Monday, January 23, 2012

Join Trade-Ideas in Supporting Jeans 4 Justice


As many of you are aware, Trade-Ideas is a longtime supporter of the Jeans 4 Justice charity organization. Jeans 4 Justice is a unique non-profit organization dedicated to ending sexual violence through the use of creative awareness campaigns and innovative education programs. 


We recently sat down to lunch with the executive director of the organization, Jessica Johnson, and she filled us in on the progress of their most recent initiative, LEAD IT, which is a part of the J4J Campus program. LEAD IT focuses on working with college communities to engage, educate, and encourage students to take charge and stand up against sexual violence.  


J4J Campus provides students with workshops that help improve self-awareness, confidence, communication, and how to effectively work with others while also helping them to develop a deepened understanding of their own values and beliefs. These workshops encourage students to expand their knowledge and provide resources for the prevention of sexual assault.  Through working with students, Jessica hopes to help cultivate young minds and provide a safe haven for individuals who have personal experiences with sexual abuse. 

Jeans4Justice.org


Much like Trade-Ideas, Jeans for Justice relies heavily on word of mouth to spread their message. We’re big fans of the Jeans 4 Justice organization, their accomplishments, and their message.


Sign up for their mailing list and let them know if you are available to volunteer, donate, attend an event, or share your story. For more information on the Jeans 4 Justice organization, upcoming J4J events, and their new J4J Campus program please visit the website: http://jeans4justice.org/ 


Wednesday, January 11, 2012

The Moneyball of Trading is Here

Use number crunching to put the "Win" in Swing Trading.  

The market moves faster than and beyond your eyes. Patterns that appeal to you on a chart visually are more often than not misleading.

Set-ups seen at trade shows or on websites are sales tricks. There is no simple and easy.

Most traders have neither the tools or the time to take an identified pattern, test it against the market multiple times, and determine any sort of consistent record of performance when the aforementioned scenario takes place.

If traders could do so, they would see most patterns and the way to trade them perform like a coin flip. Sometimes it works and sometimes it does not.  


Obviously a coin flip is not a good trading strategy. 


I argue that a successful trader from now on must clean house and throw out tools and approaches that offer only diminishing returns: 
  • Visual, from-the-gut trading of 1 stock's chart pattern 
  • The race for lowest latency and scalping for profits
  • Client based technology and limited database capacity 
Trading demands better number crunching against the avalanche of data generated by the markets.


Call it the Moneyball of Trading. And enter The OddsMaker.

The OddsMaker by Trade Ideas slices through the enormous data generated by the market every day.  After more than 4 years of analysis and continual improvement, here's one fact results prove over and over: market windows of opportunity open and close. If someone is telling you they have a system that has been working for 10 years . . . run.


A trader who lets go of the '1 Holy Grail' approach to unlocking the markets' "secrets" comes better prepared to hunt for opportunities.     

Below is a system we designed performing well over the last 30 days. Imagine crunching the market data for every stock generated over this period.  From that pile we identify a pattern and a set of trading rules that performed with a high success rate.  Call it the “strategy of the week.” It looks for stocks oversold: making a 30 day low, are down 4 days in a row, and are trading on unusually high volume today.


Oversold 30 Day Low, Down 4 Days


The trading instructions are set to go long when the alert takes place and to hold the trade for 5 days exiting at the open on the 5th day.


Fig. 1: OddsMaker settings
The results:


Fig. 2: OddsMaker results
What do these results tell us? 


What looks like a break in support is actually a buying opportunity.  


The trading rules above stipulated that the minimum dollar amount to be defined as a winning trade was 20 cents. This requirement and the underlying strategy generated a 60% success rate, a 2 to 1 ratio of winner size to loser size, and over 90 points extracted out of the market in the last 30 days - a good starting point. 


These are tools and approaches that stand a chance against the kind of market many trading veterans describe as the most frustrating ever.  Time to put on the field technology that can crunch Big Data and time the market's windows of opportunity.

If you have any questions about the strategy, please email us or post a comment. If you're not yet a subscriber and would like to try out a demo of Trade-Ideas Pro, please sign up for a free trial.

Tuesday, January 03, 2012

Trade-Ideas Fundamentals


Trading is hard.  By selecting Trade-Ideas, you choose a powerful tool to find opportunities in the market. At the same time we task ourselves with making sure you get the most out of our technology.  With the new year comes the opportunity to review the basics and extract even more value from the use of Trade Ideas.  Here are some fundamentals you don't want to miss.

Volatility

Most of our traders know volatility is important. But do you know how to use it to your advantage?  If you like looking at charts, you are picking up on volatility whether you know it or not.  A typical market view window will hide the volatility from you.  Several of our filters are available with or without volatility.  Look for the filter icons that look like stock charts.  The filters based on stock chart patterns take volatility into account.   

Negative numbers

We have a lot of videos and articles on this subject.  People still ask us, "I only see 'Gap up.' How do I find a stock which is gapping down?"  The simplest answer is to start with the positive case of the filter, and then use the flip button to get the reverse.  If you're still confused by our use of negative numbers, use this page to verify that you are setting up the filter correctly.  

Baselines

Our focus is never on individual numbers, like the today’s volume or today's opening price.  Taken out of context, these mean nothing.  We like to talk about a stock’s normal behavior, and find it doing something interesting right now that is different from its normal Behavior.

For example, a lot of users will say, "I only want to see stocks that have traded at least 1,000,000 shares today."  What does that mean?  You won't trade TNA until 15 minutes after the market opens, but you'll start trading BAC only a minute or two after the market opens?  You don't start trading GOLD until lunch time?  That's probably not what you meant, but it’s a common mistake.  We'll let you do that if you really want, but please consider average daily volume or current volume instead.  Here is a link to a helpful video about volume

Alerts vs. Filters / Top List vs. Alert Window

An alert is an event.  You are notified when the event described for the strategy occurs.  It is like telling the software, “When XYZ happens, tell me.”  You will see fewer alerts when nothing is going on in the market.  Compared to alerts, filters last for some period of time.  These are useful when you want to periodically check on stocks that you like. 

A top list window is like the evening news; the news lasts for the same amount of time every day regardless of what happened today.  The alert window is like a hurricane warning; the TV starts beeping at you and displaying time-critical information.  Click to view a helpful video about alerts

You don't have to use everything

Think of our software like Baskin Robbins.  Don't be offended or confused when you see diet ice-cream or some strange thing from Italy.  Tell the clerk that you want strawberry with chocolate sprinkles on top.  A lot of our most successful traders only use 2 or 3 of our alerts and fewer than 10 filters.  We offer so many choices because different traders like different things. 

When you start your complementary one-on-one training, tell the trainer the sorts of things you like to see.  He will point you to a good starting place and help you to configure a relevant strategy.  You can explore more at your own pace.  Go here to schedule a one-on-one training session. 

These are some of the most important and the most underused tools that we offer.  If you only have a little time for education, start here.