Wednesday, September 3, 2014

Creating Custom Toolbar Buttons in MetaStock

MetaStock includes an incredible number of trading strategies, methodologies, and studies.  In fact, there are so many tools available, that sometimes it can be a daunting task to stay organized. The good news is that there are some handy (and often underutilized) buttons that will help you keep your favorite set-ups just a click away. 

At the bottom of MetaStock is a toolbar with six buttons in a row.   These six buttons come pre-installed with some common templates included in MetaStock. 

One click on these buttons will launch a specific set-up, or template on the chart you are currently viewing.   It’s easy to create additional buttons or replace the existing buttons with your own configuration.  Here’s how you do it:

1.    Right click on one of the six Custom Toolbar buttons and select “Custom Toolbar Properties”.



2.    A new window will open with the list of pre-installed buttons.  To create a new button, click “New”.  To make a change to an existing button, select that button and click “Edit”.  In this example, I’ll be creating a new button.



3.    Another new window will appear and ask you to locate the template that you would like to attach to the new button.  Click “Browse” to select the template from your local folders.  (The MetaStock templates folder should automatically populate, but if it does not, the file path is “Libraries > Documents > MetaStock”).  


 Make sure that “Templates” is selected under the “Files of Type” drop-down menu.Select your template from the list and click “Open”.  Then click “Next”.




4.    Now you will be prompted to select an icon for your new button.  Click on the icon that you want, then name your button.   Click “Next”


 

5.   The final step is to name the status bar prompt.  Then click “Finish”.  Your new custom button is created! 


Customization is one of the hallmarks that makes MetaStock the wold leader in technical analysis. These helpful buttons are just one way to make your experience fit your individual charting needs.

TechniTrader Weekly Stock Review

The New Technical Bottom Formations

As Market Structure Changes, so too do Technical Patterns

Since 2008, the stock market and all of the financial markets from FOREX to Derivatives have been under massive structural changes. These include new venues, order types, order routing, data analysis, data documentation, compliance issues, and regulations. No part of the professional side has been left untouched by at least some of these changes.

The heaviest concentration of new regulations, venues, and orders has been in derivatives and stocks. Both financial markets are seeing changes not only internally, but also on the charts that most professional traders use every day. These new patterns are reshaping how the professional technical trader approaches trading with new trading processes, systems, and strategies.

Individual traders can follow their “big brother” lead, and learn the new technical patterns too. This will enable them to avoid unexpected price action, weaker picks, and potential losses.


The above chart of NTAP shows how bottoms are being reshaped, by the new orders that come from the many new venues for professionals. A traditional head and shoulders bottom which would have had a V shape shoulders and head, with volume dropping to the downside and rising to the upside on the right shoulder. Instead of a deep long head, this bottoming pattern has the distinct pattern that reveals Dark Pools are quietly moving in starting with the Shift of Sentiment exposed by the TechniTrader Quiet Accumulation TTQA Indicator in the bottom chart window. The black vertical line on the chart shows the base. This is where the Shift of Sentiment occurred, with Dark Pools taking control of price starting in late April.  The TTQA indicator reveals the Dark Pool activity well ahead of the final low. Notice that instead of a V the final low is shallower, with a flat base pattern which has become the most common bottom pattern of the Dark Pools.

Summary: Technical traders and individual traders must learn new technical patterns, and also Relational Analysis™ which is the understanding of the relationship between who controls price at any given level of a trend. By recognizing the patterns that each market participant forms when they control price, a trader will find trading far easier and much more rewarding.

Trade Wisely,

Martha Stokes CMT

Master Rated Technical Analyst: Decisions Unlimited, Inc.
Instructor & Developer of TechniTrader Stock Market Courses

© 2014 Decisions Unlimited, Inc. DBA TechniTrader®. All rights reserved.

Disclaimer: All statements are the opinions of TechniTrader, its instructors and/or employees, and are not to be construed as anything more than an opinion. TechniTrader is not a broker or an investment advisor; it is strictly an educational service. There is risk in trading financial assets and derivatives. Due diligence is required for any investment. It should not be assumed that the methods or techniques presented cannot result in losses. Examples presented are for educational purposes only.

Friday, August 29, 2014

MetaStock Weekly Stock Review 082914

How to Use Large Lot Versus Small Lot Indicators

by Martha Stokes CMT


Indicators that Reveal Large Lot Rotation Divergence from Price


With institutions accounting for 80% of all the market activity nowadays it is imperative to have indicators that expose large lot distribution or rotation patterns even while price moves up. Often times the Dark Pools are quietly selling in the background while smaller lot investors, retail traders, and smaller funds are buying a stock, temporarily pushing it upward.


Divergences between uptrending stocks on lower volume while Dark Pool large lot orders are firing on the sell side, warn of the increased risk of a sudden downward price action.  JNJ has a pattern of recent giant fund rotation.


Rotation is the lowering of shares held for Charters for the long term. The giant funds are not selling out of the stock, but lowering their held shares to avoid having too many shares held in the portfolio as the company encounters slower quarters of revenue and earnings growth. Rotation is not the same as distribution. Distribution is significantly more critical and can often cause a topping formation.


Rotation is common at the end of quarters and is especially visible during August. Rotation increases the risk of HFT interference as the algorithm discovers the slow consistent selling pattern footprint of the Dark Pool giants. JNJ show such a rotation pattern. As price moves up, driven by at market orders from smaller lots who do not know much about buying stocks and are buying on the dip, the large lots are selling as the stock moves up. This increases the risk of a sudden HFT run or gap down one day event. Points run down by an HFT can be huge.


If HTFs trigger on that steady selling pattern even though the stock moved up recently, the risk of a huge downside run increases. Therefore it is important for swing, day, and other trading styles to recognize that the run up is due to smaller lot buyers and that large lots are quietly selling behind the scenes.


The stock may move up further, but often times, the sudden reversal catches retail traders by surprise which can cause a loss for that trade. Avoiding stocks with heavy large lot selling while the smaller lots run price upward, can reduce risk of losing trades, and help in choosing which stocks to trade.


By selecting stocks that have quiet accumulation patterns or steady Dark Pool large lot buying, the retail trade increases their potential profits and lowers risk. Retail traders will find that when they employ these indicators, their losing trades, whipsaw trades percentages drop.


One of the critical things retail traders must learn to do is to avoid losses in their trading. A beginning retail trader should strive for a 75% success rate in their trades. That means 7-8 trades are highly profitable while 2-3 are small losses.


Many retail traders have dismal success rates ranging from 30-50% which means that most of their trades are losses. This consumes capital reserves and erodes confidence.


By using indicators that tell you what side of the transaction is large lot versus small lot, traders can and do increase their profitability per trade ratios.




…Martha Stokes CMT, TechniTrader.com. To read the full report, go to http://hub.am/1njmvuW.   


Trade Wisely,


Martha Stokes CMT


Master Rated Technical Analyst: Decisions Unlimited, Inc.
Instructor & Developer of TechniTrader Stock Market Courses


© 2014 Decisions Unlimited, Inc. DBA TechniTrader®. All rights reserved.


Disclaimer: All statements are the opinions of TechniTrader, its instructors and/or employees, and are not to be construed as anything more than an opinion. TechniTrader is not a broker or an investment advisor; it is strictly an educational service. There is risk in trading financial assets and derivatives. Due diligence is required for any investment. It should not be assumed that the methods or techniques presented cannot result in losses. Examples presented are for educational purposes only.

Tuesday, August 26, 2014

Employee Spotlight: Lynn D

Lynn in Frankfurt.
Name: Lynn D.
Time with Company: almost 16 years. Started on 10/15/1998.
Area of company works in:  Support, Product Management, etc.
Do you trade in your spare time: No, too busy spending time with kids, Gardening, and enjoying Soccer.
Favorite part of your job: Solving problems
Favorite Quote: The difference between stupidity and genius is that genius has its limits. (Albert Einstein)
Favorite Color(s): Blue
If you weren't working with MetaStock what would you want to be doing: Working at some other software company but not enjoying it nearly as much.

Friday, August 22, 2014

Good confirmation indicator of market bottoms

One good indicator of market (as measured by S&P 500 index) bottoms is the state of VIX futures contango. Normally, the front month contract is lower than subsequent months. During market declines, the value of front month and possibly other near months (front month +1) rises much faster than farther months until they all nearly converge, or the front month value exceeds farther months. When this occurs, the market is usually making a short term bottom.This is shown on attached charts. The top chart is the S&P 500 index, the bottom is several VIX Futures (Jan 14 through Nov 14). Note, to load expired recently expired VIX futures, add a ^1 to the symbol. For example, VXZ3^1 will load the Dec 2013 contract.Of course, a trading decision should not be made based on this indicator alone. One should combine with other studies (breadth, oversold, etc) before executing trades. See charts below:


A Better Indicator than MACD: Leading vs. Lagging Indicators

By Martha Stokes, CMT


MACD is one of the most popular indicators for retail traders, particularly for traders with less than 2 years of market experience. This is primarily due to retail online brokers and trading systems which promote the use of MACD for retail trading.


However, the question that every trader should be asking is if MACD is such an awesome indicator, why do most retail traders lose money trading stocks?


Here is the answer:


While MACD was an excellent indicator when it was first written, there are several reasons why MACD is no longer the best indicator to use for short-term trading. This is especially true if you are a swing, momentum, or day trader.


  1. High Frequency Trading firms discovered a few years ago that retail traders use MACD, and that their brokers encourage them to use MACD for automated retail-trading systems. HFT Quants wrote algorithms to exploit and front-run retail traders using MACD systems. With so many retail traders all trading exactly the same way, using MACD as an entry signal, it creates anomalies in order flow called “cluster orders.” Cluster orders are easy for the algorithms to identify. The HFTs are able to jump ahead in the queues to buy ahead of the retail cluster orders, and then start selling as retail-trader orders move through.
  2. MACD is a lagging indicator due to the new order-processing systems, which are exclusively available to the Dark and Twilight Pools and other professional trading venues. The Dark Pools have controlled bracketed orders which do not move price, even while they buy huge quantities of stock. The trick is they buy in incrementally with controlled bracketed orders, which contain the price they are paying in a tight price pattern.
  3. Professional Traders are also aware of the retail crowd’s obsession with MACD. Pros have often developed their own, unique indicators and trading systems, and they can easily exploit the retail traders using MACD because it lags the price action.




In the chart above, a modern indicator called TT Volume Accumulation (TTVA) leads the price movement. It is able to lead price because it is comparing current VOLUME to prior volume overtime. By comparing large-lot activity versus small-lot activity, the TTVA indicator is able to determine whether the buying is on the upside tick or downside tick, differentiating where the Dark Pools are buying or selling. This is crucial, especially after a correction in the market, OR at a high, speculative-trending market at risk of a top.


The MACD indicator lags, as it is based on the very old and outdated moving averages, which inherently lag; so, price must move up first before MACD can give a signal.


TTVA, on the other hand, signals several days ahead of MACD, allowing the short-term swing, momentum, or day trader to buy in earlier, earning much-higher profits on the short-term horizon.


The significance of seeing the reversal pattern before price moves up is important. Each extra point adds up. If you are trading 100 shares, 1 extra point gained in a trade equates to an additional $100 in profit. If you are trading 1,000 shares, it becomes $1,000.


This is why professional traders earn far higher incomes from trading than retail traders do.


When you learn to use indicators that signal ahead of price moving up or down, your income from trading will exponentially increase.




Trade Wisely,


Martha Stokes CMT


Master Rated Technical Analyst: Decisions Unlimited, Inc.
Instructor & Developer of TechniTrader Stock Market Courses


© 2014 Decisions Unlimited, Inc. DBA TechniTrader®. All rights reserved.

Disclaimer: All statements are the opinions of TechniTrader, its instructors and/or employees, and are not to be construed as anything more than an opinion. TechniTrader is not a broker or an investment advisor; it is strictly an educational service. There is risk in trading financial assets and derivatives. Due diligence is required for any investment. It should not be assumed that the methods or techniques presented cannot result in losses. Examples presented are for educational purposes only.

Friday, August 15, 2014

Understanding Sideways Price Action: The Symmetrical Triangle

Home Depot’s (NYSE: HD) Symmetrical Triangle
By Martha Stokes, CMT

Stocks have been trending sideways more often in the past few years as more and more of the institutional orders are automated. With brand-new custom orders for each market participant group, and a wide diversity of trading venues and platforms, the automated order streamlines the routing of orders and makes processing the billions of orders that come in from around the world far more efficient.

There are many types of sideways patterns, and each is unique to a specific market participant group, which can control price in a manner which causes a certain sideways pattern to persist. The symmetrical triangle doesn’t form as much as it used to but, at times, it forms on the broader big blue-chip company stocks that are popular with retail traders and small-lot independent investors.

Most of the time, wide sideways price action is a Trading Range or Range-Bound price action, which is at least 10 points to over 100 points wide on an expensive stock. What happens when a triangle forms is either the upper range or lower range starts to compress, or both compress at the same time, creating the symmetrical triangle. This type of controlled price action is often indicative of larger-lot buyers moving in. Their ability to control price is one of the “footprints” they leave on the stock chart.

HD has a symmetrical triangle which has increased its angle of ascent on the lower side of the price action of the trading range. In this instance, the triangle is forming lower highs and higher lows, compressing from both the upper side and lower side of the trading range. It is most easily seen on a 3-day chart. HD started out with a trading range that had plenty of inconsistent highs and lows and mid-range-level peaks and valleys, which are common in trading ranges and cause problems for traders using Parabolic and Stochastic indicators.

The daily chart provides additional clarity.


The stock is compressing at a faster rate, which is indicative of an impending breakout pattern. Price alone, however, even with all the various price indicators, will not define which direction the breakout will occur. For that analysis, traders must use Quiet Accumulation or other large-lot indicators to expose whether the large lots are on the buy side or sell side of the compressing price action. This is why price indicators and price analysis by itself is insufficient for optimal stock picks in trading.

The speed at which the compression is occurring on both the upper and lower ends of the range is creating more and more pressure for the breakout, which could be either a run or another gap on High Frequency Trading action triggering when HFTs discover what side the Dark Pools are trading.

Sideways action is a critical aspect of technical analysis that must be learned proficiently. There are numerous new sideways patterns that are not taught in the technical analysis books written even a few years ago. The massive structural changes to the stock market are creating new patterns all the time. Being able to see these patterns, without drawing lines eventually, should be the goal of every technical trader. Then, studying where the large lots are dominant will provide the trading direction and breakout.

First, learn to see the compressing triangles, and then study the institutional action.


Trade Wisely,

Martha Stokes CMT

Master Rated Technical Analyst: Decisions Unlimited, Inc.
Instructor & Developer of TechniTrader Stock Market Courses
MetaStock® Partner

© 2014 Decisions Unlimited, Inc. DBA TechniTrader®. All rights reserved.

Disclaimer: All statements are the opinions of TechniTrader, its instructors and/or employees, and are not to be construed as anything more than an opinion. TechniTrader is not a broker or an investment advisor; it is strictly an educational service. There is risk in trading financial assets and derivatives. Due diligence is required for any investment. It should not be assumed that the methods or techniques presented cannot result in losses. Examples presented are for educational purposes only.