Sunday, June 21, 2009

What i've been working on...

Ok, so as you can well imagine i've been a busy little kid planning my next moves. I want to get a lot of this stuff nailed down and finalized before I start work in July which gives me one more week to do just that. But before I go into any of that - THANK YOU TO EACH AND EVERYONE OF YOU WHO LEFT A COMMENT ON MY PREVIOUS POST!!! The comments were heartfelt and sincere and went a long way towards reinforcing the positive aspects of my current situation rather than dwelling on the self-perceived negatives. This is a new opportunity for me plain and simple. And it sounds like a lot of you have been at these kind of spots in your lives and the key is to just keep pushing forward. So onto the broker debacles.

Last week I took all of my money out of TradeStation and they called back promptly wanting to close out my account. I told them I had already paid them hundreds in commissions this month and the next months data and platform fees should be waived regardless. So it gave me a month to migrate to a new platform. Putting 99.00/month towards their platform (no matter how accustomed i've come to it) is ridiculous for someone in my situation. But I have a copy of Multicharts and its almost the same thing. Furthermore I found out that I can open up a Mini-FX account (250.00 minimums) with Open E Cry and get free data (Including tick and volume) for all the currency pairs and nearly every futures contract you can dream up all for free and no platform fees!!!

Best part? Multicharts can use the data stream from Open E Cry which means I can essentially keep the same charting and workspaces and simply feed them data from elsewhere for free. Also, I can use their "Free Quotes" for charting daily and weekly timeframes for stocks as I pursue swing trading equities.

On that note i've been searching high and low for good low-commission equity brokers that have low account minimums. I have an account with TD Ameritrade but at 9.99 a side its too expensive when you consider the size of the trades i'll be putting on. I stumbled onto SogoTrade which offers 3.00 flat fee commissions on trades, 500.00 account minimums to open and all the features I need. Since i'll probably only be putting 500.00 or so into the positions i'll be buying the 6.00/rt isn't too ridiculous. This is more to get my feet wet and mess around for the time being. So what strategies am I pursuing?

Well I do plan on using the site for a 1 month trial run and see if I can't find a simple way to utilize their picks and my analysis but for the time being i'm not starting that service yet.

I've been focuses HEAVILY the past week on developing the "intraswing support/resistance" idea I was talking about. I really feel that my best bet for success is to keep my risk parameters low and aim for 2:1 returns. The only way I can realistically do that in my mind is to try and find swing highs and lows so I can have a defined stop and risk.

So I put on my EasyLanguage pants and started coding up my ideas. I came up with some really cool stuff and the best part was yesterday I figured out how to modify the code so I can just pull up a list of 500-1000 stocks every night in the scanner and be alerted to the 10 that put up potential trade signals that day. I am also going to cross apply this to the forex markets and use big scanning windows on different pairs and timeframes to search for trades.

My big idea is trying to find essentially candlestick patterns that identify areas within a swing where buyers or sellers are interacting and one side has clearly tried to push lower or higher and failed to do so.

Heres my scanner window right now with the stocks that fired off one of the two signals i'm looking for on Friday. Now this scan is of the entire S&P 500 and these were the only ones with signals. So its fairly selective to begin with. But added to the mix is that fact that i'm only taking signals that are following trends (H, HL, L, LL, or DB/DT's) and I look for one more secondary indicator to confirm they swings are at extremes and I just generally check that the swing is fairly smooth and concise. Of these 20 that fired off potential entries, only 2 ended up to be valid trades.

Trades for Monday:
Long DRI @ 33.54

These prices are at the close on Friday, so technically I would just be buying them at the opening prices on Monday.

I'm using this same strategy for the Forex markets intraday as well and i'll be posting up outcomes in those markets starting Monday.

So to recap, i've been a busy little beaver. I've put my ideas into code, expanded on them, backtested further, and created a rule set around them. I'm focusing on these types of trades only and not anything else I have used prior.


E-Mini Player said...

Best of luck man!

Gustavo said...

I have not posted in a long time, but I continue to read your blog and really enjoy your drive for success. Good luck with everything and I hope you achieve what you are shooting for!

Anonymous said...

Go for it Matt!!

Fadi said...

what platform did you use to get generate that scanner list?


Matt said...

Its in Multicharts... but the platform is seriously lacking in a lot of features and it has some stuff in it that just is flat out broken and doesn't work.

I'm amazed they can charge money for it.

Ziad said...

Just a quick note about your last post. Whatever you do, don't join Bright trading. I started my career with them and quickly realized that it's not the way to go. Their pairs trading strategy will make you consistent money week after week, until you blow up. It's structured around the bell curve distribution, and thus by definition has inadequate risk management in the long-run because it is based on faulty assumptions about the nature of markets. Just read when Genius Failed, or other books about traders that believed in the efficient market hypothesis. Moreover, their training courses are overpriced and offer no real meat, although they make it seem like you're going to be taught some very important stuff. If you're gonna take any advice regarding your trading career take this one, no matter how tempting it may seem otherwise.

Matt said...

Great info Ziad! Thank you for your input.