100 Best Blogs for Future Investors

Whether you’re studying finance or just thinking about investing in the future, doing some research before you jump in is wise. Online, some of the best resources for learning about investments are through regularly updated blogs. Use these 100 blogs to track investment news, trends, and more.

asr: if you wanted to learn technical analysis, seems these 3 blogs are good
# AC Investor Blog: This blog offers independent day trading strategies based on technical analysis.
# AlphaTrends: Alpha Trends shares objective and unbiased technical analysis from a full time trader.
# Trader Mike: Trader Mike offers insight into stocks with technical analysis and more.

asr: add this abnormalreturns
http://www.abnormalreturns.com/mentions/ -- seems this blog picks best out of blog for the day ( general market reading )

General

Find general research and information for investment on these blogs.

1. The Disciplined Investor: On the Disciplined Investor, you’ll get financial insight, market news, and investments.


2. The Motley Fool: The Motley Fool is all about educating amusing, and enriching investors.


3. Cafe Hayek: Cafe Hayek shares a refreshing look at economics.



4. InvestorsInsight: Get financial intelligence, advice, and research from the InvestorsInsight blog.


5. The Becker-Posner Blog: Read this blog to learn about investment and economics from two accomplished scholars.


6. Investor Trader: Investor Trader can take you from mangy stray to financial fat cat.


7. Seeking Alpha: Follow Seeking Alpha to find stock market news, investing ideas, global markets, and much more.


8. FT Alphaville: Alphaville covers hedge funds, capital markets, commodities, and beyond.


9. Investing Blog: This blog offers insight into stocks, forex, hedge funds, futures, and commodities.



10. Greg Mankiw’s Blog: Greg Mankiw has random observations for students of economics.


11. Jim Rogers Blog: Jim Rogers shares his financial commentary on this blog.


12. The Online Investing AI Blog: This blog is all about automated trading.


13. Brad DeLong: Brad DeLong is an economist offering a balanced and reality based look at the financial world.


14. Infectious Greed: Paul Kedrosky discusses finance and the money culture.

News

These blogs will help you stay on top of investment news.

15. The Prudent Investor: The Prudent Investor is a former financial journalist who evaluates financial and political news to discover market trends.


16. Global Investing: Global Investing is full of insights behind the investment headlines.


17. Wall Street Greek: Learn about financial news from experts on Wall Street Greek.


18. Financial Sources: Monitor financial resources and sites on the Internet through Financial Sources.


19. The Wall Street Journal: Get the business and financial news you need from The Wall Street Journal blogs.



20. FEI Financial Reporting Blog: Learn about financial news from finance executives on this blog.


21. Talking Biz News: Talking Biz News has information about business journalism.


22. Imaginatik Investor News: Imaginitik’s blog has news for investors.


23. Bizjournals: Find economic news articles across the US from Bizjournals.


24. The Street: You can get news and investing advice from The Street’s blog.


25. Resource Investor: Resource Investor will provide you with news that trades.



26. Financial Times: Financial Times offers world business, finance, and political news.


27. UpsideTrader: UpsideTrader calls the financial media to task.


28. InvestorCentric Blog: InvestorCentric shares news and information for real estate, small business, and alterative investors.


29. CNNMoney: Check out business, financial, and personal finance news on CNNMoney.


30. DealBook: DealBook will keep you on top of mergers, acquisitions, venture capital, and hedge funds.


31. HSH Associates Financial News Blog: This long-standing publisher of consumer loan information writes about financial news.

Business

Follow business investments using these blogs.

32. Organizations and Markets: These professors offer a discussion on organizational economics, strategic management, and more.


33. Financial Blog: BusinessWeek shares investor insights on the Financial Blog.


34. Investor Relations Musings: You can learn about the practice of investor relations from this blog.


35. Footnoted: Footnoted shares the details that are found in the footnotes of SEC filings.



36. Money & Company: You can track the important market and economic trends on this blog.

Personal Finance

These blogs examine investments from a personal finance standpoint.

37. AllFinancialMatters: This personal finance blog is dedicated to investment and financial planning.


38. MiB Smarter Money: MiB Smarter Money shares great advice for smarter personal investing.



39. Consumerism Commentary: Consumerism Commentary is a personal finance blog about money, investing, and more.


40. MoneyRates: Use MoneyRates to find the best interest rates available.

Stocks

Follow Wall Street through these blogs.

41. AC Investor Blog: This blog offers independent day trading strategies based on technical analysis.


42. Bayesian Investor Blog: Read about stock market speculations from this investor.



43. Random Roger: Random Roger shares this stock market blog about portfolio management and beyond.


44. The Kirk Report: The Kirk Report is a pro’s view of the stock market.


45. Anne Marie’s Trading Blog: Anne Marie writes about trading on this blog.


46. AlphaTrends: Alpha Trends shares objective and unbiased technical analysis from a full time trader.


47. TraderFeed: TraderFeed takes a look at historical market patterns.


48. Chart.ly: Take a look at Chart.ly to find useful stock market charts.



49. Trader Mike: Trader Mike offers insight into stocks with technical analysis and more.


50. StockTwits: StockTwits shares some of the best blogs for stock information.


51. The Stock Masters: The Stock Masters share market commentary for the savvy investor.


52. Fund My Mutual Fund: Learn about mutual funds through this model blog.


53. MarketWatch: MarketWatch offers commentary on the stock market.


54. Peridot Capitalist: Chad Brand’s blog is about the stock market and investing.



55. Charles Amadeus: Charles Amadeus uses technical analysis to discuss risk management techniques.

Forex

In these blogs, you’ll see the latest in foreign exchange.

56. Forex Pros: You can find quotes, strategies, and more from this forex blog.


57. Earn Forex: Get Forex trading information from this blog.


58. Alan’s Forex Blog: Alex discusses his adventure in currency trading.



59. Forex Trading Blog: Find out what to look for in the market from the Forex Trading Blog.


60. Forex Blog: Forex Blog shares currency trading news and analysis.


61. OANDA Forex Blog: OANDA writes about the beat of the forex market.


62. Kathy Lien: Kathy Lien offers her knowledge as a foreign exchange currency expert.

Real Estate

Use these blogs to study the real estate market.

63. Real Estate Investor Blog: Stay on top of Atlanta real estate and beyond from this blog.


64. Norada: Norada’s blog is a discussion of real estate investments.


65. Real Estate Dispatch: The Real Estate Dispatch is full of news, analysis, education, and commentary.


66. Peter Gordon’s Blog: Peter Gordon discusses urban planning and real estate development in economics.


67. Panama Investor Blog: Learn all about investing in Panama real estate from this blog.

Hedge Funds

With these blogs, you can learn all about hedge funds.

68. Market Folly: Find hedge fund portfolio tracking and macro commentary on Market Folly.


69. FiNTAG: FiNTAG writes predictions, opinions, news, and gossip about hedge funds.


70. HedgeCo: HedgeCo is an online hedge fund database and community with this great blog.


71. Hedgefunds Weblog: Hedgefunds Weblog offers hedge funds news that is easy to digest.



72. Hedge Fund Law Blog: The Hedge Fund Law Blog writes about hedge fund laws, news, and events.


73. Hedgeworld: Hedgeworld from Reuters is the definitive hedge fund community.


74. The Official Activist Investing Blog: This blog shares activist shareholder information.


75. Hedge Fund News: Find creative volatility on this hedge fund blog.

Industry & Markets

Study industries, markets, and more through these blogs.

76. BioHealth Investor: Here you’ll find a biotech and medical business blog.


77. Oil Price: Oil Price offers an excellent source for oil price information.


78. Kevin’s Market Blog: Kevin shares analysis of major world markets on this blog.


79. Credit Slips: The Credit Slips blog is a discussion on credit and bankruptcy.


80. Broken Credit Blog: Get insight into mortgage foreclosures, credit reports, and lots more on this blog.



81. Contrarian Value Investing Blog: Visit this blog to learn more about contrarian value investing.


82. Fat Pitch Financials: Fat Pitch Financials discusses special situation stocks and value investing.


83. Credit Karma: Learn about credit and personal finance on Credit Karma.


84. The Sports Economist: This blog is full of economic commentary on sports and society.


85. Gregor Weekly: Gregor Macdonald writes about the energy sector.


86. Market Connections Blog: Market Connections Blog has research you can act on.



87. Cara Community: The Cara Community offers perspective and discussion on capital markets and social equity.


88. Liv-ex Fine Wine Market Blog: Read this blog for an insider’s guide to the global fine wine market.

Sustainable

These blogs highlight environmentally friendly investing.

89. HIP Investor: Learn about maximizing human impact and profit from the HIP Investor blog.


90. Oikos: Oikos discusses the connections between the environment and the economy.



91. Triple Pundit: Triple Pundit is all about people, planet, and profit.


92. Renewable Energy Stocks: Renewable Energy Stocks will give you insight into global green investing trends and opportunities.


93. Cleantech Investing: Cleantech Investing discusses green investments.


94. Environmental Economics: Economists discuss environmental and natural resources on this blog.

Venture Capital

Get insight into startups and venture capital from these blogs.

95. Feld Thoughts: This blogger is an early stage investor with a blog.


96. Investors’ Circle: This blog is a network of angel investors, venture capitalists, foundations, and more.


97. Venture Chronicles: Jeff Nolan’s Venture Chronicles is full of technology, innovation, management, and other topics in venture capital.


98. Seth Levine’s VC Adventures: Seth Levine shares his thoughts as a venture capitalist.


99. Will Price: Will Price discusses the VC industry, technology, and life.


100. Who Has Time For This?: Read this blog about a venture capitalist’s observations on science, startups, and security.

Ten Characteristics I See Among Successful Traders

There's no one formula for trading success, but there are a few common denominators that I've tracked in my years of working with traders:

1) The amount of time spent on their trading outside of trading hours (preparation, reading, etc.);

2) Dedicated periods to reviewing trading performance and making adjustments to shifting market conditions;

3) The ability to stop trading when not trading well to institute reviews and when conviction is lacking;

4) The ability to become more aggressive and risk taking when trading well and with conviction;

5) A keen awareness of risk management in the sizing of positions and in daily, weekly, and monthly loss limits, as well as loss limits per position;

6) Ongoing ability to learn new skills, markets, and strategies;

7) Distinctive ways of viewing and following markets that leverage their skills;

8) Persistence and emotional resilience: the ability to keep going in the face of setback;

9) Competitiveness: a relentless drive for self-improvement;

10) Balance: sources of well-being outside of trading that help sustain energy and focus.

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However, in Van Tharp’s latest book “Super Trader,” he provides 10 common characteristics frequently found among the best of the best among the hundreds of traders he’s worked with throughout his career. Like me, I think you may find it of interest!

1.They all have a tested, positive expectancy system that’s proved to make money for the market type for which it was designed.

2. They all have systems that fit them and their beliefs. They understand that they make money with their systems because their systems fit them.

3. They totally understand the concepts they are trading and how those concepts generate low-risk ideas.

4.They all understand that when they get into a trade, they must have some idea of when they are wrong and will bail out.

5.They all evaluate the ratio of reward to risk in each trade they take. For mechanical traders, this is part of their system. For discretionary traders, this is part of their evaluation before they take the trade.

6. They all have a business plan to guide their trading. You must treat your trading like any other business.

7. They all use position sizing. They have clear objectives written out, something that most traders/investors do not have. They also understand that position sizing is the key to meeting those objectives and have worked out a position sizing algorithm to meet those objectives.

8.They all understand that performance is a function of personal psychology and spend a lot of time working on themselves. You must become an efficient rather than inefficient decision maker.

9.They take total responsibility for the results they get. They don’t blame someone else or something else. They don’t justify their results. They don’t feel guilty or ashamed about their results. They simply assume that they created them and that they can create better results by eliminating mistakes.

10.They understand that not following their system and business plan rules is a mistake.

Six Keys to Trading Success: Lessons From a Successful Trader

In my last post, I mentioned that a generous blog reader shared his intraday trading approach with me last week.

1) The successful trader is selective. The trader's approach took about 1300 trades in a five-year period, or about one a day. It spent more time out of the market than in the market. As a result, it did not rack up huge commission overhead. Instead, it only took very high percentage trades.
asr: i need to practice this take only 2 trades/week .

2) The successful trader has made the approach his or her own. When I talked with the trader by phone, I sometimes had trouble following his thinking. He spoke quickly about hitting the red line or the brown line on his charts and casually mentioned important trading ranges and levels. It was clear that this way of trading had become part of him. The way he set up his charts is the way he thinks. No doubt this internalization helps him see when the market is acting normally and when it is not, enabling him to quickly act upon opportunity or threat. Only considerable experience, watching markets day after day and studying charts upon charts, makes it possible to internalize a method to that degree.
asr: VP approach( for statistical market edge ) my own

3) The successful trader has found a niche. The trader did not just send me one or two charts illustrating his method; he sent dozens. On the phone, when he talked about his approach, there was real enthusiasm in his voice. It was clear that this kind of trading had captured his interests, skills, and talents. That creates a virtuous cycle in which success leads to more excitement which leads to more learning, which creates further success. He didn't try to trade instruments or time frames for which his approach--and his skills--were not suited. He focused on his strengths.
asr: trades only OIL , USD , EURO , ES and relative trdes of ES/EURO/OIL


4) The successful trader is creative. I think it's fair to say that his approach is a short-term trend-following method. His way of evaluating the market trend, however, is unique. He is definitely not just looking at the same old 14-period oscillator that comes pre-programmed in most charting applications. Similarly, he has clear stop points and price targets, but these are defined in a unique way, based upon the market conditions he's observing. This "out-of-the-box" thinking style is common to successful traders, I've found. They look at markets in unique ways that help them capture shifts in supply and demand.
asr: a) need to combine VP , VSA tradeguider, Innvoanalytics , ATR/stocha apporach
and our 4 letters for OIL
b) need to use PUT/CALL buying at opposite extreme use it as protection .

5) The successful trader is always seeking improvement. If our trader is already successful, why does he need to talk with Henry? He knew that, by sharing his ideas, he would learn a great deal about the strengths and weaknesses of his trading. Sure enough, Henry found that the average size of the trader's losers was larger than it needed to be. A simple modification of stop-loss rules improved the system's performance meaningfully. Similarly, by putting a filter on the system--only taking trades if certain conditions were met--the average profit per trade went up significantly. That could aid position sizing. The trader knew he had something good, but good wasn't good enough. He wanted better.

6) The successful trader is persistent. One thing I want to stress: the trader's methods were very sound--and Henry found ways to make them better--but they were not perfect. Out of about sixty months analyzed, fourteen were losers. The drawdowns were not hellacious, but there were periods of flat performance and drawdown. What that means is that a successful trader needs to have the confidence to ride out these periods of poorer performance to get to the periods of success. That is one reason why it's so important to find a way of trading that you can make your own. You're more likely to stick with a method that fits with how you think (and that fits with your skills) than if it's something you've blindly copied from others. Our trader believes in his method, and that gives him the brass ones to hang in there during relatively lean periods.

---
Ten Characteristics I See Among Successful Traders

Five Steps To Consistent Profits

I'm often asked how to become a consistently profitable trader. Recently, Tharp outlined five simple steps to consistent profits:
--
asr: 11. Trading success is a function of possessing a statistical edge in the markets and being able to exploit this edge with regularity

- read the above word by word here is dicect
a) possessing a statistical edge in the markets : it takes at least 6 months to 1 year to JUST realize this fact ( after many losses for many people )and then another 6 months to find edge ( in my case. with observing Mr. K i realized what is his edge)
b) exploit this edge with regularity : the regularity is key , how can you do it . in case of Mr. K he has stock machine screens that screen stocks he wanted to trade in future and setup alerts when certain criteria is met and have UPFRONT prepared notes to ACT when such alerts are triggered ( not thinking what to do when alerts are triggered).
--
1. Work on yourself and your personal issues so that they don’t get in the way of your trading. This step must be accomplished first; otherwise, it would interfere with each of the other steps.

2.Develop a business plan as a working document to guide your trading. This business plan is not to raise money, which is the purpose of many business plans. Instead, it’s designed to be a continual work-in-progress to guide you throughout your trading career. The business plan actually helps you with all five of the steps. The plan also includes an overview of the big picture influencing the markets you will be trading and a method for keeping on top of those factors so that you will know when you are wrong.

3.Develop several strategies that fit your view of the big picture and understand how each of these strategies will perform under various market types. The ultimate goal of this step is to develop something that will work well under every possible market condition. It’s actually not that hard to develop a good strategy for any particular market condition (including quiet, sideways). What’s difficult is to develop one strategy that works well under all market conditions—which is what most people attempt to do.

4.Thoroughly understand your objectives and develop a position sizing strategy to meet those objectives. Probably less than 10% of all traders and investors understand how important position sizing is to trading performance and even fewer understand that it is through position sizing that you meet your objectives. Thus, the fourth step is to develop position sizing strategies for each system that will help you meet your objectives.

5.Monitor yourself constantly and minimize the number of mistakes that you make. I define a mistake as not following your rules. Thus, for many people who have no written rules, everything they do is a mistake. But if you have followed the first four steps, then you will have rules to guide your trading and you can define a mistake as not following those rules. And, of course, when you repeat the same mistake over and over again, then that is self sabotage. However, by monitoring your mistakes and continuing to work on yourself, you can minimize the impact of such mistakes. People who do this, in my opinion, will tend to produce consistent, above average profits."

Market Types

These are the six market types and the percentage of time we’ve been in them (rolling 13 week windows) since about 1950. Down quiet markets very seldom occur (about 2% of the time), but the other five market types do occur often enough that you need to be able to find something that works profitably when it does happen.

1/ Up volatile (11%)
2/ Up quiet (19%)
3/ Sideways volatile (20%)
4/ Sideways quiet (38%)
5/ Down volatile (10%)
6/ Down quiet (2%)

Develop several strategies that fit your view of the big picture and understand how each of these strategies will perform under various market types. The ultimate goal of this step is to develop something that will work well under every possible market condition. It’s actually not that hard to develop a good strategy for any particular market condition (including quiet, sideways). What’s difficult is to develop one strategy that works well under all market conditions—which is what most people attempt to do.
---

application of this to our OIL is as follows: for OIL we need to what state we are going to be in next 4 days. When OIL reached 81.5 on 10/26/09 morning we need to identify for next 4 days the probabilities are
sideways volatile chance 30% - meaning varies -2% to +1% but over all remains at this same level at end of 4 days
down quiet chance 40% - meaning drops 1% per day

so once we identify this percentage, we can choose what trades types we take like zero-cost cylender ( at money sell call/buy put ) or plain "buy PUT" etc..

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Trading Styles

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asr: How to identify Oversold / overbought , here are few links

Oversold Market Reaching Extremes

2/ using telechart T2 indicators for each sector to find extreme values
---
asr: one of 3 of TA/FA/Sentiment is overridding other 2 case.
- but in general beaware of buying/selling in "overbought instuement in OB market " same way "OS instrument in OS market"

How can do you quantify odds of 10-1 in your favor before you make a trade? Is it your profit goal is 10x more than your stop loss?
The point here is that whatever analysis you undertake to evaluate a potential trade (technical, fundamental, sentiment, etc.) in most cases you want the factors to be lined up in your favor. Where most people have trouble with this is that they think they can simply use a check list in every environment they face to produce consistent results. Unfortunately, the market doesn’t make it that simple. At times, you must learn that extreme sentiment readings (like oversold stocks in an oversold market) outweigh the poor technicals for example in terms of your risk/reward evaluation. At other times, perhaps fundamentals (like a stock trading so far below its book value) outweigh poor sentiment and poor technicals.

And, yes, it also works the other way around. For example, not making a trade (but adding it to the watchlist instead) in a stock where you really like the fundamentals but can’t justify the buy yet because the stock is currently too overbought in an severely overbought market. Evaluation of all of these factors is really the tricky part and why I can’t really provide you a simple risk/reward checklist to generate your own low-risk high-reward setups because not only is each trade different, and the market conditions itself change so your strategy and analysis of it must adjust. This is where experience and skill plays a significant role in trading successfully.
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The Psychology of Trading: Tools and Techniques for Minding the Markets

asr: 11. Trading success is a function of possessing a statistical edge in the markets and being able to exploit this edge with regularity
the author regarded them as the 11 major themes explored in his book.
- read the above word by word here is dicect
a) possessing a statistical edge in the markets : it takes at least 6 months to 1 year to JUST realize this fact ( after many losses for many people )and then another 6 months to find edge ( in my case. with observing Mr. K i realized what is his edge)
b) exploit this edge with regularity : the regularity is key , how can you do it . in case of Mr. K he has stock machine screens that screen stocks he wanted to trade in future and setup alerts when certain criteria is met and have UPFRONT prepared notes to ACT when such alerts are triggered ( not thinking what to do when alerts are triggered).

1. Behavior is patterned.
2. Your trading patterns reflect your emotion patterns.
3. Change begins with self observation
4. Problem patterns tend to be anchored to particular states. (When you enter a particular state thru emotional, physical, or cognitive activity, you tend to activate the behavioral patterns associated with that state.)
5. Our normal states of mind, which define most of our daily experience, lie within a restricted range of our possibilities. (Your immersion in daily routine keeps you locked in routine mind states)
6. Most trading occurs in a limited range of states, trapping traders in problem patterns. (Traders tend to place greater emphasis on the data they process than on the ways in which they process those data.)
7. People in general, and traders specifically, enact solutions as well as problem patterns.
8. Eliminating emotions is not necessarily the secret to improving trading. (Traders can utilize positive emotional experiences to identify constructive solution patterns and to create an anchoring of new, positive patterns.)
9. Success in the markets often comes from doing what doesnt come naturally.
10. The intensity and the repetition of change efforts are directly responsible for their utlimate success.
11. Trading success is a function of possessing a statistical edge in the markets and being able to exploit this edge with regularity.

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The Psychology of Trading
http://www.esignal.com/trading201/ask2/psychology.aspx

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Enhancing Trader Performance: Proven Strategies From the Cutting Edge of Trading Psychology

1/ Competence precedes confidence: Winning mindsets result from mastery, not the reverse pg 4

2/ When you have found your niche, you dont need discipline to do the right things; you wont want to do anything else. pg 29
( like our VP )

3/ Markets, like people, have their personalities; our relationships with markets will profit to the extent that there is compatibility. pg 35

4/ Evolution occurs when we are so taxed that we must make fresh adaptive efforts. The expert is one who continually adapts to extraordinary performance demands. pg 119

5/ How to trade and what to trade are subordinate to when to trade. pg151

6/ Amateur traders turn into professional traders once they stop looking for the next great technical indicator and start controlling their risk on each trade. - John Carter pg 156

Naïve Backtesting is Bogus

Naïve Backtesting is Bogus

If traders have learned anything during either 2007 – 2009 (or 1998 – 2002), it should be that the fundamentals of economics and finance are not stable: nearly every statistical measure in common use across nearly all asset classes exhibited inconsistent behavior over this period (mean, variance, volatility, covariance, correlation, cointegration, principal components, skew, kurtosis, etc.). Introductory economics informs us the root causes for these instabilities are many, ranging from business cycles to monetary policy.

Simple Tools for Testing Trading Ideas

asr: all this 'vertical solutions' tools and mainly this F score and T score concept can be used to test Trade Alchamby systems and to examine the results.
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asr: this Tradestation code is simple to do , for OIL we can do it on USO intraday data or @CL . we do not need intraday we can do it on EOD data .

- doing this kind of simple test reveals good trading setups on OIL , GOLD , SOY beans/OIL etc..
- few people do this kind of test on commodities , and that to with VP data we can have edge. we can add like PTM/PTL increasing in last 2 days with Nindex as 1 to this condition by querying VP data ( based on date) with .csv file loaded and Easy lang. code reading and loading .csv data into TS array.

testing trading ideas:

Three simple tools:

1. Historical Data
2. Software to test the idea with
3. Two statistics to evaluate the test results

One simple process:

1. Translate an idea into the testing software
2. Run the software and generate the results from testing the idea
3. Evaluate the results using two statistics: t score and optimal f
4. Evaluate the evaluation (what are the results saying?)

Idea #1b: What happens after c > o for each of the last five days and the market is up at least 1%?

In TradeStation that idea looks like: ( asr: wow. very simple easy code )

countif(c[0] of data1 > o[0] of data1, 5) = 5 // close is greater than the open on each of the last 5 days

c[0] of data1 > c[6] of data1 * 1.01 // close is greater than the close six days ago by at least 1%

The test is now:
Sell on the close and exit one day later (because of the negative expectation)

The results of this test are:
36/69, 52%, avg 11.8 pts, sd 8.3, win loss ratio 1.68, largest losing trade -$2157 (emini)
--
How to read his test results, see below..
Idea #1: What happens after c > o for each of the last five days?

The results of the test (S&P futures since 1997) are:
44/88, 50%, avg -1.2 pts, standard deviation 8.7

(Historically there have been 88 trades matching the test, 44 have closed up the next day with an average loss of -1.2 pts for all trades with a standard deviation of the trade results of 8.7 pts which means that roughly 65% of the trades fall between -9.9 pts and +7.5 pts)
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Systems with ranks below 0.5 are suspect and should be examined and retested.

trend_day_indicator_validation

The trading system I built buys when the indicator is over 60% and the market is up and sells when the indicator is over 60% and the market is down. Trend following with the Trend Indicator.

The system exits at the end of the day. There are no stops, slippage or commissions.

The results for the e-mini futures contract 1998-present were:

434/742, 58%, avg 1.3 pts, sd 11.4 pts, t: 3.1

The t score of 3.1 means the results are significant to 3 standard deviations leaving little liklihood they occurred by chance alone. We were looking for a t score higher than 1.6.
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he is talking last 20 days high volume stocks of > $5 ( he is taking around 250 stocks he said )
http://www.verticalsolutions.com/forecasts/trend_high_vol_stocks.html
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Using Stops as Entry Filters



How to Build a Simple Swing Trading System

trade Setups

asr: Let us collect different setup in this blog
asr: see this chart is interesting, he is using EMA(8,13,34) on intra-day chart 5-min chart. we can write small easy code for these conditions and do a scan and back test on a bunch of symbols.
- since this popular traderX guy is using EMA 8,13,34 on 5-min charts, this must be good setup for 5-min. charts.


Someone asked a few weeks ago what is my "bread and butter" setup. I don't know that I have just one, but if I do this is probably it. It is simple, which is always better:

1.) Gap up.
2.) Price breaks the opening range high (ORH).
3.) Price pulls back to the ORH with support from a rising moving average.
4.) Price rallies to the Fibonacci extension (FE).
--
asr: another idea is to test this kind of GAP-ORH performance on basket of stocks in 6 different market type ( see our post ) and see which market type gives good performance , I think it is 'UP volatile' .
- similar way as Thapper said develop set of 'trading strategies' that work in each market so that you have one type of strategy to use when you identifity market as one of the 6 types. Even you can have parameter in the TS easycode while testing as input what kind of market it is out of 6 . based on this input you can change 'entry criteria' etc.

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asr: we should try to code this 'Holy Grail setup' in TS easyLang and run scanner on 5-min daily data to find statistical Edge on basket of stocks .

asr: this is same book on amazon site, see inside book , it shows 'holy grail' . It may be work trying these 15 setups with TS easycode , book it bit expensive ..
http://www.amazon.com/Street-Smarts-Probability-Short-Term-Strategies/dp/0965046109#reader_0965046109

I get questions all the time about the Holy Grail Setup: Well here it is explained and i’ll walk you thru it step by step.

First of all The “Holy Grail” trade was originally described in Linda Bradford Raschke’s Street Smarts book. This setup is VERY easy and simple, it is very spottable, and occurs very often especially during trending markets, UP or DOWN. Also, if you master this pattern, i am confident that you’ll be able to pull money out of the market a lot more often.

Tools You will Need to Day Trade the Holy Grail Setup:

1. A 5 or 10 minute chart. 1 minute charts work really well too.
2. A strongly trending stock, chart or index.
3. Volume indicator
4. The 20 Period Moving Average (simple or exponential)
5. Basic pattern recognition skills
6. Respect for Stops losses
7. An ego that can handle a small loss from time to time

First:
You need to spot a trend in a stock (i like to use the 5 minute bars). The trend can be either UP or DOWN and you can see that just by eye balling the direction of the price trend after the first hour of trading.

Second:
Once you have decided what the trend is (market direction helps a lot as well), be on the look out for clean and crisp movement in the stock. Movement with confidence i like to think of it as.

Third:
Look at volume to see conviction in the move. Lots of volume during the first hour will tell you the force of the move UP or DOWN. Volume increases the confidence in the move and gives validity of the action.

Fourth:
Now, this is the most important part of the setup and where it becomes an art moving away from the ’science’ of trading. You wanna see a slow and corrective retrace back to test the 20 bar simple moving average (20 SMA). You do NOT wanna see a hard crash into the 20 period moving average, this is NOT constructive action. You wanna see a hammer or several hammers off that 20 SMA, a pattern like a triangle, a wedge or a coiling symmetrical triangle, NR7s, or a consolidation move of some kind. The operating words here are: slow and corrective retrace to test the 20 SMA.

Really strongly trending stocks will not pullback for long, so you need to be aware of that, it will tell you what kind of demand/supply you are dealing with. I always BUY/SHORT into the pattern/pullback but some people like to wait for a complete test and breakout away from the 20 SMA.

Fifth:
ALWAYS buy HALF a position into the pattern/test and if the trade starts to work (hopefully right away, because the best trades work right away) add the other half and ride out a bigger move. I prefer to be wrong on a small amount then be wrong on a full position. If you are seeing a profit in the trade, that should tell you that the market is agreeing with your assessment and tells you to buy more because you are probably correct.

You know you are wrong when the pattern fails to hold the 20 SMA and starts to break below or above the area of consolidation which attracted to the trade to begin with. That’s when i just SELL it and MOVE ON to the next trade. Don’t get stubborn and hold on to something that isn’t working….please just sell it and move on. I always use stop losses. Trading isn’t a game for slackers, dreamers, or optimists. Please just scratch the trade and move on to the next. This pattern is very common and reliable enough that be sure you’ll have better success on the next trade.

Always trade in the direction of the overall trend of the market and I am confident you will see success from this trading setup.
http://blog.chart.ly/2009/10/29/trading-holy-grail-patterns/
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asr: above Book Review
asr: this Review author Chuck Kowalski is good author of many articles , so we can trust his review and above 'holy grail' post on chart.ly validates 1 of 15 of 'setups' of the book.
asr: may be good idea to code all of these 15 strategies and back test . Say for AMZN this holy grail worked. then back test and find out as
10/15/2007 , 5/12/2006 , 6/15/2005 , 5/15/2007 it worked
after that identify the days where this strategy worked on particular stocks and
take the aggreagate of intraday price of all those days and plot with % gains for day like commodity seasonal charts.
- finaly plot those aggrate price moment ( of all those days ) against TODAY so that you know how it progresses as day go by

Street Smarts is a no-nonsense book that provides specific trading setups and strategies designed for the short-term trader. The authors, Larry Connors and Linda Bradford Raschke, are two very recognizable figures in the futures trading industry and they each have decades of trading experience. At first, you may feel overwhelmed by the number of strategies detailed in the book, but all you need to do is focus on a couple strategies that fit your trading style.

Raschke and Connors cover more than a dozen trading strategies in Street Smarts as well as a question and answer section following each strategy to better explain it. The strategies are not overly complicated, but they are unique if you are fairly new to the game.

The trading strategies are the main focus of the book, but the authors like to cover the whole spectrum of trading. You will find numerous additional trading tips throughout the book that focus on what it takes to be successful in trading. Good trading strategies are only part of the game. You also have to practice solid money management and control your losses.

I believe Raschke mentions that trading is a game of holding your ground throughout the month and you will have a couple of trades that turn into a windfall. That is where you will get the majority of your profits. The key is to not take big losses.

How to Use the Trading Strategies
The trading strategies are explained in a very easy-to-understand format in each chapter. It is recommended by the authors that you pick one or a couple of trading strategies that you are comfortable with. From there, you need to research and test the strategies through paper trading until you feel comfortable to begin trading with real money.

It only takes one good trading strategy to become a successful trader. Do not try to force trades. You have to wait for your particular setup and let the probabilities take their course. Using stop losses on every trade is thoroughly stressed in Street Smarts[/link].

Street Smarts: High Probability Short Term Trading Strategies is an excellent book to learn short-term and day trading strategies. It is important to understand that this book is not just a list of trading strategies, but it is also a guide on how to trade successfully.

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What to do when Alert are triggered on a technical EVENT:

If the market is moving fast and you have a lot of preset alerts going off on your stocks, what do you look at first in order to decide what you want to do next.

You're right, price alerts tend to come all at the same times because of large-scale movement in the market. The key here is to do your work when you set those alerts. You should have a file/database that you can refer to when those alerts are triggered with exact instructions on what to do at that point to avoid confusion, double-think, over analysis, and paralysis when the time comes.

In other words, I'm reminded of the saying that every war is won or lost by the preparation. And that is true for trading. If you're waiting until the alerts are triggered to then figure out what to do, you're dead! That's why having the game plan ahead and following that plan when the alerts occur is very important.

The time to think about the trade is when you set the alert, not afterwords. There are alerts I will set to remind me of a specific technical event (like a breakout or breakdown, moving average crossover, ATR violation, etc.) but when those events occur, I already know what I want to do with that signal (i.e. buy, sell, move a stock up to my short-term watchlist, and so on).

-------
asr: good call for break-down of Tradermike , he also gave a day before fading of after earning gains of INTC and many others.
asr: this kind of drawing trend lines helps, note he points 'low volume on UP , high volume on DOWN days for last one week ' ...

The Nasdaq and S&P 500 have been churning just above those support levels for the last week and a half. I can't see them staying in those ranges much longer and I suspect the break will be to the downside.

---------
And for developers:

A discretionary trader and a mechanical trader will build a better rule base faster than either the mechanical or the discretionary trader alone

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asr: in 1996 he started building trading systems at age 34 (1996) , so for me it is high time to go into this Trading that to having found VP , tradeguider VSA , MCRI.com ( seasonal spreads), Mr. K blog kind of supporting software to find the EDGE.

Henry has degrees in Mathematics, Economics and a minor in Physics. A software engineer by training he sold his software company in 1995 and began building trading systems in 1996.

Vertical Solutions S&P Trading Strateg
http://www.verticalsolutions.com/strategies.html

asr: this kind of S&P strategy can be used as additional entry/exit criteria with a) Mr. K fundamental setups ( ATR/stochastic ) b) Vantage point c) VSA tradeguider d) Innovanalytics. d) velocitysignal.com e) worden TSV, VWMACD (telecharts )etc...
- the more the better for confirmation ...
- if we see tradermike , Mr. K etc. are trying to find out EDGE with drawdown of 5% , so with VP we can easily find EDGES with triple-EMA with 5% drawdown and stops with FUture Options.
- Have USD, EURO , OIL , S&P charts of vantgepoint on couple of screens side by side. we can not have with Vantagepoint windows software multiple screens. so dump data to .csv and READ .csv with PHP and construct chart with FUSION charts. so with FUSION charts we can see multiple VP charts.
- Key is able to view multiple VP chats with FUSION like 4 monitor setup like (Ama..sh). this is key if we see VP triple-EMA charts of above 4 for OIL we can see the trend for OIL.
- for chart setup practice ( as Mr. K said), we need to setup VP charts data for practice . With key stroke it displays next day . Have 4 charts 2 side by side on two rows and with one key stroke charts will update all 4 FUISON charts with next day data. If we practice triple-EMA like this we can learn VP setups.

practice, and practice. Repeat, repeat, and repeat again , do setups

How do you define Trading skill development:
A systematic program of learning that emphasizes pattern recognition, an understanding of market movement across time frames, intermarket relationships, sound execution of trade ideas, and risk management.

Am I deluding myself by following his assertion that successful trading is predominantly based on mindset--and that this is the key--this is all that has been missing from my previous trading ventures? I have spent years and thousands of $'s trying to educate myself as to trading systems, books, and methods. I thought that all I really needed to do was find a trading method that suited me - (my psychological makeup), something I could follow with a degree of self-confidence...Is there any hope that this might become a possibility?"

Let's try an experiment: Read the first two paragraphs of this post again, but this time substitute the words "play chess" for trade and "chess playing" for trading. Now read the paragraphs again and substitute the words "play golf" for trade and "golf playing" for trading. Do it yet again, imagining that our writer is an aspiring Broadway star, and substitute the words "act" and "acting".

Of course, the re-readings sound ludicrous: we know that there is far more to success in chess, golf, and acting than "mindset" and prefab "systems, books, and methods". The missing element? Skill development. Training. A systematic program of learning that emphasizes pattern recognition, an understanding of market movement across time frames, intermarket relationships, sound execution of trade ideas, and risk management.

The bottom line is that the answer to successful trading cannot be found in any coach, book, or system. Success is something that is cultivated over time, with directed effort. There is hope for our reader if he can identify his strengths and systematically learn to apply them to markets that capture his interest and motivation.

-------------------

In your opinion, what's the best way for a newbie to get up to speed, concentrating on the books in your recommended reading list or through online/live training? If the latter, do you have any specific recommendations?
Thursday October 22, 2009 12:03 Ed
12:05

Mr. K answer
You can read thousands of books, attend hundreds of seminars, subscribe to dozens of stock advisories and newsletters, but the best way to learn is by practice, practice, practice and then more practice, practice, and practice. Repeat, repeat, and repeat again.

The more setups you work on, the more practice trades you do, the faster your skill development. There's just no substitute for this and the time spent in that endeavor will do far more to build the skills you need than anything you can buy from others.
----------------
asr: do historical setups with tradestation/esignal with ATR/Stocastic and do repeat of it.

Esignal simmulator - this seems good ( seems no equivalent in tredestation?)

features


One way to simulate the trading decisions we might have made at that time is through the use of eSignal’s bar replay mode. For those who haven’t used this handy tool before, check out the eSignal Central section on bar replay in November’s issue of the Exchange. We could, then, step through this trade advancing the bars, day by day, and play out the decisions along the way. At each critical juncture, we’d ask ourselves these questions at each step:

* What conditions are needed to trigger me into a trade?
* What’s my target price for this trade?
* Where will my stop be set?
* What would my limit order be for entry?

Some of these questions are better answered by using smaller charting intervals for better timing or even by using tick data for simulated bid / ask quotes. That brings us to another aspect of replaying data in eSignal.
--
asr: as shown in these URL screens, keep DAILY chart and 30-MIN chart next to each other and play 30-min chart , place trades using Mr. K. "ATR no violation/Stocastic OS" . Also use "Vanate point VP" charts and "Innovo RMI" charts side to side screen to make better decision.
- since Innova is esignal add-on, it will work with bar by bar so no issue there. for Vantage point move back on data and see one day at a TIME
- also you can keep one more screen for 3 to 5 EMA ribbon also next so that will also help. In this way you can also have Track n Trade that provides Bar by Bar simulation with Bulls N Bears system .
- we can also have TradeGuider VSA on side with showing back data only (with scrolling ) to add decisions.

- the Key as Mr. K said it is identifying "historically repeated EDGE" patterns ( trend channel , ATR/SToc OS ) and practice on many charts , over a period of months data and find see if you are able to place correct trades ..
- to find historic BIG advance/decline stocks and DATES use the barchart.com link
-http://21cvision.blogspot.com/2009/09/historic-top-gain-loss-for-day.html
http://www2.barchart.com/pdecline.asp?date=051209 -- once you get these , you put on chart and see if any "ATR/stoch OS" and "trend channel" and how it bounnced in last 4 months etc.
- also we can ask Mr. K if he has old emails of "news letter" so that we can request those emails and get symbols form it .


The purpose of this tool is to give you a way to move to a previous point in time and have the chart react as if that point is current. As mentioned above, it lets you test your formulas and strategies with a full day’s worth of data.
--------------------
setting Alerts and acting on It

Q: If the market is moving fast and you have a lot of preset alerts going off on your stocks, what do you look at first in order to decide what you want to do next.
Thursday October 22, 2009 12:07 Tom K
12:09

Mr. K answer:
You're right, price alerts tend to come all at the same times because of large-scale movement in the market. The key here is to do your work when you set those alerts. You should have a file/database that you can refer to when those alerts are triggered with exact instructions on what to do at that point to avoid confusion, double-think, over analysis, and paralysis when the time comes.

In other words, I'm reminded of the saying that every war is won or lost by the preparation. And that is true for trading. If you're waiting until the alerts are triggered to then figure out what to do, you're dead! That's why having the game plan ahead and following that plan when the alerts occur is very important.
Thursday October 22, 2009 12:09
12:10
The time to think about the trade is when you set the alert, not afterwords. There are alerts I will set to remind me of a specific technical event (like a breakout or breakdown, moving average crossover, ATR violation, etc.) but when those events occur, I already know what I want to do with that signal (i.e. buy, sell, move a stock up to my short-term watchlist, and so on).

InVivo

asr: she is PHD so she is qaulified .. and Mr. K says she gives ( in this post below ) independent opinion ..

asr: this Innovi RMI indicator is similar to traderGuider VSA , even VSA may have decade old reserach behind it than one man firm Innovi. if we get VSA EOD version cheper that may be better than Innvo.

asr: this Alchamy strong trend cacher (url below ) may be equal to Innovi indicator, but the Alchamy guy in strategy example gave 3-min ES chart. It seems Innovi helps more in DAILY chart ( Mr. K use mainly daily charts) . For daily we need to see how Traderguider VSA works, we know it is good for intra-day 30-min, 60-min charts but DAILY we need to see.
http://www.tradingalchemy.com/ViewChartsStrongTrend.htm


I’ve applied InVivo.RMI stops (StopFactor 1.1) and histogram to the daily chart. A trader whose strategy is to trade with the trend would not go short so long as the price bars are green and the green histogram lines are above the grey threshold line. My indicator helped traders exit long positions after the uptrend ended in March.

Again, a trader whose strategy is to trade with the trend would not go short so long as the price bars are green and the green histogram lines are above the grey threshold line. My indicators helped the trader to exit long positions after the top in March.

The last chart is Google (GOOG).

Google

While investors were clinging to hope, the price action said otherwise. In December 2007, the green histogram lines went below the grey threshold line as the stock began to weaken. The sell signal came in mid-December and was in place for three months.
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asr:this is on same URL as above.
Teresa Lo: The “tightness” of the stops is based on the StopFactor setting. The default is 1.5. If a user wishes to change the StopFactor setting, my suggestion is to investigate a range of settings between 1 and 1.5 at 0.1 increments. StopFactor settings under 1 are insufficient. When it comes to directional trading, it is perhaps not possible to tighten the initial stop or trailing stop beyond what volatility dictates. Time and again, we have seen that a wide range of trading “problems” tend to be resolved by trading high-priced, high-volatility issues in larger time frames while simultaneously reducing trade size/leverage with the use of reasonable stops. When qualified by RMI, I suggest StopFactor 1.1.

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http://www.invivoanalytics.com/tools-for-swing-trading/
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STEC - Fingers Crossed?
Daily Chart, with Relative Momentum Indicators

asr: grey line is based on related index of the stock , great concept to compare with appropriate index.
The RMI Histogram compares price action of a stock (or sector) against an appropriate benchmark index while the RMI PaintBar colors price bars according to the status of the histogram values. This provides me with (i) a detailed, bar-by-bar account of a stock’s performance against the benchmark and (ii) helps identify potential change of trends in the big picture when price bars are painted yellow.

The position of the green and red histogram bars relative to the grey threshold line is very important. A number of combinations and permutations can occur. Price bars are colored based on information contained in the histogram according to these rules:

1. Green = RELATIVE OUTPERFORMANCE = Histogram > 0 AND Histogram > Threshold Line
2. Red = RELATIVE UNDERPERFORMANCE = Histogram < 0 AND Histogram < Threshold Line
3. Yellow = POTENTIAL CHANGE OF TREND = all other combinations
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TOL stock -- see histogram ..

Stocks are ranked by price momentum. In a rising market, stocks at the top of the list are the ones that everyone wants to own. They are the bubble stocks, the tulips. Be careful buying those. In a falling market, stocks that are at the bottom of the list are the ones everyone is dumping. They are the dogs being sold at any price. Be careful shorting those.

trade Flashback

Archive for the 'Trade Flashback' Category

asr: one thing to note is in all these flash trades the STOP is around 5 to 8% , so in comparision our OIL trade trade having 8% cost as OPTION BUY will always give result . 1.5% x 4 weeks = 6% stop value that is OPtion price gives protection and atmost you may lose 3% value if you BUY future with option.
this Mr. K stocks are low priced so high RISK so they need 8% STOP values , so in that sense our OIL OPTION/FUTURE strategy is not bad.

asr: Mr. K progression , what kind of charts was used in the time period progresson from 2008 to 2009 . Also see good # of losses in 2008 so Mr. K lowrisk perfection is recent like 2009 with ATR/stochastic ..
- best example to document a trade with chart , before and after trades notes ..
- all his trades talks about looking back history how stock price moved, he look for at least one price move in the past

1) trend channels -- it seems in both 1) and 2) Innova universal stops are used even though they were not shown here. other posts charts with Innova are dated in 2008 which is case for 1) and 2)
2) Stocastic & RSI 5
3) ATR no-voilation and Stocastic Oversold condition
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another Innova stops
How would you buy the pullback in Baidu

on the above URL page one more Innvo.. on SIGM
You posted recently that you were trading Sigma Designs (SIGM) because it was one of the February’s
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Mr. K used to be very talkative about trades in 2008 ,but no longer in 2009
http://www.kirkreport.com/membersonly/2009/02/26/plugging-away/
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examples recently how once can use ATR in combination with stochastics for timing the entry. But, I’ll provide a recent trade to illustrate how one could use ATR to generate a short-term setup.
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VICL
The one negative I don’t like here is how the stock hasn’t been able to rally back from oversold conditions like it did in mid-August. In essence, if it is going to rally back, it probably should have done so by now. Here a very small starter position (maybe just 1/5 of the desired target allocation) makes se
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10 day low

asr: you need to back test this on a particular stock and see. also combine this with " ATR (no violation)/STOCastic oversold " and see

Here is one that is SIMPLE and EFFECTIVE.

Are you ready for this wonder of quantitative wizardry?

The 10 day low.

I programmed in a %true indicator with the 10 day low PCF
C < C9 AND C < C8 AND C < C7 AND C < C6 AND C < C5 AND C < C4 AND C < C3 AND C < C2 AND C < C1

this gives me a pink spike whenever the stock is at a 10 day low. The rules are that the security is above the 200 day avg. Buy near the close when this spike occurs. You're own your own with the exits.

Use this for strong stocks & market leaders to get in at a short term low.

OIL price

OIL reached $80 on monday 10/19/09 with EURO reaching 1.490 and GOLD at 1060 and S&P 1090
then today 10/20/09 it dropped to $78 then rise to 78.50 , here is marketwatch comments

asr: I should have opted for short at 80 on 10/19 given contract expires this week , so there may be pull back of $2 as shown today on 10/20 ( given equities RUN too high for SP 1090 on 10/19 )
BULL 1
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Tuesday's decline was "more a pause in the rally," said Zachary Oxman, managing director of TrendMax Futures. "Now that we've breached $80, I expect to see firm trading in the $80s before the end of the month.

BULL 2
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"Areas of weakness remain, but most of the groundwork for a sustainable move up has been laid," said Amrita Sen, an analyst at Barclays Capital. "We continue[d] to reiterate our view of $76 a barrel average for the fourth quarter."

JIM also siad as BULL $82-$84 with $76 as support for whole NOVEMBER

BEAR
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"Fundamentals remain poor amid a glut of product stocks and low refining margins which could see refiners reduce utilization further, hence reducing demand for crude," said Nimit Khamar, analyst at Sucden Financial Research, in a note to clients.

Demand recovery is far from convincing, while spare capacity has increased significantly, he said.

"So, once fundamentals come into the limelight crude prices could be susceptible to a sharp correction as a rally not supported by fundamentals cannot be sustained indefinitely," Khamar said.

8 Traits of a Successful Trader

Mr. K reference

The market is an ever-changing entity, each day presenting us with different and unique scenarios with no two days every the same. Nevertheless, the market is more or less a reflection of people's ideas and attitudes and while it is also true that no two people are alike, each and every one of us has something in common with someone else, whether it’s the way we get out of bed in the morning or the foods we prefer to eat. Additionally, we tend to repeat actions, such as preferring to brush our teeth at a certain time of day or making sure we try to catch the Thursday night prime time television shows. No matter which angle you look at it from, humans are creatures of habit and this tendency gets reflected in a security’s price movement. It's what makes technical analysis a reliable and profitable method for analyzing the market.

Unfortunately, technical analysis is not always cut and dry. The same core pattern does not work the same way in every market environment. For instance, one of the setups I often look for on a daily chart is a 3-5 day pullback in an uptrending stock for buying opportunities. Where newer traders tend to get in trouble, however, is taking such a setup to mean that every time an uptrending stock pulls back 3-5 days and then breaks the previous day's highs that it means they should buy it. In reality, there are always exceptions and its learning what these are that can be the dividing line between those traders who are successful and those who fail. In this example, how a security pulls back in a primary uptrend, as well as overall market conditions, will greatly influence whether taking such a pullback as a long is really worth the risk to reward. In some cases it is not.

The ability to adjust to changing market circumstances is just one of the traits of a successful trader. In truth though, there are quite a few. Over the years I’ve mentored quite a few traders. Many succeeded, but many of the traders I have spoken with over the years have failed. I have observed a number of traits which are present in those who succeed. Some of the top traits of successful traders are as follows:

1. They stay neutral;
2. They have a business plan;
3. They keep a journal;
4. They focus on several techniques that suit them well;
5. They are great money managers;
6. They are comfortable with risk and uncertainty;
7. They accept personal responsibility for all of their trading action; and
8. They use risk capital to trade.

1. Staying Neutral

You're probably wondering away just what do I mean by “staying neutral.” When you are chatting with your trading buddies online or reading a message board and all you hear are how the market maker or specialist is out to get them, or how one minute they are a market god and the next they have what is certifiably the worst luck in the entire world, then you are dealing with a trader that is NOT staying neutral! They are letting each trade or each trading day rule their emotions and this pressure builds upon itself, making it very difficult to succeed.

The professionals don't let the day to day oscillations in their accounts faze them. The results of one day of trading, or even a few weeks or a month are not as important to them as the average over time. Among most of the professional traders I know, you cannot tell by their mere appearance whether or not they had a great day in the market or if they lost. Sure, they may tell you one way or the other.

We are not robots devoid of all emotion after all, but when we leave the market for the day after a difficult session, we are able to disassociate it from the rest of the world and don’t spend the rest of the day complaining or moping around the house thinking that entire world must be out to get us. Similarly, on a great day, we do not call up every person we can think of and tell them how we rule the market universe. Extreme emotional responses either way will often lead to greater difficulty in the market since emotions take over from reason and can often override it, making it difficult to remain objective.

2. Have business Plan

Most successful traders also have a business plan. As in any other profession, it’s important to know what it entails in order to succeed. As in any business, this consists of a set of rules or guidelines to help keep the trader on track and from making decisions purely on a whim.

Would you open a restaurant with out a plan? No, or at least I really hope that you wouldn’t! A new restaurant owner must take into account the type of cuisine they wish to serve, the décor of the restaurant, the hours of operation, to whom they are catering as clientele, etc.

As in the restaurant business, traders must also have a business plan. A partial list of the questions you should be asking yourself and including in your trading plan are as follows:

How must time will you spend study and trading?
What techniques and strategies you will focus on?
What are the expenses involved in becoming a trader?
What is your maximum loss limit, not only per position, but on your account as a whole?
What are your objectives?
etc...

The more comprehensive your plan is, the better. You can always go back and change it, modifying it to suit your development as a trader. I find that it is very helpful, for instance, to go back and read over my techniques and goals whenever I am in a slump and my progress has stalled. It helps me maintain the right frame of mind so that I can push forward.

3. Keep a Journal

One of the first questions I ask any of my new clients is whether or not they have a trading journal, and if you, what does it consist of.

Most traders don’t even have a journal. Those that do have one typically keep it in a spreadsheet format. This offers very few insights into a trader’s personal style and strengths and weaknesses. Some things to consider when developing a trading journal are:

What techniques were used in locating the position?
Did you follow your entry, stop and exit criteria?
What pros and cons did the setup have?
What, if anything could you have done better and what are you most proud of?

It is also important to print out a chart of your trade. Mark both the entry and exit on the chart. If necessary, print it out on several time frames to show the details of the position.

4. Focus on Several Techniques that Work Well

Let’s take a minute to look at a typical college student. What kind of person majors in general studies? Unless they go on to focus on a specific occupation in graduate school or law school, etc., well-paying jobs will be hard to find for most of these students upon graduation. Instead, for those who focus their studies in one field, and more specially, one subdivision of that field, demand for their skills will be much higher. If you focus on just a few techniques, it allows you to really become an expert on the technique you are using. Great traders have several strategies that are their bread and butter plays and they will focus on them for as long as the market conditions favor them.

Remember: The jack of all trades and master of none is usually a low-paid, unskilled worker.

5. Being a Great Money Manager

Great traders are also great risk managers. They respect the risks they are taking and on each trade they risk a small amount of capital. Usually this is 1/4% to 1% per position (and no more than 2%). The idea is that you can't trade tomorrow if you blow out today and if you can't trade you won't be a great trader, now will you?

Great traders protect their accounts. It's their baby. Each position is so small they don't really care what happens with it. It's just a nick... win, lose, or draw. So, if they have a 200K account and are risking 1/4% on each trade, if they take a stop they are out $500. That's a very small amount of money compared to the account. They can take a couple of hits and still be in the game.

6. Being Comfortable with Risk and Uncertainty

The sixth trait of great traders is that they are comfortable with risk. Let's face it, trading is certainly risky and if you are afraid of the risk you won't last. If you are afraid you will lose money, then I can say with near-certainty that you will.

Great traders are comfortable trading a pattern that is not a 100% sure-thing, because there simply is no such thing. Many new traders have a terrible time with this: the uncertainty of a trade, but you must over come it. It is very easy to allow yourself to become frozen with fear over the risks and uncertainties of trading. Great traders get beyond it.

7. Accepting Personal Responsibility

Great traders accept personal responsibility for everything they do, even to an extreme. If I loan you $100 and you never pay me back, then yes, perhaps you are not a very honorable person, but I also made a poor choice to lend you the money in the first place. I made that choice, however, and I must accept personal responsibility for that action.

The same concept applies to trading. Many traders, lacking the expertise and confidence to make all their own decisions to begin with, will rely upon others for advice. The input may come from CNBC or it may come from a newsletter service or trading chatroom or message board. It doesn’t matter where you get the original idea from, it is still up to you to implement it or not and you have the due diligence to stand behind your decisions and make them your own, whether they succeed or fail.

8. Using Risk Capital to Trade

Finally, great traders use risk capital. This should be obvious. They trade with money they can afford to lose. It is very difficult to trade well if you are worrying about paying your mortgage or putting food on the table. I’ve also seen a number of traders over the years take out equity loans to open a trading account. You are supposed to be limiting your risk and outside stressors, not adding to them if you wish to succeed. If you think you can be one of the exceptions, then you should really think again!

Trading with risk capital frees up your mind. It lets you trade and not worry about every little stop you have. You can just focus on trading correctly instead of trying to force yourself to meet certain financial needs. They say scared money never wins. Well, I have yet to see a person who has no other source of income or savings make a living off their $5,000 trading account.

Many of these traits may take a bit of time to acquire. Overcoming the fear of loss, for instance, haunts many, but by focusing upon these traits and characteristics, my hope is that you may model your own frame of mind to those who have come before you and have made the leap to a successful and long-lasting career in the markets. It is said that the majority of successful people in the world became such by following in the footsteps of others, their mentors. Even if you do not have one specific person in mind, familiarizing oneself with the traits of those whom have succeeded before you is a great place to begin!

RMI stands for relative momentum indicator

asr: Invivo tools used by K . see K ATR posts ... and details below
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http://ww.istockanalyst.com/article/viewarticle/articleid/2510023

--

We offer two studies: InVivo.RMI PaintBar and InVivo.RMI Histogram. RMI stands for relative momentum indicator. These two studies are applied to DAILY CHARTS ONLY.

Price bars are colored based on information contained in the histogram according to these rules:

1. Green = RELATIVE OUTPERFORMANCE = Histogram > 0 AND Histogram > Threshold Line
2. Red = RELATIVE UNDERPERFORMANCE = Histogram < 0 AND Histogram < Threshold Line
3. Yellow = POTENTIAL CHANGE OF TREND = all other combinations

InVivo.Stops are engineered to reflect actual volatility and range, providing users with a real edge over other so-called volatility-based indicators or bands. Stops can be used in two ways:

30 day options

30 days to go

EMA ribbon

Rainbow or Ribbon

http://www.patternexplorer.com/rainbow-chart.html

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Moving Average Exponential Ribbon

EMA ribbon in GOLD
http://singerprofitcharts.blogspot.com/2009/10/guy-bagging-groceries-told-me-gold-just.html

asr: This EMA ribbon is similar to our VP triple-EMA cross over. in VP triple-EMA is powerful when that occurs it trends. so must be EAM-ribbon.
- see if stocksfinder.com using it , if we can screen to find out EMA-ribbon indicator showing todays buy/sell stocks.
- http://www.stockfinder.com/ is from same Telechart guys worden (used by Kirk, and has TSV , Money stream )
- if we combine EMA ribbon with VP triple-EAM for the same stock ( from VP list) , it is double validation.

ATR Stocastic Oversold with ATR BUY setup

How Do I Create the 3/10 Oscillator?
One of the most popular questions I get on the blog refers to the “3/10 Oscillator.” I thought I’d take a moment and share how it’s constructed and some basics about the Oscillator.

The following chart shows the theory behind the construction of the Oscillator

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http://www.kirkreport.com/09/rom_11_7_09.gif - ROM
asr: it shows big boss must have traded good with this ATR support line
These day Mr. K strategy seems
1) first fundamental reserach sector performance, stock with in sector
2) finding OB/OS with stochastic with No-ATR violation and observing length of NO ATR violation ( McClellan oscillator T2 ...)
3) looking market sentiment data
------------

asr: note: Here worden is wrong all these short calls on this page
http://peterworden.blocks.com/Category/Short%20Candidates

Worden BUY calls also wrong, but red/green chats show good down/uptrend, notice the parameters used for TSV, MS, etc. all same for all symbols ( so there is consistency ). since Mr. K advice many times so there is some value
http://peterworden.blocks.com/Category/Exchange%20Traded%20Funds

Worden education
asr: it seems buying these videos can help master "money stream" and 'TSV' of Worden. It is worth the price , they have 1 year refund warrenty.

http://www.worden.com/legacy/Products/BooksAndVideos/?

Mr. K again advised these telecharts here -- IMPPPPPPPPPPP!!!!!!!!!!!!!!!!
http://www.kirkreport.com/membersonly/2009/10/21/member-mailbag-14/

----
Time Segmented Volume TSV and Money Stream MS indicators , see chat this is the one used by Kirk (his fav. ).
seems TSV and MS are good indicators only available in Telecharts see url below , it is very nice compact charting
http://www.worden.com/legacy/TeleChartHelp/TeleChart.htm#Indicators/Time_Segmented_Volume.htm?
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asr: see this post ,dated JUN-2008
http://www.kirkreport.com/membersonly/2008/06/13/kirks-mailbag-2/

Essentially, my goal is to develop a mechanical trading system that basically identifies 10 stocks from my stock screens with the most upside potential for a one week hold time. I’ve begun initial testing and tracking of this strategy and I’m excited about its potential (so far my results have been positive with an average 7% weekly return with minimal drawdowns of no more than -2%). But, it needs more time and testing especially over different market conditions before I can put it into action. The basis of this mechanical system is so different from what I’ve done in the past and I wouldn’t have found it if I hadn’t been dedicating so much more time to my research and trading this year.
------------

Starting next year I will no longer provide access to trading portfolio. This was an extremely difficult decision to make and I assure you that it was not made in haste. I’ve been debating about doing this for well over two years now and I think ultimately it must be done.

The main reasons for removing the trading portfolio feature from the website include the following:

1) Far too many members are still using my trading portfolio as a way to copycat trades I make even though I do everything I can to prevent that from happening
-------------

A lot of people want to know more about how I spend my time and when I make statements that stock screening takes me hours, I can understand the utter confusion and disbelief. As you say, under your approach, it is as simple as running a screen and downloading the results and off you go!

My stock screening process is fairly complex because I’m undertaking a significant, and what I think will ultimately be, very important research into the creation and design of an advanced screening system. Using what I’ve learned about stock screening in the past along with continued research and development, this project has become a very big part of my professional life. As might imagine, this research process requires a lot of performance testing and tweaking of criteria as well as tracking the screens over various time periods.

Currently, I’m actively working on a little over 300 different screens using the same tools I’ve detailed on my tools of the trade section. My goal with this research is to come as close as I possible can to the so-called holy grail of stock screening.

-----------
http://www.kirkreport.com/membersonly/2008/02/08/mailbag-4/

5) Filter your screens by technical parameters. Using filters that look for oversold/overbought stochastics, relative strength, money flow, on balance volume, etc. will help you trim down your screen’s selections.
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Q: hot to find Reversals
http://www.kirkreport.com/membersonly/2008/11/04/mailbag-18/

Using Teresa Lo’s InVivo Universal Stops or SmartStops may also help you with determining those levels. Beyond that, I often find subtle clues on what to watch for by looking at how the stock performed in the past when it pulled back to its 50 day moving average, etc. similar to the current setup.
---------------------------

InVivo STOPS better than Parabolic SAR ( seems K uses along with ATR ... )

http://www.kirkreport.com/membersonly/2008/06/06/kirks-mailbag/

CYTX is in full breakout momentum mode. The only thing to do here is to buy the dips and pull the plug at the first sign of distribution (or when the trailing stop has been hit). I’ve used InVivo Stops in the chart above to help provide a general sense of how to accomplish that. Again, this is a speculative momentum trade only.



in the chart in the above URL both ' parabolic SAR' and 'InViVO' indicators are sown
a) while dots with BUY/SELL text is parabolic SAR
b) pink/Green dot lines and the bottom accumulate/distribute histogram is part of InVivo indicator. even thought it is PINK line in APRirl with InVivo you do not buy till end of APRIL because bottom histogram is DISTRIBUTION , you wait till zero line or positive.
c) so with those 2 , it is hard to enter at $5 in april with parabolic SAR

--
http://www.kirkreport.com/membersonly/2008/06/05/chart-requests-amx-cytx-cme/

, I might point out that the colors used (along with the corresponding histogram) are very helpful to see the change from distribution to accumulation. I suppose you could do that same with the Par Sar but for my dollar I prefer to use InVivo Stops. Like all indicators of this nature, my recommendation for you is to build and track strategies that use both and just let the performance numbers speak for themselves.
---

http://www.kirkreport.com/membersonly/2008/10/03/mailbag-questions/
I also like the RMI indicator (bottom window) which helps detect a major trend change (green to red) which is not possible through SmartStops. Notice, for example, in the chart of Potash that a key character change occurred which would have been something you had to take notice of if you were long the stock. I also appreciate that I can adjust the InVivo indicator as well as use it in conjunction with other technical analysis studies at the same time which gives me more flexibility and confidence
---

http://www.kirkreport.com/membersonly/2008/11/12/mailbag-19/
Could you share the technical set up for Gilead Sciences (GILD)? The stock shows favorably in two of your screen.
asr: another good Innovi accumulate/distribute RMI indicator at bottom who gives good signal when bars changed from red to green ( still sold BLUE dots) but giving sinal to get ready for BUY ( purple dot change ).
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http://www.kirkreport.com/membersonly/2008/11/12/mailbag-19/
The Relative Strength Index (RSI) quite helpful. But, what time frame to you prefer to use and why?

A: It really depends mostly on the time objective of the trade and overall market conditions. As a default, I generally use a 5-period RSI, but if I’m trading in shorter time frames like now it isn’t unusual for me to use a 2-period RSI instead.

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http://www.kirkreport.com/membersonly/2008/10/27/monday-mailbag/
if I’m actively trading I’ll be monitoring the following throughout the trading day:

*

I have multiple time frame charts – intraday, daily, 5 day, 10 day, & monthly – of the Dow, S&P 500, Nasdaq, Russell 2000
*

Intraday indicators like the Equity Only Put/Call Ratio, NYSE Breadth, NYSE TICK, NYSE Up & Down Volume, TRIN, & VIX
*

Trade-Ideas (various criteria) that scours my watchlist in real-time for potential trading setups & unusual moves
*

Real-time watchlists (based on percentage gain & loss) for both my watchlists and the market itself
*

Real-time charting of current positions and stocks at the top of my watchlist
*

Real-time screening (moving average crossovers, breakouts, high-volume surges, etc

----
The longer the ATR buy signal without whipsaws, the more impressive the chart.
http://www.kirkreport.com/09/inin_10_14_09.gif
-- asr : how to screen those ?? probably using Tradesation SCANAR with ATR code ..
-- in TS combine ATR and Invivo stops indicators for scanning ....


------------
asr: here is example of REAL setup , we call talk about setups , now I know a good setup and how to back test it.

Stoc Oversold with ATR BUY setup
Q:I want you to explain what you meant by the following on twitter “$VICL offers a timely example of why I like to buy oversold pullbacks (see mid-August) that don’t violate their ATR.”

A: Remember my golden rule – I only trade situations where I think the risk/reward is tilted heavily in my favor. What that will require many times is simply to wait for oversold situations in technical pullbacks. I pointed this out in Vical (VICL) today not because I successfully traded this position, but that looking at the chart this morning it is easy to see where I would have been interested in it if Vical had been on my radar last month.

A buy setup would have occurred here on that August pullback where the stochastics turned oversold (i.e. below 20) yet the stock held above its ATR stop line (see this chart). In essence, I’m always looking for pullbacks that fit this type of setup because they often (but not always) present a good risk/reward trade especially if the setup occurs within a stock I’m already tracking within my stock screens (this was not the case in Vical as it does not appear within my screens). Remember, if the stock later violates the ATR on a closing basis, we have a clear sign that the trade is wrong so we can move on. Sure, there are times we’ll see violent whipsaws and you’ll get stopped out in stocks that reverse hard and move to new highs even with an ATR violation, but I know from backtesting oversold conditions with a close test of an ATR stop in an uptrending market tends to provide attractive risk/reward trading setups.

asr: wow so K back tested it , how to back test in TS code , let me try
- test if there is any ATR violation last N days ( get ATR N day MIN value and CLOSE(N) Min value
- if no ATR BUY signal violation in last N days and STOCastic is oversold ( <20)
- ATR current is close to LOW of the day ( LOW testing for ATR violation i.e. close )
- then BUY and close the BUY after Ndays or some other criteria (profit %) or price close to ATR etc..
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TRADESTATION: Average True Range Trailing Stops

Sylvain Vervoort’s article in this issue, “Average True Range Trailing Stops,” describes a technique for generating trading signals with average true range calculations. Once the initial entry is made, any number of reversals may follow. The strategy’s first trade date and first trade direction are established by user inputs.

Strategy: Vervoort ATR_Trail

{ Modified ATR Trailing Stop }
inputs:
TrailType ( 1 ), { enter 1 for modified version, any
other number for unmodified version }
ATR_Period( 5 ),
ATR_Factor( 3.5 ),
Quantity( 100 ),
InitialMonth( 1 ),
InitialDay( 1 ),
InitialYear( 2009 ),
FirstTrade( 1 ) ; { enter 1 for long, any other
number for short }

variables:
Loss( 0 ),
HiLo( 0 ),
HRef( 0 ),
LRef( 0 ),
HiLoHRefMax( 0 ),
HiLoHRefMaxLRefMax( 0 ),
ATRMod( 0 ),
WaitingForEntry( true ),
Trail( 0 ),
LineNum( 0 ),
ReturnVal( 0 ) ;

if TrailType <> 1 then
Loss = ATR_Factor * AvgTrueRange( ATR_Period )
else
begin
HiLo = iff( High - Low < 1.5 * Average( High - Low,
ATR_Period ), High - Low, 1.5 * Average( High -
Low, ATR_Period ) ) ;
HRef = iff( Low <= High[1], High - Close[1],( High -
Close[1] ) - 0.5 * ( Low - High[1] ) ) ;
LRef = iff( High >= Low[1], Close[1] - Low,
( Close[1] - Low ) - 0.5 * ( Low[1] - High ) ) ;
HiLoHRefMax = Maxlist( HiLo, HRef ) ;
HiLoHRefMaxLRefMax = Maxlist( HiLoHRefMax, LRef ) ;
ATRMod = XAverage( HiLoHRefMaxLRefMax, 2 *
ATR_Period - 1 ) ;
Loss = ATR_Factor * ATRMod ;
end ;

if WaitingForEntry
and Year( Date ) + 1900 >= InitialYear
and Month( Date ) >= InitialMonth
and DayOfMonth( Date ) >= InitialDay
then
begin
if FirstTrade = 1 then
begin
Buy Quantity shares this bar Close ;
WaitingForEntry = false ;
Trail = Close - Loss ;
end
else
begin
Sell short Quantity shares this bar at Close ;
WaitingForEntry = false ;
Trail = Close + Loss ;
end ;
end
else if WaitingForEntry[1] = false then
begin
if Close > Trail[1] and Close[1] > Trail[2] then
{ continued long }
Trail = MaxList( Trail[1], Close - Loss )
else if Close < Trail[1] and Close[1] < Trail[2]
then
{ continued short }
Trail = MinList( Trail[1], Close + Loss )
else if Close > Trail[1] then
{ close is above trail }
Trail = Close - Loss
else
Trail = Close + Loss ;

if MarketPosition = -1 and Close > Trail and
Trail > 0 then
begin
Buy Quantity shares this bar Close ;
LineNum = TL_New( Date[1], Time[1], Trail[1],
Date, Time, Trail[1] ) ;
ReturnVal = TL_SetColor( LineNum, Cyan ) ;
end
else if MarketPosition = 1 and Close < Trail then
begin
Sell short Quantity shares this bar at Close ;
LineNum = TL_New( Date[1], Time[1], Trail[1],
Date, Time, Trail[1] ) ;
ReturnVal = TL_SetColor( LineNum, Magenta ) ;
end
else if Trail[1] > 0 then
begin
LineNum = TL_New( Date[1], Time[1], Trail[1],
Date, Time, Trail ) ;
if Close > Trail then
ReturnVal = TL_SetColor( LineNum, Magenta )
else
ReturnVal = TL_SetColor( LineNum, Cyan ) ;
end ;
end ;