Wednesday, February 28, 2007
If you can't make it there for those dates, come and visit us during the upcoming Scottrade ELITE User's Summit scheduled for Saturday, March 24 in Chicago, IL. The event is for current Scottrade ELITE users, but if you are a reader of this blog and ever wanted to kick the tires at Scottrade, consider yourself invited as a guest of Trade-Ideas (after all Scottrade ELITE customers get Trade-Ideas free).
What: Scottrade ELITE User Summit, Regional Conference
When: Saturday, March 24, 2007, 1:00pm - 6:00pm
Where: Hyatt Regency Chicago, 151 East WACKER Drive
>> >> >> Register Here
Attendees will learn about Scottrade ELITE's latest features directly from Scottrade and their partners:
"Scottrade ELITE - The Guided Tour"
Kevin Dodson - Director, Online Trading Platforms, Scottrade Inc.
Get a first hand look at the platform's customizable features
"Mining Opportunities with Trade-Ideas"
David Aferiat - Managing Partner
See stock trends before the rest of the crowd - P.S. have you seen the commercial?
"Understand the Market with NASDAQ TotalView"
Randall Hopkins - VP, Market Data Distribution, The NASDAQ Stock Market, Inc.
Identify new opportunities to more effectively trade positions
I look forward to seeing you there. Drinks afterwards?
Tuesday, February 27, 2007
The truth is - it's never enough. Keeping customers talking about a product or service in a positive, constructive way means delivering on the features that customers ask for and fixing or changing what they dislike. Fortunately we keep the conversation ratio tilted to the positive.
The 3 latest improvements to the service fall into this category. In some cases these new features are in preview mode - they are only currently available in the browser version of Trade-Ideas. We sometimes do this because the concept of what we are doing is often easier to implement over the web via the browser than it is to do via the small PRO downloaded application - call it an advanced beta. Let's explain:
1. Added the flip feature to the web based product
The flip feature allows you to switch between a bullish strategy and a bearish strategy in one click.
For example, assume you are looking at new 7 day highs, which are at least 10% above their VWAP. When you click flip, the window will show you stocks which are making new 7 day lows and are trading at least 10% below their VWAP. Some items don't change. If you are looking for block prints in stocks which are in a consolidation pattern of at least 7 days, the flip feature will point you back to the same strategy. It's often useful to right-click on the flip link and select "Open in New Window". This feature is coming to Trade-Ideas PRO - shortly.
2. Added new exchanges: OTC and Pink Sheets
We've had many people ask for this for awhile - and so it's finally here. Already these issues and the free Stock Info reports we maintain daily are fast becoming the talk of many forums and stock boards. If you participate in boards like these and want to fast become a trusted voice, we're glad to provide you the reports from which you can build your case. You'll find these exchanges in both the browser and downloaded PRO application.
3. Added an RSS feed to our customizable stock screener
You can now view custom End-of Day (EOD) scan results as an RSS feed. Here’s an example of a scan I developed for WallStrip:
WallStrip Scan: Trading at All-Time Highs
At the bottom of this scan are the options to add the output to an RSS feed (”Add to your blog, web page, or news aggregator”). Note that this data is end-of-day and refreshes automatically - very convenient if you want to see this list every day in your feed reader.
Monday, February 26, 2007
Friday, February 23, 2007
UPDATE! New dates for the Trade-Ideas 2nd Annual Learning Curve Seminar! Now June 21 - 22! Read the full update HERE.
The plans are set for the 2nd Annual Trade-Ideas Learning Curve Seminar this summer. It takes place (Ed. Note: NOW June 21-22) June 19-20th 2006 in San Diego, CA. This learning experience allows attendees (i.e., current and potential subscribers) to achieve 3 objectives:
- Flatten the learning curve associated with using Trade-Ideas and quickly master the ability to model trading plans and preferences
- Maximize trading and risk management results
- Network with others excelling at the use of our tools
Details so far:
Place: Gaslight District of San Diego, TBD - will not be far from the San Diego Traders Expo taking place June 20 - 23rd
Cost: TBD - Discounts will be offered to Advantage Player and Annual subscribers to Trade-Ideas as well as Odds Maker customers (new and existing)
Reservations: To make sure we give everyone the attention that is needed to make this event a success we are limiting attendance to the first 100 people who RSVP. If you are interested in attending and want to influence the current agenda with your own suggestions, please leave us a comment. To reserve your spot at this event please reply to firstname.lastname@example.org - attention Heather.
The mantra this year explores the follow through involved in trading: managing the in and out of the trade. You know by now the ability of Trade-Ideas to generate ideas based on a trader's preferences. Our latest innovation, The Odds Maker (released late last year and previewed at our 1st Annual LCS), statistically tests whether those trade ideas and risk management rules are currently being rewarded in the market using statistically relevant backtesting methods. The Odds Maker is to your trading what the probability of winning the hand numbers are to ESPN's Poker coverage - only you can use our tools legally and fully to your advantage.
Many pundits tell their audience that emotions in trading adversely affect performance and their P&L. Put a lid on them and remove them entirely they say. Others like Dr. Brett Steenbarger convincingly argue that they are essential to long term, consistent success of a trader. However you decide, we think the real weak link in the Apprentice's Boardroom is a trader's opinions. Opinions get a trader in trouble - facts, probabilities, and statistics do not.
Here's my example: Think of the Oscars that are upon us this weekend. Will Scorcese win his FIRST Oscar for The Departed?! Should he have won for Casino? Goodfellas? Your answer, no matter how researched, rational or logical, is your opinion. What you think should happen is irrelevant. Keep those kind of opinions to the movies - not your trading. You'll be richer for it. The kind of tools and thinking to bring to your trading is what the LCS will be all about.
What else do you want to see in a seminar from Trade-Ideas? As blog readers and subscribers to Trade-Ideas your comments will shape the event. Please contribute. More details on how to register are forthcoming. The dates are set. Be sure to make room on your calendars and make the seminar a good excuse for a vacation in sunny, Southern California.
Wednesday, February 21, 2007
First let's sum up the lesson from Brett's post today:
we've typically had some degree of weakness during the market day, but--as on Tuesday--buyers have tended to step in and use such weakness as an opportunity to accumulate stocks.this is somewhat rare, as Brett points out, but signals a temporary behavioral strength in the market that one would be wise not to discount. For several weeks we've been describing this market as one whose patterns tend to revert to the mean more often than not. Results from The Odds Maker and observations from Dr. Steenbarger suggest that we may have entered a small momentum/buy on the dips behavior in the market:
One of the reasons for this is that the occasions of persistent strong closes have tended to cluster.The subscriber from the support IM today wanted to do this:
A Brooklyn trader (03:50 pm): what i am trying to find are those situations in which a stock is up say 5% for the day and then it has a sudden sharp move down, (i.e., a shakeout). Is there a good config to signal the sharp move down in a situation like that?We determined he was looking for a nice pullback and so I created this Strategy Session for him which I'm happy to share with you.
The Strategy: Trampoline Dip and Bounce
How It's Modeled:
Here are the filters for this strategy:
Max spread: 10 pennies
Min Average Daily Volume: 300,000 shares/day
Min Current or Relative Volume: 0.5 (no less than half their average during the session)
Min Up Days: 2 days previous to today
Min Up Candles - 30 minutes: 2 candles in a row
Min Up from Close: 5%
Here is the alert that triggers only after satisfying all of the above filters:
15 Minute Low
We are essentially buying after a definite uptrend on dips hitting a 15-minute low marked by potentially low current volume.
To see how good this strategy performed over the last 3 weeks, The Odds Maker was configured with the following trade management rules:
- The alerts that initiate The Odds Maker to trade are entry signals to go Long
- All trades are held until the market close
- Trading ends (i.e., no new trades) 3 hours before the close
39 / 79 = 49.37% up $0.01 at the close; Average winner = $0.611, Average loser = $-0.3305, Net winnings = $11.5474, Best = $3.30, Worst = $-1.81; Casino Factor = 93.91%Learn what each of these items in the summary mean in The Odds Maker Manual - including the one trade/stock/day rule The Odds Maker uses.
Learn how to interpret win rates vs. Average Winner/Average Loser from a great 2 x 2 decision tool.
- Link to other Strategy Sessions
- 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
Tuesday, February 20, 2007
Let's start with a big thank you for the informative article Dr. Brett Steenbarger wrote on Saturday,
Brett identified a trading best practice, part of his rapidly popular series, using Trade-Ideas' opening range breakout/breakdown alerts. He describes the best practice in a nutshell,
"Index traders may not be stock pickers, but they can benefit by taking a look under the hood and seeing how the stocks in their index are really trading."Trade-Ideas can reveal the activity behind the index to help a trader understand the depth or shallowness of a particular move in the index. This is important because many indices can be misleading in that they are capitalization weighted - allowing a relative few stocks to move the index. This would be a shallow depth of activity in the index if all the others stocks were not participating.
There's also a great number of comments generated from the post. All are intelligent and well-informed questions.
"Do you know of a way using Trade Ideas to quantify the number of stocks that are trading above/below the opening range? It seems a little tedious to just visually estimate the difference in advancers/decliners using this method."Veteran traders will appreciate the fact that Trade-Ideas automates a lot of the ancient art of tape-reading for traders by alerting to the real-time patterns forming that used to hide in the scrolling ticker of information everyone accessed. Looking at the information in a 'meta' way of interpreting the quantity of red breakdowns and green breakouts can be a useful measure of assessing the big picture of who's winning the battle. If you need a more specific measure, here's a tip: separate the breakouts in one window and the breakdowns in another window - both looking at the same universe or stock list. You can then determine whose winning by the number of alerts in each strategy.
It's a great article from Brett. Read the entire post for a more nuanced understanding of this practice.
There's one last footnote to mention - in Brett's own words
"Please note that I have no commercial relationship with Trade Ideas; nor have they solicited this post or been involved in its writing"
Friday, February 16, 2007
Dan Mirkin will be participating in a lively panel on Monday, February 19th (markets closed!) as follows:
For those of you who have never heard Dan speak before, it's like going on safari: you'll be on the edge of your seat - and there are a lot of analogies about animals. I promise you will not be bored for even one minute. Dan is a veteran of the markets and his presentations will have something for everyone.
Registration for the conference is still available - FREE! Registrations take place at the Marriott Marquis starting February 17 at 7:00am. All you need to do is visit the registration desk at the Expo. If you have any questions please call the Expo directly at: 800-970-4355.
Hope to see you there!
PS - we'll describe our idea for a Wallstrip segment on Monday. Have a great weekend!
Wednesday, February 14, 2007
Part 1 discussed why scalping, the way the veterans know it, is a tough business to maintain and even tougher to teach to another. Today we'll describe how active/day trading with a positive, repeatable edge (as Dr. Brett Steenbarger likes to put it) leverages technology and accessible information to put the individual trader on the same footing as any hedge fund manager. The 3rd part of the series ties everything together with our idea for a future WallStrip segment - spoiler alert: the theme is 'Heroes'.
Part 2: The 3 Ways to Measure A Trader's Technology
First you should agree with the following 2-point premise:
- The Right Technology Tools Are As Essential As a Trading Plan to Keep a Trader ‘On the Path’ and Maintain Discipline
- Technology Represents One of the Biggest Arrows in a Trader’s Quiver Against Larger Market Participants
From that premise a trader's technology is measured as 'good' by its ability to:
- Make You Better at Trading and Managing Risk
- Create a Level Playing Field
- Promote Independent Thinking and Reward a Deeper Use of the Tool
Today many professional day trading firms embrace our software and specifically what The Odds Maker brings to the table. As a result we feel strongly that active trading is turning a corner with more individuals acting like their own hedge fund and leveraging the right technology to even the playing field with larger, more capitalized institutions. I know it sounds like a big claim, but I see it first hand many times over: an office of traders, where instead of people sitting there (in 2 - 5 positons) looking to jump in and out of things, you have traders in 15 to 45 positions - all at the same time - managing these positions with better risk management. More of the traders' faculties and concentration are spent on the trade management aspect of the trade with less energy spent on finding the opportunities and eyeballing the risk management techniques.
It is all happening even today as I write this blog on February 14th, I have a good friend of mine at this firm in 19 positions working the odds to his favor. We'll talk more about the best practices we see in some of these firms in the near future. Until then use this 3-point test on your technology and score yourself. If you have an additional criteria to offer, please share.
Sunday, February 11, 2007
Today we start a 3-part series that draws the trendline on the art of trading itself. Specifically we'll share why scalping as the veterans know it is over and how the rebirth of day trading leverages technology and accessible information to put the individual trader on the same footing as any hedge fund manager. The 3rd part of the series concludes our idea for a future WallStrip segment.
Part 1: The Death of Scalping
SOES Bandits Take the Easy Money
I started day trading in 1995.
Back then there was a real information arbitrage in how orders were executed on the Nasdaq. When I was learning to trade, SOES and Select-Net allowed us, the day traders, to have a slight edge on the market makers when executing orders of 1000 shares or less. It was real, and it worked. Not only did traders make money, but a whole industry was born out of it. Block Trading (where I got my start), Cornerstone Securities, Momentum Trading, and Harvey Houtkin's All Tech thrived. This was before the ECN's and before direct access software.
The style of trading that made the most sense in that environment was a style called "Scalp Trading". You would buy 1000 shares on one network, typically SOES and then sell the same thousand on another network, typically Select-Net, to market makers who were trying to reduce their risk. In quickly and out quickly in seconds, that was the name of the game.
The One Direction Market
As the market started on its long road up some of the traders at the firms were noticing that they could make more money with another style of trading. It was called position trading and it was conceptually simple. Identify the prevailing trend and press your bets - sometimes holding positions several days and being in as many positions as risk allowed. As it turned out, this style of trading lead to the biggest volume increase for day trading firms. Quickly it was evident that good software had to be built around this new, more technically, focused trading. Enter CyberTrader, TradeCast, Gr8Trade, and TradeScape. All of these software products were built around the day trader. The software made it possible to manage multiple positions at once, track risk, and execute strategies very quickly when opportunities presented themselves.
As the markets pushed higher and higher fueled by the dot com mania, most investors and would-be traders got the idea, pushed by the media, that day traders were people who had accounts with E*trade and Ameritrade and bought stocks and held them and got rich. People who became interested in the markets ran to open up their accounts at these big brokers and started trading. They did this and we saw the commercials, but it is important to point out that this group was really not the day traders. They were the weekend warrior investor trying to jump in on a trend.
The professional traders were still trading at offices mostly sitting in front of trading terminal during market hours looking to exploit some strategy. The more successful of them that I got to see in person were leveraging the position style of trading to get the kind of returns I never though were possible. I saw first hand guys in Austin, Texas have 100K, 200K, and some even 500K days. They pressed longs at the right time, when stocks like Yahoo and Ebay and Dell were unstoppable, and that is just to name a couple.
Fast forward. When the mainstream got wind of what was going on at the day trading firms, specifically how this software makes it possible for traders to trade a whole lot more than ever thought possible, most of the firms were bought out.
#1 CyberTrader - 400 Million Plus - SchwabAfter the WipeOut, A Chance at a Balboa-like Comeback
#2 TradeScape - 300 Million Plus - E*Trade
#3 ProTrader - 150 Million - Instinet
#4 TradeCast - 60 Million - Ameritrade
There were many others. But as the market got closer and closer to 2000 and the trend not as clearly identifiable many of the day traders simply kept doing what they did before, pressing their bets and losing a lot of money quickly. A large number was never able to adjust and got wiped out. As the market plunged and trading ranges got more narrow an old school type of trading became more and more viable in the day trading world.
The business although much smaller after the dot com bubble days never faded. Offices all over the US and even overseas continued to run. Now traders got back to what they did before the dot com bubble started. In fast and out fast. Trading ranges were defined and the trend was down. Those who were savvy at trading the downside were rewarded quickly. Scalp trading was reborn and thrived.
The problem with scalp trading is that it is very specific to a certain kind of person.
It is more art than science and you really have to have a good feel for the market and reading the tape. It requires a lot of skills that can be acquired through the school of hard knocks but are really almost impossible to teach. It doesn't compare well to the other trading methods that exist today. The average churn within professional trading firms falls far short of the time it takes to practice and master the scalping art. That is why as the dot com bubble burst it sounded like the death of day trading. The people that still traded professionally were very savvy and fairly few in numbers compared to the hey days of mid to late 90's.
Wednesday we'll discuss what's behind the rebirth of day trading and why there'll be more people at it with a better chance of doing better than before.
Thursday, February 08, 2007
Dan Mirkin, Senior Managing Partner, Trade Ideas LLC
LIVE from The Traders Expo New York
"When Trading Styles Collide: Technicians and Fundamentalists Go Head-To-Head"
Monday, February 19, 2007, 8:00 am-9:30 am EST (add to your Outlook Calendar)
- a nice way to get some learning before the open.
In this rapid-fire session, a panel of traders with very different styles will discuss their methods so that you can decide which one is right for your risk tolerance level. Each of the panelists will talk about how to find opportunities, including entrance points, exit points, and holding time frames. Each panelist will be asked what indicators they use, what time frames they watch on their charts, and what confirmation signals they need to see prior to hitting the execute button. The panel will also discuss how much capital you should dedicate to each trade and help you determine where to place your stops. Technical, fundamental, and combination trading will be covered so that you can determine which system or combination thereof will give you the most confidence when you return to your own trading.
Trading successfully has never been an easy venture. It is crucial to have the best, fastest, and most accurate data possible and to use that information to your most profitable advantage, knowledge and confidence are essential. Join us LIVE and online for this exclusive Webcast event and discover a wealth of tips, tools, and tactics designed to bring you the latest information available so you can make enhanced, more profitable trading decisions starting with your very next trade.
Monday, February 05, 2007
Source: Richard Teitelbaum, Bloomberg, January 31, 2007Mark Carhart, 40, co-head of the quantitative strategies group at Goldman Sachs Group Inc., uses his July speech to poke fun at the Berkshire Hathaway Inc. chief executive officer's penchant for investing in market-leading brands like Coca-Cola and Gillette. He cites study after study showing that big-name companies with high price-earning multiples or rapid growth rates make poor bets.Carhart himself has a pretty good story to tell. Though he doesn't like to talk about it, Carhart is one of the world's most successful money managers, a mastermind behind Global Alpha, a $10 billion hedge fund for wealthy clients and employees of Goldman Sachs. In 2005, Carhart and co-manager Raymond Iwanowski, 40, notched a 51 percent gross return at Global Alpha. Posting that kind of gain requires taking risks -- and last year, Alpha lost 6 percent, its first deficit since 1999.Carhart, a former assistant professor of finance at the University of Southern California, helps oversee other hedge funds, four mutual funds and scores of separate accounts. In all, he and Iwanowski have $101.5 billion at their command. Carhart and Iwanowski use math-heavy trading tactics that fund consultant Sol Waksman likens to counting cards in a casino. The two lead a corps of computer-loving traders, statisticians and finance and economics Ph.D.s.
Am I testing a strategy or am I testing a stock?That should provide some good starting points as to what might work best for your trading style.
Saturday, February 03, 2007
Each alert type is combined with an or. If you select multiple alert types, you will see stocks matching the criteria of any one or more of the alert types. For example, if you check both the running up (confirmed) and the running down (confirmed) alert you will see all stocks which are running up or down.
The alert specific filters are each associated with only one alert type. For example you can request to see stocks only which (((are making new highs) and (these are 5 day highs)) or ((are making new lows) and (these are 10 day lows))).
The window specific filters are typically combined with an and. For example if you set the minimum price to $5, and the maximum price to $90, you will only see stocks trading between those two prices. Read the detailed help for each filter for some exceptions and other details.
The alert types combine with the window specific filters using an and. A stock must satisfy at least one of the alert conditions and all of the window specific filter conditions for you to see it.
Some conditions are available as both alerts and filters. This gives you more options when you configure a window.
For example you can use the high relative volume alert and the running up alert to see stocks meeting either criteria. Or you can use the running up alert with the min current volume filter to see stocks which meet both criteria.
You can create multiple alert windows for completely different alert conditions. This way you can see all stocks which match either one set of filter conditions or a different set of filter conditions.
An alert message is always caused by a specific event, which we organize by alert type. The filters allow you to suppress alerts meeting specific criteria. For this reason you always need to specify at least one alert type, but can specify any number of additional filters. This shows one of the biggest differences between an alerts server and a stock screener: The alerts server sends a message when specific market events occur. A stock screener responds to different types of events, such as when you hit the refresh button.
In general it is not meaningful to combine two or more alert types with an and. Alert types, unlike filters, are events which occur instantaneously. While it is possible that two alerts will happen at exactly the same time, this is usually coincidence. (The quickest, easiest way to see a lot of alerts at once is when the exchange reports a really bad print.) What you probably wanted in this case was one alert event happening or almost happening near the same time as another alert. The window specific filters smooth out the data, allowing you to achieve this. Are the conditions combined with an "and" or an "or"? Different parts of the alert window are combined in different ways.
Friday, February 02, 2007
In the spirit of this weekend's Super Bowl featuring football, food, and especially better than average commercials, we share with you the debut of Trade-Ideas in its tightly integrated form with Scottrade ELITE, the active trading platform of our partners, Scottrade, Inc.
"Opportunities Hide, We Seek - Scottrade Trade-Ideas"
The 15 second spot (along with the other vignettes that comprise the latest campaign) begins this week everywhere with specific placement in Dateline (NBC) , 20/20 (ABC), and 60 Minutes (CBS).
I smell a Clio!
Maybe next time I can drive the taxicab - or be the key grip...
The problem is already fixed but the lack of data will affect Friday only. Data will be restored completely by Saturday and ready for use by Monday's pre-market session. We apologize for the inconvenience this has caused our subscribers.
To see real-time NASDAQ data for today, subscribers are encouraged to not use any filters and only the simpliest alerts that do not use baseline information (i.e., New Highs/Lows, etc.)
An excerpt from a recent support IM:
D TradeIdeas (11:02:54 AM): Last night the server in charge of processing our NASDAQ data did not do its job - as a result for today and today only, the filters of TI using NASDAQ do not work (but the alerts do). This situation has already been solved and prevented from happening again - and it certainly means that by Monday everything will be back to normal
D TradeIdeas (11:03:42 AM): I apologize for the inconvenience
(subscriber) (11:04:13 AM): so, the filter will be down all day?
D TradeIdeas (11:05:50 AM): yes, the reason is that the filters make comparisons btwn present and average, or past, data - this data is being rebuilt today and is unavailable. We are however receiving present real-time data from NAZ - that's why the alerts will work - but only if the filters are removed - this will be resolved today and ready for Monday