Trading Tools I Use
Lloyd (Mr. Flatwallet), in a comment to a previous post, asked what tools I use for scanning/trading. I started replying, and the comment got so long (what, me, full of hot air?), I decided to put it up as a separate post. Here ’tis.
…as for tools, they fall under my personal rule that I won’t pay $10 for anything stock-related unless I’m nearly certain that it will be responsible for making me at least $11. This especially applies to newsletters- a friend wanted me to subscribe to one that was $1200/year.. I asked, “And you’re sure it’ll make me at least $1201/year? And if he’s that good, why’s he selling overpriced newsletters with hocus-pocus mystery inside secrets?” (I’m not talking about a legit case like Fallond, who’s completely open about how he bases his recommendations, as well as disclosing their performance; I’m talking about “Subscribe Now! And we’ll tell you about the stock of a company which participates globally in the commodity technology financial business, and is ready for a Big Move! So Subscribe Now!)
Ergo (I’m gettin’ tired of starting paragraphs with “So”), I use various tools which all have one thing in common- they’re FREE. Most are premium subscription services that are free because I use Ameritrade, so if you don’t use AMTD, I’d say explore any “perks” that your broker offers in addition to the freely-available stuff on the internet. Here goes my list:
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MedVed Quotetracker integrated with Ameritrade streaming data feed. I’ve never in my life touched a more customizable interface. How many million times have I thought, “If only I could do this with this chart…” Infinitely-variable bar frequency and chart periods (how about 13min bars on a 3hr 45min chart?), or setting the bar width in pixels so they’re not too skinny or fat for your visual preference, setting custom AUDIO alerts based on your hand-drawn trendlines, custom colors for every bar, line, trend, etc… Well, Quotetracker can pretty much do it all, it’s just a matter of knowing where to click. And even better, you can save the settings to use them later across a range of stocks. And unlimited real-time charts, just depends on how much monitor real-estate you have (I’m thinking of going from two 19-inchers to four).
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Ameritrade Streamer Suite — the charts I used before quotetracker. Not as customizable, but useful enough for daytrading (although limited to 5 open charts at at time). Also free Level II (useless for me), free time and sales (very useful at times), real-time actives lists by volume or trades for last 1,5,30min, etc (set to “volume” and “1min” catches some nice block trades), streaming quote portfolios with custom alerts (kinda clunky to set and change on-the-fly, though)
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Advanced Analyzer — this software used to be a premium piece called BigEasy Investor before AMTD bought them. It still very much has a 1998 feel to the interface, but it works great for end-of-day scanning on daily bars for potential swing-trade entries. After the data is updated (~1 hr after the close), you can scan the entire market for stocks that meet your criteria (RSI over 60, greater than but within 1.5% of 10ma which is less than 4% below 20ma, volume less than 70% of 30-day average, etc, etc, etc)[this is not an actual scan, just “for instances”]… you can start the next day with a very short list of stocks that you’re confident are good potential trades.
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ProphetScan from Prophet.net. This free scanner gives me exactly what I need for my crop of daytrade candidates, both long and short- Lucky for me, as the free version only allows two saved scans. My “Long Daytrade” scan goes as follows:
- Last Price between 15 and 100
- Average Volume at least 300,000 shares
- Virtual Volume at least 20% greater than average (see their site for an explanation of this one, very very handy)
- Today’s Open at least 1% higher than previous close (i.e. a gap); also note that this is NOT a gap above the previous high, but the previous close.
This scan usually gives me a list of 20-40 stocks, which I then pare down manually. Note that you typically must wait 10-15 minutes after the open for the results to reflect today’s list, so this is not of use if you trade in the first few minutes after the open. If things go well, by 1015-1025 EST I’ll have a list of 8-15 stocks that I end up watching for actual trade entries.
I’m seriously considering subscribing to Prophet.net, since I’m all John Galt-ish with my money and I think they provide services that are well worth the subscription price. I’ve only hesitated because the scanner is the only tool of theirs I use.
Otherwise, I pay a grand total of Zilch for the trading tools I use, so every penny they make me is an undefined return on my investment (little division-by-zero joke for the 7th graders).
Cheers.
lloydphilip said,
November 15, 2006 @ 5:15 pm
First thank you for that. Second thank you for that. Third, if you’ve misspelled my name, you join the 99% who do it all the time. Hell I have family that have been spelling it wrong for years and years. And Since I suck at grammar and spelling, I won’t hold it against you.
estocastica said,
November 15, 2006 @ 8:18 pm
Great post!
Glenn said,
November 15, 2006 @ 8:45 pm
QuoteTracker rules, I hope they don’t change much with the new owner.
lloydphilip said,
November 15, 2006 @ 10:19 pm
You do realize that if I listen to you I will have to change the name of my blog to Phatwallet or Fatwallet…at this rate you are slowing down the chances of me from being a part of the 80% that fail at trading…which means you will have to answer to the financial powers that suck blood out of every trader that doesn’t make it…You are turning into Morpheus and making us choose between the red and the blue pill?
themarketspeculator said,
November 16, 2006 @ 1:06 am
I like your style, probably since mine is very similar in that I don’t believe in the need for high tech tools. Most of what I use is also free, and I seriously doubt my results would be any better for high prices scanners and services.
Will said,
November 16, 2006 @ 1:11 am
esto- thanks! I enjoy your site very much; as a matter of fact, you may see that I mentioned it as one of my favorites in a yet-to-be-published interview with a certain website
Glenn - So far AMTD seems to pretty much leave their “annexed” software alone, for better or worse. I think they hired the MedVed team to continue updates and development, so all should be well.
Lloyd - Morpheus, eh? That’s a nice compliment- thanks. I tend to think of myself more like the guy in Monty Python and the Holy Grail, saying “Bring out your dead!” (ding) “Bring out your dead!” (ding)
Will said,
November 16, 2006 @ 1:20 am
TMS - I completely agree. Since I’ve gotten used to Quotetracker (been using it about a month), I couldn’t live without it, and I’m sure there’s some $$$ package that I would love even more, but like you, I’m skeptical whether it would actually improve my trading. If they would all offer a 30-day full-featured trial, I might give more of ‘em a test drive. But one thing I’m sure of- the bottleneck in my trading isn’t in my software, it’s between my ears, so that’s where I need to focus most of my energy. Thanks for stopping by!
em said,
November 16, 2006 @ 3:55 am
This is an excellent post as I already use prophet for scanning but I would love to narrow my candidates without narrowing my opportunities. I’m going to try your settings. However, in the Gap Up section of prophet (where you place your setting 1% above previous close) it might be beneficial for readers to know that if you set the first section to -.01 below the previous high (for longs) you can get a comphrensive list. Took me awhile to figure that out. Also, you’re post labeled: URBN Block Trade Triggers Profitable Flip-Flop is also very, very interesting. I’ve checked some of my previous trades on the 5 minute chart and noticed on more than once occasion a huge spike in volume a couple of bars before a reversal. In addition to the candlesticks… it’s nice to have another indicator. Thanks for your posts… extremely helpful.
Oh… I am a Gold subscriber to prophet because I use them for charting (which I may change because of Quotetracker), but a big issue I have with Prophet is sometimes their feeds are incorrect or very different than what I see in my trading platform. Volume is always about 1% lower in prophet and their data sometimes varies as well. For instance, prophet may have a different high or low or open or close. This is important especially if you rely on candles (which I do). I currently have to confirm every trade in my trading platform (which takes times). I need to look for a reliable data feed for Quotetracker - suggestions are welcome!!!!
Brad said,
November 16, 2006 @ 4:59 am
First of all, great site!
I also use quotetracker and prophet.net, both of which are excellent. I agree with other posters that perhaps there are better (and more expensive) tools available, but I find that for my style these are more than good enough. I can also recommend a couple of other free sites that are good for finding stocks on the move (I think trader-x also had a post about this):
http://dynamic.nasdaq.com/dynamic/premarketma.stm
http://quote.com/qc/research/hotlist.aspx?hotlist=
By the way, these sites and others can be found at my trading blog (www.cutyourlosses.blogspot.com). I use this blog mostly for my own purposes (i.e. as a trading journal and as a one-stop shop for links to on-line scans such as those mentioned above), but if anyone finds it useful, feel free to check it out.
Declan Fallon said,
November 16, 2006 @ 5:34 am
Thank you Will for the mention (I was getting a significant level of traffic from your site!).
Just to add my 2 cents. Everyone needs to find their comfort level for trading/investing; there are so many free tools available on the internet (and with the boom of the blog, personal opinion too) it is now much easier and most certainly better to tinker and identify the strategies which work best for you before rushing off to subscribe to a stock picking service or buy an overpriced black box system. For many, a couple of moving averages and support/resistance lines are as much information needed to make profitable trades. The public Stockchart list is a great free resource if you have an interest in Technical Analysis (I keep a list there too). On my blog I do a weekly summary of the leading public lists, showing what some of the most popular posters are saying about the market.
As Will noted I offer a stock pick service and endeavor to keep it as honest as possible (as the information I provide is a tool I use for myself first and foremost). It certainly as its ups and downs and it is interesting to see how some of my scans which work well under one set of conditions, can utterly fail when conditions change (the unwritten curse of black box systems). I wish more service providers would keep record of their true performance (bloggers included); the problem of course is that [1] its not fun to write about the losers and [2] one tends to have more losers than winners, which would be enough even to make an optimist cry!
Anyhow,
Time for my bed..
Best wishes,
Declan
Will said,
November 16, 2006 @ 6:13 pm
em - Thanks for the note. Didn’t know that about Prophet’s problem with volume and OHLC’s being different than others. Also you’re completely right- I neglected to mention that the scanner has no “gap up from previous close” per se; I figured out a while back how to “finesse” it as you have, by using a negative number for the “above previous high” figure.
(For those playing along at home, it’s on p.6 of the ProphetScan, “Intraday Activity” under “Gap Up/Down”. Choose “Gap Up: Today’s open price is at least XX % greater than Previous High”) … I use -2 “%” for this figure, looks like this is where em uses -.01 “$”, if I’m not mistaken.
Brad - thanks for the comment, and the links. Also have “del.icio.us’d” your Stock Operator site and look forward to visiting it often
Declan - thanks for the great info and the tips!
Setup on MA; Ameritrade StrategyDesk for Intraday Screening • dummyspots.com said,
February 14, 2007 @ 9:40 pm
[…] When I cross-referenced the stocks the StrategyDesk screen burped out with my usual Prophet.net screen, I got some very promising results. For instance, early-on the combo was sitting on CIEN and AMAT like Dickey Betts sitting on that last riff in Ramblin’ Man. After firmly establishing the major tonality with a singing bend of the 9th or 2nd (A) from the Aeolian mode to the major 3rd (B), he basically treats measures 1–6 (I and IV) as a G tonality and emphasizes the root (G), 3rd (B), and 5th (D) notes from the G major triad. Measures 11 (vi) and 15 (I) are the only time that Betts uses the b6th (C) from the Aeolian mode as a quick pull-off to the B (major 7th of C and 3rd of G) for melodic variety. (from the “Fender Players’ Club”) […]