Friday, October 31, 2008

Farley and Twitter Combine to Find My Next Great Trade

A Scan that Finds Stocks Resisting the Market Downtrend - Stick Above the 200 MA

Already my post earlier this week,  How Twitter Improves My Trades, continues to evolve and provide further lessons.

Twitter Apps to Consider
  1. There's a growing list of applications that build off of the Twitter data feed of wit, prose, commentary of 140 characters (that's the limit Twitter allows you to express your thought/twit).  Here's just 2 applications that seek to manage and organize Twitter chatter into relevant conversations based on your interests and those whose comments you follow:

    A. Tweetdeck, a slick application that in one view organizes group conversations and replies to your comments:

    B. StockTwits, I expect to see more of these types of applications - the kind that create communities around common domains (e.g., movies, sports, or in this case, all things stocks and markets).  StockTwits mines the Twitter feed for those comments that use stock symbols and organizes not only who is talking about what stocks, but given a stock, who has talked about it:

    Both of these apps and others build off your Twitter account (which you must first create at Twitter).

  2. Via Twitter and its associated, helpful assist applications, I'm getting more articles about market strategy than I would ever found on my own.  The Twitter community about the markets that I follow supplies an almost never-ending supply of "Hey, look what this guy said".  These articles are the source of most of the Strategy Session articles we write (where we model what's theorized according to the Trade-Ideas list of alerts and filters).
Farley Picks: Above 200MA Resisting Downtrend

Here is an example of an article and a scan from today:
Interesting article d'A. Farley re: NOT picking stocks at lows but rather safer stocks resisting dwntrnd: Ex: $NDN 

Here then my scan interpretation, "Farley Picks: Above 200MA Resisting Downtrend" - $DV $STRA $AFAM 

Same strategy but further refined for optionable stocks only: - interesting $DNA $BUD 

Wednesday, October 29, 2008

How Twitter Improves My Trades - A Dummy Makes A Comeback

Using Twitters helps my feel for the markets and satisfies my sense of community with fellow traders.

Specifically I use Twitter:
  • to contribute to the conversation among those I follow and those who follow me.  I do this by taking advantage of the ample resources Trade-Ideas makes available to the trading community at

    For instance I might create a free intraday scan based on the topic of conversation, or I might link to the list of symbols alerting a head and shoulders pattern.  I do this to build up my reputation as an expert and valuable contributor - you could do the same within your community and mine!
  • to get reactions on how a variety of traders with different profiles and preferences are trading the markets.  This is a real benefit because those Twitters that I follow have already been pre-screened by me (by virture of me deciding to follow them).  As their insights help me make sense of the markets, my process of developping themes for the market and deciding on which strategies to trade becomes easier.  Here's my Twitter profile:
If you're not a member of Twitter yet, consider joining.  I think it's liberating to be a free forum of trading insights without the feeling of being in a closed forum like EliteTrader or others.  Can anyone argue this point with me?

Today I followed this conversation that led me to rediscover a strategy we wrote about on this blog back in 2005.  What comes around goes around!
StockTickr: Sleepy trading day. My trade in $WSM finally woke up. Others on my radar were: $APOL, $VPRT, $SEE, $NXY, $AG, and $GRMN. 

Prospectus: @StockTickr What setups do you trade? Dummy trades?

StockTickr: @Prospectus Yes one strategy I'm trading is a variation of the dummy style.

TradeIdeas: @StockTickr @Prospectus How to Model a 'Dummy' in Trade-Ideas: 

The link to the strategy mentioned in my Twit post is here:

Recycling is a good thing!

Thursday, October 23, 2008

Strategy Session: Over Extended Up Move - TAS&C November Article

 Traders’ Tips

 November Issue

“With globalization, the big [countries] don’t eat the small; the fast eat the slow.” Thomas L. Friedman (Op-ed columnist, New York Times)

Mr. Friedman’s observation easily applies to traders.  For this month’s Traders’ Tips, we’ve provided a strategy that uses speed to uncover a backtested and winning advantage in this volatile market.  It’s based of course on the Trade-Ideas inventory of alerts and filters and backtested with trading rules modeled in The OddsMaker.

This strategy fades certain movements to take advantage of our market theme that today’s markets are – and will continue to be – very volatile.  Our hypothesis, given this market theme, states that stocks moving up at least 75 cents in the last minute tend to be lower over the next 15 minutes.  The idea is to put short offers out at the time of the alert.  Please note: If certain categories of stocks are excluded from short sales by the government, simply create a short sell excluded list.  A video describing how to edit symbol lists appears here:

Provided by:

Trade Ideas (copyright © Trade Ideas LLC 2008). All rights reserved. This sample Trade Ideas strategy and its configuration are for educational purposes only and may be modified to further reflect a trading plan.  Remember that these set-ups are sketches meant to give an idea how to model a trading plan. Use this 'as is' or modify it as many others do. Know, however, that and all individuals affiliated with this site assume no responsibilities for trading and investment results. The indicators, alerts and all other features are for research purposes only and should not be construed as investment advice.

 Description:  Over Extended Up Move

Copy this string directly into Trade-Ideas PRO using the “Collaborate” feature (right-click in any strategy window)

Where 1 alert and 6 filters are used with the following specific settings:

·         Running Up Now: 0.75 ($)

·         Min Price = 10 ($)

·         Max Price = 300 ($)

·         Max Spread = 5 (pennies)

·         Max Distance from Inside Market = 0.1 (%)

·         Min Daily Volume = 500,000 (shares/day)

·         Min Current Volume = 3 (ratio) 

-- by Dan Mirkin, Senior Managing Partner, Trade Ideas LLC,


Tuesday, October 21, 2008

Walk, Chew Gum, and Trade Ideas: Introducing Mobile Trade-Ideas

We first mentioned our work on Mobile Trade-Ideas back in June thinking this would be a good application for the 3G iPhone which just rolled out.  Now we have Google/T-Mobile G1 so it's time to make Mobile Trade-Ideas available.

What makes Mobile Trade-Ideas appropriate for the smartphone set is something as universal as 'function follows form'.  While Mobile Trade-Ideas employs the same bang of the regular technology such as the alerts, filters, exchanges, etc., the presentation on these devices is what counts:
  • minimal
  • easy on the eyes
  • clean
  • fast
That means little formating and just enough graphics to deliver a trader's alert strategy.  Our Chief Technology Officer, Philip Smolen, puts it this way:
My favorite part of this, oddly enough, has nothing to do with the customer or how s/he might use it.  I like this product because it is so clean.  The pages have very little graphics and formatting.  Just our logo and a small amount of other standard stuff at the top and the bottom.  Nothing else.  Let the user pick his/her own favorite font in the browser (as s/he could with a desktop computer, too.)  And the product itself is very minimalist.
Log in to your account and see all recent window settings: view them, change them, act on them.

There's more.

In addition to the subscription-based features of Trade-Ideas, the free End-of-Day scans and Intraday (but delayed) scans are also optimized for smartphones.  Once you create your scan look at the bottom of the page for the link that says, 'Mobile', along with the other options for embedding scans on your blog or webpage.  Example.

Let us know what you think!

Friday, October 10, 2008

It Feels Like Animal Farm

George Orwell writes how the animals rose up against their human oppressors and took over the farm. 

However it was soon evident that once they were in power, not all animals were created equal. Some animals were more privileged than others. It seems that Wall Street and Main Street have a case of Animal Farm-itis.  
"Animal Farm" tells the simple and tragic story of what happens when the oppressed farm animals rebel, drive out Mr. Jones, the farmer, and attempt to rule the farm themselves, on an equal basis. What the animals seem to have aimed at was a utopian sort of communism, where each would work according to his capacity, respecting the needs of others. The venture failed, and "Animal Farm" ended up being a dictatorship of pigs [led by Napolean, their leader], who were the brightest, and most idle of the animals.
Source: Anna Hassapi Book Review, Animal Farm by G. Orwell

"All Animals Are Equal, but Some Animals Are More Equal Than Others"

The government is coming in to rescue the big houses. Enron was allowed to fail, Worldcomm was allowed to fail, Bear was not allowed to fail, Lehman was allowed to fail, Merrill was spared, and Goldman and Morgan are going to be spared along with AIG.

How does this resemble a free market? While we get that the turmoil from the failure of these institutions can be very painful, at what point do you have to look in the mirror and say, "this is just not right."

Where were the auditors who audited the financial statements of these companies? How are they not accountable? How are the CEO's allowed to come on CNBC and state that everything is OK only to file for Chapter 11 in the next few days. (See Howard Lindzon on the split between Jim Cramer and CNBC at the house GE built).  No wonder credit markets are frozen - how can any business make a decision with nothing but knee-jerk and unpredictable government action?  How can the world still respect the financial system of a country that is randomly turning the free markets on and off?
When everything else failed [Squealer, the pig in charge of propoganda] would use the threat of "Jones returning" to silence the animals. In this simple but effective way, Orwell presents the tragedy and confusion of thought control to the extent that one seems better off simply believing that" Napoleon is always right".
There are serious things to consider here. 

What is the point of earnings calls and announcements when at any point and time the government can come in and do whatever it wants. Take the recently floated idea that the government may buy equity positions in several banks.  The ban of shortselling is another idea - the craziest thing that I can imagine ever seeing in a free market. Next it will be sex-with-the-animals and bong hits required for floor traders.

What's worse is that there is a vacuum of leadership at the helm: an out-going, highly unpopular President and a country on the eve of a century-defining election.  This feels like the morning after a very big party and you just woke up with a huge hangover and you have no idea who is laying next to you or where you even are.  Somebody come and clean the stables - it stinks in here!

Thursday, October 02, 2008

Question for Zecco Traders

Anyone using Trade-Ideas with an account at Zecco?  If so we'd love to hear from you.  Send me an email at david "@" or comment below.

Some interesting things for you to try and items to bounce off of you.