Thursday, June 28, 2007

Play Both Sides of the Fed Decision

In light of the Fed decision, I am posting links to some of our previous Strategy Sessions that work best when the market is about to absorb key information:
  • The Fed Watcher - uses the unusual number of prints trigger to pinpoint key activity and incorporates some advice dished by TheKirkReport and Toni Hansen; the link describes the Bull version of the strategy, here is the Bear version of The Fed Watcher

  • The News Watcher - similar to above but more emphasis on volume surges (this configuration can be used long or short)

  • How to Hunt with the Pack - "go with the flow", here's how to find it (both sides are modeled in the post)

  • "Buy to the sound of cannons, sell to the sound of trumpets." If you think the market will overreact to the Fed or any other breaking news item (e.g., the Middle East anyone?), this list of strategies will help you spot the oversold/overbought opportunities
Several of the past strategies were modified in their original post to better model the intended behavior. These can certainly be improved upon even further. Use them as a starting point to your own ideas and interpret them according to your own trading plan.

See Who's in Control: Bulls or Bears

Look at one of the strategies. Right click and select the option of duplicating the window. In the new window right click and select 'Configure' in the bottom corner you'll see a button that says, 'Flip'. Click this button to see the exact opposite of the strategy configured instantly. Put the two windows side-by-side and watch how the market plays out.

Wednesday, June 27, 2007

Does Your Trading Plan Benefit from Continuing Education?

After the Traders Expo in San Diego finished this past weekend, I asked several members of our team what their impressions were and how things went.

Traders are not like CPAs, but in one regard they should be

One reason I think it's important to share these thoughts is to help you judge whether or not events like these are helpful as a source in what should be your ongoing education in the markets. Traders are not like CPAs or attorneys who need to take credit hours throughout the year to stay abreast of new developments, techniques, and technology - but they should. Traders would do well for themselves and their trading plans to invest in continuing education - with free resources as well as paid ones - for the same reasons.

To help you with the decision to attend a future Expo, consider what we thought of the experience. This was our first experience with our own booth and independent of our partners with whom we've exhibited in the past.

Great Customer Interaction
  • It was pleasant to meet our customers on our home turf. Without exception, the feedback from our current client-base was positive and validating.

  • It was good to meet a lot of happy customers. Because of my position in the company [Note: our Chief Technician's thoughts here], I usually only meet people when they (a) have a problem and (b) the problem is too complicated for our normal customer support to handle it. This is especially true for all of the Scottrade customers who I met.

  • I liked seeing people wearing our T-Shirts at the convention. I know that we give away a lot of T-Shirts. But most of those go through the mail, so I don’t see them in action.

Good Partnerships Say Alot About Each Company
  • Scottrade partnership: The benefits are numerous and it was continually reinforced by the loyal Scottrade/TI users; many of whom stated the Trade-ideas integration was a major reason for their brokerage choice or at least the reason they continue to maintain their account at ST. [Note: See our commercial on the right hand side of the blog below]

Some Expos Are Better Than Others
  • Size and caliber of attendee: Candidly, I was a bit disappointed in both the count and quality of the walk-by traffic. I did not see the numerous savvy electronic traders that seem to be present at past NY, LA and Vegas shows. The exhibitor count seemed relatively small. Am I confusing the Trader’s Expo with the Online Trader’s Expo of the past? Regardless, we were speaking to a segment of our target audience.

  • New York and Vegas are certainly the largest. We've decided to attend but not exhibit in Las Vegas this year in order to concentrate on New York and San Diego again since these represent our "home turf" on each coast.

Booth Ideas for the Next Expo
  • We had nice booth graphics. Let’s step up our hardware infrastructure with giant a Flat Panel (36”) and multiple other means to view the software. Let’s have scheduled TI Pro product demonstration, tips & tricks and How to use the OddsMaker presentations at the booth vs. in a separate seminar room.

  • We had originally planned to let people sign up at the convention, but due to unforeseen circumstances we had to ask people to sign up when they got home. In the end, I think that may have worked out for the best. We had more time to focus on questions and answers. And people from the convention have already started signing up.

  • Booth babes? Is Lindsay Campbell available?
What do you think? Is this the right thinking or might there be a better way you'd suggest for us? Please let us know.


Here's what we thought of the last Expo we attended in Las Vegas.

Tuesday, June 26, 2007

Trading Events vs. Stocks: an Online Presentation

On the heels of the recent Traders Expo in San Diego last week, I am participating in a virtual online trader's expo organized by TradersWorld, a financial magazine and conference organizer de jour.

My presentation to the online attendees will cover some of what Dan Mirkin and I discussed during our Learning Curve Seminar at the Traders Expo last weekend - so I assure the material is fresh and quite good!

The FREE Traders World Online Expo (II) will showcase over 30 expert trading speakers - 100% virtual and online.

I will be speaking at:

I'll be explaining what this picture is below and why it's an important tool for measuring how good your strategy or trading plan is in the current market. For a hint read about this picture's first appear on our blog here:

The dates for the entire expo are:
  • Date: June 26 - 29, 2007
  • Time: 10:00AM - 6:00PM est

- Gann Trading- Position Sizing- ABC Corrections- MindPower for Peak Trading Performance- Combining Candlesticks with Technical Indicators- Volume Spread Analysis- Beating the Financial Futures - FX Options Pricing- Systematic Trading- Grand SuperCycle Top- Pyramid to Trading Mastery- Cycles in the DJIA and Gold- Learn How to Trade With Time and Price Cycles- Why 95% of Futures Traders are Unprofitable - Trading for a Living- Powerful Strategies for Successful Trading of E-Minis- Gann's Cycles in Soybeans

and much much more...

Monday, June 18, 2007

How a Boston Roundtable Will Affect Your Future Trades

Last week I mentioned a industry roundtable facilitated by the Aite Group, a research think tank that provides actionable, strategic advice on IT, business and regulatory issues in the financial services industry. It's a group we admire for their finger in the wind forecasts and analysis of emerging trends - special hat tip to Sang Lee (the Obi One) and Brad Bailey (the young Jedi) for providing an example of what we mean.

In early May, Aite Group hosted a roundtable discussion on the practical application of event processing (EP) in the capital markets. Panelists agreed that event processing will experience broader acceptance in the capital markets space in years to come.

What is Event Processing?

In a nutshell it's making actionable sense from enormous amounts of data in order to make a real-time decision. In our corner of the world I believe it to be an umbrella term that encompasses algorithmic trading - others apply an even broader definition.

How does this affect me?

EP offers a way out from the information overload. From the Aite Group's findings: "EP is solving challenges in the capital markets where extreme volumes of data are overwhelming traditional technologies."

Here's another clue: we are seeing a young guerilla gain weight before our very eyes. Aite Group estimates that "EP revenues will reach approximately US$460 million by 2010 - over four times the estimate for 2007."

Are you a Trade-Ideas subscriber and Odds Maker customer? If so you're already getting statistically proven guidance on critical trade managment decisions like, "How long to hold each trade opportunity? When to trade during the market session - skip the open? exit before the close?" Soon you'll also have the opportunity to automate these rules and let the software make these trades with surgical precision. As Aite Group observes, "EP is allowing firms (like Trade-Ideas) to capture alpha through the analysis of great amounts of data and by focusing in on opportunities that otherwise might have been overlooked."

Stay tuned.

Thursday, June 14, 2007

Summer Camp Automation at Trade-Ideas Will Yield an Even Hotter Winter

Between beach trips, the San Diego Traders Expo (you're coming right?), and cookouts, development on automated algorithmic trading continues. The results (like all our tools) will bring new leveraged abilities to individual traders to level the playing field against anyone in the market.

Early "alpha" testing of automating trades begins with strategy development in Trade-Ideas, then validation and backtesting via The Odds Maker, and finally into our "Event Processing Engine" that relates position management rules into a partner's existing execution platform.

Algorithmic Trading: a la Trade-Ideas
  1. Trade-Ideas PRO: models the strategy from any number of alert and filter combinations
  2. The Odds Maker: judges the strategy's recent outcome in the current market (over the last 3 weeks) according to position management parameters chosen (e.g., holding time, trailing stops, trading hours during market, etc.)
  3. Event Processing Engine: rolls forward in real-time with the Trade-Ideas strategy and The Odds Maker rules to direct a partner's execution platform how to trade and how to stop
The review of The Odds Maker in the upcoming issue of Technical Analysis of Stocks & Commodities (July 2007 issue) quotes us summarizing our view on automated/event-driven trading,

In the future, suggest Mirkin and Aferiat, the battle in the marketplace will be less trader versus trader and more algorithm versus algorithm (or “bot” versus “bot,” as the partners put it). In this, Odds Maker seeks to be a part of that future — both in its present form as an add-on allowing traders better insight into finding and creating profitable, short-trading strategies, as well as in its future form (a form that could develop as early as this summer) as a “totally automated” trading and strategy testing platform.

Mirkin and Aferiat explain that Odds Maker turns events in the market — from the common to the complex — into technical parameters. “We are designing a system that looks at an event,” they point out. “Not a stock-specific backtesting system, but an event-specific system.” TAS&C, July 2007, David Penn

Here's some details regarding our efforts:

Integration of Trade-Ideas, The Odds Maker, and the Event Processing Engine into the Anvil platform with a launch date in late summer.

Integration with the API of a major Mid-West online options broker to produce automated trading. Live trades with the Event Processing Engine have already worked successfully.

We are not the only ones doing something about event processing and automated trading. The Aite Group held a roundtable last month on the topic with some interesting conclusions I'll discuss tomorrow.

Tuesday, June 12, 2007

Trade Like TraderMike discusses strategies and techniques with Trader Mike, one of the best known traders and commentators out there.

Just some of the gems from this interview (Specs: 15 mins, 01 secs):
  1. Why he likes shorting stocks more than going long
  2. Thoughts about how blogging helps him be a better trader
  3. What are the minimum filters and alerts used in his Trade-Ideas scans!
  4. How he uses his own blog to prevent second-guessing and overthinking
TraderMike Interview

Related articles:
  • TraderMike's been instrumental in developing a few of Trade-Ideas' alerts and filters in the past (why wouldn't we listen to him?). He is responsible for our development of the NR7 alert. Here is a strategy that uses this alert and a link to TraderMike's comments.
  • Another trader, Wall St. Warrior, uses Trade-Ideas effectively. Read the articles where Trade-Ideas is mentioned and you'll get a feel for how he uses the scanner.
  • Trader-X is another trader using Trade-Ideas to find good gap candidates. Here is his technique explained.

Thursday, June 07, 2007

Let Us Take You to the Next Level: 1 on 1 with TI

SCHEDULE A PHONE APPOINTMENT. We know you're incredibly busy. So, to make life easier, you can now schedule a time to talk to a Trade-Ideas trading and strategy expert to get professional advice on everything from strategy configuration, modeling to trading plan discipline and position management. 
UPDATE 6/01/2009: Fill out this form, with the best date, time and your number (we're available Monday - Friday, 9 a.m. to 8 p.m. EST), and we'll give you a call.

Give a man a fish and you've helped for a day. Teach a person how to fish - and you've given him/her a gift to last a lifetime.

We work with several institutions who license Trade-Ideas for their entire floor and we work with a lot of traders we call "instividuals" - relatively small groups of customers who are vocal with their feedback and demands for personal assistance. Sometimes the sqweaky wheel does get all the attention. We want to level the playing field a bit and help any of our subscribers (especially those who use The Odds Maker) refine their use of Trade-Ideas.

Our Annual Partners Meeting is coming up at the beginning of January in San Diego. We plan to develop a special suite of services and "gifts" to those who make the investment in The Odds Maker. But until we come up with a formal plan, we want to put the offer out to any of our subscribers:
If you are interesested in setting up a strategy with Trade-Ideas to achieve serious results, contact us and schedule an appointment.

We will work with you (using The Odds Maker - whether you own it or not) to show you how to use the tools to get consistent, optimum results that match your trading style - just contact us to schedule an appointment that's convenient for both of us. We work better this way than an out-of-the-blue IM or phone call (those methods are better for the quick troubleshooting question or explanation).

We'll be your co-pilot.

The Odds Maker pays for itself many times over for many of our users so we simply want to show more of you how to get it done the right way.

Reach us at or Subject: Odds Maker appointment.

Here are the other ways to schedule an appointment: