AlgoTrend Gamma Levels Bot: Leveraging Key Option Market Levels 🚀

Introduction 🌟

The financial market is complex and often driven by forces not immediately visible on price charts. One such force stems from the options market, where the accumulation of open positions (Open Interest) at specific price levels (strikes) can create powerful support and resistance zones. AlgoTrend Gamma Levels Bot is an advanced algorithmic trading tool for cTrader, designed to identify and exploit market reactions around these key levels, known as the "Call Wall" and "Put Wall".

How It Works: The "Gamma Walls" Concept 🤔

Large operators and Market Makers in the options market sell Call and Put contracts. When the price of the underlying asset (e.g., the SPY ETF tracking the S&P 500) approaches a strike with enormous Open Interest, these operators are forced to intervene in the underlying market to hedge their risk (the so-called Gamma risk).

• Call Wall: A strike price with a high number of sold Call options acts as resistance. As the price approaches this level, Market Makers might sell the underlying to hedge, slowing the ascent. Breaking this wall can trigger forced buying (gamma squeeze), accelerating the rally.
• Put Wall: A strike price with a high number of sold Put options acts as support. As the price approaches this level, Market Makers might buy the underlying, slowing the decline. Breaking this wall can trigger forced selling (reverse gamma squeeze), accelerating the fall.

The AlgoTrend Gamma Levels System ⚙️

This isn't just a simple cBot, but an integrated system consisting of two parts:

1. The Python Server (The Brain 🧠): A separate program (provided with the package) that connects to the Interactive Brokers (IBKR) API. This server downloads real-time option chain data (requires a specific data subscription, see below), identifies the Call Wall and Put Wall levels by analyzing Open Interest, and makes them available via a local web address (API).
2. The cTrader cBot (The Executor Arm 💪): The SmartGammaBot (or AlgoTrend Gamma Levels) that you install on cTrader. This cBot calls the Python server to get the updated levels and then monitors the price of the underlying asset (e.g., US500). When the price breaks one of the walls, the cBot executes a trade based on the strategy and filters set in the parameters.

Potential of the Tool ✨

• Hidden Level Identification: Reveals support and resistance levels not visible with traditional technical analysis.
• Volatility Trading: Allows capitalizing on accelerated movements (squeezes) that often follow the break of these key levels.
• Strategic Flexibility: Thanks to configurable parameters, you can decide whether to trade the breakout (follow the break), the reversal (fade the break), or do nothing.
• Advanced Risk Management: Includes features like Trailing Stop, Break Even, and daily/total loss limits, suitable even for Prop Firm traders.
• Multiple Filters: Allows refining entries with filters on spread, time, Moving Average, and RSI.

Fundamental Requirements (Read Carefully!) 📜

To use the AlgoTrend Gamma Levels Bot, it is essential to meet the following requirements:

1. cTrader Platform: The cBot works exclusively on cTrader Desktop (the installed Windows version, not the Web version).
2. Interactive Brokers (IBKR) Account: An IBKR account (preferably live and funded, not demo) is required to access the data.
3. IBKR Data Subscription (OPRA): You must subscribe to the real-time "OPRA (US Options Exchanges)" data package. For "Non-Professional" users, the cost is minimal (~$1.50/month, often waived with minimal commissions). Without this real-time subscription, the bot cannot function correctly.
4. Python Server Execution: The provided server.py script must be running constantly (24/7 or at least during trading hours).
5. • Option 1 (Recommended): Install it on a VPS (Virtual Private Server) with Linux or Windows. This ensures stability and continuous operation.
   • Option 2 (Test/Local): Run it on your local PC, but this requires the PC to remain on, connected to the internet, and with IB Gateway running and logged in.
5. IB Gateway (or TWS): The IBKR software (preferably IB Gateway, which is lighter) must be installed and running on the same machine (local PC or VPS) where the Python server runs, with the API enabled (port 4001 for Live, 4002 for Paper).
6. Python and Libraries: Python 3 and the libraries ib_insync, pandas, flask, nest_asyncio (and optionally waitress) must be installed on the machine running the server.

Detailed Parameter Description 📊

Here is an explanation of all configurable cBot parameters:

Group: API

• Server API URL: The web address where the cBot can reach your running Python server (e.g., http://127.0.0.1:5000/get_levels if on the same machine, or http://[YOUR_VPS_IP]:5000/get_levels if on a VPS).

Group: Strategy

• Action Above Call Wall: What to do if the price breaks above the Call Wall.
• • Buy: Enter Long (Breakout/Squeeze strategy).
  • Sell: Enter Short (Reversal/False Breakout strategy).
  • None: Do nothing.
• Action Below Put Wall: What to do if the price breaks below the Put Wall.
• • Sell: Enter Short (Breakout/Squeeze strategy).
  • Buy: Enter Long (Reversal/Support strategy).
  • None: Do nothing.
• Close Opposite Positions on Signal: If true, when a signal triggers (e.g., Buy), it automatically closes all Short positions opened by the same bot (and vice-versa). Useful to avoid hedging and follow only the latest signal.

Group: Risk Management

• Use Fixed Volume: If true, uses the fixed volume specified below. If false, calculates volume based on risk percentage.
• Fixed Volume (Lots): The fixed volume in lots to use for each trade (if Use Fixed Volume is true).
• Risk % per Trade: The percentage of the account balance to risk per trade (used if Use Fixed Volume is false). Volume is calculated based on this % and the Stop Loss in pips.
• Stop Loss (Pips): The fixed Stop Loss in pips, calculated from the entry price.
• Take Profit (Pips): The fixed Take Profit in pips, calculated from the entry price.
• Enable Prop Firm Risk Management: If true, activates checks for maximum daily and total loss.
• Max Daily Loss (%): The maximum allowed percentage loss in a single day, calculated on the equity at the start of the day. If exceeded, the bot stops trading until the next day.
• Max Total Loss (%): The maximum allowed percentage loss relative to the initial balance since the bot started. If exceeded, the bot stops permanently (in live mode).

Group: Position Management

• Max Long Positions Per Symbol: Maximum number of Long positions the bot can open simultaneously on the same instrument.
• Max Short Positions Per Symbol: Maximum number of Short positions the bot can open simultaneously on the same instrument.
• Enable Trailing Stop: If true, activates the Trailing Stop function.
• Trailing Stop Trigger (Pips): The number of pips in profit the position must reach before the Trailing Stop activates.
• Trailing Stop Distance (Pips): The distance in pips the Stop Loss will maintain from the current price once trailing is active.
• Enable Break Even: If true, activates the Break Even function.
• Break Even Trigger (Pips): The number of pips in profit the position must reach before moving the Stop Loss to Break Even.
• Break Even Lock (Pips): The number of pips above (for Buys) or below (for Sells) the entry price where the Stop Loss will be moved when Break Even triggers (0 = exactly at entry price).

Group: Filters

• Enable Spread Filter: If true, the bot will not enter the market if the current Bid/Ask spread is higher than Max Spread.
• Max Spread (Pips): The maximum allowed spread in pips to open a new position.
• Enable Time Filter: If true, the bot will only open positions within the specified time window.
• Trading Start Hour (Server Time): The hour (broker's server time) when the bot can start trading.
• Trading End Hour (Server Time): The hour (broker's server time) when the bot stops opening new positions (open positions continue to be managed).
• Enable MA Filter: If true, activates the Moving Average filter.
• MA Period: The period of the Moving Average to use for the filter.
• MA Type: The type of Moving Average (Simple, Exponential, etc.). Logic: Enter Long only if Price > MA, enter Short only if Price < MA.
• Enable RSI Filter: If true, activates the RSI filter.
• RSI Period: The period of the RSI.
• RSI Overbought Level: The level above which the bot will NOT enter Long.
• RSI Oversold Level: The level below which the bot will NOT enter Short.

Conclusion 🏁

AlgoTrend Gamma Levels Bot is a powerful tool for traders who understand the influence of the options market and desire an algorithmic approach to exploit its dynamics. However, it requires a specific technical setup (IBKR, Python server, VPS) and an understanding of the data requirements. It offers great strategic flexibility and robust risk management mechanisms, making it suitable for experienced traders looking for an edge based on derivative order flows. Visit [your algotrend.it website] for more details and support.