Trade Ideas and Oddsmaker

Posted by downtowntrader | 9/13/2006 09:48:00 PM | 7 comments »

I've been experimenting with a new daytrading style recently that is somewhere along the lines of the Maoxian dummy setups and Trader-X methodology. There are several bloggers trading these types of setups and this has proven to be a successful style, however, I've incorporated some of my own concepts and exit strategies to this style. The basic premise is to find stocks that are having a continuation of momentum after either gapping or opening strongly in either direction.

I've found Trade Ideas realtime scanner indispensable to my daytrading so that is where I started. I created a custom scan that basically looks for stocks breaking out of their opening range on volume. I added a few criteria such as a minimum gap, volume ratio, volatility, etc. I've been using the new Oddsmaker function to ensure that my strategy is profitable before spending energy trying to test it. Here is a screenshot of the Oddsmaker settings I am using to backtest. I ran this scan for the last 14 days and it returned 60.65% winners with the average winner larger then loser as well. While this is not true strategy testing, it at least gives you an idea if the alerts you are watching are working in your favor. I've seen Fallond and Dr.Brett experimenting with Oddsmaker as well, and I imagine that the tool will improve as it gains a larger following.

Here is an example of a trade I took today off an alert. I entered GROW on a break of the 4th bar and closed it out after the evening star pattern in the afternoon.
Here is the missed trade of the day. I've been experimenting with stop strategies and one of them is based on setting stops under the low of a 15 minute bar that makes a new closing high. I entered NTGR on the 3rd bar and was stopped out for a whopping 10 cent gain. With the futures dipping (shown by arrow on chart) I decided to hold off on re-entries and then lost track of NTGR. DOH!! Bad decision as this would of been a great and easy to manage trade. Still, this is just one example of several alerts that would of been nice trades, so I'm happy with the scan results.
Here are a few charts for tomorrow. With Options expiration on Friday, I will be cautious of entering any trade longer then a day or two.

Here is IIIN right up against resistance. It looks like commodities may get a technical bounce, and IIIN has already started to move. However, it is best to wait at least till mid-morning on this to see which way it breaks.
ASEI gapped over some resistance today and has a lot of shorts in pain right now. It fell short of taking out it's 50sma, but could follow through tomorrow.
BTJ got a nice bounce today with the rest of the Oil and Gas sector. It held on previous resistance which did in fact hold as support, so there is a chance that it holds this area as a bottom.

Thats all for tonight. If you're interested in trying Trade-Ideas, please sign up for a free demo here . If you want to know a little more about the software I also reviewed it here.

Good Luck,

DT

7 comments

  1. Dan Mirkin // 2:06 PM  

    Hi DT,

    Thanks for the great write up! I noticed that the link to sign up you have has a small error.
    Here is what it should look like.
    http://www.trade-ideas.com/CreateAccount.php?prefix=DTT_

  2. Anonymous // 10:15 AM  

    Hi I just read your blog entry about that odds maker. Where can I try it?

  3. downtowntrader // 10:24 AM  

    I fixed the links in the post so you can click on the link either in the post, or in the Trade-Ideas section on the upper right hand side of the page. If you have any issues, feel free to email me directly. The address is downtowntrader AT gmail DOT com.


    DT

  4. Anonymous // 5:38 PM  

    Hi also read your blog on the Odds Maker tool. Is that available to anyone or do you have to run additional software. It looks pretty interesting and I would like to try it as well, is there a link?

  5. downtowntrader // 10:05 PM  

    The software you need is the latest version of Trade-Ideas. The Oddsmaker is integrated into the new version. When you setup an alert window, the oddsmaker button appears on the lower left. You can click on the link I provided on the post or on the upper right hand side of my homepage to sign up for a trial version of the software. It really is a neat tool that I use every day.

    DT

  6. D TradeIdeas // 6:19 PM  

    Small clarification: Once you download the latest version of Trade-Ideas (from our home page), visit this blog post to add the beta-version of The Odds Maker to Trade-Ideas.

  7. downtowntrader // 10:06 PM  

    Thanks D_Tradeideas.
    You are correct.

    DT