Overview of Trading


Sierra Chart provides complete trading functionality. Below you will find information to get you started with trading in Sierra Chart.

Terminology

This section defines basic trading terminology used in this documentation and with trading in general.

  • Trade Order/Order: To provide an instruction to your trading service or to an exchange to buy or sell, you will submit what is called an Order which contains all of the details of your instruction. If it is accepted, the order becomes Open and is in a working state. If it is no longer working the status will be Canceled, Error, or Filled.
  • Order Fill/Fill: When an order fills or partially fills, then this is known as an Order Fill or Fill. Sierra Chart keeps track of individual order fills. These are held in the Trade >> Trade Activity Log. This is a persistent log.

    When an order fill occurs, the Trade Position for the symbol is adjusted to reflect the fill. For example, if there is a fill for a Buy order of quantity 1, then the Trade Position Quantity for the symbol will be increased by 1. This adjustment is performed internally by Sierra Chart. Also, in most cases, the external Trading service, for non-simulated trading, will provide an update for the Trade Position for the symbol. When this update is received after an order fill, the internal Trade Position quantity is synchronized to this Trade Position Quantity from the Trading service to ensure it matches.
  • Trade Position/Position: When an order fills, this results in a Position if you currently did not have a Position in the market being traded. Usually the documentation makes reference to this as a Trade Position to make it clear that we are referring to a Position related to trading. A Position indicates how many shares/contracts you are long or short in a particular market and trading account. This will either be a positive number or a negative number. A positive number indicate you are long the market. A negative number indicates you are short the market. Sierra Chart will never make reference to a Position as an order. It is known as a Trade Position. When you do not have a Position in a market, this is known as being Flat the market.
  • Trade: A Trade takes place when an order fills. If you were currently flat the market for a particular symbol, then this Trade will establish a new Trade Position.
  • Bid: In every market for a particular symbol, there is the Bid price which establishes the highest price of the buy limit orders in the market.
  • Ask/Offer: In every market for a particular symbol, there is the Ask or Offer price which establishes the lowest price of the sell limit orders in the market.
  • Attached Orders: An order can have child orders and these are known as Attached Orders. Attached Orders will be Target and/or Stop orders that are used to lock in a profit at a certain price and limit the loss at a certain price. These Attached Orders become active and are capable of filling only when the parent order to which they are attached to, fills.
  • OCO: This refers to Order Cancels Order or One Cancels Other. When there are orders in an OCO group, when one of them is filled or is canceled manually by the user, the other order will be canceled. In the case of a partial fill of one of the orders, depending upon the type of OCO order, the other order will be canceled or its quantity will be reduced by the amount of the fill of the other order that partially filled.
  • Bracket Order: A bracket order is another term which describes three orders. This consists of a parent/main order and 2 Attached Orders. The Attached Orders consist of a Limit order and a Stop order. The Limit and the Stop order are in an OCO group. OCO is documented in this section.

    This Bracket Order can be managed on the Server side or on the Client side. If the Server does not support management of Bracket Orders, but supports server-side OCO orders, then only the OCO portion of the order is managed on the Server.

    The term Bracket Order is not entirely descriptive because a Bracket order could just be considered an OCO order which may or may not be linked with a parent order. However, in this documentation when this term is used, it means an order which consists of three orders as described.
  • OCO Order: An OCO order consists of two orders in an OCO group. See the definition above for OCO. An OCO order can be a completely independent order of one of the OCO order types documented on the Order Types page. Or the OCO order can be part of a Bracket Order and is the Attached Orders attached to a parent order.

Essential Settings for Trading

This section describes settings that you should verify are correct for the trading functionality to work properly. In almost all cases, these are already preconfigured and set correctly.

  1. Essential: Select Chart >> Chart Settings on the menu. Verify that the Tick Size and Price Display Format are set properly for the Symbol of the chart. The Tick Size represents the smallest increment that the symbol trades in. The Price Display Format is the number of decimal places that the symbol requires to be displayed or the denominator for a fraction display.

    Note: If the Tick Size is set incorrectly, order prices may be wrong.

  2. To control the format for the Profit/Loss display on the Position line on a chart and the Profit/Loss display on the Trade Window for the chart, select Chart >> Chart Settings on the menu. Go to the Advanced Settings tab. The Profit/Loss Display can be set to display the Profit/Loss value as an actual currency value that considers the order quantity and considers the contract size in the case of futures, as a Point value based upon the pricing of the symbol, as a Point value that does not consider the order quantity, or several other formats. In the case of Currency Value, you need to be certain the Currency Value per Tick has a valid setting on the Chart Settings window.

Difference between Simulated and Non-Simulated Trading Modes

When performing trading in Sierra Chart, there are two trade modes. Simulated and Non-Simulated.

Trade Simulation Mode is the default. This is a global setting. This can be activated or deactivated by adding or removing a checkmark to/from Trade >> Trade Simulation Mode On on the menu.

To be in Trade Simulation Mode, make certain there is a checkmark by Trade Simulation Mode On. When you are in Trade Simulation Mode, all trades will be simulated.

If Sierra Chart is not in Trade Simulation Mode, then trades will be sent to the connected Trading service, assuming it is connected to a valid Trading service. However, this does not necessarily mean that the trades are actually live because Sierra Chart may be connected to a simulation account you have with your Broker/Trading service.

Whether Sierra Chart is in Trade Simulation Mode or your order requests are sent to the connected trading service, the trading functionality and interfaces in Sierra Chart work identically. There are no differences.

Although, live trading is different in that trades are handled by a remote server so trading is not necessarily instantaneous and works 100% perfectly as it does in trade simulation mode. In most cases Sierra Chart has a very reliable and well engineered interface to the live trading servers it works with especially where the FIX protocol is used.

How to Know You Are in Trade Simulation Mode

  • The title bar contains: [SIM].
  • The Trade Window for the chart will have a different background color. This is set through Global Settings >> Graphics Settings >> Colors and Chart Font >> Colors and Widths >> Chart Trade Window Background SIM (simulation) . Set this to a color which cause you to recognize very clearly you are in trade simulation mode.
  • Order confirmations will say *Simulated* at the top.
  • The Trade Window Account # will display [SIM] .
  • The chart trade mode box at the top left of the chart will also be prefixed with [SIM]. The color of the box is set according to Global Settings >> Graphics Settings >> Colors and Chart Font >> Colors and Widths >> Chart Trade Mode Box SIM (simulation).
  • The Trade Simulation Mode Control Bar button (TSM) will be pushed in. This button can be colored as well. Refer to Control Bar Button Properties to custom color it or change its caption.
  • Refer to the image above for an example of all of this.

Control Bar Button for Trade Simulation Mode

To add a control bar button for Trade >> Trade Simulation Mode, refer to Customizing Control Bar.

Non-Simulated Mode And Using Automated Trading Systems in Trade Simulation Mode

When you are in non-simulated trading mode, this is when there is no check mark by Trade >> Trade Simulation Mode On, then all new orders, order modifications and order cancellations, will be submitted to the connected Trading service as has been explained.

However, automated trading systems can be set to be simulated completely independent of the global Trade Simulation Mode . Therefore, if an automated trading system is set to be simulated, then it will continue to be simulated even in the global non-simulated trading mode. Any manual orders that you enter from the chart, ChartDOM, Trade Window for a chart, or Trading DOM will still be non-simulated sent to the connected Trading service.

Understanding Non-simulated Trading With an External Simulation Account

In Sierra Chart, when Trade >> Trade Simulation Mode On is disabled, then orders are sent to the connected Trading service. This is considered non-simulated/live trading.

Although Sierra Chart may be connected to a simulated account with the Trading service you are using and therefore the orders will actually be simulated through that Trading service.

Using Sierra Chart Trade Simulation Mode

Sierra Chart has a complete Trade Simulation Mode feature. When using Trade Simulation Mode, all of your trades will be simulated. Trades from automated trading systems will also be simulated when in this mode. For complete documentation, refer to the Trade Simulation documentation.

Basic Trading and the Trade Window

For instructions to enter New orders, Modify orders, and Cancel orders, using the Trade Window and for complete information about the Trade Window, refer to the Basic Trading and the Trade Window page.

Chart Trading and the ChartDOM (TM)

For instructions to use the chart based trading, the Chart DOM (TM), and the Trade DOM features, refer to the Chart Trading and the ChartDOM (TM) page. Submitting new orders, modifying orders, and canceling orders is all explained.

Viewing Orders and Positions

When you enter an order to Buy or Sell, this is called an Order and it will be filled either by your Trading service or by the Sierra Chart Trade Simulation system, if you are in Trade Simulation Mode. There either can be one fill or multiple fills until it is fully filled to the quantity of the order. To view your orders including order Status, refer to the Trade Orders tab section on the Trading Information Windows page.

When an order is filled, this results in what is called a Trade Position. To view the current Trade Positions, refer to the Trade Positions tab section on the Trading Information Windows page.

Open Orders and the current Trade Position for a Symbol and Trade Account can also be viewed directly on a chart for that symbol. For instructions, refer to the Chart Trading and the ChartDOM (TM) page.

The Trade Window also displays the current Trade Position for the Symbol and Trade Account of the Chart or Trade DOM that the Trade Window is for.

A detailed log of all historical trading activity is in the Trade >> Trade Activity Log.

Trading Different Symbol Compared with Symbol of Chart

Follow the instructions below to trade a symbol different than the symbol of the chart.

For example, you may want to trade an options symbol and chart the underlying market.

Or you may want to use one of the Sierra Chart Forex symbols and trade a different corresponding Forex symbol with the trading service you are using.

  1. Select Chart >> Chart Settings.
  2. In the Trade and Current Quote Symbol box, enter the particular symbol that you want to trade. This symbol should have some relationship to the symbol of the chart but it is the actual symbol that will be traded. This needs to be a symbol supported by the Trading service you are using. For additional information, refer to Trade and Current Quote Symbol.
  3. Press OK.
  4. The data in Window >> Current Quote Window will be for this Trade and Current Quote Symbol and also the last trade price on the right side of the chart and the market depth data will be for this symbol as well. In an upcoming version, there will be the capability for the symbol to be a trade only symbol.

Trading Different Trading Accounts

Sierra Chart supports using multiple trading accounts which are accessible on the current connection to the external Trading service. To do this, requires selecting the Trade Account you want to trade on the Trade Window for a Chart or Trade DOM.

Therefore, it is supported to trade different trading accounts from within Sierra Chart.

It is not supported to trade from a single instance of Sierra Chart different Trade Accounts which are part of different trading services. For this requires that you use multiple instances of Sierra Chart. Even in the case when using multiple instances of Sierra Chart, orders for different Trade Accounts on different Trading services, need to be entered separately.

It is supported to share the market data and trading functionality from a single connection to an external Trading and/or Data service, with other instances of Sierra Chart. Refer to Using DTC Server for Data and Trading in Another Sierra Chart Instance.


*Last modified Saturday, 10th September, 2016.