Algorithmic Trading and Strategy, The Next Level

March 15, 2010 – 7:58 pm

Algo Trading Software

When you think of stocks and attempt to go out there and work on your own to build your own portfolio you are going to hear terms like auto trading, algo trading, stock scanner software, algorithmic trading, automated trading, black box trading, and robot trading, and you will not be alone. You may scratch your head but let’s look at some of these phrases and demystify them. There’s a movie based although it is quite old based on the premise that there is an algorithmic formula and when it becomes fool proof the recipe is for success. Is this something to believe?

Take your trading to the next level; There is stock scanner software like madscan, and others that helps you purchase and sell stock based on triggers or criteria that you have set. For example, this software will alert you when particular stock on the NASDAQ, NYSE, and AMEX exchange is available at a certain price so you can purchase it along with alerting you when it reaches a certain price so you can sell the stock. These are triggers you yourself have put into the program. This is considered real time automated trading. Whether you are interested in custom scans that are for your private use of their API for black box trading the software can assist you in today’s challenging markets.

By decreasing trade sizes caused by decimalization, algorithmic trading has reduced trade sizes further and jobs once done by human traders are being switched to computers with auto trading and algo trading now the future steps. As with anything else in the electronics age that we are in as more algorithmic trading strategies are introduced the easier it is to implement the computers since machines are faster than humans. Machines are able to identify mismatches and prices difference through several line items quicker and against several markets simultaneously. This is something we as society have strived for in the technology world, building the computer programs stronger and faster moving large amounts of information in a millisecond. Financial institutions are the ones that have to adapt quicker since they have the most to lose.

The goal to trading the stock is to find something that helps make it easier for you. There is no foolproof system, it doesn’t exist. If you can find stock scanner software like Madscan.com, that helps you when defining your choices then you do have a program working for you on your side to do a lot of the work. Automated trading has become part of life for the stock brokers. One thing that has not changed is if you decide to invest in any stock do some research. One thing that has changed is you have the advantages of algorithmic strategies with automation and speed.

So, what were some of the new terms that you should be familiar with? Here they are once again; auto trading, algo trading, stock scanner software, algorithmic trading, automated trading, black box trading, and robot trading. Except now you should have some understanding of the words. For more information, please check out our website at www.madscan.com

Stock Trading Strategies for a Shifting Economy

February 28, 2010 – 8:23 pm

Today’s economy has created a shift in the stock market and more than ever before stocks are volatile. However, even in a volatile market, stocks have major short term movement. This movement can be capitalized on when investors have the proper training, stock screeners, plan and discipline. Here are some stock trading strategies for today’s market.

Swing trading is a profitable trading strategy in today’s market. The volatile market provides a swing trader to be very profitable due to news and events and other variables that cause a stock to move in one direction or another. A swing trader does not focus on the fundamentals of a company or even what product a company sells. In years past the fundamentals of a company played an important part in picking a stock because the investor was buying and holding a stock for 5 or 10 years and sometimes until retirement. However, that is not the most prudent strategy in today’s market.

The most prudent strategy is to have the tools needed for quick assessment of stock changes. It is crucial to have a system that provides real time stock alerts in order to capitalize on daily stock movements. Stocks move very quickly and many times there is a small window of opportunity to get in on a stock that is moving based on news.

An online company that provides real time alerts quickly and reliably is an absolute must. Madscan gives you the speed, reliability and video tutorials needed to succeed as a swing trader. You need real time stock alerts and real time stock quotes are delivered to you immediately as events are unfolding.
Moving averages are assessed quickly with online trading tools. There are so many stocks on the market and you need quick information about the stocks that match your criteria based on your strategy. You must have quality training and information at your disposal. Moving averages are an example of an indicator that is many times used improperly due to lack of knowledge. You need to know how to use moving averages for short term investment as well as long term investment.

Quality online stock scanners like www.madscan.com show you how to consistently make money by giving you all the real time info you need on trading a trending stock. You will know what the characteristics are on trending stock as opposed to a stock that looks like its trending but is actually ready for a reversal. Various stock cycles or stages tell you if you should be in a long or short position. It is essential that you be able to identify what stage a stock is in so that you can trade accordingly.
http://www.madscan.com provides a full free 30 day trial. Test it out yourself, read through the invaluable information and start your journey to becoming an online stock trader. Take the guesswork out of playing the stock market and become a consistent and profitable stock investor.

Working with Madscan Stock Screener Software Using E-Signal Tools

February 25, 2010 – 11:54 am

Although investors have gone through a rough ride, over the last few years, thanks to the downturn in the economy, some good things still came out of the experience. Investors have had to learn, many the hard way, that they need to be responsible and in control of their own stock monitoring – leaving it to someone else is not a good idea. Thankfully, following the movement of the stock market, including the status of your stocks has never been easier, thanks to a group of traders who have joined together and created a stock screening software program.

The Madscan Software is revolutionary technology in that it incorporates Esignal products to give you access to real time quotes and alerts – making sure you are on top of all the madness that can occur in the financial world, the good, the bad and the ugly.

Thanks to the Madscan Software program, you can create your own trading center and add real time alerts for stocks that you wish to follow, you will be notified every time there is a change, you will never have to go from site to site to find out how your stocks are doing. As an additional bonus, you can also link your stock alerts to filter through real time news, effectively keeping you in the loop when your stock shows up in the media.

The Madscan Software program features two critical Esignal tools:
The Esignal Charting option allows you to create one or more charts, enabling you to track a variety of scenarios, all in real time. Once your charts have been created, they will be saved under your personal username and you will always have access to them in future sessions. This means that you can create charts that will supply you with both historical information as well as current. Your charts can be directly linked to any alerts you have set, automatically updating your chart information, should you choose.
The second option available is the Quoteboard. Although you can only open one Quoteboard , you can work with multiple tabs, adding whatever symbols you want to monitor. Because you can add new tables, you can actually work with various groups of symbols – making your projection and analysis much easier.

The Madscan Software program is aimed at all levels of investors. Whether you are a beginner or a seasoned veteran, consider registering for one of the easiest, user-friendly, complete and fastest stock scanner systems in the world.

In today’s fast paced financial world, you need all the help you can get, especially if you want to make a killing on the market. Download the software today at www.madscan.com today for a 30 day trial.

Some Tips, Tricks: How Stock Scanner Software Helps Eliminate the Uncertainty of Trading

February 15, 2010 – 10:02 am

Many traders anticipate a tremendous amount of variation in the stock market and either overcompensate or react too conservatively, holding their cards close to their chest. Whichever type of trader you happen to be, whether you’re a professional broker or “Trading from home,” you’ll find that stock scanner software such as MadScan can provide you with instant info, news, and take some of the guesswork out of successful trades.

The first thing any trader needs to know is that the price of stock is going to fluctuate. In the short term, that price can fluctuate quite a bit. A point analysis of the price can look like the inside of the shark jawbone at the Baltimore aquarium! Careful study will reveal that these peaks and troughs occur at fairly regular intervals. With Madscan stock scanner software tracking the stock’s movement, swing traders can easily track the patterns of these highs and lows and time their trades perfectly.

For traders looking to settle in for the long run, tracking the medium term uptrend provides a tremendous amount of insight into trading patterns. Stocks generally accelerate in three stages, which can be tracked in real time using a simple line graph manufactured by your stock scanner software. These grafts generally accelerate in three stages. The third (or final, if the stock defies the pattern) will be the one that accelerates along the steepest slope. When that price crosses the uptrend line without developing another peak a downtrend is about to begin. At that point, it’s time to trade.

Many traders choose to make use of the Andrews pitchfork when attempting to estimate the future price of a stock. Short term, the Andrew’s pitchfork can be used to identify profitable opportunities in the short term and identify overall cycles that affect the underlying spot activity on a long term basis.

The creator of the Andrew’s pitchfork believed that market price would gravitate toward the median line 80% of the time, with wild fluctuations accounting for the other 20%. He hypothesized that the overall long-term trend would remain intact. Pivots are drawn using highs or lows already present on the chart, which can easily be established using real time stock scanner software. In fact, given the fact that the Andrew’s pitchfork uses a tremendous amount of information to generate its conclusions, automated software can usually do the job much more effectively than drawing the chart by hand.

The experienced stockbroker knows that you rarely want to rely on one trend or plotting technique to make the final decision regarding your trades. Combining them with the other unique tools available through your stock scanner software will provide you with the arsenal you need to make strong decisions regarding your trades. Check out www.madscan.com for real time stock scanner software that can get you ahead of the curve!

More about About Algo Trading, Robo Trading and Your Investments

January 28, 2010 – 9:02 pm

What You Need to Know About Algorithmic Trading, Robo Trading, and Your Investments

When you’re playing the stock market, coming out ahead is the name of the game. You don’t want to find yourself trapped in an endless cycle of speculative trades or making a mistake that could cost you thousands because of inexperience. That’s why many of today’s investors rely personally and professional on the process of algorithmic trading.

Algorithmic trading utilizes a complicated process of elimination to determine the wisdom of your personal trades. Each potential trade is evaluated by the software program using pre-established parameters for specific variables, such as price, timing and quantity. By using these parameters the computer is able to mathematically determine the statistical probability of profit and use that information to decide whether or not to proceed.

Algorithmic trading or Algo trading, is primarily used along with stock scanning software such as MadScan. By working with the software, the algorithm is able to constantly update using real time information from the market for the best possible outcome. In many cases, the program is able to buy and sell independently, without the need for human intervention. This is a process is also known as robo trading, and it takes human error out of the equation completely.

Algorithmic trading and robo trading first became possible back in the seventies, when the NYSE instituted its DOT (Designated Order Turnaround) system and OARS, the Opening Automated Reporting system. This was the first time successful computerization of stock market trades had taken place. In the 1980s changes in decimalization facilitated further automation of the stock market by permitting the algorithm to recognize smaller differences between trades. This made it easier for traders to track the changes algorithmically and effectively predict the success of a particular trade.

It is important to note that trading algorithms have been around much longer than today’s current algo trading systems and were an integral part of the manual interpretation of trading patterns. Today, algo trading and robo trading are heavily used by large trading firms in the management of mutual funds, hedge funds and retirement accounts. As of 2009, most large firms relied heavily on auto trading and algorithmic trading to manage their investments.

Algorithmic trading is an integral part of what is known as a black box system, such as that used by MadScan.com software, in which the computer allows the user to input their parameters and watch as the software cranks out results. The investor in this case doesn’t have to understand the computing process or the mathematics behind their recommendations, making it an ideal choice for beginning investors who lack the familiarity and experience with the market needed for long term investing.

In short, algorithmic trading takes the guesswork out of trading by automating the system, putting the guess work in the hands of the computer and allowing the user to enjoy maximum success with minimal risk.
check out Madscan stock scanner software at www.madscan.com

Candlestick Strategies That Work with Stock Scanner Software

January 21, 2010 – 12:39 pm

Japanese Candlestick Patterns Work with Stock Scanner Software to Lay the Foundation for Solid Online Stock Trading Strategies

Effective online stock trading strategies are built on a comprehensive knowledge of the stock trading system and the trends and patterns that suggest the direction a particular stock or group of stocks is going to take in the future. To obtain that knowledge, an efficient method of analysis that describes the stock’s recent and past behavior is absolutely vital. That’s why many stock traders have chosen to utilize the Japanese candlestick pattern when laying the foundation for their trading practices.

The Japanese candlestick pattern was developed back in the 1600s as a technical way to analyze the price of rice contracts, and utilizes the simple figure of a candle with a wick protruding from both ends laid against a traditional X and Y axis. Simply put, the candlestick represents traders’ reactions to the market at a given time. The tendency of traders to react en masse, and the ease with which candlestick patterns can and should be used with other means of technical analysis, is what makes this form of analysis particularly effective.

The top of the “wick” represents what is known as the upper shadow, the price at which the stock price peaked during the day. Where that wick joins with the “body” of the candle is the opening or closing price, whichever is higher. If the closing price is higher than the open, the “body” of the candle is white; otherwise, it is shaded black. The bottom of the candle meets the bottom wick at the opening or closing price, whichever is lower, and the lowest tip of the wick represents the lower shadow, or lowest price of the stock.
Candlestick patterns focus on the presentation of trends and fluctuations over extended periods of time, condensing a large quantity of information into a relatively small figure. The data one can convey with this simple image over the course of a week could take technical data analysts page upon page of graphs and charts, and investors would spend three times as long trying to identify trends that are easily identifiable with the simple candlestick.

Online stock trading strategies are built on the philosophy that once investors are able to analyze certain bullish and bearish trends when represented on a candlestick pattern they’ll be in a good position to make decisions regarding their trading habits. There are many patterns a candlestick chart can present; however, familiarity with those listed below is sufficient to lay the foundation for a successful trading career.

Common Candlestick Patterns:
• Mat hold
• Rising three methods
• Separating three lines
• Side by side white lines
• Upside gap 3 methods
• Upside Tasuki Gap

It’s important to understand that candlestick patterns should be viewed as a part of a whole rather than an individual method of analysis. There are literally hundreds of factors that play into a trading decision, and investors should consider as many of those factors as possible before making a solid decision. Once their analysis techniques are successfully incorporated, however, investors will have the tools they need for savvy online stock trading strategies and successful trades.

Stock scanning software from MadScan.com works well as an accessory to candlestick pattern tracking because it successfully analyzes elements of online stock trading that wouldn’t otherwise be included. Along with the information you gather on the relationship between open and closing costs, MadScan’s real time stock alerts give you up to the minute information on price fluctuations and make efficient online stock trading easier than ever. Checkout their website for more information www.madscan.com

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Black Boxes, Algo trading, what are these names?

December 22, 2009 – 8:26 pm

The team at Madscan strives to make its stock scanner software the best in the trading industry. Madscan will soon be adding an auto trading system to its signal server. This will allow users to create a scan and trade it automatically through an algorithmic system. We have heard the terms black box, grey box and algorithmic trading…in this post we hope to give you a better definition of what these are, and how you can incorporate them into your trading strategy.
What is Auto Trading?
Auto Trading is essentially a strategy whereby you can place buy or sell orders using a stock scanner software program to handle trades automatically, and execute them based on a specific set of criteria. These systems are generally used by active traders who enter and exit positions much more frequently than common investors. They can be applied to many different markets including stocks, options, futures and Forex. Some of the features of an auto-trading system include; controlling trade size, trading different markets, the ability to modify criteria, auto-sync features and trading on multiple systems simultaneously.

Algorithmic (algo) Trading
Algorithmic or Auto trading involves the use of computerized systems that handle the entering and exiting of trades based on proprietary algorithms. These systems automate various aspects of trading including timing, price, quantity and the initiating of trades. There are different systems, like black box and grey box, and is widely used by mutual funds, pension funds and highly active investors.

In 2006, one third of all US and EU trades were initiated by algorithmix trading systems. These numbers have crept up to over 60% in 2009, and increasing popularity of black box and grey box systems has no end in sight.

Grey Box and Black Box Trading Systems
Grey boxes are used to create trading suggestions from an algorithm, usually found in sophisticated stock scanner software systems. Sometimes, users are allowed to modify the algorithm to fit the trader’s strategy. With grey box systems, there is a bit of human intervention…meaning that the automated component will get you into the trade, but you have to manually exit, or, it will exit the trade for you if you manually enter it.
The main difference with a black box trading system is the undisclosed nature of the proprietary algorithm. A stock scanning software program with a black box system provides trading recommendations and also provides complete automation, meaning that it gets you in and out of trades based on a certain set of criteria. Capabilities of these systems include basket trading and signal trading. Madscan will soon create custom signals to be executed through their auto trader component in a later version.
The black box part of an auto trader system has many calculations and formulas which the user does not see, or even need to see in order to use the system. These systems have become extremely popular of late, attracting the likes of robot scientists, astrophysicists, economists and mathematicians. This combination of economics and science has produced black box firms that have some of the best performing systems over the past decade. Check out madscan.com for more info on stock scanner software.

Madscan’s Stock Scanner Charts, Signals and Great Filters

December 17, 2009 – 9:00 pm

In today’s economy, any type of edge can help when deciding to trade stocks. First and foremost, any serious investor will use a stock scanner to get real time stock alerts and news. Most stock scanning software programs can seem to be very similar…but one certainly stands out. The Madscan stock screener does everything that you could need, whether you are just getting into the market, or are a seasoned investor.

First, you begin by creating and configuring an initial scan by selecting any number of choices. This filtering process will give you a good place to start. Madscan has plenty of cool features, like spikes, candlestick patterns, moving averages and convergence/divergence crossings. You can set the spikes to represent volume, or as pricing signals…as well as taking advantage of more common features like x days above or below moving averages. The other great benefit of this stock scanner, is that you can have multiple scans running at the same time. Just name any given configuration and your parent window will house all of these alerts, and allow you to access them as needed.

Another great feature about the Madscan stock scanner program are Charts and News. Simply click on any row within your scans, and right away you will be shown two new screens, one for news, and one for charts. Even better…is that Madscan provides 4 different charts, all linked to the symbol you chose! Within this section, there are 38 studies and 11 different drawing tools…much more than any other stock screener software. Of course, news is streaming in real time from as many as 9 different sources (BusinessWire, PR NewsWire, etc).

Now that you’ve got an idea of how powerful Madscan is, take it to another level by implementing a few filters. This allows you to exclude certain data that doesn’t meet your desired criteria. An interesting feature of the filtering process is the ability to filter whether a symbol was a news item…which utilizes Madscan’s patent pending technology! Other filtering options include whether the symbol was part of an earnings report, or if it was recently involved in an upgrade or downgrade (can be filtered by specific brokerages). Basically, you can look at the filters as falling into 3 categories: General Filters, News Filters and Symbol Filters.

Finally, Madscan stock scanner software allows you to operate on three different exchanges: Nasdaq, NYSE, and AMEX. Also, Madscan is working on making alert generation available for historic data.

The bottom line is…that the Madscan Stock Scanner software package contains a great set of signals, filters and alerts to allow you to succeed. Killer features like the ability to “pop in/pop out” make it easy to manage large amounts of data in an organized fashion. The hardest part about being an investor/trader, is managing the plethora of information coming at you on a continual basis. Madscan’s real time stock scanner can help you do just that – stay ahead of the curve…
Check out the latest software at http://www.madscan.com

A little Background on Auto or Algo Trading

November 30, 2009 – 7:43 pm

Once upon a time investors had to rely on the information printed by newspapers and stock scanners to determine when (and if) they should buy or sell their stocks. While that system has made people millions over the years it was risky at best and often left in the hands of experienced traders. With auto trading anyone, even the first time investor, can watch their investment grow with the help of a highly technical program that determines the when, where and how of trading stocks.

With auto trading the decision over whether to buy or sell is taken out of the hands of the investor and their trading partner by computerized software. That software does exactly what investment experts used to do-it analyzes the growth or depreciation of certain stocks, watches for trends in the market and decides when (or if) the investor should buy or sell. Only it does it much faster and with greater efficiency than a human trader thanks to a process known as algo trading (algorithmic trading), which analyzes stocks based on a highly technical, pre-programmed criteria.

Investors realize many benefits from auto trading, particularly if they are new to the investment game. You’ve heard over the years how inexperienced investors almost always lose big on the stock market before they begin to realize a profit. Auto trading serves to step in and stop that from happening. It’s kind of like the way an automatic transmission stops the driver from stalling out or sliding backward on a hill; it’s not necessary, per se, but it gives the beginner a much greater chance of success.

There are two different forms of auto trading, and thanks to the flexibility of auto trading software most investors have the option to choose which is right for their investment needs. Grey box trading involves some user interaction with the trade. The bot either enters into the trade and allows the investor to exit or gets the investor out of the trade once they’re in, and the user has the option to modify the settings or the parameters based on their personal experience and preferences.

Black box trading, on the other hand, takes the process out of the hands of the investor and completely automates it. They use undisclosed proprietary algorithms to provide trading recommendations and may buy or sell for the user, depending on their own settings and preferences. Many online trading tools are now incorporating the option for black box trading into their repertoire of stock scanning software.

When choosing to utilize black box trading software, be sure you know exactly who the developer of the software was. Many inexperienced developers are trying to make money by riding the wave of black box popularity. Black box software tried and tested by genuine experts in the field of stock trading is the only type of black box that is able to guarantee a best odds chance of success. The only real time stock trading software to use of course, is madscan.com.

Imbalance Alerts, Advanced alerts, and Trading signals

November 25, 2009 – 9:56 pm

MadScan.com is known for its top notch stock screener with real time stock alerts and advanced features for online traders. Using proprietary algorithms, Madscan helps its clients trade intelligently by providing stock screener software with a variety of advanced alerts and trading signals. Some of the categories of alerts and signals include:

• High or Low Related Signals
• Open or Close Related Signals
• Candle Pattern Signals
• Moving Averages
• Reversal Related Signals
• General Filters
• News Scans
• Exchanges Lists

Madscan offers a wide range of video tutorials for a subscriber to walk through their feature rich system. Their stock market scanner software contains hundreds of alerts and filters that you will want to understand and familiarize yourself with. Such as, configuring open indicators and imbalance alerts, and other news filters, it is a good idea to watch these videos for a quick online trading lesson. Having a firm understanding of how to configure these alerts will play a large role in your success as an online stock trader.

One of the more interesting features are the imbalance alerts, the NYSE imbalance alerts only happen near the end of the trading day. These are based on the specialist’s market on close orders. If there are more people trying to buy a stock than are trying sell the stock, then we call that a Buy Imbalance. Inversely, if there are more people trying to sell, then we call it a “sell imbalance.” The details of the alert include the size of the imbalance in shares.
When there are more buyers than sellers that often pushes the price of a stock higher. When there are a lot more sellers than buyers, the demand goes in the other direction. The imbalance data speaks directly to these facts. That’s why the green color is used to show buy imbalances, and the red to show sell imbalances. Madscan stock scanner software takes full advantage of these alerts so the trader can achieve an edge over the day trader that is not online.

In this Madscan video (www.madscan.com/ShowVideo.cfm?VideoID=20) , an overview of the List Scan features are explained. By opening up the Filter Scan Settings, you can generate real-time lists of just about any criteria you are looking for. Now, if you are really attracted to the News Filters, you will want to take the Madscan Elite product for a test run. It contains all of the features included in the Madscan Standard product; however it also contains real time news filters, streaming news and business wires. The product also comes with a 1 month free trial, so there is nothing to lose!

Another cool feature of the Madscan Stock Scanner is the ability to see recent IPO’s, Mad Money mentions and Upgrades/Downgrades. Choose from IPO’s within the last 3, 6, or 12 months and then adjust the settings to refine your search. For upgrades/downgrades, you can narrow your filter by investment firm, and then by any other metric from your existing lists.

If you are a veteran of online trading, you can also upload lists into the MadScan Stock Market Scanner. You can upload from a text file (.txt) or from CSV (.csv), and bring them directly into your lists. From here, you can configure you filters as normal and save these settings for future use. Please note that you can maintain separate lists for different accounts, or even just for different strategies.

Obtaining real time stock alerts has never been easier with in-depth video tutorials, live online help, and 1 month free trial on Madscan Software; there is great potential here to take your trading to the next level. Fully customizable stock screening and real-time news updates are just a click away.