Wednesday, November 26, 2008

Results of Automated Trading: Trade-Ideas Turducken Mash-Up

Trade-Ideas' Automated Trading Bot ran off 3 profitable days of trading this week.  That's notable because:
  • this is the first week we've been trading automated strategies designed for this market's volatile action - and not on a testing basis
  • we're relearning our own tool - gaining insight on how to trade profitably given any commission structure (Hint: all depends on your average lot size - some of this explained in the video)
Spielberg's Pet Rock Could Make a Better Video

For now.  We are learning.  We're also not too big on lots of editing because we don't want to give any impression the real-time results recorded are rigged in any way.  We will have to eventually edit more (or have edited versions) for brevity's sake.

Here are the videos.  They will also soon appear on Trade-Ideas' YouTube Channel where many other videos featuring basic functionality reside.  The first set (2 videos) is from November 24, 2008.  The other days will appear as either related videos or 'More from Trade-Ideas' links.  Subscribe to the channel and you won't miss a day of results - we may not video a losing day, but we will show you the record of how the robot performed each day we use it - either in the next video or here at the blog.

Short on time? 
  • Best parts of Part 1: Skip to 4:13 as the earlier stuff is exposition
  • Part 2: Timestamp 2:30, 4:15, and 5:30
The Automated Trading 411

Trades execute through the Trade Ideas LLC account held at TD AMERITRADE - that's right, we're trading retail to prove a point.  This technology is cutting edge (just watch) and it's not behind the iron curtain of a powerful institution (an oxymoron these days) or a Stevie Cohen secret hedge fund.  Revenue is where the volume is - partners like TD AMERITRADE and others offer Trade-Ideas large numbers of active traders and we in turn provide the technology to improve their trading.

Want to learn more about the lessons learned from automated trading? Look no further than Dave Mabe of StockTickr who chronicles his journey in his popular series of blog posts -

Ending on the High Notes

First some kind words for @StockTickr and @TradeIdeas from Joey the Downtowntrader:
Thank You!

Happy Thanksgiving to All

Monday, November 24, 2008

Trade-Ideas Featured Partner in Tom Busby & DTI's Chatroom

UPDATE:  Good news/Bad news

Bad news
I will not be speaking today in the DTI chatroom (daughter's Thanksgiving play)

Good news
Trade-Ideas will be a regular feature on Tuesdays with Busby starting next week, DECEMBER 2nd.

Turns out the good folks at DTI and Tom Busby are having an Open House tomorrow to talk about the markets and showcase Trade-Ideas during their very popular Live TradeRoom sessions.

The day starts in the chatroom at beginning at 9:15 AM EST, TUESDAY, DECEMBER 2ndI have the honor of speaking at 11:00 PM EST.  My topic:

Patterns admist Market Uncertainty 

If you are new to Trade-Ideas or an old hand in need of a fresh pointer or two, please register for this free event by clicking here:

Free Event - Login Here 

I hope to see you there!

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Wednesday, November 19, 2008

Trade-Ideas in Your Town: Vegas 2008

We are headed to Las Vegas this week and weekend for the Traders Expo.

Here are the details:

Las Vegas, NV: The Traders Expo, Mandalay Bay Resort,

November 19-22, 2008

Are you planning to attend?

Here's a snapshot of some last minute fares to Las Vegas. There's another good travel site to consider called FareCast. They are good at forecasting airfares for flights and letting you know if a current price is above or below the historic average. They also developed a cool tool called FareGuard that lets you protect the lowest fare for one week without buying a ticket.

We are hosted again by Scottrade this year as well as a couple of other new partners. Please look for us at their booth and talk shop.

Presentations Not to Miss
Did I mention we're going to take in a show at TBS Comedy Festival featuring Kids in the Hall? Should be a trip - join us for drinks before the show.  Leave a comment you're interested.

If you can't make it

The good folks at capture many of the presentations at the Expos. Some of them are available for free. Here is a free presentation from the last Expo in San Diego last year featuring me and Trade-Ideas. We discuss several different styles of technical analysis (no trading fundamentally dared to speak on the panel!) and fire off several hard-learned lessons on advancing the practice of trading. Take a look:

We'll post this year's presentation on the blog as it becomes available.

Luck be a lady!

Thursday, November 06, 2008

Trade-Ideas in Your Town: NYC

Today I'm flying to NYC for the rest of the week and weekend consisting of meetings with a whole cast of characters and friends - old and new as well as the optionsXpress New York Xpo.  

I am especially looking forward to some drinks with new friends near Union Square tomorrow. This includes Aaron Task from Yahoo's Tech Ticker - if you're not watching this daily, you're missing great perspective on the financial markets in a tight, quick package.

Also meeting with some new and old prop traders both in the city and in Ramapo!!!  Ramapo folks! Very near my family in the area.  Should be fun.  As always there's additional fun to be had in NYC at the same time.  As evidence I give you this:

If you are in the area, dear reader, leave a comment or Twitter me and let's meet up. We take these offers seriously. Famously now I met a reader of the blog here in NYC and answered many questions about the use of Trade-Ideas as an input into the quant fund he manages. Good stuff.

Wednesday, November 05, 2008

Trading Desks Like JPM Fail for this Reason

I got this headline and article today:

JPMorgan Chase is to scrap its standalone proprietary trading desk, highlighting how the dearth of investment opportunities is prompting banks to retreat from in-house hedge funds that had thrived before the turmoil. People close to the situation said the decision to fold the 80-strong global proprietary trading unit into JPMorgan’s other trading operations could result in job losses.

Institutions closing their internal trading desks.  How is that possible given all their resources? Surely they are always at that intersection of bright minds, leading edge technology, and lots of money, right?  Wrong.  

I argue that the institutions are failing for not keeping up with the latest tools and technology that often exists below their radar and outside the 4 walls of their IT department.  In this sense the individual trader may be succeeding (with tools like Trade-Ideas) where the institutions fail.

Aside from money see how key assumptions about the advantages institutions maintain over individuals stand on a weak foundation.  

Minds Gone to Mush

In these last few months (going on a year or so), the mighty institutions (e.g., BEAR, Merrill, etc.) fall pretty hard and the emporer runs around naked alot.  With the relative parity in access to primary sources of widely disseminated information, it's just as easy as the next guy to put 2 and 2 together and get 4.  Smarter people outside these institutions saw the writing on the wall. I'd say a mix of the 'blinding greed' of executives contributed to these failures combined with the inherent inertia of bureaucratic organizations (i.e., the CYA attitude of many employees, the "if it ain't broke, don't fix it" day by day routine mentality).  This makes finding new technology almost impossible let alone trying to champion its use within the organization.  (How did Trade-Ideas ever land its partners?)

Leading Edge of Blah

I've seen too many trading floors with homemade platforms marketed as the "Ultimate Driving Machine" of applications.  Each of them had their moment of glory and each of them unknowingly saw it go by.  That's because a department of in-house developers and IT organizations make it their job to maintain the status quo.  At this they are very good - but innovate or build from scratch? 

The Value of Small Companies is their Innovation

The cost and effort to develop something internally is staggering in its budget, time to implementation, and constantly changing scope.  Good companies I associate with know its better to buy these applications from the outside and integrate them rather than develop them internally on their own. 

Smaller companies (hey, like Trade-Ideas) fill this gap.  We just keep refusing to go to the dance. In the meantime our customers benefit because it's our niche focus and fast adapting development capabilities that allow us to constantly meet and exceed market demands on what our tools need to do.

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