Good movies often portray characters who go through transformations. They are different at the end of the film from where they were at the beginning. Here is the continuation of Rick B.’s trans-formative experience with Trade-Ideas. Part 1 of the story begins here.

The Trade-Ideas rep suggested that I get set up with a private one on one training session to show me some of the new improvements that have been made recently that the Trade-Ideas rep thought would change how I looked at the market. Again I was fairly skeptical in that I just wanted my stochastics added, but since I was now a Trade-Ideas customer and this trainings session was a one on one and it was free I decided that it could not hurt.

What happened next has changed the way that I approach trading stocks and has added at least over 25K in my account since the month of May. I was called by Jamie Hodge, who is the resident Trade-Ideas expert at setting up trading strategies using their software. Jamie quickly took me through some basics and even in that brief session I realized that I had no idea what Trade-Ideas software was really capable of doing. We dove into the various filters like Min Up Days and Max Up Days and went further into set up creation. Jamie informed me that it was quite common for people to come into Trade-Ideas looking for TI to recreate what they had learned from older technical analysis software programs.

Then Jamie said imagine any chart pattern not in terms like MACD, or DMI, or RSI, but can you linguistically say what the pattern does? I gave him a couple of examples and in less than 2 minutes he had Trade-Ideas spitting out those patterns using a combination of their alerts and filters. He said just speak to yourself in English when you are trying to describe something and it will easily translate into a Trade-Ideas strategy. Then came the big one! Jamie had me install the latest version of their software. This is version 2.1 and at the bottom of every window you can see a green button that says “Start” he said lets look at a strategy that will demonstrate how important it is to have the right tools in front of you when you set off to trade the markets.

He asked me if I was familiar with “Breakout” trading. I gave him a quick history and said that I had been in the game since the old SOES days. So he said then that I must be aware of a simple but popular breakout pattern called the 30 day high. I told him that of course and he asked me if I had my charts up. I said yes, and he proceeded. He sent me a link over IM that allowed me to instantly take a strategy he made for me and import it into my Trade-Ideas Pro using a feature of their software called collaborate.

For those of you who are Trade-Ideas customers I am including this strategy as it is an important lesson in my opinion for everyone to see.

30 Day Highs on High Relative Volume

Jamie and I went through this window and pulled up the stocks for a bit as they came through. He asked me what I noticed. I said well the stocks are making 30 day highs on pretty high volume. He said exactly. He said, do you notice that as well pull these stocks up, all of them look pretty good from the trading set up standpoint. I agreed that they did. He said that is exactly what he wanted me to see. He then said for me to press the Green “Start” button at the bottom of my alert window. I followed the instructions and a new window opened. It was called “Configure Odds Maker”. He asked me if I wanted to know if I had traded these great looking 30 day highs how well I would have done. I of course said yes. Below is a picture of the settings we put into the Odds Maker window. They are easy to set and even easier to understand.

Figure 1: Odds Maker configuration for testing a strategy in Trade-Ideas PRO

The Odds Maker has some rules that Jamie described to me. Again they are simple. You only trade the first alert for any stocks and you can only trade one stock one time a day to keep things simple. Additionally the system limits you right now to 100 trades per day and allows you to test back 3 weeks or roughly 1500 trades to see how you would have done trading a set up. So in the example above I wait out the first volatile 30 minutes and then buy the new 30 day highs when I first see them and test to see what would have happened if I had kept the stocks until half hour before the market close. The result is self explanatory in the picture below.

Figure 2: Odds Maker Results featuring a daily summary of how the strategy fared in the market

This system that spits out perfect looking trades is the market equivalent of quicksand. It looks good, looks stable and sound but in actuality it can kill you. Then Jamie pointed something out to me that should have been obvious but really did not hit home until I listened more closely. He said for me to be mindful of the fact that the Odds Maker is a new system testing paradigm. The difference is that this software was an event specific system test not a stock specific test. What is the difference? Everything as I have come to realize.

When I designed my fancy stochastic or moving average cross system in TradeStation I was only able to test it out against one stock at a time. It would have taken me 6 months to get all of the results that I got in less than 2 minutes from working with the Odds Maker. That realization is what hit home hard. I asked Jamie for a little time to work with the software before I had to pay the $1100.00 dollar one time fee. He obliged and I went off to do some work on my own.

In two days I made systems with results similar to the picture below and I have never looked back.

Figure 3: Better strategy results described by The Odds Maker

Tomorrow we’ll conclude the story and list Rick’s own conclusions.