How to Use Algo Trading to Boost Performance

Focus: Technology

John Person Image John Person Founder and President, John Person, Inc.

Can you survive trading in today’s algo world? I believe you can, asserts John Person, a 36-year trading veteran who has written several books and is a featured speaker. Third part of a weekly series.

This is the third in a series of articles designed to help traders better understand what “algo” trading is and what the various inputs and factors are so that you have a comprehensive idea how to build these concepts into your trading routine to boost performance.

As promised, this week’s article will cover why we want to incorporate spreads in our trading models, from various market products as well as different timeframes.

Remember, in this advanced trading environment, diversification does not come from just trading different products; trading system models can be within the same product using different timeframes.

For example: one can have a swing trade or overnight trading model using a daily chart or using 60-minute time frames and a different system one can trade on a separate trading account counter trend trade signals based on 60-minute, 15-minute or 5-minute time frame charts.

Examine the chart below the daily chart is in a daily PPS buy signal (green arrow) while Persons Pivots are in a monthly Bullish buy mode as indicated by the higher projected resistance line in red and the higher support target in green than the preceding month's levels. Below we are using Trade Navigator charts from Genesis Software.

chart 1

Each of the charts above shows the daily time frame on the left, the 60-minute in the center and the 15-minute chart on the right.

I highlighted June 16 as we were in a signal buy mode.

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