Jun 30

A couple weeks ago, I was given a review copy of the new book by Stephen T. McClellan: Full of Bull: Do What Wall Street Does, Not What It Says, To Make Money in the Market. Here is my review:

Much of the text is autobiographical anecdotes about what it’s like to be an analyst. Those parts reminded me of Confessions of a Wall Street Analyst, the Reingold book, quite a bit. That’s not a bad thing, really, as in both books the story is interesting and worth knowing about if you are in the markets.

Still, at first I was wondering if Full of Bull would offer anything new on the topic. Thankfully, McClellan put a new twist on his book, and interspersed his anecdotes between directly useful advice for investors. So, it’s one-part autobiography, one-part textbook, and generally pretty well-written. He gives you some history, and then looks you right in the eye and says “… and here’s what this means to you.” I liked that, and thought it worked well.

The book is structured well with ample headings, and in the text he uses an informal writing style. It’s as if he’s having lunch with you, telling you what he knows about the markets. That makes it an easy and fast read, and at the same time gives the information an air of genuine honesty.

Topics covered include:

  • properties of good management
  • analyzing a company’s customer base
  • protecting capital
  • what to make of analyst recommendations
  • how to interpret events like stock buybacks
  • how to analyze corporate ‘turnaround’ stories
  • … and many more

Be aware that this book is targeted toward investors, rather than traders. You won’t hear much about chart patterns in here! The focus is on interpreting news, fundamentals, and of course, analyst reports. Still, McClellan is conservative, which appeals to me even as a trader. Through his examples and his stories, he tells you how and why many events that are positive on the surface are actually covering up deeper problems. He tells you what kinds of companies, industries, and executives add to his confidence in an investment.

That’s not to say the book is perfect. I found that a few of the points are made in multiple places in the book. On one hand, you could say this helps drive the point home. On the other hand, in a couple places it felt repetitive. It is good to see the investment insights tied back to real-world analyst knowledge, but at the same time, not all of the insights are unique insider gems. The book’s textbook side forces it to go over some basics that an experienced investor will already have picked up. For instance, it advises to try to hold an investment for at least a year to get the lower tax rate. You don’t have to be a wall street insider to know that!

Overall, though, I’d say that the book was worth the read. The combination of an investing guide and an insider look at the life of an analyst works very well, and should make the book appeal to a wider audience than other purely autobiographical books. It gives the book practical applications, which I appreciated.

Jun 30

I was investigating ninja coding issues this morning, so I didn’t make any trades. But, I did go back and take a snapshot of another example scalp from what is becoming my favorite hit-and-run setup:

Nice, clean, and (relatively) easy.

Not only am I still working on getting the main eotpro functionality moved over to ninja, but I also closed a deal to do some ninja strategy work. So, I’m going to be quite busy the next couple weeks, and trading may be light as a result. We’ll see!

Jun 27

Since I’ve been trading abbreviated days this week, I’ve mainly been using my scalping technique. It’s a simple setup I’ve gone over in the eotpro live room most days lately. I’ve described an early version of the setup in the forums and old blog posts. The only real difference is that I’ve changed up the support indicators a bit… so that I use my new volume indicator variant, and my custom paintbars. But the idea is the same… a tag of the rolling vwap and a small move.

Anyway, here’s three examples from the end of the day today:

The third one is a pretty loose example of “tagging” the rolling VWAP, but look at how well volume precedes the move down just before entry (as seen by the volume indicator in the bottom subgraph diverging sharply against price).

I have found the technique is especially effective when you scalp moves after big volume divergence on a larger-grained chart (like a 2584 share bar chart, or a 3/4 pt range bar chart). This is doubly effective if we are near support or resistance on a PnF chart. Things like that are even more evidence in favor of a probable swing in a direction. That’s how I’ve been playing it, anyway, with very high success rate (no losses this week, that I can recall… sound good?).

Barb’s Reversal indicator also had two wins today, though I didn’t trade them. Here’s the second example:

Very nice!

Jun 26

Wow, has it really been 4 days since my last blog entry? Sorry… new gf has the majority of my attention right now. I haven’t stopped trading, by any means… but something has to give and this time it is blogging. I have been in the eotpro live room most days, and will be participating in indicator lesson school tonight.

Jun 22

At least, this is one reason I have always felt more relaxed when trading liquid futures…

This is an extreme example, but you see less drastic versions of it all the time on the volatile stocks. That’s why I say stocks have a bit of a ‘wild west’ feel compared to @ES.

But, I do watch all of this guy’s videos, as I think I’ve mentioned before on the blog. I can tell from listening to him that he really knows what he’s talking about… he drops little tidbits here and there about stuff like nuances of L2 data that you don’t often hear, but that I know from experience is very important (at least to my hit-and-run style, it was!).

Since I’ve enjoyed their videos so much, I’ll also point out that they have a website/subscription service now, over at todaytrader.com. I can’t endorse the service because I’ve never used it and haven’t talked to anyone that has. It could be really horrible, for all I know. But, based on what I’ve seen on youtube, it’s probably worth at least checking out if you are trading stocks and like their style.

Jun 19

Oh yeah! I’m showing my 3/4 pt range bar chart today. Nice clean signals in that first subgraph. Clearly outperforming my “classic” Patty-B-based signals in the second subgraph. The new volume indicator is in the third subgraph.

Jun 18

The author of the S&P 500 Futures Journal blog wrote a comment here a while back, and I’ve been following his blog ever since. I think it’s pretty good. Nice concise review of the day in 15-minute candles, and often an opinion on the likely direction for the next day.

It doesn’t appear to have too many readers yet, so I wanted to plug it. I think it will make the Blogs I Read page soon, if it holds up.

Check it out!

Jun 18

Oh yeah, baby… Here’s the first 2 hours of the market, or so, in 2584 share bars. My cool new experimental entry signals were awesome yet again.

That doesn’t mean that they are actually awesome. But I would say every day that passes makes them look more and more promising.

They looked pretty good on my 3/4 pt range bar chart, as well. But not as good as the volume chart.

Jun 16

Am I happy with this morning’s experimental entry signal performance?

Yes. Yes I am :-) Two trades in the first 1.5 hours, and they were pretty darn clean wins.

Hopefully the rest of the day will hold up. I like how it avoided the choppy section in the middle of the chart, even if that meant in sat out for the initial breakout.

Jun 14

As I’ve been mentioning… Bill’s Arrows are awesome. But, they are also conservative. And, even if it’s not in their best interests, some people want more action than that. I swear, many beginners would rather lose money trading fast than make money trading slow. Sad but true.

So, I’ve been working on a new kind of entry indicator, that attempts to catch all the moves in the market. Sure, if you attempt to do that, you have to be willing to take some swings that miss. But, this morning I arrived at something that looks promising. Here’s Friday’s action in 2584 share bars, across two screenshots:

There’s 18 trades on Friday, 9 trades on each screenshot. 16 Wins and 2 Losses. I highlighted the losses on the charts above… it was easier than highlighting all those wins! :-) Obviously more research is needed…

The indicator is built out of GCycle Stochastics, Market Sync, VRam Bars, the Rank Sum Tests, Alla’s Average, the Rolling VWAPs, and a new variant of volume indicator I threw together this morning. Except for the new volume variant, all of these are available today from eotpro.

The tall Red and Green lines are meant to be the more confident entries, while the shorter cyan and magenta lines are more for aggressive entries or trend hijacking. That’s the intent anyway… I’m not sure yet if you should play them any differently. This chart is set up so that early exits are gauged by Bonnie’s Bars (the paintbar), as usual. That’s how I gauge which are wins vs losses, anyway, for these purposes. It’s assumed that if you show 1.5 points or more profit, that you won’t let the trade become a loss.

Just please try to remember that the faster your signals are, the more skill and discipline you need to actually make money from them. Beginners really would be best served by learning a conservative approach like the Arrows we’ve released.

Jun 13

I don’t like to brag, but… I mean… wow, Bill’s Arrows are good! It’s part of the Elite Series package I’ve released through EOTPro.

Today, many of the signals had steep pullbacks just after entry, which is always scary. But, I watch Bonnie’s bars (the paintbars) for indication that I should bail on the trade… and most times it indicated that you should hold on and wait for the move. Good thing!

I was watching a 2584 share bar chart today… somewhat faster than Bill’s 3382 chart. I tend to think his chart is better, but for some reason I usually can’t bring myself to use the non-fib number. I’m a purist, I suppose.

Here’s another example, from the TS platform:

As you can see, the arrows are available for both tradestation and multicharts… and I’m going to try my best to make them work on ninja. That’s going to be tricky.

Hope your day was good.

Jun 12

I didn’t trade much today… took a long lunch. I did try out an idea I had, and I’m not sure if it was contract rollover, or what, but we’ll just say it didn’t work! :-) I lost $200. One day I will stop experimenting and stick with one of the setups I know works!

Anyway, I also demonstrated Bill’s Arrows for TS today, so I might as well post a screenshot from that:

People just love arrows… and are asking for an arrow-ized version of my scalping method. Maybe soon…

Jun 11

At least I can do live-action video still… of course then you are forced to look at my face!

I’m doing massive file transfers into a new computer I bought today, and had nothing better to do but play with the webcam…

Jun 11

This will teach me to wake up late…

The first signal was pre-market, and even if I’d have taken it, I would have waited for it to bounce off Alla’s Avg before getting in. The second signal was around 8:40 (Central time) and I wasn’t awake yet. Oh, well…

Note this is an example of an oversized move that crosses several math lines. So, even if I had taken it, I would have scaled out of my contracts too early. I’m thinking that if I trade with 3 or more contracts, I’ll try to hold the last one until Bonnie’s Bars reverse on me. That might be a good balance between conservative profit taking and riding my winners. And, it’s still mostly mechanical, which is cool.

Jun 10

I know it’s my day off, but I couldn’t resist trying out this trade:

Entry is at the vertical line. I was playing with my charts, and sped up Shelly’s Volume VR4 (the red/green oscillator on top of price) a bit by applying less smoothing than the standard amount. It turns a little quicker now, which I like. I also applied my divergence and hidden divergence indicators to a REALLY unsmoothed version of SV VR4. That version was too ugly to look at, but my platform doesn’t mind checking it for divergences. The two divergence indicators are in the bottom subgraph.

So, at the time of my trade, I had price acting very well, making a base right on top of Alla’s Avg. The SV4 on my chart exhibited bullish hidden divergence (it dipped really low as price meandered upward, recharging for a strong push up). The two divergence indicators also both showed bullish divergence against the super-fast SV VR4. So, I got in when bonnie’s bars turned green. There was no Patty B signal, but I thought lots of evidence was in my favor. :-)

Ok, now my day off starts…

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