The objective of this video is to show you how to create market safeguards for the Auto Trader. These safeguards will help ensure that the Auto Trader stays within specified limits and protects against potential market crashes.
Navigate to the Buying Power Allocation setting: This setting controls how much of your account's funds the AutoTrader can use.
Input your desired amount: If you have $50,000 in your account but want to limit the AutoTrader to $10,000, enter "$10,000" here.
Understand the safeguard: The AutoTrader will never exceed the specified amount. If a trade would exceed the limit, the AutoTrader will not execute the trade, ensuring your funds stay protected.
Cautionary Note: This step is required for setting up the market safeguards.
Navigate to the Max Positions setting: This controls how many positions the AutoTrader can have open at the same time.
Set the number of positions: If you want to limit the number of open positions, enter the maximum number here (e.g., 2).
Note: This step is optional. You do not need to set a limit unless you want one, as buying power limits may already restrict the number of positions based on the amount available for trading.
Understand the Market Crash Trigger: The market crash safeguard activates if the market moves beyond three standard deviations and starts to reverse, which signals a potential market crash (such as events in 2020, 2018, and 2008).
Enable or Disable the Safeguard: You can choose to enable or disable the safeguard based on your preferences. When enabled, the AutoTrader will exit your positions if a market crash is likely.
Understand the Impact: This safeguard helps protect against significant market downturns by closing positions when a crash is anticipated.
Ensure that the buying power allocation is set correctly to avoid exceeding the account's available funds.
Be cautious when setting the max positions open at a time, as it should align with the buying power limit and trading strategy.
Consider the potential risks and benefits before enabling or disabling the market crash safeguard.
If you are unsure about any of the settings, click on the question mark icon for explanations.
Review your pricing plan to understand the buying power limits and make appropriate decisions.
Use the chat box for any questions or clarifications.
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.
