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Day Three

 Hey everyone, and welcome back to the blog! For those following along, you know I've been deep in the trenches of developing my news straddle strategy. It's a fascinating area of algorithmic trading, aiming to profit from volatility spikes around major news announcements. My initial development work has been quite focused on leveraging the ForexConnect library, which has been a valuable tool for getting the strategy's logic hammered out.

However, as any beginner on this algo trading path will tell you, it's rarely a straight line! I've hit a bit of a crossroads, or more accurately, a redirection, on my journey.

The FTMO Focus

Lately, my sights have shifted firmly onto FTMO. For those unfamiliar, FTMO is a prop trading firm that offers to traders who can prove their profitability and risk management skills through a rigorous evaluation process a profit share without risking capital. The appeal is obvious: access to significant capital without risking your own. It's a huge step for aspiring algo traders like myself, especially when operating on a smaller personal capital base.

This pivot means that my development efforts need to align directly with the platforms and APIs available to me once (or if!) I pass the FTMO challenge.

The DXtrade API Speedbump

In my last post, I hinted at some API considerations, and unfortunately, I've confirmed a significant one: the DXtrade API is not available on an FTMO account. This is a crucial piece of information for me, as I had been exploring its potential for live execution.

It's a classic "learn as you go" moment in algo trading. You plan, you develop, and then you discover limitations of the real-world environment you're trying to operate in. While a little frustrating, it’s not a showstopper. It simply means adapting and ensuring my strategy is compatible with the tools FTMO does provide, or at least, the execution methods I'll need to employ through their platform.

Back to the Lab: Backtesting Until the Next Free Trial

So, what's the immediate next step for my news straddle strategy? For now, it's back to the lab.

I'm continuing to refine and develop the strategy specifically for backtesting. This means:

  • Robust Logic: Ensuring the entry, exit, stop-loss, and take-profit conditions are as solid as possible.
  • Data Sourcing: Verifying I have access to clean historical news data and price data to accurately simulate past performance.
  • Performance Metrics: Defining and implementing clear metrics to evaluate the strategy's profitability, drawdown, and risk.
  • Parameter Optimization: Exploring different settings for my strategy's variables to find the most robust configurations.

The goal here is to have a highly optimized and thoroughly tested news straddle strategy ready to go for my next FTMO free trial. These free trials are invaluable for getting a feel for their environment and testing the waters without committing to the challenge fee. It's a chance to ensure everything integrates smoothly before I jump into a live evaluation.

This process of adaptation and focused backtesting is a big part of the algorithmic trading journey, especially as a beginner. It's about building, testing, hitting roadblocks, and then strategically re-evaluating. I'm excited about the potential of the news straddle strategy, and I'm determined to get it ready for the FTMO environment.

Stay tuned for more updates on my backtesting progress and any breakthroughs (or headaches!) I encounter along the way. As always, feel free to share your own experiences with prop firms or strategy development in the comments below!

Happy (algo) trading,

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