Friday, April 28, 2006

Truer Words Were Never ... Pt.4


As part of an occasional series of great approaches to trading, written by fellow traders/bloggers, here is a series we call "Truer Words".

Part 1 is posted here.
Part 2 is posted here.
Part 3 is posted here.

The articles discuss topics of trading which include: emotional intelligence, trading journals (especially, but not limited to, the ones that document benefits of using Trade-Ideas), size management, P/L performance, and many other dimensions of the trading process - not just pre-trade analytics and idea generation.

Downtown Trader Spreads the Word

Downtown Trader's style is short term trading based on technical analysis. After his introduction to Trade-Ideas, DTT discovered several unique ways to use the tool. For example he recently entered CNBC's stock picking contest using Trade-Ideas exclusively. You can read about his progress here. DTT describes his other ways of using Trade-Ideas in his detailed review of Trade-Ideas. The article appears here.

StockTickr's Interview with Brett Steenbarger

StockTickr is free "social investing" and it's the easiest way to store a watchlist on the web. Uncover new trade ideas, use RSS to track investing ideas, and more. Their blog features interviews with interesting members of the trading community. For the sixth interview in the StockTickr Interview Series (RSS feed), they spoke with Brett Steenbarger, a clinical psychologist, S&P futures trader, and Director of Trader Development at Kingstree Trading, LLC. Brett is the author of The Psychology of Trading (Wiley 2003), a topic that most of us would do well to read up on. He’s also put the finishing touches on a second book called Enhancing Trader Performance which is due out this fall.

Footnote
More true words appear on our website under Testimonials.

Wednesday, April 26, 2006

New Sample Strategies Make Their Debut

Readers of this blog and those familiar with Trade-Ideas' capabilities as a decision support and risk management tool know that we constantly innovate to improve the technology and exceed expectations on value, features, and support.

A key driver of this behavior is the data collected from subscribers' feedback and their use of Trade-Ideas. The subscribers we study include the new, existing, demo, and cancelled ones. From these tea leaves we try to determine what the signposts tell us. A recent signpost told us to make some changes to the sample strategies within Trade-Ideas. If you want some more of our reasoning explained, skip to the bottom of the post. Otherwise take a look at what's being revealed beginning today:


New Proven Strategies from Trade-Ideas


The sample strategies are the most visited places of our software. We used to conclude that customers therefore regularly used a variety of different strategies, changing strategies perhaps to match the market's overall trend or key events like FOMC or earnings announcements. While some subscribers certainly do this - especially those who read this blog! - it is not the majority, especially among those who eventually cancel their subscription. This group was the most revealing in that the number of different strategies accessed during their subscription averaged 1 or 2. After seeing this behavior in other groups, we decided to give the sample strategies a makeover in order to force some change. And we may continue to change the sample list more frequently.

The effort to showcase different strategies in our Strategy Session articles as well as our June Learning Curve Seminar are two other recent efforts that address the challenge of encouraging subscribers to use more of the powerful tool at their disposal.

The previous sample strategies will appear on the website as a link from the new page - for now we want to showcase the new samples and encourage subscribers to try them. Remember existing subscribers can always reference the "Recent Window Settings" to see the list of strategies recently used.

Friday, April 21, 2006

Toot a Partners' Horn

Here is some news recognizing the recent achievements of our partners.


First item is the the May 2006 issue of Technical Analysis of Stocks & Commodities magazine, which lists (p 84) The Bandit Broadcast stock newsletter as the #1 Advisory Service! The Stock Bandit appears on our blogroll for more information. Congratulations Jeff!







Item #2 is our partner Scottrade who recently launched a coordinated marketing effort that will place print materials and signage featuring Trade-Ideas at their branch offices across the nation - over 260 of them! Trade-Ideas is now integrated into Scottrade's powerful active trader platform, ScottradeELITE and free for these traders. Visit any of their branch offices beginning next week and tell us what you think!

Partners are encouraged to share with us any of their milestones or achievements like TraderMike's 3rd Blogiversary or Fallon D's new, informative strategy comparison charts. We will help spread the news!

Thursday, April 20, 2006

This Month's List: Top 7 Trading Strategies





This month we again present a list of the most popular strategies Trade-Ideas subscribers either use as is or modify to fit their trading plan. These items are from two sources:



  1. The list of pre-configured strategies that's available on our site and inside Trade-Ideas Pro (under "Samples").
  2. The list of strategies developed from our popular blog series, "Strategy Session", where we model additional methodologies found in articles, speeches and/or inspiration.

Here is the list of the Top 7 Trading Strategies for the last 21 trading days ending Wednesday, April 19, 2006 (This list does not include our widely seen Free Demo):

Remember these strategies can be used as is OR they can be modified to fit your own trading plan (as they are intended). For example by merely changing the Minimum Average Daily Volume to a different threshold, you see a whole different layer of the market than someone using the original configuration. Imagine what changing the Minimum Relative or Current Volume filter will do.

The filters are like a periscope into the market. Change some of the settings and you'll see completely different schools of fish than someone at another depth.

Know, however, that Trade-Ideas.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, alerts and all other features are for research purposes only and should not be construed as investment advice.

Trade-Ideas Learning Curve Seminar - Sign Up Today!

To gain a full understanding of how this strategy and others can help you in your trading plan, we suggest you attend our training seminar in June. There we will focus on all the advanced aspects of our software needed to give you an edge against larger, more capitalized participants. Beautiful Del Mar, CA (San Diego) offers a chance to:

  • Meet other successful traders
  • Build a network
  • Learn a lot techniques and trading wisdom

We just opened the sign up page so that you can officially pay for and reserve your spot (conference limited to 100 existing subscribers). http://www.trade-ideas.com/Seminar/

Tuesday, April 18, 2006

Strategy Session: Moved Up on Lite Volume? Fade It.






A helpful article by Andy Swan on DayTradeTeam's site got us thinking about the warning signs that go off when stocks head upwards but on lighter than normal volume.



DTT's article suggests this is the beginning of a losing battle for a stock's demand and thus a signal that a decline is immenient.

Andy's article concerns the Head and Shoulder Reversal Pattern and lists 6 characteristics needed to confirm this pattern (shown below):


Key points to the Head and Shoulders Reversal:
  • A prior trend must be in place for a reversal to occur.
  • Uptrend continues, but on weaker volume (B to C).
  • Heavy selling pushes point D below the trend line.
  • The right shoulder is formed, lower than the head and on light volume.
  • The neck line must be broken decisively to complete the pattern.· A return
    move is very common, on light volume. Short at or near the neck line.
The Strategy: Fade the Up on Lite Volume Move
You should read and follow their advice in the article if you want to look for this specific indicator. The strategy we developed is more aggressive and shows a trader opportunities to fade upward moving stocks that are out of gas (i.e., when demand gives way to oversupply). With regard to the Key points above, the strategy signals as soon as the first 2 conditions are met.

How It's Modeled:
The set-up includes these filtering conditions:

  • Minimum Price is set at $10
  • The spread between bid and ask cannot be larger than 10 cents
  • The candidate stocks must trade on average at least 300,000 shares/day
  • The candidate stocks must be in a previous and current uptrend: a minimum of 2 up days prior to today and in the top 20% of its daily range

and most importantly:

  • The candidate stocks must be trading less than their normal, current volume - at least 35% below average at the time the signal is triggered

Subject to these filters above, the alerts will trigger whenever the stock: makes a check mark, crosses daily high resistance for the past 3 days, OR runs up in price with higher than normal acceleration.

Who Could Benefit:
This is one of the few 'Strategy Sessions' that uses the Maximum Current (or Relative) Volume filter to highlight stocks with weak volume patterns. Traders who base their trading decisions on volume will appreciate this strategy as a good contrarian spotter. Swing traders and intraday traders will also see opportunities in line with their holding preferences.

This strategy is not recommended during a strong bull market. It works best when the market is sideways or weak.

Note: If these stocks take a real dive as a result of showing up on this strategy, you could consider using a previous strategy called, "Oversold, Phoenix" to catch any bargains as they roar back.

Note: A similar strategy that tries to fade up moves can be found here. Keep in mind this strategy uses RSI and different alerts to find its opportunities. You may appreciate the different approach.

Footnotes:

  • Link to DTT's site for Andy Swan's article, Head and Shoulders Reversal Patterns (TA)
  • Configure this strategy for your own use here.
  • Link to other Strategy Sessions here.
  • Remember that these set-ups are sketches meant to give you an idea how to model your own trading plan. Use this 'as is' or modify it to your own liking as many others do. Know, however, that Trade-Ideas.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, alerts and all other features are for research purposes only and should not be construed as investment advice.
  • June Seminar Footnote - To gain a full understanding of how this strategy and others can help you in your trading plan, we suggest you attend our training seminar in June. There we will focus on all the advanced aspects of our software needed to give you an edge against larger, more capitalized participants. We just opened the sign up page so that you can officially pay for and reserve your spot (conference limited to 100 existing subscribers). http://www.trade-ideas.com/Seminar/

Wednesday, April 12, 2006

Strategy Session: Flat is a Relative Term


Leave it to Dr. Brett Steenbarger to inspire another Strategy Session from the valuable insights on his blog, TraderFeed.

Brett's observation relates to how the market action in the first half-hour of the market can be a predictor for the rest of the day's activity. In his own words he summarizes:

A slow half-hour appears to be a warning sign of low volatility for the remainder of the day.

The Strategy: Volatile First Half Hour Trading Range Breakouts and Breakdowns

Let's create a Trade-Ideas strategy that looks for volatile stocks and ones that are breaking out or down from the range established within the first half-hour of the market. According to Brett's findings this strategy creates a pool of stocks that should be volatile the rest of the day and be candidates for above average gains. We will therefore add a requirement that the stocks to be considered must have closed near their open. This is based on the findings from Brett's follow-up article on volatility:

When the [overall] market [as measured by the SPY] was volatile but closed near its open, the next three days averaged a gain of .56%. When the market was nonvolatile and closed near its open, the next three days averaged a gain of only .09%.

How It's Modeled:

The set-up includes these filtering conditions:

The alerts selected will trigger whenever the stock breaks above or below the trading range established during the first 30 minutes of the market.

Note: Brett's follow-up article regarding volatile stocks closing near their open means that the 30 minute breakout alerts are strong candidates for further gains. Be careful and know that Brett does not suggest the opposite is true for 30 minute breakdowns. We just include them in this strategy for you to judge.

Who Could Benefit:
Those who don't use Trade-Ideas can (and should) fairly conclude from Brett's articles that on low market volatility days, its best for the P/L to take it easy or go for a walk. Those who use Trade-Ideas, however, know that beneath the overall market activity exists plenty of opportunity among stocks and derivatives that buck the trend.

This strategy will appeal to those readers who enjoyed this previous Strategy Session, Predicting Strong Closes. They are both similair animals.

Footnotes:
  • Link to Brett's article, First Half Hour as a Volatility Indicator
  • Link to Brett's follow-up article, When Days Are Flat: What Comes Next?
  • Configure this strategy for your own use here.
  • Link to other Strategy Sessions here.
  • Remember that these set-ups are sketches meant to give you an idea how to model your own trading plan. Use this 'as is' or modify it to your own liking as many others do. Know, however, that Trade-Ideas.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, alerts and all other features are for research purposes only and should not be construed as investment advice.
  • June Seminar Footnote - To gain a full understanding of how this strategy and others can help you in your trading plan, we suggest you attend our training seminar in June. There we will focus on all the advanced aspects of our software needed to give you an edge against larger, more capitalized participants. We just opened the sign up page so that you can officially pay for and reserve your spot (conference limited to 100 existing subscribers). http://www.trade-ideas.com/Seminar/

Thursday, April 06, 2006

Trade-Ideas In Your Town: Update


This year's Annual Partners Meeting produced a list of scheduled conferences and shows that key personnel from Trade-Ideas will be attending. If your city is listed and you'd like a little one-on-one assistance with Trade-Ideas or learn how we keep the ship afloat, please let us know via the comments section or at info@trade-ideas.com Subject: RoadTrip.

If there is a good response we'll set up a convenient time for everyone to meet. If it's just one or two that are interested we'll still meet or at the least schedule a phone call during our visit.

Upcoming Events 2006 (June is a BIG, BUSY month)
  • Ft. Lauderdale, FL: The Traders Expo, Broward County Convention Center, June 7–10, 2006
  • Del Mar, CA: The 1st Annual Trade-Ideas Learning Curve Seminar, June 16-17, 2006
  • New York, NY: SIA Technology Management Conference, Hilton New York, June 20-22, 2006
  • Las Vegas, NV: The Traders Expo, Mandalay Bay Resort, November 16-19, 2006
  • International Conference: TBD
  • Atlanta, GA: Our East coast office all year round
  • San Diego, CA: Our West coast office and Data Center all year round

Past Events 2006
New York, NY: The Traders Expo, Marriott Marquis Hotel, February 18-21, 2006 (Read our RECAP)

More events will be added as needed. The June SIA event in New York City will also feature our Press & Partners Event. Last year's success guaranteed we would do it again. All of the Trader's Expo events will feature our partnership with Scottrade and their Scottrade ELITE platform - a powerful combination.

Last year's list of events is here.

Monday, April 03, 2006

CNBC Squawk Box Fantasy Portfolio Challenge



UPDATE 4/4: Looks like someone else is sponsoring a stock picking contest.

Thanks to Downtown Trader for pointing this contest out. Downtown Trader created a separate blog for the Squawk Box contest and plans to track the results of his stock selection using Trade-Ideas' Idea Generation Technology (IGT). We wish him good luck.

Here is the contest website: http://www.sbfantasyportfolio.com/index.asp#Home.asp

Are there others registered for this contest? It begins tomorrow, April 4th.

For those readers who entered the contest and plan to use Trade-Ideas to win it all, we wish you the best of luck as well. Whether you keep a blog of your progress or not, please let us know how you are doing and we'll share your progress with everyone.

Choose a strategy from the 'Samples' list in TI Pro or the same list in the browser called, 'Proven Strategies'. You can also select from any one of the Strategy Sessions we've published in the past.

Make sure to tell them who helped you win!