MATR EXAMPLES

Hello and welcome to my blog. All references to specific securities on this blog are for illustrative purposes only and are not intended to be, and should not be interpreted as recommendations to purchase or sell any of these securities. The views expressed herein are not intended as investment advice and should not be construed as such. Due diligence is your responsibility. If you need professional investment advice then find a professional.

Three examples of working with MATR. The first is PSR.TO (short and long view), GTH.TO, and URA.V, which is waiting for a signal and has been used in an earlier post as an example.

Will have to see what happens with these in the next few days and weeks. This is still an experiment and a solid exit strategy has not been worked out. Early thoughts are a cross of price below the short term MATR (blue) or price moving below the HMA. I have added a SAR to the charts as a comparison indicator.

Thank you for your time.










All charts and indicators created with NINJATRADER.
Thank you NINJATRADER.

MULTIPLE ATR's AS ENTRY SIGNAL

Hello and welcome to my blog. All references to specific securities on this blog are for illustrative purposes only and are not intended to be, and should not be interpreted as recommendations to purchase or sell any of these securities. The views expressed herein are not intended as investment advice and should not be construed as such. Due diligence is your responsibility. If you need professional investment advice then find a professional.

This is being done on the fly and I will flesh it out in a later post. While examining the use of a trailing stop ATR as a risk management tool I placed three different ranges of an ATR trailing stop on the charts. It then occurred to me that these three ranges could be used as an entry signal. Something may look good from the scans that I do but then it has to be checked against the positioning of the multiple ATR's. To save typing it out I will simply call this creation: MATR.

Whether it is a valid approach to making a buy or sell decision is not known. This is something that is being experimented with. The time frame for the look back period of the MATR is the same, I am using 6 days for now. The three ranges I am planning on using are 1.5, 2.25, and 3. Narrow to wide. The thought behind using the MATR is that if a stock price is below an ATR stop then there is no reason to even enter a position. With this situation it is not possible to find a risk management level. No risk management, no entry.

With the MATR what I am looking for is a situation where the three ranges are stacked from wide to narrow. 3 at the bottom, 2.25 in the middle, and 1.5 on top. An entry can be initiated when this look is present on the chart. The other addition that I am looking at is a Hull Moving Average, HMA. Seems to have a good response time.

The two charts below are BRG.V and CA.V. I definitely got the crayons out for this one but I want the look to be as bold and simple as possible.

Since this is new I have yet to work out a fully fleshed exit strategy. It will either be a close moving below the HMA or a change in the structure of the MATR. I have some ideas about the exits but will work out a more detailed plan during the next week.

Thank you for your time.

STEPS TO HERE

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I am adapting. The puzzle is currently in pieces all over the floor. Once again it is time to start putting the pieces together. A side journey during the larger adventure.

When I went looking for information on ATR the Jose Silva site showed up. This lead to the MetaStockTools site and while I was there I spotted the Thomas DeMark indicator. On my search for more information on this indicator I ended up at NinjaTrader. While out in the real world I stopped in at the library looking for a book on coding C#. As always I glanced over the market section and the book "Super Trader" by Van Tharp caught my eye. Cruised the book and came away with the use of a trailing ATR stop. Also came away with the 'head game' side of trading.

This side journey has provided a few new items to explore and that is where I am at now. Actually it is more of a re-exploration since I looked at both DeMark and Van Tharp a number of years ago.

Items for the next couple of weeks.

Try to isolate the 1 point in the sell count down of sequential. Want to be able to scan for this point.

Explore and learn NinjaTrader. Some interesting indicators along with eye candy. Learn how to write scripts.

Work out an ATR trailing stop ala Van Tharp.

Start working on my own 'head game'. Not just market but all.

Adapt and learn.

Thank you for your time.

VANITY

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The following long excerpt is from 'The Psychology of Stock Market Timing' by Peter Wyckoff. It was published in 1963 and in many ways seems rather quaint. I also think this section of the book is an updated and revised excerpt from an even earlier book, "Why You Win, or Loss" by Fred C. Kelly.

"Probably the greatest single enemy to stock market success is vanity---one's own personal vanity. It is vanity that leads us to take small profits, but large losses. Even a fraction of a point net profit is all right, because small as it is, you have nevertheless beaten the market and that is a sop to vanity. But a fractional loss hurts your pride and, instead of accepting the loss after a stock begins to act poorly, you decide to wait for a rally to bail you out.

To take a loss is to confess that your original judgment was wrong; and that is not nice to admit. You hate to have your friends know you were a victim. Worse, you shrink from having yourself know it.

...number of men sitting around, calm and collected. Most of them probably have tiresome losses to which they have long become accustomed. They are still hoping to appease vanity by getting out even and are prepared to wait...if you see a nervous fidgety man, evidently not quite sure what to do, he probably is trying to make up his mind to sell and thus clinch a small profit before his vanity is in jeopardy.

Because of vanity, men hate to be compelled to do anything."

Beware of your vanity, pride and ego.

Greed and Hope are also examined and the following is the chapter summary.

"When a man is most confident that a stock is going to advance, what he means is: 'Oh, if it only would.'

People are so optimistic by nature that they are not esily scared.

The 'will to believe.' Cold facts are seldom as sensational as unchecked imagination.

We think to be true whatever we hope is true."

Thank you for your time.

NINJATRADER DEMARK

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All references to specific securities on this blog are for illustrative purposes only and are not intended to be, and should not be interpreted as recommendations to purchase or sell any of these securities. The views expressed herein are not intended as investment advice and should not be construed as such. Due diligence is your responsibility. If you need professional investment advice then find a professional.

Two steps up and one back. The last couple of weeks I have been exploring the Thomas DeMark Sequential. Take a compass for this adventure. Boiled down I think I will take away the very basics and leave what seems to be endless qualifiers behind. Look at some of the trees but remember the forest. The trees I plan to look at are the SETUP which is the 1-9 count, the COUNTDOWN which is the 1-13 count, and the use of where these are as potential support or resistance markers.

I did find out that I am unable to scan for Sequential with MetaStock. This means I have to visually look for the numbers on the charts that show up after my scans. I also wrote a couple of scripts of the Sequential to show where the start of the Sell setup is. Ended up with erroneous results. I plan to go back and play with this and see what I come up with.

Overall the time has been well spent despite some reservations towards the Sequential. I do like having the numbers on the charts to provide a guide and the next week or so will be spent letting the whole concept gel in my brain.

During my DeMark searching I did come across a free charting program that I plan to use in conjuncture with MetaStock. It is NinjaTrader and it is pretty darn good. Link: http://www.ninjatrader.com/ Sometimes a change of view changes your thoughts. The charts below were created using NinjaTrader. Check it out for yourself.

The three stocks I plan to monitor for performance over the next couple of weeks are LRG.V, URA.V, and ADE.V. The charts are below. My time is limited or I would have come up with a couple of more. For now I will see how these ones perform.

PS. I am also going to monitor AMC.TO but do not have a chart right now. Maybe later. The top indicator on the charts is a BOP and the price setting is using blocks. New views new ideas.

Thank you for your time.

AMC.TO added.

TDMS BUY/SELL SIGNAL CHART

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One more time with feeling. I got the coloring box out this morning and this chart is the result. I hope it clarifies the information I have been presenting about the Thomas DeMark Sequential (TDMS) indicator in the last few posts. The more I look at the charts with the TDMS drawn on them the happier I get. The ability to see when the price is partially into a sequence is of great value. It dictates that it may be better, but not always, to wait for the sequence to complete. This is probably the last post outlining how I plan to use the TDMS, it is now time to put it into action. In the future I will post any of the charts that look interesting based on TDMS and any long entries that I take. All Thomas DeMark Sequential indicator stuff shown here is the work of Thomas DeMark. Thank you Thomas DeMark. Thank you for your time.

TDMS COMBINED

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All references to specific securities on this blog are for illustrative purposes only and are not intended to be, and should not be interpreted as recommendations to purchase or sell any of these securities. The views expressed herein are not intended as investment advice and should not be construed as such. Due diligence is your responsibility. If you need professional investment advice then find a professional.

The final step has been done. Both the buy and the sell signals of the Thomas DeMark Sequential (TDMS) have been coded into MetaStock. To quote a line from the Talking Heads, "Fooled around enough with numbers." (there is a song link at the bottom) A video follows and the stocks used are ones that I have been been placing in my watch folder over the last week or so. No cherry picked examples.

Keep in mind that the long entry signals can be based on either the buy or sell sequential.

The buy long entry based on the buy sequential occurs at 13 of stage 2.
The buy long entry based on the sell sequential occurs at 1 of stage 1.

Exits from long positions can also be based on either the buy or sell sequential.

Exit long at 9 in stage 1 of the sell sequential.
Exit long at 13 in stage 2 of the sell sequential.
Exit long at 1 in stage 1 of the buy sequential.

It may seem that down is up and up is down but the sequential system does make sense. Thank goodness I am only interested in long entry points. Also, the final numbered points are not hard entry points. The TDMS also contains a couple of trigger points after the sequences are complete. These trigger points do not always show up so it may be necessary to employ other entry triggers.

I am glad to have all three templates available so that different views can be easily obtained. Messy on one template, maybe not so messy on another.

All Thomas DeMark Sequential indicator stuff shown here is the work of Thomas DeMark. Thank you Thomas DeMark.

I did a download and then an upload of the video but the quality was no good. Will just use the alternative of posting it to see if it works, there is also the link for when it does not work.

http://screenr.com/DSQ



SONG LINK: http://www.youtube.com/watch?v=AcX3aWNOxQM

TDMS SELL SIGNALS AS BUY SIGNLS

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All references to specific securities on this blog are for illustrative purposes only and are not intended to be, and should not be interpreted as recommendations to purchase or sell any of these securities. The views expressed herein are not intended as investment advice and should not be construed as such. Due diligence is your responsibility. If you need professional investment advice then find a professional.

I took the time to code the sell side part of the Thomas DeMark Sequential (TDMS) indicator into MetaStock. It occurred to me that I could use the sell side as a long entry signal. Since TDMS shows the sequence of a trend, the sell side part of the indicator would signal an up trend prior to giving a signal.

In contrast to the TDMS buy indicator, outlined in a previous post, it seems best to use only the stage 1 (1-9) sequence when using the sell indicator to enter long trades. So instead of waiting for stage 2 (1-13) to develop, it may be more prudent to exit at point 9 of stage 1. Perhaps this reflects the notion that markets take a longer time to develop an up move versus a down move. I hope the video clarifies these points.

Please remember that there is no Holy Grail, Silver Bullet or Secret Formula. An indicator is just that, an indicator. The examples posted on this blog are ones that show when something has worked in the past. There are way more charts of when things did not work. However, it does help to be able to recognize a past situation when something similar occurs in the future. Seeing something that looks familiar is better than seeing nothing at all.

All Thomas DeMark Sequential indicator stuff shown here is the work of Thomas DeMark. Thank you Thomas DeMark.

Thank you for your time.

If the video does not work you can click on this link.
http://screenr.com/BUQ
Next time I think I will try a download and then an upload.

UMJ.TO CHART

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All references to specific securities on this blog are for illustrative purposes only and are not intended to be, and should not be interpreted as recommendations to purchase or sell any of these securities. The views expressed herein are not intended as investment advice and should not be construed as such. Due diligence is your responsibility. If you need professional investment advice then find a professional.

UMJ.TO was cut off at the end of the video in the previous post. Given the TDMS 13 count it is a stock that I am going to monitor for future performance. Right now I am waiting to see if any entry signals emerge.

Thank you for your time.

TDM SEQUENTIAL

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All references to specific securities on this blog are for illustrative purposes only and are not intended to be, and should not be interpreted as recommendations to purchase or sell any of these securities. The views expressed herein are not intended as investment advice and should not be construed as such. Due diligence is your responsibility. If you need professional investment advice then find a professional.

I have decided to add yet another indicator to what I am doing. It is the Thomas DeMark Sequential (TDMS). You can google around and find all the codes for yourself. I looked at this indicator years ago and found it confusing and I also could not code it to MetaStock. Now I think I have figured it out.

In my view it is a trend indicator that sequences you to a point that shows when the trend has ended and you can enter a trade opposite to that trend. Since I am only interested in long entry trades I set up the TDMS to give buy signals. This means that the sequence starts with a sell signal and then maps out two stages of a down move. The first stage starts with the sell signal and then counts up to 9. Once this stage ends the second stage begins with a count up to 13. When this second stage ends a couple of different buy signals may show up. These signals do not always appear and other criteria can be used to determine an entry.

1. Sell Signal: Start of Stage 1.
2. Stage 1: Usually a pronounced down move. Counts up to 9.
3. Stage 2: Leveling off of down move to sideways. Counts up to 13.
4. Buy Signal: Does not always show up. Can use other entry signals.

Since the TDMS buy signals after the 13 count do not always show up you can look for other signals to enter the market. This is what I plan to do. Watch for the 13 and then be alert for an up move based on other signals.

One of the nice things about the sequencing is being able to watch for an increase in the numbers. If I am looking at a chart that is the result of one of my scans and I see a 10, 11, or 12 on the chart then I can keep a watch for the 13 to show up in the future. Another nice thing with the TDMS is that I can ignore a lot of the stocks from a scan that do not have any sequential records on them.

All Thomas DeMark Sequential indicator stuff shown here is the work of Thomas DeMark. Thank you Thomas DeMark.

Thank you for your time.

The last stock in the video is UMJ.TO. Time ran out but it is one I will place on a watch list since it gave a count 13 a few days ago. A point to watch will be the Darvas Box Low for possible support.

Again the video here does not want to work. Here is a link.
http://screenr.com/SIJ

SENTIMENT CYCLE

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I am pretty sure this is on my other blog but it has been on my mind recently so I moved it here. This is a chart by Justin Mamis. It can be found at the Teresa Lo website and she provides additional commentary.

http://invivoanalytics.com/2007/12/07/the-sentiment-cycle/

Thank you for your time.

BOOKS AND 10% SLIDESHOW

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All references to specific securities on this blog are for illustrative purposes only and are not intended to be, and should not be interpreted as recommendations to purchase or sell any of these securities. The views expressed herein are not intended as investment advice and should not be construed as such. Due diligence is your responsibility. If you need professional investment advice then find a professional.

I mentioned the book by Jesse Livermore in the last post. It is available online and you can go to this site for the link. There is also some interesting content at the site and it is worth the time to look around and do some clicking.
http://blessedfool.blogspot.com/2010/01/livermore-market-key.html

I have not seen any code for the Livermore Market Key for MetaStock. I find it useful though to keep his ideas of market stages in mind when I look at the charts. I did find an interesting MetaStock indicator at the
Jose Silva site.
http://metastocktools.com/
It is the "stepped output" indicator and plots price or indicator values in user-defined quantized $ or % steps. Thank you Jose Silva. I changed the reference to be an average of the open, high, low, and close versus just the close. I use either a 5% or 10% parameter. Not Livermore but provides a nice visual of support and resistance levels. Slideshow at the bottom.

The other book is the Psychology Of The Stock Market by Selden and is available online.
http://www.archive.org/details/psychologyofstoc00seldrich
This one is interesting since it was written in 1912 and human nature has not changed much, if at all.

Couple of slides with the "stepped output" indicator. These examples are clean ones, on many of the charts this indicator just looks messy. But then so does the price on those charts so it is best just to move on and look for something clean.

Thank you for your time.

LIVERMORE

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Years ago I was given a photocopy of the book by Jesse Livermore. Highlighted and reread many times. I would recommend it to anyone interested in the markets. While surfing the other day I found the following on the MetaStock forum. It is a good summary of some of the rules. I should reread these rules at least once a week.

Thank you for your time.

Reminiscences of a Stock Operator published in 1923 offers timeless wisdom for all investors and traders. This is not the book written by Livermore but a fictionalized account.

Never act on tips.
Use a system and don't deviate from it.
Never buy a stock because it has had a big decline from its previous high. If a stock doesn't act right don't touch it; because, being unable to tell precisely what is wrong, you cannot tell which way it is going. No diagnosis, no prognosis. No prognosis, no profit.
Don't blame the market for your losses.
Never add to a losing position. A losing position means you were wrong.
Stocks are never too high for you to begin buying or too low to begin selling. But after the initial transaction, don't make a second unless the first shows you a profit.
Always sell what shows you a loss and keep what shows you a profit.
Don't argue with the tape. Do not seek to lure the profit back. Quit while the quitting is good--and cheap.
There is only one side to the stock market; and it is not the bull side or the bear side but the right side.
The speculator's chief enemies are always boredom from within.
A man must believe in himself and his judgment if he expects to make a living at this game.
Bulls and bears make money, but pigs get slaughtered.
Use money management at all times.
Establish your trading plan before the markets open.
Detailed your plan for each trade.
Establish entry and exit points and understand risk reward rations.
Accept small losses as part of the game if you want to win.
Trade markets from the short side.
Stand aside from a position, knowing you have taken a position.
Develop a trading plan for each potential situation you may face.
Do not look at quotes during the day.
Do not concentrate on break-even levels when you are losing.
Don't liquidate a winner to keep a loser.
Develop and maintain an exit plan. Follow this plan with rigid discipline.
Sustain your patience. Big movements take time to develop.
Don't be overly curious about the rationale behind a move. The key to wealth in trading is simplicity

SLIDESHOW

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All references to specific securities on this blog are for illustrative purposes only and are not intended to be, and should not be interpreted as recommendations to purchase or sell any of these securities. The views expressed herein are not intended as investment advice and should not be construed as such. Due diligence is your responsibility. If you need professional investment advice then find a professional.

Since the videos are not loading I decided to try using a slideshow instead. The tags for slide.com are hard to miss. Heck it is free. I may look around for an alternatve. Looked around and found nothing better. Mouse roll over the picture to get the stock name at the bottom. Also there is a little control panel in the lower left corner.

The stocks shown are what I have found interesting in the last few days. Will have to see how they perform in the next few days.

Thank you for your time.

WHAT MOVES PRICES

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Fear, greed, happiness, sorrow, elation, dejection, excitement, and apathy.

Thank you for your time.

ADDING ATR BANDS

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All references to specific securities on this blog are for illustrative purposes only and are not intended to be, and should not be interpreted as recommendations to purchase or sell any of these securities. The views expressed herein are not intended as investment advice and should not be construed as such. Due diligence is your responsibility. If you need professional investment advice then find a professional.

One of the first things I noticed after I downloaded Visual System Trader (VST) by Jose Silva was the use of ATR bands as an indicator. I then personalized the ATR band code to my own use and will incorporate them into my market approach.

One thing I did was the creation of a stand alone lower ATR band indicator. Since I am only interested in long entry signals this makes it easier to call up as a reference. I also narrowed the spread amount to provide more signals. A little whippy but probably will be used more as a 'pay attention' signal than as an entry signal. The signal occurs when the close moves from below to above the band. A stop point is also provided by this indicator when the close moves from above to below the band.

I have also created another indicator using the wider lower ATR band. I simply added it to the existing DARVASKASE indicator and took the average of the two. Named it the SILVA COMBO. It is a little faster than the DARVASKAS indicator. Signals are generated with a cross of the close from below to above the signal line. The stop point from the lower ATR band mentioned in the previous paragraph can be used as an initial entry stop level for this signal.

I now have four daily scans to perform.
Close moving from below to above the Darvas Box Low.
Close moving from below to above the DarvasKase line.
Close moving from below to above the tighter lower ATR band.
Close moving from below to above the SILVA COMBO.

From the results I can then visually check the charts to see what has potential. As an aside I would like to again thank the creators of the JB LIST CREATOR program. All of my daily scans are kept in Excel and the ease of access I now have to these records is fantastic. While working with these new indicators it was great to be able to bring up any sample data from the past that I wanted to use.

A chart and a video are below.

Thank you for your time.

The video does not want to display so here is a link.

http://screenr.com/hxJ

VISUAL SYSTEM TRADER VST

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Just when I thought most things were in place a lot of things changed. Adapt or die. While looking for information on ATR I came across the Visual System Trader site. I had viewed it previously but never stayed long enough to appreciate this gem. This time I took the time to look more closely.

Visual System Trader (VST) is an add-on for MetaStock developed by Jose Silva. VST allows you to see system performance. There is a free version which has two parts. Download both if you are interested and play with what has been generously provided. Links follow and I feel it is well worth the time to go exploring. On the first link look for the VST download on the left side of the page. Thank you Jose Silva for VST.

The major discovery for me with the VST was the use of ATR bands as an indicator. This has resulted in another change in my approach and I will elaborate the details in another post.

Thank you for your time.

http://vstcharts.blogspot.com/
http://www.metastocktools.com/vst/index.html#order
http://metastocktools.com/