Trading Indicators » Day Trading Indicators

STANDARD ERROR: Linear Regression Trendline?

admin — Fri, 14 Jan 2011 22:17:01 +0000

CAVEAT: I have a limited knowledge of statistics and and am not particularly adept with respect to formulas. Hence, kindly explain using prose if you would.

ISSUE: Using stock trading software by prophet.net, a 64-day Linear Regression Trendline ("LRT") is currently the best fit for a particular stock. The 64-day LRT has an R-squared of .933. Now, the trading software has an indicator called "Standard Error Bands" which allows you, for example, to enter (64,3), (64,2), (64,1) etc. In this example, of course, the indicator plots "standard error band" values ("SE") (3SE, 2SE, 1SE etc.) both above and below the 64-day LRT.

With all this in mind, I have researched how to calculate "standard error" but my results don’t seem to match the trading software. The trading software determines the 64-day LRT by using the CLOSING prices for the last 64-days. Can someone give me a step-by-step on how to calculate the 1SE of the 64-day LRT. ASSUME THAT I ALREADY HAVE THE LRT VALUE–I do.
It’s my understanding that the "Standard Error" is the "Standard Deviation" divided by the square root of the number of samples. I tried taking the Standard Deviation of the Closing Prices over the last 64 days and, alternatively, the Standard Deviation of the 64-day Linear Regression Trendline itself–both of which come out to 3.15 and 3.18 respectively, and then divided both of those numbers by 8, which gives me a value of .39 or so for 1 Standard Error. The software, however, has a value that is much greater–closer to .80.

Trading indicators are best used along with money management and good risk control, using trading indicators alone will not enable you to be a successful trader, even if you learn everything about day trading indicators the market is just too random and unless risk is controlled, over time your account will slowly get wiped out, regardless how good a “trader” you think you are.

This question was about day trading indicators and there have been some pretty good answers that should help in your trading, and especially in relation to day trading indicators, the answer has been posted in the categories listed below:

Stock trading method question?

admin — Thu, 09 Dec 2010 22:19:46 +0000

This question is for those familiar with technical charts. In a bull market when selecting a stock, does setting a buy stop price a little above resistance, selecting a stock that’s currently above 30-day moving average and the MA is trending up, and relative strength indicator is also trending up mean that there is a good if not strong possibility that the stock will break out to a new high? Conversely, does a stock that’s broken through support and trending below 30-day moving average usually mean that the stock is more likely than not to fall to new lows? Thanks!

What does the "pre-market" stock quote mean when I look up a stock before the opening bell ?

admin — Sun, 31 Oct 2010 07:55:30 +0000

What establishes the "pre-market" price??? Is it usually any indicator for the regular trading day ??? I basically want to know if it’s relevant to anything.

Does anyone know a program or a site for newbie day traders?

admin — Sat, 25 Sep 2010 07:51:56 +0000

I’m an aspiring day trader and I still have a lot of questions about indicators. I also want a program or online service that will help me develop what I have learned about day trading.I’m so new at this and I don’t want to create any slip ups. Any site you can recommend? I’d appreciate it very much.

is there anyone out there who trades the market, and not necessarily specific companies.(daytrading/marketmove?

admin — Mon, 16 Aug 2010 17:31:11 +0000

i’ve been trying to trade the market, using indicators and not really looking at company fundamentals… so etfs like spy, vxx, gld…. and i’m wondering if anyone else does this, and what works for other day traders out there… i only like to hold stocks for on stochastics cycle… so usually about 5-10 min….

Could The Economic Meltdown Be The Result of Economic Terrorism?

admin — Sun, 11 Jul 2010 17:27:06 +0000

I heard something interesting related to the world economic meltdown. It was suggested this could be the result of economic terrorism. This week it was reported that the World Bank had been hacked several times over the past year or so. We know that there are many active, experienced hackers in Russia and China who have made it into some very sensitive computer systems in recent years.

There has been a lot of activity at the last minute on the stock exchanges that send indicators downward. This last minute activity happens so late in the trading day, that the markets don’t have time to respond.

Makes me think. Has the world been plunged into the pages of Tom Clancy techno thriller novel playing out on the reality side of the book?

Well thought out comments are welcome.
Oh yes! "Debt Of Honor"! I forgot about that Clancy classic! Rewritten the "bad guys" would be Russians and NGO terrorist types hacking away on their computers!
Marcus, true, but people are behind the computer programs that trip at the last minute. Who is behind the "snipes"?

It’s rather like "sniping" on eBay…..

Linear Regression Indicator: Calculation in Microsoft Excel?

admin — Wed, 02 Jun 2010 03:08:27 +0000

The Linear Regression Indicator (LRI) is a stock market indicator. It’s value each day is the same as a Linear Regression Trendline (LRT). The LRI is calculated using the "least squares method." I would like to know the formula to calculate the LRI in Microsoft Excel if you could assist me.

I am uncertain how my stock charting package calculates this value, but here are some clues. For the SPY, which generally tracks the value of the S&P 500 stock index, the LRI values at the end of the trading day today were LRI(1 day)=0; LRI(2 day)=128.42; LRI(3day)=128.51. The value for LRI(2 day) is simply the closing price of the SPY for today, which was 128.42. I’m really interested in how they calculate LRI(3day), and am seeking an explanation as to why LRI(1) is 0 and LRI(2) is today’s closing price.

I’m not sure whether they use the Open, High, Low and Close for each day, or just the Close or some combo. Here are those values for the last few days: (See Additional Details)
8/3: Open=127.33; High=128.55; Low=127.15; Close=128.42. 8/2: Open=127.58; High=128.46; Low=127.55; Close=128.08. 8/1: Open=127.34; High=127.38; Low=126.63; Close=127.22. 7/31: Open=127.66; High=127.96; Low=127.46; Close=127.85.

Can you give me advice on daytrading?

admin — Fri, 30 Apr 2010 17:40:00 +0000

I’m 24, in college, and am interested in day trading. I am on my second book reading up on it. I am interested in technical analysis. I am very good at math so the concepts come easy to me and the charts do as well.

I used www.freestockcharts.com as a resource for practicing. It provides lots of features including indicators, portfolios, and tools to draw trend lines in.

I have paper traded 5 days so far. Here’s how I did.
1. +4%
2. +5%
3. +4.6%
4. -0.5%
5. +1.32%

With about 15 trades a day tops and a lot of starting capitol I think I could make good money. I know I’m very green so there’s lots to learn. I don’t even have money to invest with yet anyways.

How do you think I’m doing? Is my profit so far good or to early to tell? What can I do to progress faster at trading and get good at it?

How can on predict when the market has topped?

admin — Wed, 28 Apr 2010 00:40:16 +0000

One of the indicators I have noticed indicating a peak in the market is heavy volume on down days and light volume on up days. Along with the above the CBOE put call ratio drops to less than 0.75 for a couple of trading sessions. Livermoore used a list of stocks which fell before the market peaked.

Who has a good system for determining entry points into a stock for long and short trades 1-5 days?

admin — Sun, 25 Apr 2010 00:41:12 +0000

I need a great system complete with strong indicators. Which strategy works well for you?

Linear Regression Indicator: How do I Calculate in Microsoft Excel?

admin — Wed, 21 Apr 2010 17:27:50 +0000

Trading indicators are best used along with money management and good risk control, using trading indicators alone will not enable you to be a successful trader, the market is just too random and unless risk is controlled over time your account will slowly get wiped out, regardless how good a “trader” you think you are.

what is the best set up for daytrading in stockmarket?

admin — Mon, 19 Apr 2010 00:39:41 +0000

which set indicators or oscillators work best for day trading in stockmarkets?

expert trader give me some tips on trading ?

admin — Thu, 15 Apr 2010 17:34:34 +0000

i have been doing day trading for about a year but i am busy and dont have time to sit and watch the stocks everyday. now i am trying to use another way to make some money and that is to buy a stock and hold it for a few days or a week and make some money from it. i am using MACD, STOCKASTIC, RSI and support level to make a predication when will the stock bounce back for a few days. i tried once and i was able to make 0 on a 00 investing in a week.

what other things i have to look at it to make sure it will bounce back. like at what number should all these three indicator be when i buy a stock.
if u can explain it in detail that would be better. thanks

how can I find a proficient day trader who will show me the ropes?

admin — Mon, 12 Apr 2010 17:30:26 +0000

I figure most guys who sell advice aren’t making any money, so they have to sell books or CDs. The guys making the money are too busy trading to share their expertise. Also, why would they want to let the world in on their secrets?

You can’t always rely on perceived wealth as an indicator of proficiency either. Could be a trust fund guy who trades stocks as a hobby and makes no real money from his trades.

Traders International info? E minis day trading?

admin — Fri, 09 Apr 2010 10:14:24 +0000

I was wondering if anyone has a spare copy of the info from Traders International. www.tradersinternational.com .

I am already trained on stocks but need to know what indicators they recommend and the settings. Ant other useful info would be appreciated too.

I can’t afford the 00 for the course so if you have already been on the course I would appreciate you sending me some info.

Thanks

David
I am looking for info from someone who has been on the course.

Born its not a scam I have been watching their live trading demonstrations every Tuesday and Thursday at 2.20pm Eastern time USA for 6 months now, they always make at least 2 points on the E minis in 5 to 20 minutes.

Day trading SPY options: How can I do this better? (Long question)?

admin — Tue, 06 Apr 2010 17:26:44 +0000

(Note: I have real money experience with options going back to 2000, first covered calls in my IRA and then long calls in my cash account though no day trading experience with real money. I have the 25K to park in an account to satisfy the pattern day trader rules and another 10K to make the actual contract purchases.)

I have a job that allows me to keep an eye on the real time stock market. Starting in January I started playing with the Virtual Trading engine at OptionXpress, daytrading options on SPY. My strategy is rather modest; I buy 5-10 ITM contracts, either put or call depending on market direction, and sell when I see the trend reverse. I chose 10 contracts because I believe that with an order size that small, if I submit a sell order at the bid it should fill immediately unless the market is moving very fast allowing me to lock in a profit if the trend reverses. I open one position at a time, I never leave my desk with an open position and I am 100% cash at market close every day. I use SPY because being a basket of 500 stocks it is buffered from sudden drastic moves in price giving me time to get out of a position with minimal loss if the price goes the wrong way on me. My immediate goal is 0 after commissions per round trip, a target that requires only a {content}.15 move in option price. I don’t always guess right on direction, 4 out of 5 is typical, and I am netting between 0 and 0 a day on 6-7 round trips. My 00 initial play money stake has grown to about ,000 since 1/19 when I started doing this seriously. I won’t get rich doing this but over the course of a year that is an extra person’s worth of income for my family. If it lets me do nothing more than pay off my house and fund future college for my 3 kids it is worth it.

Now that I have proven to myself that this seems to be a reasonable strategy I am trying to understand what I can do better and am now in the area of "I don’t know what I don’t know." I know about Level 2 quotes but if these are something that can help me I am not clear how to use them. I know that there are all sorts of indicators that technical traders use but I don’t know if these scale down to the day trading level. I know about the existence of the Greeks, and while I understand roughly what the numbers and equations mean, I don’t know if these will help me on positions lasting 15 minutes or less.

My main interest in posting this question is to find out if there are tools I can use to help me make better choices about getting in or out of a position or tell me more about what the market is doing. This strategy seems to be working okay and if I can translate this to real money I will consider myself successful. I don’t want to be greedy but I certainly would like to know if I can do what I am already doing more effectively.

I spent time on 888options and optionetics.com but it seems much of the content out there deals with strategies like spreads, butterflies and condors, things that simply don’t apply to what I am doing. I know there are options day traders, even some specializing in SPY, who read these questions, and I’d be appreciative if I even had a list of books or even just some things to go research and learn about that you have found helpful in your experience.

Thanks for reading this far and any help y’all provide.
I definitely understand the problem with fills; in fact, I asked a question about that here the other day. I had noticed that I could put in a sell at a price like 3.10 and a minute later see a bid/ask spread of 3.15/3.20 with my sell order still open. My only thought was "What the ****?!" I was told by another answerer that in reality, on an order that small an ask below the bid would never stay open on something as liquid as SPY.
Regarding filling at the mid, on SPY I could live with this. The options on SPY move enough intraday that even if every buy order filled at the ask and and sold at the bid I’d still make money because I am looking for moves of .15 on options that can move .30 or more in a short time. I’ve gotten good enough at picking the trend direction that I will buy options that are 3 or 4 points ITM. This gets me my .15 or more move with only a small move in the price of SPY.

Day trading ETFs?

admin — Sat, 03 Apr 2010 10:32:36 +0000

I’d like to trade options on some some ETFs; QQQQ, DIA, SPY, IWM. I’d like to stay focused on a few stocks and trade when they move. I’d prefer not to trade on news; just the technicals.
I use options so that I do not have to risk that much cash(5K) but willing to take the volatility of options.
What indicators and what confirmations should be used to make 1 day-trade per day? .03 – .06 per trade would be fine trading 40-80 contracts.
I currentl use QuoteTracker software using EMAs and WMAs, MO, TRIX and RSI as indicators.
I just can’t seem to get very successful using my settings.
What have you successfully used? What should I be using and what should I be looking for?

Dan

Trading indicators are best used along with money management and good risk control, using tesnical indicators alone will not enable you to ne a successful trader, the market is just too random

What can you tell be about day trading? Day traders only, please.?

admin — Wed, 31 Mar 2010 17:28:06 +0000

Day trading has really interested me, and I am looking into it greatly. I have a few questions for the experienced traders who make a living off of it.

How much money do you have in your accounts for day trading, and how much per trade? How many trades do you work on at a time?

What percentage earnings are you looking for each trade you make (I know it varies, but this info would also be helpful)?

What time frames do you focus on, and what are acceptable percentages for each (ideally speaking)?

What is your estimated average annual salary?

How often are your predictions correct?

Any comments on risks and rewards for day trading only?

What are your most reliable indicators/indexes/patterns/oscillators?

What are the best mental qualities to focus on? Is technical analysis, wisdom, and integrity enough, or should I focus on others?

As you can see, these are not the kinds of questions I can just search for. Quick responses are more than enough. Thank you!!!

Trading indicators are best used along with money management and good risk control, using tesnical indicators alone will not enable you to ne a successful trader, the market is just too random

what indicators do usually day traders use.?

admin — Sun, 28 Mar 2010 17:27:34 +0000

what indicators do mostly day trader use. i use stockcastic (14,3,3),rsi(14) and mcad clsoe(12,26,9). what does these numbers means and what they do and which one are the best for day trading. do day trading make mistakes or they always get good trader. i have been doing day trading for about 20 months and i have improved alot but still make mistake 1 or twice out of five.

Trading indicators are best used along with money management and good risk control, using tesnical indicators alone will not enable you to ne a successful trader, the market is just too random

what is the best day trading strategy's & indicators?

admin — Fri, 26 Mar 2010 00:45:59 +0000

Trading indicators are best used along with money management and good risk control, using tesnical indicators alone will not enable you to ne a successful trader, the market is just too random Related posts:what are the best indicators for day trading? Adapting indicators for day-trading…….? what indicators do usually day traders use.? Related posts:

what are the best indicators for day trading?

admin — Mon, 22 Mar 2010 18:02:41 +0000

Trading indicators are best used along with money management and good risk control, using tesnical indicators alone will not enable you to ne a successful trader, the market is just too random Related posts:what is the best day trading strategy's & indicators? Adapting indicators for day-trading…….? what indicators do usually day traders use.? Related posts:

Adapting indicators for day-trading…….?

admin — Fri, 19 Mar 2010 17:27:03 +0000

Are there any sites for information on adapting stochastics, rsi for day-trading?

Adapting in terms of the parameters used.

The default parameters in most cases give exceptional amounts of whip-saws.

Trading indicators are best used along with money management and good risk control, using tesnical indicators alone will not enable you to ne a successful trader, the market is just too random