How to Build an Automated Trading Strategy in NinjaTrader 8: A Step-by-Step Guide for Beginners

Are you feeling excited whenever you are trading? Let’s be honest, it can also be stressful sometimes, right? One moment you feel confident, and the next, you second-guess every move. Maybe you’ve hesitated and missed a good trade, or jumped in too fast and taken a loss. Sound familiar. Well, that’s where automated trading strategies come in. They follow clear rules, so your emotions stay out of the way. No more guessing, and no more panic moves. And the best part? You don’t have to be a coding wizard to do it.

With NinjaTrader 8, even beginners can build powerful strategies using a built-in tool that’s easy to understand. In this guide, we’ll show you step-by-step how to create your very first automated trading strategy, using plain language.

Why Automate Your Trading with NinjaTrader 8?

Automating your trading means you set the rules, and the software takes care of the rest. The software follows your rules to enter and exit trades, also helps you to remove emotional decisions, save time, and ensure consistency. And, NinjaTrader 8 is perfect for this because it’s user-friendly, plus you will get a free version for charting and testing, and it has a built-in tool called the Strategy Builder. So, using this tool, you can create strategies without writing complex code. And the best part is NinjaTrader works with stocks, futures, forex, and more, making it versatile for all kinds of traders.

Step-by-Step Guide to Building an Automated Trading Strategy in NinjaTrader 8

To build an automated trading strategy, you have to follow a few steps:

Step 1: Set Up NinjaTrader 8

Before starting trading with NinjaTrader 8, you have to set up first. And for setting up, you need to go to the NinjaTrader website, from there you can download the free version. If you don’t know, then let us tell you that it’s really great for charting, backtesting, and trade simulation. And you just have to follow the steps to install it on your computer.

And then, next, you need market data to work. So, for that, you have to use a free data feed for practice, or you can also connect to a broker for real trading. On the NinjaTrader website, you will see many brokers like NinjaTrader Brokerage and Interactive Brokers. So, after that, you need to open NinjaTrader 8, and you will have to check out the Control Centre. It’s where you will find charts, strategies, and orders.

Step 2: Define Your Trading Idea

If you are done with the setup, then it’s time to make a trading plan that is easy for you. So, what you have to do is you need to think and make a clear idea to start. So, you can start by thinking about what kind of trading sounds good to you. Want to make quick trades to catch small price changes? That’s scalping strategy, so you can go for it. Or do you like going with the flow, like buying when prices go up or selling when they dip? That’s called trend following. Maybe you want to trade at special price points where the market often flips, well then, you can choose support and resistance.

Step 3: Open the Strategy Builder

Now it’s time to build your trading strategy with NinjaTrader 8’s Strategy Builder. It’s a tool that makes creating strategies easier for you, no coding needed. Here’s how to get started:

• Firstly, go to the NinjaTrader Control Centre
• Now go to New > Strategy Builder.
• The Strategy Builder window opens. You’ll see tabs like Conditions, Actions, and Properties; these are where you’ll build your strategy.

Step 4: Create Your Strategy

Now, let’s build the trend-following strategy from Step 2. Follow these steps in the Strategy Builder:

1. Name Your Strategy:

• In the Strategy Builder, click Properties.
• Give your strategy a name, like “TrendFollowerSMA_RSI”.
• Set the Instrument (e.g., NQ for Nasdaq futures or EUR/USD for forex) and Timeframe (e.g., 5-minute chart).

2. Set Up Indicators:

• Go to the Conditions tab.
• Click Add under Indicators.
• Select Simple Moving Average (SMA). Set the period to 50.
• Add another indicator for RSI. Set the period to 14 and smoothing to 3.

3. Define Entry Conditions:

• Under Conditions, click Add to create a condition for entering a long trade.
• Set it to: “Close price crosses above SMA (50)” AND “RSI (14) is greater than 50”.
• Add a condition for a short trade: “Close price crosses below SMA (50)” AND “RSI (14) is less than 50”.

4. Set Entry Actions:

• Go to the Actions tab.
• For the long condition, add an action: Enter Long > Market Order > 1 contract.
• For the short condition, add an action: Enter Short > Market Order > 1 contract.

5. Add Stop-Loss and Profit Target:

• In the Actions tab, add a Stop-Loss order 10 ticks below the entry price for long trades (or above for short trades).
• Add a Profit Target order 20 ticks above the entry price for long trades (or below for short trades).
• Enable OCO (One-Cancels-Other) so if the profit target is hit, the stop-loss cancels, and vice versa.

6. Save the Strategy:

• Click Generate to create the NinjaScript code
• Save the strategy with a unique name. It’s now ready to test.

Tip: If you want to add an Advanced Trade Management (ATM) strategy for automatic stop-loss adjustments (like trailing stops), you’ll need to write custom code or use pre-built ATM templates. So, as a beginner, it’s better to stick with the Strategy Builder’s simple exits.

Step 5: Backtest Your Strategy

Backtesting is like taking your strategy for a test drive using old market data to see how it would’ve done. In NinjaTrader 8, you have to follow some steps and here’s how you can see:

• Open a chart for your chosen instrument (e.g., NQ on a 5-minute chart).
• Go to New > Strategy Analyser.
• Select your strategy (“TrendFollowerSMA_RSI”).
• Choose a date range for testing (e.g., the past 6 months).
• Click Run Backtest.

And then the result will be shown, so if you see it’s a neat number, that means how profitable your strategy is. If you see it’s above 1, that means you’re on the right track. It’s like a report card for your trading plan.

Tip: Look for a strategy with a low drawdown and a profit factor above 1.5. If the results aren’t great, tweak your SMA or RSI settings and test again.

Step 6: Forward-Test in a Simulated Account

Backtesting shows how your strategy did in the past, but markets are always changing. Forward-testing lets you try your strategy in real-time market conditions using a simulated account. It’s like a practice run with fake money, so you can see how your plan handles the live action without any risk. Here’s how you can check:

• Open a Chart and Add Your Strategy: Open a chart in NinjaTrader 8. Right-click the chart, select Strategies, choose “TrendFollowerSMA_RSI,” and click Enable to start it.
• Use NinjaTrader’s Sim101 Account: Go to the Control Centre, select Accounts, and use the free Sim101 account. It’s like a practice wallet with play money.
• Monitor Trades: Check the Control Centre’s Orders tab to see trades being placed in real time. It’s exciting to watch your strategy in action.
• Let It Run: Allow the strategy to run for a few days or weeks to gather enough data. This helps you see how it performs over time.

Remember, it’s important to check that orders are placed as expected. If something’s off, like too many trades, then go back to the Strategy Builder and adjust your conditions.

Step 7: Monitor and Optimise

Trading markets always change, and you need to keep an eye on your strategy. Monitoring will help you catch issues, and with the help of optimisation, you can make your strategy even better. Here’s how you can monitor and optimise in NinjaTrader 8.

• Check the Control Centre: If you want to see the active trades, then visit the Orders tab to see active trades. But if you are feeling like you want to pause or stop the strategies, then use the Strategies tab.
• Watch for Issues: Internet problems or platform crashes can mess things up. So, always check that there are no open orders when stopping your strategy.
• Optimise Your Strategy: If your strategy isn’t doing great, tweak settings like the SMA period, RSI threshold, or stop-loss distance. And then run it through the Strategy Analyser to test improvements.
• Start Small with Live Trading: When you’re ready for real money, it’s better to use small positions like micro contracts to keep risks low. And then you can scale up slowly as you feel more confident.

Step 8: Explore Advanced Features

Once you’re comfortable with your strategy, NinjaTrader 8 has some amazing features to take your trading to the next level. These tools will make trading easier and work smarter. So, let’s start with ATM Strategies, which will automate your trade management. You can create them in the Order Entry window. So, what you have to do is, in the Order Entry window, you have to set up ATM (Advanced Trade Management) Strategies to use trailing stops or breakeven stops. They help lock in profits or cut losses automatically.

Do you want custom trading ideas, like trading only at certain times? Well, then you can learn NinjaScript, NinjaTrader’s coding language, or grab pre-coded strategies from the NinjaTrader Ecosystem to save time. Also, you can visit the NinjaTrader User App Share to download free tools like support/resistance indicators or risk calculators. These extras make your trading setup even stronger.

Best Practices for Beginners

Trading is exciting, but to do well, you need a clear and simple plan. Starting with the right habits can make trading more fun and much safer. Here are some easy tips to help you begin like a pro.

• Test Thoroughly: First, always test your strategy before using real money. Use backtesting to see how it would have worked with past market data, and forward-test in a demo account; it helps you learn without taking real risks.
• Keep It Simple: You can use basic indicators like SMA or RSI. Because complex strategies are tough to handle, especially when you’re new.
• Manage Risk: Always manage your risk. Protect your account with stop-losses and small trade sizes
• Stay Disciplined: Even though your strategy runs on its own, you still need to stay disciplined. So, check in regularly to see how your strategy is doing, and be aware of changes in the market that could affect it.
• Learn Continuously: Never stop learning. You can watch NinjaTrader’s free tutorials, explore online courses, and you can also visit the NinjaTrader Ecosystem for new tools and ideas. The more you learn, the stronger your strategies will become.

Final Say

Building an automated trading strategy in NinjaTrader 8 is easier than you think. With the Strategy Builder, you can turn your trading ideas into reality in just a few clicks. So, start by defining your rules, testing thoroughly, and monitoring performance. Automation helps you trade with discipline, but you need to keep learning. So, set up NinjaTrader and start building your strategy today. Your journey to hands-free trading is just a few steps away.

Want More? Well, you can check out the training of NinjaScript programming courses for NinjaTrader 8, or you can explore the NinjaTrader Ecosystem for ready-made strategies.