042216 MetaStock - Improving the use of Bollinger Bands

Improving the use of Bollinger Bands®

Adding Quantity and Volume Indicators to the Analysis

One of the most exasperating things that happen to Retail and Technical Traders is to find a chart with a perfect setup, but the stock has already gapped or run up with a huge one day gain. High Frequency Trading algorithms triggered the running or gapping of the stock up, in the first few minutes of the trading day.

Many traders want to learn how to capture these gains, and be in the stock before a huge gap or big run day.

Bollinger Bands are the best Channel Indicators for Technical Trading, and for finding Breakout Compression Patterns prior to gaps or runs. The ability for the bands to expand and contract makes the bands the ideal channel indicator to use. However as with ALL Channel, Price, and Time Indicators they require additional indicators for directional signals.

Bollinger Bands tell you that the stock is poised for a strong Momentum Run or gap, but do not tell you whether the Breakout will be to the Upside or Downside. During Trading Range Market Conditions such as we currently have now, it is impossible to “guess” the Breakout direction solely using Price and Time Indicators.

Employing Quantity and Value Indicators provides the complete set of indicator analysis to determine the direction of the Breakout when using Bollinger Bands. When trading Options this eliminates the need for Options strategies that buy both a Call and a Put because the trader has no idea what direction the Breakout will go. When trading Stocks it eliminates the risk of whipsaw action, or assuming that just because the Indexes are down that the Breakout will be down also.

This is especially helpful during Bottoming Market Conditions when stocks frequently retest prior bottom lows.

Quantity Indicators reveals the slow Quiet Rotation™ and Quiet Distribution, and Quiet Accumulation patterns by the giant Institutions. The TechniTrader Quiet Accumulation TTQA Indicator was designed for MetaStock users for this purpose. Quantity indicators are used by Professional Traders regularly but are rarely used by Retail Traders. There are both line and histogram Quantity Indicators available.

Volume Oscillators are also seldom used by Retail Traders. These offer a significant advantage over Price and Time Oscillators, which tend to give false signal during Momentum Runs, Velocity Runs and other fast moving price action that exceeds the parameters of the Price Oscillator scaling.

The Flow of Funds Indicators are another group of indicators that help determine direction of a Breakout. Often time Smaller Funds and Independent Investors are selling, as the giant Institutions are quietly buying the same stock hidden from view on Dark Pool venues. These types of indicators show whether money is flowing into or out of the stock.

By incorporating additional indicators into the stock analysis, Retail and Technical Traders can significantly improve their trading profits by identifying the direction of the Breakout prior to price suddenly moving with momentum, a gap, or velocity action caused by HFT triggers.

Quantity and Volume Indicators are easy to interpret, and provide the missing data for a complete stock pick analysis during sideways patterns.

For Options Traders this is a far more useful analysis than traditional Options Indicators, and it can lower contract costs by providing the missing data needed to choose the proper contract and Option strategy.  

Trade Wisely,

Martha Stokes CMT

TechniTrader technical analysis using a MetaStock chart, courtesy of Innovative Market Analysis, LLC dba MetaStock

Instructor & Developer of TechniTrader Stock and Option Courses

This weekly stock discussion is sponsored by TechniTrader.com a MetaStock® Partner

Copyright ©2016 Decisions Unlimited, Inc. dba TechniTrader. All rights reserved.

TechniTrader is also a registered trademark of Decisions Unlimited, Inc.

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.

METASTOCK LEIBOVIT VOLUME REVERSAL TUTORIAL FOR SUNWORKS - SUNW - APRIL 25, 2016

From the desk of top market timer Mark Leibovit:

SUNW (SUNWORKS) is down from $160 to $0.22 and then rallied to $8.00 and then retraced to just over $2.00.  The current rally was confirmed by a Leibovit Positive Volume Reversal last Wednesday accompanied by a rising 5/3/3 stochastic.  Support (stop) is at the recent $2.00 low. Upside potential is tough to gauge, but a push up to the $4.00-$5.00 range is not unreasonable over the near-term. 

https://youtu.be/vpgZIUQ1iVI

[Video] Find Hidden Flaws in Any Trading System...Using Trading KPI's

Business managers, engineers, Pentagon planners, and financial experts all model their projected results. So should traders.



Traders routinely get into trouble with one strategy or another because they focus on one or two Key Performance Indicators (KPI's), such as % winning trades, or % gain per trade. The truth is that there are at least 8 essential KPI's -- Account Size, Position Size, Trades per Month, Hold Period, % Winners, % Gain per Trade, % Loss per Loser (or Trailing Stop), % Exposure -- and they all interact with each other.



Some KPI's, like % Gain per Trade, are not nearly as important as you might think. And when you look at all the KPI's of a trading strategy together, you will quickly see that many trading systems have absolutely no chance of succeeding! Even if you are producing great buy signals!



Are you ready to put your assumptions put to the test?



Join Roy Swanson and he will show you how to:



See which of your trading assumptions are just wishful thinking

"Right-size” your buys to be in line with your strategy & account size

Why your "average hold period" is more important than just about anything else

Avoid the common trap of ignoring cash flow -- the fatal error lurking in most trading systems

This will be an interactive session where you can ask Roy to model the KPI's of your own trading system. Please take note of your current results so you can contribute to the discussion.



About Roy Swanson

Roy Swanson is the founder of SteadyTrader.com. A veteran trader and math geek, he started trading at the dawn of the online brokerage era, and was even asked by DL&J if he wanted to work on derivatives, back when they first became popular in the late 1990’s.



Roy has consulted for some of the best-known names in the trading strategy world (and still does). Last year, he decided it was time to turn his no-nonsense, professional approach to trading into tools that average traders can use in their own trading.​

041516 MetaStock – Use Dark Pools Chart Patterns for Higher Profits

Use Dark Pools Chart Patterns for Higher Profits

How to Calculate the True Cost of Your Trading

To use Dark Pools Chart Patterns for higher profits is an area of Technical Analysis that has not made its way into most stock market books, articles, and information available on the internet. The reason why Dark Pool technical patterns aka footprints are not yet part of the Technical Analysis standard of teaching is that these are NEW chart patterns.

Dark Pools did not exist in the 1980’s, 1990’s, or early 2000’s decades. These are relatively new trading venues for the giant Institutions who demanded obscurity, due to the rise of the High Frequency Trading Firms HFTs in the mid 2000 decade after the switch from fractions to decimals. Basically HFTs morphed out of the Small Order Execution System SOES Bandits, during the rouge Floor Traders era.

Just as an interesting note, did you know that the Flash Crash of May 2010 was caused by an error in an Institutional order? Instead of using a Time Weighted Average Price TWAP order, the fundamental trader used a Volume Weighted Average Price VWAP order. VWAPs trigger on rising Volume, which then triggers more and more orders. TWAP is the appropriate order for Quiet Rotation™ and Quiet Distribution, as well as Quiet Accumulation.

A Retail Day Trader can no longer see the large lot activity on their level 2 screens, as nearly all large lots are transacted nowadays on the hidden venues called Dark Pools which are used by giant Institutions. However what can not be hidden, is the easy to identify Dark Pool footprints on the stock charts.

There are many different types of Dark Pool footprints the giant Institutions leave on charts, due to their preferred professional Order Types.

One of the more common footprints happening is the “Basing Bottom Formation,” which is a brand new type of bottoming formation. In order to use Dark Pool Chart Patterns for higher profits, the key element in this pattern is to identify the Dark Pool Quiet Accumulation before the stock runs up with an early entry.

However early entry can be problematic if a trader is using Price and Time Indicators, and both Momentum and Price Oscillators. You may get an early crossover, but then the stock moves sideways up and down in a choppy pattern that causes whipsaw exits and losses.

Another problem getting in early is that many Retail Traders wait and wait for signals from Momentum Indicators, which gets them into the stock very late in the run. This means instead of a high profit trade, the Retail Trader takes a meager profit.

True profit is one big part of trading that most traders fail to include in profit evaluation. How to calculate the true cost of your trading is considering more than just the cost of Charting Software, Broker fees and charges, and possibly subscriptions to Newsletters.

To accurately calculate whether a trade is profitable or not, you must also include ALL of the normal business expenses for Trading as a Business. Otherwise you are deluding yourself as to your profitability in trading.

Trading as a Business includes the following:

1. You MUST pay yourself something for your time. How much could you make an hour, working for a corporation in your field of expertise or your degree? That is the minimum amount you should use as a base for trading expense as an hourly wage.

2. You must also include the average losses. You must take an average of your losses each month and divide it into your trades per month, and subtract that loss from your profits of every profitable trade.

3. Other expenses include your computer, printer, and other hardware depreciation.

4. In addition there is the office space in your home, electricity, internet, phone, and office expenses such as paper, pens, and journals.

5. Finally add up the cost of time attending webinars, the reading articles, and also if you pay a a simulator fee.

Summary

If you did an accurate and thorough calculation of your TRUE trading costs, you would find that taking a .25 cent profit on a 100-1000 share trade is not at all profitable. You are actuality losing money every time you trade.

So learning how to enter a stock trade earlier based on recognizing a Dark Pool Buy Zone™ is crucial, and can turn your trading hobby into a career that all your friends envy and admire.

Trade Wisely,

Martha Stokes CMT

TechniTrader technical analysis using a MetaStock chart, courtesy of Innovative Market Analysis, LLC dba MetaStock

Instructor & Developer of TechniTrader Stock and Option Courses

This weekly stock discussion is sponsored by TechniTrader.com a MetaStock® Partner

Copyright ©2016 Decisions Unlimited, Inc. dba TechniTrader. All rights reserved.

TechniTrader is also a registered trademark of Decisions Unlimited, Inc.

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.

METASTOCK LEIBOVIT VOLUME REVERSAL FOR GENERAL CANNABIS - CANN - APRIL 4, 2016

From the desk of Mark Leibovit.

The Leibovit Volume Reversal has been demonstrated as useful in all time frames and in all market where volume is available - even in the penny stock market.  My VR Vice Letter covers a large list of 'sin' or 'vice' names ranging from gaming, alcohol, tobacco and cannabis (marijuana) shares.  There are probably 200 publicly traded 'penny' marijuana related names and we track and trade those at the Vice Letter. Here, as a demonstration of its applicability in that arena, this week I am presenting General Cannabis (CANN). Take a look.

https://youtu.be/mJAS7lHwB3k