Sunday, September 30, 2007

Never Too Late to Praise Accomplishments

You might think you're alone on the battlefield engaging the market. It's not true. There are many who work to support your efforts either indirectly (like your broker, your technology - including Trade-Ideas for example) or directly (like a mentor, spouse, or fellow trader). The people closest to you especially deserve your appreciation - not everyone can a home run in a game.

So if there is an occasion to recognize someone "on your team" for their efforts, don't miss the opportunity. Even better give some praise when there's no occasion - your gratitude will reflect positively on you and surely be welcomed by the recipient.

I'm writing because an occasion snuck by us to recognize and praise the efforts of our partner, Scottrade - specifically the Scottrade Director of Product Management and Development, Kevin Dodson. In July Kevin got the nod from the St. Louis business community as a “30 Under 30” award winner for his business and civic responsibilities.

We congratulate Kevin on his award and are proud to be associated with him and Scottrade as partners.

Here's the full story on the achievement

Thursday, September 27, 2007

Trade-Ideas and Market Exchange Entitlements: Cross T's and Dot I's

Trade-Ideas, at the behest of the market exchanges, requires its customers to electronically sign a simple agreement form. This explains why our customers recently received the following email from our own Brad Williams:

Dear David,

Thank you for subscribing to Trade-Ideas.

Our records indicate you have not yet completed the NYSE and AMEX Exchange Agreement for account “ xxx ”.

You may complete this requirement by means of an online form. Please click on the following link: http://www.trade-ideas.com/EntitlementsNyseNonPro.html
to complete the form and ensure your service continues uninterrupted.

It is necessary to first log in; please click on the link at the top of the entitlements page if you are not currently logged in. If you have forgotten your password, please click on [FORGOTTEN PASSWORD]. Once the grace period expires, if this form is not completed, access to NYSE and AMEX data will be removed.

Thank you for your prompt cooperation in this matter and if there is any assistance we can provide, please let us know.

Regards,

Brad

Brad Williams
Managing Partner, Support Services
Trade-Ideas, LLC
IM (AOL/YAHOO): TradeIdeasAssist
Skype: BradDoubleU


The online form for NASDAQ access is here: http://www.trade-ideas.com/Entitlements.html

The NYSE/AMEX online form is currently for non-professional traders. If you do not know the difference between non-professional and professional traders, 1) you are probably a non-professional traders and 2) here is a link with the difference: http://www.trade-ideas.com/FAQ.html#Q29

Professional traders are required to fill out an additional form - done manually. Please contact info@trade-ideas.com if you have any questions.

Tuesday, September 25, 2007

Poker Odds and Professional Trading


There is no doubt in my mind that the skills to succeed in poker are the same skills to succeed in trading. Unfortunately most people approach trading differently and in a way that opens them up to losses and eventual failure.


Is your hand worth playing?

In poker understanding the odds of your hand determines your success. Let's put it in another way, is your hand worth playing? Knowing the difference is critical to success. It is much easier to get a grasp of the odds in poker because players can understand the relationships of one card to another in a deck. When it come to trading, however, all logic often goes out the window.

A poker hand can seem really tempting to play, for example your two hold cards are a pair of Sixes and you pay to see the flop. Then you flop 2 Tens and a Jack. Well now you think to yourself that you have Two Pair so it is time to start betting. I am really over simplifying for illustrative purposes, but the thing is that you really have to be careful here. How many people at the table might have a higher pair and waiting to trap you? Who might have had a Jack and now has two pair as well but a higher two pair? This, as well as the size of the pot and what are you risking versus your bank roll are all things to consider as you place bets. The seasoned professional probably would have folded his hand right after the flop if he saw anyone else raising. In poker the biggest mistakes are made when inexperienced players try to win hands they have no business in playing. Players often call or raise hands that they should have folded pre flop.

In trading the same thing happens when inexperienced traders think they know something and continue to hold on to positions that are clearly moving against them. Something about the stock market makes people do the silliest things.

Trading, like poker, is a game of statistics

If you want to win you have to know the odds of you winning versus the size of the pot. In poker it is easy to discern the odds because there is one deck and, based on the hand, you can know the probable outcomes are for different cards.

What makes trading very difficult is that it is hard to discern the odds of any particular trade. The market is not as simple to read as a deck of cards. There are very few tools out there that help a trader figure the odds of success for a particular trade. We aim to help traders figure out those odds by giving them access to the appropriately titled OddsMaker. Our OddsMaker software lets a trader calculate the odds of winning on virtually any trade. Just like in poker, knowing the odds does not guarantee success, but it goes a long way to make you succeed in the long run. At the end of the day you want consistent, frequent success from trading.

In trading I see people staying in losing trades - hoping for things to turn around - like staying in a weak poker hand to get lucky on the turn or the river. It might happen once or twice but odds are you will lose. A trader should approach his/her trades much like playing poker. Use your P/L as a guide. Don't sit in bad trades waiting for things to turn around - the opportunity cost of tying up your capital and the mental drain is too high a toll to pay.

Related Articles and the Bloggers Who Wrote Them

Chris Perruna does a great job (possibly better) at explaining the many similarities between trading and poker over at his blog. They are always a good read: http://www.chrisperruna.com/category/poker/

Here is another article that points out the money management similarities between trading and poker by Dr. Brett Steenbarger: http://traderfeed.blogspot.com/2007/04/what-we-can-learn-from-trading-and.html

Monday, September 24, 2007

How Trade-Ideas Displays Time: Time & Sales Comparisons

Occasionally a customer pushes the Trade-Ideas tools in a new way and/or reveals another small piece of functionality.

The other day we received an email about how we display time in Trade-Ideas PRO.

This is a feature that has existed for a while, but it's hard to use. We plan to add this to the GUI (i.e., TI PRO), so it will be easier to use, but not for a while. It will take some effort and there is a lot of stuff before that on our list. In any case, it’s a useful feature. Several people have asked about it, and everyone seemed happy when we showed this to them (presumably when comparing our alerts to Time & Sales).

-----Original Message-----
From: "Ron F-l" abcdefg@sbcglobal.net>
To: info@trade-ideas.com
Sent: 9/20/2007 8:26 PM
Subject: Time

Hi,
I just started using the downloaded version of Trade-Ideas Pro. In the Time column I only get the time by the minute. When I was using the web based I was getting the time column to the second. Please advice how I can get the downloaded version to show to the second?
thanks,
Ron F-l
Our response:

----- Original Message -----
From: Philip Smolen
To: mailto:abcdefg@sbcglobal.net
Cc: support@trade-ideas.com
Sent:
Friday, September 21, 2007 1:04 AM
Subject: RE: Time

Hi.
Try this. Find the file c:\Program Files\Trade-Ideas\Trade-IdeasAlerts\Local.ini and open it with notepad.

Add the following line to the bottom of the file.

TimeFormatList=h:nn:ss m/d/yyyyh:nn:ss

Restart Trade-Ideas Pro. Let us know if you need anything else.

Sunday, September 23, 2007

PR Pitfalls to Avoid from a Hedge Fund Manager

Trader Monthly's contribution to my regular diet of news and information comes not via the magazine but its daily email of articles - often from other sources but with a concise summary and witty tilt all their own. Occasionally their own articles make the cut - especially last Friday's article about a hedge fund manager's efforts to get behind the velvet rope of an event sponsored by the magazine.

"Sure, Tuesday’s Trader Monthly “30 Under 30” party in New York was a hot invite, with over 800 attendees, but one shudders at the length Timothy Sykes, up-and-comer turned trading laughingstock, went to try to get in. Sykes, who was on last year’s “30 Under 30” list, and then tried painfully to brand himself as a financial expert and bon vivant, while his small hedge fund began losing money with uncanny monthly regularity. Behold, unedited and in full, the Timothy Sykes grovel chain:" http://www.traderdaily.com/news/item/10748.html (free registration may be needed to read entire article)

Funny and a little painful. I've had the pleasure of talking with Tim several times over the phone and found him to be engaging and personable so I am reserving judgement. But there are a few easy lessons about self-composure that apply whether you are addressing an audience, engaging a broker/customer service representative, or certainly talking to the press.

Who knows when your trading accomplishments will attract the beat writer for your local newspaper or when you'll describe your work and lifestyle as a trader to a curious audience?

Some takeaways:

  1. Keep your cool. Someone's potentially recording you and your musings for posterity - and certainly for the record
  2. If you do lose your cool, never get into a pissing contest with someone who possesses a bigger bullhorn (i.e., continually has a larger audience) than you
  3. Leave the parties early, stick to a 2 drink minimum, and leave with no regrets (good advice from a Colin Hays song)

Timothy's latest book, An American Hedge Fund, is here from Amazon

More information on taming a trader's inner demons and maintaining composure resides at Dr. Brett Steenbarger's blog: http://traderfeed.blogspot.com/

Thursday, September 20, 2007

From Trade-Ideas to Vacation Ideas



Some traders, like Trader Mike, are sharing amazing photos of their recent trips to exotic ports of call. This inspired me to do the same. We recently celebrated the birth of our second child so we stayed local this summer. However we did a trip to Morocco last year and the photos from that trip were submitted to a recent Conde Nast photo contest. One of the photos appears below at the end of the right hand side of information on this blog.


Take a look at these submitted trip photos and those of others. Rate the ones you like and feel free to comment. The images may inspire you to set some goals and rewards for your trading.


Photo 1: Marrakech Spices for Sale; Recent comment: "Beautiful market shot! Good memory. 5 stars just for the colors alone :-)"

Photo 2: Marrakech Porter Sleeping; Recent comment: "I love travel photographs of local people doing what they do. This is a perfect example. Great photo!"

Photo 3: Rooftop Rug Market; No comments yet - be the first!

Wednesday, September 19, 2007

Using Scans to Test Market Activity

We still have Dan in Hawaii running a half marathon (we'll need some proof!) and hanging out, but it's been too long a break and the markets decided to do something this week.

Let's look at the market activity through a Trade-Ideas lens that features many of our free customizable scans and develop some different themes:

Activity: All major indexes were UP (above 2.5%) and market volume UP (above 38%). The Nasdaq was UP 4 of the last 10 days, DOWN 5, FLAT 1.

The Momentum Up Theme posits that there may be stocks that were up ahead of the Fed announcements and are continuing their upward movement.

Relevant Trade-Ideas scan: 4 Consecutive Up Days

You could make the case for Momemtum Down. The thinking here is that certain stocks are down the last few days and, despite the Fed cuts, still remain down with no up in sight.

Relevant Trade-Ideas scan: 4 Consecutive Down Days

There's more you can create from the custom scan options available. Remember these scans showcase our End of Day data. They are update daily around 3 am EST.

Thursday, September 13, 2007

One More Drink on the Underhill's Tab Please!


Yes, we've been on vacation lately from the blog as we take some rest ourselves. This might go without saying, but we receive several emails a-day with inquiries as to our whereabouts on the blog. I've also noted some others taking the time to relax, breathe deeply, and take stock of things.

The response is flattering. We will be back in the swing of it very shortly. Although have we really missed a lot over the last month?

Speak with you soon.