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Trader Resources

My Tools of the Trade

Trader Mike and Blain at StockToGo both posted recently on the various tools they use in their trading. I know I’ve talked about this before, but I figured it was worth revisiting the subject. Seeing as I work for one of the biggest information companies in the world (Thomson Reuters), I have access to all kinds of stuff. The jealousy factor among my peers is quite high. 🙂

At Work
For my daily work as a forex analyst I have four monitors running from one CPU. One of displays Thomson One, with which I keep track of the equity markets. Another screen has Reuters 3000 Xtra (haven’t updated yet to Eikon). That’s my primary data and news workhorse application. I’m mainly a technician, but I cannot ignore the fundamental side of things as I have to write about that as well. On a 3rd screen I have a version of MetaStock Professional to use some custom indicators, run the occasional screener or test, etc. My fourth monitor is my working screen, of course.

Among the other tools of my trade during the work day are Reuters Messenger (we’ve got Compliance limits on what IM apps we can use) for quick contact with colleagues and contacts, Feedly to keep track of a long list of blogs and news sites, and SnagIt for grabbing and editing charts and other graphics. All of our content creation and editing is web-based, for which I generally use Firefox. I also use Excel a fair bit, in many cases bringing data in (live and/or EOD) from Reuters or MetaStock (which is really the same data), either as a drag-and-drop or through a special plug-in. Seeing as I have a very geeky research-oriented side, Having access to all this data is very cool. 🙂

My own trading
In my work I have to follow the markets in real time and know what’s going on across the board all the time. For my own trading my needs are much, much less. In fact, I can generally get all the information I need from free and/or low cost sources, and I don’t need anything special on the computing side beyond a relatively modern machine and a high speed internet connection.

I have always done my stock and option trading with Charles Schwab (I may think about changing that this year), and have had plenty of access to information, screeners, and all the stuff I use in my equity market trading through their website and other tools. My other primary trading focus is forex, and for that I use Oanda’s fx Trade platform. The commonly expressed complaint about the Oanda platform is the lack of charting tools, but it’s got more than enough for my purposes as I don’t really need much more than a price chart. The one drawback for me is the lack of chart time frames above daily.

There are only three data/charting packages I have ever paid to use. One is Daily Graphs. Readers of The Essentials of Trading will know that I have long had the CANSLIM system as the underlying philosophy of my stock trading. I can get much of the same info through my broker, but using the Daily Graphs service can make the process quicker and more efficient.

I have also paid for MetaStock and Sierra Chart with IQ Feed data. Seeing as I work for the parent company of MetaStock now, I get the software and data free these days. I first started using it back in the middle 90s, however, and paid for the software and EOD data (didn’t need intraday, and still really don’t) for more than a decade as something to back-up the free charting I was getting through my broker accounts and to work on research ideas. In the case of Sierra Chart, it was strictly about price distribution charting (Market Profile/TPO). Sierra Chart is very reasonably priced and has some other nice features, like a replay function.

Beyond that, I’m probably pretty boring. I use Excel a great deal for performance tracking, data analysis and research. My knowledge of and experience with VBA makes it a powerful tool for me. That’s about it, though. I tend toward swing/position trading time frames, so I don’t need a lot of the decision-support help day trading can require.

Categories
Trading Book Reviews

Book Review: The Complete Trading Course

[easyazon-link asin=”0470594594″][/easyazon-link]By way of full disclosure, I received a free copy of Corey Rosenbloom’s new book [easyazon-link asin=”0470594594″]The Complete Trading Course[/easyazon-link] from Wiley at the author’s behest. Wiley is also my own publisher and Corey is a personal contact of mine. Oh, and he also lists me in the acknowledgements to the book. That was more for sharing my perspective as an author and commiserating on things than for any direct contribution to the text, however. This is the first time I’ve actually seen the book, so this review is coming from the perspective of a fresh impression. Corey, by the way, is an active blogger at AfraidtoTrade.com and contributed to my New Trader FAQs book.

Perhaps a more accurate title for this book would have been The Complete Technical Trading Course. That is what we’re talking about here – a front-to-back approach to applying technical analysis to trading. This is not, however, a survey book that attempts to walk the reader through all the various sorts of technical methods and techniques. The author, instead, focuses on the tools he actually uses in his own market analysis and trading.

The book starts off talking about trends, both in terms of defining them and in terms of identifying them. It then progresses into the subject of momentum, and that is followed by a chapter focused on market phases. All of this lays the groundwork for the second part of the book where it gets into strategies and tools. These include candlestick charting, price pattern analysis, Fibonaccis, and Elliott Wave techniques. The final section of the book focuses on trade set-ups and strategy execution.

It should be noted that this is NOT a trading system book. It’s about analyzing the markets and identifying good set-ups. If you’re looking for something mechanical you’ll want to look elsewhere. Also, the author is very much a stock market oriented trader, and that is reflected in the text. This doesn’t mean the methods and concepts are not applicable to other markets, however.

Overall, I’d say this is the exact sort of book I’d recommend to those readers of The Essentials of Trading who were interested in seeing how technical analysis can be applied in trading. It’s well structured and loaded with examples. I have a personal pet peeve with the standard internal formatting of Wiley Trading books, but that’s not the fault of the author and it doesn’t really detract from the message or lessons. Oh, and the bibliography is huge!

Bottom line: If you want a nitty gritty detail-oriented book on how to apply technical analysis techniques and methods, [easyazon-link asin=”0470594594″]The Complete Trading Course[/easyazon-link] fits the bill quite nicely.

Make sure to check out all my trading book reviews.

Categories
Trader Resources

What Should I Read on my New Kindle?

Last week I finally gave in and ordered myself a Kindle from Amazon. This is something I’ve been thinking about for quite a while. I read a ton, and some of it happens on my daily commute. While that’s fine for paperbacks, it’s not so great for hard covers, especially bigger ones. Just can’t handle them in one hand while holding on to a rail with my other riding on the train (I don’t get to sit very often). Plus, in the warmer months I like to read outside, and since I live near the coast that means wind flipping pages around when reading a larger book. The Kindle helps in both those situations.

I’ve also got a bit of green thinking going on here as well. I’ve started to feel guilty about buying print books when they are so readily available in electronic format now – and often at lower prices in any case.

Now, I’ve only just got the device, and have a few print books to get through before I’m likely to be focused on a Kindle book, so I won’t have a good impression on things for a little while yet. I have begun accumulating books to read, though. Project Gutenberg is a good source for public domain books and I grabbed a couple dozen of the classics from there last night. One of them is Adam Smith’s Wealth of Nations.

What I would love to find is old trading books, which basically means early 1900s. I’ve started doing some research. If you know of any, definitely leave a comment below.

I’m also going to be developing a list of books to read and include among my trading book reviews here on this blog. If there’s a book (or books) you would like to see me write about, definitely let me know. And they need not be strictly non-fiction. There’s a fair bit of trading and markets oriented fiction out there (for example, the books by Paul Erdman). I like to read that kind of stuff, so definitely include those titles too.

Categories
Trader Resources Trading News

The Best Forex Market Analysis in the World!

Yesterday, at the FX Week awards event in London, the forex market analysis product I work on within the IFR Markets group at Thomson Reuters was presented with the coveted Best Vendor for FX Research and Strategy award for 2010. Basically, that means we do a better job than any other 3rd party provider (non-bank, non-broker, non-dealer, etc.) of providing insightful and useful market commentary, analysis, and trading strategy according to the voting of users.

We’re #1! We’re #1! We’re #1! 🙂

While most of our customers come from the institutional trading world (banks, hedge funds, etc.), our content is also available for free to retail forex traders through Oanda, FXDD, dbFX, and FXCM (to a limited degree). If you broker isn’t on this list, tell them you want IFR Markets. IFR Markets forex coverage is also available to members of the Currensee community through that platform.

Here’s the release:

IFR Markets wins prestigious industry award for FX commentary

IFR Markets, the real-time markets commentary service of Thomson Reuters, has won a prestigious FX Week Award for its agenda-setting coverage of the foreign exchange market through a year of great turmoil.

IFR Markets Forex Watch won the Best Vendor for FX Research and Strategy, 2010 award, which is decided by votes from the foreign exchange industry and recognizes the expertise, commitment and flair of the editorial team.

The team consistently provided incisive commentary and winning trade ideas through a stormy year for currency markets that included a yuan revaluation and Japanese intervention, a euro crisis, multiple dollar slides and a surge in emerging currencies. They faced stiff competition from players such as Informa Global Markets and 4Cast who value this accolade above all others.

IFR Markets Forex Watch is a commentary service run by analysts in London, New York, Boston, Sydney, Tokyo and Singapore who cover majors and emerging FX around the world, around the clock. Packed with flow and order information, technical trading strategies, options flow and volatility data and regional/country focus reports, Forex Watch complements Reuters News and Reuters Dealing, giving Thomson Reuters customers a complete offering in the foreign exchange space.

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Trader Resources

It’s gold Jerry!

OK, I don’t normally make old television references, but in this case I couldn’t help myself. A reader of my Trader FAQs book just sent me this:

“I’m sitting reading your book and I just have to tell you that SO far it’s REALLY good.  It’s invaluable really (and even after all this time spent there are things that are being made clearer to me simply by virtue of the fact that they’re being CLEARLY explained by people who KNOW what they’re talking about)!!!  It’s ‘Gold’ for a new trader.”

This particular gentleman – who’s been in the market for a while – is from South Africa, so I’m not sure if he’s familiar with Seinfeld. I was never a massive fan myself, but I couldn’t help picturing Banya saying “it’s gold” to Jerry in one episode and chuckling a bit to myself.

In all seriousness, though, the feedback for the FAQ has been fantastic! I heard good things from the contributors as they saw it develop, of course, but it’s a whole other thing when the people who can actually get the most value of the book are so enthusiastic. Another email that came in recently said “The FAQ is a great value because for what is probably less than the hourly wage of most middle class people, you save hours of researching to get the same or better answers.” I was really pumped to read that because it’s EXACTLY the purpose of the book – to save people all the time and effort of having to dig around to find answers to common questions, and to not really know how worthwhile those answers were when they got them.

Anyway, give the Trader FAQs a look. Check out the questions and contributors and take a peak inside.

Categories
Trader Resources

Black Friday Suggestions for Traders

Today, of course, is the notorious Black Friday – that crazy holiday shopping day which is supposed to get retailers into the black for the year. You won’t catch me anywhere near any shopping locale, and not just because I have to work (someone please tell me what sense it makes for today, not Wednesday, to be the early markets close). Keeping with the theme of the day and the season, however, I’ve got some suggestions for your shopping list. These items are largely taken from a 12-days of Christmas sort of thing I did a couple years ago as outlined in the Traders Wish List.

Of course I have to put my own book, The Essentials of Trading at the top of the list. Good for anyone getting into trading or looking to get their trading on track. 🙂

Market Wizards

My own book aside, Market Wizards and its follow-up editions The New Market Wizards are right at the top of the list. They pull together insightful interviews done with some of the great traders and investors of the modern day. There are names you may know and others with whom you may not be familiar. They cover the wide spectrum of markets, methodologies, and trading styles making the information and opinions of broad value to all traders.

MetaStock
If you’re in the market for charting and system design and testing software, Metastock should be at the top of your list. Metastock is the charting software package I have used for more than a decade now. If you have read The Essentials of Trading, you will know that I used charts and the results of system tests from that package as examples in the book. I continue to use it on a daily basis when I do my market analysis and write commentary.

In particular, I have worked mainly with the End-of-Day edition for my personal use because I generally do not need the functionality of the real-time versions. Regardless, though, the quality and functionality is outstanding.

Financial Fiction
Should you be in the market for some fireside reading to help you get through the cold winter months, there are several books in the trading fiction category I’d suggest. The Day Trader by Stephen Frey, Nest of Vipers by Linda Davies, Free to Trade by Michael Ridpath, and The Velocity of Money by Stephen Rhodes are all ones I’ve enjoyed.

And definitely check out the books by Paul Erdman. He is perhaps the premier author of financial markets fiction. Erdman has published a quite a few excellent books. They combine very entertaining and enjoyable reads with incredible market insight. In fact, his stories have, over the years, been viewed as predictive of developments that eventually came to pass.

Here are some of Erdman’s titles:

Liar’s Poker

Michael Lewis is a well known writer these days, and probably best know in the wider world for his book Moneyball. You may be familiar with that one, as in it he chronicles the evolution in baseball to a more statistically based system of evaluating players. Liar’s Poker, though, is the book that put Lewis on the map in the first place. It is a semi-autobiographical look at Lewis’ relatively brief career in investment banking. He was in the middle of the 1980s glory days as a member of the Salomon Brothers team. The people he worked with are some of the truly significant names on Wall Street – some of whom would eventually go on to found the now notorious Long-term Capital Management (LTCM). Consider this one part history, part insight into life inside Wall Street firms.

I could go on and on, but rather than fill the page up here I’ll just refer you to the entries on the Traders Wish List. Enjoy! And definitely feel free to offer up suggestions of your own.

Categories
Trader Resources

An Inquiry for Active Forex Traders

I need to do a some research for my employer. If you’re an active forex trader, I would like to ask you for a little bit of help with that research. I just need answers to a few questions. Feel free to answer directly using the comment form below. Alternately, you can submit your answers by email to author (at) theessentialsoftrading.com.

The first question is really part of the quick survey:

What broker do you use?

Now here are the real questions:

1) What short-term trading resources do you use in your trading? By this I mean information and data sources and other tools you use to stay up on market events and make your trading decisions.

2) What short-term trading resources or info do you not currently have access to, but would like.

3) What format(s) of information distribution do you prefer – text, audio, video, live chat, etc.

Your input is most appreciated.