Adam Hewison’s  Minute 3 video (click here to watch) suggests traders choose between technical and fundamental information for their trading decisions.

I have to ask:  How about using what works?

We have the technology now to check out how well each of the different types of data performed in the past.  You can look at the track record of experts writing newsletters, back test technical indicators, back test fundamental numbers like Earnings Per Share (EPS), Price/Earnings, and most of the key statistics of a company.   Services tell how well seasonal predictions correlated with actuals, and even programs to data-mine for dates a market “always” moves.

With all that at our fingertips, we’re in a great position to estimate the quality of data source, and cherry-pick the data sources that demonstrated their effectiveness — or at least avoid the ones that are complete hooey.

However, our human brains are wired for stories.   Both fundamental analysists and technical analysists can weave compelling stories.  Unfortunately, at times the juiciest stories are not based on the strongest data.

Perhaps the key question is:  Do you want to make your decisions based on objective data with a known track record, or do you want to remain a sucker for a good story?  Adam Hewison is right in that you need to decide what type of information you will use to trade.

Tags: behavior finance, fundamental, INO, technical

 In the 2nd Market Club Minute, Adam Hewison talks about a key decision you need to make as a trader - choosing a time frame.   Click here to watch his 1-minute video. 

One way to facilitate that decision is to list the types of traders and their time frames:

• Buy and Hold Investor - forever
• Active Investor - longer term of a year or more but has a plan to sell eventually
• Position Trader - catch one leg of a trend, hold trades for weeks or months
• Swing Trader - get in for a quick pop and out within days
• Day Trader - doesn’t hold overnight
• Market Maker - constantly offers a bid and ask price

Understanding yourself is essential.    Understanding the different risks and rewards of trading in each of these timeframes gives you a framework to find the optimal spot for you.  A good place to find out more is the BackTesting Report Baseline - click here to download it directly (no registration required).

(BackTesting Blog is an INO.com affiliate.)

Tags: INO, timeframe

Professional trader Adam Hewison is distilling his decades of experience into one-minute videos.

Click here to watch the first one directly

The key word in the video is clearly “Confidence”

What do you need to do to gain the confidence you need to trade successfully?  Your answer might include items like these:

• Build knowledge of markets, charts, and indicators
• Follow strategies of experts such as Adam Hewison
• Back test strategies and indicators
• Trade small and then scale up once successful
• All of the above

Your answer is unique to you but whatever it is, I encourage you to take time early in the year to plan for your success throughout 2010 and beyond!

(BackTesting Blog is an INO.com affiliate)

Tags: INO

 I just watched a video lecture by Jack Swager, author of trading classics Market Wizards and The New Market Wizards.   If you haven’t heard of them, in each book Schwager interviews top traders and picks their brains about trading, the markets, and what made them successful.

The reasons these works are revered as classics is not because he gets the Market Wizards to reveal their ”magic” strategies.  In fact not one says explicitly how to profit trading and they all have different methods.   What we do get is insight into what makes them tick.  See below for a partial list of traders mentioned in the video.  Its a very accomplished group.

In the lecture, Schwager pulls together the common traits of these elite traders and distills them into critical success factors.  All are important ingredients for success.  The one I want to highlight as critical is Schwager saying that none of the wizards would do something like “la-de-da today looks good to buy bonds”.   They all had some sort of pre-planned strategy, that strategy gave them an edge in the market, and they knew what to do with it.  Schwager also pointed out that by entering the market without a plan, the amateur trader can do worse than chance.

Schwager touches upon the paradox that trading seems easy yet requires a tremendous amount of work to master - I can definitely relate!

 The video (and the books) are somewhat dated.  I doubt the traders Schwager mentions are today getting chart books delivered to their homes on the weekends.   These days, the web and services like Market Club offer charts on about every market that moves so we can all pour over thousands of charts like the masters.   Or, we can program our computers to scan for us.   Schwager’s comments on computerized trading is another area that is outdated.

Even so, many of the traits and behavioral patterns that made these traders great can offer us timeless lessons towards success.    Here’s who I heard Schwager cite as Market Wizards: Jim Rogers, William O’Neil, Ed Seykota, Michael Marcus, Marty Schwatrz, Paul Tudor Jones, Monroe Trout, Linda Raschke, Van Tharp, William Eckhardt, Stanley Druckenmiller (worked with George Soros).

Click here to watch this complimentary video  

(Disclosure: BackTesting Blog is an INO.com affiliate and an Amazon Associate.)

Tags: Ed Seykota, INO, Jim Rogers, Paul Tudor Jones, strategy, trading, Van Tharp

At the Trader’s Expo I watched portions of presentations on two different back test tools: TradeStation and Wealth Lab.   The most striking differences between them were not in functionality but in following.   The TradeStation talk in the exhibition theater area was packed, with people standing to watch.   Wealth Lab was discussed in a private room with very light attendance.

The difference in venue is not the root cause.  The (new) owners of Wealth Lab, Fidelity, restrict access to only customers trading in excess of 130 times per year with Fidelity.  If this limited access is a marketing ploy to get more active traders for Fidelity, I’d hazard a guess that its not working.

Too bad Wealth Lab is kept locked away because it sounds like it has features which are lacking in TradeStation.  Portfolio simulation, for example, is a capability often requested by TradeStation customers which is already available in Wealth Lab.

TradeStation, on the other hand, offers futures and forex which Wealth Lab does not support.  It also appeared as though Wealth Lab required more effort than TradeStation to set up the data for even basic back tests.

 As it stands, I’ve put TradeStation to work for a lot of back tests and didn’t see enough compelling capabilities in Wealth Lab to go through the pain of both switching software and lining up 130 trades per year at Fidelity.

What about you?  Which tools are you using?

Tags: back test, backtesting, TradeStation, Wealth Lab

I promised the nice lady in the ICE booth at Trader’s Expo that I would look into futures and currencies.  Along came this video about finding the trend in forex markets which seems a fine place to start.

Tags: currencies, forex, INO

With many Traders Expo talks webcast and (in two weeks) available on-demand from the web, its fair to wonder why attend in person.  I won’t presume to say for everyone but I do want to comment that not everything gets recorded in the presentations.

Of course, in person you get to ask questions live, see the products live and meet other traders.   What’s not always apparent is WHO you get to ask.  With the StockFinder guys appearing incognito as FreeStockCharts.com and INO TV quietly taking  meetings, its clear that some of the big names at the show chose not to be listed in the program.

Be open to learning from everyone you see at an event like Traders Expo because you never know if that guy you pass in the hall is a Today Trader headed for a tweet up or the manager of a hedge fund.  And you just might run into a private trader or two who knows the ropes and  is willing to “talk shop”.

In the next couple blog posts, I’ll highlight sessions and lessons not covered in the Traders Expo webcast.

Tags: Traders Expo

Greetings from the Las Vegas Traders Expo!

I’m here to present the “Truth About MACD”.  Click here to check out the webcast.

People attending in person get the chance to fill out a BackTesting Report survey for a chance to win a doorprize.   If you would also like to participate remotely, you can also fill out the survey.   It’s anonymous so we will have to rely on the honor system.

You can enter a second drawing by signing up for the BackTesting Report mailing list below.   I’ll randomly select an email address on Nov 30th and arrange to send out a copy of Sell and Sell Short
by Dr. Alexander Elder.

Tags: Traders Expo

Dear Trader, Trading global markets has changed dramatically since the market meltdown last year. To profit today, it is imperative that you learn expert tactics to become more consistently profitable. And the place to do this is at The Traders Expo Las Vegas, November 18-21, 2009 at The Mandalay Bay Resort & Casino. Attend and learn how to minimize your risk and determine profit and stop levels before every trade, enhance your trade accuracy using the latest tools and software, and look at charts and indicators to find opportunities you’ve previously missed. Discover these and other top trading strategies to increase your percentage of profitable trades in 2010. REGISTER FREE The Traders Expo is the one event this fall where you will learn everything you need to sharpen your trading edge. You will have opportunities to network with 50+ leading trading experts to find out what’s working for them (and what’s not) and attend educational presentations to learn expert strategies and techniques. Plus, you can evaluate the leading trading products and services available today from top companies in the state-of-the-art Exhibit Hall. While you’re at the conference, please join me for the following special presentation: The Truth about MACD Thursday, November 19 8:00am - 9:00am Jackie Ann Patterson   Discover complete Expo details, learn how to attend, and register FREE online. Or call 800/970-4355 and mention priority code 015487 .   With more than 125 in-depth workshops led by some of the best minds in the business, you are sure to expand your trading knowledge and gain strategies and techniques that you can put to use five minutes after leaving the conference (if not sooner), bringing you well on your way to increasing your profitability in current market conditions! You’ll hear from experts on a wide range of topics, from how to maximize your profits using money management and simple decision-making tactics for controlling your emotions, to understanding market psychology, and much more. You will also have the opportunity to look over the shoulders of top traders as they trade live! Whether they lose or profit, you’ll learn the thoughts behind the actions, so that you can gain an understanding of how successful traders approach today’s changing markets.  REGISTER FREE The Traders Expo Las Vegas is the ultimate opportunity to take a productive step back from the trading screen and gain a broader perspective by interacting with profitable trading experts. I look forward to seeing you there! Sincerely, Jackie Ann Patterson Editor, Back Testing Report Own Mountain Trading Company

Tags: free, MACD

 I get Google alerts on every MACD blog posting which is quite a lot. Most are not noteworthy and some are downright off base, but every once and awhile, a really good post on MACD comes along. That happened most recently when I came across a well-done video by Adam Hewison using MACD and MACD divergence. I liked it well enough to see what else he had to offer and now have some goodies to share with you. See the guest blog post below from Adam Hewison. You can sign up for his free email trading course by clicking here.  I’ve taken the first lesson so far and thought it a succinct and timeless lesson. 

First of all I want to thank you for having me as a guest today!

My name is Adam Hewison. You might want to Google Me to confirm what I am about to share with you.

There are plenty of people out there that create “exclusive email courses” with little or no credentials to actually backup their teachings. So, I think it’s right that I share a little bit about myself with you before we even start.

I was a former floor trader on the IMM, IOM, NYFE and LIFFE as well as a risk manager of a large, multinational corporation in Geneva, Switzerland. I also have written books on forex trading and trend following. In 1995, I founded INO.com and later co-founded MarketClub. I’ve been in the trading biz for over three decades and have seen it all. I created this course as a way to give back and share trading tips and techniques that I still use in my trading today.

Click here to begin.

In my Free Mini Email Course, I will show and explain the tools and strategies you need to increase your success rate in the marketplace.

(1) The importance of psychology in price movement

(2) How to spot mega trends

(3) Understanding of technical price objectives

(4) How to picture price objectives

(5) How to trade with moving averages

(6) How to use point and figure trading techniques

(7) How to use the RSI indicator

(8) How to correctly use stochastics in your trading

(9) How to use the ADX indicator to capture trends

(10) How to capitalize on natural market cycles.

Plus, you will you will learn all about fibonacci retracements, MACD, Bollinger Bands and much more.

Just fill out the form and we’ll get you started right away.

Click here to begin.

Every success,
Adam Hewison
President, INO.com & Co-Creator, MarketClub

Tags: free, strategy, trading