Thursday, November 30, 2006

Get Your Motor Runnin': Custom EOD Scan

Anyone can use our Stock Research area of Trade-Ideas.com that uses End-of-Day data. Did I mention freely? This large toolbox features:
  1. Pre-configured scans like 200-Day Winners by %
  2. Individual stock research reports like SIGM (featured today on WallStrip!)
  3. A tool for designing your own custom scans
and 4. recent scans created by visitors to the site.

Here's one that caught our interest from Thursday, November 30, 10:52 AM (ET). We'll call this one '2 Days Up and Above the 20 Day MA' or 'Get Your Motor Runnin'':

Filters:

Min PriceMin Price=20 (Dollars) 20(Dollars)
Min Daily VolumeMin Daily Volume=500,000 (Shares / Day) 500,000(Shares / Day)
Min Up DaysMin Up Days=2 (Days) 2(Days)
Max Up DaysMax Up Days=4 (Days) 4(Days)
Min Up from 20 Day SMAMin Up from 20 Day SMA=0.1 (%) 0.1(%)
Max Up from 20 Day SMAMax Up from 20 Day SMA=1 (%) 1(%)

Sort options:

Min Up DaysMin Price
Min Up Days on top, followed by Min Price.

Stock exchanges:
NASDAQ
New York Stock Exchange (NYSE)
American Stock Exchange (AMEX)

Here's just a few from today - but the list updates anew overnight every night:

Scan results:

  1. MSCC - MICROSEMI CORP
  2. AQNT - AQUANTIVE INC
  3. XLK - SELECT SECTOR SPDR TR SBI INT-TECH
  4. CC - CIRCUIT CITY STORE INC
  5. XLP - SELECT SECTOR SPDR TR SBI CONS STPLS
  6. SFD - SMITHFIELD FOODS INC
  7. STZ - CONSTELLATION BRANDS INC CL A
  8. CVC - CABLEVISION SYS CORP CL A NY CABLVS
  9. NFB - NORTH FORK BANCORPORATION NY
  10. FDO - FAMILY DLR STORES INC
Want to add this to your site? Here's how to embed the tool on your blog or page.

Wednesday, November 29, 2006

Happy Birthday TraderFeed

HAPPY BIRTHDAY!

Many of our Strategy Sessions and the ways in which we think about training and educating our subscribers come from the questions TraderFeed raises and its insightful observations.

All of us at Trade-Ideas give a big thanks and offer best wishes for many more years into adolescence and beyond to TraderFeed.

Sunday, November 26, 2006

Rise of the Educators: Vegas Expo Thoughts


Last week's Traders Expo in Las Vegas left us physically spent with no time to regroup before following up on opportunities and celebrating Thanksgiving. The Expo revealed surprising and encouraging trends that we are now tuned into and will watch to see develop. Let's hear from you whether you agree or not:
  • Existing tools among vendors get better at what they already do. Charts contain more functionality, order execution comes with more options, background 'plumbing' gets faster, etc.
  • Examples include Fidelity's improvements to Wealth Lab Pro, E*Trade's expanded free research and better conditional orders, Carlin Financial Group's improved spread trading technology, and OptionsXpress' penny pricing for options spreads.

  • Companies continue to weed out tedious, manual steps from the trade process in new creative ways. This includes not just the extreme of automated trading, but a lot of other partially automated options where the trader can simply move from trade idea to execution more quickly. (Ed.: read the comments for a clarification on this point)
  • Examples include the importation and creation of symbol lists in a platform on the fly (See Stocktickr), linking among tools within and outside of the trade platforms, and (our sweet spot) trade idea generation and pattern recognition.

  • Educators, coaches, mentors, and trainers are catching up to their advanced students' knowledge of trading technology and are using such tools to improve their market analysis and performance. Those married to or associated with a particular platform now identify what gaps exist and increasingly look to fill them with third party tools like Trade-Ideas and others. Education and mentoring must be a continuing part of a trading plan. I'm more convinced of this as I read more of Dr. Brett Steenbarger's latest book, Enhancing Trader Performance.
  • Perhaps I'll do a more detailed review of who I see as adding value. We will initially include in our reviews the following: Linda Raschke, Toni Hansen from Trading from Main Street, Rick Swope from The Market Guys, Adrian Manz, and a few others
In fact let's build the interview questionnaire together. I can think of a few to start off:
  1. Who are the giants whose shoulders you stand on? Who most influenced your teaching philosophy? Your trading philosophy?
  2. Who is your ideal type of student? teaching environment?
  3. How has your lesson plan or trading principles changed from your first student?
  4. What tools do you use in your trading and that assist you in the execution of your trade plan?
  5. How do you keep abreast of new tools, technology, etc.?

Friday, November 24, 2006

Good Enough for Seconds and Thirds: The Next Trade-Ideas Widget

It's a meal in itself or great with leftovers. We introduce the embeddable Stock Screener for your blog or web page to add your property's content value. How does it improve your content's value? The customizable screener can generate a list of stocks according to whatever view of the market you are taking that day. If you are discussing moving day averages, for example, configure the screener to show what stocks match your conclusions. You can name the scan and post the results via the widget whose width and height are all customizable.

Take a look at the right hand side of our blog for our latest example.

Here's the instructions on getting the screener embedded.

Here's the Help to answer any questions.

Happy Thanksgiving!

Our other widgets are here: http://www.trade-ideas.com/Banners.html

Wednesday, November 15, 2006

Trade-Ideas In Your Town: Vegas Update


We are headed to Las Vegas this week and weekend for the Traders Expo. Here are the details:

Las Vegas, NV: The Traders Expo, Mandalay Bay Resort, November 16-19, 2006 - maybe we'll have another episode of "the Tao of Dan" ;)

Are you planning to attend?

Here's a snapshot of some last minute fares to Las Vegas. There's another good travel site to consider called FareCast. They are good at forecasting airfares for flights and letting you know if a current price is above or below the historic average. They also developed a cool tool called FareGuard that lets you protect the lowest fare for one week without buying a ticket. The picture today is an example of some fun ways to look at air traffic.

We are hosted by Scottrade this year. Please look for us at their booth and talk shop. Drinks on us. You can also catch our presentation on Saturday and see how bad the effects of a Friday Nite Vegas hangover can be.

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

  • Del Mar, CA: Annual Partners Meeting, January 7, 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
  • 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

Monday, November 13, 2006

Strategy Session: Price, MA Crossovers on Strong Volume

Let's pull a question out of our support forum that sparked a pretty good strategy in Trade-Ideas with a positive expectancy as reported by The Odds Maker.

Here was the pitch:
"A trading strategy I am trying to implement in Trade-Ideas is to use moving averages over 15, 30 and 60 minute periods along with volume confirmation. I am looking for price and MA crossovers on strong volume. Can this be done in Trade Ideas? If not, are there any equivalent signals?"
Our at bat (I consider it a double - I miss baseball):

OK here is my stab at your strategy. First let's come clean: we do not have MA crossovers on that small a time frame, but you are looking for price and MA crossovers and are open to equivalent signals. This is good because it suggests flexible thinking vs. dogmatic thinking.

SO here goes:

Strategy: Price and MA Crossovers on Strong Volume

The strategy uses alerts we developed for Mel Raiman and his Precision Trading System. The alerts look for crossing of trendlines on the timeframes you requested. All of this of course on stronger than usual volume.

Using the Odds Maker I've come to really make this strategy work. Its one thing to create a strategy but its another knowing how and when to use it. The Odds Maker analyzes recent market activity using this strategy to provide guidelines on what to expect - without risking your precious capital!

Here is The Odds Maker readout:
173 winning trades out of 352 total = 49.15%. Winning trades defined as up $0.01 in 45 minutes;
  • Average winner = $0.3432
  • Average loser = $-0.1882
  • Net winnings = $29.62
  • Best = $10.52
  • Worst = $-1.85
  • Casino Factor = 98%
To undertand what these numbers mean, refer to The Odds Maker manual: http://www.trade-ideas.com/OddsMaker/Help.html

Footnotes
  • We modeled a similar strategy of interest called, Moving Average Breakouts
  • 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

Sunday, November 12, 2006

If You Don’t Know Your Hand's Expectancy, the Odds Are Against You


Chris Perruna explains the basis of position sizing, expectancy and how poker has made him a better trader.

In writing this article he produces one of the strongest cases for using Trade-Ideas' Odds Maker as a crucial risk management tool.

"How the Poker Craze Can Help You Trade", (.pdf), November, 2006; Chris Perruna, founder and president of MarketStockWatch.com

Here are the main points:
  1. Luck may and will play a small part under certain circumstances but rules, odds, risk and money management are the largest components of [poker and trading].
  2. Back testing may help but playing sports my whole life has taught me that Monday morning quarterbacking is for theorists. Once a system has been tested profitably in real-time, the trader or poker player needs to follow rules in order to preserve capital and cut losses.
  3. The traders must also consider the odds of their stock making a gain or making a loss. Price objectives and targets should be a large part of every investor’s system but it is not the essential ingredient to success. Understanding how much to trade or how much to bet and when to make that bet based on the system’s expectancy should be the top priority.
  4. A system that has been tested will have an approximate expectancy that will tell the trader how much will be gained or lost during each trade over a period of time.
  5. Most traders and poker players look for three major factors when developing a system: How much to trade or bet; The right odds or positive expectancy; Multiple trades or hands to play (opportunity)
  6. What exactly is expectancy? Expectancy tells you what you can expect to make (win or lose) for every dollar risked. Casinos make money because the expectancy of every one of their games is in their favor. Play long enough and you are expected to lose and they are expected to win because the “odds” are in their favor. The same holds true for investing. If your expectancy is positive; you can make more money with multiple trades in shorter periods of time.
  7. So what is my point? The point is that being more active or less active is not a way to guarantee success. You must formulate a positive expectancy system that balances the opportunities with minimal risk and maximum gain.
The Odds Maker by Trade-Ideas is not a backtester per se. It calculates the expectancy that Chris describes as an essential ingredient for initiating a trade.

I'll repeat for emphasis:

The Odds Maker calculates a strategy's expectancy BEFORE any capital is put at risk. We calculate all the components used in the expectancy calculation that Chris attributes to Dr. Van K. Tharp’s Book: Trade your way to Financial Freedom.
Expectancy = (Probability of Win * Average Win) - (Probability of Loss * Average Loss)
Expectancy = (PW*AW) less (PL*AL)PW is the probability of winning and PL is the probability of losing. AW is the average gain (win) and AL is the average loss
The Odds Maker emphasizes the most recent market activity of the last 3 trading weeks (3 weeks vs. 10 years of data that some boast) to deliver what the expectancy of the strategy is, what the average winning and losing trades are for the strategy, and what net winnings are expected - i.e., what's working right now; in this market. The Odds Maker does this by taking your exit preferences for trades and applying them to the strategy developed within Trade-Ideas Pro. The manual makes this point in more detail.

Chris' article is an excellent piece of writing that draws a lot of positive behaviors a trader can employ to improve his/her trading. Here's the kicker: Chris wrote this without seeing The Odds Maker. So guess who I'm going to chase down on Monday to extend a 'kick the tires' offer? Hopefully he'll see the tool as an extension of his thinking.

What to learn more? Here is The Odds Maker FAQ.

Wednesday, November 08, 2006

What the Retail Brokers are Buying May Not Be What's Served to Active Traders

TD Ameritrade purchased another technology platform company, after it recently bought QuoteTracker. This company is called Crontech, they make a front end called “Stock Watch Pro” which TD Ameritrade is renaming into Strategy Desk (Note: the rest of our review of this software appears in the first comment to this post). Surprisingly the product, Stock Watch Pro, is in many ways similar to QuoteTracker. There is significant overlap in that it also has charts and level 2 but the main purpose of this acquisition, from what I hear, is the back-testing and auto trade capabilities that Stock Watch Pro provides. This makes it a combined $90 million between QuoteTracker and Crontech that Ameritrade just spent to try and catch up to TradeStation, gain a sense of parity with Fidelity, and the lead the industry with a reputation for powerful, advanced tools.

Are there other reasons for these moves? Surely.

I mentioned in a previous post the virtues of companies who at least consider that the best thinking in product development exists outside their four walls. I assumed that fast moving companies can buy, partner, or license with another company in order to get the best of the best technology under their roof and to the customers. Yet there is another possibility. An industry leader can buy another company to eliminate its technology from the marketplace or from falling into the hands of another competitor - if the technology has loyal customers willing to stay with the acquiring company - all the better. I don't know if this is TD Ameritrade's tactic but they are in an acquisition mode for technology and their ultimate purpose is not yet clear.

The acquisitions may not entirely be in the service of active traders but may also influence regular investors who trade infrequently. The thinking here is the same company that engineers a NASCAR winner ought to be equally capable of producing a well-built sedan. Active traders (or as Bear Stearns calls them, 'instividuals'), however, are clearly a coveted and profitable group that represent trade volume and revenues. Online brokers are desperate to get their hands on technology that can boost both of these items. A recent WSJ article mentions that TradeStation customers trade an average of 47 times/month. The industry average among retail online brokers is just 2.5 times/quarter! There's a big prize to the player who can close that gap.

2005 appeared to be the year of brokerage acquisition and consolidation. Among the notables were: Ameritrade's acquisition of TD Waterhouse, E*Trade's acquisition of Brown|Co and Harrisdirect, and J.P. Morgan's acquisition of Neovest. 2006 appears to be the year of technology acquisition and consolidation (e.g., QuoteTracker, Crontech, Instinet by Nomura, etc.) with the looming possibility of a price war (witness the free online trade offers from Bank of America and Zecco).

Note: We pay attention to this segment of the marketplace because of our licensing partnership with Scottrade and their Scottrade ELITE customers - plus it is easier to follow the steps the players in this space take vs. the more secretative and walled off segments we also cater to (e.g., hedge funds, institutions, etc).

Monday, November 06, 2006

Netvibes Trade-Ideas Screener Module


Anybody use netvibes?

TraderMike explained how he uses this homepage-maker awhile back. I think that's how I came to use it. Think of it as Bloglines meets My Yahoo meets FireFox tabbed-browsing and you'll get a good idea what it's all about. TraderMike even created a sample homepage that already brings together good sources a trader might keep on his/her page.

Several others at Trade Ideas use it as well to keep abreast of their corner of the web. A few days ago we released a module for netvibes that taps the free End of Day scanning information we publish. The module let's you perform quick scans based on a long list of possibilities. If you want to build more elaborate free scans with multiple sorts, you can quickly get there from the module. I recommend:
  1. A. Create a free netvibes account
  2. B. Grab TraderMike's sample homepage as a starting point
  3. C. Add the Trade-Ideas module as your first modification!
Add to Netvibes
Then you can go out there and start building your Trader Cred . . .

I'd appreciate any comment about your use of netvibes and if you like or don't like the module. Thanks and enjoy!

Friday, November 03, 2006

You Don't Have to See the Future, to Know We'll Be Watching These Markets One Day


A fascinating short video details what may be coming around the corner for the world markets. Let's just say that Trade-Ideas will one day include the Brazilian, Russian, Indian, and Chinese equity markets. Here's the picture Goldman Sachs sees:
Over the next 50 years, Brazil, Russia, India and China--the BRICs economies-- could become a much larger force in the world economy. We map out GDP growth, income per capita and currency movements in the BRICs economies until 2050.

The results are startling. At the projected pace, in less than 40 years, the BRICs economies together could be larger than the G6 in US dollar terms. By 2025, they could account for more than half the size of the G6. Of the current G6, only the US and Japan may be among the six largest economies in US dollar terms in 2050. The list of the world's ten largest economies may look quite different in 2050. The largest economies in the world (by GDP) may no longer be the richest (by income per capita), making strategic choices for firms more complex.

Over the past several years we have produced a series of research reports and recently introduced a virtual tour to share this story.
Click on the link in the upper-right-hand corner of your browser to launch the web tour.

Thursday, November 02, 2006

Odds Maker versus TradeStation, Wealthlab, CyberTrader and Other

Since we launched the Odds Maker beta in September many have asked the question. Why are you guys so excited about back-testing? It has been around for a long time and other software products like TradeStation, Wealthlab, Metastock, and CyberTrader all have their own back-testing modules. What is the big deal? Here are the real important differences for your bottom line.

Their version of backtesting is much different from ours. It is a matter of a stock versus a strategy. Given a strategy, they pick which specific stocks work best with that strategy. Instead, we let users create different strategies and our software finds stocks that match those strategies in real-time. The difference is night and day.

Let's say you want to find out if new 30 day highs are following through. Just set up a Trade-Ideas window with 30 day highs and run the Odds of a stock being higher 5, 15, 30, minutes from when you bought, or maybe its better to hold until the close or the next open. Perhaps this strategy does not work on the long side and is better as a short.

Those answers are instantly delivered to via the Odds Maker. Test a sector or a custom portfolio for any pattern to see how the stocks behaved before risking capital. That is the key advantage, once you find a strategy with good odds, Trade-Ideas will notify you in real-time when stocks match the pattern.

Wednesday, November 01, 2006

Trade-Ideas Releases Version 2.0 with The Odds Maker

Subscribers asked us to add key features such as saving multiple layouts and automatic notification of future versions. We in turn added a powerful new add-on tool called The Odds Maker that we're certain will delight those who try it. Version 2.0 enables you to make better trades and manage your risk.

As of today Trade-Ideas Pro Version 2.0 is available via the Trade-Ideas Pro download page: http://www.trade-ideas.com/Application/Help.html.

A big thank you to those who downloaded and experimented with version 2.0 in its beta form. Your comments and use of the beta are appreciated. We'll continue to announce new beta versions here first. We decided to show our appreciation with an extended period of free use for The Odds Maker. Evaluate the tool free until November 15th. At that point free use of The Odds Maker continues for 10 additional times before payment is required.

The list of major improvements includes the following:
  • This is the first release of the OddsMaker. Try it now, while it is still free (until 11/15).
  • Save and load multiple layouts. These are ordinary files that a user can copy and carry from one computer to another.
  • TI Pro now automatically checks for upgrades.
  • A new "Options" window replaces the "Global Actions" window and the local.ini file.
  • A single alert window can now be attached to multiple actions.
  • The external linking window and the symbol list window are now easier to use.
  • The title bar now shows more information about an alert window. This makes the history feature easier to use.
  • Each strategy shows a summary of the alerts and filters used. Right-click on the icon and go directly to the setting to change or remove it from the strategy.
Go to our developers' page if you have integrated Trade-Ideas into your own application. To safely upgrade other applications using Trade-Ideas inside, go to our 3rd party upgrades page.

NOTE: ScottradeELITE users are not affected and do not need to do anything.

On another note, we want to thank all the bloggers who continue to add our ticker to their financial blogs as a way to add real-time content to their site and support our Idea Generation Technology - the list keeps growing. New banners are being added soon (including ones for The Odds Maker) if those who are interested in helping us spread the word and share in our growth as an affiliate. Details are available at info@trade-ideas.com