing these advanced exit strategies, you can tailor your trading experience to your specific needs, reducing risk and enhancing profitability.
Now, we’ve covered how to set up strategies, manage risk, and fine-tune the system to fit both short-term and long-term goals. Now that we’ve gone through the technical steps, let’s summarize the key takeaways for using this system effectively.
Key Takeaways
Risk Management is Crucial: The ability to control risk is at the core of successful trading. By setting parameters like stop-losses, risk allocation, and automatic safeguards like the VIX-based buying power, users ensure they are protected from unexpected market swings. Always focus on creating a system that allows for risk to be effectively managed before diving into live trades.
Customization & Flexibility: The system allows extensive customization, from setting buying power allocation to adjusting position sizes based on market conditions. The ability to tweak the strategy according to the user's needs (like allowing trades to expire in the money or applying a maximum trade position limit) ensures flexibility and aligns with a wide range of trading preferences.
Learning & Adaptation: Starting with paper trading is essential. Users can familiarize themselves with different strategies before going live, reducing the risk of making costly mistakes. Additionally, reviewing trade logs, analyzing exit reasons, and using features like the trade preview can help refine strategies and ensure the rules are set correctly before any money is put at risk.
The Power of Automation: The heart of the platform lies in the automated trader. With automatic trade execution and robust tracking capabilities, users can free themselves from the day-to-day decision-making and let the system handle it all. It’s a perfect fit for those who want passive income without the stress of constant market monitoring.
With the tools and features provided, users can take control of their trading strategies, minimize risks, and maximize returns. Whether you’re a beginner just starting with paper trades or an experienced trader looking to scale, the auto-trader system is designed to cater to every need. The process is simple, and the risk management features ensure that your trades are as safe as possible.
TERMS OF SERVICE: Please be aware that continued use of the Options Auto Trader is subject to our Terms Of Service. If you have any questions or wish to review these terms, feel free to visit the website.