What if I told you there was a tool out there that would analyze market data, figure out which strategies could best trade that market, optimize those strategies, tell you your likelihood of profit, and then produce source code that you could dump into your trading software and begin using in the real markets?
Let’s just say this mythical program exists. What would the features of this program be? It would have to be able to import any kind of historical trading data, for one. You’d want it to be able to analyze data from equities markets, futures markets and Forex markets; you’d want it to be able to analyze any time frame of data, from minute charts to daily, weekly, or monthly charts.
You would also want it to be able to give it some guidance as to what kinds of strategies to look for, especially if you knew something about the market data you are analyzing. So, if you knew that a particular market moved in trends, you’d want to include moving averages in the strategy; if you knew the market data had frequent breakouts, you’d want to include Average True Range in the strategy; if you had traded that market well with Bollinger Bands, then you’d want to include that in the strategy.
Ok, so what else? This mythical program would need to try a few strategies, and give you some feedback on how well they worked, then eliminate the less profitable ones, and improve the ones that looked good. Then the program would want to start with a pool of fairly good strategies, and improve those, and again, eliminate the losing ones, and improve the profitable ones. You would want to see the program in action, displaying equity curves and profitability reports as it did its work, yes? Then, maybe over a number of iterations, you might start to see some really good systems come forward.
You would definitely want to be able to see any strategy that looked good, and be able to save it for further analysis later; you’d want it to be able to show you all the statistics about a strategy, such as percentage of winning trades versus losing trades; average winning and losing trade amounts, consecutive wins and losses; things like Expectancy, R-value, Maximum Adverse Excursion, Kelly ratios and all the little detailed numbers that would tell you how well this strategy would perform in the real world.
Then, if we were really optimistic, this tool would then be able to just produce some source code that you could plop into a trading platform, of say, Metatrader or Tradestation, and begin using in the real markets. Wouldn’t that be amazing?
You could just feed the program some market data, give it some starting parameters, and then watch it go to town. In a few hours of processing, you could take an algorithm and test it out in the markets.
Wouldn’t that be totally amazing? Seriously, could such a thing exist?
This program exists. It is called Builder.
Adaptrade’s Builder is my secret weapon. Part of me wants to keep it a secret because it is such an amazing powerful tool, but the bigger part of me wants you to succeed in your trading systems beyond your wildest dreams, and Builder needs to be a part of your toolbox.
When I first learned about Builder, I thought it had to be too good to be true; I mean, how could such an amazing program exist? And how could it be affordable? I downloaded the trial, and worked with it for a couple weeks, testing it, building strategies, back-testing, tweaking parameters, and running the resulting strategies. And then I bought it. It felt like I’d discovered a hidden secret. Make no mistake, this program is real, it is affordable, and it works.
Builder is a complex tool; there are many parameters to adjust, and many things you can do to change how it builds strategies, and how it picks winning strategies and eliminates losers. You will need time to get this program up and running. Thankfully, the author of the tool, Mike Bryant, has provided extensive documentation. There are tutorials, sample data sets and parameters, walk-throughs and some bonus ready-to-go strategies. There is a Google group for Builder users, in which Mr. Bryant actively participates. You will have all the support you need to get up and running, and if you get stuck, you can ask questions in the Google group, or you can write me here. (Just post a question to our Contact Us page.)
I use builder frequently, and it has had another effect on my programming. When I am coding a trading strategy by hand (which I still do), I will often compare the back-testing results of my hand-coded strategy with a winning strategy that Builder has created. It gives me a frame of reference for what might be possible or achievable for a given market data set.
You need to try Builder. When you do, don’t keep it a secret. Build. Succeed. Share your success.