Getting Started with PredictoPilot

published on Predicto, February 2025

Photo by Andrés Dallimonti on Unsplash

PredictoPilot represents our latest step in making AI-powered trading accessible and safe. Currently available to a select group of beta users, PredictoPilot automates the execution of trades based on PredictoAI's forecasts while giving you full control over your risk parameters and trading strategy.

For a high-level overview of PredictoPilot, you can read our introduction article Trading on Autopilot: Your Strategy, Our AI. This guide will walk you through the practical steps of setting up and using PredictoPilot safely.

Before we start

It's important to understand that automated trading carries additional risks beyond manual trading. Please read our disclaimer carefully before proceeding. PredictoPilot executes trades based on AI forecasts, but you remain responsible for your trading strategy and risk management settings.

Pattern Day Trading Protection

When using PredictoPilot, it's important to understand Pattern Day Trading (PDT) rules and protections. While PredictoPilot itself doesn't enforce PDT rules, Alpaca provides built-in protections to prevent unintentional PDT violations.

A day trade occurs when you buy and sell (or sell and buy) the same stock on the same trading day. You're considered a Pattern Day Trader if you make four or more day trades within five business days. With automated trading through PredictoPilot, day trades can happen when:

A stock's high volatility triggers both entry and exit on the same day
Your settings have small differences between entry price and exit targets (e.g., ≤ 2%)
Stop loss orders are triggered shortly after position entry

Important: If your account has less than $25,000 equity, Alpaca will reject orders that could result in a PDT violation. This means some PredictoPilot trades might not execute to protect you from PDT restrictions.

To minimize the risk of hitting PDT limits:

Set wider ranges between entry and exit prices
Avoid trading highly volatile stocks if your account is below $25,000
Monitor your day trade count in Alpaca's platform

Shorting Orders

By default, shorting is disabled in both your account settings and PredictoPilot settings. This is a safety measure since shorting carries additional risks and costs compared to long positions.

To enable shorting, you need to:

Enable shorting in your Account Settings under Trading Account section
Enable shorting in your PredictoPilot settings by checking "Allow Shorting"

Important: Before enabling shorting, understand that:

Short positions have theoretically unlimited loss potential
You'll incur daily borrow fees for holding short positions overnight
You need at least $2,000 account equity to short stocks
Only "easy to borrow" (ETB) stocks can be shorted

If you decide to enable shorting, we recommend:

Keep holding periods short to minimize borrow fees (typically between 30-300 basis points annually)
Set strict stop-loss limits to manage the unlimited loss potential
Monitor your positions closely as stocks can go from ETB to "hard to borrow" (HTB)
Start with a small allocation until you're comfortable with the mechanics of shorting

Note: Stock borrow availability changes daily. A stock that was ETB yesterday might become HTB today, in which case PredictoPilot won't open new short positions in that stock. For more details about margin and shorting rules, see Alpaca's documentation.

Connecting Your Trading Account

The first step in using PredictoPilot is connecting your Alpaca trading account. We strongly recommend starting with a Paper trading account to test the system and understand how it works before using real funds.

To connect your account:

Go to your Account Settings
Find the "Trading Account" section
Click "Connect trading account"
Select "Paper" as your account type
Complete the Alpaca authorization process

Tip: Paper trading lets you practice with simulated money in real market conditions. It's the perfect way to test PredictoPilot's features and your trading strategy without any financial risk.

Configuring Your Trading Settings

Once your account is connected, you'll need to configure your trading settings. These settings determine how PredictoPilot will trade on your behalf. You can find these in the PredictoPilot settings page.

Key settings to consider:

Total Amount Allocated: The maximum amount you want to use for trading. Start small and increase as you gain confidence.
Position Limits:
- Maximum amount per position (long/short)
- Maximum new positions per day
- Maximum total positions
Stock Selection: You can:
- Trade all available stocks
- Trade only specific stocks
- Exclude certain stocks
Risk Management:
- Volatility filters
- Minimum predicted return thresholds
- Maximum holding period
- Earnings avoidance settings

Important: Start with conservative settings and gradually adjust them based on performance. It's better to start too cautious than too aggressive. For example, select to auto trade only stocks with low volatility, or start with the default settings which are configured conservatively.

Understanding the PredictoPilot Picks Page

The PredictoPilot Picks page is where you'll see PredictoPilot's daily trade recommendations. This page shows you what trades PredictoPilot is planning to execute at the next market open, based on your settings.

At the top of the page, you'll see a status card that shows:

When the picks were generated
When they will be executed
Your current settings summary
Whether auto-execution is enabled

Note: Even with auto-execution enabled, PredictoPilot will skip trades if:

You already have an open position in that stock
The trade would exceed your position or total amount limits
The stock doesn't meet your volatility or earnings criteria

Monitoring Through the Logs Page

The PredictoPilot Logs page is your window into PredictoPilot's activity. Here you can monitor:

Which trades were executed
Which trades were skipped and why
Any errors or issues that occurred
Position entry and exit details

It's important to check the logs regularly to:

Understand how your settings are affecting trade execution
Verify that PredictoPilot is behaving as expected
Identify any patterns in skipped trades that might suggest needed settings adjustments

Best Practices for Safe Automated Trading

Based on our experience and user feedback, here are key recommendations for using PredictoPilot safely:

Start with Paper Trading

Paper trading lets you test PredictoPilot with simulated money in real market conditions. Use this time to:

Understand how different settings affect trade execution
Monitor the performance of different strategies
Get comfortable with the system without risking real money

Build Your Strategy Gradually

Start conservative and adjust gradually:

Begin with a small allocation of your total funds
Set conservative position sizes
Use strict volatility filters
Focus on stocks you know well

Important Safety Tips:

Never allocate more than you can afford to lose
Always use stop-loss orders to limit potential losses
Monitor your positions regularly even with automation
Be especially careful during earnings seasons and high market volatility

Customize Your Stock Universe

Take time to define which stocks you want to trade:

Use the exclude list to avoid stocks you don't want to trade
Start with a small selection of well-known stocks
Consider excluding highly volatile or low-liquidity stocks

Beta Program and Feedback

PredictoPilot is currently in beta, available to a limited number of users. This allows us to:

Gather detailed feedback on the system's performance
Refine and improve the automation logic
Ensure stability and reliability before wider release

Join the Beta: If you're interested in joining the PredictoPilot beta program, please contact us. Your feedback helps us improve the system for everyone.

Please read our full disclaimer before using PredictoPilot, and remember that automated trading carries additional risks beyond manual trading.

Happy auto trading with PredictoPilot!