The On Chart Theoretical Average
and Next Entry/Exit Indicator.
OCTANE is a different kind of indicator.
Instead of showing information derived solely from market data, OCTANE shows the trader’s financial exposure to the market.
OCTANE is designed for traders who usually initiate multiple entries and/or exits during a trade. It shows the average price paid for entries initiated since the start of a trade, and how additional entries or exits will affect the average price.
In the case where partial profits have been taken since the start of the trade, OCTANE includes this intermediate profit to determine the new average price, or Theoretical Average.
In addition, OCTANE shows how pending orders would change the Theoretical Average if they are filled by the market.
Why is it useful?
Imagine a scenario where two traders with similar trading styles have bought the same instrument but entered the market at different prices.
If the first trader has unrealized profit but the second trader has just entered the market, they are going to look at short term market moves differently.
If the market starts to go against them, the first trader may have to give up some of the money he’s made since starting the trade. However the second trader looking at the same adverse move will be losing money that’s been in his account longer, perhaps money that he feels very attached to.
Therefore it is important that traders in the market are comfortable with their market position. If they can see graphically that they are in a trade that will not cost them any of the money that they brought to the table, then psychological stresses are reduced. These stresses, besides being unpleasant, can start a cascade of dangerous trading behaviors that can cause lasting damage to both a trader's account and psyche.
OCTANE helps develop trades.
Besides showing the current Theoretical Average, OCTANE offers insight into exactly how adding or removing parts of a position would impact the Theoretical average.
The Next Entry/Exit component graphically displays how adding to a trade (Scaling in) or taking profit (Scaling out) would affect the Theoretical Average.
This is useful in deciding when, where and how much to either take profit or add to a trade to either:
A) Lock in profits and ensure a trade remains profitable by moving the Theoretical Average away from the current market price or
B) In cases where a trade is going well, determining the effect of adding to a trade, which will move the Theoretical Average closer to the current market price. This can be done in a way that manages risk while at the same time making the most of a favorable opportunity.
OCTANE helps when scaling in and out.
When traders enter the market, they rarely see prices move in a straight line to their target price. Instead, the market moves on smaller timeframes toward and away from their targets. Partially scaling in and out of a trade during these small moves can improve the trade’s Theoretical Average, which means the market would have to move further to negate the profit in the trade.
Being able to see ahead of time exactly how much the Theoretical Average is improved with each scale in or out helps not only to ensure the current trade remains profitable, it also helps train the trader to gain an intuitive feel for what is possible in future trades.
OCTANE includes all commissions.
OCTANE includes all commissions in its calculations, including the cost to get out of the current position. This avoids “Rose Colored Glasses” where a theoretical average calculation without commissions shows a trade as profitable, but the next day’s account statement says otherwise
If a trader takes advantage of short term moves and repeatedly scales in and out of a position, commissions can quickly add up. If not accounted for, a very distorted picture may be presented.
This is particularly true with the new CME E-micro contracts, which on a cost per tick basis have commissions that are several times greater than their E-mini counterparts.
OCTANE for NinjaTrader 8
OCTANE is available for NinjaTrader 8, on a monthly or annual subscription model.
Monthly subscriptions have a 7 day trial period; annual subscriptions have a 15 day trial period.
During the trial period a cancellation can be requested with full refund.
Click a link below to get OCTANE!
$50 per Month
$500 per Year
Your credit card will not be billed during the trial period,
during which you can reconsider your purchase decision.
You can unsubscribe at anytime.