Trade-Ideas Stock Scanner Alerts Software

Join Trade-Ideas in Supporting Jeans 4 Justice

2012-01-23T16:16:00.000-08:00

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

Werecently sat down to lunch with the executive director of the organization,Jessica Johnson, and she filled us in on the progress of their most recentinitiative, LEAD IT, which is a part of the J4J Campus program. LEAD IT focuseson working with college communities to engage, educate, and encourage studentsto 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 alsohelping them to develop a deepened understanding of their own values andbeliefs. These workshops encourage students to expand their knowledge andprovide resources for the prevention of sexual assault. Through workingwith students, Jessica hopes to help cultivate young minds and provide a safehaven 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 spreadtheir message. We’re big fans of the Jeans 4 Justice organization, theiraccomplishments, and their message.

Signup 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 Jeans4 Justice organization, upcoming J4J events, and their new J4J Campus programplease visit the website: http://jeans4justice.org/

The Moneyball of Trading is Here

2012-01-11T15:58:00.000-08:00

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.

Trade-Ideas Fundamentals

2012-01-03T17:39:00.000-08:00

Trading ishard. 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 themost 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 tradersknow 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 whetheryou know it or not. A typical market view window will hide the volatilityfrom you. Several of our filters are available with or withoutvolatility. 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 ofvideos and articles on this subject. People still ask us, "I onlysee 'Gap up.' How do I find a stock which is gapping down?" Thesimplest answer is to start with the positive case of the filter, and then usethe flip button to get the reverse. If you're still confused by our useof negative numbers, use this page to verify that you are setting up the filter correctly.

Baselines

Our focus is never onindividual numbers, like the today’s volume or today's opening price. Takenout of context, these mean nothing. We like to talk about a stock’s normalbehavior, and find it doing something interesting right now that is differentfrom its normal behavior.

For example, a lot ofusers will say, "I only want to see stocks that have traded at least1,000,000 shares today." What does that mean? You won't tradeTNA until 15 minutes after the market opens, but you'll start trading BAC onlya minute or two after the market opens? You don't start trading GOLDuntil lunch time? That's probably not what you meant, but it’s a commonmistake. We'll let you do that if you really want, but please consideraverage 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 themarket. Compared to alerts, filters last for some period of time. These are useful when you want to periodically check on stocks that youlike.

A top list window islike the evening news; the news lasts for the same amount of time every dayregardless 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 softwarelike Baskin Robbins. Don't be offended or confused when you see diet ice-creamor some strange thing from Italy. Tell the clerk that you want strawberrywith chocolate sprinkles on top. A lot of our most successful tradersonly use 2 or 3 of our alerts and fewer than 10 filters. We offer so manychoices because different traders like different things.

When you start your complementary one-on-one training, tell the trainer the sorts of things youlike to see. He will point you to a good starting place and help you toconfigure 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 themost important and the most underused tools that we offer. If you onlyhave a little time for education, start here.

Introducing Trade-Ideas Pro 3.1

2011-12-16T16:42:00.000-08:00

Trade-Ideas is on the leading edge of stock scanning and eventbacktesting technology. Maintaining the roleof market leader requires a mantra of “constant and never-ending improvement” regardingour technology, partnerships, and personnel. I’m happy announce that I’vejoined the Trade-Ideas team during an exciting growth period for the company.

Allow me to briefly introduce myself before introducing thenewest version of the Trade-Ideas Pro stock scanning and backtesting software. Myname is Scott Olson and I’m honored to join Dan, Phil, Brad, David, Jamie, andthe rest of the TI team as their new Director of Marketing. I had the privilegeof working with some of the crew back in the early 2000s in a software startup.So, I’m excited to come onboard to work on marketing strategies for Trade-Ideas.2012 is going to be an exciting year for our company and our customers.

The Trade-Ideas Pro 3.1 rollout

I happened to join the TI team during the beta testing ofthe replacement for Trade-Ideas 2.3. A newbie couldn’t pick a better time tolearn about the software and the improvements that Trade-Ideas Pro 3.1 bringsto the table.

Trade-Ideas Pro 3.1 is available for download here.

There are a lot of exciting new features. So, what’s new?

The TI Pro 3.1 Options menu has additional connectivityoptions and we are now translated into Dutch, French, Portuguese, Chinese, andRussian.

New ways to view the market depths

TI Pro 3.1 adds two new types of windows to compliment theAlert window. We now offer Top List and Multi-Strategy windows. Use the TopList windows to view the biggest gainers, losers, volume movers, gapers, andmore. The lists are filterable, sortable, and configurable, helping you spotinteresting stocks.

Top List Windows

The Multi-Strategy window is a powerful tool to findinteresting events happening now. You can configure as many strategies as youwant in a Multi-Strategy window and easily toggle the strategies on andoff. This video highlights the newfeatures in the Multi-Strategy window.

Odds even more in your favor

Our Oddsmaker backtesting module is the only event based stockbacktesting tool on the market. It’s one of our most popular and praisedfeatures. We’ve made improvements to the Oddsmaker that will provide you withmore ammo for the hunt.

When you select to use Oddsmaker from an alert window, theOddsmaker window for that alert is opened.

Oddsmaker Window

The Oddsmaker results are now displayed more clearly and youhave several options to export the results. If you select “Copy Data toClipboard”, you can easily paste the results as you see them into another programlike Email, Notepad, or Word.

Oddsmaker Results

Selecting “Save Detailed Results” allows you to save thedetailed data for each and every trade as a CSV or Excel file. Traderswho want to drill-down into the details of how their setups preform canleverage this information to finely tune successful strategies.

Oddmaker Detail Export

Take your scans on the road – QR codes

Another area Trade-Ideas continues to innovate is making itquick and easy for traders to share their strategies across email, instantmessage, and social networking apps like Twitter and Facebook. Our Collaboratefeature is built into all our windows (Alert, Top List, Multi-Strategy). And we’vemade it even easier to get the collaboration links in and out of the window.

Now there are buttons to help you copy/paste the Collaboratelink for sharing. However, the biggest change is the addition of a QR code tothe window.

Collaborate QR Code

Use the Collaborate QR code to get your alerts and listsonto your mobile devices like smartphones and tablets! You can even share thelink from your phone by simply texting or emailing that link to a friend or colleague. This video demonstrates how easy it is to get your lists and alerts to your phone!

TI Pro 3.1 is easier to configure

The new Configuration window streamlines selecting the rightalerts and filters to get your strategies and lists just right to find the bestopportunities. Selecting and searching for alerts and filters is now mucheasier. This video demonstrates how these changes benefit the user.

Configuration Window

Get Trade-Ideas Pro 3.1

The newest version of the best stock screening andbacktesting software is available for download here. If you aren’t yet aTrade-Ideas subscriber, you can try TI Pro3.1 for free (download and login as “DEMO”).

To sign up for a Trade-Ideas account or to receive updates,sign up here.

I’m looking forward to big things in 2012. Follow me onTwitter for updates (@TradeIdeas_Scot) so you don’t miss any news or updates.

Cheers!

Holiday Reflection

2011-11-27T07:56:00.001-08:00

Celebrating Thanksgiving at Trade Ideas means reflecting on many things - like our loyal customers. Over 50K in over 75 countries around the world. Wow. With us since 2002. In what seems like a blink of an eye nine years has come and gone. I recall our first Trader's Expo in 2003 in Las Vegas where we stayed at the Hotel Boardwalk and Casino for $45.00 dollars a night!

That year Vegas was freezing in November. We weren't quite thankful then, but just the opposite: hopeful.

At that time we hoped that our innovative technology, forged out of 10 years of bloody noses in the "e-pits" of the SOES, SNET, and SuperDot, a $50 million dollar education courtesy of Menlo Ventures from a previous market technology experiment, and the dot.com bubble would give us the kind of product that could change how people sought to capture alpha. We knew what traders and investors needed to see because we were also its intended audience.

This philosophy holds true to this day.

Our own initial feedback drove changes back then, today it is our customers who give us valuable feedback. With our technology customers often become partners and partners become customers too. Our customers and partners are our lifeblood and we thank you for all of your support!

The world is littered with good ideas but many of them never see the light of day. In order to bring a good idea to market you have to have a great combination of different talents. In our case you have to have nothing short of incredible software development. Initially there was just one. The man himself, Philip Smolen. We don't joke around when we say we have the "Good Will Hunting" of code writing. Simply put this man is a Juggernaut. And now he leads a team of Juggernauts as he's learned to identify, attract, and nuture others with similar talent. So many props go out to our development team who make the magic happen.

Everyone who actually has done a business deal can tell you that the art of the deal is an art. To an extent you have to be born with it. Enter my good friend David Aferiat. Here is a man who took a leap of faith at the perfect time. Learned all there was to know about the trading business and put his talent of relationship building and deal closing to work! David's ability to communicate the value proposition of our technology at both the executive and management level of business was instrumental in us forging long lasting mutually beneficial enterprise licenses. Cheers, sir!

The next bit of thanks goes to our COO Mr. Brad Williams. It takes a very unique individual with the skill set that allows him to speak business development, sales, and be able to distill requirements into a language that software development can take and make into a product. There is a notion that the customer is always right, but as we all know from business sometimes, you can't take anything literally. Brad engages customers and understands not only their words, but their unspoken desire and needs.

Every customer that needs support comes in contact with different members of the team. Marissa Hill is our point for internal and external communication - relaying waves of information to the appropriate team members. For your educational needs Jamie Hodge is our resident expert on getting started with the software and building your alpha hunting strategy. You can have the most amazing software but unless there is support to help you get started it can be like that piece of gym equipment that serves as a coat rack in your garage :-)

Thanks to our amazing support team that helps customers get the kind of user experience that makes them see why Trade Ideas is the leader in the field. So there you have it. Thanks to all of you, customers, partners, and team members new and old.

On the Verge... Introducing Barreleye

2011-10-16T09:23:00.000-07:00

Think of the calm before the storm.

Think of the change that suddenly makes the way things were previously done seem quaint - like a rotary phone or a phone booth.

Here comes something we know will have a similar effect on financial market participation.

Let me put it into historical context: A tale of two markets.

My career in trading started in 1994 after graduating from The University of Texas in Austin. E*TRADE was a private company. A small group of savvy retail investors were already taking advantage of technology in the market in a way that would make most traders today very jealous. It was the time of the SOES Bandits. Mind you they were called SOES Bandits by the market makers who did not like other people taking their easy money. SOES Bandits were the pioneers of day trading. These small offices were set up because at that time it was the only place you could have fast T3 Internet and direct connections to the NASDAQ Work Stations.

Here's what Market Makers disliked: The instant access to market liquidity gave SOES Bandits the ability to beat Market Makers at their own game. You pressed a button and instantly had stock - instantly at the front of the line, ahead of the majority of others who still used phones to place their trades!

Using Level 2 data SOES Bandits could determine which of the big firms were in line to buy or sell - an effective tool at the time that determined once Bandits where at the front of the line, which direction to trade.

The days of the SOES Bandits are long gone. Today we find a market with virtually zero technical advantages for the individual investor.

That is until now . . .

Trade Ideas' recent development focuses on the creation of a completely new way for participants to understand the market moments before they make a trade. The tool is code named "Barreleye" and if you want to understand why just google the term :)

Order entry will completely be transformed! No more phone booths!

Stay tuned.

Nasdaq Velocity and Forces is the New Level II

2011-09-18T10:13:00.000-07:00

Maybe I've been in this business too long. There was a time when level II was revolutionary. Even in the early 90's only a few people had it, and they had a huge advantage over people who didn't. When I was learning to trade in 1994 we would watch level II data and try to follow GSCO and MSCO and MLCO and HRZG and JEFF. In those days Market Makers had to be good for 1000 shares on the best bid and best offer. You could see bidders coming in and offers stacking up and take advantage. In 1997 ECN's like ISLD and INET got in the game and the advantages started to fade.

Before Trade Ideas, in what we now call the $50 Million Dollar Education (Thanks Menlo Ventures) we were building a trading platform to compete with REDI Plus. I visited a lot of potential customers. By this time everyone knew what level II looked like. Two of the most popular customer questions were

1) How can I see it?
2) How can I hide my orders so they don't show up?

Please take a second to think about those two questions together. Everyone thought they were the first to use this tool, when the tool was in fact already well established. If you're new to it, and you can figure out how to fake it, then what makes you think any of it is real? Below is from one of our market data feeds. http://www.nanex.net/aqck/1521.HTML

The chart below shows how many quotes it takes to get $10,000 worth of stock traded in the U.S. for any point in time during the trading day over the last 4 years. Higher numbers indicate a less efficient market: it takes more information to transact the same dollar volume of trading. Quote traffic, like spam, is virtually free for the sender, but not free to the recipient. The cost of storing, transmitting and analyzing data increases at a higher rate than its rate of growth: that is, a doubling of data will cost significantly more than twice as much.

This explosion of quote traffic relative to its economic value is accelerating. Data for September 13, 2011 is the thicker red line that snakes near the high. There is simply no justification for the quote traffic that underlies this growth. Only the computers generating this traffic benefit when they successfully trick other computers or humans into revealing information, or executing trades. This is not progress. Progress is almost always accompanied by an acceleration in efficiencies. This is completely backwards.

And to anyone who might say: "To my knowledge there's been no proof shown that high-frequency trading has been detrimental.", we'd like to submit this as exhibit A. We think that a 10-fold increase in cost would be considered "detrimental" by most business people.

And that's just what's on the surface. I've read multiple articles like this. There's just a tremendous amount of traffic out there with no obvious value. The number of quotes keep increasing as the value decreases.

The article suggests malice and fraud are behind the explosion in bandwidth. My experience in technology suggest something far more banal. There is a saying a fool with good intentions is more dangerous than an enemy. How many people wanted a piece of high frequency trading but didn't really know how to get there? They hire a cheap, inexperienced programmer, and they produce a lot of activity. But they aren't really doing a good job. How else do you explain all of those quotes that are pegged to exactly 50¢ from the best bid or offer? What good could really come from constantly updating those?

That's why we're investing in something new. We've always liked the last and the NBBO because they are fast and they are real. Now we also offer NASDAQ Velocity and Forces data. Like level II used to be, this is the way to see the orders before they happen. Unlike level II data these orders are real. While there is no such thing as the Holy Grail in terms of predictive value this is the best way to gauge the real market sentiment, as quickly and accurately as possible.

Please check out our new alerts and filters.

NASDAQ and Trade Ideas Power Punch

2011-09-15T09:52:00.000-07:00

We gave you hints that behind the scenes, work on one of the more powerful innovations to hit the trading markets was happening. Today we released Nasdaq Velocity and Forces data completely integrated as alerts and filters inside Trade Ideas. Why is this such a big deal?

This is pre-trade data. This is orders coming into the system before they are executed!

Put another way: Velocity & Forces data inside Trade Ideas allows you to scan the whole market for buyers and sellers versus just price action and trading patterns. Imagine you could color code those traders in the iconic images of them in the pits and automatically tally which trade direction they were about to take before they started shouting. Buyers or sellers - which is the larger group?

NASDAQ recognizes Trade Ideas as the first and exclusive tool in the whole world to use this technology and now it's in your hands. Patent pending.

You can combine existing Trade Ideas alerts and filters with Nasdaq Velocity and Forces data to your search. For example show me a channel breakout with large number or buy orders or a channel breakdown with a large number of sell orders! There is almost an unlimited way in which you can slice and dice the data to give yourself the ultimate advantage.

Here's an example strategy we posted in our support forum: http://forums.trade-ideas.com/index.php?topic=592.0

This is a one of a kind technology and if you are even remotely trying to get some edge you should be looking at this data in real time!

Here are the definitions of the alerts and filters based on NASDAQ Velocity and Forces data.

Quantalitics The Shape of Things To Come

2011-09-11T14:50:00.000-07:00

When the going gets tough the tough get going :-) Everyone who is involved in any kind of trading for income knows that recently the game has been challenging. Very rarely are professional endeavors easy but lately the market has been especially tricky. Why is that the case? There are several reasons:

For starters traditional metrics that measure price action are terribly antiquated for today's tape. Remember that indicators like the RSI (Relative Strength Index) were created over 40 years ago. Japanese Candlesticks go back something like 1000 years. These same indicators are present in every major chart package. The problem is while these indicators have some informative value nobody is giving you tools that help you understand and what to do with stocks when certain indicator scenarios present themselves.

The feel. In sports it is called the zone. It is when all planning is put to the side and you execute the game plan. It is the reason that a Stanford or Harvard MBA does no good in the trading world. You can't just write an equation to solve the market alpha problem. You have to get a feel. The market is a reflection of our collective conscious. Support and resistance lines are just areas that attract your eyes. You have to figure out what to do when the time comes and that is not easy.

The problem with feel is that it us usually a direct derivative of bloody noses. I learned how to trade through over 15 years of making mistakes and dealing with the types of emotions that come up when you are hit hard over and over and over again. Part of my fortune is timing. I learned to trade at a time when the market was in a formative phase 94-98. There were mechanical advantages that existed that no longer exist today. Nonetheless all of that served to help me get the feel. Now we are working to mold our software in such a way as to help you get the feel faster.

People all over the world are doing the same exact thing. Watching the S&P, watching the DOW, watching Gold. People watch that on various time frames. If you are looking for an edge doing the same exact thing that everyone else is doing I have some bad news for you, it's not going to happen. You have to do something different. When Tiger Woods came on the scene in golf and started lighting up tournaments people in the golf world started to examine what Tiger was doing. What they found was that Tiger practiced differently from most other golfers in quantity and quality. Plus he spent an enormous amount of time at the gym working on the physical body to help him get swing results.

That brings us to Quantalitics. Quantalitics is data stream like no other. It takes our proprietary data of intraday price action combined in a proprietary way with our statistical volume analysis and gives the viewer a stream of green and red pulses that goes right to your subconscious. Your mind's eye sees this data and starts to interpret the data as a barometer of price action. Since everyone else and their grandma is not looking at this stream you have an edge because you are looking more at the internals. Thins like 10 minute and 30 minute and 60 minute highs and lows that are taking place with a certain type of volume.

The second part of the feel is to run through 15 years of day trading without the 15 years. In all of trading software there is only one option that is available that will let you accomplish what I am talking about and that is the OddsMaker Do yourself a trading favor and just watch this video. It will be the best time investment you can make for your trading career. Put the OddsMaker and Quantalitics together and you have the best one two combination for capturing alpha in this challenging market. Take a look at some of our recent videos on how I am doing exactly that which I write about in this article!

Golf and the Art of Trading

2011-09-04T08:50:00.000-07:00

I would like to draw your attention to the similarities between success in golf and success in trading financial instruments. Mental specifics involved in properly executing a golf swing and shooting a low score are almost the same as they are in executing a trade, managing risk, and taking profits. If you allow yourself, you can take advantage of the mental training aspect of honing your golf game to significantly improve your trading results.

The Swing:
One of the more difficult aspects of executing a golf swing is understanding that the act of swinging a golf club to send a small white ball at an intended target is subconscious. What does that mean exactly? High level it means there are so many parts in motion the human brain simply can't consciously control all of them at once. When the brain tries to control the varied aspects of the swing during the swing, disaster happens and you hit terrible shots. In order to swing the golf club well you have to give up that need to control your body. You have to ask your body to swing it the right way and hope that it is listening.

Bad Preparation:
Giving up control is not as easy as it might seem. Not only is the act of hitting the golf ball completely different from what people expect, high handicap golfers have terrible practice habits. These facts are well documented and researched by the PGA. Weekend golfers tend to get ready for a round of golf by hitting many balls at the range. This is called grooving a swing. After a little bit the ball starts to do the right thing and they are able to repeat this swing. However, as soon as they get to the golf course to play and keep score they become very frustrated when their tour-level range swing does not seem to ever come out on the golf course. Professionals practice to score. Instead of banging away with your driver for an hour like the amateur a professional has a specific practice routine which usually means spending the most time on the putting green where they score!

Fixing the Wrong Problem:
Finally, most high handicap golfer suffer from "Paralysis by Analysis". They attempt to think their way through the golf swing focusing on the mechanics. Is my wrist hinged? Did my head move? Did I shift my weight laterally? This type of thinking is a kin to being stuck in quicksand. The more you think/struggle the more you get stuck.

The Solution:
If you want to score well in golf, and it is not easy, imitate what is done by professionals. They approach the game differently, they practice differently, and that is why they get results. We will discuss the solution more as we delve into the trading similarities.

Placing A Trade:
The act of placing a trade, means committing capital and getting your stock or option or ETF or whatever instrument you are trading and then hoping for the optimum result. That instant in which your finger presses the buy or short sell button is akin to swinging your golf club. Buying 200 shares of AAPL as it comes into a level of support and trying to play the bounce for 4 points is similar visually to driving a golf ball 290 yards down the middle of the fairway with draw spin. So how do the pro's do it? In golf, the professionals see the shot and shot shape before they take a swing. They visualize very clearly what they want to take place. So just like a professional golfer if you want a good trade you have to visualize it. See yourself placing the trade and seeing the P/L and watch yourself taking profits. Once you place the trade you must come to terms with a simple fact. Actually you have no idea what will happen. Most amateur traders just don't want to admit this simple fact. Nobody knows the future. So, just like the pro's in golf you have to visualize the desired result but have confidence that if the desired result does not happen you will be able to recover.

Bad Trading Practice
There are two common camps of amateur traders when it comes to preparation. Both produce poor results. The first group practices by paper trading. They spend countless hours sitting in front of a computer playing the market without any real money at stake. Much like the range golfer the paper trading master gets pretty confident after seeing the paper profits pile up. Also, just like in golf the paper trader becomes frustrated quickly when paper results never translate to actual similar returns when real money is on the line. If you want to take the paper trading approach and apply professional golfing rules to it here is what you have to do. Practice losing. That's right, practice losing. First know exactly what you are willing to lose on the trade, then get in front of your paper trading terminal and take your losses over and over and over again. This is like the professional golfer putting. Get good at getting out quick for a small loss. Forget winning trades when it comes to paper trading. This practice of losing small often is what will give you confidence when trades do not go your way. Taking small loses properly is where you as a trader score.

Trading Over Analysis
The second group of amateur traders has a hard time just pulling the trigger on a trade. To them all of the magic elements such as RSI, EPS, PE, SMA 200 and 50 crossing over and whatever other stuff they believe is predictive must take place. They pour over SEC filings and Blogs about this and that. This group of traders needs to believe that they have the "Right" set up. It is a very dangerous type of thinking because believing that you are correct makes it almost impossible to do the proper thing and reduce risk when the market goes against your analysis. Imagine if Tiger Woods could only hit the ball if it was nice out with no wind. It might work well on a simulator but in real life you have to be prepared for the uncomfortable. Professional traders try to avoid putting so many unnecessary burdens in front of their success. They can trade in either direction simply getting out of trades that don't go their way until they catch the right wave and ride it to alpha town.

In Summary:
I like to keep things simple so I will boil it down to this. Visualize and practice. Vizualize the good result you want in a trade and practice over and over doing the right thing when the wrong thing happens. The wrong thing will happen a lot! If you have any doubts about the value of visualization and how it can help your trading Google "Jack Nicklaus Visualization". Jack Nicklaus is the greatest champion in modern day sports. He did not get there by thinking about the mechanics of his golf swing.

Why Trade Ideas
You have seen me post videos of how I use Trade Ideas and how I place trades. You have seen my P/L. The best golf analogy for Trade Ideas is that it helps me with my course management. In a round of golf, many amateur golfers pick the wrong club and don't know their distance to the pin or the hazards. Trade Ideas is like a golf GPS with caddy tips. I use it to find shapes of movements that appeal to my trade vizualization. I also use it to gauge strength and weakness much like a golfer might throw some grass into the air to see which way the wind is blowing. I use the OddsMaker like a driving range on steroids. I am able to practice my shots more efficiently as I am able to run through more practice rounds than is possible if I was just paper trading. I trade professionally and if you follow these tips so can you!

Next Generation Tools from Nasdaq and Trade-Ideas Partnership

2011-08-16T12:04:00.000-07:00

There comes a time once in a while when a real deal changer in terms of technology for traders comes to the market. This was the case with Level 2 data and SOES and SelectNet in the early nineties. That time is almost upon us again.

Specifically what we are talking about is the marriage of Nasdaq's proprietary analytic data called Velocity and Forces which measures the speed and inclination of incoming orders before they are executed on the market with Trade-Ideas global alerting and filtering. The result is a new depth of information to make the most informed trading decisions possible.

While neither product is completely new the combination is a power punch that simply has never existed before.

First of all you will be able to now watch the entire market in real-time applying this proprietary analytic to the data. Examples: "Show me 60 highs as they run into large NASDAQ V&F Sell Pressure" Or "Show me stocks in a narrow range with NASDAQ V&F Buy Pressure building" this is the next level stuff and you can only get it through Trade-Ideas. For anyone who remembers how it was important to be able to follow certain market makers who were referred to as the AXE, you know names like GSCO, and MSCO, and JEFF before the market because so fragmented with ECN's. Those traders can now enjoy a new competitive advantage as we serve up the next generation of AXE data.

We believe it says quite a bit for NASDAQ to work with Trade-Ideas to bring this next level of information to the broad trading market. It is time to take advantage of the latest cutting edge technology and sign up!

Time Running out on $65 Monthly Rate

2011-07-22T08:27:00.001-07:00

As many of you hopefully already know the prices for Trade Ideas subscriptions are going up August 1st by 15% across the board. If you subscribe before August 1st or if you are already a subscriber you will have successfully locked in your old rate!

Right now while things are still slow is the best time to take advantage of all the new features we have added at the old price. Go on, get trained, and get ALPHA!

Trade-Ideas Webinar

2011-07-07T10:21:00.001-07:00

How to get the most out of Trade-Ideas Pro

Wednesday, July 20th, 2011 at 2:00pm EST

Jamie Hodge, Trade-Ideas Director of Education, will spend an hour walking you through Trade-Ideas Pro and it's latest functionaltiy. This webinar will cover the following topics:

Basic Alert Window Functionality
Using PreConfigured Strategies
Customizing Your Alert Configurations
Using History
The OddsMaker
Top Lists

Space is limited. Reserve your Webinar seat now at:

https://www2.gotomeeting.com/register/804166355

After registering you will receive a confirmation email containing information about joining the Webinar.

Trade Ideas Price Going Up August 1st

2011-07-06T08:39:00.000-07:00

Dear Traders,

We are almost ready to release the new and much improved version of Trade Ideas

This is a complete redo of our software from the ground up.

We are now utilizing the latest in what technology has to offer to give our subscribers the best streaming market analysis on the market. Not only do you have the ability to work with our software in several different new ways but you can now build your own custom alerts and filters using our scripting language

As a result of this complete change in the software we are raising prices to $75 dollars a month from $65 dollars a month. However, you have the ability to keep the old price and never be subject to the increase. Here is how:

Subscribe before August 1st it is that simple!

We are very excited to continue the innovation that has made Trade Ideas the leader in this market niche :-)

The new Multi-Strategy window

2011-06-28T09:14:00.000-07:00

Version 3.0 of Trade-Ideas has many feature enhancements. One significant improvement is the MultiStrategy window which allows users to include multiple full-featured strategies in a single Trade-Ideas window.

Each strategy can have a unique color scheme for easy identification.

You can download the above MultiStrategy window example here: http://forums.trade-ideas.com/uploads/Multi-Strategy_blog_example.zip

Unzip the file and then load this into your Trade-Ideas window from the Toolbar under File, Load Window...

New Version 3.0.17 is out

2011-05-26T11:54:00.000-07:00

New Trade Ideas Pro Beta version 3.0.17 is out. This version gives you more ability to add special columns to our top lists. In addition there is improved speed and stability. Plus the graphical indicators are getting pretty cool :-)

If you have questions about the new version or need assistance with our existing version do not hesitate to set up your training session!

SMB Capital and Trade Ideas Partner in building SMB Radar

2011-04-27T13:34:00.000-07:00

SMB Radar powered by TradeIdeas made its debut today.

Take a look at what the best of education & technology looks like. Namely, SMB's excellent trading methods paired with custom alert programming which we call Trade Ideas Quant (TIQ).

See @smbcapital at the controls. Demo provided by Stocktwits.tv http://bit.ly/jgo9ro

We'll have more information about this partnership and the SMB Radar in the days to come. Visit SMB Capital to learn more: http://www.smbtraining.com/overview/smb-radar

New Version Getting warmer

2011-03-27T10:11:00.000-07:00

As many of you already know we are working on a completely new version of Trade Ideas Pro. What did we do differently this time? Ok the first thing is this, we took the evolution approach versus the revolution. It means that at first glance you should not find the new version too different. The most important things are under the hood. We have discussed this in other blog posts but under the hood is where our users will get the most bang for their buck. The new version is in C#. We did this for a number of reasons. We will be able to do more customizations quickly. Our business is a business of change. New features and ways to combine data force us to develop very quickly. If you want to see how fast Trade Ideas changes look no further than here.

But that rate was with the old code. The new code is going to give us even more power. If you want to get the latest version of our beta like I just did, click here. Select the second optional link,

In terms of key features one is a next generation of top lists. You will be able to make some amazing queries and see almost unlimited combinations of data. Consider stocks that have gapped up 5% or more sorted by which is up the most in the last 15 minutes as in the attached picture. All sorts of things like that are now going to be possible.

Social and Quant a New Business Model

2011-02-27T08:23:00.000-08:00

CEP stands for Complex Event Processing. If you want to read up on it here is the link from Wikipedia
The bottom line is that to have an edge you need to be able to process many things at once.

There is a problem with the CEP acronym. The problem is the "complex" part. So how does this relate to Trade Ideas and doing better in the market? Having been in business since 2002 we know one thing for certain, most people are only scratching the surface of the power of Trade Ideas. Here is an example using negative number, did you know that this is how we work with the downside?

Our set of filters is the most powerful analytic scalpel on the market today but many people intuitively don't get it and don't have the time to learn. In order to help you get more out of our software, but at the same time avoid all the hassle we created a different version of our stream in a partnership with StockTwits. The idea was simple. Take some of the best streams that we have created and sell them as individual subscriptions for a fraction of the cost.

Of course you can't configure them, but that is okay because you probably don't want to learn how to do it. Those that want to dig deeper can always use our core offering. However for someone that wants the instant gratification without the configuration look no further. These streams range anywhere from $9.99 per month to $19.99 and they are powerful and easy to use. If you were hesitant about spending $65 a month this new version of our software is perfect for you. There is even a 14 day free trail so give it a whirl. Your future is on the line!

In New York with NASDAQ

2011-02-22T14:21:00.000-08:00

NASDAQ Velocity and Forces® — A Real-Time Tool for Tracking Market Direction, Momentum and Liquidity

NASDAQ Velocity and Forces® measures levels of pre-trade order activity in the NASDAQ trading system to indicate the intensity of trading interest and relative buy versus sell pressure.

Market Velocity measures the intensity of the trading interest using order messages entering NASDAQ trading systems — Execute your trading strategy before other traders by comparing the expected order activity in a security with the current activity to detect surges in trading interest before trades occur.

Market Forces provides a real-time, pre-trade indication of the direction of the market by indicating whether trading interest is surging in buy or sell orders. Used in conjunction with NASDAQ Market Velocity, traders can determine trends and when to place buy or sell orders to secure the best prices.

Velocity and Forces offers the perfect pairing of market intensity and trend awareness to arm you with the insight necessary to predict the most effective trading times. As with any trading tool or strategy, NASDAQ Velocity and Forces does not guarantee profit.

See stock specific NASDAQ Velocity and Forces data in the new ticky™! Look for new alerts and filters coming soon that will utilize Velocity and Forces data.

Garbage in Garbage out

2011-02-01T12:01:00.000-08:00

This happens from time to time. I like to share it with you when it's obvious on the web, so you can see it for yourself. The simple fact is that market data is not as precise as we'd like it to be.

Market data is our lifeblood. We examine every bit in so much detail. And we know it's important to you, too. So we always try to get it right. But sometimes, the data just isn't consistent. Sometimes, different sources will give you different answers to what you thought was a simple question. Yesterday, 1/31/2011, the question was, what's the opening price for VIT?

Take a quick look. That's quite an interesting stock chart. That's the sort of thing that a lot of our customers are interested in.

Just one problem. When the day started we said the open price was $34.25. Later we changed that number to $32.44. If you use our change from the open filter http://www.trade-ideas.com/Help.html#WSF_MinFOP that would make a significant difference. Why did we change it? The details are technical, but obviously it came from the market data. Obviously it came from what people reported to the exchanges, and what the exchanges passed on to us.

So, what's the right answer? That depends on who you ask. Look at this list of daily prices that I got from Google.

It clearly says $34.25. Now look at the 5 minute chart from Google. Notice that I was hovering my mouse over the first 5 minute candle from 1/31. (Notice the blue circle on that candle, at the opening price.) So the prices near the top of the chart correspond to that candle. So the opening price for the first candle was $33.48. How can the open for the first candle of the day be different than the open for the day? Clearly there were data problems. At least three different answers seem reasonable for the opening price for that stock.

We know how important the data is for your trading. We always do our best to get this right. But, at the end of the day, you can't expect perfection. We can't give you better data than the exchanges give us. As you trade, please understand that market data is just the best approximation that's available, nothing more.

More info: http://www.trade-ideas.com/VideoHelp/Menu.html?video=Configuration%20Window%3A%20Bad%20Market%20Data

Starting the New Year Right

2011-01-04T09:48:00.000-08:00

It is easy to get overwhelmed with information today. Not just from the market but from a host of other venues that try to help one find what to trade. Research is getting faster and faster. With so many things coming at you we thought we would take a small step back and show you the various ways to access the most advanced number crunching software available today.

1) Trade Ideas Web
2) Trade Ideas Pro

Both versions of the software do similar things but the access changes. Trade Ideas web allows you to get real-time streaming alerts on your mobile phone, iPad, or web browser on your desktop. It is easy to use and easy to access. However as with many web based products there are some limitations. Speed and flexibility are some of the things are compromised. For the professional who needs to have power at his/her fingertips there is Trade Ideas Pro. This is the desktop version that gives the end user the kind of power that allows you to save layouts and customize views in a way to give the end user the ultimate in custom experiences!

You can try out the software for free by typing in DEMO as the username and password.
If you want to get the latest on how we are using the software follow us on Twitter by following either @TradeIdeas1 or @TradeIdeas.

We spent quite a bit of time creating the video help & YouTube archive to give you access to all the tools and tricks to get you through the learning curve quickly. If you need more help contact us and arrange for your free training session it is a great way to get started.

Let's enjoy the new year and start profiting today!!

Happy Holidays from Trade Ideas

2010-12-24T08:53:00.001-08:00

The happiest of holiday wishes from all at Trade Ideas!! We are humbled and appreciative of all of the support and great feedback we have had in 2010! Many exciting things are in the works for 2011.

The Trade Ideas Team :-)

Stock Market Alerts vs. Stock Market Filters

2010-10-28T00:29:00.000-07:00

Configuration Window: Simple Moving Averages

We are constantly adding new instructional videos. I want to highlight this one because it shows some of the basic principals that are confusing to many of our new users. This video shows the difference between a stock alert and a stock filter. It also shows how to describe a stock chart in terms of alerts and filters.

Trade-Ideas Webinar

2010-10-26T11:41:00.001-07:00

How to get the most out of Trade-Ideas Pro

Webinar Date: Wednesday, October 27th, 2010 at 12:00pm EST

Jamie Hodge, Trade-Ideas Director of Education will spend 45 minutes walking you through Trade-Ideas Pro. This webinar will cover the following topics:

What is Trade-Ideas and How Can It Help You
Basic Alert Window Functionality
Using PreConfigured Strategies
Customizing Your Alert Configurations
Using History
The OddsMaker

https://www2.gotomeeting.com/register/451249203

Jeans 4 Justice

2010-10-14T06:50:00.000-07:00

Congratulations to our own Marissa Hill (left). While participating in a charity fashion show, the jeans she created and modeled brought in a record breaking price at auction!

For more information about Jeans 4 Justice: http://jeans4justice.org/

More information about the show: http://www.facebook.com/event.php?eid=21624490115

Trade Ideas Quant Servers Getting Faster

2010-09-29T09:47:00.000-07:00

David Wooderson from Dazed and Confused circa 1993 doles out a terrific metaphor that describes what we have in our California server farm :-)

This is not your grandpa's market scanning software. You might want to ask yourself why companies like eSignal, IB and the like don't have this type of killer software tool. The answer is simple. They can't build one.

This is like a Google but for stock and ETF price action in real time. You ask it and it will keep giving it to you until you say I don't want it anymore. So not only is America smitten but having come back from Europe we are pushing hard into the overseas markets. Soon to come will be the German market DAX and then Forex. This is going to be some really cool stuff because while all of this is happening our own internal skunk works is rebuilding TI Pro from scratch. Oh yeah baby, out with the old and in with the new new @#$t!

Trade-Ideas expanding to Europe

2010-09-22T08:37:00.000-07:00

Trade-Ideas is broadening its reach!

Europeans are excited to get their hands on the Trade-Ideas technology. Soon our statistical analysis will expand from North American equities to International exchanges as well.

In the photo below, Dan Mirkin speaks at at conference in Budapest.

SMB Capital and Trade Ideas Partner in building SMB Radar

2010-09-09T11:16:00.001-07:00

A little while ago during an epic gathering at Lindzonpalooza in Coronado Dan Mirkin, Brad Williams and the heads of SMB Capital got together and thought....we should do more sh@t together. Over a subsequent round of golf at the epic Torrey Pines, details were hashed out to meet up in California and work through the designs of a new type of scanning tool that was specifically needed for the masters of the one good trade.

Custom Software makes for Powerful Analytics

Pictured above is the New SMB Radar and it does some really cool stuff. Designed in more of a dynamic sortable list format versus the traditional streaming Trade Ideas format this piece of software focuses on the specifics of SMB custom formulas.

If you want a piece of this one good trade just contact the guys at SMB and see what it takes to join the team!

New Widgets place Stock Scanner on your site and blog

2010-08-23T09:14:00.000-07:00

Trade-Ideas Stock Market Scanning goes to the Cloud!

Trade Ideas is giving you the ability to tap our cloud computing servers and place a stock scanning widget right on your web site or blog. The widget, which is free works with delayed data but it will make your audience much more sticky :-)

If you like we can make slight adjustment to the widget by showing stocks from a certain symbol list.

Trade Ideas Stock Scanner goes to Europe

2010-07-26T07:14:00.000-07:00

We at Trade Ideas have been working hard to shake things up recently. Behind the scenes we have partnered with a large German distributor to add our powerful stock scanner analytics to a fully functional stock and Forex trading platform.

Our CTO Philip Smolen and Dan Mirkin will be travelling to Europe in the end of September to launch the product. We are looking forward to giving the European market participants the power that Trade-Ideas stock scanner has delivered to US market traders over the last 8 years. If you are interested in this data please send us an email at info@trade-ideas.com

See an Example of Robust Automation From Benchmarq Trading Partners Using Trade-Ideas

2010-07-10T10:25:00.000-07:00

Join us for a Webinar on July 14 at 12pm EDT featuring: Nick Nazarov, Managing Member, Benchmarq Trading Partners

Do you have a viable trading strategy but lack programming skills?
Want to trade multiple systems simultaneously but lack the manpower and discipline to execute them efficiently?
Learn the answers and much more in this unique presentation from a prop trading industry veteran.

In this presentation, our speaker will cover:
How The B.A.T.M, in conjunction with Trade-Ideas, can unleash your trading concepts with

No coding or scripting
Managing multiple positions with institutional strength risk management controls
Dynamic auto-hedging

Whether you are an experienced trader looking for an edge, a group manager that wants to limit risk, or a newbie that needs direction, this presentation is a must-see for all.

Wednesday, July 14, 2010

12pm EST

30-45 min presentation

15-20 min Q&A

Space is limited.

Reserve your Webinar seat now at: https://www2.gotomeeting.com/register/287375307

Before or after the webinar you can sign up for a demo account (Use the promo code TIBATM): http://www.benchmarqtp.com/demo.php?PromoCode=TIBATM

Note: Benchmark Trading Partners is a 3rd party that offers brokerage services and technology integrated with scanning technology from Trade ideas LLC.

Trade Ideas Stock Scanner Free Powerful Tools for Profits

2010-06-05T14:28:00.000-07:00

One can get very powerful stock picking information for free from the Trade-Ideas web site. Would you like to know which stocks have at least doubled in the last 20 days? This is easy to do. Take a look at our screen and see how easy it is to find the answer to this question.

Here are the specific scan paramenters:

1) Stock has Min Price of .50 and a Max Price of 50
2) Stock has to have increased at least 100% over the last 20 days

What makes this particular screen powerful is that it does not mean that these stocks are still on highs, it just means that they have had a move of 100% or more in the last 20 days. There are some great opportunities to position yourself either long or short in a scan like this.

To use this stock screener you do not have to subscribe to Trade-Ideas simply create a username and password and you are ready to go.

Stock Scanner Adventures in Technical Analysis, or How to Compute the ADX

2010-05-17T12:45:00.000-07:00

When people watch our real-time stock scanner, they sometimes say that our formulas don't look exactly like what their trading or charting software says it should look like. We try to minimize this, but there's only so much we can do. When doing millions of real-time computations a second, there's bound to be something that you disagree with. Most of the time the difference is small. However, the ADX indicator turned out to be one of the most inconsistently defined indicators that we've come across.

We recently changed our ADX to look more like what eSignal says. It used to look more like RealTick. What's the difference? The primary difference is using a Wells Wilder sum vs. a traditional EMA.

What's the difference? Sadly, the difference is mostly terminology. Some people talk about an EMA in terms of %, and other people talk about it in terms of bars. The % version seems to be more consistent. When you talk about N bars of smoothing, that can mean two different things. It can mean that the most recent value represents (2/(N+1))*100% of the most recent EMA. Or it can mean that the most recent value represents (1/N)*100% of the most recent EMA.

I say "sadly" because neither of these gives you any more power than the other. Do some quick algebra and you can see what I'm talking about. Let's say that you're used to using a charting package that uses the first formula, and you always used 14 bars as an input. Now you switch to a charting package that uses the second formula. You can type 6.5 in as an input to the new charting package, and you will get exactly the same results. Just one catch. Most charting packages won't let me enter 6.5 into that field! Again, there's no mathematical rationale for that, but it's common. However, if you type 6 or 7 into that field, you will see a result that is generally similar to typing 14 into the other charting package.

So, which version of the formula does your software use? Don't ask me! They're all different. And which one is right? I've reviewed a lot of sources, and they all seem to say different things. I like this one, because it lists multiple answers. Average Directional Movement Index ADX Formula in C# | Dinosaur Technology and Trading If you don't like that opinion, Google can give you a lot more.

There are other small differences. Some people like to use an N period SMA to start their EMA. I can't see any mathematical rationale for doing that. But it's common so it's worth mentioning. It's also worth mentioning that not everyone uses the same number of bars for the initial SMA!

How important is that? Well, it depends how much data you are looking at. The earlier entries often show more differences than the later periods. If we are looking at two different charting packages, and we look at today's value, we would expect fewer differences than if we were looking at the earliest value printed on the chart.

That brings up another difference. How much data are you looking at? Like all indicators based on EMAs, adding more historical data will change the value for today! How much of a difference? It depends. If the chart is pretty boring, older values quickly become less and less interesting. But if you go back a little further, and suddenly one day the price dropped by 50%, then suddenly today's value will have a noticeable change.

Many of these issues are common to a number of different indicators. But I've been looking at a lot of different definitions recently, and I've found other discrepancies in the ADX formula. This one comes from a forex site. Some people say that the ADX started with forex traders, so maybe we should take a look. Average Directional Index (ADX) | Forex Indicators Guide There's another subtle difference in here. Their formula for the ADX is certainly shorter than others. Look at their definition of PDI and MDI. Most people say that at least one of these has to be 0. But not their definition. Is this a typo? An improvement done on purpose? Hard to say.

What's the moral of the story? These things are not exact. Different people compute these formulas differently. And the underlying data is not always correct or the same for everyone. (See Configuration Window: Bad Market Data) If you're looking for something simple and precise, go back to bingo. Stock trading is challenging. We're here to help, but you're not always going to get a simple, perfect answer. You have to do the best you can with the data available.

New Milestone for Trade-Ideas Stock Scanner 350K unique users

2010-05-12T09:09:00.000-07:00

Today we are proud to announce that the Trade-Ideas stock scanner has crossed over the 350,000 unique user mark. Since inception in 2002, our real-time stock scanner has attracted active traders from all around the world as they seek to get the information edge.

Consider this, TradeStation, which is an online brokerage with a market cap of 400 million specializing in technical analysis has less than 50 thousand customers. What this tells us, in terms of our technology is that active investors across all brokers need our services, because you can't get them in other places. Imitations are flattering do not count.

There are some amazing developments in the pipeline. Our users should note how fast we have been adding functionality lately. This is just the beginning. Our team has been working on a complete redo of TI PRO so get ready and get excited, the best is still to come.

Trade-Ideas Stock Scanner adds New Strategy

2010-05-11T10:59:00.000-07:00

As we continue to separate ourselves from other analytics vendors, we are happy to add another powerful set up to our extensive array of real-time stock alerts and filters . This strategy is called the Opening Power Bar strategy and just like before we customized it to make it better than the original and harder to imitate. Please continue to give us your feedback and we promise to add the functionality that you all have been waiting to see!

Stochastics now in Trade Ideas Stock Scanner

2010-05-03T08:26:00.000-07:00

Hi Traders,

We enjoy showing you, our customers, why our scanner is simply the best stock scanner on the market today. Just a few days ago we added the stochastics alerts to our feature rich alerts menu. This alert tracks the stochastic indicator on the 5, 15, and 60 minute time frames. In addition we put a little proprietary math magic in our stochastic algorithms, so that when imitators try to copy our ideas they will be getting completely different results. Enjoy the innovation, there is a lot more coming in the very near future!

Trade Ideas Stock Scanner adding functionality at breakneck speed

2010-04-12T08:49:00.000-07:00

For those of you who follow our What's New section you probably notice that we have been adding a lot of functionality in the last few days.

Recently added features now include:

1-2-3 continuation buy and sell signals
MACD signal line and zero line crosses
ADX and DMI
as well as modified versions of our pullback from highs and lows alerts

We have been working behind the scenes on some big fundamental infrastructure changes that will really let us push the envelope. Please let us know if set ups that interest you and we will see if we can do our magic :-)

iPhone Stock Screener Beta

2010-04-05T07:36:00.001-07:00

Trade-Ideas is about to release a new version of our iPhone app. If you want to be the first to see it, please join the beta program.

If you are interested, please send an email to info@trade-ideas. You need to include the UDID of your device. Here's some information on how to find your UDID: http://www.innerfence.com/howto/find-iphone-unique-device-identifier-udid

This new version has a lot of changes. Most notably, it shows more data about each stock.

Trade Ideas Stock Scanner Guilty of Performance Enhancing

2010-04-03T09:49:00.000-07:00

Oh boy, we knew this was going to come out sooner or later. It is now impossible to hide that using the Trade Ideas stock scanner is the equivalent of using performance enhancing drugs. For over a year we have been working on some magic on our "back end" technology. The massive server farm that crunches all of the data behind the scenes was getting a big makeover to utilize some of the more powerful new technology that just metaphorically speaking adds nitrous to the Ferrari.

As a result a lot of new features will be coming to you all by the end of next week. Here is list of some of the features:

Multi-time frame MACD signal line crosses

Daily ADX, +DI, -DI

This is of course just a taste. We are working on some amazing data visualization innovations that should take scanning to the next level. Click here to keep tabs on all the new features.

Scanning Stocks with Breaking News? A Broken Idea

2010-03-30T06:54:00.000-07:00

The world has changed for those trading on news and even stock scanning services that incorporate breaking news into their offerings. News just broke.

The recent injunction by a judge against news headline distributor, flyonthewall.com, ordered it to delay disseminating the stock recommendations of financial services firms long enough so that the firms can alert their clients first.

Flyonthewall.com argued they publish recommendations only after they become "public" and free for the taking because they emerge through other media, chat rooms, "blast IMs" or other sources. This argument was rejected by the court: just because others do it doesn't excuse the rights the authors and owners of the original research have to inform their clients first.

The order reveals what most veteran traders know - a key to their longevity:

News will always chase the tape.

News is just one way to filter market activity and direct a trader to where interesting activity occurs the same way a foghorn is one way to get the teacher's attention in a classroom. Stock scanning tools like Trade-Ideas PRO offer a more refined way to get you in front of news (one example). Squawk boxes and services come close but don't offer the customization of modeling a trader's particular stock pattern like Trade Ideas.

Let's face it : News was old even when it was redistributed in real-time. Now by court order you'll be waiting 30 minutes - 2 hours.

And Trade Ideas delivers a head start by turning statistically relevant analysis of the market's activity into a game of whack-a-mole: only showing a trader what's unusual right now and scanning for stocks impossible to find and track on one's own - or via the news.

Does your Trade-Ideas T-Shirt fit?

2010-03-28T21:10:00.000-07:00

Did you get the wrong size?
Did you wear out your shirt?
Did someone "borrow" it from you?
Let us know if you need a new one!

Stock Scanning to Make Opportunity Out of the Market's Traps

2010-03-24T12:14:00.000-07:00

Here's the beginning of a correspondence with Dr. Brett Steenbarger who wisely suggested that the exchange would make for a good blog post. That's why he's the PhD.

From the Desk of Trade Ideas
March 24, 2010

Dear Brett,

I just read your quick post regarding the "traps" the market can play on intraday traders and was inspired to model how a trader might separate real directional moves from mean reversion where stocks rise with momentum but retrace back to their previous levels precipitously.

One approach is to start with the assumption that mean reversions are the opportunity and not the trap. As a reliable stock scanning tool for recognizing custom patterns in price, volume, and volatility, Trade-Ideas is ideally suited for finding such moves:

Here's a strategy that looks for moves beyond a stock's standard deviation of volatility. It looks for upward thrusts defined as a price move of $0.50 or higher in the last 5 minutes on 250% higher than normal volume for a 5 minute candle in that stock.

Short: Up 50 Cents or More on Big Volume Spike

(Note: to import this into TI PRO copy the link address and paste it into the Collaborate dialog box when you right-click inside any TI PRO Strategy Window)

Using the OddsMaker, Trade Ideas' event based backtesting tool, I realize the best way to trade the strategy is to short it and exit under either of 2 conditions: 1. if the stock goes up (against my position) more than $0.50 or 2. after a hold time of 45 minutes. I trade this strategy during the entire market session as opportunities arise.

Here's the OddsMaker output from the last 15 days (picture attached). I create an additional measure from the report to evaluate a strategy and the trading plan associated with it: the ratio of the average winning trade over the average losing trade. I like to see at least a 2:1 ratio like I do with these results.

The second approach is to find the sustained movers and avoid the traps as you originally intended to define as opportunity.

Here's a strategy that looks for moves where stocks are either out performing the Qs or increasingly diverging (upwards) from their VWAP, or the 5-period SMA crosses above the 8-period SMA using 10-minute candles. These alerts are subject to a universe where most notably the NASDAQ and the S&P are both up at least 0.1% over the last 15 minutes and that all opportunities shown are up at least 5% from yesterday's close.

Long: Stocks Showing Strength Now

Using the OddsMaker I realize the best way to trade the strategy is to go long and exit under either of 2 conditions: 1. if the stock goes down (against my position) more than $0.50 or 2. after a hold time up until 5 minutes before the day's close. Notably I only begin trading this strategy 60 minutes after the open and enter no more trades 60 minutes before the close.

Here's the OddsMaker output from the last 15 days (picture attached). One additional measure I create from the report to evaluate a strategy and the trading plan associated with it is the ratio of the average winning trade over the average losing trade. I like to see at least a 2:1 ratio like I do with these results.

Feel free to try these strategies in real time. Happy to discuss and refine these with your thoughts!

Best regards,

David

Related Articles

Fading an Up Move: http://marketmovers.blogspot.com/2005/10/strategy-session-fading-up-move.html
Overextended Up Move: http://marketmovers.blogspot.com/2008/10/strategy-session-over-extended-up-move.html
These Stocks Trade Straight Up from the Open: http://marketmovers.blogspot.com/2009/05/these-stocks-trade-straight-up-from.html
10 Trading Principles - Strategy Examples: http://marketmovers.blogspot.com/2007/07/strategy-examples-of-10-trading.html

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

Reducing Latency and Increasing Bandwidth in Your Trading Environment

2010-03-18T09:54:00.000-07:00

Marissa recently created a YouTube video titled "Reducing Latency and Increasing Bandwidth in Your Trading Environment." http://www.trade-ideas.com/VideoHelp/YouTube_Index.html?date=2010-02-19#id36. We've gotten so much response to this, I want to elaborate on a few points.

First, a quick picture will show the path your data takes using HTTP mode vs. a TCP/IP socket. There are more network hops. But more than that, HTTP mode requires your data to be massaged and reformatted. This adds overhead and takes time.

That picture was an ideal case. If you choose to switch between HTTP and the default, high performance mode, that's what you'll see. But if your corporate firewall forces you to use an HTTP connection, it's probably so they can make you to go through their proxy server, as shown below.

The proxy server is another way for the company to monitor what you are doing. It will inspect each message, looking for porn and other things they don't approve of. This proxy server was made for individuals browsing the web one page at a time. It was never designed to support realtime streaming stock alerts. It will get overwhelmed easily. One person monitoring the stock market with Trade-Ideas is like 100 people browsing web pages. You want to avoid the corporate proxy server to maximize performance.

I also want to add a clarification. Marissa pointed to an old video to show how slow HTTP can be sometimes. http://www.trade-ideas.com/VideoHelp/Menu.html?video=Trade-Ideas%20Pro%3A%20Columns%3A%20Charts The stock charts were slow back then for a couple of reasons. That example showed HTTP used in the traditional way. Now Trade-Ideas can provide stock market data much faster, even in HTTP mode. That's because of our proprietary data aggregation and streaming compression technology. That speeds up your internet connection, even when you are forced to use HTTP mode.

A lot of people ask about ping time. As you can see in this picture, pings only give you an ideal picture your speed. They avoid the corporate porn filter and a lot of other things. They are good for measuring ideal network speed, not the actual message traffic. The latency monitor in the Trade-Ideas status bar uses a more accurate measure. We send our test message through the same mechanisms that we use for normal stock alert messages. You need that if you're trying to diagnose any network problems.

At Trade-Ideas we're always striving to make sure you get your stock market alerts as quickly and efficiently as possible. But you might need some help from your IT department. If they ask questions, this page will tell them everything they need to know. http://www.trade-ideas.com/Application/FirewallsAndProxies.html

Stock Scanner Settings in a Market Going Nowhere

2010-03-04T08:53:00.000-08:00

What does one do when it looks like nothing is happening? Traders often find themselves frustrated at times when seemingly there is nothing going on. This is a time that separates the professionals from the amateur traders.

Professionals know first of all that there is no need to push it. Getting frustrated mentally only hurts your own performance. The market could care less. The first step is to get smaller. Trade smaller share sizes to avoid being whipsawed. The second thing is to use a stock scanner to find tops of ranges for stocks and then fade the moves. When it is clear that the market is not following through use the power of analytical software to find those names that are at either the top or bottom of their 10 or 20 day range. Trade Ideas uses these filters to make such a task very easy.

Once you find the stocks the next thing to do is figure out which ones of those are statistically overdone. One great way to do that is to use daily Bollinger Bands this will find the really oversold issues at the bottom and the really overbought ones at the top. Having access to this information gives the trader an edge in an otherwise stale market that can "bleed" the inexperienced trader through frustration.

Finally understand the market is like the ocean: there's more than one current in motion. There may be calm waters at the surface but tectonic, violent activity on the ocean floor. A stock scanner that can comb the depths of the market and 'ping' all the varied activity makes for a vital, essential tool with which to navigate. See our related articles on this very point:

Frustrating Markets: Explanation and Your Edge
Strategy Session: Take Your Stock Trading to New Depths

Stock Scanner Setting to Catch the Trend-line Break

2010-02-24T11:26:00.000-08:00

The Trade-Ideas stock scanner can not only show you events that are happening now that have implications for short term day trading, it is also used to find trading patterns for longer term investing or swing trading.

One of the most powerful trading set ups is a trend-line break either up or down. What we will demonstrate now is how simple it is to create a monthly trend-line breakout system using alerts and filters that are inside the Trade-Ideas stock scanner.

Let's start with the filters. We are looking for stocks that have been trending lower as of late. In order to find that stock pattern we will use our position in 20 day range filter. We will set the maximum value to 15%. That means that stock has to be trading in the lower 15% of its trading range over the last 20 days. To avoid stocks that don't move we added a volatility filter set to have the stock trade at least a range of 1 dollar over the last 20 trading days. If you ever want to know how to set min and max values in our filters and what those values mean, click here to access a tool that we created which specifically explains everything in detail.

Now let's set the trigger to get us to see when the negative trend is broken. The easiest way to do this is to select a 5 day high as the trigger and to make sure that the high is above the high of yesterday.

In the attached picture above you can see the last stock that came across SNMX, take a look at the daily chart for yourself. Finally to make sure this strategy is viable we ran the odds using our OddsMaker. We said we were going to be buying these stocks and holding them for 3 days. Sure enough the results are pretty impressive, with a win rate for this strategy at over 66%.

Being a successful trader means finding what is working more quickly than your competition. This whole exercise took less than 10 minutes to build and test the strategy. We are certain that no set of tools on the market today can get you better and more timely results. That is the power of using the Trade-Ideas stock scanner and our back testing tool called the OddsMaker.

Click 'Buying the Trendline Breakout' for the exact set up.

What can a Stock Scanner do for you?

2010-02-22T07:53:00.000-08:00

There is lots of stuff going on behind the scenes at Trade-Ideas. As we work to bring the latest innovations in trading and investing to market we really want to hear from our users. Here is the bottom line. We have lots of alerts and filters to choose from. Basically, when you configure the Trade Ideas stock scanner, you can slice the market up in almost any way that you can imagine. That said, we know there are great ideas out there and we would love to incorporate them if possible. Here is a small example of some features that are coming soon to a Trade-Ideas stock scanner near you.

1) MACD's on multiple time frames

2) Stochastics on multiple time frames

3) RSI on more time frames

4) Top lists

All of the above is already in the works and being tested. Tell us what you want. Post a comment on the blog or send an email to dan@trade-ideas.com

We are serious about getting more of our customers involved in contributing to the feature set!

Investing Smart: Don't Trade Away Your Freedom to Profit

2010-02-21T09:28:00.000-08:00

Investing and trading are not really all that different. The question is of course the time frame. Day trading has often been portrayed in a negative fashion but in reality the mechanics of investing and day trading are the same. It is all about the time frame, but even that is a bit misleading, the truth is that it is more about control.

When one says, "I am in it for the long term", it is simply a phrase that says I am letting go of risk controls. That may sound harsh but it is true. If an investment starts to perform poorly, how long is the long term? When Ford Motor Company went from $40 per share to $1 at what point do the long term investors say enough? This is at the heart of failure in stock trading as well as investing in the markets. When you give up control, you set yourself up for failure. The big brokerages want this believe it or not. They want you to give them your money and they would prefer if you completely let them control it from start to finish.

Pricing Conditions Behavior

Ever wonder how brokers like Schwab and Fidelity still charge $8.99 per trade and try to sell it as cheap? Think about it. You just bought 100 shares of a $10 dollar stock. You just paid 9 cents a share!!! If you had to repeat the process 10 times during the day, you will have paid the brokerage $90 dollars that day. This pricing basically says, please don't trade often. When it is price prohibitive to trade often people feel like they have an excuse for why they give up the control. Do not let yourself fall into this trap. There are less expensive alternatives that are just as safe, that will give you the kind of pricing that at least makes it possible to get out of danger. Imagine a car that only turned right!

Does that mean you have to trade stocks often? Not necessarily, you just need to have the ability to do so without punishment. We are fortunate today because many market alerts and filters things that are important to long term investors, like P/E ratios, sales, and debt can be incorporated into stock scanning software where the results automatically make sure you are only looking at candidates that meet the minimum level of performance in a long term investing or trading strategy.

The Trade Ideas stock scanner incorporates fundamental data in its stock scanner results. One approach to using building useful scans consists of finding stocks are not only performing well from a technical analysis and price action point of view but exhibit: A) strong or B) weak fundamentals depending on which way you are looking to trade the stock. See all the fundamental indicators that are available in the Trade Ideas stock scanner.

When looking at strength or weakness don't settle for being one dimensional. Take advantage of all that the Trade Ideas stock scanner has to offer, including a wide breadth of fundamental data to help you zero in on winning trades!

iPhone Stock Screener, version 2, is now available in the app store

2010-02-18T05:58:00.000-08:00

Be sure to check out the recent upgrades to our iPhone app!

What's new in version 2

We've added more icons for clarity.
You can now log in to your Trade-Ideas account from your iPhone. This is not required, but it will allow you to access some additional features.
Your scans can now include custom symbol lists. You can now scan for only certain symbols, or exclude certain symbols.
You can now sync your stock scans between your iPhone and your computer. You can create a market scan on either one, and then use it on the other.

Free Realtime Market Data on the iPhone

We've gotten one request more than any other. People want to get realtime market data rather than delayed data. And they want it for free.

That's a little tricky for a number of reasons. There are exchange fees, of course. But we're working on it. We plan to set it up where you can use the data from your Trade-Ideas account or your brokerage account on your iPhone. You're already paying for that, so why not use it everywhere you go?

Do you like our iPhone app?

We've got a lot of active users, but only a handful of reviews in the iTunes store. This is a free product. We're doing it all for the publicity. If you like our iPhone app, and you want us to continue working on it, please give us a good review. Thanks!

Download our Free iPhone app

Click here to get more information about our app, including download instructions. iPhone Stock Screener Help

Stock Scanner, Stock Screener, Stock Filters: Know the difference

2010-02-11T09:46:00.000-08:00

We find that many people today are confused about the difference between common industry terms that describe software that helps to identify trading opportunities. This blog post is to help clear up this problem. Let's start at the top.

Stock Scanner - A stock scanner, like the Trade-Ideas real time stock scanner is software that watches the market in real-time and then displays events in a streaming format. That means you do not have to manually do anything to get new information. As new stock alerts occur they are streamed directly to your desktop.

Stock Screener - A stock screener, like the one found in the Trade-Ideas trader's area section gives the end user a list of filters like price, volume, and many other criteria by which to limit the search. Once the user inputs all of the appropriate stock filters, the software goes to the database and retrieves a static list of all of the stocks that met the criteria. The most important thing to note is that stock screeners are static, that means they do not update unless you refresh the page or manually adjust the filter criteria.

Stock Filters - Stock filters, like the ones found in the Trade-Ideas help section are used to limit the criteria by which to search for opportunities. Examples of stock filters include, price, volume, EPS, beta, or even a customized symbol list. Stock filters are very helpful in refining scans or screens in order to not be inundated with tons of information.

We hope this helps to clear up what you are actually looking for when evaluating trade detection software.

Stocks Down for the Day: A Great Pattern for Your Scanner

2010-01-31T21:28:00.000-08:00

A very common question we get is,

"How do i find stocks that are down for the day? I only see 'up' filters."

A new video shows how to find stocks that are up or down for the day, using our "up from the close" filters. Thank you Marissa for explaining that so clearly.

A related question is,

"Why don't you add a down for the day filter?"

The short answer is that you only have one column in your market view showing this information. You wouldn't create an up for the day column and a separate down for the day column. That would be a waste of space on the market view, and it would be a waste of space on our config window. The video shows the relationship between the filters and the fields in the market view. It's all the same data!

Another question in this theme is

"Wouldn't it be easier to have a down for the day filter?"

I admit that I used to have these same thoughts. Sometimes negative numbers are confusing. But once I started to work through some examples, I realized the power of negative numbers. I would not want to type in something like:

Show me stocks where: The price was up from the previous close.
Also show me stocks where: The price was flat from the previous close.
Also show me stocks where: The price was down no more than 0.5% from the previous close.
Also show me stocks where: The price was down at least 1.5% from the previous close.

It is much more concise to enter just two values into the filter. http://www.trade-ideas.com/MinMaxNegative/?min=-0.5&max=-1.5&filter_name=FCP

I started from the video. The market as a whole was down about 1%. I'm looking for stocks that did not move the same was as the rest of the market. But then I started making some changes. What if the market is down by only 1/4%? Or up by 1/4%? By expressing these values only as numbers, it was easy to move the range around as I needed it. And by using the our new filter visualization tool, I could really see what was going on.

Good luck modeling? Call us or contact us with any questions or help you need building your patterns.

Scan for Pattern Rotations, In Addition to Sectors

2010-01-26T08:05:00.000-08:00

Many traders and educators talk about catching sector rotations - when money moves from one industry to another. Capitalizing on this kind of capital movement can make for great trades. Sometimes it's difficult to ascertain what is moving. Additionally industry leaders may indeed begin moving, but laggards may not.

Another way to think of rotations is to consider not the stocks in the same industry moving, but stocks in the same pattern moving: Pattern Rotations.

Consider $GLD and $SLV: Both seem interesting to the long side recently. Rather than consider the entire metals sector as a destination for your capital, think of the pattern these stocks and others in any sector are sharing. It's possible with a tool like Trade-Ideas' Stocks Like This. Trading ETFs like $XLF and XHB? The same logic applies: find stocks that mirror the same pattern as the sector ETF.

It works like this: given the filter and alert characteristics of $GLD during a recent day in the market (from today to at least a week back), then find me other stocks like it - right now.

Simply indicate which filter characteristics and alert trigger(s) that we reported for $GLD by putting a check in the box and copying the chosen indicators into a new strategy that we already name for you: "Stocks Like $GLD".

We think it's a great on-ramp to the Trade-Ideas superhighway and its a great way to reverse engineer into a strategy given a stock you know you want to emulate.

Stock Alerts and Filters Help You Read The Market

2010-01-23T09:16:00.000-08:00

Stock alerts can help you see where real opportunities are hiding. It is easy to be scared when you see the market going down over 200 points two days in a row. However, even on days like yesterday and the day before there are pockets of strength that a good trader simply has be aware of in order to get a better feel of where the higher percentage opportunities exist. Stock alerts from a real-time stock scanner at Trade-Ideas filter the market in such a way so that you won't be be overwhelmed by the negativity. As the market is making new lows, take look at the attached picture showing you the pockets of strength that you need to be aware of in order to catch the high percentage moves up. This window was set up by using a simple, yet powerful combination of stock alerts and filters, specifically new highs for stocks no greater than 10 that are up 50 cents or more from the close on unusually high volume.

Click here to see a free 20 minute delayed version of this exact set up. This delayed version is a great way to familiarize yourself with the most powerful real time stock scanner on the market today.

Once you have separated yourself from the madness it is much easier to focus on trading opportunities that others are not seeing because they are toocaught up in the negativity of the moment.

Stock Market Scanner, Why You Need One Now!

2010-01-22T08:10:00.000-08:00

Today's market is not the type of market where knowing a couple of stocks well can make for a profitable trading year. You have to be able to get out of your comfort zone and trade the set up. Why is that the case? The answer is competition. When you are trading the likes of $AAPL and $GS you can certainly find a big move, but volatility and having thousands of others in the exact same trade make it difficult to stay in a position with any kind of stop loss.

The solution is to be able to find the set up you are looking for across a lot of different stocks. When a trader uses a stock alerts market scanner like Trade Ideas they open themselves to new opportunities which are not being exploited by the masses. Here is a great example that applies to today. Let's say you want to find stocks that are acting like $GOOG is acting today. Simply put in the symbol into the Trade Ideas stocks scanner "Stocks Like This" section. Right away, our servers go to work scanning all stocks on all exchanges looking for trading patterns that are similar to Google, Apple, or any other stock you select. The result gives you other stock names to track in real-time that have acted in much the same way today as the stock that you selected.

It is for this reason alone, that using a stock scanner can be the difference between chasing the crowd and getting in first.

Don't get Mad, Scan the market with ease!

2010-01-18T09:20:00.000-08:00

It can be frustrating, trying to scan the market on your own to find that set up you saw while you were trading. That is where it helps to have market scanning software that can also be your trading set up search engine. We listened to our customers and as a result we have a new web based search tool that helps you find other stocks that are doing the exact same thing.

Let's take a look. The tool is called "Stocks Like This" and it works as follows. Simply type in the symbol for a stock that you saw setting up. Tell our software the time that the move happened, and our stock market scanner will show you all of the internal data that we registered for that stock during the move. Then simply export the filters that you deem the most relevant and immediately our stock alerts scanner will report all other stocks that match the filter criteria for the symbol that you inserted.

If you are still having any trouble, just sign up for a complimentary training session and one of our customer service representatives will walk you through the whole process, at no cost.

There is no need to get frustrated and mad. Scan the market on your terms!

Trade-Ideas Version of Gainers & Losers: Latest from Support Forum

2010-01-10T16:48:00.000-08:00

Some recent posts in the Trade-Ideas Unofficial Support Forum contain interesting strategies - this one asks about Gainers & Losers.

REQUEST: How to set to get top Gainers and Losers alert for stocks with, min price$5, max price$20,daily average volume is 1.000.000 and min current volume is 250.000

SET-UP: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=44601712

We also delivered several new features recently to the capabilities of Trade-Ideas:

New Bid/Ask ratio that looks for stacked sides in the inside market: http://www.trade-ideas.com/Help.html#WSF_MinBAR
Reverse engineer a new set-up from a symbol that's in the pattern you want to model: Stocks Like This
A helpful tool for understanding our use of negative numbers in Min/Max filters: http://www.trade-ideas.com/MinMaxNegative/

Take the Name out of the Game

2009-12-27T09:24:00.000-08:00

Why is trading so difficult for so many people? For myself and the millions of others who engage in the market the quest to be a good trader is an elusive one. Countless books could be dedicated to answering this first sentence. To get to the point consider other professions where you can make millions of dollars. In sports for example, you are competing all the time and only the best of the best get to the ranks of professional. It is similar with medicine and other accounting and law. You have to get qualified before you are paid for your services.

In trading that is not the case. If you have capital you can play. That is the lure as well as a pitfall. Something so attractive brings with it all of the psychological baggage that professional traders know all too well. The fear and greed. We are all afraid to lose and at the same time afraid to miss the move.

Unlike in other professions like sports where you specialize in offense or defense, or law where you are a prosecutor or contract specialist in trading people often have no idea what they are or why they are in the trade and simply become swept up by the excitement.

We buy Apple and all of a sudden decide we are an Apple investor. Trading and investing are completely different animals. You have to be able to distance yourself from the affection you feel for any company if you are to be a good trader. There ample opportunities to trade Apple on the long and short side.

So one of the best exercises I can show you in becoming a successful trader is as follows. Next time when you are in a few positions simply shrink the "symbol" column so you cannot see the name of the stock. Don't trade the name, just trade the money. This is one of the best ways to get yourself into the trading zone.

A Thousand Paper Cuts

2009-12-07T17:22:00.001-08:00

Winning is not easy. It is not easy in professional sports and it certainly is not easy as a professional or active trader. When you hear people telling you that they have no losing trades this year, you should be careful.

In trading winning is process of managing losses. When we use our software to help us trade, we know that just because we see all of these great set ups, does not necessarily mean that we are going to make money.

In order to make money a trader has to learn how to lose. You have to learn how to lose and how to lose well. The problem with losing well is that it is very difficult. You can lose poorly in obvious ways like getting into a trade long or short and then just letting the trade go against you. That is the easy way to lose poorly, but the scientific way to lose poorly and something that we see happen to smart people all the time is the dreaded death by a thousand paper cuts.

Notice the wide angle wedges on the daily chart of the SPY. What that mean is that any technical trader that is trading this is easily prone to getting stopped out in either direction. It is a very tricky type of trading environment. The best advice to avoid the dreaded death by a thousand paper cuts is to divide your positions into 3's if you are trading 300 shares separate it out into 3 lots of 100 and slowly scale in. Often time you have to do the opposite of what is termed correct technical trading.

Using the OddsMaker we know that right now the strategy is to fade the high volume spikes, especially on the downside. There is good money to be made in either direction, just don't put all of your eggs in one basket let the market show you the path of least resistance!

Tooltip: Spank Father Time While Improving Your Trades

2009-11-05T07:22:00.000-08:00

Add seconds to the Time column display on your Trade-Ideas Alert window.

One from the vault (link): http://marketmovers.blogspot.com/2008/04/tooltip-spank-father-time-while.html

Format and Themes for Upcoming StockTwits Episodes & Videos

2009-10-27T17:32:00.000-07:00

[Queue the Rocky theme song]

We're getting in fight shape as we practice several pilot episodes for our eventual debut on StockTwits.tv. Believe me - we need the practice. But in the end it will benefit you, dear reader & viewer.

Here's our current format for a 15 minute show. When we start taking tweets, we'll grow to 30 minutes:

Intro - Market summary
Strategy in Automation - description of pattern we're hunting in realtime; odds of our trading plan
Charts! - what trades we've done, we're in, and what might pop up during show
P&L Update - where we are today and how we are managing the trades

Several themes will be recurring in our episodes. These are the touchstones for the way we trade. It's not the only way to use the Trade Ideas tools (goodness knows there are better traders using our technology), but this is how we use "the scalpel" to heal and grow the patient (our P&L).

When trading try and let the P&L speak to you. Be less concerned about what will or might happen; just focus rather, on P&L in the now
So much time is spent on looking at charts not realizing that it is where YOU are in the trade (i.e., the plan/expectations you set before the trade) that is most important
This is what separates great, good, average, and bad traders: The ability to see the relativity of price action to your entry (i.e., what's your stock's wiggle?)
Trader as scientist. One of the most critical points as a trader: How does one know whether to keep doing what they are doing or change tactics (i.e., hypothesis and assumption testing)

Have a preference for what you'd like to see in an episode? Leave us a comment about format or topic you want to see covered.

Stay tuned.

Signposts: A Method of Market Forecasting Which Strategies to Employ

2009-10-26T15:02:00.001-07:00

3 Roadsigns popped up today from 3 different people whose opinion and calls on the market activity I respect.

These people aren't market timers - if anything they're probably early with their calls, but when I hear or read people I respect offering these types of market forecasts, I pay attention and start to pull up previous strategies I think might be appropriate - in this case Bearish.

Here's the evidence:

@steenbab 11:25 AM CT - Midday briefing shows significant selling pressure in the wake of USD strength: http://rurl.org/223v
about 6 hours ago from web

@AnnMaries2006 So many failed breakouts...sure sign of resolution to the downside for now $$
about 3 hours ago from Seesmic

@TradeIdeas1 http://chart.ly/2ang29 $SPX - One of the ways that helps me know which way I should be trading is illustrated in this picture
about 3 hours ago from Chart.ly

Signposts can come from anywhere. The reason for them is simple: to understand with more clarity what's coming ahead. Devise your system of signposts - of places that will deliver the information you'll use to understand the larger, dominant themes in the market, so you'll know whether your swimming upstream or with it.

Related Articles:

FEEL THE BOTTOM? SEE THE SIGNPOST

JUNKIN' NARROW RANGE BARS IN THIS MARKET

New Version of Trade-Ideas iPhone Application is Now Available through iTunes

2009-10-14T09:44:00.001-07:00

iTunes has just released the latest version of our iPhone application. This version fixed several of the previous bugs our users reported. We would really appreciate if our users who also had iPhones downloaded and rated the free application.

We want to add more functionality to this iPhone application. One thought is giving users the ability to monitor and interact with automated robot trades through the application. Another thought is having cool automatically updating top 10 lists. We also encourage users to give us ideas of what they would like to see in an iPhone app.

Thank You!

Like Gump But Without The Smarts: More SOES Stories & Trading Lessons

2009-10-13T09:47:00.000-07:00

I have the unfortunate luck of having been in some of the best, upwardly mobile stocks of all time, and not taking advantage of it.

There - I said it.

Like Forest Gump - wherever I live, the craziest bullish stock of all time happens in the same place.

Case 1: DELL

This stock was the best stock to buy and hold for 5 years straight in the 90s. I was living and trading in Austin and traded in and out of DELL countless times. I discussed the problematic nature of my DELL trading in previous blog posts. Suffice it to say I left about $15 million on the table with that one :-(

Case 2: QCOM

When I moved from Austin to San Diego in 1998, QCOM was in the mid forties. A year or so later: the cellphone boom. QCOM went from a regular stock to something just insanely bullish. I finally figure out that I should get long around $187 :-).

I bought 200 shares during a breakout and held on. QCOM went and went and went. I was still long my 200 shares at 440 dollars. This is where my DELL memory really played havoc on my finances. I remembered how I failed to buy and hold DELL and thought this time I finally did it right. I was up over 200 points on 200 shares and was ready for the split and continuation of the run up. This was going to be my million dollar stock...

QCOM pulled back, and then it pulled back some more. I held on tight and it continued to pullback. I finally sold my position at 192. The desire to be right and make money was so bad that it blinded me to any kind of money management rules which would have gotten me out much much sooner with a ton of profit. It was crazy how I just let all that money get away from me, but people do the same thing all the time. It is so difficult to catch yourself in the act.

Avoiding These Mistakes

Since then I have devised a couple of great ways to avoid these types of mistakes. One is a mantra of knowing that tomorrow is another day and anything can happen. Treat today like it is your last trading day, do the right thing. I don't focus on the future because I came to realize that it is impossible to predict. There are just to many variables out there that can impact a theory. The most important part is that the market does not have to make sense to you. I learned the very very hard way that a market can stay irrational much longer than you or I can stay solvent fighting it.

Another method of keeping yourself honest is to look at your open positions during the day and hiding the symbol column so you don't know which stock is doing what, you just know the P/L and act accordingly. This last exercise was one of the best I had ever come up with in helping to free myself from the bind of needing to be right. Give it a try and watch how your discipline takes over!

Photo credit: http://www.flickr.com/photos/hulk4598/3459718843/

The Market Sneezes, but Trade Ideas Never Catches a Cold: Data Variances

2009-10-09T09:27:00.000-07:00

Editor's Note: The following post is from our Chief Technical Officer, Philip Smolen. In it he points to a rather frequent occurrence of the data inconsistencies that plague the tape and which, if left unchecked or not addressed, can seriously affect real-time sensitive tools like Trade Ideas.

Fortunately for us and for those of you who are subscribers, our team at Trade Ideas works tirelessly and with great precision to engineer such errant data out of our systems - as they happen.

Here's a peek behind the kimono . . .

I was looking at a suspicious price. Our primary data feed had a questionable price. When I checked other data feeds, they disagreed with each other. Here are three free examples. Look at the price of the open.
http://www.google.com/finance?q=ntap

http://finance.yahoo.com/q?s=ntap
http://moneycentral.msn.com/detail/stock_quote?Symbol=ntap&getquote=Get+Quote

This, and variations on this, happen a lot. People don't always realize it. If they hurry, they can see this example for themselves.

We also have a video tutorial highlighting this issue.
http://www.trade-ideas.com/VideoHelp/Menu.html?video=Configuration%20Window%3A%20Bad%20Market%20Data.

A lot of people try to be very precise. At one price they buy, at a penny less they don't. Some people scour the charts, and get excited when we don't match exactly to what they were expecting. Here's the reality check. Here's one I just happened to run into. I'm sure if I spent the time I could find a lot more. If you deal with market data, you have to understand the limits.

Make the Market Work for You

2009-10-06T13:41:00.000-07:00

Counter Trend Trading: Inviting Your Ego to Trade

Today while trading and discussing trading on Stocktwits, I came across a very interesting article written by Dr. Brett Steenbarger. This article discusses the compulsion some traders have to counter trend trade. Traders who counter trend trade are sometimes called contrarians. The reason I wanted to blog about this article is that when I first started trading this was a mistake that I made often and it was costly.

I want to give a personal spin on what this is like as well as explain when being a contrarian can work to your advantage. Click here for the complete article.

I started trading in the early nineties, using the SOES and Select-Net systems to get in and out of Nasdaq stocks. It felt really good to be doing something that most people could not even remotely understand. It was an ego boost. Back then the high flyers were stocks like DELL, and CSCO, and INTC and my favorite INTCW. We would see the sellers stack up on level II and watch as momentum slowed and just when we thought the time was right we would hit bids, get short against our boxes and look to make a quarter or fifty cents on 1000 shares. It was awesome, especially if you were half way decent. But, as we worked the mechanical magic of trying to get short into the momentum and bid in a quarter later for our $250 dollars we were completely blind to the fact that these stocks were tearing the hell up. There was no sexiness to buying these stocks and holding them, yet at that time that was really all that you needed to do. Our super smart SOES system was state of the art and it made us money, but we lost countless millions in opportunity cost. I was living and trading in Austin, Texas at the time and there were many low level DELL employees driving Ferrari's around all because of their stock options. All the while, we the trading experts, just could not see it. We were blinded by our ego's, the speed, and how cool it all seemed at the time.

The Power of Right Now - Not I'm Right

As I got older I realized that being a good trader had nothing to do how fast I could punch keys, but rather it was about simply making as much money in the market that I was able to make and most of all making sure that I managed my exposure and risk in a way that would allow me to milk a trend but not put me out of the game should something not work out. It is not the stock or the market type I realized that makes you money, but it is how you manage a trade. Many traders and pundits attempt to guess what the market is going to do tomorrow, but nobody knows. You might guess right but you certainly will be wrong at some point. When you are counter trend trading as a habit, you are focusing on being right, you are not in the present, but rather in the future that has not happened.

There is a more scientific type of contrarian trading. This contrarian trading uses the power of statistical analysis as an edge. It is often called mean reversion and in our experience, is most effective when used with an automated trading system. This type of trading requires you to be in several positions at the same time and it is almost impossible to do it by hand. This is where technology really can help the trader. Our automated trading software and our OddsMaker analysis software combine to allow trader to take a quantitative spin on contrarian trading. We have several videos showing this type of trading in action on our YouTube page.

Kick the tires. Evaluate this approach. You'll be a calmer, data-driven trader who only plays the odds as a result.

Trade Ideas on Your Kindle

2009-09-18T11:59:00.000-07:00

Trade-Ideas Mobile works on the Kindle.

Add a bookmark for http://mobile.trade-ideas.com. Make sure to turn on "Advanced Mode" in your Kindle browser to get the formatting right.

Of course, we're always pushing the limits. You can get streaming stock alerts on the Kindle. But Trade-Ideas works best if you request historical stock data for your strategy - a leisurely way to read and review the tape. Then you can scroll through the alerts one page at a time, just like an ebook. That will minimize the amount of flickering present in the real-time mode.

Trade-Ideas mobile gives you the same access to realtime stock market information on the Kindle as it does on the Blackberry and other mobile phones. But TI Mobile can take advantage of the Kindle's bigger screen.

If you were having trouble logging in, please try again. Our apologies. There's a bug in the Kindle's experimental web browser.

It doesn't handle cookies right. We have fixed Trade-Ideas Mobile to work around that bug. If any Amazon programmers are reading this, let us know, and we'll give you more details.

Steenbarger Inspired Strategy: Trade the Transitions

2009-09-08T19:10:00.000-07:00

Great strategies align themselves with vetted and observable themes in the market.

Strategy comes from taking a stand based on what you perceive are demonstrative behaviors in the recent market and then submitting that position to the market's cross examination - you'll come out smelling like a rose or its fertilizer. The nice thing with The OddsMaker backtesting tool, is that you'll know this without risking a penny of capital.

Don't know which behaviors to identify? What cause to fight for? Adopt someone else's opinion - preferably someone you may regard as a mentor or at least a trusted interpreter of the market's various and many signals.

I haven't had an original thought since I named our second daughter 2 years ago. So when I want some heavy theme action, I look to another doctor who's good at midwife-ing ideas through delivery and into the world: Brett Steenbarger.

Yesterday the good doctor produced a beauty.

Theme: "buying strength and selling weakness has led to consistent, short-term underperformance."

Strategy:
Trigger 1 occurs when stocks close above or below a defined distance from their moving averages. This captures relative strength or weakness.
Trigger 2 occurs when stocks lose upside or downside momentum after the first signal has occurred and after stocks have continued their move to new price highs or lows. This captures a loss of momentum to the upside or downside.
Trigger 3 is an execution signal [sic] that looks for buying that makes a lower high (if one is going short) or selling that makes a higher low (if one is going long).
Trading Plan:
The stop loss occurs when Trigger 3 is violated; i.e., stocks make a higher high after having seemed to have topped out.
The average holding period for the trades is 2-3 days.
Source: http://traderfeed.blogspot.com/2009/09/developing-trading-system-to-support.html

Ok. So here is the strategy I developed from the description above. Subscribers will see this in real time, everyone will see the delayed 20 minute data.

LONG The Transition Pattern Reverting Back Up

Type or copy/paste this shortened string directly into a browser then copy/paste the full length link into Trade-Ideas PRO using the “Collaborate” feature (right-click in any strategy window):

http://bit.ly/abNgY (case sensitive)

The strategy uses 3 alert triggers subject to 7 filters:

25% Pullbacks from Lows
Positive VWAP Divergence
10 minute Bullish Engulfing

Min Price = 5 (Dollars)
Min Daily Volume = 500,000 (shares/day)
Min Above Low = $0.10
Min Position in Previous Day's Range = 50% (Percentile)
Min Position in 5 Day Range = 40% (Percentile)
Max Position in 10 Day Range = 25% (Percentile)
Max Up from 20 Day SMA = -5 (Volatility Bars)

Click on the icons to see a definition of each of these indicators.

Tomorrow I will post the trading instructions I used to produce these results:

86 / 198 = 43.43% up $0.01 at close after 2 days; Average winner = $0.777, Average loser = $-0.3204, Net winnings = $31.90, Best = $3.17, Worst = $-2.89; Casino Factor = 99.86%
Daily summary:
8/14 : 0.7400/14
8/17 : 1.3300/3
8/18 : 3.6500/33
8/19 : 13.6800/33
8/20 : 7.5700/25
8/21 : 4.3200/13
8/24 : 0.7200/9
8/25 : 0.3100/7
8/26 : 2.7500/14
8/27 : 0.6800/7
8/28 : 2.0300/11
8/31 : 1.1100/7
9/01 : 2.6400/7
9/02 : 0.6900/5
9/03 : 5.0000/10

Understand these backtest results from The OddsMaker in more detail by reading the User’s Manual: http://www.trade-ideas.com/OddsMaker/Help.html

Trade-Ideas Yearbook Picture: Our 1st Homepage

2009-09-02T17:17:00.000-07:00

Some fun from the Twitter stream.

Always interesting Howard Lindzon posted this tonight,

howardlindzonhow 20 popular websites loooked like when they launched http://bit.ly/SsPi0 ...always be evolving...
Source: http://twitter.com/howardlindzon/status/3722169552

Very interesting to see great sites at their beginnings - it's like looking at yearbook pictures from those of us painfully transitioning through adolescence and puberty. I could go on . . .

But this picture is priceless and worth a 1000 words - mostly full of profanity.

We've come a long way, baby . . .

Fibonacci Long 1st 30 Minutes = 88% Odds in Your Favor: TASC Trader's Tip September

2009-08-24T08:30:00.000-07:00

Traders’ Tips: September Issue

"Now, you listen to me! I want it reopened right now. Get those brokers back in here! Turn those machines back on!" Mortimer Duke, Trading Places (1983)

This month’s Traders’ Tips concerns pivot points. While researching an appropriate strategy for this month, we discovered a stock trading strategy based, in part, on Fibonacci values. We liked the results as reported by our event-based backtesting tool, The OddsMaker, so much that it's the basis of this month's strategy and our proxy for pivot points.

This month’s strategy is a long strategy, but because it produced only 34 trades in the last 30 days, our recommendation is to also run the flip of this strategy with the same trading rules modeled in The OddsMaker. The 'Flip' feature is a button found in the Trade-Ideas PRO configuration window. The results of this flip strategy appear in Figure 4.

Description: “Fibonacci Long First 30 Minutes”

Provided by:
Trade Ideas (copyright © Trade Ideas LLC 2009). All rights reserved. For educational purposes only. Remember these are sketches meant to give an idea how to model a trading plan. Trade-Ideas.com and all individuals affiliated with this site assume no responsibilities for trading and investment results.

Type or copy/paste this shortened string directly into a browser then copy/paste the full length link into Trade-Ideas PRO using the “Collaborate” feature (right-click in any strategy window):

http://bit.ly/sjNIE (case sensitive)

You can build the strategy from Figure 1 below.

Figure 1 shows the configuration of this strategy:

Where 1 alert and 7 filters are used with the following settings:

Fibonacci 79% Buy Signal Alert
Max Price = 40 ($)
Min Spread = 50 (Pennies)
Max Spread = 200 (Pennies)
Min Daily Volume = 50,000 (Shares/Day)
Max Volume 5 Minute Candle = 150 (%)
Min Today's Range = 40 (%)
Max Distance from Inside Market Filter = 0.1 (%)

The definitions of these indicators appear here: http://www.trade-ideas.com/Help.html.

That’s the strategy, but what about the trading rules? How should the opportunities that the strategy finds be traded?

To recap briefly The OddsMaker doesn't just look at a basket of stocks, à priori, to generate backtest results. Rather it considers any stock that matched a desired pattern in the market, finds that stock, and applies the backtest's rule set before summing up the results into a detailed set of totals: win rate, average winner, average loser, net winnings, confidence factor, See Figure 3.

In summary this strategy trades the first 30 minutes of the market buying Fibonacci 79% signals. We evaluated several time frames, but were ultimately led to a hold time of just 15 minutes with a $0.40 stop and no pre-determined profit target.

Here is what The OddsMaker tested for the past 30 days ending 7/14/2009 given the following trade rules:

On each alert, buy (long) the symbol (price moves up to be a successful trade)
Schedule an exit for the stocks after 15 minutes
Trade only the first 30 minutes of the market session

The OddsMaker summary provides the evidence of how well this strategy and our trading rules did. The settings are shown here in Figure 2.

The results (last backtested for the 30 day period ending 07/14/2009) are as follows:

The summary reads as follows:

This strategy generated 34 trades of which 30 were profitable for a win rate of 88%. The average winning trade generated $0.45 in profit and the average loser lost $0.24. The net winnings of using this strategy for 30 trading days generated $12.48 points. If you normally trade in 100 share lots, this strategy would have generated $1248. The z-score or confidence factor that the next set of results will fall within this strategy’s average winner and loser is 100%.

As mentioned earlier you can also deploy the flipped version of this strategy to trade stocks in the opposite pattern. Here successful trading means selling short each opportunity. The backtest results of this approach appear in Figure 4 below.

Understand these backtest results from The OddsMaker in more detail by reading the User’s Manual: http://www.trade-ideas.com/OddsMaker/Help.html

-- by Jamie Hodge & David Aferiat, Managing Partners, Trade Ideas LLC

www.trade-ideas.com, david@trade-ideas.com

In Response to Trusting Market Moves: Why Relative Volume is Important

2009-08-19T08:25:00.000-07:00

Let's start with my comment first and then the excellent post this AM from the ever astute and keenly insightful Dr. Brett Steenbarger:

Glad to read your emphasis on the importance of 'Relative Volume' in determining how trustworthy market moves really are.

It's the bedrock of much of our analysis at Trade-Ideas as you know. We express the concept as a ratio, placing the current accumulated volume up to any given point in the day over the historical average volume of the same period. A reading such as 1.5 means therefore that a particular issue is 50% above its normal volume. A reading of 7 means its trading 7x more than usual; and so on for readings of 0.6, etc.

Full definition of Relative (aka Current) Volume.

Source:
http://traderfeed.blogspot.com/2009/08/trusting-market-moves-why-relative.html?showComment=1250691755319#c4900951752302019060

Here was Brett's original post:

http://traderfeed.blogspot.com/2009/08/trusting-market-moves-why-relative.html

A 1-hr Visit Can Improve Your Trading Plan

2009-08-03T13:21:00.000-07:00

The good folks at DTI and Tom Busby invite Trade-Ideas to present during their very popular Live TradeRoom sessions tomorrow, Tuesday, August 4 beginning at 9:15 AM EDT.

Here is the agenda for tomorrow. Note: I will be speaking at 12:00PM EDT.

9:30am - 12:00pm EDT
"Live Trading and Education: Futures First: Using the Indexes to Get the Trend"
DTI Team

12:00pm - 1:00pm EDT
Topic: Modeling IntraDay Breakouts
David Aferiat, Managing Partner, Trade Ideas LLC

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 on this link:

Reserve Your Place - Register
I hope to see you there!

Related Articles:

Does Your Trading Plan Benefit from Continuing Education?

200 Day SMA Good Support for a Swing Trade: August TAS&C Traders' Tips

2009-07-23T05:50:00.000-07:00

Traders’ Tips

August Issue

"It's not being wrong that kills you, it's staying wrong that kills you." Jeff Macke, Trader

For this month’s Traders’ Tips, we offer a stock trading strategy based, in part, on the position of a stock near its 200 day Moving Average. Specifically this strategy discovers that in today’s market the 200 day SMA offers a good support price for a small swing trade. We asked our event-based backtesting tool, The OddsMaker, to evaluate a strategy that buys new multiday lows.

To recap briefly The OddsMaker doesn't just look at a basket of stocks, à priori, to generate backtest results, it considers any stock that matched a desired pattern in the market, finds that stock, and applies the backtest's rule set before summing up the results into a detailed set of totals: win rate, average winner, average loser, net winnings, confidence factor, See Figure 3.

This strategy owes it’s high percentage win rate, in part, to a decision to set the Days Up/Down in a Row filter to only show us stocks that are down 5 days in a row or more (Max Days Up = -5).

Description: “New Low Right Above the 200 Day SMA”

Provided by:

Trade Ideas (copyright © Trade Ideas LLC 2009). All rights reserved. For educational purposes only. Remember these are sketches meant to give an idea how to model a trading plan. Trade-Ideas.com and all individuals affiliated with this site assume no responsibilities for trading and investment results.

Type or copy/paste this shortened string directly into a browser then copy/paste the full length link into Trade-Ideas PRO using the “Collaborate” feature (right-click in any strategy window):

http://bit.ly/16eHIM (case sensitive)

Figure 1 below shows the configuration of this strategy:

Where 1 alert and 3 filters are used with the following settings:

· New Low Alert

· Max Up Days = -5 (Days)

· Min Up from 200 Day SMA Filter = 0.01 (%)

· Max Distance from Inside Market Filter = 1.0 (%)

The definitions of these indicators appear here: http://www.trade-ideas.com/Help.html.

That’s the strategy, but what about the trading rules? How should the opportunities that the strategy finds be traded?

In summary these are stocks that are being sold off aggressively right into the 200 day SMA. We evaluated several time frames, but were ultimately led to selling at the open after two days. Note that we did not check the box for setting a profit target or stop loss. The OddsMaker results provide good guidelines, however, using the average winning and average losing trade.

Here is what The OddsMaker tested for the past 30 days ending 6/09/2009 given the following trade rules:

On each alert, buy (long) the symbol (price moves up to be a successful trade)
Schedule an exit for the stocks at the open after 2 days
Trade any time during the market session

The OddsMaker summary provides the evidence of how well this strategy and our trading rules did. The settings are shown here in Figure 2.

The results (last backtested for the 30 day period ending 06/09/2009) are as follows:

The summary reads as follows: This strategy generated 49 trades of which 36 were profitable for a win rate of 73%. The average winning trade generated $0.74 in profit and the average loser lost $0.25. The net winnings of using this strategy for 30 trading days generated $23.22 points. If you normally trade in 100 share lots, this strategy would have generated $2322. The z-score or confidence factor that the next set of results will fall within this strategy’s average winner and loser is 100%.

Understand these backtest results from The OddsMaker in more detail by reading the User’s Manual: http://www.trade-ideas.com/OddsMaker/Help.html

-- by Dan Mirkin & David Aferiat, Managing Partners, Trade Ideas LLC

www.trade-ideas.com, david@trade-ideas.com

Like "Kobe Doin' Work", To Get Great You Gotta Watch the Tape

2009-07-13T04:47:00.000-07:00

Here's one in an occasional series of posts highlighting the growing number of our partners who's adding value to the trading community. Today we highlight an educational service that leverages the use of realtime video to provide insight on the decisions of an experienced trader reacting to the market's opportunities.

TodayTrader

The educational service is run by two professional traders known to us at Trade Ideas for over 10 years: Steve Gomez and Andy Lindloff. Both can show trading scars since the mid 90s and continue to profit from the experience in any market. That kind of longevity by itself is a testament to their skills. But great traders are not always good educators. Additionally as in sports a player and his/her coaches must appreciate each other's style and method for playing the game. Fortuntately TodayTrader's unique spin on a trading service means you know upfront whether or not this method is for you.

The Method

Traders watch via video as Steve and Andy trade during the day. It's like the process in medical school regarding procedures: see one, do one, teach one.

In my own experience starting out, it was critical to be in a trading group where people made money so that you could watch and see what was working. Learning through imitation. Today good trading floors are hard to find especially if you are not in a big city. That is where TodayTrader really helps the novice. You can log in and watch what Andy and Steve are doing in real-time day to day and learn from their mistakes as well as from their success.

Steve and Andy both use Trade Ideas to help them isolate good trading opportunities. This video channel on YouTube showcases how Steve trades opportunity and uses Trade Ideas to find them.

Watch the video, get familiar with Steve and Andy, and determine if their's is a method of learning from which you can benefit.

Improve Your Trading Plan with a 1-Hour Visit

2009-07-06T12:04:00.000-07:00

So the good folks at DTI and Tom Busby invite Trade-Ideas to present during their very popular Live TradeRoom sessions tomorrow, Tuesday, July 7 beginning at 8:15 AM CST.

Note: I will be speaking at 12:00PM CST.

Topic: How to Find a Profitable Strategy in Under 10 Minutes

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 on this link:

Reserve Your Place - Register
I hope to see you there!

Related Articles:

Does Your Trading Plan Benefit from Continuing Education?

Trade-Ideas in Your Town: Chicago

2009-06-30T17:57:00.000-07:00

Headed to Chicago for the rest of the week and weekend to meet several hedge funds and pal around with a long time group of subscribers/traders.

We're actually meeting at Rivers after the close on Wednesday to hoist a few as part of a impromptu Tweet Up. Hopefully I've got enough T-shirts. http://bit.ly/dhFhO

I'll be looking forward to my meeting with the folks at RealTick and stealing soap from the executive bathroom - a Barclays upgrade I hear.

Chicago is such a great place - and it's at its peak in the summertime. We've lined up a great stay and a wonderful hotel too. Should be fun.

If you are in the area, dear reader, leave a comment and let's meet up. We take these offers seriously.

Trailing Resistance & Support Stops: TAS&C July Traders' Tips

2009-06-27T17:21:00.000-07:00

Traders’ Tips

July Issue of Technical Analysis of Stocks & Commodities

“Eventually, luck runs out; skill does not.” Scalper68 (AlexD)

In this month’s Traders’ Tips, Sylvain Vervoort offers a 3rd trailing stop method, called a trailing resistance & support stop, which evaluates price movements or ‘turning points’. This 3rd trailing stop method most closely resembles the Trade-Ideas concept of automating the creation of a custom trailing stop based on a stock’s natural 15 minute volatility. Therefore our strategy this month, retains all of the settings from last month and an updated set of backtested results. Only a few additional filters are applied to make sure the strategy trades with good volume. Subscribers to Trade-Ideas PRO who use our event-based backtesting tool, The OddsMaker, already understand the different premise these tools use to find high probability winning trades.

To recap briefly The OddsMaker doesn't just look at 25 stocks, à priori, to generate backtest results, it considers any stock that matched a desired pattern in the market, finds that stock, and applies the backtest's rule set before summing up the results into a detailed set of totals: win rate, average winner, average loser, net winnings, confidence factor, See Figure 3.

Description: “Modified ATR Volatility Stop Part 2”

Provided by:
Trade Ideas (copyright © Trade Ideas LLC 2009). All rights reserved. For educational purposes only. Remember these are sketches meant to give an idea how to model a trading plan. Trade-Ideas.com and all individuals affiliated with this site assume no responsibilities for trading and investment results.

Type or copy/paste this shortened string directly into a browser then copy/paste the full length link into Trade-Ideas PRO using the “Collaborate” feature (right-click in any strategy window):

http://bit.ly/19DiKt (case sensitive)

You can also build the strategy from Figure 1 below.

Trade-Ideas approached the Average True Range stop loss using a modified ATR, called ‘Trailing stop, volatility down’, based on the average 15 minute volatility of a stock. The modified ATR is similar to ‘The Wiggle’ we discussed in last month’s article.

Entry signals were created that went short any time a stock between 5 dollars and 50 dollars moved up 75 cents or more in 1 minute or less.

Figure 1 below shows the configuration of this strategy:

Where 1 alert and 4 filters are used with the following settings:

• Running Up Now (in 1 minute or less), $0.75

• Min Price Filter = 5 ($)

• Max Price Filter = 50 ($)

• Max Distance from Inside Market Filter = 0.15 (%)

• Min Daily Volume Filter = 300,000 (shares/day)

The definitions of these indicators appear here: http://www.trade-ideas.com/Help.html.

That’s the strategy, but what about the trading rules? How should the opportunities that the strategy finds be traded? For the stop loss we used one of the more advanced options available in the OddsMaker. Instead of using a traditional stop loss we selected ‘Another Alert’ as the exit condition called ‘Trailing stop, volatility down’. This alert is triggered when a stock moves down an amount equal to the average 15 minute volatility multiplied by the number of 15 minute bars we decide – in this case 2. For example if the average 15 minute volatility is 10 cents, this alert would not trigger until a stock moves down at least 20 cents.

Here is what The OddsMaker tested for the past 3 weeks ending 5/08/2009 given the following trade rules:

• On each alert, sell short the symbol (price moves down to be a successful trade)

• Schedule an exit for the stocks 30 minutes after entry

• Start trading from the open and stop trading 30 minutes later

• Set a stop using the alert, ‘Trailing stop, volatility down’, with a setting of 2 bars

The OddsMaker summary provides the evidence of how well this strategy and our trading rules did. The settings are shown here in Figure 2.

The results (last backtested for the 3-week period ending 05/08/2009) are as follows:

The summary reads as follows: This strategy generated 228 trades of which 137 were profitable for a win rate of 60%. The average winning trade generated $0.24 in profit and the average loser lost $0.14. The net winnings of using this strategy for 15 trading days generated $21.70 points. If you normally trade in 100 share lots, this strategy would have generated $2170. The z-score or confidence factor that the next set of results will fall within this strategy’s average winner and loser is 99%.

Understand these backtest results from The OddsMaker in more detail by reading the User’s Manual: http://www.trade-ideas.com/OddsMaker/Help.html

-- by Dan Mirkin & David Aferiat, Managing Partners, Trade Ideas LLC

www.trade-ideas.com, david@trade-ideas.com

Other Traders' Tips Articles from TAS&C

http://marketmovers.blogspot.com/search/label/TASC

Show Your Colors, Take Some Credit

2009-06-24T05:04:00.000-07:00

With the recent website redesign comes a roll of new banners that hopefully convey the value we bring to the trade decision process. If you agree and one of these banners resonates with you, feel free to place them on your blog or social media outlet. They come in several shapes and forms.

Anyone who agrees to replace their old Trade-Ideas banners (which we haven't discontinued) and/or picks one to use on their site, will receive 200 credits towards the use of The OddsMaker (i.e., 200 x times to hit the 'Backtest' button and see results). If you're not a Trade-Ideas PRO subscriber who can take advantage of this offer:

you should be, but
let me know and we'll send you a t-shirt instead.

Check out the list of what's available here and thank you in advance for your support!

http://www.trade-ideas.com/Banners.html

Just one of the many in the stable:

If you would like information on becoming a more involved affiliate, please email me for the details at david@trade-ideas.com.

Data Traders Who Swing: Rejoice With Longer Term Filters

2009-06-23T12:15:00.000-07:00

Trade Ideas Releases Start of New Filters Aimed at Longer Term Patterns & Trades

We added several new filters aimed at longer term data traders.

As of today you can now:

Filter stocks based on the size of a multi-day range (5, 10, 20 day range)
Filter the stock's position in that multi-day range (5, 10, 20 day range)
Filter the size of the stock's multi-day move (5, 10, 20 day range)

5 Day Range

10 Day Range
20 Day Range

Position in 5 Day Range

Position in 10 Day Range
Position in 20 Day Range

Up in 5 Days

Up in 10 Days
Up in 20 Days

Strategy Example

Here's an example strategy that puts these filters to work. This strategy shorts stocks up a certain amount over the last 5 days.

Short 5 Day Range
Provided by: Trade Ideas (copyright © Trade Ideas LLC 2009). All rights reserved. For educational purposes only. Remember these are sketches meant to give an idea how to model a trading plan. Trade-Ideas.com and all individuals affiliated with this site assume no responsibilities for trading and investment results. This strategy's results not backtested.

Thanks to everyone who helped us beta test these filters before their release. Please provide any feedback in the comments. Good luck!

Mailbag: Bot Trading Manages Risk at the Open

2009-06-12T08:28:00.000-07:00

The Open and its frenzied activity can reward as well as punish traders. The difference between these two groups comes down to experience certainly, but also the insight and quick decisions that new tools (especially automation) can bring to bear.

From the Mailbag (Support Forum) came a question about such topics that I want to answer here. First the question then our response:

Mean Reversion and poor fills:

I'm using a mean reversion strategy that looks for stocks with spreads >9c. I have been automatically placing limit orders at bid+1c at the open, and have been getting killed by adverse selection.

If the stock moves up, I only get 1/10 of my order, and if the stock moves down, I get the entire order. I did learn that I'm making my time the order is in force too long (2 min) - losers move down in that time span, and will automatically fill my limit order.

So if I tighten the TIF (Time in Force) to 10 seconds, I probably won't get filled on as many losers.

But there's still a big problem here:
Set limit at bid - only fills on losers
Set limit at ask, or market order - Lose 9-19c per trade (1-4% on stocks from 6-9 dollars!)
So if there's a stock with a large spread, how do you trade it profitably?

Our Director of Trader Education, Jamie Hodge (jhodge@trade-ideas.com) responds:

For as long as I can remember, either myself, or other traders I know have engaged in mean reversion off of the open.

Whether it be manual, or robotic, one rule has always held true, the larger the spread, the larger the reward, the greater the risk. There aren’t many trading rules that have stood the test of time in light of recent market activity, but this one has.

As a manual scalper of yester year, I would run from large spread stocks as well as thinly traded issues. Today, with the assistance of robotic execution, I welcome the big and the thin.

Here is a snapshot of one of my strategies that I launch on the open every morning:

For this strategy the minimum spread is set to .40 and the maximum spread is $2.

[Editor's Note: this strategy runs from the open until 388 minutes before the close; each position entered into lasts only for 15 minutes or a stop loss - whichever comes first; Understand these backtest results from The OddsMaker in more detail by reading the User’s Manual: http://www.trade-ideas.com/OddsMaker/Help.html]

Fill rates can average anywhere from 10 to 30% depending on opening conditions, mkt gap, etc.

So, looking at the daily summary, on May 11th, 12 signals were generated off of the open, so I more than likely was filled on 7 or 8 of the 35 possible trades.

From a statistical viewpoint, it doesn’t matter which orders get filled, they all have the same probability of working out.

The same strategy may also be flipped and run for shorts with favorable back test as well. Typically I’m bidding or offering a nickel inside, that’s where you want to get hit on a large spread stock.

I hope this helps.

Automated Trade Ideas in Your Hand: You Set Our Course

2009-06-10T08:00:00.000-07:00

Trade-Ideas on your smartphone: iPhone or Palm Pre or Blackberry

Who wants to trade on such a confined space? On the go . . . making so many decisions with so many distractions?

Trading actively and manually doesn't seem to make much sense. But supervising fully automated trades with automated risk management controls (what we call 'gray-box' trading) does make sense.

We are looking into the possibility of creating a Trade Ideas application for the iPhone and or the Palm Pre. We hesitated at first as we did not see exactly how it would work - and in many ways, it doesn't. But then we thought about automation. Many traders who use our Automated Trading Robot like to track what is going on without sitting at the computer.

No - not the golf course (not necessarily) (and BTW what a cliche!)

Let's start with just the bathrooom, or at the lunch table, or the skilled barista who knows you by name.

Supervising Bot Trading on the smartphone would include the following capabilities:

Alerts when P/L reaches a critical point in either direction.
1-click ability to adjust positions (e.g., 1/2 a position, 2x a position) or slightly modify existing rules from the phone.
Halt trading, automation, and/or completely exit position(s).

So now we're looking at the various development kits. Any suggestions or comments from our customers and blog readers are welcome. Is there something (i.e., feature, capability, platform, etc.) that we overlooked?

This Strategy's Winners Are 5x Greater Than Its Losers - Explanation:

2009-06-09T17:19:00.001-07:00

I gave a solid presentation to traders online in a DTI chat room this afternoon.

DTI offers educational services across all instruments but specialize in equities, commodities, and futures. They are lead by the talented Tom Busby and Jeanette Sims.

The format I used involved soliciting requests for favorite chart patterns ahead of my talk so that I could take such examples and model them during my presentation - very off the cuff and impromptu strategy configuration. Most of the time this usually generates sub-par strategies as measured by our backtesting tool, The OddsMaker - not today. Thanks to the group we stumbled onto unusually profitable strategies that I share with you now.

Here was the chart pattern request:

"buying above price consolidation/selling below -
more powerful off daily time frames"

It produced this strategy that caught $DIN in the mid-morning (a beautiful chart):

"LONG - Above the 20Day MA Just Above 3Day Consolidation"

1 Alert:

11 Filters:

and these backtest results from The OddsMaker:

The trade plan modeled for this strategy consisted of trading from the open until 3 hours before the close and holding each symbol generated from the strategy until the open 2 days later. A stop loss of $0.30 was consistently used.

The results?

The average winner was 5x the size of the average winner (even though the win rate was 1 out of every 4 alerts). That's still a good strategy: when I lose, I lose only $0.30, but when I win, I win $1.50. Hand it over.

Note that the daily summary of results which show the date, the day's P&L total, and the number of trades that day, reveals how the market rewards this strategy more recently than during the first days of the strategy. Viewed as a histogram I might consider being more aggressive with this strategy i.e., with profit targets and number of trades I take from the strategy.

I'll be keeping an eye on this strategy and may tweet some example alerts. Stay tuned and follow me @TradeIdeas.

VWAP Mashup of the Daily Trading Coach and Trade-Ideas

2009-06-02T17:45:00.000-07:00

A Strategy-Session post.

The Daily Trading Coach

Dr. Brett Steenbarger is a trader's coach. As essential as his experience getting the best performance out of traders is the way in which he conveys his wisdom in plain language - judge for yourself in his latest (his third) book on improving trader performance and decision making, The Daily Trading Coach: 101 Lessons for Becoming Your Own Trading Psychologist.

His lessons, culled from direct interaction with professional traders, continuously produces a fountain of important methods for controlling emotions, dealing with mental obstacles, as well as (like today) generating great trading ideas.

The Mashup

So here's a mashup of an article about trading ranges and VWAP appearing on his blog today with its corresponding Trade-Ideas strategy window.

Dr. Steenbarger's article:
"Volume-Weighted Average Price (VWAP) and Trading Range Days"

Trade-Ideas Strategy:
"Fade VWAP Positive Divergences within Defined Trading Range"

Below is a summary of the alerts and filters used. Click on any of them to understand what the specific settings and definitions are.

This strategy is a short strategy: all opportunities are found when price decreases. The trade plan that produced excellent results was a hold time of 15 minutes or a stop loss of $0.25 + each stock's specific volatility measure (what we call the wiggle - Google results here) - whichever comes first. Additionally the entire trading day is used to capture this pattern (i.e., no specific time of the day was specified to make trades).

Here is the backtest result for the last 15 days for this pattern generated by The OddsMaker within Trade-Ideas PRO:

The summary reads as follows:

This strategy generated 52 trades of which 28 were profitable for a win rate of 53.85%. The average winning trade generated $0.41 in profit and the average loser lost $0.09. The net winnings of using this strategy for 15 trading days generated $10.42 points. If you normally trade in 100 share lots, this strategy would have generated $1042. The z-score or confidence factor that the next set of results will fall within this strategy’s average winner and loser is 100%.

Understand these backtest results from The OddsMaker in more detail by reading the User’s Manual: http://www.trade-ideas.com/OddsMaker/Help.html

Previous OddsMaker articles here

Previous Strategy-Session articles here

New Website, Same Old Approach

2009-06-01T14:45:00.000-07:00

Our website changed today - the result of some new branding for our advanced trading tools and a better way of communicating the value we bring to the trading process.

http://www.trade-ideas.com

But with all that's changed in our message and our look, somethings remain very much the same. It's great to read this from a loyal subscriber who uses Trade-Ideas and other great tools (like Stocktwits) to build an environment where better decisions driven by the data are routine - and profitable:

jeffreyswright@TradeIdeas Been a TI trader for years now and watching stocktwits I am always amazed at the traders that dont use this wingman. Everyone has a opinion..TI has the facts.

Can't argue with this. More great things to come. Details here.

Trade-Ideas Blog Gets Its Makeover

2009-05-29T11:35:00.000-07:00

Here's the new blog redesign that comes just ahead of the entire website redesign which should launch by Monday, June 1st.

Your feedback is appreciated and very welcome.

Morning Prep and Trades Show How I Got Ready Today

2009-05-12T06:14:00.000-07:00

I get ready for the day, trying to figure out a market theme that will bias my trading direction for the session and thanks to Twitter/StockTwits, I get an insightful nugget from Brian Shannon of Alphatrends:

"When 200 DMAs are DECLINING, rallies typically DO NOT hold, especially when they are advertised so strongly in media, keep guard up."
Source: http://twitter.com/alphatrends/status/1773111423

9:20 AM EST

Rummaging through my list of short strategies, I choose one I recently created for an upcoming Technical Analysis of Stocks & Commodities issue - we appear in the magazine's monthly Traders Tips section.

"Modified ATR Volatility Stop Part 2"

http://bit.ly/2tsmt

Click on the above link and goto 'Configure' to see how this strategy looks to short large spikes in price (of at least $0.75 in under a minute).

That’s the strategy, but what about the trading rules? How should the opportunities that the strategy finds be traded?

For the stop loss we used one of the more advanced options available in the OddsMaker. Instead of using a traditional stop loss we selected ‘Another Alert’ as the exit condition called ‘Trailing stop, volatility down’. This alert is triggered when a stock moves down an amount equal to the average 15 minute volatility multiplied by the number of 15 minute bars we decide – in this case 2. For example if the average 15 minute volatility is 10 cents, this alert would not trigger until a stock moves down at least 20 cents.

Here is what The OddsMaker tested for given the following trade rules:

On each alert, sell short the symbol (price moves down to be a successful trade)
Schedule an exit for the stocks 30 minutes after entry
Start trading from the open and stop trading 30 minutes later
Set a stop using the alert, ‘Trailing stop, volatility down’, with a setting of 2 bars

I have a few other strategies also up and ready to trade, but I'll watch what comes through here and short the large spikes in price I see from this set-up.

9:30 AM EST

Here we go.

Taking THG at $33.74 at 9:34AM EST. Out at $33.45 at 10:11AM EST +0.29

Taking TRH at $$40.41 at 9:42AM EST. Out at $40.46 at 10:12 AM EST -.05

Not thrilling, but living to see another day.

These Stocks Trade Straight Up from the Open

2009-05-03T11:11:00.000-07:00

Big HT (Hat Tip) to SMB Capital.

Our friends over at SMB Capital write an incredibly informative blog about the art of trading, the training regiment required for success, and what tools (both in your head and at your fingertips) are need to be successful consistently.

Below is the pattern they described in the article they wrote on Thursday, April 30th describing VISA (V):

"I was aggressive right on the Open with V today because…..
it was very strong into the Close yesterday. It never traded below 61.80 after the Fed and held nicely near 63.50 into the Close.
The first ticks were up above 64.
The first tested bid held.
The next resistance was not for miles, 67.
V has a history of being explosive.
V is a Tier 1 stock that Hedge Funds and Institutions buy. Think best of breed.
The SPY’s are above 87.
Strong stocks have made strong moves after solid earnings.
The bids kept stepping up and holding. This is the key. When I see this I think “game on.” Now I am aggressive.
The bids never dropped from 64 to most of 67.50.
I do not care where V closes. This is a momentum trade to be made on the Open. Later, the market rolled over so V plummeted. I care about a pattern that I see time after time which most developing traders miss. This is easy money."

Source: "“V” Right on the Open - Where I Want to Be"

Based on the article I developed this strategy that caught 'V' and several others just like it on Thursday as well as Friday and will ongoingly.

The strategy contains 2 alerts and 11 filters:

"Stocks Like 'V' at the Open"

Note: If you want to add more conservative risk to this strategy, one suggestion would be to increase the market directional filters in Trade-Ideas PRO and choose, for example, the S&P 5 Min Up filter with a higher setting than 0.05% or make choose additional markets that must also be up. This will only show you opportunities when the S&P or another market you choose is even more positive.

Click here to share this on Twitter!

This is my favorite type of post: we find an article from someone reputable and model the pattern they've shared in the article inside Trade-Ideas PRO. We not only find the stock that they mention in the article, but many others in the same pattern.

I need to do more of these - on top of all the ones we tag with the words, "Strategy-Session".

		5 Day Range
		5 Day Range
		10 Day Range
		10 Day Range
		20 Day Range
		20 Day Range

		Position in 5 Day Range
		Position in 10 Day Range
		Position in 20 Day Range

		Up in 5 Days
		Up in 5 Days
		Up in 10 Days
		Up in 10 Days
		Up in 20 Days
		Up in 20 Days