Thursday, January 29, 2009

Trade-Ideas In Your Town: San Diego, Annual Partners Meeting



I am headed to San Diego Friday away from some miserable weather all along the East coast for our annual Partners Meeting. 

The other partners and our staff don't have far to travel as they live in the coastal towns just north of the city. I have to hike it from Atlanta, GA.  As a result there won't be too much to post about until I come back with a recap and a head full of steam like a few years ago.

I know from Twitter and elsewhere, there are those of you in the San Diego area.  If you are close and would like to meet for a drink, please let us know at info"at"trade-ideas.com or on Twitter: http://twitter.com/TradeIdeas

Here's a summary of the agenda we'll discuss:
  1. Location of bottle opener - Opening Ceremonies of alcohol containers
  2. Summary of 2008 Accomplishments and Missed Opportunities
  3. Industry Outlook
  4. Economic Outlook
  5. Strategy and ’09 Business Plan
  6. Development Plans
  7. Marketing
  8. Staff 
  9. Systems
  10. Partnerships: Ones We Grow, Ones We Let Go
  • a. Financial reporting
  • b. Security
  • c. Reliability
  • d. Hardware
  • e. Product Development
  • f. Organization, responsibilities

Wednesday, January 28, 2009

Strategy-Session: 2 Patterns You Want to See As They Happen

I mentioned in yesterday's post that a bunch of traders gathered online to see and hear my present how Trade-Ideas PRO can model any pattern.  

They let me have it.

I took almost 20 descriptions 30 minutes before the presentation began and picked 3 to model and walk everyone through the process of modeling the requested chart patterns.  Here's what we did with 2 of them (I'll save the 3rd for another post):

Pattern Question: "How can i set up a scan that will look for 45 degree power trends?"


Click on any of the icons below for a detailed explanation of each alert/filter.

Alert:
Running up (intermediate)Running up (intermediate) Ratio: 2

Filters:
Min Price5(Dollars)
Max Spread15(Pennies)
Max Distance from Inside Market0.2(%)
Min Daily Volume
300,000 (Shares / Day)
Min Current Volume2(Ratio)
Min Up Days


2 (Days)
Min Up Candles2(10 minute candles)
Min Up from the Open0.05($)
Min Position in Range50(%)
Min Position in Previous Day's Range90(%)
Min 20 above 200 Period SMA (5m)0.05(%)

The scan of the pattern is only half the battle.  The other half concerns the trading rules that generate the highest odds of generating a profitable trade.  Those readers who use our pattern-based backtesting tool, The OddsMaker can model their position management rules and determine what probabilities they have of consistently making profitable trades.

For example after backtesting several different position management scenarios for these event over the past 30 days, I discovered that (by far) the best way to profit from this event with an intraday hold time is to sell SHORT every opportunity presented from this scan.

Pattern Question: "Scan for relative strength of a stock to market?"


Alerts:
Sector breakout (from open)Sector breakout (from open)3(Minimum % up) 
Positive market divergencePositive market divergence3(Minimum % up)

Filters:
Min Price5(Dollars)
Max Spread15(Pennies)
Max Distance from Inside Market0.2(%)
Min Daily Volume300,000(Shares / Day)
Min Up 50.1(%)
Min NASDAQ Up 50.05(%)
Min Up from the Open0.05($)
Min Position in Range92(%)
Min Current Volume2(Ratio)

This strategy also appears to do well when I sell SHORT each opportunity intraday.  The OddsMaker showed that trading only the morning session (after waiting out the first 30 minutes) proves to be the time that generates most high probability trades.  That's great knowledge with which to go into trading.

See if that works for you. To get the opposite view of these strategies, configure this and then use the "Flip" button.

Footnotes and Related Articles:
  • Check out the whole category of articles written about patterns we've modeled from various other authors and articles we've come across called: Strategy-Sessions
  • Use The OddsMaker to further understand what trading rules would produce the optimal trading outcome for this strategy in the recent market. Trading rules would include the answers to these questions: How long to hold each opportunity? When during the market session should this strategy be traded? Where should the stop loss be set?
  • Remember that these set-ups are sketches meant to give you an idea how to model your own trading plan. Use this 'as is' or modify it to your own liking as many others do. Know, however, that Trade-Ideas.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, alerts and all other features are for research purposes only and should not be construed as investment advice
  • See this video on our Collaborate function to learn how to open these strategies inside Trade-Ideas PRO



Tuesday, January 27, 2009

5 Modeling Techniques of Any Decision Support Tool


TodayI gave about 250+ traders from VCM (Velez Capital Management) a chance to get personal questions answered and see first hand how the platform performs in the hands of its custodians (me).

I want to share with you the essentials of what I presented to them; namely, what challenges Trade-Ideas resolves for traders and what modeling techniques consistently yield the best results in Trade-Ideas or any other tool.

Common challenges facing traders – in their words:

(Note: these are culled from our customer support experiences and testimonials)
  • “I’ve been taught a certain method of trading, but it’s hard for me to find the stocks in terms of time and the effort it takes”
  • “I’m looking at the same information everyone else is – often times I’m shaken out of a trade”
  • “Keeping track of just the 10+ stocks I follow means I miss some opportunities with a stock while I’m watching another”
  • “I need something to help me find some good trades that I will like, as well as keep me out of bad trades”
  • “I am limiting myself by trading the best of what I am watching, which on some days was not worth waking up for”
Other trading challenges:
  • Information overload: like having 500 channels and nothing to watch
  • How much research has to be done ahead of time to prepare for a day of trading?
  • How many analysts exist doing the same thing for institutional firms?
  • How can an individual really compete with large hedge funds that pay thousands of dollars for such analysis and research?
Any of these resonate with you? If it's not Trade-Ideas helping with these challenges, keep looking for the tool or approach that will.

Modeling Techniques - Rules of Thumb

These techniques work in any other decision support tool. Let me know if others come to mind as well.
  • Don’t start from scratch at the beginning; Do modify an existing strategy to fit your trading plan
  • Articulate clearly the pattern you wish to idenitfy – writing it down first (like a grocery list) can clarify your purpose (vs. shopping while hungry)
  • Draw your best trade on a chart and clearly label each axis – this works in selecting the correct alerts and filters for your timeframe
  • Separate bullish or up-trending strategies from bearish or down-trending strategies – this allows for more ways to ‘stack the probabilities’ of movement in a certain direction
Tomorrow I will post some of the strategies we modeled during my presentation.

Monday, January 19, 2009

Coming Back? Returning Traders Guide to Trade-Ideas

"Yeah we tease him alot cuz we got him on the spot, welcome back.  Welcome back, welcome back, welcome back."
Welcome Back Kotter Theme Song

Often Trade-Ideas and our subscribers resemble the local neighborhood bar. The locals there everyday collecting their mail. The casual drifters. The frequent regulars. Many start as one type of customer and switch to another. We keep the taps clean and the information flowing - whoever we are serving.

Are you a customer coming back to Trade-Ideas after some time off? Could have been with another set of tools; getting more education; raising more capital - we won't ask any questions. Instead here's a guide to help you so you don't skip a beat. It comes straight from a IM session:


Welcome Back! Remember to sign the exchange agreements
(12:13:20 PM) bricerator: hey there. U have time for a quick setup question?
(12:14:30 PM) David: i can anticipate the question
(12:14:34 PM) David: here's the answer: http://www.trade-ideas.com/AdvancedFeatures.html
(12:14:46 PM) David: visit the Entitlement section and fill out the exchange agreements to see the symbols on that exchange - that's something new that previous customers did not have to do.
(12:14:56 PM) bricerator: I did that
(12:15:05 PM) David: oh ok. Well done.


Quick Answer to How You Find Fast Moves with Trade-Ideas
(12:15:35 PM) bricerator: I just want a list that shows 1, 5 and 10 minute fast moves
(12:16:04 PM) bricerator: how can I set that up?
(12:16:19 PM) David: look at the intermediate running up alerts
(12:16:42 PM) bricerator: where is the alert section?
(12:17:04 PM) David: http://www.trade-ideas.com/Help.html. You can also use our filters on the 1, 5, 10 minute candles - for instance show me all stocks with a 5x higher than normal volume on the last candlestick
(12:17:20 PM) bricerator: oh I like that too
(12:17:20 PM) David: right click and select Configure - you'll see the series of tabs
(12:17:33 PM) bricerator: oh ok


We're Constantly Improving the Product - How to Catch Up
(12:17:47 PM) David: a lot has changed since you last used the tool
(12:17:54 PM) David: look at our video for some overview
(12:17:55 PM) David: http://www.trade-ideas.com/VideoHelp/Menu.html - new videos get added all the time. For example new videos are there that demonstrate our automated trading capabilities
(12:18:27 PM) David: also glance at what we've added since your last use: http://www.trade-ideas.com/WhatsNew.html
(12:19:29 PM) David: Since you are a paying subscriber, let me also give you an email to our Director of Education, Jamie Hodge. We give a 1-hr, 1 on 1 training session to anyone who subscribes
(12:19:38 PM) bricerator: k
(12:19:45 PM) David: to get the most out of it; you should familiarize your self with the videos first before contacting Jamie
(12:19:52 PM) bricerator: k
(12:19:56 PM) David: his email is jhodge@trade-ideas.com 
(12:20:12 PM) David: just give him 2-3 times that are most convenient for you and he'll schedule you
(12:22:38 PM) bricerator: k, I will watch video and get with jamie. Thanks!
(12:22:48 PM) David: ok


Welcome Back!