Stock trades are executed in two phases. In the first, opening, phase the stock is bought (long) or sold (short). This is commonly called an open position. In the second phase the held stock is sold (long) or bought (short) to close the position.

The Securities and Exchange Commission (SEC) has imposed a $25,000 minimum on accounts they classify as day traders. The definition involves the number of completed single-day trades in a five-day period. To avoid this classification (and the mandatory 90-day suspension of trading it requires) Interactive Brokers will refuse to open any trade orders (buy or sell) which would push an account containing less then the required minimum into day-trader status.

When trading live, CoolTrade™ will reflect this limit on the left side of its main window under the field Day Trades Left.

Typically this error results from an older version of either CoolTrade™ or the Trader’s Workstation. Upgrade your programs to the latest version to correct this error.

Certain U.S. localities (Hawaii, Arizona, Puerto Rico, Guam and the U.S. Virgin Islands) do not observe Daylight Saving Time. CoolTrade™ does not automatically compensate for this, so users in these locations must adjust their CoolTrade™ "clock" manually.

Click Preferences and Strategy Preferences, then adjust the start and end times for trading one hour earlier at the start of DST (since your location is effectively shifting to an earlier time), and one hour later again in the fall.

Many people, on first seeing CoolTrade™ working, comment that the numbers ‘just don’t add up.’ In reality, ‘Today’s P/L’ and ‘Change’ are calculated on a daily basis, starting from the opening price. These will both be zero at the opening bell every day.

What this means is, on the day a position is opened, those figures will be accurate. On subsequent days, to find out how a particular open position is doing just click on its symbol in the Active Trades window, and you will see the Net P/L value displayed for that position.

Absolutely. Although we at CoolTrade™ are not brokers and cannot give investment advice, there are currently no accounts with Interactive Brokers that CoolTrade™ cannot manage. Simply be aware that the SEC and IRS have their own rules about IRAs and what can or cannot be done inside those accounts.

You will have to configure the Strategy Wizard yourself to effectively trade limited accounts like IRAs in accordance with any applicable federal regulations, but it can be done! Several of our clients have done so successfully, and most of them are happy to tell you how they do it if you just ask them on the CoolTrade™ discussion boards.

Several clients have asked what the Exceptions list and Blocked list are for. Since many people may never use these lists, here’s a quick explanation for future reference.

The Exceptions list is for those securities which were on a watch list, but for which CoolTrade™ is currently unable to locate any trading data. Usually this results from a stock changing its ticker symbol. If you see a stock on the Exceptions list, you might go to your favorite financial website and look up that symbol to find out what the new symbol is. It may very well be back on your watch list already under its new name!

The Blocked list is a bit different. This is where you list securities you do NOT want CoolTrade™ to manage. Interactive Brokers allows trading of many securities through its Trader Workstation, some of which (like futures or options) CoolTrade™ is not designed to deal with. If you trade in any of these securities (or you just never want to deal with the stock your cousin recommended) simply place their symbols on the blocked list and CoolTrade™ will cheerfully ignore those stocks and any trade orders associated with them.

This is typically an issue with anti-virus software or firewalls. CoolTrade™ uses a specific communications port to exchange market information and orders. This port is frequently blocked by security software, often without any notice to the user.

The CoolTrade™ developers are currently looking at using different ports in future versions of the program to avoid this conflict, but for now either send us an email asking for the port number so you can put it on your software/firewall’s approved list, or turn off the offending program.

CoolTrade™ is designed to update its market data several times a minute throughout the trading day. This is why we strongly recommend a wired broadband (cable or DSL) connection to the internet.

Some customers have been successful with satellite internet links, but the delicate nature of wireless connections makes this a less-than-ideal choice for time-sensitive programs like CoolTrade™. Dialup connections, even the so-called ‘high-speed’ dialups, are simply too slow to permit CoolTrade™ to work effectively.

This is a rare situation, now, but occasionally someone will get an older copy of the CoolTrade™ installer from a friend or colleague. These older versions were not designed for the strict standards of Windows XP and may display this error on launch.

Simply go the website and download the most recent version of the software. Don’t forget to uninstall the old version first before you install the newer one, too!

We hear this from time to time, and it almost always turns out that the other person is either executing manual trades which CoolTrade™ does not control, or has tweaked their strategy in some fashion and forgotten about it. In either case the program will produce different results; perhaps better, perhaps worse, but certainly different!

Hey, we all started out confused; don’t be embarrassed to say so! There are lots of great websites out there to introduce the terms and concepts of the market. Here are a few of them. 

1. The Motley Fool, always a popular choice:  http://www.fool.com 
2. StockCharts has both a glossary of trading terms and a feature called ‘Chart School’ which details how to read a chart in fabulous detail:  http://www.stockcharts.com 
3. Overview of how stocks are traded. Very basic: http://stocks.about.com/od/tradingbasics/ 
4. Comprehensive glossary of investing terms: http://www.investorwords.com/

 

Rules can only be added to a strategy if they make sense. That seems simplistic, but it can be confusing at times. Rules involving percentages, for example, must always have something to compare against the percentage. For example, ‘Indicator X is greater than 51%’ is not a valid rule, while ‘Indicator X is 51% greater than Indicator Y’ is valid.

If the indicator you need for such a comparison isn’t listed, please drop us a line on the CoolTrade™ discussion boards or send us an email requesting the indicator. If you use a specific indicator, the odds are other CoolTrade™ users might find it useful as well!

Here are the steps to enable live automated trading between CoolTrade™ and the broker (InteractiveBrokers.com ). 

1. Install the InteractiveBrokers Trader Workstation (TWS). http://www.interactivebrokers.com/cgi-bin/windows_standalone_tws.pl

2. Log in to IB.

3. Resize the TWS screen (in half, leaving it as tall as the CoolTrade™ screen) so that it only takes up the right half of your monitor. That way, both applications will be side by side when you run the CoolTrade Automated Trader.

4. From the IB Menu, Select Configure & API and place a check mark next to Enable ActiveX and Socket Clients.

5. From the IB Menu, Select Configure & API & Socket Port and enter 7496

6. From the IB Menu, Select File and click on Save Settings. 

The first time you run the CoolTrade Automated Trader in "Live" mode, CoolTrade will prompt for your IB username and password. CoolTrade™ will then AUTOMATICALLY START IB AND TYPE IN YOUR USERNAME AND PASSWORD FOR YOU. You must allow CoolTrade to type your username and password into the IB login screen. This is necessary so that the CoolTrade application can automatically log into IB every time it starts in the future. 

If IB is already running when you start CoolTrade, CoolTrade will stop IB and restart it again. This is necessary so that both applications can be in sync at startup. 

If you have any trouble getting the Interactive Brokers Workstation to run with CoolTrade™, email or call us and we’ll do our best to get you running and making money! 

Backtesting is something the major brokerages and many ‘professional’ traders are extremely fond of. They’ll recommend you backtest any strategy extensively before putting money into it.

All backtesting can do is tell you how a strategy would have performed in the past, not how it will do in the future, when you really need it to deliver. Ever seen that disclaimer on investment ads or prospectuses, “Past performance is no guarantee of future results”? It’s there for a reason, and it’s absolutely true. Backtesting is largely useless. Yesterday’s market is not today’s market.

CoolTrade™ doesn’t do backtesting. Instead, it allows you to ‘forward test’ your strategies using real, live market data, and shows you how much money your strategy would have made that day (or week or month) if you’d had real money in it. To us at CoolTrade™, that sounds much more realistic (and more exciting) than backtesting.

So you want to trade some stocks that CoolTrade™ isn’t tracking? Your cousin heard from her mother that options are the way to go? Try them out, no problem! You can enter stock orders directly in the Interactive Brokers Trader’s Workstation, as well as orders for securities CoolTrade™ wasn’t designed to manage (like options or futures).

To prevent CoolTrade™ from cancelling or modifying these orders, just place the symbol(s) you want to trade on CoolTrade’s™ Blocked list (before you place the order!), and CoolTrade™ won’t track, report on, or modify orders relating to these symbols.

You sure can! Just go to the CoolTrade™ website ( http://www.cool-trade.com ) and log in. Then click the ‘See Trades’ link next to ‘My Automated Trader Status’. All your open positions and executions for the day will be listed as they occurred; you can even print out this list to show off to your cousin!