Tuesday, October 31, 2006

Truer Words Were Never ... Pt. 5


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

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.

Dr. Brett Steenbarger's Latest Book Clears a Trader's Head for Trading

The book arrived early this morning from the publisher and I am excited to begin reading Brett's method for turning talent (or luck) into trading skill through a structured process of 'athletic-like', regimented development. NFL Films describes the work ethic to become an expert best,

"Amateurs practice until they get it right. The pros train and practice until they can't get it wrong."

Brett also includes a very kind mention of Trade-Ideas and our technology,

Trade Ideas is "a comprehensive and creative screening tool that really shines in intraday analyses. [It] allows for layering of screens on multiple time frames. This is my favorite program for scanning the market for historical patterns that possess a directional edge."
Source: Brett N. Steenbarger, Ph.D., Enhancing Trader Performance, p. 259, 2007, Wiley Trading

Buy it HERE. I am diving into it now. Don't take my word for it. Read Brett's daily insight at his blog, TraderFeed.

An Unlikely Trading Veteran Talks Sense: Michelle B.

I have enjoyed reading the recent articles appearing on TraderMike's site written by Michelle B., a 10-year trader living in southeastern France with a varied, fascinating background. Michelle's post, "Out of the SKILL(let) into the Fire", strikes a couple of themes that Brett Steenbarger examines in his book. Her recent interview with Stocktickr reveals her trading style, most influential book on trading, and how she got started trading.

Anytime Michelle B. wants to start writing about her experiences using Trade-Ideas on our blog or TraderMike's, we would be happy to read her excellent prose!

I am also including an interesting article on the reasons female traders may outperform their counterparts.

Truer Words Series:
  • Part 1 is posted here. (highlight: TraderMike spreadsheet trading journals)
  • Part 2 is posted here. (highlight: FallonD's performance data, StockBandit's game face)
  • Part 3 is posted here. (highlight: Dr. Brett Steenbarger on the first hour of trading)
  • Part 4 is posted here. (highlight: How DownTownTrader uses Trade-Ideas)

Monday, October 30, 2006

Junkin' 30 Minute Opening Range Breakouts

I got my wife's ring professionally cleaned by the same merchant who sold it to me in the Diamond Exchange off of Times Square during my recent visit. (Let me know if you would like his contact info - a great jeweler.) The cleaner removed 5 years of crud and transformed it once again to its original brillance. When I returned it was like giving it to her for the first time.

Making something old, new again is what we call Junkin'. In this second edition of the Junkin' series The Odds Maker is like the cleaner who gives an old Strategy (created in Trade-Ideas) a good polish and adjustment to make the strategy fit this market once more. Using The Odds Maker I gave a previous strategy, Volatile First Half Hour Trading Range Breakouts and Breakdowns, the tune-up.

Thanks to The Odds Maker a trader can evaluate if a Trade-Ideas strategy produces reliable, profitable trades in the current market. Let's take strategy above. I ran a lot of different Odds Maker configurations (which govern how long the trade is held and when the trade takes place) and came up with some interesting results - including the conclusion that this strategy excels in the second half of the session (assuming a long position on every trade alert).

First I didn't need to update the strategy by changing any alerts or filters to see good results in The Odds Maker. This suggests the strategy is as good or better now than when it was first created in April. Second because the strategy works well with the original configuration, the profitable trades from this strategy depended on not trading any signals until 2.5 hours after the open and holding each position until the close. This may seem counter intuitive - after all the strategy suggests acting on 30 minute opening range breakouts/ breakdowns. The Odds Maker says hold on and wait 2.5 hours before trading these alerts for better outcomes.

The snapshots of The Odds Maker configuration show which settings produced the best results:















Here is the summary information The Odds Maker provides for this strategy: (Note - you can also select to see the results expressed with %s vs $)





These results are based on a look at the last 3 weeks of market activity and are therefore subject to change as time moves on. Running The Odds Maker every couple of days informs a trader if the use of the strategy is still valid. That's a key trading lesson: It's not enough to have the right strategy for a given market, but knowing when to use the strategy during a session and how long to hold the position. The Odds Maker turns out to be a good trading coach, calling for the right plays at the right time based what's working now (i.e., the last 3 weeks). It's also great at putting a fine polish on something that was already pretty brillant.

PS - I'm glad I picked up the ring after my enjoyable visit to WallStrip and Howard & Co (think of their address in NYC as 'The Departed' meets 'Demolition Man' - lots of construction and blunt instruments lying around). I loved meeting Jeff and Adam and drank enough of the Kool-Aid from Howard to believe their plans for what's coming will be worth watching. If you haven't seen WallStrip, go - they are off to a great start!

Wednesday, October 25, 2006

Strategy Session: Take Advantage of Other Traders' Fears

"Greed for a lack of a better word is good." -- Gordon Gecko, Wall Street (1987), Director: Oliver Stone
Change greed to fear and we get an equally motivating factor in others that can mean big opportunity. Fear is good because it kicks in among people who panic the self preservation instinct that we as 'efficient market predators' love to see.

Take for example this strategy called, Buy Gap Up Reversals. Several candidates in this strategy do not look good on a chart.

What do we see?

All the stocks in this strategy gap up at least $1 dollar and then retrace 75% of the gap. It looks like the bears have you in their claws right? Time to panic? Many would - and they would be wrong. When we applied The Odds Maker to this strategy we found that the 75% pullback on these gap plays is a nice entry point giving us the following readout:
38 winning trades out of 62 total trades (over the past 3 weeks) = 61.29% success defined as all results up at least $0.01 and exiting the position at the close; Average winner = $1.1192, Average loser = $-0.7087, Net winnings = $26.23, Best = $4.73, Worst = $-2.67; Casino Factor = 99.09%
Making 26 points in 3 weeks is not too shaby - considering an average of 4 trades a day with this strategy.

For more details on the terms used in The Odds Maker summary, see them defined in the manual.

November is approaching fast so if you are interested in saving $100.00 dollars off of the one time Odds Maker price, click below to pay the October rate.

Sunday, October 22, 2006

Joe Bloggs of Trading


Before the Blogosphere there was Joe Bloggs.

For those of you who remember taking standardized tests to get into college (SAT or ACT) Joe Bloggs is the name of the average American student. He's not an idiot and he's not a genius, he's just average.

On the SAT he scores exactly what the average American student scores. When Joe takes the SAT he gets all the easy questions right, half the medium ones right and none of the hard questions. When you take the SAT, they tell you to keep in mind how Joe Bloggs would answer an easy, medium or hard question. Joe Bloggs always picks the answer that seems right. On hard questions, find the answer that doesn't seem right and eliminate it--that's the Joe Bloggs answer. Why is Joe Bloggs important in trading? Predictablility.

Stay with me.

In trading Joe Bloggs faces a test much more challenging than the SAT. All the questions are the hard ones. Only in hindsight do chart patterns look obvious but when you look at situations in real-time every breakout and every breakdown can look like a good candidate. Most traders learn the savant skills necessary to survive through a painful process of trial and error. That process is an expensive to say the least. Joe stuggles because he is bombarded with information that's difficult to processs.
  1. The trend is your friend
  2. Don't follow the crowd

Easy enough right? So Joe comes across a strategy that he thinks may yield some interesting results. First he is going to look to short stocks, because he wants to make money when the average person loses money. He is going to short stocks that are down big over 2 dollars and he is going to initiate the trade toward the end of the day because he is following the trend. With about an hour and a half left in the trading day Joe starts placing his trades.

Unfortunately, Joe quickly starts to realize that even though all the set ups look pretty good only a third or so move in his direction and he is even more discouraged to find that every winning trade is less than half the size of his average loser. Although Joe tried his best to follow the market advice of going in the direction of the trend and not following the crowd he was dead wrong. Test flunked.

That was a big part of our idea for The Odds Maker. The strategy described above is actaully one that we created to find Gap Up candidates. It occured to us as these set ups appeared on the charts in real-time how tempting they look to hungry short sellers - when actually the opposite is true.

At Trade-Ideas we went through similar situations as traders - the experience helped us design the tools we believe can give Joe Bloggs a cheat sheet to the market. Remember that Joe is not an idiot, and he is no genius - he gets all the hard questions wrong. In the market thinking that you are a genius can be very expensive. Joe just needs a little insight as to what is currently working - and his Odds Maker.

Thursday, October 19, 2006

10 Trading Commandments - Who Can Follow Them?


The 10 Trading Commandments written by Minyanville's Todd Harrison and served by TheKirkReport will improve your trading if followed - it's that simple.


HOWEVER


Our question is, Can the commandments be followed?

Sun Tzu says, "Know they enemy". We say "Know Yourself".

Experience painfully teaches traders that they are their own worst enemy. So it goes without saying that the hardest part of following the 10 Trading Commandments is . . . following the 10 Trading Commandments.

This is where Trade-Ideas and The Odds Maker come in handy. The tools serve heaping handfuls of discipline like an all you can eat Italian buffet. Added to Todd's divine dishes, we add a touch of our own marina sauce (never from a bottle):


  1. "Respect the price action but never defer to it": If you use The Odds Maker to see which strategies are paying off probabilistically you do not need to have a bias about the direction of the market. Simply play in the direction with higher odds of success.


  2. "Discipline trumps conviction": 100% Truth. The market is not going to do something just because you hope that it will. When The Odds Maker gives you a readout like this: Average winner = $0.922, Average loser = $-0.3158 you know what to expect from a strategy's trade alert (i.e., the profit target, the stop) before you even enter it. Discipline to manage risk.


  3. "Opportunities are made up easier than losses": Trade-Ideas' alerts show hundreds of opportunites from which to choose every day. Take your time and find the right ones using The Odds Maker. There is no reason to rush or force anything - every trade arms you with an informational edge.


  4. "Emotion is the enemy when trading": Trading is ruled by fear and greed. Those two sinners thrive on a lack of enough information or trade expectations. The Odds Maker readout collars these guys by revealing a strategy's odds of success (%) as well as average winners and losers and net gains or losses.


  5. "Zig when others zag": The trickiest of all the commandments. How do you even know if you are zigging while others are zagging? You certainly don't want to zig in front of zag by GOOG, lest you be left very zoggy. Use The Odds Maker and instantly clue in when it's time to make the right move. Rest assured those relationships are always in flux.


  6. "Adapt your style to the market": It is so important to know what kind of foe you are facing. Do breakouts follow through or do they pull back? Are you in a trending or range bound market? The Odds Maker tells a trader which strategy best fits the market's behavior.


  7. "Maximize you reward relative to risk": A simple example how The Odds Maker takes this commandment to the next level. Below is a readout of 2 Trade-Ideas strategies evaluated by The Odds Maker:

    Choice 1: 53 out of 69 trades = 76.81% success rate (defined as up at least $0.01 and exiting the position after 30 minutes); Average winner = $0.922, Average loser = $-0.3158, Net winnings = $46.00, Best = $4.23, Worst = $-1.96; Casino Factor = 100%

    Choice 2: 72 / 157 = 45.86% up $0.01 in 30 minutes; Average winner = $0.3979, Average loser = $-0.4413, Net winnings = $-6.21, Best = $1.69, Worst = $-2.24; Casino Factor = 14.14%

    Which strategy provides you with an edge? It is clear that scenario one is preferred over scenario 2. Without The Odds Maker it's difficult to know which Trade-Ideas strategy to use without risking capital in the market - no matter how good your money management is. The Odds Maker lets you float the buoy.
  8. Perception is reality in the marketplace: See #5.


  9. "When unsure, trade 'in between'": See #3.


  10. "Don't let you bad trades turn into investments": See #4. Shed light on any strategy with The Odds Maker.

In golf a handicap is used to even the playing field between players of different skill levels. In trading innovative technology helps the have-nots (of capital and elite access) gain some edge over the haves. Make sure you are playing with the right set of clubs. You still are not assured the green jacket, but The Odds Maker and the right mentality, education, trading buddy or mentor are the right stuff that makes it possible.

Want more? Our Odds Maker manual (quick read) explains more.

Wednesday, October 18, 2006

Custom Scans To Go?

It's day 3 since we added the Custom Scan feature to our free Stock Research section of the website. Thanks to TraderMike, FallonD, Dr. Brett Steenbarger, theKirkReport, and several others for helping to spread the word. A lot of people are kicking the tires!

One quick helpful tip to mention (we'll add some additional help soon):
When using the filters the scan and the sort options are completely separate. You can select as many filters as you like to use in your scan, just like in the normal product. In addition, you can choose to sort by any of the fields (whether they were chosen for the scan or not).

Here is an idea that's brewing about the Custom Scans:

We can make the Custom Scans transportable and embeddable in a web page or blog template - very similar to our real-time banners.

Would this be useful? Rather than leave someplace and come to Trade-Ideas to use these tools, a reader could stay on your site and get valuable TA research results. We're not so interested in traffic per se (although clicking on the results would take you to TI pages of more analysis). We'd rather provide decision support tools and build awareness of those tools (free and subscription-based) if they are good enough.

Monday, October 16, 2006

Build Your Trader "Cred"


Start your next conversation with a list of stocks created from an insightful perspective on the market. Shop for this perspective - freely, with no strings attached - using a new tool added to our Stock Research section of the website over the weekend.

(I didn't earn my salary this weekend like others did putting this together as perfectly as it came out. No my weekend was all fun and games and at least an hour, at all times, away from sobriety).

The Odds Maker isn't the only new feature we developed recently. Starting today create custom scans using the best filters in Trade-Ideas. Input your own values and then sort the results by any filter to 3 degrees. You can even name and save scans for later use in your favorite bookmark application (e.g., favorites, deli.ci.ous, etc.) All of these scans use End-of-Day data processed overnight from the previous day's close. Anyone - either a Trade-Ideas subscriber or not - accesses this information. Kirk: This one's for you!

Here's an example of how it works:

Name of Scan: UP Days and Volatile close to 200 day

What it does: Quickly see a list of stocks that have been up at leasts 2 days and are just above their 200 day moving average. Use it to possibly spot a good buying point for further momentum or track it as a fade opportunity (those of you with The Odds Maker can know for sure).

Today that scan produced the following stocks:
  • NDSN - NORDSON CORP
  • SHFL - SHUFFLE MASTER INC
  • WY - WEYERHAEUSER CO
  • XLNX - XILINX INC
  • NRG - NRG ENERGY INC COM NEW
  • PVX - PROVIDENT ENERGY TR TR UNIT
  • WXS - WRIGHT EXPRESS CORP
  • PSI - POWERSHARES ETF TRUST DYN SEMCT PORT
  • VPRT - VISTAPRINT LIMITED
  • SNUS - SONUS PHARMACEUTICALS INC
  • VIMC - VIMICRO INTL CORP ADR
  • WPS - WPS RESOURCES CORP
  • BBBB - BLACKBOARD INC
  • MTA - MAGYAR TELEKOM LTD SPONSORED ADR
  • CUB - CUBIC CORP
  • ADTN - ADTRAN INC
  • KEYN - KEYNOTE SYS INC
  • EP - EL PASO CORP

Create a new scan.

Make the most of this new feature:

  • Generate candidates for stock lists
  • Develop ideas for further study in Trade-Ideas or elsewhere
  • Use as inspiration for good, informed posts on trader forums or blog comments
Howard is right - In fact let these scans serve as your own content - a great way to insert yourself into the conversation and further yourself as a reputable trader with a pulse on what's happening in the market. No need to credit us - you're the one who built the scan and had the thought.

Friday, October 13, 2006

If They Are Listening, Why Can't They HEAR YOU?

CyberTrader made this announcement about a slew of new improvements arriving soon:
Top Enhancements Currently in Development *
We hear you! You made requests for the features described below, and we listened. The following enhancements are currently in development and planned for a future release. Read on and see how you and your fellow traders are driving evolution of a leading direct access software platform.
The list:
  1. New Chart Toolbar for Greater Customization
  2. Configurable Statistics Panel/Balances Bar
  3. More News Feeds
  4. Advanced Order Types to Help Manage Risk (brackets, auto-cancels, etc.)
  5. Automatic Layout Backup for Redundancy
  6. Sell-Write Orders
  7. Track Potential for Short or Long Term Gains
What about Trade-Ideas? We've said before that it never hurts to ask your broker about having them pay for your Trade-Ideas subscription. What about asking them to embed our tool into the platform itself? Its been done before.

I like what I recently read on Howard's site about the "NIH" (Not Invented Here) walls that are crashing within companies that realize leadership in an industry requires the presumption that the best tools, the best customers and best thinking can reside outside their four walls. Among the choices to build (or grow), buy, or partner the last two options are getting more popular than the first. I submit TD Ameritrade's recent acquisition of Medved QuoteTracker, our partnership with Scottrade, and certainly Google's grab at YouTube as evidence.

Lots of our subscribers already marry CyberTrader with Trade-Ideas Pro. Can you guys step up and let us know how the bliss could be better?






The asterick? Here's what it means: "Please keep in mind that you are reviewing developmental material. Actual changes may be substantially different than described above, delayed, or dropped from development." There's hope yet!

Wednesday, October 11, 2006

Trade-Ideas In Your Town: Update

Where's Waldo? The picture below was part of the direct mail pieces promoting the next Traders Expo scheduled in Las Vegas in November. You gotta take whatever free publicity comes your way. Although I don't remember signing any release form ...



The partners are coming to your town! That's the truth if your town appears on the list below. Want to meet for a drink? Talk shop? Drink some more?? Drop us an email at info@trade-ideas"."com and we'll make it happen.


Here is the latest tour list:
  • St. Louis, MO: drinks, meetings, drinks, October 11-12
  • Austin, TX!!!: meetings, happy hour, oblivion, fraternity reunion weekend, Longhorns football - no cameras allowed, October 13
  • New York, NY: AlgoTrading 2006 Conference, October 23-25, 2006; meetings with WallStrip, several prop firms, and others
  • Las Vegas, NV: The Traders Expo, Mandalay Bay Resort, November 16-19, 2006 - maybe we'll have another episode of "the Tao of Dan" ;)

Here is a recap of our own past events in 2006 that were open to our subscribers:

Tuesday, October 10, 2006

Junkin' Narrow Range Bars in this Market

I can't call The South my home because I don't venture out beyond a perimeter highway that encircles the city of Atlanta, GA called, "The Perimeter". I live in Atlanta and enjoy every minute of its natural beauty and big city mix. But certain southern terms creep their way into my vocabulary and one example is the word, "Junkin". A term that describes the art of finding a gem in the garage sale.

TraderMike fielded a question about narrow ranges and our NR7 alerts and gave a detailed explanation you can't miss.

This got me junkin' through some of our older strategy sessions regarding the NR7 alert. I think its appropriate to revisit one of the first strategy sessions we created using the NR7 alert - considering TraderMike and a few others convinced us to add it. Using The Odds Maker I found a tweak that makes this strategy sparkle again.

Dan created this strategy and it's become one of our most popular posts: "I saw it on the Discovery Channel"

Does this strategy perform well? Thanks to The Odds Maker a trader can evaluate if a Trade-Ideas strategy produces reliable, profitable trades in the current market. Let's take Dan's strategy. I ran a lot of different Odds Maker configurations (which govern how long the trade is held and when the trade takes place). I got dismal results with no clear odds for going long or short. Many of the trades were losing trades that were also greater in value than the combined winning trades.

So how did I tweak this strategy? One tip is to add a volume requirement for pulling the trigger on a trade. In this case I demanded that all the alerts be subject to a minimum current volume ratio of 3. This means the stock has to be trading 3x what it normally trades at the moment of the alert.

The results were vastly different than before.

Here is the revised strategy:

I saw it on the Discovery Channel (with the Volume Up)

Here are the results from The Odds Maker:



Although the win rate is less than 50% at 43.15% this is still a decent strategy. Why? Take a look at the average winner vs. the average loser. It's twice the size! That means you will lose less with the losing trades and score much more on the winning trades. The net winnings calculates the exact result of trading all 343 trades in this sample - $19.08/share traded. Note: You could easily see these results expressed as a % as well. The average winners and losers give you an easy signpost for knowing what to expect in a trade and where stops and profit targets should go. The Casino Factor high score of 90.91% supports how reliable those averages are.

Read more about The Odds Maker from our Manual and get started using The Odds Maker in your trading (in the latest version available for download) while we are still in beta! (Beta ends November 1!)

Go junkin'!

Sunday, October 08, 2006

Strategy Session: Catching the One That Got Away

We received an email from one of our long term customers looking at The Odds Maker.

Question:
"Some of my setup entries are based on a specific set of conditions being present such as prices breaking the first 5 min hi or lo candle by +.05 for longs and -.05 for shorts. I use Trade-Ideas to find the candidate and then I enter only under certain conditions such as above. How would i use The Odds Maker where i only enter if the first 5 min candle is broken by .05?"
The question highlights how the alerts in Trade-Ideas flag interesting situations. The alerts connect to other aspects of a subscriber's tools set (e.g., charts, order entry) to get more details. Often times subscribers will use just a single alert window which provides information in both directions: long and short opportunities.

Instead of just using Trade-Ideas as a heads up, refine the set up to show only very specific situations. In other words instead of using Trade-Ideas to cast as wide a net as possible. Haul it in with a bait specifically tailored for the fish you want. Most users often don't utilize the full power of the Trade-Ideas filters that can, when combined with other filters and alerts be used to disect virtually any market situation. Specifically for the question above we are working with our customer to reconfigure his set up and get very specific results. Here are some of the filters we are going to be using.

http://www.trade-ideas.com/Help.html#WSF_MinUp5
http://www.trade-ideas.com/Help.html#WSF_MinFCD
http://www.trade-ideas.com/Help.html#WSF_MinRD

The point we want to convey is that it is important to ask questions. We are more than happy to help our customers work on creating a strategy. If you have specific questions send us an email at info@trade-ideas.com.

By the way here is the strategy we came up with:

Enter if the first 5 min candle is broken by .05

The Odds Maker analysis of this trade used this configuration:



Couple of things to note:
1. Trading ends after roughly the first half hour
2. Every position is held for 5 minutes only

What is The Odds Maker?
If you want to see what results The Odds Maker gave for achieving profitable trades with this strategy (which were better than 50%), load the strategy into TI Pro and click run if you downloaded the latest beta version.

Maybe you can do better! This strategy looks for long opportunities. To test yourself you can design the strategy for short opportunities by reversing the filters and changing the alerts.

Sincerely,

Trade-Ideas




Tuesday, October 03, 2006

6 Ways Your Decision Support Tool Helps or Harms Your Trading

The Wall Street Journal ran this headline on page B1, Saturday, September 30, "Your Portfolio on Autopilot - Brokerages Roll Out Software To Automate Trading Strategies - Risks of Becoming a 'Quant'".

Brokerages will move mountains to attract active traders to their camp with trading tools - and are increasingly indifferent whether its developed internally or acquired externally. From the article it's clear to us the characteristics these trading tools have.

Characteristics of attractive trading tools:

  1. Performs intensive data-crunching to test strategies and improve decision making
  2. Determines if that strategy's success is coincidence or potentially reliable and repeatable
  3. Removes some of the emotion of trading and allows a trader with a trading plan to be more disciplined in following it
  4. Requires little programming effort to customize and develop
  5. Informs a trader if a strategy is in-tune with the overall market's behavior
  6. Levels the playing field between amateur and professional
We read the article several times and decided to forgive writers Aaron Lucchetti and Justin Lahart for not mentioning Trade-Ideas. Our letter to them features sections of the article and our 2 cents. Parts of it appear below.

"Previously, tools like these were the exclusive domain of whiz kids with Ph.D.s hired to design complex trading algorithms for hedge funds and giant institutional investors. Known as "quantitative" strategies or "program trading," it involves setting up specific sets of rules -- say, buy 100 shares of Stock X if the Dow rises a certain amount for several days in a row -- based on intensive data-crunching."

Trade-Ideas brings the intensive data crunching capability to the average trader. We track every stock on all the exchanges using a growing list of alerts and filters to do this. This is sweet spot we now own. Our customers don’t need a Ph.D but can have access to that type of power. No need to be a programmer.

[Quantitative strategies and historical stock data] is proving to be popular with investors. At TradeStation Group Inc.'s brokerage unit, where automated trading already makes up a significant percentage of the business, trading is up 50% from last year and the average customer now buys and sells 47 times a month.
Up 50% is a very big number. TradeStation, while being the leader in this space, is extremely complicated for the average trader. What they have going for them is the fact that their average customer buys and sells 47 times a month. That is considerably more than any competing online brokerage customer. Trade-Ideas' arguably simpler interface and more powerful real-time analytics hold the promise of similar trading activity for brokers seeking this type of activity. Traders can take the first step in asking their broker to pay for their Trade-Ideas subscription. It never hurts to ask.

TD Ameritrade Holding Corp. plans to start rolling out automated trading for its six million client accounts as soon as next month that is designed to mimic some of these functions.

The competition is coming into this space hard and fast. The fact that one of our partners Scottrade already has Trade-Ideas gives Scottrade a big advantage.
One of the biggest risk areas for newbies, says Michelle Clayman of New York money manager New Amsterdam Partners LLC, is the data mining. It is possible to look at historical data about market behavior and find all sorts of things that appear to have worked in the past -- but without extensive testing, it is hard to determine if they would work the same way again or whether they simply represent a coincidence that might never be repeated.
The Odds Maker, to be formally released November 1, resolves this issue. It allows the users to continuously monitor trading strategies for returns. It assumes you are going to keep running the Odds Maker to make sure the strategy is valid. The appropriate analogy is this: If you are a card counter in Vegas, you would not be counting cards once and then placing bets based on that count. In order to have an advantage over the house you have to continuously keep counting the cards. Same goes with the Odds maker. You will continuously run the Odds Maker to make sure the strategy stays valid. The whole assumption of the Odds Maker and the reason why it looks at the more current data (15) days is so that you are not trying to work a system that is based on old information.

In many ways, automated strategies like these level the playing field by giving investors some of the same tools the pros have been using for years. It helps them get trades sent into markets more quickly, and by giving them a preset strategy, "removes some of the emotion" from investing, says Franklin Gold, a vice president at Fidelity's brokerage unit.
This is why having a tool like the Odds Maker becomes very appealing. You are not having to rely on the process of trial and error, which is psychologically frustrating and financially dangerous, to figure out if a trading strategy works or does not work. You have the hard numbers directly in front of you.

Another problem, says Paul Bukowski, a portfolio manager with Hartford Investment Management, is that sometimes even tried-and-true methods can stillput an investor into too many of the same sorts of stocks. That lack of diversification is risky because if a particular sector gets hurt badly, the portfolio could be in trouble.
This is another problem that Trade-Ideas and the Odds Maker solve. Trade-Ideas does not only look at a portfolio, although it can, but rather creates one on the fly, by showing users all stocks that meet certain criteria right now, something that nobody else does. The whole universe of stocks is being monitored and only the appropriate ones are flagged. When you add the Odds Maker, it will keep the trader trading stocks that exhibit a certain pattern that is working in the market right now. Since the end user keeps running the Odds, they will always have a heads up to when the conditions change.

Vladimir Ivanov, an auto mechanic, decided to try his hand after he took evening programming classes and found several Internet sites where programmers discussed strategies like these. He opened an account at Interactive Brokers and at first made money in a program he designed to buy and sell groups of stocks at once, a so-called "pairs" strategy.
With Trade-Ideas and Odds Maker you really get rid of the need for this programming business and open up the data crunching capabilities to the average user. This is where TradeStation falls very short. If you can imagine the resources needed to build another strategy for Vladimir versus a Trade-Ideas customer who simply: hits configure in her Trade-Ideas window, changes a few settings and then runs the Odds Maker to see if those changes are valid. If they are not, then the customer immediately saves valuable time and money by not trading a non-working system right now.

According to Mr. Asness, one of the key things successful investors do is know when not to believe in the investment strategies they have cooked up. That is particularly tricky for amateurs, he says, because they might not have old hands to bounce ideas off of and help guide them away from danger.
Most online traders (with the exception of our readers) are amateurs when categorized by levels of capitalization and often don't know what works and what does not work. This is the problem that we at Trade-Ideas are resolving with the combination of the Trade-Ideas alerts and the Odds Maker. The Odds Maker by giving them the numerical readout is the element that will provide the help and at the same time guide them away from danger.

Measure Trade-Ideas by the list above and you'll find we score close to 100%. Evaluate other decision support tools by the same list or any other you think is valid. We would love to hear what criteria you choose.

Monday, October 02, 2006

October is Here and the Odds Maker Price has been Updated

Dear Trade-Ideas Customers,

We are now in the final month of testing the Odds Maker. Those who wish to save $100.00 dollars off of the one time fee are able to do so through the links below.

Pay for OddsMaker using 2CO
Pay for OddsMaker using PayPal

We encourage anyone who is interested in testing any of their Trade-Ideas strategies for profit potential to download this new add on module. To access the Odds Maker click on the link below. Please make sure that your Trade-Ideas Pro software is closed when you run the install file for the Odds Maker otherwise it not be added properly.

Download the beta version of The Odds Maker.
Read the previous articles about The Odds Maker.

If you are interested in a particular strategy but are having trouble setting it up, please send us an email at info@trade-ideas.com. We are happy to lend a helping hand.

Sincerely,

Trade-Ideas