Advanced bot configuration and optimization

Order Types

Market Orders:

Execute immediately at current market price
Guaranteed fill
No price control
Best for liquid assets during market hours
Can have slippage on wide spreads

Limit Orders:

Execute only at specified price or better
Price control
Not guaranteed to fill
Better for illiquid options
Use midpoint pricing for best results

Entry Time Windows

Restrict when your bot can enter trades:

Market Open: 9:30 AM ET
Avoid first 15 minutes (9:30-9:45) - high volatility
Recommended start: 9:45 or 10:00 AM ET
Avoid last 30 minutes (3:30-4:00 PM) - day close
Consider lunch hour behavior (12:00-1:00 PM)

Example safe window: 9:45 AM - 3:30 PM ET

Position Sizing Strategies

Fixed Contract Size:

Trade same number of contracts every time
Simple to manage
Doesn't scale with account growth
Good for testing strategies

Fixed Dollar Amount:

Trade specific dollar value each time
Contract count adjusts based on price
More consistent risk per trade
Recommended for most traders

Percentage of Account:

Trade X% of account value
Automatically scales with account growth
More aggressive
Requires careful monitoring

Max Open Positions

Limit how many concurrent trades bot can have
Prevents overexposure
Recommended: 1-3 for beginners, 3-5 for experienced
Consider correlation between positions
Leave some buying power for opportunities

Spread Filtering

Reject trades with excessively wide bid-ask spreads:

Wide spreads mean poor liquidity
You pay more to enter, receive less to exit
Recommended max spread for stocks: $0.05-$0.10
Recommended max spread for options: $0.20-$0.50
ATM options typically have tighter spreads than OTM

Trading Calendar Integration

Skip trading during high-risk periods:

Holiday Weeks - Thanksgiving, Christmas
FOMC Days - ~8 per year
Major Economic Events - CPI, NFP, GDP (~24 per year)
Day-of-Week Skipping - Skip Mondays, Fridays, etc.
Custom Date Ranges - Vacation, earnings season, etc.

Progressive Stop Loss

Adjust stop loss tighter as you take profits:

Initial stop: -30%
After TP1: Move to breakeven (0%)
After TP2: Move to +20% (lock in gains)
Reduces risk as trade develops
Protects profits from reversals

Trailing Stop Strategies

Trailing from Entry:

Activates immediately from entry price
Independent of take profit levels
Good for trending markets
Set trail distance: 10-20% typical

Trail After Final TP:

Activates only after all TPs filled
Lets winners run with protection
Combines well with scaling out strategy
Typical: 10-15% trail distance

EOD Close Protection

Automatically close options before market close
Prevents overnight assignment risk
Configurable close time (e.g., 3:45 PM)
Only affects options expiring that day
System ensures closure by Alpaca deadlines

Draft Bots

Save bot configurations without activating
Test different setups side-by-side
Make adjustments before going live
Clone existing bots to test variations
Perfect for strategy development

Mass Bot Editor

Edit multiple bots at once
Update shared settings in bulk
Change stop-loss levels across all bots
Adjust position sizes for all strategies
Modify entry windows simultaneously
Saves time when managing many bots

Optimization Workflow

1) Start with conservative settings in paper mode, 2) Test for 2+ weeks, 3) Review analytics and adjust, 4) Test new settings, 5) Go live with small size, 6) Scale up gradually as profitable.

Performance Monitoring

Track win rate, profit factor, and Sharpe ratio
Review MFE (Maximum Favorable Excursion)
Analyze MAE (Maximum Adverse Excursion)
Monitor average win vs. average loss
Check max drawdown periods
Use Research Module for strategy backtesting