Thursday, January 24, 2008

Knowing the Market's Mood is Better than Guessing What Comes Next

Figuring out exactly what the market will do at the very next moment is tough to do. Understanding what mood the market is in, however, proves to be not only easier, but eventually leads to better accuracy about what comes next.

The beauty of Trade-Ideas' tools is that you get to ask and answer your questions about the market's mood.

Trade-Ideas allows you to develop any theme or behavior about the market like,
  • "Are recent new lows enticing buyers?"
  • "Do bounces in this market have strength or are they dead cats?"
  • "Do any of these themes behave differently in the afternoon than in the morning?"
  • "What are the odds of a winning trade on any of these themes in the market right now?"

Aren't these better questions to be asking than "Is this stock going up or down?"

Subscribers who use The OddsMaker (our event-based backtesting tool) already know how to answer the last 2 questions in particular. But everyone can answer all these questions with some observations of a strategy/theme's real-time results or even a look at its History.

I'm linking to a previous post that highlights some ways to model these questions. Take a look and further modify them to fit your unique trading plan. If you are a subscriber to TI Pro but don't use The OddsMaker (yet), leave me a comment with your take on how these themes would work in your trading plan or any other questions, and I'll add credits for your free use of our backtesting tool.

Friday, January 18, 2008

Resources to Get You Over the Learning Curve

Recent question posted in our support forum:
New Scottrade User - Is there a newbie's guide to this very powerful tool? A simple way to scan for volume surges, volatility, and trending?I am frankly overwhelmed by the options here. Thanks.

Our Answer:

Good question. There are alot of places to start. Here's a list:
  1. The User Manual to get a feel for how everything works:
  2. Use the Pre-configured strategies. By using them you can understand how we model different patterns. Start with the one that most resembles the way you like to trade and slowly start to change things and watch what happens.
  3. Read our blog - it has many articles you'll find helpful:
  4. Watch some of our videos that describe how we look at volume, volatility and the like (some of it is a little dry but its worth the visit):
  5. If you are a paid subscriber to Trade-Ideas PRO, reply to this post in the comments and we can even schedule a one-on-one training session for you with our Director of Training, Jaime Hodge (

The posts in the support forum may also help you. I hope this helps. We try very hard to bring what is massively complex analysis of the markets down to something tangible that's useful and provides real information leverage. Good luck.

Wednesday, January 09, 2008

RoundUp of the Best Headlines - 2007

It's been a year of tremendous growth and innovation at Trade-Ideas. You can see what's been added in a snapshot timeline by following this What's New link - you may have missed something that could help your trading even more!

Thanks to our dear readers our blog gets more visits each week (even if we've slacked off a bit lately). We promise to serve up some more Strategy Sessions that model opportunities and patterns we and others find in the markets. We also promise to keep things relevant to your trading and ways to improve it.

Here's the list of the most viewed and read posts from 2007:
  1. The 2 x 2 Decision Box for Determining a Good Trading System - Most read: This is a tired but true consultant's tool for understanding the relation of two elements and their possible outcomes: Spread and Win Rate
  2. Are You Testing a Strategy or a Stock? The more analysis we do of the marketplace, the more we see that people are guessing - and mostly based on emotions. The Odds Maker allows you to trade like a professional speculator rather than an emotional investor
  3. A Best Practice in Trading Using Trade-Ideas - Dr. Brett Steenbarger often inspires our best posts. In this example 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
  4. Strategy Session: Persistent Strong Closes - OddsMaker and Dr. Brett describe this momentum pattern that seemed to appear only in the afternoon. Here's how to trade it
  5. Be Like Rick (Part 2): Learn Technique on Our Time - Save Yours for the Improved Trading - One customer trading transformation using Trade-Ideas
  6. Trade Like TraderMike - One of the most widely read trading blogs out there is TraderMike and he's widely read because he shoots straight (or could it be because he uses Trade-Ideas?)
  7. What to Do When You're Suspicious of Low Volume Rises in the Market - We created a couple of strategies in Trade-Ideas that model the behavior TraderMike describes, namely; upward price movements on lite volume
  8. 4 Steps to Get the Jargon Out of Your Strategy - The biggest problem is that traders cannot articulate what they want to see. Thinking of market movements in terms of RSI, Stochastics, MACD, Elliot Waves, etc. never help in articulating the picture
  9. How My Trading Improved Thinking Like a Martial Arts Fighter - Whether a fighter or a trader when opponents face one another in the ring, they juggle 3 complete games to be competitive
  10. Trade More Profitably: 9 Effective (and Slightly Badass) Ways to Just Do It - Advice from 2 veteran traders to filter what the Chicken Littles are crying about and better navigate the market's waters