This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
Emini Futures Part 1 Basics (ES) How to trade Futures
Yes its very basic but hey everyone has to start somewhere right?
Seems to be a good stand up guy. I was following him before I found mtm (and eotpro.com)
E.
This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
I remember, towards the end of my college “career,” a classmate gave me a chance to go in with him to get some Red Hat IPO shares at their initial offering price (around $15 I think). I don’t remember how he managed to get that arrangement, or why the subject even came up; I wasn’t in the markets back then. Still, I knew this would be a good deal. The problem was how to raise the money in time. This was especially complicated because I would need to find money that my parents wouldn’t know about…. they were (and are) very anti-stock market. So, the next day I decided it was too much trouble, and turned the guy down.
Well, the first day RHAT traded, the stock closed at $54. Exactly one month later, it closed at $120. Wow! I told the guy he was crazy not to get out (assuming he was allowed to sell his shares that quickly… I didn’t know enough to ask, back then). But, as a fellow linux geek, he said that he believed in the company and that this was a long term position for him. I had no trading experience, but even I knew something didn’t feel right about holding through a 1000% 1 month return.
Well, I graduated soon afterwards, and for all I know that guy still owns his shares. But, I can only assume he was kicking himself when the stock traded for $7 a few months later. oops!
Worse, though, I was also kicking *myself*. Because if I weren’t so lazy, I could have pulled together the money and made a huge profit. Just by chatting with the right classmate at the right time. Think about that! Damn, a quick $150k right when I was trying to choose a post-college job could have changed the course of my entire life… at the very least, it could have gotten me into active trading right then, instead of seven years later.
Anyway, that college story is what I think about when I read the first half of An American Hedge Fund. Here was a young guy (Timothy Sykes, who you may recall as the only entertaining cast member of Wall Street Warriors: Season 1, although I liked the blonde chick, too). He had some capital, some market interest, supportive parents, and free time… all at the perfect moment in recent history to play in the markets. And more importantly, he took advantage of it. From 1999 to 2002, while finishing high school and continuing to college, he turned $12k into $1.65 million.
If you spend any time on elitetrader forums, you know that this story makes a lot of people on the internet insanely jealous. It’s actually kinda sad to watch.
It’s also hard to blame them… I’m jealous, too! Everyone likes to think that they could have done the same thing, in the same circumstances. Then, they would be the one on TV eating sushi with the model chick. But, that doesn’t really matter. I didn’t do it, and they didn’t do it, but Sykes did. At least he had a couple sensible strategies, mostly involving questionable news releases on penny stocks (and the tell-tale volume patterns that follow). I had no such market savvy in college. And, anyone who’s traded knows that trading consistently is hard, no matter what year it is, anyway.
So, for the first half of the book (maybe not in terms of page count, but conceptually), you get this incredible account of a college life that all traders wish we had lived. It must have been awesome. Timmay and I both skipped a lot of classes to stare at computer screens, but he was making thousands of dollars in the markets and I was just looking for the best free porn. Then, while I cooked macaroni and cheese, he took his entire dorm to a nice restaurant.
It’s fun to read, and you hear about some interesting triumphs and mistakes along the way. If you are reading blogs like this one, you must like to hear about trading stories. So, I’m not going to try to sell you on why I found them entertaining. It’s not a book about how to trade like Sykes did… they are anecdotes, and not recipes. Times have changed since then, anyway.
The second half of the book covers Sykes’ hedge fund, the Cilantro Fund. So, you’ve made literal millions during college trading your own money… now what? Sykes decided the next step would be to trade OPM. The book describes the troubles you have attracting capital as a small hedge fund. I was reminded of Marty Schwartz’s Pit Bull at times, because they both complain about the amount of time you have to spend finding and coddling the investors you do get.
Sykes goes into a lot more first-hand detail than any other book I’ve read about the process of starting and building up a small fund, though. I think most small traders with vaguely big ambitions would find this section enlightening and entertaining, if not a little disheartening as well. It turns out, like every other part of Wall Street, this too is a hard game…. even if you have one of those media-friendly stories about making a fortune in college. The book covers the details, so I won’t repeat them here, but the chief complaint is all the non-publicity regulations leveled against hedge funds. You need publicity to attract money (and give the public an accurate picture of the risk involved with hedge funds compared to, say… mutual funds), but that publicity is exactly what you are not allowed to have.
Turns out, the Cilantro Fund was not a spectacular success, and while it didn’t implode, I think it is now closed. A lot of people seem hung up on that fact, but I don’t think it hurts the book. I ask myself: would this be a better book if it said that every choice Sykes made was perfect and he made billions? Of course, the answer is not one bit. I loved that movie Rogue Trader, and it’s about a ridiculously bad trader. Doesn’t matter. This is an autobiographical book, and what happened, happened. If you are a trader, you probably relate to most of the story on some level, and that’s what’s important.
I basically lived in front of Tradestation this weekend. I’m pretty sure it wasn’t healthy. I will need to eat extra vegetables to compensate, or something.
The word for the weekend was “Adaptive.” I read Rocket Science for Traders: Digital Signal Processing Applications, which is a great book. It outlines algorithms for automagically estimating the dominant periodic component of price action. If it’s accurate enough to be useful, this is an important piece of information. For instance, if you know how fast price is cycling, then you know the correct period length to use for oscillators, so that they don’t suffer from horizon effects. I made like 17 adaptive indicators for TradeStation so far, and I’ll talk more about them if they turn out to be useful.
On the stability front, I did manage to break the platform at least 5 times, but that’s not as bad as it sounds. Luckily, the program is very modular (multiple communicating processes), so it never completely crashed. Instead, it continued working in some hampered fashion, and all five times I was able to save/verify whatever I was working on. That was really great.
3 out of 5 crashes happened when I changed some indicator code, while the indicator was also visible on a chart. Usually, this works without issues. The worst case is if the change introduces an error (like divide by zero, or if you rename a function that the indicator calls), and then the platform just tells you, and takes the indicator off the chart. No problem. Sometimes, though, it decides to die instead.
The other two crashes are a complete mystery to me. I was just typing in some code, and I think the syntax hi-lighter got confused and messed up the editor. Because, I was unable to type anything else new in that window, though I could edit stuff that was already there, in a limited way. Weird.
Some things I like:
Some things I don’t like:
I have a number of nit-picky things to say about the language itself, but that’s to be expected because I am a programming language nut. Overall, despite some annoyances, I’m very pleased with the platform so far. I haven’t come across anything yet where I couldn’t figure out how to do it. Of course, now the question is whether all the technology will make me more profitable, or if it’s just a fun distraction.
I’ve heard a lot of people swear by How To Make Money In Stocks: A Winning System in Good Times or Bad, 3rd Edition, so I read it this weekend. (yeah, after two books reviews this weekend it’d be hypocritical of me to post a weekend non-reading entry, so I’ll skip it)
I thought How to Make Money in Stocks was dated. It says “completely updated” right on the cover, and the copyright says 2002. Yet, it still covers controversial topics like:
huh? I’m pretty sure that either the word “completely” or “updated” does not mean what the author thinks it means…
It describes the CAN SLIM stock picking method in great detail. It seems like a sensible enough strategy, and I know a lot of people use it. In terms of technical analysis, the book goes over cups+handles, and double bottoms, and gives example charts of stocks just before they broke out big. The general advice here is buy high and sell higher, rather than looking for a bargain.
It warns against day trading, which is typical of books like this, so I can forgive it. It also spends a lot of time pimping Investor’s Business Daily, which the author founded. I can forgive that, too (I kinda expected it).
What I’m finding more and more with non-fiction books is that it’s hard to compete with the internet. There’s nothing in this book you haven’t read on the internet, if you’ve been looking. Aside from autobiographical trader books, I think the days of trading books are numbered, if not already past. The same is true in most technical fields, as well. I’ve bought very few comp sci books in the last few years, since everything I’d want to know is on-line. So, even though there’s some good information in this book, it’s hard for me to recommend that you purchase it.
This weekend I read: Just One Thing: Twelve of the World’s Best Investors Reveal the One Strategy You Can’t Overlook. Like an idiot, based on the title, I thought the book was about one thing that twelve great investors agreed on. In fact, it’s individual chapters written by twelve different people, each about something different.
But, don’t let my stupidity keep you from reading this book… I thought it was pretty interesting throughout. The standout chapter, in my opinion, was the one on human behavior/psychology by James Montier. It outlines ways that humans are wired to make bad investing choices, which is something we’ve all heard before. But it’s pretty exhaustive, and describes the justification and relevant psychological studies very clearly. In some cases it also suggests ways to counteract our human deficiencies. I liked this chapter best partly because it was applicable to short-term trading (whereas a lot of the book is investor-oriented), and also just because I am intrigued by the way people work.
Another memorable chapter is by John Mauldin, the editor of the book. It describes trends in place now that are likely to shake up the world in decades to come. Again, it’s stuff you have heard before if you are interested in such things, like: the population in the West and Japan is set to decline, even as it ages. Looking ahead, what might that mean? I disagree with some of the conclusions he makes, though, about the population and the workforce. I think he’s forgetting how much technology can help us in those areas. For instance, he talks about how the west needs to desperately import young educated immigrants to fuel our workforce and support retirees. But, who’s to say that elderly people will need (or even want) to retire, or need a lot of care from human workers? If I’m going to live to be 150, I don’t want to be out of the game and bedridden from age 65 on… and I’m betting I won’t have to be.
Common themes in other chapters were: Don’t hold on to losses. You can’t make money with information everyone knows. Compounding works.
This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
I downloaded a trial version of Button Trader, installed it, read the manuals, and today was my first day using it, (in simulation mode) but you can still use it to trigger entries for real trades, which is what I did. I went 3 for 3 on the SPY and DIA using the signals from Button Trader.
Button Trader (www.buttontrader.com) is a front end to Interactive Brokers that allows you to invoke trades with button clicks through Interactive Brokers, though the features are much more rich than that. I’ll explain further, but this is just a small fraction of what it can do.
One common problem I have is getting an alert from Trade Ideas, where a resistance level or support level has been penetrated, but the stock has not moved enough to know how to trade it. The volume is usually below normal, and this might be tradeable, but I don’t know.
With Button Trader, I can set an entry above and below with 2 mouse clicks, with a time out, and forget it. If the price level is hit, Button Trader will initiate the position with IB. It then will use a set strategy for managing the trade, like a break even stop and profit trail. With a click I can also move my profit stop and move my loss stop up or down to make my potential loss as low as possible, or take profit early.
On a breakout or breakdown, I’m in the move when it happened. My loss stop and profit stop are automatically set. I usually have a problem triggering into fast moving breakouts, This handles that problem for me. This also makes managing mutiple positions much easier.
I’m running this as a trial, and obviously just new with it. I was looking for a software solution to improve my trade execution and management once I decided I had a tradeable signal. So far, it lools pretty good. Below is a screen shot:
- TraderD
This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
I have been trading OMNI’s Nasdaq and S&P 500 e-mini futures recommendations for just over two months now. As I have said in previous posts, Oscar’s S/R levels and directional calls are awesome. I first started using them to trade SPY, and then I went over to trading ES and NQ. I still watch SPY while trading futures- partly out of habit. Mostly due to missing entries, I haven’t taken every OMNI trade. Be advised that I usually used my own exits, so these results differ from Oscar’s. Trading futures is one tough racket, as acknowledged by Ugly. Thankfully, I managed to make a profit over the last couple of months.
| Total P/L: | 7.23 R |
|---|---|
| Trades Taken: | 22 |
| Winners: | 13 (59%)(smallest winner $155) |
| Losses: | 8 (3 less than $100 trading 1 ES contract) |
| Expectancy: | .33 R |
| Biggest Winner: | 2.0 R |
| Points gained: | 54.8 (1 contract each trade) |
| Biggest Loser: | -1.06 R |
This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
Any guesses on the secret to this one? The 100pct system. I keep getting emails about it that start out:
“Would you believe me if I told you that I could show
you a method which has success rate of 100%?I’m serious. No position ever ends up a loser.”
I somehow got on their mailing list, I guess. If you read the page, it turns out to be an FX system, so my first guess is that it somehow relies on interest rate differentials to try to “guarantee” a return. The big red flag (other than the promise of a 100% win rate) is:
“While every position will end up producing a profit, the system does experience open equity drawdowns - meaning open positions can and will go negative, sometimes significantly. The trader willing and able to ride out those adverse periods will be well rewarded, though.”
If my understanding of market mechanics are correct, then any system that wins 100% of the time and has an ROI greater than the risk-free interest rate can and will be arbitraged right out of existence.
It’s an eye-catcher, though, to promise no losses… I’ll give them that. To be fair, I haven’t paid the $97 to see what the system is… maybe it is amazing. If they want to send me an evaluation copy for review, I’d be happy to give it every chance to prove to me that it’s safe for people to use.
This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
I started watching Oscar Carboni’s YouTube videos off and on in February, but it wasn’t until I figured out how to use his rec’s that I started to regularly watch his videos. One thing that stood out for me initially was seeing Oscar wear his floor trading jacket each time he produced his videos. When I initially saw his videos for the first time, I thought, man this guy must have a very hectic schedule, trading in the futures pits all day, and then rushing off to do this video right afterwards! And then I found out that he was actually laid off from NYMEX as a result of the exchange going electronic, and was wearing his trading jacket just for the purposes of the video. However, once that New York Post article went public, his videos really started taking off in popularity.
Oscar has been through the crash of ‘87, Operation Desert Storm, the great bull run of the late 90’s and the first market session after 9/11. Suffice it to say that he probably knows something about trading futures. Recently, he’s been asked to be one of the speakers at the Money Show in Las Vegas, mostly likely a direct result of all the great work he’s done in the videos.
The OMNI is a KISS - based tool to assist futures traders with their own technical analysis (Oscar calls it your own “homework”).
The OMNI basically provides a trading scenario to the user. How do I use the OMNI? Well, I take a look at the buy/sell levels suggested the OMNI, and together with current levels of various contracts (eg. NQ, ES), I extrapolate that to determine what will be the potential scenario for the day’s trading session. For example, if the OMNI says buy ESM7 @1438, and ESM7 is currently @1445, then that means the likely scenario for the day is a pullback to some sort of a support level, and then a move back up.
But it also goes beyond that. The futures indices generally trade in synch with the market indices. So, if the thesis is an initial pullback to support levels, and then a move back up, I would be looking for something similar in individual stocks, especially ones that are components of indices, like AAPL, RIMM, GOOG, etc.
Prior to following the OMNI, I had no idea what the futures would be doing for each session, ie. no overall thesis in mind, and nothing to test against the market. But now, thanks to the OMNI, I have a thesis in mind going into each day’s trading session, and that goes a long way to assist me in finding the high probability trading scenarios (like the recent trade I made in ZG).
The OMNI is not 100% accurate (nothing ever is). What I’ve recently learned is that the buy/sell levels suggested by the OMNI should not be treated as precise levels, but more of general AREAS of support and resistance of which the trader should be mindful. Of course, sometimes the OMNI makes the wrong call. However, when it is wrong, I haven’t lost any money, and when it is right, I’ve made money. And, being able to profit from OMNI’s rec’s is a compelling reason for me to like it and to continue to use it. I think it’s a great tool to have when trading not just futures, but also when wanting to trade the indices (or even just to stay informed of the direction of the indices), like SPY, QID, IWM, etc. Hats off to Oscar Carboni, the man behind the OMNI who shows that life clearly does not end after you get laid off !!
This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
Has anyone read either of these books? They look very interesting to me. Especially the first one, which appears to be about applying modern signal analysis techniques to stocks… so we’re talking about adaptive filters that “lock on” to trends and cycles, versus a fixed-period EMA for instance. I’ve noticed that I have to use most indicators as “good enough,” and kind-of filter out the rough spots by mentally ignoring them when they seem not to apply. You know, like when a price seems to plow through a given MA again and again, I’m not going to pretend it might be support 10 minutes later! Well, maybe these more advanced indicators apply more often. Sounds like something I’d like to play with, if it’s any good.
[EDIT: If you've blocked my beautiful Amazon images, the two books are: Cybernetic Analysis for Stocks and Futures by John Ehler, and Evidence-Based Technical Analysis, by Davin Aronson.]
This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
QuoteTracker is an outstanding charting program that I use. It’s got a freeware version with a few limitations and ads, and the full version is free to holders of a funded ($2k) TD Ameritrade account (which I also have). Without that, it’s only $7/month or $60/year. QT is a charting package only, not a data provider or brokerage. You can link to lots of different data sources and even integrate trading within QT with some brokerages (like MB Trading, Interactive Brokers and TD Ameritrade). I get my data from my TD Ameritrade account, and I trade manually through Zecco. Lots of different options there–full details are at the QT site.
One of the great features of QT is the Paintbars–graphical signals that show up on your charts based on quantitative calculations that you define. Here’s an example of one of my charts:
This chart has two paintbars added, which I chose to show up as a diamond above the candle–gray if it’s a narrower range bar than the previous one, and yellow if it’s an inside bar (which is also a narrower range bar by definition). In the chart above, the second bar is narrower than the first, hence the gray diamond. The third is inside the second, so it gets yellow.
To set this up in QT, you choose Charts>Chart Paintbar Editor from the menu. You get a screen that looks like this:
You can see one of the paintbars that I created in that picture. You create a new paintbar, name it, and then add rules. Rules are the calculations and comparisons made to decide to implement your paintbar on the chart or not. You can have more than one rule per paintbar. If you click the “switch to simple expression” toggle button, you can go to a pulldown list of built-in indicators. By choosing some of these and then clicking the button again, you’ll see the complex expression code–this is a good source of examples to build your own complex expressions. In my example, the words ‘Bar High’ refer to the high of the current bar, and ‘Bar High[1]‘ refers to the high of the previous bar. The number in brackets is an offset of previous bars. The “action” and “else” pulldowns determine what you will do if the conditions you specify are or are not met. You can also change the color involved in the paintbar.
Here’s the code for some of my paintbars:
NRBar:
if ABS(Bar High-Bar Low) <= ABS(Bar High[1]-Bar Low[1]) set color to Gray
InsideBar:
if ABS(Bar High-Bar Low) <= ABS(Bar High[1]-Bar Low[1]) AND Bar High[1]>=Bar High AND Bar Low[1] <= Bar Low set color to Yellow
NR7:
if ABS(Bar High-Bar Low) <= ABS(Bar High[1]-Bar Low[1]) AND ABS(Bar High-Bar Low) <= ABS(Bar High[2]-Bar Low[2]) AND ABS(Bar High-Bar Low) <= ABS(Bar High[3]-Bar Low[3]) AND ABS(Bar High-Bar Low) <= ABS(Bar High[4]-Bar Low[4]) AND ABS(Bar High-Bar Low) <= ABS(Bar High[5]-Bar Low[5]) AND ABS(Bar High-Bar Low) <= ABS(Bar High[6]-Bar Low[6]) AND ABS(Bar High-Bar Low) <= ABS(Bar High[7]-Bar Low[7]) set color to $8000FF
Once you have saved your paintbar, you need to apply them to a chart. Right click on a chart and choose “select indicators”, and you see this screen:
There is an indicator called Paintbar-Top and one called Paintbar-Bottom. ‘Top’ shows up on the price, while ‘Bottom’ shows up linked to a lower panel, like volume or another indicator. Once you enable it with the right arrow, you have to click the “edit” button for the paintbar indicator you want to set up. Once you do, you see this:
Choose the paintbar you saved that you want to use from the “name” list, and then choose your “show on” effect. Hit ok and you’re ready to see them in action! Make sure you save the chart template if you want to be able to keep the setup.
Feel free to post your own paintbar codes in the comments, or to ask questions about any of the above.
This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
Last week someone wrote me an email to tell be about a free charting package at StockWrap.com. They were so enthusiastic about it that I actually assumed it was spam, and I wrote them an aggravated reply about how you don’t have to pretend you aren’t affiliated with a product to get me to try it. Well, it turns out this was an actual stranger that actually just felt compelled to write me out of the blue to praise the product. Sorry about that! You’d be surprised how many dishonest requests I get, though… :-)
Anyway, I had to wonder if the enthusiasm was warranted, so I downloaded the product. It took a couple days for me to get around to it because it’s Windows-only, and I spend most of my time on Macs. It was a mild annoyance that I had to download the dotNet framework to make it run. The needed version comes with Windows Vista, so that annoyance will diminish over time. They provide links to Microsoft’s download page, which was nice of them.
With the dotNet install out of the way, I downloaded their SWEC product. They warn you that you might need WinZip to extract their .zip archive, but I found the winXP compressed folder facility worked fine for me. It installed with no problems.
So, I start the program, and it refused to do anything until I obtain a license file. That annoyed me. This is a free program. I don’t get it. I can only assume they harvested my email address and sold it to untold hordes of spammers. Good thing I gave them a temporary email address. But, once I got my license file, it activated painlessly and I could get started.
It’s a charting package for daily data, which you can roll up to Weekly, Monthly, Yearly as you might expect. It has a large array of tools you can use to draw on charts (such as the “Spiral of Archimedes” which I proudly put in the chart above). It does a good job of maintaining the locations of lines you’ve drawn when you switch time-frames.
The number of indicators available is wider than the set available via my broker’s platform, which is nice. The charts look clean. The interface for some things wasn’t immediately obvious. Like, double-clicking on an indicator adds it below the chart, even if it’s something like Bollinger Bands. To get the indicator overlaid, drag the name of the indicator onto the chart area. Fair enough…
Multiple charts open up in a tabbed interface, which I like. If there is a way to make additional charts open with some predifined set of indicators already applied, it wasn’t immediately obvious to me. But, I bet there is a way, or will be soon.
They claim on their website that it’s beta software, but the version number is 1.0.4, so that confuses me. Playing with it for 30 minutes, I only noticed one bug, which was pretty minor. Say you change parameters for an RSI from 14days to 5days. It still displays in the list of applied tools as RSI(14). If you have 3 different RSI’s applied, it looks confusing. I’m sure that will be fixed soon.
I only played with this for a minute… long enough to see that the scanner is not customizable enough for my tastes. It appears you select a set of stocks, and chose among a preset list of things to scan for. Then you run the scan. I didn’t immediately see a way to scan the whole NYSE and Nasdaq, which is no surprise because it has to download the OHLC data for each stock you add, as you add it. I think this part of the product needs to get more mature, and maybe do server-side processing so that entire markets can be scanned.
There are supposedly a number of portfolio tracking features, but I have no interest in them and didn’t try to find them.
The charting part seems nice, and you can’t beat the free price tag. It would be nice if there were a way to get (delayed, of course, due to the free nature) intraday data. With that, I could see using this product to investigate stocks after the markets close, since the number of indicators and drawing capabilities is large. With only daily data available, this could still be quite useful for swing traders and longer-term investors. In fact, with the portfolio management stuff in the product, I think that’s the market they are aiming for.
I’m back from my end-of-year travelling now, and normal posting will resume here soon. Since the markets will be closed until Wednesday, I thought I’d start off with something from my home life:
I am an avid loose-leaf tea-drinker. When I used to work in an office, I’d make constant use of the coffee maker’s hot water spigot. That was great, but now that I trade at home, I always have to heat water up on my stove. It’s like moving from cable or DSL back to dial-up internet service… the wait is excrutiating once you’ve had access to instant near-boiling water. Well, it finally bothered me enough to look into solutions, and I found this:
It’s the Zojirushi CD-LCC30 Micom 3.0-Liter Electric Dispensing Pot, and it’s everything I was looking for. For me, this is much better than buying a big coffee maker and running a water line to it. Now, for things like soups, oatmeal, tea, hot chocolate… just about anything that calls for sitting around and heating water… I no longer have to wait. And, while I’m not sure, I’d venture to guess it uses less energy than boiling water on my stove does.
I saw someone asking about FreedomRocks FX trading on a forum today. I went and looked at it and I had to laugh. They flash some really complex stuff like “Moving Average” on screen to highlight how complicated and intimidating trading is. Don’t worry if you don’t understand what they are talking about, though, because according to their promotional video:
You don’t need to know how everything in your car works in order to drive effictively, and the same principle applies here.
What is the system they sell? It appears they put you in a long position, and then place a buy line below your position, and a sell line above it. Whenever your position goes against you as far as the buy line, simply buy more! Eventually, the price will undergo a correction, they say, and you will make money. Here’s the educational graphic:
Here’s the case where the position goes in your favor, and you inexplicably only sell 1 lot, even though you supposedly know a correction is about to happen:
What they don’t say is… what happens if there is no correction? And, if there is always a correction, why bother putting on the initial position? Their examples show the original position always breaking even…
While the video looks pretty slick, it’s amusing to note that during the entire running time, there’s an obvious “Your Name Here” that they forgot to fill in on their template. :-) At FreedomRocks, attention to detail is job #1!
I have not tried their service, so they could be the best thing since sliced bread. If so, then their marketing is doing them a great disservice by offering to do things like “allow you to select virtually any interest rate you desire on your portfolio.” Yeah, because knowing you’ve got that 10% interest rate will make you really happy when half your account has evaporated…
If you watch their movie and do not agree with me, they have a free trial you can try out. I’m opting to pass on this particular offer of a lifetime.
I just noticed on a digg story that Google Spreadsheets lets you put live stock data in the cells. It’s the same as Google Finance data, which means it has the typical 20-minute delay. If it were real-time data, I’d use the heck out of it to program complicated real-time alerts based on a bunch of criteria. With a 20-minute delay, it’d just be pointing out opportunities I’ve already missed. :-(
I could maybe see this used to publish a shared spreadsheet that determined in 20-min delay time which stocks are posting higher than average volume for the day. Maybe there are other good ideas out there. The key limitation to doing anything too complex with it, is that you can’t ask for the quote for a day/time. Like, imagine what you could do for swing trading off daily charts if you could have a list of cells for the closing price for the last 50 days. Suddenly a whole wealth of technical indicators could be programmed in, spreadsheet-wise. And, every 20 minutes it would update. Kinda cool. If it’s all keyed to a symbol on the top row, just changing that symbol does the same analysis for a different stock, etc. But, it’s not quite there, yet.
You can get: