Algorithmic Trading Tips 02.
SPEED UP YOUR DECISIONS.
HOW TO CREATE YOUR OF EQUITY BASKET OR ENERGY SPREAD.
It is an easy task if you want to chart just one equity. But how do you chart a whole basket of instruments with just one click? That’s what custom symbols in Tradesignal are meant for and they help to speed up your access to visual information, for faster trades, less work and potentially, better profits.
FIG. 1: FOUR BANK SHARES TO BE MIXED IN A FOLLOWING BASKET / BENCHMARK.
To chart the performance of this basket we need to create a custom symbol. First, select “New Symbol à ‘A composite symbol calculated by formula”. Second, enter the following code:
UKBankBasket = C of 'BARC.L’ + 'HSBA.L' + 'LLOY.L' + 'RBS.L';
Use whatever symbol codes your data provider (Bloomberg, Morningstar, Thomson Reuters …) uses and don’t forget the parenthesis around that symbol code. In this example I used Thomson Reuters RICs.
The meta command ‘outputlotsize(1)’ defines the global settings of this custom symbol. In this case I set the lot size to 1, as you will earn £1 when the composite symbol rises by one. This functionality is mainly used by futures traders to adjust for the right ‘big point value’ in the future.
Next you define a variable as a placeholder for your calculations. You can use all kind of functions from Equilla (Tradesignals’ formula language) when calculating your new custom symbol, so you are not fixed to a simple addition of four stocks like I did it in this example. The more complex then, the more work Tradesignal is doing for you. As an example I can rewrite the code with “(2 * ’BARC LSE’)”, this will alter the weighting within my bank basket to favour moves from Barclays. Instead of ‘2’ I could also use an input to be flexible and for later optimisation.
The last step is to draw the chart. Therefore you can use the ‘drawline’, ‘drawbar’ or ‘drawcandlestick’ command. Finally name and save this custom symbol, e. g. ‘UK Bank Basket’. This is now a symbol stored in Tradesignal; it can be shared with colleagues or charted again in a flash, no more coding required.
FIG. 2: A SECURITIES COMPOSED OF FOUR BANK SHARES THAT CAN BE USED IN TRADESIGNAL LIKE A NORMAL CHART.
With this custom symbol it is a quick and painless task to chart the relative performance of this bank basket against the index. Using your new custom symbol we chart that along with the index we wish it to be compared to and then build in a relative performance indicator as you can see.
FIG. 3: THE PERFORMANCE OF THE SELF-CREATED BANK SHARES BASKET COMPARED TO THE FTSE 100 INDEX.
So if you need to chart a stock basket, an energy mix, a custom spread or even the performance of your portfolio, using the custom symbol functionality can save a lot of small fiddly steps and ultimately contribute to more efficient trading.