OmniTrader User Guide

Transcription

1 OmniTrader User Guide OmniTrader User Guide February 2007 Edition BK-OT-01-05

2 Support Worldwide Technical Support and Product Information Nirvana Systems Corporate Headquarters 7000 N. MoPac, Suite 425, Austin, Texas USA Tel: Fax: Sales Information For product information or to place an order, please contact or You may also fax or send to Technical Support Information For assistance in installing or using Nirvana products, please contact You may also fax or send to To comment on the documentation, send to 2007 Nirvana Systems Inc. All rights reserved.

3 Important Information Copyright Under the copyright laws, this publication may not be reproduced or transmitted in any form, electronic or mechanical, including photocopying, recording, storing in an information retrieval system, or translating, in whole or in part, without the prior written consent of Nirvana Systems, Inc. Trademarks OmniTrader, VisualTrader, Adaptive Reasoning Model, ARM, ARM Knowledge Base, Easy Data, The Trading Game, Focus List, The Power to Trade with Confidence, The Path to Trading Success, The Trader s Advantage, Pattern Tutor, and Chart Pattern Recognition Module are trademarks of Nirvana Systems, Inc. Product and company names mentioned herein are trademarks or trade names of their respective companies. DISCLAIMER REGARDING USE OF NIRVANA SYSTEMS PRODUCTS TRADING STOCKS, MUTUAL FUNDS, FUTURES, AND OPTIONS INVOLVES HIGH RISK INCLUDING POSSIBLE LOSS OF PRINCIPAL AND OTHER LOSSES. NEITHER THE SOFTWARE NOR ANY DEMONSTRATION OF ITS OPERATION SHOULD BE CONSTRUED AS A RECOMMENDATION OR AN OFFER TO BUY OR SELL SECURITIES OR SECURITY DERIVATIVE PRODUCTS OF ANY KIND. NEITHER NIRVANA S OMNITRADER, VISUALTRADER, NIRVANA SYSTEMS, INC., NOR ITS EMPLOYEES AND AFFILIATES RECOMMENDS ANY SPECIFIC SECURITY FOR PURCHASE OR SALE, NOR DO THEY RECOMMEND ANY SPECIFIC APPROACH TO INVESTING IN SECURITIES. NIRVANA SYSTEMS, INC. IS NOT AN INVESTMENT ADVISORY SERVICE NOR A REGISTERED INVESTMENT ADVISOR OR BROKER/DEALER. NO REPRESENTATION IS BEING MADE THAT THE METHODS PRESENTED WILL GUARANTEE PROFITS IN TRADING. PAST PERFORMANCE, WHETHER ACTUAL OR INDICATED BY HISTORICAL SYSTEMS TESTING, IS NO GUARANTEE OF FUTURE PERFORMANCE OR SUCCESS. INFORMATION PRESENTED BY NIRVANA SYSTEMS, INC. IS FROM SOURCES NIRVANA BELIEVES ARE RELIABLE. HOWEVER, NIRVANA HAS NOT INDEPENDENTLY VERIFIED SUCH INFORMATION.

4 Conventions The following conventions are used in this manual:» The» symbol leads you through nested menu items and dialog box options to a final action. The sequence File»Page Setup»Options directs you to pull down the File menu, select the Page Setup item, and select Options from the last dialog box. This icon denotes a tip, which alerts you to advisory information. This icon denotes a note, which alerts you to important information. bold italic monospace Bold text denotes items that you must select or click in the software, such as menu items and dialog box options. Bold text also denotes parameter names. Italic text denotes variables, emphasis, a cross reference, or an introduction to a key concept. This font also denotes text that is a placeholder for a word or value that you must supply. Text in this font denotes text or characters that you should enter from the keyboard, sections of code, programming examples, and syntax examples. This font is also used for the proper names of disk drives, paths, directories, programs, subprograms, subroutines, device names, functions, operations, variables, filenames, and extensions.

5 Contents Introduction to OmniTrader Chapter 1 Philosophy Behind OmniTrader About Fundamental Analysis Does Fundamental Analysis Work? About Technical Analysis Does Technical Analysis Work? About OmniTrader OmniTrader Approach Setting Up OmniTrader Installing OmniTrader System Requirements Chapter 2 Additional Real Time Requirements Installing OmniTrader Upgrading from Previous Versions Updating OmniTrader Registering OmniTrader If You Purchased OmniTrader From Nirvana If You Purchased OmniTrader From an Authorized Reseller Setting Up Your Data Easy Data vs. User Data Data Vendors Supported by OmniTrader Setting Up OmniData Setting Up Easy Data Setting Up User Data Worden Brothers TC2000 Data Setup AIQ Data Setup OmniTrader Process OmniTrader Profiles Opening a Profile Chapter 3 Creating a New Profile Importing Symbol Lists & Profiles Selecting Trading Strategies Nirvana Systems Inc. v OmniTrader User Guide

6 Contents Running the To Do List To Do List Actions Tab Reviewing the Analysis Results Sorting the Focus List on Signal Charting Summary of the OmniTrader Process Chapter 4 Focus List Concepts Focus List Features Viewing Only the Focus List Docking the Focus List Configuring the Focus List Removing Columns Focus List Columns Profile Statistics Focus List Columns Database Statistics Easy Data & User Data Easy Data Only Sorting the Focus List Finding Symbols in the List Adding Static My Symbols Lists Selecting a Viewable List Adding & Removing Symbols for OmniData & Easy Data Using the Quick Chart Feature Using the Symbols Database Entering Symbols Directly into the Focus List Importing Symbol Lists Copying & Pasting Symbols Adding & Removing Symbols for User Data Using Worden TC2000 Data Using AIQ Data Using MetaStock or CSI Data When You Know Where the Data Is on Your Hard Drive Using MetaStock or CSI Data When You Do Not Know Where the Data is on Your Hard Drive Importing ASCII, Text, or Excel Symbol Lists Selecting Multiple Symbols Chapter 5 Trading Strategies About Trading Strategies Default Strategy OmniTrader User Guide vi nirvanasystems.com

7 Contents 7 Day Moves Strategy Trending Strategy Diverge Strategy Swing Strategy Breakout Strategy Activating Trading Strategies Voting Multiple Strategies Strategy Voting Strategy Menu Flow Chart Concepts Flow Chart Interface Blocks in the Flow Chart Creating New Strategies Chapter 6 OmniTrader Charts Plotting a Chart Plotting Multiple Charts Modifying the Chart Specifying How Much Data to Display OmniTrader Drawing Tools Plotting Signal & Exit Information Viewing Crosshairs & Data Values Changing the Chart Period/Date Adjusting the Chart Area Charting Different Timeframes Chart Toolbar Options Template Period Symbol & Synch Option Scale Chart Books Chapter 7 Customizing Charts Chart Options Chart Tab Colors Tab Plotting Indicators Adjusting Indicator Settings Moving Indicators Adding Panes Nirvana Systems Inc. vii OmniTrader User Guide

8 Contents Systems Tab Trades Tab Statistics Tab Color Charts Adding a Color Chart Condition OmniTrader Chart Templates Trending Chart Template Reversal Chart Template Swing Chart Template Applying a Template Creating a Template Editing a Template Plotting Chart Patterns Chart Patterns Chapter 8 OmniTrader s Analysis To Do List Test Settings Tab Optimization Vote & Signal Lines Reading Vote & Signal Lines Viewing a Strategy's Systems Plotting Systems & Indicators Chapter 9 OmniTrader Portfolio Orders & Alerts Toolbar Adding the Orders & Alerts Toolbar Portfolio Window Account Tab Open Orders Tab Order History Tab Open Positions Tab Position History Tab Cash Transactions Tab Order Notifications Creating an Account Editing an Account Deleting an Account Placing an Order Editing an Open Order Canceling an Open Order OmniTrader User Guide viii nirvanasystems.com

9 Contents Deleting Orders from Order History Entering a Position Editing a Position Closing a Position Adding Historical Positions Editing Historical Positions Deleting Historical Positions Making a Deposit to an Account Making a Withdrawal from an Account Recording a Fee Charge to an Account Editing an Account Entry Deleting an Account Entry Confirming Order Notifications Portfolio Reports Portfolio Simulation Mode Portfolio Simulation Interface Chapter 10 Allocation Methods Fixed Trade Size Fixed $ Amount % of Equity $ to Equity Size to Equity Kelly Criteria Optimal f Running the Simulation Portfolio Simulation Settings Portfolio Simulation Settings Trade Source Tab Portfolio Simulation Settings Account Settings Portfolio Simulation Settings Trading Parameters Tab Portfolio Simulation Settings Test Period Tab Portfolio Simulation Settings Simulation Constraints Tab Portfolio Simulation Settings Commissions Tab Portfolio Simulation Statistics Equity Curve Chapter 11 Trade Plans How Trade Plans Work Activating Trade Plans Selecting a Trade Plan Nirvana Systems Inc. ix OmniTrader User Guide

10 Contents Trade Plan Setup Global Order Information Trade Plan Source Trade Plan View Game & Lab Mode Running in Game Mode Purpose of Game Mode Chapter 12 Goals of the Trading Game About the Game Mode Interface Trading in Game Mode Starting a New Game Controlling the Speed of the Game Ending a Game Placing an Order Undoing an Order Viewing Profit & Loss Stops Running in Lab Mode Creating a Lab Mode Profile Running a Lab Session Trading in Lab Mode Leaving a Lab Session OmniTrader User Guide x nirvanasystems.com

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13 Introduction to OmniTrader 1 Congratulations and thank you for choosing OmniTrader! You have before you one of the most powerful tools for the Technical Analysis of securities markets available today. OmniTrader has the following goals: Total Automation of the Trading Process The first and most important goal of OmniTrader is to get the computer to do the analysis so you can do the decision making. OmniTrader will automatically gather price data, analyze that data by applying Trading Strategies, and give you the results of the analysis on potentially tens of thousands of stocks, futures, and mutual funds, so that you can choose the ones that you want to trade. Provide Maximum Signal Confirmation While OmniTrader does produce Trading Signals, that is just the start of the process. Markets are tough, and no computer program will give you Holy Grail trading signals, not even OmniTrader. This is why OmniTrader includes so much information in the form of Indicators, Systems, and Trading Assistants to help you trade profitably. Facilitate Your Education as a Trader You will find three powerful simulators in OmniTrader Game Mode, Lab Mode, and Portfolio Simulation Mode. These simulators help you practice, as you get better and better at your craft. Be sure to visit for tutorials, seminars, and other education materials to assist you in your trading. Tip Nirvana Systems recommends that you regularly check for updates to OmniTrader. We are constantly improving the product and documentation. Nirvana Systems Inc. 1 OmniTrader User Guide

14 Chapter 1 Introduction to OmniTrader Philosophy Behind OmniTrader There are two distinct approaches to trading Fundamental Analysis and Technical Analysis. About Fundamental Analysis Fundamental Analysis includes quantifiable and non-quantifiable indications of a company s financial prospects, such as earnings and earnings growth, book value, market share, insider trading statistics, new products, and new markets. Fundamental Analysis attempts to assess the likelihood of future earnings being higher or lower than they are today. There are problems with Fundamental Analysis. First, it is difficult to quantify. If Company X has a new product, you may suspect that the product will sell on the market, but you will not know that until it has been introduced and marketed. A while back, many of the Genetic Engineering companies had rises in their stock prices before their products could be realized. When the reality was less than the dream, shares plunged. A similar phenomenon occurred with the internet stocks. You may have heard the saying, Buy the rumor, sell the news! Fundamental factors tend to be discounted in the market. You may have seen stocks move down after a favorable earnings report is announced. This happens because there were too many buyers ahead of the news, and no one was left to buy after the news was published. That is, if Company X s earnings are moving up, the stock price will already reflect the public s anticipation that this will continue. If the market is ever disappointed by an earnings report below market expectations WATCH OUT it can react with a vengeance! Even if you watched the news all day long, you would still not know which way the stock was going to move on a given earnings report unless you could also factor in this discount. The only reason prices move is because of an imbalance between buyers and sellers. That is why contrary opinion works. If everyone thinks a stock is going up, that is because they all own it. Since there are few buyers at the current price, it takes very few sellers to drive it down! OmniTrader User Guide 2 nirvanasystems.com

15 Chapter 1 Introduction to OmniTrader Does Fundamental Analysis Work? Although computers can access information necessary to perform Fundamental Analysis, data must still usually be hand-keyed or collected from many different sources. Then, there is usually no clear-cut formula or method for analyzing the data. Technical Analysis lends itself to rapid, automated processing by a computer. Both Fundamental and Technical Analysis can yield excellent results, but Technical Analysis is the method of choice for those who trade using computers. Fundamental Analysis does not automate easily. About Technical Analysis Technical Analysis is the study of historical price and volume movements in an attempt to predict future prices. Any prediction method that uses the study of market data (price, volume, open interest, and market capitalization) can be included under the art of Technical Analysis. Technical Analysis is also known as the study of market psychology. The powerful forces of greed and fear have been prevalent in markets ever since the first public trading exchanges were opened. As markets rise, greed takes over until everyone wants to own the item. Then, when there are no more buyers at the current price, the market collapses and may even plummet as fear takes over. Each commonly used Technical Analysis method was derived through observation. For example, Trading Bands were invented when a technician noticed that for some securities, price tends to move up and down between well-defined bands. Primarily, the following techniques are used to analyze a chart in the technical sense: Chart Patterns Indicators Systems Nirvana Systems Inc. 3 OmniTrader User Guide

16 Chapter 1 Introduction to OmniTrader The following chart illustrates each of these ideas. The line labeled Moving Average on the price chart is an indicator that helps us determine the direction of the current trend. Indicators are used to indicate when a condition has been met or exists. The horizontal line labeled Support Line represents a support level and helps us determine when a security is oversold. At the bottom of the chart there is a system. Systems are often based on indicators and are defined to generate signals when a condition is met. This example shows a Rate of Change-Divergence system and generates signals when the indicator direction diverges from the direction of price. To learn more about specific indicators and systems, select Help»Indicators and Systems from the OmniTrader menu. Figure 1-1. Technical Analysis Techniques Applied to Chart of Allegheny Whether you are using chart patterns, indicators, or systems, the goal is to use these tools to determine the future direction of price. Using chart data to assist in this determination is the essence of Technical Analysis. OmniTrader User Guide 4 nirvanasystems.com

17 Chapter 1 Introduction to OmniTrader Does Technical Analysis Work? The question most asked by newcomers is, Can Technical Analysis make me money? The answer is, Yes! There are many documented success stories of individuals who win big year after year using technical trading methods exclusively. The best sources are The Market Wizards and The New Market Wizards by Jack Schwager. These interviews with great traders will both inspire and educate you. Read about Ed Seykota, who multiplied his clients accounts by 2,500 times (250,000%) in about ten years Marcus parlayed a $30,000 initial stake into $80 Million. Another famous trader not included in Jack Schwager s books is Larry Williams, who won a national trading competition in 1987 by multiplying $10,000 into over $1,000,000 in one year. Each of these traders say they use technical methods almost exclusively. Did these gentlemen discover the secret to riches? Not according to them. If you read the interviews, you will find that each trader says basically the same thing, Develop a trading method or style that matches your personality, and Maintain discipline in sticking to your routine. Every successful trader develops a trading style that matches his or her personality. You, too, have a natural inclination toward your own, personal style. Whatever your style, it is important that your trading method matches it. You may be very short-term oriented, wanting to capitalize on quick, five-to-ten day moves to make many small profits over a long period of time. If you are less active or more sensitive to commission costs, you may want to trade every six weeks or so, and set wide stops so that your trades have breathing room. You may want to focus on the general market trend, or you may feel more confident trading short-term opportunities against the trend. Almost any method will work, if it matches your personality and incorporates good money management principles. Van K. Tharp, one of the gentlemen interviewed by Jack Schwager, has since written the book Trade Your Way To Financial Freedom, which is devoted to developing your own trading style. Our goal in creating OmniTrader was to provide the best information possible, so you can learn to apply the art of Technical Analysis successfully as you develop your own approach. Nirvana Systems Inc. 5 OmniTrader User Guide

18 Chapter 1 Introduction to OmniTrader About OmniTrader In order to use OmniTrader effectively, it is important to understand the difference between OmniTrader and the other trading systems available to investors and traders. Many software packages have been introduced to the market in the last few years to help investors and traders. However, most of this software makes the assumption that you, the user, are comfortable doing a great deal of research to arrive at an investment decision. OmniTrader is designed to do all the hard work. That means total automation. When you sit down to make a trading decision, all the homework has been done. The Trading Strategies have been tested and the results are displayed for you. The key technical patterns have been calculated and drawn. All of the analysis has been distilled down to prime Buy and Sell opportunities presented in one easy-to-review list. Most trading software falls into one of the following categories: Toolbox Programs When the first Technical Analysis programs were created for individual investors in the late 70s, they were based on the toolbox paradigm. That is, they provided lots of Technical Analysis tools (systems, indicators, etc.) and left it up to the user to figure out how to use these tools for actual trading. As it turns out, most of the popular Technical Analysis programs available today are based on this do-it-yourself approach. Toolbox programs certainly have their place and can be used by a technician to improve his or her trading. Since no one trading approach can be used across all markets, a lot of time can be wasted tinkering with the indicators and systems and not trading. Using these do it yourself packages is a lot like trying to build a complex piece of machinery without any blueprints. You may have all the tools, but no idea which tools you should use when. The result is a lot of trial and error at your computer, and even if you are able to find a strategy that shows promise, it fails as soon as the markets change their behavior. While it is true that most of the modern toolbox programs now allow you to automate system testing, you still have to decide which systems to use and which tools to apply to the charts. OmniTrader is completely automated. You do not have OmniTrader User Guide 6 nirvanasystems.com

19 Chapter 1 Introduction to OmniTrader to know anything about Technical Analysis to use it, but you will learn as you go along! Black Box Programs The term black box was coined by engineers and is used to describe systems that produce signals without disclosing their logic. Picture a box with some wires going into it and more wires coming out. You have no idea what will emerge from the box if you hook the wires up to some input device. The internal workings are hidden from you. In black box trading systems, signals emerge as if by magic, but you have no idea how they were generated. This would be fine if black box programs worked consistently, but none has ever done so. It would be difficult for any computer program to completely understand all factors occurring in the market. OmniTrader automates the Technical Analysis process and then shows you trading signals generated by strategies, similar to a black box program. However, the basis of the signals is always available for you to see so you know exactly how OmniTrader generated the signal. OmniTrader is neither a toolbox nor a black box type of trading program. OmniTrader is a prospecting tool. Unlike toolbox programs that require you to figure it out and black box programs that say, trust me, OmniTrader automates the process of finding great trading opportunities and illuminating key technical factors that help you pinpoint the really great trades. Basically, everything the computer can do to help you make a trading decision is done for you by OmniTrader. You can begin making trading decisions almost as soon as you have the program out of the box. Because OmniTrader is fully automated, you will spend less time tinkering and more time trading. Plus, OmniTrader offers tools to help you understand why the signals were generated, which assists you further in your evaluation of the opportunities as they are presented. Nirvana Systems Inc. 7 OmniTrader User Guide

20 Chapter 1 Introduction to OmniTrader OmniTrader Approach There are various Technical Analysis tools available to help you assess the future direction of a security. Yet, depending on the security and the type of trade you are looking for, you would need to use specific types of systems, indicators, and patterns to analyze trading candidates. OmniTrader offers two different approaches to prospecting for trades the Voting Method and the use of Trading Strategies. Voting Method OmniTrader's exclusive Adaptive Reasoning Model gives you the ability to run the program over a list of securities and have dozens of systems analyze each security to find the most accurate systems for each security. Once this is done, OmniTrader applies a voting process to the best systems to arrive at a consensus signal. The Voting Method finds which systems worked the best on each security in the past and uses these systems to generate signals. This process gives you a wide variety of signals that cover many different types of trading opportunities. Trading Strategies As you gain experience, you will find that certain types of setups suit your trading style better than others. For instance, you may like to trade only stocks that are reversing off of support levels on heavy volume. OmniTrader's Trading Strategies give you the ability to prospect a list of securities to find specific types of trading opportunities. By applying particular systems, filters, and additional settings to a security, a Trading Strategy can isolate a desired setup. OmniTrader provides several Trading Strategies that you can use to find these specific setups, or you can create your own strategy. For more information, refer to Chapter 5, Trading Strategies. The ease and flexibility that OmniTrader provides allows you to spend less time analyzing charts and more time concentrating on your trading. Whether you are new to trading or a seasoned veteran, OmniTrader provides you with an automated analysis process that will help you find great trading candidates in a matter of minutes! OmniTrader User Guide 8 nirvanasystems.com

21 Setting Up OmniTrader 2 This chapter contains instructions for installing OmniTrader, registering the program, and setting up your data so that you can begin using OmniTrader to find profitable trades. Installing OmniTrader The following sections explain the system requirements as well as how to install and update OmniTrader. Tip Nirvana Systems recommends that you regularly check for updates to OmniTrader. We are constantly improving the product and documentation. For more information, refer to the Updating OmniTrader section in this chapter. System Requirements To run OmniTrader, Nirvana Systems recommends that your system meet the following requirements: Pentium 4 microprocessor 512 MB of memory for End-of-Day version and 1 GB for Real Time version Windows 2000 or XP (coming soon, support for Windows Vista) Microsoft Internet Explorer version 5.5 or higher Minimum screen resolution of 1024 x 768 pixels 2 GB of free hard disk space CD-ROM drive Internet access to obtain daily quotes Price data service. Refer to Data Vendors Supported by OmniTrader in this chapter for a list of data vendors supported by OmniTrader. Nirvana Systems Inc. 9 OmniTrader User Guide

22 Chapter 2 Setting Up OmniTrader Additional Real Time Requirements In addition to the general system requirements of OmniTrader, the Real Time edition requires streaming delayed or Real Time market data. The amount of RAM memory your computer has determines how many symbols you can follow with OmniTrader Real Time. The more RAM in your computer, the more symbols you can track. For example, a machine with 512 MB of RAM can analyze and generate signals for approximately 250 symbols, while a machine with 1 GB of RAM can handle about 500 symbols. Installing OmniTrader Follow these instructions to install OmniTrader for the first time: 1. Insert the OmniTrader CD into the CD-ROM drive. The installation should begin automatically. If it does not, click Start»Run from the Windows Start menu. Type x:\ot2007\setup.exe (where x is the CD-ROM drive you are using) in the command line box and click OK. Figure 2-1. Run Dialog Box in Microsoft Windows 2. Follow the instructions that appear in the installation wizard dialog boxes. Upgrading from Previous Versions If you have been using any previous version of OmniTrader, refer to Installing OmniTrader in this chapter to install the program. OmniTrader is a standalone application, meaning that it is installed independently of previous versions. OmniTrader User Guide 10 nirvanasystems.com

23 Chapter 2 Setting Up OmniTrader Updating OmniTrader Use the OTUpdater.exe program to update OmniTrader. To run the OTUpdater.exe program, complete the following steps: 1. Confirm that you are connected to the Internet. 2. In Windows, click Start»Programs»OmniTrader200x»OmniTrader Updater, where x is the version of OmniTrader you are using. You will be redirected to the OmniTrader Support website. 3. If there is an available update to the software, you may be prompted to enter your Nirvana ID and Password to login. Figure 2-2. OmniTrader Support and Updates Page 4. Select the update you want to install and follow the on-screen instructions to update to the latest release. Registering OmniTrader Before you can run OmniTrader, you must register the software. In order to register, you will need your customer number and your CD-Key, which are supplied on the that you received when you purchased OmniTrader as well as on the back of your OmniTrader CD case and on your purchase invoice. Complete the following instructions to register OmniTrader when you open it for the first time. Nirvana Systems Inc. 11 OmniTrader User Guide

24 Chapter 2 Setting Up OmniTrader If You Purchased OmniTrader From Nirvana 1. Double-click on the OmniTrader icon on your desktop to open the program or select Start»Programs»OmniTrader 200x»OmniTrader 200x, where x is the version of OmniTrader you are using. The Product Registration dialog box appears. reg Figure 2-3. Product Registration Dialog Box 2. Enter your Name, Company (if applicable), Customer Number, and CD-Key. 3. Click OK to accept the entered registration information. Note You can also access the Registration dialog box by clicking Help»Registration in OmniTrader. If You Purchased OmniTrader From an Authorized Reseller 1. Confirm that you are connected to the Internet before starting OmniTrader. 2. Double-click on the OmniTrader icon on your desktop to open the program or select Start»Programs»OmniTrader 200x»OmniTrader 200x, where x is the version of OmniTrader you are using. The Product Registration dialog box appears. 3. Enter your CD-Key. The CD Key is on the back of your OmniTrader CD case. 4. Click OK to accept the entered information. 5. Follow the on-screen instructions so that you are properly registered as a customer of Nirvana Systems. OmniTrader User Guide 12 nirvanasystems.com

25 Chapter 2 Setting Up OmniTrader Setting Up Your Data OmniTrader needs historical and daily price information to perform its analysis. This data is obtained from various exchanges, such as the NYSE, AMEX, and NASDAQ, by data providers such as OmniData, esignal, and Worden Brothers. The third party data providers then sell the data to end-users. Easy Data vs. User Data OmniTrader divides its data handling capabilities into two broad classifications Easy Data and User Data. If you subscribe to a supported Easy Data vendor, OmniTrader can collect the data directly from the vendor. This integrated data collection approach is called Easy Data. If you subscribe to a data vendor other than one supported directly within OmniTrader, you are using User Data. The primary distinction between Easy Data and User Data is whether or not OmniTrader downloads the data. Data Vendors Supported by OmniTrader OmniTrader supports a number of data vendors, including OmniData. The Easy Data vendors supported by OmniTrader are esignal and IQFeed. OmniTrader also supports data downloaded by other programs, as long as it is in MetaStock, Worden Brothers, AIQ, or CSI format. Depending on the format of your data, your method of importing the data into OmniTrader will differ slightly. If you are unsure of the format of your data, please contact your data vendor. Tip Contact your data provider to find out which data formats are available for your data storage as well as where the data is stored (by default) on your computer system. Nirvana Systems Inc. 13 OmniTrader User Guide

26 Chapter 2 Setting Up OmniTrader Setting Up OmniData Once you have installed OmniData, you can begin collecting data by setting up OmniData as your data vendor. 1. Open OmniTrader and select Edit»Data Settings. Figure 2-4. Symbol and Data Settings Dialog Box 2. Select OmniData from the Datafeed drop-down menu. 3. Enter your OmniData Username and Password found on the back of your OmniData CD case 4. If you would like OmniTrader to check for the latest available data every time you plot a chart, enable On Demand Downloading. 5. From the Batch Download drop-down menu, select All Symbols, Stocks, or Funds. If you select All Symbols, OmniTrader will collect data for both stocks and funds. 6. Click OK to accept the data settings information. Setting Up Easy Data Follow these instructions to set up your data source in OmniTrader, after you complete the registration information. The following steps will work for all Easy Data vendors. If you are using User Data, skip this section and go to Setting Up User Data in this chapter. OmniTrader User Guide 14 nirvanasystems.com

27 Chapter 2 Setting Up OmniTrader 1. If the Symbol and Data Settings dialog box is not already displayed, select Edit»Data Settings. data Figure 2-5. Symbol and Data Settings Dialog Box 2. Select your Datafeed vendor from the drop-down menu. 3. Enter the Username and Password for your esignal or IQFeed account. 4. If you would like OmniTrader to collect the latest data every time you plot a chart, enable On Demand Downloading. 5. Click OK to accept the data settings information. Setting Up User Data If you are using AIQ or Worden Brothers (TC2000) for your OmniTrader data, follow the steps in the following sections so that OmniTrader will recognize your data format. All other User Data vendors do not require a set up process. However, refer to the Adding & Removing Symbols for User Data section of Chapter 4, Focus List Concepts so that OmniTrader knows the correct path to your data. Worden Brothers TC2000 Data Setup Confirm that TC2000 is installed on your machine. When you open OmniTrader for the first time, OmniTrader will detect the presence of TC2000. The following process will set all of the symbols in OmniTrader s profiles to read your TC2000 data. 1. If the Symbol and Data Settings dialog box is not already displayed, select Edit»Data Settings. 2. Select TC2000 from the Datafeed drop-down menu. 3. You will not need to enter your account information for TC2000 since OmniTrader is not downloading data directly from the data vendor. Click OK. Nirvana Systems Inc. 15 OmniTrader User Guide

28 Chapter 2 Setting Up OmniTrader AIQ Data Setup If you are using AIQ data, you will need to run the AIQ data component so that OmniTrader can properly recognize your data. 1. Insert the OmniTrader CD into the CD-ROM drive. The installation should begin automatically. If it does not, click Start»Run from the Windows Start menu. Type x:\ot2007\launch.exe (where x is the CD-ROM drive you are using) in the command line box and click OK. 2. Select the Browse This CD option from the menu. 3. In Windows Explorer, select and open the Utils directory. 4. Browse to the AIQ directory and double-click on Setup.exe. 5. Follow the instructions that appear in the installation wizard dialog boxes. OmniTrader User Guide 16 nirvanasystems.com

29 OmniTrader Process 3 This chapter explains the main features and concepts in OmniTrader: the profile, trading strategy, To Do List, Focus List, and chart. You will learn how to create a profile, select a trading strategy, run your To Do List, review OmniTrader s analysis, and use the chart so that you can begin finding profitable trades. OmniTrader Profiles A profile is a set of symbols, the configuration of the Focus List in that profile, and the settings and Trading Strategies used to generate signals. While most users will choose to work within one profile, OmniTrader gives you the ability to create and maintain as many profiles as you want. Profiles are limited to security type and timeframe. For example, you may have one profile for End-of-Day stocks and another profile for Real Time stocks. If you want to analyze futures in Real Time, you would need another profile. OmniTrader provides you with the following default profiles: Stocks, Futures, Funds, Real Time Stocks (RTStocks) and Real Time Futures (RTFutures). Opening a Profile When you start OmniTrader for the first time, it will open to the Stocks profile. The Stocks profile is an End-of-Day profile with an existing list of symbols. The symbols in the default profiles are not recommendations; you can remove them and add your own symbols at any time. You can get started with the Stocks profile, switch to a different profile type, or create a profile of your own. To open a different type of profile, complete the following steps: Nirvana Systems Inc. 17 OmniTrader User Guide

30 Chapter 3 OmniTrader Process 1. Select File»Open. Figure 3-1. Open Profile Dialog Box 2. Select a profile from the list, and click the Open button. OmniTrader will load the profile you have selected along with all the components of the profile, including the Focus List. OmniTrader User Guide 18 nirvanasystems.com

31 Chapter 3 OmniTrader Process Creating a New Profile To create a profile in OmniTrader, complete the following steps: 1. Select File»New to open the Create a New Profile dialog box. Figure 3-2. Create a New Profile Dialog Box 2. Type a name for your new profile into the Profile Name field. 3. In the Description field, enter a description for the profile to help you remember specifics about it. The Description field is optional. 4. Select whether your Profile Mode will be for End-of-Day or Real Time data. 5. Select the security type of the profile: Stocks, Mutual Funds, or Futures. 6. Click OK to create your new profile. Nirvana Systems Inc. 19 OmniTrader User Guide

32 Chapter 3 OmniTrader Process Importing Symbol Lists & Profiles To import symbol lists from another version of OmniTrader, complete the following steps: 1. Select File»Import. 2. Select Symbol List or Profile from the submenu. The submenu gives you the option to import components of various indexes as well as the symbol list from profiles of other OmniTrader versions. Note You can copy and paste profiles from another version of OmniTrader. You can find the profiles in the following directory: C:\Program Files\Nirvana\OT200x\Profiles, where x is the version of OmniTrader. Copy and paste profiles from a previous version of OmniTrader to the Profiles folder of the new version. Selecting Trading Strategies You can access a list of the current OmniTrader Trading Strategies in the To Do List on the Strategies tab. The strategies that are selected to run in the current profile are indicated with a check mark in the Enabled column to the left of the strategy name. When you are selecting a trading strategy, the best approach is to first determine what types of trades you are looking for. For example, you might categorize your preferred trades as either long-term or short-term. OmniTrader includes several strategies in each of these categories. The long-term End-of-Day strategies included in OmniTrader are Diverge, Breakout, and Trending. The short-term End-of-Day strategies are 7 Day Moves, Default, and Swing. RTBreak, RTDefault, and RTTrend are designed to be applied to real time strategies. Now that you have setup your profile and you have enabled the strategies that best suit your trading style, it is time to run the analysis. OmniTrader User Guide 20 nirvanasystems.com

33 Chapter 3 OmniTrader Process Running the To Do List OmniTrader s first and most important goal is to automate the market analysis and trading process as much as possible. The primary feature for accomplishing this task is the To Do List. You might think of the To Do List as your command center for OmniTrader. Figure 3-3. To Do List Button The To Do List contains three tabs: Actions, Strategies and Test Settings. The To Do List tells you what needs to be done and completes the unfinished tasks for you. We looked at the Strategies tab in the last section, now we will learn about the Actions tab. To Do List Actions Tab The Actions tab contains the following options: Download historical & current price data Collects current and historical data from your data vendor. This option is only for use with Easy Data. Update OmniScan Lists Updates your OmniScan lists with current data and displays any changes in the Focus List and OmniScan interface. Selected lists in this profile Updates only the lists enabled for this profile. All OmniScan lists Updates all OmniScan lists. Run analysis tasks on Runs the analysis tasks as specified. Current list Runs analysis on the selected list. All lists in this profile Runs analysis on all of the lists in the selected profile. Run Analysis The Trade Processor runs all active Strategies for each symbol, generating reports as required and updating the Focus List results. As needed Runs any analysis that needs to be run as a result of a change. Forced for all symbols Ensures that all symbols are back tested, regardless of prior state. Run Portfolio Simulation Runs all active allocation methods in the Portfolio Simulation Mode. Nirvana Systems Inc. 21 OmniTrader User Guide

34 Chapter 3 OmniTrader Process Update Portfolio with current prices Updates the portfolio with the latest price information available. Update COT data Collects COT data from the government site. This option is only available in Futures profiles. Perform Selected Tasks Completes each of the selected tasks in the To Do List. todoactions Figure 3-4. Actions Tab on the To Do List Note If you are using User Data (data downloaded from a 3rd party vendor), you will only need to enable the options below Run Analysis. OmniTrader User Guide 22 nirvanasystems.com

35 Chapter 3 OmniTrader Process Reviewing the Analysis Results The Focus List is the window of information that shows the results of OmniTrader s analysis for each symbol in your profile. After you run the To Do List, you will see new signals appear in the Focus List, including statistics calculated during the signal process. For more information on the Focus List, refer to Chapter 4, Focus List Concepts. You can also view OmniTrader's analysis below a chart in the Vote and Signal lines. For more information, refer to the Vote & Signal Lines section in Chapter 8, OmniTrader s Analysis. Sorting the Focus List on Signal You can quickly bring new candidates to the top of the Focus List by double-clicking on the column header labeled Signal (Sig). Once your new signals are at the top, you can browse through the charts for potential candidates. Charting The chart is where OmniTrader summarizes all the information it has gathered about a security. 1. To plot a chart with the results of all OmniTrader s analysis, highlight a security in your Focus List. There are several ways to bring up a chart. 2. Click on the Chart icon at the top of the Focus List, or double-click on the symbol in your Focus List. You can also use the Page Down key on your computer keyboard to quickly scan your charts for patterns and other confirming factors. Nirvana Systems Inc. 23 OmniTrader User Guide

36 Chapter 3 OmniTrader Process Summary of the OmniTrader Process This chapter has covered the basic process in OmniTrader. Let s review this step-by-step process. 1. Select or create a profile using the File menu. 2. Add or import symbols into your list or enable desired OmniScan lists. 3. Define the general timeframe you are interested in trading and select your strategies accordingly. 4. Make the appropriate To Do List selections and run the analysis. 5. Sort your list(s) and review your charts for great prospects. This highlights the basic steps to start your prospecting right away with OmniTrader. However, our intention is to provide you with all of the tools you need to make profitable trades. The following chapters contain a deeper look at OmniTrader s features and concepts. OmniTrader User Guide 24 nirvanasystems.com

37 Focus List Concepts 4 The Focus List is a list of securities that are analyzed by OmniTrader. The Focus List also summarizes all of OmniTrader s Trading Strategy signals and statistical analysis. The relationship between a Focus List and a profile is that each profile contains one or more viewable lists to display OmniTrader s analysis of the symbols you have selected for that profile. Subsequently, any changes made in a profile s settings will affect the information displayed in the Focus List. For more information on profiles, refer to the Creating a New Profile section of Chapter 3, OmniTrader Process. focuslist short Figure 4-1. Focus List You can configure the Focus List to contain many pieces of information about a security or just a few. From the Focus List, you can select the enabled list of securities that are displayed in OmniTrader. Note As with many windows in OmniTrader, you may change the size of the Focus List by dragging the window to the desired size. Nirvana Systems Inc. 25 OmniTrader User Guide

38 Chapter 4 Focus List Concepts Focus List Features There are various features in the Focus List to help you locate symbols, manage the list, and view signals and statistics. Figure 4-2. Focus List Icons Following is a brief description of each feature in the Focus List. Chart Icon Charts the highlighted symbol(s) in the Focus List. Edit Icon Accesses the Symbols database where you can add and remove symbols from the list. Find Icon Searches the Focus List for a specific symbol. For more information, refer to Finding Symbols in the List in this chapter. Sort Icon Sorts the Focus List by up to four different criteria. For more information, refer to Sorting the Focus List in this chapter. Current Order Notifications Icon Opens the Current Order Notifications window. For more information, refer to Chapter 9, OmniTrader Portfolio. OmniTrader User Guide 26 nirvanasystems.com

39 Chapter 4 Focus List Concepts Configure Icon Accesses the list of statistical columns where you can add and/or remove columns from your list. Refer to Configuring the Focus List in this chapter. Filter Icon Filters all symbols that do not meet the conditions you specify on the Filter Signals dialog box. Scan Menu Displays a drop-down menu where you can select an OmniScan list to display in the Focus List. In order to access the lists in this menu, you must be registered for OmniScan. For more information, visit the Nirvana Store at Watchlist Button Toggles the Watchlist off and on. Notes Button Opens the Notes window where you can view and edit your notes on the symbols. Statistics Button Opens the Statistics window, which contains the test statistics for the active Trading Strategy. Chart Button Opens below the Focus List a mini chart of the highlighted security. Nirvana Systems Inc. 27 OmniTrader User Guide

40 Chapter 4 Focus List Concepts Viewing Only the Focus List To view the Focus List without the main screen in OmniTrader, complete the following steps: 1. Select Tools»Options in the main menu bar. options Figure 4-3. Options Dialog Box 2. Enable the Focus List is separate from OT option. 3. Click OK. This will enable you to view the Focus List without the main screen. You can do this by clicking the minimize button at the right top of the screen to minimize the main screen. OmniTrader User Guide 28 nirvanasystems.com

41 Chapter 4 Focus List Concepts Docking the Focus List You can choose to show or hide the Focus List. When the Focus List is shown, it can be docked or undocked. Docking in OmniTrader is a feature that allows windows such as the Focus List and the toolbars to align automatically to the edge of the OmniTrader main window. When a window is docked, it is moved and resized within the main OmniTrader window. To show the Focus List, select View»Focus List. To hide the Focus List, select View»Focus List again, or select the minimize button at the top right corner of the Focus List and it will become a tab on the Windows menu bar at the bottom of your screen. To dock the Focus List, align the left-most edge of the Focus List with the left edge of the OmniTrader window using the Focus List s title bar. The Focus List will snap in place. To undock the Focus List, drag the Focus List away from the left edge of the OmniTrader window using the Focus List s title bar. Configuring the Focus List You can click on the Configure List (wrench) icon at the top of your Focus List to configure your Focus List into a powerful database. You can have as few or as many columns as you want in your Focus List. The box on the left contains the columns to be contained in the Focus List. The tabs on the right contain the current Easy Data database columns. OmniTrader includes Symbol databases for stocks, futures, and mutual funds that contain a wealth of information about each security. This information may come from a securities exchange or may be generated by OmniTrader. Note It is important to note that much of the Focus List data comes from third parties and that some of the data is subject to change. For example, much of the Database Statistics data comes from your data vendor. Before you make a decision based on any of the data in the database, you should confirm that it is accurate and up-to-date. Nirvana Systems Inc. 29 OmniTrader User Guide

42 Chapter 4 Focus List Concepts configure Figure 4-4. Configure Columns Dialog Box To add a column to the Focus List, select from the tabs on the right, highlight one or more of the names in the list, and click on the Add arrow. The abbreviation and name of the selection will appear in the Focus List Columns list. The Configure Columns dialog box includes the following options: Font Size You can specify the size of font to use for the Focus List. You can choose any size from 6 to 14 points. Unique to this Profile Select this option to add the desired Focus List column only to the open Focus List. Global to all Profiles Select this option when you want the columns you add to appear in all Focus Lists. To remove a column from the Focus List, highlight one of the names in the Focus List Columns list and click on the Remove arrow. The abbreviation and name of the statistic will be removed from the Focus List. OmniTrader User Guide 30 nirvanasystems.com

43 Chapter 4 Focus List Concepts Removing Columns You can use the Configure Columns dialog box to add, remove, and re-order the columns in the Focus List. To remove a column from the Focus List, complete the following steps: 1. Right-click in the Focus List and select Configure Grid from the menu. 2. On the Configure Columns dialog box, select the column you want to remove from the left Focus List Columns list, and click the Remove arrow. Figure 4-5. Configure Columns Dialog Box 3. Click OK to remove the column and close the dialog box. Nirvana Systems Inc. 31 OmniTrader User Guide

44 Chapter 4 Focus List Concepts Focus List Columns Profile Statistics To add a column to the Focus List, highlight one or more of the names on the Profile Statistics tab and click on the Add arrow. The abbreviation and name of the statistic will be displayed in the Focus List Columns list. Profile statistics are generated by OmniTrader. These statistics refer to composite results of multiple Trading Strategies when a voting process is used. If you select one Trading Strategy, these statistics refer to the statistics generated by that Trading Strategy only. For more information, refer to the Strategy Menu section in Chapter 5, Trading Strategies. Some of the following statistics can have the prefix BT (back test), or FT (forward test), indicating the period of time OmniTrader is considering for that statistic. ADV (Advisor Rating) Indicates the strength of the signal. It is based on the individual scores of the Trading Systems that contributed to the vote. POS (Position) Indicates that a position for the corresponding symbol exists in the OmniTrader portfolio (accounts). SIG Contains the signal for the corresponding symbol, as outlined below. Signal Description New long signal indicates that OmniTrader has found a new long opportunity. New short signal indicates that OmniTrader has found a new short opportunity. Reinforced long signal indicates that OmniTrader was already in trade and another system(s) generated a signal in the same direction. Reinforced short signal indicates that OmniTrader was already in trade and another system(s) generated a signal in the same direction. In long signal indicates that OmniTrader is currently in a long position. In short signal indicates that OmniTrader is currently in a short position. Exit signal indicates that the trade has been exited by OmniTrader. Dash indicates that no signals were generated for the backtest period. No signal indicates that OmniTrader is not currently in a trade. Strategy Specifies the Trading Strategy that was used to generated the signal to the vote line. OmniTrader User Guide 32 nirvanasystems.com

45 Chapter 4 Focus List Concepts Days Used in conjunction with the In Long and In Short signals, this column indicates the number of days OmniTrader has been in a trade on the Voting Line. You can think of this column as the age of a signal. NL (Number of Longs) Shows the total number of long signals for the given period. For example, a BTNL of 4 means that four long signals were reported on the Voting Line between the back test start and end dates. NS (Number of Shorts) Indicates the total number of short signals for the symbol over the given period of time. NT (Number of Trades) Shows the total number of trades for the specified period. It is the sum of NL and NS for the given time period. PL (Profitable Longs) Indicates how many of the total long signals for the given time period were profitable. For instance, an FTPL of 4 and an FTNL of 5 would mean that of the 5 total long trades for the forward test period, 4 were profitable. PS (Profitable Shorts) This column is very similar to the PL column. The definition is the same except that instead of longs, OmniTrader uses shorts. HR (Hit Rate) This column displays the hit rate for the specified time period. The hit rate is calculated using the formula 100% * (xpl + xps)/ xnt, where x indicates BT for back test or FT for forward test. Prof% (Percent Profit) The Prof% column shows the percent profit for the given symbol. It is calculated by summing the total profit in all trades over the given time period. Worded differently, it is the sum of the profits from each trade on the Voting Line. Percent profit is a base statistic for APR. Prof% = 100*($ Returned)/($ Invested) For Futures: Prof% = 100%*(PINc- POUTc) * PF /(Total Margin), where: PINc = Price In, the close of the day OmniTrader entered the market POUTc = Price Out, close of the day OmniTrader exited the market PF = Price Factor Total Margin is the Total Margin for the given commodity in the Easy Data database Nirvana Systems Inc. 33 OmniTrader User Guide

46 Chapter 4 Focus List Concepts Note For long trades, a positive (+) sign is a gain and a negative sign (-) is a loss. For short trades, a positive (+) sign is a loss and a negative sign (-) is a gain. APR (Annualized Percent Return) Displays the APR of the given symbol. APR is the percent return, Prof%, averaged out to a full trading year of 250 trading days. BTStart (Back test Start Date) The back test start date is the first day of the back test. It might not be the same for each symbol. BTStartW (Weekly Back test Start Date) The weekly back test start date is the date of the previous Friday from which the daily back test was run. For example, when the daily back test start date is Wednesday, June 8th, then the weekly back test start date would be Friday, June 3rd. It might not be the same for each symbol. BTEnd (Back test End Date) Shows the end date for the back test for the given symbol. The back test end date is the last day of the back test. It might not be the same for each symbol. You may notice that the length of the back test will be the same for all securities in a given profile. BTRunDate (Back test Run Date) Shows the most recent date the back test was run. This date is used to determine when the back test was last run on a per symbol basis. Good Opportunity Indicates whether or not you have marked the security as a good opportunity. SigRunDate Shows the date the symbol was updated with current signals. It is often the same as the day the Focus List was updated with current signals, but not always. It does not represent the last date the data was updated the Updated column performs that function. OmniTrader User Guide 34 nirvanasystems.com

47 Chapter 4 Focus List Concepts Focus List Columns Database Statistics To add a column to the Focus List, highlight one or more of the names in the Database Statistics tab and click on the Add arrow. The abbreviation and name of the statistic will be displayed in the Focus List Columns list. Database statistics are populated by your data provider, where available. database Figure 4-6. Database Statistics Tab on the Configure Columns Dialog Box There are Focus List columns that apply only to Easy Data and there are Focus List columns that apply to all data sources. Nirvana Systems Inc. 35 OmniTrader User Guide

48 Chapter 4 Focus List Concepts Easy Data & User Data The following columns apply to both Easy and User Data. Close Indicates the most recent closing price value for the given symbol. End Shows the most recent date of the data file for the given symbol. High Indicates the high price for the most recent day of data. Low Indicates the low price for the most recent day of data. Open Indicates the open price for the most recent day of data. Start Shows the earliest date in the data file for the given symbol. Updated Shows the date and time the symbols information was last updated. Volume Indicates the volume for the most recent day of data. Symbol Displays the symbol for the given row in the Focus List. The Symbol column is the first column in the Focus List. Easy Data Only The following columns apply to Easy Data only. Exchange Indicates the exchange on which the given symbol trades. Industry Shows the Standard and Poor s industry group to which the symbol belongs. Not all symbols belong to an industry group. Leap Indicates whether or not a leap exists for the given symbol. Name Shows the name of the symbol. Opt Indicates whether or not the symbol has an option. SharesOut Shows the number of shares of stock that are available for trade. It is a fundamental statistic. OmniTrader User Guide 36 nirvanasystems.com

49 Chapter 4 Focus List Concepts Sorting the Focus List To sort on a single column, double-click on the name of the column. You can establish multiple sorts (one column, followed by another, etc.) by using <Ctrl + Click> on a second column header, or by clicking on the Sort (A-Z) icon in the Focus List. Note After you establish a sort in a profile, the same sort will remain in effect the next time you open the profile. Figure 4-7. Sort Dialog Box Nirvana Systems Inc. 37 OmniTrader User Guide

50 Chapter 4 Focus List Concepts Finding Symbols in the List An OmniTrader Focus List may contain thousands of securities. To find the security you want to analyze, you can scroll through the Focus List or you can use the Find (magnifying glass) icon by completing the following steps: 1. Click on the Find (magnifying glass) icon to display the Locate Row in Database dialog box. Figure 4-8. Locate Row in Database Dialog Box 2. Enter the name of the symbol you want to locate, for example, DELL. 3. Click OK to highlight the symbol in the Focus List. If the symbol is not in the Focus List, a Symbol Not Found message will appear. Adding Static My Symbols Lists Each OmniTrader profile can contain multiple list selections in the Focus List. By default, a new profile begins with a blank Focus List. Any symbols added to the Focus List in a new profile will go into the static My Symbols lists. It is possible to create multiple static My Symbols lists in your profile. Click the Edit (pencil) icon, select OmniScan as your data source, highlight the My Symbols list at the top of the OmniScan window, and click the New List button. A new consecutive list will appear under My Symbols. A blinking cursor will appear in your Focus List and you can manually enter the desired symbols for your new list. OmniTrader User Guide 38 nirvanasystems.com

51 Chapter 4 Focus List Concepts Selecting a Viewable List The OmniScan menu at the top of your Focus List allows you to view your enabled lists individually or summarized by certain conditions. To change the Focus List view, click the OmniScan menu (yellow drop-down menu at the top of the Focus List) and select the desired list. You can choose from the following Summary Lists: All Analyzed Symbols Compiles a list of every security that meets the scan criteria (if any) of all enabled lists that have been updated in OmniTrader. Current Positions Compiles a list of symbols that have a position entered in your OmniTrader portfolio. New Signals Compiles a list of only the new signals from each selected list. Flagged Symbols Compiles a list of any symbols that are marked as Good Opportunities from each selected list. Adding & Removing Symbols for OmniData & Easy Data There are many ways to add symbols to your list: Quick Chart, Database, Direct Input, Import Symbol Lists, and Copy and Paste. The following sections outline each of these options. Using the Quick Chart Feature The Quick Chart feature in OmniTrader makes adding and plotting symbols as easy as typing a symbol into a text field. Figure 4-9. Quick Chart Feature In the Quick Chart text field, type the symbol you want to plot and press <Enter> on your computer keyboard. Nirvana Systems Inc. 39 OmniTrader User Guide

52 Chapter 4 Focus List Concepts Using the Symbols Database If you have configured your data as described in the Setting Up OmniData section of Chapter 2, Setting Up OmniTrader, you can add data from the symbols database. 1. Click on the Edit (pencil) icon at the top of the Focus List. 2. Select OmniData or Easy Data from the Data Source drop-down menu. 3. Choose the securities you would like to analyze by clicking on them. Use <Ctrl + Click> to select multiple securities. 4. Click on the Add arrow to add your symbols to the Focus List. 5. Click OK. easy database Figure Easy Data Symbols Database Entering Symbols Directly into the Focus List 1. Right-click in the Focus List. 2. Select Add Symbols. OmniTrader adds a text field to the bottom of the Focus List. 3. Type the symbols in, pressing <Enter> after each one. 4. Press <Esc> on your computer keyboard to exit this mode and return to the Focus List. OmniTrader User Guide 40 nirvanasystems.com

53 Chapter 4 Focus List Concepts Importing Symbol Lists 1. Select File»Import. You will see that you have the option to import a predefined Symbol List (such as the components of an index) or the list of symbols from one of the other profiles in OmniTrader. 2. Select the list of symbols you want to add and they will be immediately imported into your profile. For information about importing ASCII symbol lists, refer to the Importing ASCII, Text, or Excel Symbol Lists section in this chapter. Copying & Pasting Symbols You can copy and paste symbols from one profile to another in OmniTrader. This is a convenient way to transfer just a few symbols between profiles. For example, if you have a profile called Tech containing the symbols AAPL, IBM, and DELL, you could add these same symbols into your profile called Hot. You could open the Tech profile, search for these symbols, and add them into the Focus List for the Hot profile. With the copy and paste features, you can eliminate the searching step. To copy and paste symbols from one profile to another, complete the following steps: 1. Select File»Open to open the Focus List for the profile that has the symbols you want to copy. 2. In the Focus List, click on the symbol you want to copy. To select more than one symbol, hold down the <Ctrl> key on your keyboard and left-click on each symbol you want to select. 3. Right-click in the Focus List and select Copy Symbols from the menu. The symbols are now saved to the clipboard and are ready to be pasted into another Focus List. 4. Select File»Open to open the profile to which you want to paste the copied symbols. 5. Right-click in the Focus List and select Paste Symbols from the menu. The new symbols will appear in the Focus List. Nirvana Systems Inc. 41 OmniTrader User Guide

54 Chapter 4 Focus List Concepts Adding & Removing Symbols for User Data The process for adding and removing symbols for User Data is different, depending on your User Data vendor. Using Worden TC2000 Data 1. Click on the Edit (pencil) icon at the top of the Focus List. 2. Select TC2000 from the Data Source drop-down menu. Note The TC2000 data option is only visible if TC2000 data is installed on your system. 3. In the drop-down box at the top of the screen, select a Worden Symbol List. 4. Choose the symbols you want to add to your Focus List by clicking on them. Use <Ctrl + Click> to select multiple symbols. 5. Click the Add arrow to add your symbols to the Focus List. 6. Click OK to accept your changes and return to the Focus List. worden Figure Add Symbols to the Focus List OmniTrader User Guide 42 nirvanasystems.com

55 Chapter 4 Focus List Concepts Using AIQ Data 1. Click on the Edit (pencil) icon at the top of the Focus List. 2. Select AIQ from the Data Source drop-down menu. Your AIQ symbols will now be displayed. Note The AIQ option is only visible if you have installed the AIQ data component on your system. 3. Choose the symbols you want to add to your Focus List by clicking on them. To select more than one symbol, hold down the <Ctrl> key on your keyboard and left-click on each symbol you want to select. 4. Click the Add arrow to add your symbols to the Focus List. 5. Click OK to accept your changes and return to the Focus List. Using MetaStock or CSI Data When You Know Where the Data Is on Your Hard Drive 1. Click on the Edit (pencil) icon at the top of the Focus List. 2. Select User Data from the Data Source drop-down menu. 3. In the Drives & Directories drop-down menu, find the directory that has your data. You will see the list of symbols appear in the symbol list. 4. Choose the symbols you want to add to your Focus List by clicking on them. To select more than one symbol, hold down the <Ctrl> key on your keyboard and click on each symbol you want to select. 5. Click the Add arrow to add your symbols to the Focus List. 6. Repeat the process for each of your data directories. 7. When you are finished adding symbols to your Focus List, click OK. Nirvana Systems Inc. 43 OmniTrader User Guide

56 Chapter 4 Focus List Concepts Using MetaStock or CSI Data When You Do Not Know Where the Data is on Your Hard Drive 1. Click on the Edit (pencil) icon at the top of the Focus List. 2. Select User Data from the Data Source drop-down menu. 3. Click the Scan Hard Drive button in the lower right corner of the dialog box. All data directories found will be shown in the drop-down box at the top. 4. In the Drives & Directories drop-down menu, find the directory that has your data. You will see the list of symbols appear in the symbol list. 5. Choose the symbols you want to add to your Focus List by clicking on them. To select more than one symbol, hold down the <Ctrl> key on your keyboard and left-click on each symbol you want to select. 6. Click the Add arrow to add your symbols to the Focus List. 7. Click OK to accept your changes and return to the Focus List. OmniTrader User Guide 44 nirvanasystems.com

57 Chapter 4 Focus List Concepts Importing ASCII, Text, or Excel Symbol Lists Use the ASCII import feature to import in a list that was created outside of OmniTrader. You can import new symbol lists from ASCII files, databases, or Excel spreadsheets. To import a symbol list, complete the following steps: 1. Select File»Import»Symbol List. 2. Select Browse from the Symbol List menu. Figure Import Options in OmniTrader 3. In the Import Symbols From Profile dialog box, click the Files of type drop-down menu. Tip For best results, remove any non-symbol related column headers and information from your original file before you import the list. Nirvana Systems Inc. 45 OmniTrader User Guide

58 Chapter 4 Focus List Concepts Figure Import Symbols from Profile Dialog Box 4. Select Comma Separated Symbol Maps from the drop-down list. You can choose OmniTrader Profiles, VisualTrader Maps, Excel Symbol Maps, User Symbol Maps, or Comma Separated Symbol Maps. 5. Click the Open button to load the selected list into your Focus List. Selecting Multiple Symbols To select multiple symbols that are in consecutive order, click and drag the mouse (while continuing to hold down the left mouse button) across several rows to highlight consecutive symbols. To select multiple symbols that are not in consecutive order, click on the first symbol, and then <Ctrl + Click> (hold down the Ctrl key while you left-click) on each additional symbol you want to select. For example, to select symbols A, C, and E, left-click on A and then <Ctrl + Click> on C and then E. OmniTrader User Guide 46 nirvanasystems.com

59 Trading Strategies 5 In OmniTrader, a Trading Strategy refers to a set of blocks, or trading components, that define the systems that are used to generate a signal as well as what conditions must be passed and a signal exit. A Trading Strategy, in its simplest form, could merely consist of an entry signal and an exit. When you add filters, confirmers, and voters, you are able to refine the initial signal and improve the performance of a strategy. With the use of OmniTrader's Trade Processor technology, you can construct strategies that can filter out unwanted signals, confirm against other securities, require specific chart conditions, and many other various factors that lead to a clearly defined trading opportunity. Why is this important? For a Trading Strategy to be successful, it needs to identify a particular type of trading opportunity. For example, it would be difficult to create a Trading Strategy that is capable of finding sharp reversal candidates as well as good trend trading candidates. Also, most Trading Strategies are based on trading systems that are trained on historical data but prone to failure if the personality of a security changes from its past behavior. Due to limitations such as these, OmniTrader provides you with multiple Trading Strategies. You can either concentrate on one strategy for your trading candidates, or you can allow OmniTrader to vote among multiple strategies to find the best strategy for each security in the current market. About Trading Strategies OmniTrader provides you with numerous Trading Strategies that you can use to find candidates. While all of these strategies are editable, it is recommended to save any changes made to the supplied strategies under a different name. This will keep the initial settings of these strategies intact for future use or reference. Nirvana Systems Inc. 47 OmniTrader User Guide

60 Chapter 5 Trading Strategies Default Strategy OmniTrader's Default Strategy applies all of the systems in the program and applies to each security in your Focus List. The top performing systems are then used to generate signals through a voting process. A flow chart of the Default Strategy is shown in Figure 5-1. default Figure 5-1. Default Strategy Flow Chart Although the Default Strategy contains a Confirm and Filter block, they are not used in the strategy. These blocks have been included for editing purposes only. The Default Strategy is constructed to generate various types of signals. While the other strategies in OmniTrader are designed to identify specific types of opportunities, the Default Strategy will attempt to isolate the historical personality of a security and use the best systems and settings to generate signals. Since this is a general strategy, it is recommended for new OmniTrader users, as well as those looking for a variety of trade opportunities. 7 Day Moves Strategy The 7 Day Moves Strategy is designed to find short-term moves in the direction of the current trend. The system exits and Orders block in this strategy are set to get out of a trade within 7 days. This strategy works very well in trending markets, provided you only trade signals in the direction of the trend. Trending Strategy The Trending Strategy is similar to the Default Strategy and 7 Day Moves in that it makes use of all of the available trading systems in OmniTrader. However, this strategy uses a 40-period Exponential Moving Average Filter in order to filter out trades that are not in the direction of the primary trend. This strategy is effective for finding good medium-term and long-term opportunities. OmniTrader User Guide 48 nirvanasystems.com

61 Chapter 5 Trading Strategies Diverge Strategy The Diverge Strategy uses only the divergence systems in OmniTrader. For example, STO-D, the Stochastic Divergence system, is used in this profile. By generating signals when price is diverging from the indicators used in the divergence systems, this strategy generates good long-term reversal signals. However, realize that the nature of divergence analysis will often give early signals. When using the Diverge Strategy, Nirvana Systems recommends that you apply additional confirmation analysis to trade opportunities. Swing Strategy The Swing Strategy is designed to find very short-term trade opportunities following periods of high volatility. When these periods occur, price will tend to move to extreme ends of a range and then snap back. The Swing Strategy uses the classic OmniTrader Voting Method of signal generation and the confirmation of the VTY-B and BND-C systems to find these candidates. Breakout Strategy The Breakout Strategy uses the breakout systems in OmniTrader (such as VTY-B), and therefore it is used to find stocks that are breaking away from a basing level or consolidation. The Breakout Strategy approach is particularly good at identifying those securities that are suddenly changing direction and entering a new trend. Nirvana Systems Inc. 49 OmniTrader User Guide

62 Chapter 5 Trading Strategies Activating Trading Strategies You can access OmniTrader's Trading Strategies by bringing up the To Do List and clicking on the Strategies tab. A list of the current strategies will be shown. The strategies that are selected to run in the current profile are indicated with a check mark to the left of their name. If you want to edit a strategy, highlight it and click on the Edit button or simply double-click on it. For more information about editing strategies, refer to the OmniTrader Help file by selecting Help»Contents in OmniTrader. Voting Multiple Strategies When testing multiple strategies against a security, you have various options available on how the signals from individual strategies are processed. For example, you may want to have the best strategy s signal (according to hit rate or back test APR) passed to the vote line, or you may want to use a voting process across the signals from all strategies. These options are controlled in the Strategy Voting dialog box. For more information about strategy voting, refer to the OmniTrader Help file by selecting Help»Contents in OmniTrader. Strategy Voting To access the Strategy Voting dialog box, select Edit»Trading Strategies and then select the Strategy Voting button at the bottom of the Strategies tab. Strategy Menu The Strategy menu provides you with quick access to the analysis and signals generated for each of your trading strategies, as well as immediate access to the strategy s flow chart. The Strategy menu is located at the top of your OmniTrader screen. Figure 5-2. Strategy Menu When you select a strategy from the drop-down menu, your Focus List and Vote Line will reflect the results of the selected Strategy. If you select All Strategies, then the OmniTrader User Guide 50 nirvanasystems.com

63 Chapter 5 Trading Strategies Focus List and Vote Line will reflect the results of the Strategy Voting process, as defined on the Strategy Voting dialog box. You can access the flow chart for any strategy by selecting it from the drop-down menu and then clicking on the Strategy (chess piece) icon next to the strategy name. Flow Chart Concepts This section covers the basics of the strategy Flow Chart. For more in-depth information on the individual blocks, refer to the OmniTrader Help file by selecting Help»Contents in OmniTrader. In OmniTrader, Trading Strategies are represented as Flow Charts. You can access the flow chart by highlighting a Trading Strategy in the To Do List on the Strategies tab and clicking Edit. A Flow Chart contains blocks which represent the individual components of a Trading Strategy. Figure 5-3. A Trading Strategy as Represented in the Flow Chart In the illustration above, we see a basic Trading Strategy with four blocks. In the first block, systems are tested against a security. The results are then passed to the Performance block, which ranks or eliminates the systems based on performance. Once the best performing systems have been identified, they are passed to the Vote block. The Vote block takes the signals generated by the individual systems and applies a voting process to them to arrive at consensus signals. Finally, the signals are passed to the Orders block, which applies entry and exit rules to the signals. Once this full process is complete, a Signal Line is generated for the Trading Strategy. Nirvana Systems Inc. 51 OmniTrader User Guide

64 Chapter 5 Trading Strategies Flow Chart Interface Each strategy is displayed as a Flow Chart (A), Strategy Blocks (B), Flow Chart Controls (C), and Time Frame Options (D). These tools allow you maximum flexibility in creating and editing Trading Strategies. Flow Chart The Flow Chart displays the blocks used by a Trading Strategy and allows you to add, remove and edit any of the Strategies components. Strategy Blocks Strategy Blocks contain all of the available components for a Trading Strategy. You can add blocks to a strategy by dragging and dropping them into the desired location. Flow Chart Controls Flow Chart Controls allow you to Zoom In and Zoom Out of the Flow Chart for easier viewing. You can also generate reports for a Trading Strategy and save the strategy under a different name. Timeframe Controls By default, strategies are applied to all active timeframes in your profile. However, the Time Frame controls allow you to apply a strategy to specific time frames. A B C D Figure 5-4. Flow Chart (A), Strategy Blocks (B), Flow Chart Controls (C), and Time Frame Options (D) OmniTrader User Guide 52 nirvanasystems.com

65 Chapter 5 Trading Strategies Blocks in the Flow Chart The right side of the Strategy window shows the various blocks that you can use to create or modify a Trading Strategy. Add blocks to the Flow Chart by dragging them from the right and dropping them directly on the Flow Chart. When you drag a block onto the Flow Chart, a connector shows you the valid locations for that type of block. If you attempt to add a block in a location that is not valid, the cursor will not appear. Edit blocks by double clicking on them. Delete blocks from the Flow Chart by right-clicking on them and selecting Delete or by dragging them off of the Flow Chart. All Trading Strategies must contain a Systems, Vote, and Orders block. The systems block is essential in order to generate a signal, the Vote block is essential in order to establish conditions on how multiple signals are handled, and the Orders block is essential due to the necessity for exits. All other blocks are optional in a Trading Strategy. Following is a brief description of how each strategy block functions. Systems Block Defines, tests, and (optionally) optimizes the systems. Performance Block Examines performance data for all signals presented to filter signals based performance. Vote Block Votes multiple signals according to various factors. Confirm Block Confirm individual signals against (optionally) optimized trading systems. Filter Block Filters individual signals using (optionally) optimized indicator, price and volume measurements. Orders Block Establish entries and exits to a Signal Line. Each block contains various settings that can greatly affect the behavior of a Trading Strategy. For more information about individual blocks, refer to the OmniTrader Help file by selecting Help»Contents in OmniTrader. Nirvana Systems Inc. 53 OmniTrader User Guide

66 Chapter 5 Trading Strategies Creating New Strategies You can create new strategies based on existing strategy templates. 1. From the To Do List Strategies tab, click on the New button. The New Strategy dialog box will be displayed. Figure 5-5. New Strategy Dialog Box 2. From the drop-down menu, select a template on which to base the strategy. 3. Create a name for the strategy and type it into the Strategy Name field. 4. Click OK. A flow chart reflecting the template you selected is displayed. You can customize the strategy by editing the blocks in the flow chart. Right-click or double-click on a block to open the settings for that component. Note You can also create a new strategy by editing an existing strategy and then selecting Save As. Your edits will be saved under the name you choose, and the original strategy s settings will remain intact. OmniTrader User Guide 54 nirvanasystems.com

67 OmniTrader Charts 6 This chapter covers the chart options and features including drawing tools, the chart toolbar, chart books, and chart templates. The chart is where OmniTrader summarizes all the information it has gathered about a security. Trendlines, Candle patterns, Support and Resistance, Fibonacci Retracements, and more all come together to give you an edge in analyzing securities. Chart templates allow you to apply a specific set of chart options to a chart at any time. Every chart displayed in OmniTrader is associated with a template. For more information, refer to the OmniTrader Chart Templates section in Chapter 7, Customizing Charts. chart bni Figure 6-1. Chart of BNI Plotted in OmniTrader Nirvana Systems Inc. 55 OmniTrader User Guide

68 Chapter 6 OmniTrader Charts Plotting a Chart Complete the following steps to plot a chart in OmniTrader. 1. To plot a chart with the results of all OmniTrader s analysis, highlight a security in your Focus List. 2. Click on the Chart icon at the top of the Focus List, or double-click on the symbol in your Focus List. Figure 6-2. Chart Plotted in OmniTrader You can use the following keys on your computer keyboard to manipulate the charts on the Focus List: Page Up or Page Down Displays the previous or next chart in the list Up or Down arrows Moves the highlight to the previous or next chart in the list. OmniTrader User Guide 56 nirvanasystems.com

69 Chapter 6 OmniTrader Charts Plotting Multiple Charts 1. To plot multiple charts, highlight various symbols in your Focus List either by clicking and dragging or by holding the <Ctrl> key down and selecting individual symbols. 2. Click on the Chart icon at the top of the Focus List and all highlighted symbols will be plotted. 4charts Figure 6-3. Multiple Symbols Plotted in OmniTrader Nirvana Systems Inc. 57 OmniTrader User Guide

70 Chapter 6 OmniTrader Charts Modifying the Chart The following chart features in OmniTrader allow you to modify what information is displayed on the chart and how it is displayed. Specifying How Much Data to Display You can define how much data is displayed in your charts by selecting Edit»Data Periods. Figure 6-4. Data Periods Dialog Box This value refers to the amount of data downloaded by an Easy Data vendor, as well as the maximum amount of data displayed on charts, whether you are using an Easy or User Data vendor. Note For TC2000 users, TC2000 (Worden Brothers) provides an extensive amount of data for most symbols. When OmniTrader runs its analysis, it will apply signals for all viewable data. Due to this fact, it is recommended to limit the amount of viewable data as it will greatly reduce the amount of time required for testing and charting symbols. OmniTrader User Guide 58 nirvanasystems.com

71 Chapter 6 OmniTrader Charts OmniTrader Drawing Tools OmniTrader gives you the ability to draw Support and Resistance Lines, Trendlines and text directly on your charts. By simply clicking on the appropriate icon, you can plot any one of these tools. Figure 6-5. Drawing Tools in OmniTrader The Drawing Tools toolbar contains the following options: Return to Mouse Cursor Deactivates a selected drawing tool and returns to mouse cursor. Support/Resistance Line Draws a horizontal line that will continue to the right edge of the chart. Trendlines Draws three different types of Trendlines: Rays (extends in one direction), Lines (extends in two directions), and Segments (no extension). Trendline with Alerts Draws a trendline and lets you configure an alert for the trendline. Eighth's Tool Draws either the Rule of Eighth's or Fibonacci Retracement lines on the chart. The Rule of Eighth's option divides a drawn line into eight equal segments, using the Rule of Eighth's trade management tool. For more information, refer to the Profiting with Chart Patterns seminar by Ed Downs. The Fibonacci Retracement option plots the 38%, 50%, and 62% retracement levels from user-defined peak and valley levels. Reward:Risk Tool Draws Reward:Risk lines on your chart. Nirvana Systems Inc. 59 OmniTrader User Guide

72 Chapter 6 OmniTrader Charts Text Tool Allows you to annotate the chart. Signal with Exits Plots a signal and user-defined exits. Exits can be selected and edited by double-clicking on a plotted signal. Eraser Tool Removes lines from the chart. Price Magnet Causes drawn lines to snap to price. Properties Allows user to edit line styles of selected line. You can also select a drawing tool or delete all of the drawings on your chart by right-clicking on the chart and using the menu that appears. The line properties of all drawing tools can be customized by right-clicking on the drawing tool and selecting Properties. Plotting Signal & Exit Information The Trade Management tool enables you to add a visual entry signal anywhere on the chart and configure the exits. This tool is useful when you see a signal that occurred a day or two ago and you want to act on it. With the Trade Management tool, you can add an entry signal and configure the exits. The exits will show the proper place to get out of the trade based on the exit rules you select relative to the entry point. To add the Trade Management tool to a chart, complete the following steps: 1. Select the proper signal from the Signal with Exits drop-down list on the Drawing Tools toolbar. 2. Place it at the desired place on the chart. The current selected exits will automatically plot. OmniTrader User Guide 60 nirvanasystems.com

73 Chapter 6 OmniTrader Charts sigs plot Figure 6-6. Signal and Exits Plotted Using Drawing Tools 3. Double-click on the signal to configure the exits. The Stops Settings dialog box allows you to activate and deactivate stops, as well as edit their parameters. Figure 6-7. Stops Settings Dialog Box Nirvana Systems Inc. 61 OmniTrader User Guide

74 Chapter 6 OmniTrader Charts Viewing Crosshairs & Data Values By clicking on an OmniTrader chart, you will be presented with crosshairs and a Data Values window. Place the crosshairs over a bar of data to see the specific data values for that bar. To remove the crosshairs and the Data Values window, simply click on the chart again. data val Figure 6-8. Data Values Window The Data Values window displays the following statistics: Date The date of the selected bar. In Real Time, this value will reflect the time period that the selected bar represents. Open The opening price value for the selected bar. High The highest price value for the selected bar. Low The lowest price value for the selected bar. Close The closing price value for the selected bar. Volume The number of traded shares or contracts for the selected bar. OmniTrader User Guide 62 nirvanasystems.com

75 Chapter 6 OmniTrader Charts ATR Average True Range represents the volatility of the selected bar as calculated using Wilder's Volatility and based on information over the previous 14 bars of data. Price The price value of the point where the crosshairs intersect. Changing the Chart Period/Date The Chart Control toolbar controls all charts, unless their scale has been customized. For more information, refer to the Scale section under the Chart Toolbar Options topic in this chapter. The Chart Date allows you to click on the date and type in a specific date, or you can use the scroll bar to adjust the date. Chart Periods can also be adjusted by typing in a value or scrolling. The Period Type drop-down menu will change the periodicity of the chart as well as the Focus List. Figure 6-9. Chart Control Toolbar Note The Chart Control toolbar affects all displayed charts that have been customized. If you have a customized chart displayed as well, then scrolling Chart Date or Chart Controls will be relative to the difference in settings. Nirvana Systems Inc. 63 OmniTrader User Guide

76 Chapter 6 OmniTrader Charts Adjusting the Chart Area You can adjust the price and time scale on an OmniTrader chart by clicking and dragging in the applicable area. adjust chart Figure Click and Drag to Adjust the Time and Price Scale Click in the chart and drag it in any direction to move the price chart and create additional room or show more data. OmniTrader User Guide 64 nirvanasystems.com

77 Chapter 6 OmniTrader Charts brdr alrt Figure Display of Adjustable Chart Area and Border Alert You can view additional chart area by clicking in the chart and dragging to the left. This will add blank space to the right of the chart. If you move the chart in such a manner that it causes the latest data not to be displayed, you will see a Border Alert. This ensures that you are aware of the fact that you are not viewing the latest price data. If you want to return the chart to the right edge and original scale, click the scale menu in the Chart Toolbar and select Automatic. scale Figure Scale Menu in Chart Toolbar Nirvana Systems Inc. 65 OmniTrader User Guide

78 Chapter 6 OmniTrader Charts When you adjust the scale of an individual chart in any direction, the scale of that chart will automatically switch to Custom. By clicking on the Scale button and selecting Automatic, the chart will return to the right edge and automatic data amount setting. Charting Different Timeframes The Period Type toolbar gives you the ability to change the time-frame of your charts and Focus List statistics. In an End-of-Day profile, you can toggle between daily and weekly periodicities, while Real Time profiles allow you to view charts and statistics in any of the time-frames that you have added to your profile. period type Figure Period Type Toolbar Click on the drop-down menu for the Period Type and select the desired time frame. OmniTrader User Guide 66 nirvanasystems.com

79 Chapter 6 OmniTrader Charts Chart Toolbar Options The Chart Toolbar helps you customize a particular chart. You can assign a chart a template, a chart period, and a particular symbol. You can also synch multiple charts to the same symbol, as well as adjust the scale for individual charts. chart bni Figure Chart Toolbar Template The Template feature allows you access to all chart templates in the program. For more information, refer to the OmniTrader Chart Templates section in Chapter 7, Customizing Charts. temp menu Figure Template Options on Chart Toolbar Nirvana Systems Inc. 67 OmniTrader User Guide

80 Chapter 6 OmniTrader Charts Period The periodicity of a chart can be locked by clicking on the Timeframe drop-down and selecting the periodicity you desire. All charts that are plotted in this chart area will default to the locked periodicity. period menu Figure Timeframe Options on Chart Toolbar Symbol & Synch Option You can lock a symbol to a chart by plotting it and then selecting the symbol from the symbol drop-down menu on the Chart Toolbar. The button next to the symbol is the Synch button. This allows you to lock multiple charts to plot the same symbol. For example, if you had two charts and always wanted one to display the same symbol, but one with the weekly chart and one with the daily chart; you could set the Synch button to 1, and then lock one chart to show the daily chart and one to show the weekly chart. synch Figure Synch Button Automates a Weekly Chart Plotted with a Daily Chart OmniTrader User Guide 68 nirvanasystems.com

81 Chapter 6 OmniTrader Charts Scale OmniTrader allows you to move a chart in any manner you wish within the chart window. However, you will undoubtedly wish to return the chart to the right edge and original scale. The Scale button allows you to immediately return the chart to the right edge as well as display the amount of data defined on the Chart Control toolbar. Figure Scale Options on Chart Toolbar When you adjust the scale of an individual chart in any direction, the scale of that chart automatically switches to Custom. By clicking on the Scale button and selecting Automatic, the chart will return to the right edge and automatic data amount setting. Nirvana Systems Inc. 69 OmniTrader User Guide

82 Chapter 6 OmniTrader Charts Chart Books The Chart Book enables you to look at multiple charts at once. For example, if you have a position in several different securities, you might want to create a new tab that contains the charts for just these securities. You can dock the Chart Book toolbar above, below, or along the right edge of the main window. The default location is on the right edge. This toolbar has two tabs: Main, and New. OmniTrader places all charts on the Main tab. When you plot a chart from the Focus List, it is displayed on the active Chart Book tab. So, if you create your own tab and it is active or on top, OmniTrader will place charts on that tab. cht bk Figure Chart Book Toolbar OmniTrader User Guide 70 nirvanasystems.com

83 Chapter 6 OmniTrader Charts The Chart Book toolbar is equipped with a right-click menu. If you right-click on a Chart Book tab, you are presented with a menu containing commands such as Label, Add, Insert, Remove, Print Chart Book, and Reset. Figure Chart Book Right-Click Menu Use these commands to change the name of a tab, add a new tab, insert a tab, remove a tab, print the Chart Book, or clear all Chart Books. A dialog box will prompt you through each step. The charts on each Chart Book tab are loaded only when you access the tab. The benefit of this is that you do not have to wait for OmniTrader to load all the charts on every tab. However, once the charts are loaded, they remain loaded. When you right-click on the Chart Book toolbar (or tab) and select Print Chart Book, you can choose to print the current book or all books from the Print Chart dialog box. print chart Figure Print Chart Dialog Box Nirvana Systems Inc. 71 OmniTrader User Guide

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85 Customizing Charts 7 This chapter contains information on the Chart Options dialog box, color charts, chart templates, and basic chart patterns. Chart Options You can access the chart tools in OmniTrader by clicking on the Chart Options button or by selecting View»Chart Options. All of the settings in the Chart Options dialog boxes are template specific. To learn more about OmniTrader's chart templates, refer to the OmniTrader Chart Templates section in Chapter 7, Customizing Charts. cht opt db Figure 7-1. Chart Options Dialog Box Chart Tab The Chart tab contains the following options: Chart Style Select from Auto, Bar, Candle, or Line. Font Sets the font, font style, and font size for your charts. Price Scale Left Displays the price scale on the left of the chart. The default is to have the price scale on the right of the chart. Display Grid Plots a price grid on your charts. Nirvana Systems Inc. 73 OmniTrader User Guide

86 Chapter 7 Customizing Charts Mark the Backtest Period Shows the data range that is used for back testing as defined in the To Do List»Test Settings dialog box. The back test period is represented by a dashed line around the back test data set. back test Figure 7-2. Back Test Period Marked on the Chart for AXP Colors Tab On the Colors tab, you can change the color of various chart features. OmniTrader provides you with a series of Color Schemes that will apply a predefined set of colors to your chart. To create multiple custom Color Schemes, save your changes as a new template. Note The selections you make on the Color Charts tab override any general selections made on the Chart Options Colors tab. OmniTrader User Guide 74 nirvanasystems.com

87 Chapter 7 Customizing Charts colors tab Plotting Indicators Figure 7-3. Chart Options Colors Tab The Indicators Tab gives you access to over 80 of the most popular Technical Analysis indicators, which you can plot on your OmniTrader charts. To add an indicator to your charts, simply check the box in the Enable column next to the indicator name. Nirvana Systems Inc. 75 OmniTrader User Guide

88 Chapter 7 Customizing Charts co indicators Figure 7-4. Chart Options Indicators Tab You can also right-click in the chart and select Add Indicator. Indicators can be removed from a chart in a number of ways. They can be disabled in the Chart Options window, you can right-click on them and select delete, or you click on them to highlight them and then press the Delete key. For more information on the indicators in OmniTrader, please refer to the Indicators and Systems Help File. You can access this file by selecting Help»Indicators and Systems in OmniTrader. OmniTrader User Guide 76 nirvanasystems.com

89 Chapter 7 Customizing Charts Adjusting Indicator Settings Once you have added an indicator to a chart, you can change the parameters and line styles of an indicator by double-clicking on the indicator name, or clicking on the Edit button. If you want to change the default parameter values, you can either type in the desired indicator values or use the scroll bar to adjust the parameters. The Base Symbol section allows you to plot the indicator for any symbol. For example, if you are looking at the chart of IBM, you can add DELL to the Base Symbol section, and the indicator for DELL is plotted on the chart for IBM. ind prop Figure 7-5. Indicator Settings Dialog Box Moving Indicators Indicators and Systems are automatically plotted in either the price chart or in a pane below the chart. OmniTrader allows you to click on the indicator and drag it to the price chart or any available pane. Nirvana Systems Inc. 77 OmniTrader User Guide

90 Chapter 7 Customizing Charts ind pane Figure 7-6. Inertia Indicator Plotted in Pane Below Chart Figure 7-6 shows the Inertia indicator plotted in a pane below the price chart. You can click and drag it to the price chart, as shown in Figure 7-7. ind cht Figure 7-7. Inertia Indicator Plotted on Top of Chart OmniTrader User Guide 78 nirvanasystems.com

91 Chapter 7 Customizing Charts You can also drag and drop indicators from one pane to another. In Figure 7-8, one indicator has been dragged to display on top of another. ind2plot Figure 7-8. Indicators Plotted On Top of One Another Adding Panes If you would like to add a pane to your chart, you can right-click on the chart and select Pane»Insert. This would be useful if you have dragged an indicator from a pane to the price chart and then wish to return it to a pane. Nirvana Systems Inc. 79 OmniTrader User Guide

92 Chapter 7 Customizing Charts Systems Tab You can plot Trading Systems on your charts by enabling them on the Systems tab. The system will remain plotted until you deselect it or click the All Off button. co systems Figure 7-9. Chart Options Systems Tab The systems are plotted with the default parameters. Once you have added it to your charts, you can change the parameters and line styles of a system by double-clicking on it's name or by clicking on the Edit button in the Chart Options dialog box. If you want to change the default parameter values, you can either type in the desired system values or use the scroll bar to adjust the parameters. For more information on the systems in OmniTrader, please refer to the Indicators and Systems Help File. You can access this file by selecting Help»Indicators and Systems in OmniTrader. OmniTrader User Guide 80 nirvanasystems.com

93 Chapter 7 Customizing Charts Trades Tab On the Trades tab of the Chart Options dialog box, you can turn on reinforced signals on the vote line, plot entry and exit delays, plot exit codes, and plot visual exits. In some Trading Strategies, entry and exit delays are used, as defined in the Orders block. You can have these delays plotted on the Vote and Signal Lines by selecting Show Entry Delays or Show Exit Delays. For more information about the Orders block, refer to the OmniTrader Help file by selecting Help»Contents in OmniTrader. co trades Figure Chart Options Trades Tab The exit a strategy uses is defined in the Orders block of your strategy. You can add the exit(s) used in the strategy to the chart. You can also edit the line styles for the exits in this dialog box. Nirvana Systems Inc. 81 OmniTrader User Guide

94 Chapter 7 Customizing Charts Each type of exit in OmniTrader is associated with an Exit Code. For example, an N-bar exit uses the abbreviation N as an Exit Code. You can have these codes shown on your Vote and Signal Lines by checking the box next to Show Exit Codes. Following is a list of OmniTrader Exit Codes. Exit Type Exit Code System Defined Exit 2 Fixed Loss Stop 3 Previous Pivot Point 4 Inactivity Exit 5 Fixed Profit Exit 6 Profit Pivot Point 7 Trailing Profit Exit 8 Breakeven Exit 9 Trailing Pivot Point B Next Pivot Point D Moving Average Crossover E Two Moving Average Crossover F Eighth's Exit H N-Bar Exit N Reversing Signals Exit R User Defined Exit x Generated Exit (Secondary Line) z OmniTrader User Guide 82 nirvanasystems.com

95 Chapter 7 Customizing Charts Statistics Tab OmniTrader allows you to display various chart statistics, such as Symbol, Exchange, Open Price, Close Price, Volume, etc., at the top of the chart. stat expl Figure Statistics Displayed in Chart Toolbar Nirvana Systems Inc. 83 OmniTrader User Guide

96 Chapter 7 Customizing Charts To access the statistics, complete the following steps: 1. Click on View»Chart Options or click the Chart Options button. 2. Select the Statistics tab. co stats Figure Chart Options Statistics Tab for the Trending Template 3. Click in the drop-down menu next to each Statistics Field to select the statistics you want to display on your charts. Remember that this setting, like all Chart Options settings, is template specific. OmniTrader User Guide 84 nirvanasystems.com

97 Chapter 7 Customizing Charts Color Charts Color Charts enable you to color any component of your OmniTrader chart based on a condition. You can color a chart based on a security's group, index, or sector. The color definitions provide visual confirmation for your trades. co clr cht Figure Chart Options Color Charts Tab Note The selections you make on the Color Charts tab override any general selections made on the Chart Options Colors tab. With Color Charts, you can color the background of a chart or indicator pane according to a condition. For example, you could add a condition that displays a Nirvana Systems Inc. 85 OmniTrader User Guide

98 Chapter 7 Customizing Charts purple color bar when there is increasing volume. You could also set the color of an indicator or the individual bars in a price chart to change with a given condition. To add a Color Chart condition to your chart, click on one of the categories in the Priority column. You can add either Price or Volume conditions. You can apply colors to Price conditions for the entire chart background, for each bar in the chart, or for the edge of the bar. You can apply colors to Volume conditions for the background of the volume area or for the volume bar itself. For more information on the Library button and Criteria Rule Library, refer to the OmniTrader Help file by selecting Help»Contents in OmniTrader. Adding a Color Chart Condition You can add color conditions to your charts by creating a technical criteria in the Formula Builder. 1. In OmniTrader, click on the Chart Options button. 2. Select the Color Charts tab. 3. Click the Add button, and the Color Chart Rule dialog box appears. cht rule Figure Color Chart Rule Dialog Box 4. From the Pane menu, select either Price or Volume. 5. From the Area menu, select either Background, Bar, or Bar Edge. OmniTrader User Guide 86 nirvanasystems.com

99 Chapter 7 Customizing Charts 6. Click the... button to open the color picker and choose a color to associate with your criteria rule. 7. Either type your criteria rule into the text field using IntelliSense or click the Formula Builder button and build your technical formula. For more information about creating a criteria rule, refer to the OmniTrader Help file by selecting Help»Contents in OmniTrader. 8. Click OK to add the condition to your chart options. OmniTrader Chart Templates Templates allow you to apply a set of chart options to a chart at any time. Most users will work within one template, while others may apply various templates to charts. OmniTrader contains the following chart templates to help you confirm specific types of trades. Trending Chart Template This template contains various indicators to help you determine the direction and strength of the current trend across multiple timeframes. trend temp Figure Trending Chart Template Applied to Chart Nirvana Systems Inc. 87 OmniTrader User Guide

100 Chapter 7 Customizing Charts Three exponential moving averages are plotted on the price chart. Each moving average is meant to represent a particular timeframe 16 periods for short-term, 32 periods for medium-term, and 64 periods for long-term. Below the price chart is the Trend Intensity Index indicator. The Trend Intensity Index helps to not only determine trend direction, but it also gives us insight into the strength of medium-term trend. For long trades, you will want to see this indicator exceed 80, and preferably be flat lined at 100. For short trades, you should look for the indicator to be below 20, and preferably at 0. Reversal Chart Template This template provides two indicators which are meant to be used with each other to confirm medium to long-term reversals. The Momentum indicator can be used in a variety of ways. For example, a break of the indicator trend helps identify price trend reversals. The MACD Histogram indicator serves as both a trend and momentum indicator, and in this template, the goal is to see it cross the zero line at about the same time as the Momentum trend break. When these conditions exists, the chances are very good that a trend reversal will occur. rev temp Figure Reversal Chart Template Applied to Chart OmniTrader User Guide 88 nirvanasystems.com

101 Chapter 7 Customizing Charts Swing Chart Template This template is similar to the Reversal template in that the indicators are meant to be used together. The Relative Strength Index (RSI) is a good momentum indicator, and it can be a good swing trade confirmer, if used correctly. Look for it to be below 70 and above 30 while rising for long trades and below 70 and above 30 while falling for short trades. This type of analysis will help you trade with current momentum without buying into overbought or oversold conditions. You should also look for the MACD Histogram to be crossing the zero line in the direction of the trade. swing temp Figure Swing Chart Template Applied to Chart You can use the RSI indicator for overbought and oversold conditions to avoid losing trades. These chart templates provide examples of how to confirm OmniTrader signals with a set of indicators. You can learn about this type of analysis in various educational resources from Nirvana Systems at Nirvana Systems Inc. 89 OmniTrader User Guide

102 Chapter 7 Customizing Charts Applying a Template To apply a template to a chart, complete the following steps: 1. To plot a chart, highlight a security in your Focus List. 2. Click on the Chart icon at the top of the Focus List, or double-click on the symbol in your Focus List. 3. In the Chart Toolbar, click on the Template menu. You can also right-click within the chart and select Template»Apply. Figure Template Options in Chart Toolbar template Figure Template Options in Right-Click Menu OmniTrader User Guide 90 nirvanasystems.com

103 Chapter 7 Customizing Charts 4. From the menu, select the template you want to apply to the chart. You can select one of the pre-defined OmniTrader templates or you can apply a template that you have created. For more information, refer to Creating a Template in this chapter. Figure Trending Template Applied to Chart Nirvana Systems Inc. 91 OmniTrader User Guide

104 Chapter 7 Customizing Charts Creating a Template To create a new template, complete the following steps: 1. To plot a chart, highlight a security in your Focus List. 2. Click on the Chart icon at the top of the Focus List, or double-click on the symbol in your Focus List. 3. Add to the chart the indicators, systems, and other chart options you want included in the template. 4. Right-click within the chart and select Template»Save As. saveas Figure Template Options in Right-Click Menu 5. Enter the name for the new template in the Duplicating Template dialog box. Figure Duplicating Template Dialog Box 6. Click OK to create the template and add it to the Template toolbar. You can also create a new template using the Chart Options dialog box, as explained in the following steps: 1. Click the Chart Options button. 2. In the Chart Options dialog box, add the indicators, systems, and other chart options you want included in the template. OmniTrader User Guide 92 nirvanasystems.com

105 Chapter 7 Customizing Charts 3. Click the Save As button. 4. Enter the name for the new template in the Duplicating Template dialog box. 5. Click OK to create the template and add it to the Template toolbar. 6. Click Close to close the Chart Options dialog box. Editing a Template To edit an existing template, complete the following steps: 1. To plot a chart, highlight a security in your Focus List. 2. Click on the Chart icon at the top of the Focus List, or double-click on the symbol in your Focus List. 3. Right-click within the chart and select Template»Manage. manage Figure Template Options in Right-Click Menu 4. Highlight the template you would like to edit and click Edit. manage temp Figure Manage Templates Dialog Box 5. In the Chart Options dialog box, add or remove indicators, systems, and other chart options. Nirvana Systems Inc. 93 OmniTrader User Guide

106 Chapter 7 Customizing Charts 6. Click Close to save your changes to the template. You can also edit a template using the Chart Options dialog box, as explained in the following steps: 1. Click the Chart Options button. 2. In the Chart Options dialog box, select the template you want to edit from the template drop-down menu. cht opt Figure Template Menu on Chart Options Dialog Box 3. Add or remove indicators, systems, and other chart options. 4. Click Close to save your changes to the template. Plotting Chart Patterns OmniTrader provides several Trading Assistants that you may place on your charts to help you in your analysis of a security. From the Edit Pattern Settings dialog box, you can add the following assistants: Trendlines, Support and Resistance Lines, Fibonacci Retracements, and Candles. 1. Click the Patterns button in the toolbar. If the button is not available, select View»Toolbars and enable the Patterns checkbox. 2. Select whether to display Short, Medium, and/or Long-term for each pattern. 3. Enable the Show Assistant Tags checkbox to activate or deactivate Assistant Tags. OmniTrader User Guide 94 nirvanasystems.com

107 Chapter 7 Customizing Charts Figure Edit Pattern Settings Dialog Box Chart Patterns You can use the following chart patterns to help you confirm your trades in OmniTrader: Consolidation Pattern A consolidation occurs when buyers and sellers are very closely matched in numbers, causing the security s price to move within a well-defined trading range. The point where the price moves outside the trading range that forms the consolidation is called a breakout. A breakout can be to the upside or to the downside. Support/Resistance Patterns Support is a level on the chart (or in the market) where there is enough demand for the security to overcome selling pressure. This causes the downward trend to halt and turn up again. Support levels indicate that most investors feel the security is oversold. Nirvana Systems Inc. 95 OmniTrader User Guide

108 Chapter 7 Customizing Charts Resistance is the opposite of support it represents a level on the chart (or in the market) where there is enough supply of a security to overcome buying pressure. This causes the upward trend to halt and turn down. Resistance levels indicate that most investors feel the security is overbought. Trendlines A trendline is a straight line drawn on a chart of a security to depict the general direction the security is headed. A trendline forms across the peaks and valleys (pivot points) in a chart. As the line becomes validated with more pivot points, its significance increases. A break in a well-established trendline usually signals a trend reversal. Fibonacci Retracement Patterns Leonardo Fibonacci discovered a sequence of numbers where each successive number is the sum of the two previous numbers. Ratios of the Fibonacci numbers to each other form the retracement values 38% (3/8), 50% (4/8), and 62% (5/8). We use these retracement values to predict reversal points or changes in price trends, also known as retracements. A retracement is a reversal in the prevailing trend for a security. Often, securities retrace some percentage of a move after making a long move in a given direction. As a Fibonacci Retracement forms, you will see the price retreating from a high to a percentage of the prior move. For example, if you look at a security s most recent significant low and high and measure between these two points, you can look for a retracement at 38%, 50%, or 62% from the last pivot point. Gap Pattern A gap occurs when the high of the day is below the low of the previous day or when the low of the day is above the high of the previous day. A gap is often seen at points of high or low demand for the security. Gaps are powerful tools for predicting future behavior of a security. Usually, the buying or selling pressure that created the gap will result in a significant move. OmniTrader User Guide 96 nirvanasystems.com

109 OmniTrader s Analysis 8 As you learned in Chapter 3, OmniTrader Process, the Actions tab of your To Do List is what you will use to run OmniTrader s analysis. In Chapter 5, Trading Strategies, you learned that you can select which strategies to run on your Focus List using the Strategies tab of the To Do List. Now, we will discuss the To Do List Test Settings tab. To Do List Test Settings Tab The Test Periods section specifies the test periods applied to all the Strategies that are enabled. Floating Test Period Specifies that the testing process will automatically take place after the number of periods specified by the Optimize on option. This is the default selection in all of OmniTrader's profiles. Back Test period of Refers to the amount of data that OmniTrader uses to train the strategies. All back test statistics refer to the data contained in this period. Forward Test period of Refers to the number of the latest bars that are not included in the back test period. Any data that is contained in the forward test period will use the optimal parameters generated in the back test period. For example, if you had a back test period of 250 days, and a forward test period of 100 days, then the Trading Strategies would use the 250 days in the back test period to optimize its settings, which are then applied throughout the 100 days in the forward test period. Note The forward test period is meant to help you evaluate how a Trading Strategy would perform without the assistance of optimization. While the forward test period helps evaluate a Trading Strategy's performance, it is designed as an evaluation tool only. For actual trading, Nirvana Systems recommends that you do not use a forward test period so that you have the benefit of your Trading Strategies being trained on the latest data. Nirvana Systems Inc. 97 OmniTrader User Guide

110 Chapter 8 OmniTrader s Analysis Optimize on Optimizes on daily, weekly, monthly, or quarterly boundaries. Fixed Test Period from Allows you to choose a fixed data set on which to train the Trading Strategies. For example, you may choose to have the strategies train over data from 1/1/2000 to 1/1/2003. The results of this training will then be applied throughout all data, after the end of the fixed test period. Profit Calculation In order to realistically recreate the effect of trading, factors such as slippage and commission costs need to be accounted for. The Profit Calculation section allows you to specify an amount of slippage and commission chart for each trade. These costs can be calculated as dollars/share or a percentage of the trade value. These costs are then applied to the gain or loss of each trade on the Vote Line, in order to more accurately reflect a true trading scenario. Do not optimize symbols with open positions in portfolio Tells OmniTrader to bypass any back testing for the securities in your list that have an open position in the portfolio. This feature allows you to follow an OmniTrader trade to completion, without the entry signal changing due to reoptimization. Figure 8-1. Test Settings Tab on the To Do List OmniTrader User Guide 98 nirvanasystems.com

111 Chapter 8 OmniTrader s Analysis Optimization Optimization in OmniTrader occurs when the systems that have been applied by a particular strategy over a historical data set are thrown out and the strategy is retested to find the best systems with the best set of parameters on a more current set of data. The strategies Breakout, Default, Diverge, Trending, and Swing all apply trading systems that have optimized parameters. The default setting in OmniTrader, which you can set on the Test Settings tab of your To Do List, reoptimizes the systems in the strategy on a monthly basis. Monthly optimization occurs on the 1st trading day of each month. New OmniTrader users often ask the question: Why do my signals change? The answer to this question is optimization. Securities do not behave in the same manner day after day. For this reason, it is a benefit to traders to allow trading systems to reanalyze securities based on current data as the market changes. Optimization helps to ensure that you are looking at current analysis on current data, which is exactly what you need for prospecting. The second most frequently asked question is How am I supposed to trade when the signals change? The answer to this question is very important to understand. OmniTrader is a prospecting tool; it should be used to find good candidates to trade. It will save time scanning the markets as well as enable you with all the tools you need to make successful trading decisions. Vote & Signal Lines The Vote Line is the line directly below an OmniTrader chart. Vote Lines can represent the signal generation results of one strategy or multiple strategies, depending on which option is selected from the Strategy menu. For more information on the Strategy menu, refer to the Strategy Menu section of Chapter 5, Trading Strategies. You can access the area below the Vote Line by clicking on the Vote Line border and dragging it upwards. Nirvana Systems Inc. 99 OmniTrader User Guide

112 Chapter 8 OmniTrader s Analysis In Figure 8-2, the Vote Line represents the signals generated by multiple strategies. When multiple strategies are selected, the Strategy Voting process will dictate how the signals from the various Trading Strategies are used to generate a voted, or consensus, signal. For more information on the strategy voting process, refer to the Voting Multiple Strategies section of Chapter 5, Trading Strategies. Figure 8-2. Vote and Signal Line Signal Lines exist below the Vote Line. A Signal Line shows the signals generated by an individual strategy. Signal lines are expandable in that you can click on the + sign next to the strategy s name and see that strategy s individual systems and the signals they generated. Other components of a Trading Strategy, such as filters and confirmers, are also represented in the expanded Signal Line. OmniTrader User Guide 100 nirvanasystems.com

113 Chapter 8 OmniTrader s Analysis Figure 8-3. Expanded Default Strategy Signal Line Figure 8-3 shows an expanded Signal Line for the Default Strategy. Starting from bottom to top, note the systems that contribute to strategy signals, the voted output of the signals, the confirming signals and filters, and finally the orders generated by the Default Strategy. The signal flow from bottom to top reflects the flow chart progression from left to right. Figure 8-4. OmniTrader Flow Chart Once a signal has been passed to the Vote or Signal Line, it will stay in trade until an exit rule, as defined by the strategy that generated the signal, closes the trade. Reading Vote & Signal Lines For most strategies, the Vote and Signal Lines will simply display an entry signal and an exit signal. Yet, depending on the settings of the Orders block and whether you have chosen to display entry and exit delays, you may see additional annotation on your Vote and Signal Lines. Nirvana Systems Inc. 101 OmniTrader User Guide

114 Chapter 8 OmniTrader s Analysis Viewing a Strategy's Systems The statistical information for a strategy s systems can be viewed by left-clicking on the system name (or Signal Line) below the Vote Line. This will display the Systems Assistant. Figure 8-5. Systems Assistant Figure 8-5 shows an assistant for the system BOL-T. The assistant that appears first gives a description of the system and then the parameters (either default or optimized) for the system on the charted security. The bottom of the dialog box shows the statistical results of the system s performance in the back test period. You can also view the parameters for your Orders exits by clicking on a signal below the Vote Line. To see the Filters Assistant, click on the component being used as a filter. OmniTrader User Guide 102 nirvanasystems.com

115 Chapter 8 OmniTrader s Analysis Figure 8-6. Orders Assistant Plotting Systems & Indicators The systems and indicators that are used in a Trading Strategy can be plotted by right-clicking on them in the Strategy Display area (the area below the Vote Line). plot ind Figure 8-7. Indicator Plotted on Chart Nirvana Systems Inc. 103 OmniTrader User Guide

116 Chapter 8 OmniTrader s Analysis The plot of the indicator appears on the chart. This plot can be removed by right-clicking on the name of the indicator again. plot sys Figure 8-8. System Plotted on Chart Systems that are being used by a strategy can be plotted in a similar manner. A plot of the system is displayed on the chart, along with any signals that were generated by the system. OmniTrader User Guide 104 nirvanasystems.com

117 OmniTrader Portfolio 9 Paper trading and simulated trading is a good way to learn about technical analysis and trading without actually risking any money. The portfolio offers you the ability to simulate trades without actually entering a monetary transaction. You can use the portfolio to edit and manage your trading transactions. There are also numerous reports you can run, such as Account Summary, Open Orders, Open Positions, Closed Positions, Transaction History and even a Schedule D report for year-end. Orders & Alerts Toolbar You can access many of the portfolio functions from the Orders & Alerts toolbar. orders toolbar Figure 9-1. Orders & Alerts Toolbar The Orders & Alerts toolbar contains the following buttons. Enter Long Position Opens the Trade Plan Setup dialog box with a long position selected for submission. Enter Short Position Opens the Trade Plan Setup dialog box with a short position selected for submission. Close Open Position Immediately records the position as closed. View Order Notifications Opens the Current Order Notifications window where you can view, delete, and confirm open and historical notification information. Nirvana Systems Inc. 105 OmniTrader User Guide

118 Chapter 9 OmniTrader Portfolio View Portfolio Opens the Portfolio window where you can manage your accounts and monitor the entire process of entering, managing, and exiting positions and orders. View Alerts Manager Opens the Current Alerts window where you can view pending and triggered alerts. Adding the Orders & Alerts Toolbar While viewing a chart of a security, you may decide to place a buy or a sell order for that security. You can do this quickly and easily using the Orders & Alerts toolbar. To add the Orders & Alerts toolbar to OmniTrader, complete the following steps: 1. Select View»Toolbars from the OmniTrader menu. 2. Enable the Orders & Alerts checkbox and the Orders & Alerts toolbar will appear. port toolbar Figure 9-2. Orders & Alerts Toolbar 3. Click OK to close the Toolbars dialog box. You can now drag and dock the Orders & Alerts toolbar within OmniTrader. OmniTrader User Guide 106 nirvanasystems.com

119 Chapter 9 OmniTrader Portfolio Portfolio Window For most common operations, you will work within the Portfolio window. To access the Portfolio window, select View»Portfolio. The Portfolio window contains many options to help you access the accounts, orders, positions, and transactions in your portfolio, as shown. The Portfolio window provides one central place where you can manage your accounts and monitor the entire process of entering, managing, and exiting positions and orders. portfolio Figure 9-3. Portfolio Window At the top of the Portfolio window, you can select the account you want to view in the Account Name drop-down menu. After you have selected the appropriate account, you can view and modify the details of the selected account using the following tabs: Account tab Displays the details of the selected account, which you have created in your portfolio. From the Account tab, you can define multiple accounts, you can add and remove money from your accounts, and you can remove accounts from your portfolio. Nirvana Systems Inc. 107 OmniTrader User Guide

120 Chapter 9 OmniTrader Portfolio Open Orders tab Displays the orders you currently have open. An open order means that you want to purchase or sell the specified security when it meets the conditions you have specified for that order. An order remains in effect until you cancel it or until it is executed. For example, if you enter a limit order, you will have to wait until the price limit is reached. Order History tab Displays the history of the orders that you have bought and sold. The Order History tab uses green, red, and blue highlighting on the rows of orders to help you quickly identify different order actions. Green highlighting indicates a request to buy Long. Red highlighting indicates a request to sell Short. Blue highlighting indicates a request to sell Long or cover Short. No colored highlight indicates that the order was not actually executed, as in the case of a canceled or rejected order. Open Positions tab Displays the positions you currently have open. An open position is a filled order that has not yet exited or an unexecuted order that is still valid because it has not yet been transacted. A position remains in effect until it expires, is filled, or is exited according to your specifications. Position History tab Displays the history of the positions that have expired or have been filled. Cash Transactions tab Displays the cash transactions made for the selected account. From this tab, you can also make deposits, withdrawals, and fee entries. Note Any changes you make to the options in your portfolio may affect your total account balance. OmniTrader User Guide 108 nirvanasystems.com

121 Chapter 9 OmniTrader Portfolio Account Tab The Account tab in the Portfolio displays information about the selected account. accounts tab Figure 9-4. Account Tab in the Portfolio Window The Account tab displays the following account summary information at the bottom of the dialog box: Account Equity Specifies the amount available in each account after all outstanding profits and losses are considered for the entire account. Value of Longs Specifies the total value of open Long positions in the account. Value of Shorts Specifies the total value of open Short positions in the account. Available Cash Specifies the amount of cash available in each account. You can use this amount to create new orders and positions. Specifies the amount available in each account to buy new securities. Available Margin Specifies the amount of borrowed money you can use to purchase securities for the selected account. The practice of borrowing money to purchase securities is referred to as buying on margin. Buying with borrowed Nirvana Systems Inc. 109 OmniTrader User Guide

122 Chapter 9 OmniTrader Portfolio money can be risky in that the potential for greater profit exists as does the potential for greater losses. You can delete an account by selecting it from the drop-down menu and clicking the Delete Account button. You can modify the information displayed on the Account tab by clicking the Add Account or Edit Account buttons and completing the following options: Account Name Specifies the name of the account. Once you have created an account, you cannot edit the name of the account. Account Number Specifies the account number for the account. This feature is an optional (not required) field. Opening Balance Specifies the amount of money used to start the selected Portfolio account. Once you have created an account, you cannot edit the opening balance. For more information, refer to the Cash Transactions Tab section in this chapter. Max Margin Specifies the margin percentage to use for the account. Type Specifies whether the account is taxable, tax-deferred, or is a paper account. Require Notification Confirmation Specifies whether the account requires the user to confirm an order before it is submitted and recorded in the Portfolio. For more information, refer to the Adding Historical Positions section in this chapter. Default Trading Commissions Specifies the commission assigned for stocks, funds, options, and futures in the account. Stocks Specifies the following commission settings for stocks in your portfolio. You can choose the appropriate settings to match the types of fees charged by an actual broker. Specifies that the commission is a flat dollar amount or percentage per share or per trade. In this example, you will pay one cent per share. This option is used in conjunction with the following options. For example, many brokers charge a set fee per share or trade for the first x number of shares. The following options allow you to set up the fee schedule for additional shares. OmniTrader User Guide 110 nirvanasystems.com

123 Chapter 9 OmniTrader Portfolio Specifies that the commission is a flat dollar amount or percentage per share for the number of shares that exceed the specified amount. In this example, you will pay half a cent per share if you purchase more than 500 shares. Specifies that the commission will max out at the specified flat dollar amount or percentage per trade. In this example, you will not pay more than $10 commission for any trade. Specifies that the commission will be a minimum flat dollar amount per trade. In this example, the minimum charge for any trade is $1. Funds Specifies that the commissions for funds in your portfolio are either a flat dollar amount or percentage per trade. Options Specifies that the commissions for the options in your portfolio are either a flat dollar amount or percentage per contract. Futures Specifies that the commissions for the futures in your portfolio are either a flat dollar amount or percentage per contract or trade. account setup Figure 9-5. Account Setup Dialog Box Nirvana Systems Inc. 111 OmniTrader User Guide

124 Chapter 9 OmniTrader Portfolio Open Orders Tab The Open Orders tab in the Portfolio window shows you all the pending orders that you have placed, including stops. This tab maintains a description of the orders you have entered, the price defined for each order, and the order type in the case of stops. From this tab, you can place orders, edit existing orders, and cancel orders. open ordr tab Figure 9-6. Open Orders Tab in the Portfolio Window You can cancel an order on the Open Orders tab by selecting an order and clicking the Cancel Order button. You can modify the information displayed on the Open Orders tab by clicking the Place Order or Edit Order buttons and making changes to the following options: Symbol Specifies the symbol for the open order. Date Specifies the date and time that the order was initially created. Order Specifies the order action to take for the order. The valid order actions for Long trades are Buy or Sell. The valid order actions for Short trades are Short or Cover. OmniTrader User Guide 112 nirvanasystems.com

125 Chapter 9 OmniTrader Portfolio Type Displays the order type. The available order types are Limit, Market, Market on Open, Market on Close, Stop Limit, or Stop Market. Limit An order to buy or sell the specified number of shares at a specified price or better. Market An order to buy or sell the specified number of shares of a security with specific conditions. Market on Open An order to sell the specified number of shares at the open price of the following bar. Market on Close An order to sell the specified number of shares at the close price of the bar in which the order is triggered. Stop Limit An order to buy or sell at a specified price (or better) after a given stop price is reached or passed. Stop Market An order to buy or sell a predetermined amount of shares of a security after a given stop is reached or passed. Stop Price Displays the stop price for stop orders only. This column shows the current stop level for the order. Limit Price Displays the order price. If the order is a Limit order, this column will display the limit price until the order is executed. Time Specifies how long the order is in force. A Day order will expire at the end of a trading session, while a GTC (Good Till Cancelled) order will stay in place until either filled or cancelled. Quantity Displays the quantity of shares to buy or sell for the open order. Nirvana Systems Inc. 113 OmniTrader User Guide

126 Chapter 9 OmniTrader Portfolio place open order Figure 9-7. Open Order Dialog Box Order History Tab The Order History tab in the Portfolio window displays the history of the orders that you have bought and sold, including details about the orders, such as the quantity and price. ordr hist tab Figure 9-8. Order History Tab in the Portfolio Window OmniTrader User Guide 114 nirvanasystems.com

127 Chapter 9 OmniTrader Portfolio You can highlight an order or multiple orders on the Order History tab and click the Delete Orders to remove the order(s) from your portfolio. The Order History tab contains the following information about the history of your orders: Symbol Specifies the symbol for the executed order. Date Specifies the date and time that the order was placed. Order Action Specifies what order action was taken for the order. The valid order actions for Long trades are Buy or Sell. The valid order actions for Short trades are Sell Short or Cover. Order Type Displays the order type. The available order types are Limit, Market, Market on Open, Market on Close, Stop Limit, or Stop Market. For more information about the order types, refer to the OmniTrader Help file by selecting Help»Contents in OmniTrader. Quantity Displays the quantity of shares bought or sold for the executed order. Price Displays the price at which the order was filled. Stop Price Displays the stop price for stop orders only. This column shows the current stop level for the order. Order Event Specifies the status of the order. An order is Acknowledged when OmniTrader has received the order request. An order is Live when OmniTrader is evaluating the order. An order is Executed when OmniTrader has processed or filled the order. An order is Cancelled when you have canceled the order before it has been executed. An order is Rejected when there are not enough funds to place the order. Message Displays error messages in cases where an order is rejected by OmniTrader. Nirvana Systems Inc. 115 OmniTrader User Guide

128 Chapter 9 OmniTrader Portfolio Open Positions Tab The Open Positions tab lists all the open positions in any given account. An open position results from an executed order. When you click on the plus (+) sign icon next to any position, you can view the money transactions for the selected position. open pos tab Figure 9-9. Open Positions Tab in the Portfolio Window You can close a position on the Open Positions tab by selecting the position and clicking the Close Position button. You can modify the information displayed on the Open Positions tab by clicking the Open Position or Edit Position buttons. When you click these buttons, the Open Position dialog box appears and contains the following options: Symbol Specifies the symbol to which the open position corresponds. Add Launches the Add Position Transaction dialog box where you can create a new position. Edit Launches the Edit Position Transaction dialog box where you can edit a previously created position. Delete Deletes the selected open position from your portfolio. OmniTrader User Guide 116 nirvanasystems.com

129 Chapter 9 OmniTrader Portfolio Memo Displays any information you have added to the memo section for an open position. When you click the Add or Edit button on the Open Position dialog box, you will see the Position Transaction dialog box, where you can complete the following details about each transaction. Date Specifies the date when you entered the position. You also have the option of including the time for the entry. Order Specifies the order action for the selected transaction. The valid order actions for Long trades are Buy or Sell. The valid order actions for Short trades are sell Short or Cover. Type Specifies the order type. The available order types are Limit, Market, Market on Open, Market on Close, Stop Limit, or Stop Market. For more information about the order types, refer to the OmniTrader Help file by selecting Help»Contents in OmniTrader. Quantity Specifies the quantity of shares to buy or sell for the transaction. Price Specifies the price for the transaction. Commission Specifies the commission for the transaction. add open pos Figure Add Position Transaction Dialog Box Shown with Open Position Dialog Box Nirvana Systems Inc. 117 OmniTrader User Guide

130 Chapter 9 OmniTrader Portfolio Position History Tab The Position History tab contains a history of the positions that have been filled. When a position is closed, it moves from the Open Positions tab to the Position History tab. pos hist tab Figure Position History Tab in the Portfolio Window You can delete a position on the Position History tab by selecting the position and clicking the Delete Position button. You can modify the information displayed on the Position History tab by clicking the Insert Position or Edit Position buttons When you click these buttons, the Historical Position dialog box appears and contains the following options: Symbol Specifies the symbol to which the historical position corresponds. Add Launches the Add Position Transaction dialog box where you can create a new historical position. Edit Launches the Edit Position Transaction dialog box where you can edit a previously created historical position. Delete Deletes the selected historical position from your portfolio. OmniTrader User Guide 118 nirvanasystems.com

131 Chapter 9 OmniTrader Portfolio Memo Displays any information you have added to the memo section for an historical position. When you click the Add or Edit button on the Open Position dialog box, you will see the Position Transaction dialog box, where you can complete the following details about each transaction. Date Specifies the date for the transaction. You also have the option of including the time for the entry. Order Specifies the order action for the selected transaction. The valid order actions for Long trades are Buy or Sell. The valid order actions for Short trades are sell Short or Cover. Type Specifies the order type. The available order types are Limit, Market, Market on Open, Market on Close, Stop Limit, or Stop Market. For more information about the order types, refer to the OmniTrader Help file by selecting Help»Contents in OmniTrader. Quantity Specifies the quantity of shares bought or sold for the transaction. Price Specifies the price entered for the transaction. Commission Specifies the commission for the transaction. add hist pos Figure Add Position Transaction Dialog Box Shown with Historical Position Dialog Box Nirvana Systems Inc. 119 OmniTrader User Guide

132 Chapter 9 OmniTrader Portfolio Cash Transactions Tab The Cash Transactions tab contains a history of all the deposits, withdrawals, and fee transactions that have occurred for a selected account. cash trans tab Figure Transaction Information on Position History Tab OmniTrader User Guide 120 nirvanasystems.com

133 Chapter 9 OmniTrader Portfolio You can delete an entry from the Cash Transactions tab by selecting the entry and clicking the Delete Entry button. You can modify the information recorded on the Cash Transactions tab by clicking the Add Entry or Edit Entry buttons When you click these buttons, the Cash Transactions dialog box appears and contains the following options: Deposit Specifies that the transaction is a deposit of funds to the account. Once you have specified the opening balance for an account, you can change the amount of the deposit but you will not be able to edit the transaction type. Withdrawal Specifies that the transaction is a withdrawal of funds from the account. Fee Specifies that the transaction is a fee incurred by the account. Amount Specifies the dollar amount of the deposit, withdrawal, or fee. Date Specifies the date that the deposit, withdrawal, or fee was recorded. You also have the option of including the time for the entry. Memo Optional field specifies any information you want to add about the transaction. cash trans Figure Cash Transaction Dialog Box Nirvana Systems Inc. 121 OmniTrader User Guide

134 Chapter 9 OmniTrader Portfolio Order Notifications When you create a new account, you must specify whether you want OmniTrader to notify you for confirmation on new orders. account setup Figure Require Notification Confirmation Option on Account Setup Dialog Box If you have the Require Notification Confirmation option selected, you must confirm an order on the Current Order Notifications dialog box before the order will be recorded in your portfolio. You can access this dialog box by clicking on the View Order Notifications (dollar sign) icon in the Focus List or the Orders & Alerts toolbar. OmniTrader User Guide 122 nirvanasystems.com

135 Chapter 9 OmniTrader Portfolio Figure Current Order Notifications Dialog Box The Current Order Notifications dialog box contains two tabs: Open Notifications and Historical Notifications. The Open Notifications tab displays notifications for orders to which you have not yet responded. Once you have confirmed a notification, you will notice that the entry is displayed on the Historical Notifications tab. Figure Confirmed Order Notification Displayed on Historical Notifications Tab Nirvana Systems Inc. 123 OmniTrader User Guide

136 Chapter 9 OmniTrader Portfolio The Open Notifications and Historical Notifications tabs contain the following information about an order: Account Name Specifies the account name to which each open notification belongs. Symbol Specifies the symbol for the open notification. Date Specifies the date and time that the notification was initially created. Quantity Displays the quantity of shares to buy or sell for the open notification. Order Action Specifies the order action to take for the order. The valid order actions for Long trades are Buy or Sell. The valid order actions for Short trades are Short or Cover. Order Type Displays the order type. The available order types are Limit, Market, Market on Open, Market on Close, Stop Limit, or Stop Market. Price Displays the order price. Stop Price Displays the stop price for stop orders only. This column shows the current stop level for the order. OmniTrader User Guide 124 nirvanasystems.com

137 Chapter 9 OmniTrader Portfolio Creating an Account The portfolio includes the ability to define multiple accounts using the Account tab. To add a new account, complete the following steps: 1. Select View»Portfolio from the OmniTrader menu. 2. Click on the Account tab. For more information, refer to the Account Tab section in this chapter. 3. Click the Add Account button. You will see the Add Account dialog box. newacct Figure New Account Setup Dialog Box 4. Type the name of your new account in the Account Name field and specify the opening balance, maximum margin, account type, and commission information for the account. For more information about these options, refer to the Account Tab section in this chapter. 5. Click OK to add the account to your portfolio. Nirvana Systems Inc. 125 OmniTrader User Guide

138 Chapter 9 OmniTrader Portfolio Editing an Account Once you have created an account, you cannot edit the name of the account or the transaction type of the opening balance but you can edit other account options such as transaction amounts, notification confirmation, and account type: 1. Select View»Portfolio from the OmniTrader menu. 2. From the drop-down menu, select the account that you would like to edit. 3. Click on the Account tab. 4. Click the Edit Account button. You will see the Edit Account dialog box. 5. Make your modifications to the maximum margin, account type, and commission information for the account. For more information about these options, refer to the Account Tab section in this chapter. 6. Click OK to accept your changes to the account. Deleting an Account In addition to adding multiple accounts in the portfolio, you can delete accounts. However, when you delete an account from OmniTrader you also remove any open orders, open positions, and history associated with that account. 1. Select View»Portfolio from the OmniTrader menu. 2. From the drop-down menu, select the account that you want to delete. 3. Click on the Account tab. 4. Click the Delete Account button. remove acct Figure Confirm Account Removal Dialog Box 5. Click Yes to delete the account and all of the orders, positions, and history associated with that account. OmniTrader User Guide 126 nirvanasystems.com

139 Chapter 9 OmniTrader Portfolio Placing an Order You can place an order, specifying that OmniTrader will purchase or sell the specified security when it reaches the conditions you specify for that order. There are several ways to place an order. This section explains how to place an order from the portfolio. 1. Select View»Portfolio from the OmniTrader menu. 2. From the drop-down menu, select the account for which you would like to place an order. 3. Click on the Open Orders tab. For more information about these options, refer to the Open Orders Tab section in this chapter. 4. Click the Place Order button. You will see the Place Open Order dialog box. place order Figure Place Open Order Dialog Box 5. Complete the details for the order and click the OK button. An order remains in effect until you cancel it or until it is executed. For example, if you enter a limit order, you will have to wait until the price limit is reached. Nirvana Systems Inc. 127 OmniTrader User Guide

140 Chapter 9 OmniTrader Portfolio Editing an Open Order Once you have placed an order and before it is executed, you may want to modify it. 1. Select View»Portfolio from the OmniTrader menu. 2. From the drop-down menu, select the account that has the order you want to edit. 3. Click on the Open Orders tab. For more information about these options, refer to the Open Orders Tab section in this chapter. 4. Click the Edit Order button. You will see the Edit Open Order dialog box. 5. Complete your changes to the order and click the OK button. Canceling an Open Order You can cancel a single order or all orders in an account using the Cancel Order button or the right-click menu on the Open Orders tab of the Portfolio window. 1. Select View»Portfolio from the OmniTrader menu. 2. From the drop-down menu, select the account that contains the order you would like to cancel. 3. Click on the Open Orders tab. For more information about these options, refer to the Open Orders Tab section in this chapter. 4. Click the Cancel Order button or right-click on the order that you want to cancel and select Cancel Order button. To cancel all the orders in the selected account, right-click and select Cancel All Orders. You will see the Confirm Order Cancellation dialog box. confirm cancel Figure Confirm Order Cancellation Dialog Box 5. Click Yes to immediately cancel the selected order. OmniTrader User Guide 128 nirvanasystems.com

141 Chapter 9 OmniTrader Portfolio Deleting Orders from Order History The Order History tab in the portfolio displays the history of the orders that you have bought and sold, including details about the orders, such as the quantity and price. To delete an entry in your order history, complete the following steps: 1. Select View»Portfolio from the OmniTrader menu. 2. From the drop-down menu, select the account that has the order(s) you want to delete. 3. Click on the Order History tab. For more information about these options, refer to the Order History Tab section in this chapter. 4. Select one or more orders that you want to delete from your Order History. 5. Click the Delete Orders button. You will be asked to confirm the deletion. 6. Click Yes to immediately delete the selected order(s). Entering a Position You can place an order to buy or sell a security using the buttons in the Orders & Alerts toolbar. When you use the Orders & Alerts toolbar or the trading chevron to enter a position, the position is entered for the currently displayed security or the security that has focus, if there are multiple symbols plotted. With the chart of the security displayed, click on the Enter Long Position (solid green triangle) or the Enter Short Position (solid red triangle) button on the toolbar. You can also drag the trading chevron into place on the chart. Figure Enter Long and Short Position Buttons on the Orders & Alerts Toolbar Nirvana Systems Inc. 129 OmniTrader User Guide

142 Chapter 9 OmniTrader Portfolio Once you click the button or release the chevron, OmniTrader plots the stops that are defined for Step 1 of the Trade Plan, and the Trade Plan interface is displayed. Figure Trade Plan Setup for a Long Position For more information on Trade Plans and completing the setup for a trade, refer to Chapter 11, Trade Plans. You can also open a position from the portfolio by completing the following steps. 1. Select View»Portfolio from the OmniTrader menu. 2. From the drop-down menu, select the account for which you would like to open a position. 3. Click on the Open Positions tab. For more information about these options, refer to the Open Positions Tab section in this chapter. OmniTrader User Guide 130 nirvanasystems.com

143 Chapter 9 OmniTrader Portfolio 4. Click the Open Position button. You will see the Place Open Order dialog box. 5. Click the Add button to see the Add Position Transaction dialog box. 6. Complete the details for the position and click the OK button. open pos Figure Add Position Transaction Dialog Box Shown with Open Position Dialog Box 7. Repeat Step 5 until you have entered all of your transactions 8. Click OK to add your positions to your portfolio. Editing a Position You can also edit a position from the portfolio by completing the following steps. 1. Select View»Portfolio from the OmniTrader menu. 2. From the drop-down menu, select the account that contains the position you would like to modify. 3. Click on the Open Positions tab. For more information about these options, refer to the Open Positions Tab section in this chapter. Nirvana Systems Inc. 131 OmniTrader User Guide

144 Chapter 9 OmniTrader Portfolio 4. Click the Edit Position button. You will see the Edit Position Transaction dialog box. open pos Figure Add Position Transaction Dialog Box Shown with Open Position Dialog Box 5. Complete your changes to the order and click the OK button. 6. Click OK to add your changes to the position to your portfolio. OmniTrader User Guide 132 nirvanasystems.com

145 Chapter 9 OmniTrader Portfolio Closing a Position Once you have submitted a position, you may want to close the position. You can close a position in many ways, but one of the easiest is to use the Orders & Alerts toolbar. 1. In the Focus List, double-click on the symbol for the security that has the position you want to close. This will display the chart for the selected security. 2. Click the Close Position (solid blue square) button on the Orders & Alerts toolbar. OmniTrader will immediately record the position as closed. Figure Close Position Button on the Orders & Alerts Toolbar You can also close a single position or all the positions in an account from the Open Positions tab in the Portfolio window. 1. Select View»Portfolio from the OmniTrader menu. 2. From the drop-down menu, select the account that contains the position you would like to close. 3. Click on the Open Positions tab. 4. Click to highlight the position that you want to close, and click the Close Position button. You will see the Close Position dialog box. close pos Figure Confirm Position Closure Dialog Box 5. Confirm that the details are correct and click OK to immediately close the selected position. Nirvana Systems Inc. 133 OmniTrader User Guide

146 Chapter 9 OmniTrader Portfolio Note You can also close all the positions in the selected account by right-clicking and selecting Close All Positions and then confirming the closure. In this case, the position is not immediately closed but is submitted for closure. Adding Historical Positions You may find it necessary at some point to add a historical position to your portfolio. 1. Select View»Portfolio from the OmniTrader menu. 2. From the drop-down menu, select the account to which you would like to add an historical position. 3. Click on the Position History tab. For more information about these options, refer to the Position History Tab section in this chapter. 4. Click the Insert Position button. You will see the Insert Historical Position dialog box. 5. Enter the symbol for which you want to add a position, and click the Add button. add pos Figure Insert Historical Position Dialog Box 6. Add the transaction details for the historical position you want to insert. Click OK to confirm the information you have entered. 7. Repeat Step 6 until you have entered all of your transactions OmniTrader User Guide 134 nirvanasystems.com

147 Chapter 9 OmniTrader Portfolio 8. Click OK again to immediately add the historical positions to the Position History tab. Editing Historical Positions You can edit a historical position from the Position History tab. You can make changes to all of the position details, such as entry and exit price. 1. Select View»Portfolio from the OmniTrader menu. 2. From the drop-down menu, select the account that contains the historical position you would like to modify 3. Click on the Position History tab. For more information about these options, refer to the Position History Tab section in this chapter. 4. Select the historical position you want to edit. 5. Click the Edit Position button. You will see the Edit Historical Position dialog box populated with the details of all the positions in your position history. 6. Click to highlight the position you want to edit, and click the Edit Position button. edit pos exp Figure Edit Position Transaction Dialog Box 7. Modify the memo or transaction details for the historical position you have selected. 8. Click OK to confirm the information you have entered. Nirvana Systems Inc. 135 OmniTrader User Guide

148 Chapter 9 OmniTrader Portfolio 9. Click OK again to immediately add your changes to the to the Position History tab. Deleting Historical Positions You can also delete a historical position from the Position History tab. Some users find this tool useful to ensure accurate reports. 1. Select View»Portfolio from the OmniTrader menu. 2. From the drop-down menu, select the account that contains the historical position you would like to delete. 3. Click on the Position History tab. For more information about these options, refer to the Position History Tab section in this chapter. 4. Click the Delete Position button or right-click on the position that you want to delete and select Delete Position. You will be asked to confirm the deletion. 5. Click Yes to immediately delete the selected position. Making a Deposit to an Account After you have created an account, you may want to deposit additional funds into your account. You can do this from the Cash Transactions tab in the Portfolio window. 1. Select View»Portfolio from the OmniTrader menu. 2. Select the account to which you want to make a deposit from the Account Name drop-down menu. 3. Click on the Cash Transactions tab. For more information about these options, refer to the Cash Transactions Tab section in this chapter. OmniTrader User Guide 136 nirvanasystems.com

149 Chapter 9 OmniTrader Portfolio 4. Click the Add Entry button. You will see the Cash Transaction dialog box. cash dep Figure Cash Dialog Box 5. Select the Deposit option and complete the amount, date, and memo information for the deposit. 6. Click OK to immediately add the cash amount to the selected account. Making a Withdrawal from an Account After you have created an account, you may want to make a withdrawal of funds from your account. You can do this from the Cash Transactions tab in the portfolio. 1. Select View»Portfolio from the OmniTrader menu. 2. Select the account to which you want to make a deposit from the Account Name drop-down menu. 3. Click on the Cash Transactions tab. For more information about these options, refer to the Cash Transactions Tab section in this chapter. 4. Click the Add Entry button. You will see the Cash Transaction dialog box. 5. Select the Withdrawal option and complete the amount, date, and memo information for the deposit. 6. Click OK to immediately withdraw the cash amount from the selected account. Nirvana Systems Inc. 137 OmniTrader User Guide

150 Chapter 9 OmniTrader Portfolio Recording a Fee Charge to an Account After you have created an account, you may want to add a fee to the account to match the fees a broker would charge. You can do this from the Cash Transactions tab in the portfolio. 1. Select View»Portfolio from the OmniTrader menu. 2. Select the account to which you want to record a fee from the Account Name drop-down menu. 3. Click on the Cash Transactions tab. For more information about these options, refer to the Cash Transactions Tab section in this chapter. 4. Click the Add Entry button. You will see the Cash Transaction dialog box. 5. Select the Fee option and complete the amount, date, and memo information for the fee. 6. Click OK to immediately record the fee for the selected account. Editing an Account Entry After you have created an account, you may want to make to a recorded deposit, withdrawal, or fee entry. You can do this from the Cash Transactions tab in the portfolio. 1. Select View»Portfolio from the OmniTrader menu. 2. Select the account that contains the entry you would like to modify. 3. Click on the Cash Transactions tab. For more information about these options, refer to the Cash Transactions Tab section in this chapter. 4. Click the Edit Entry button. You will see the Cash Transaction dialog box. 5. Make your changes to the transaction type, amount, date, and memo information. 6. Click OK to commit your changes for the selected account. OmniTrader User Guide 138 nirvanasystems.com

151 Chapter 9 OmniTrader Portfolio Deleting an Account Entry After you have made a deposit, withdrawal, or fee entry, you may want to later delete that entry. You can do this from the Cash Transactions tab in the portfolio. 1. Select View»Portfolio from the OmniTrader menu. 2. Select the account that contains the entry you would like to delete. 3. Click on the Cash Transactions tab. For more information about these options, refer to the Cash Transactions Tab section in this chapter. 4. Click the Delete Entry button. You will be asked to confirm the deletion. 5. Click Yes to immediately delete the selected entry from the account. Confirming Order Notifications You can view and respond to all of the pending order notifications for each account in your portfolio from the Current Order Notifications window. An order will only appear on the Current Order Notifications dialog box if you have set the account to Require Notification Confirmation. For more information on the require notification option, refer to the Account Tab section in this chapter. 1. Click the View Order Notifications (dollar sign) icon in the Focus List or the Orders & Alerts toolbar. 2. On the Open Notifications tab, select the order that you would like to confirm and click the Confirm button. For more information, refer to the Order Notifications section in this chapter. Figure Edit Open Order Dialog Box Nirvana Systems Inc. 139 OmniTrader User Guide

152 Chapter 9 OmniTrader Portfolio 3. Make any modifications you would like to the order and click OK to confirm. The order will be sent to your Portfolio. The order notification will be moved to the Historical Notifications tab for reference. Portfolio Reports You can generate various portfolio reports by selecting File»Print Reports in OmniTrader. Click on the Portfolio tab. portfolio reports Figure Portfolio Reports Tab You can generate the following reports on the accounts in your portfolio: Account Summary Prints/displays an overall summary of all accounts. Open Orders Lists all of the open orders in the selected account. Open Positions Lists all of the open positions in the selected account. Closed Positions Lists all of the positions in the selected account that have been closed over the specified beginning and ending date range. Transaction History Lists all the transactions for the selected account, including positions and related transactions over the specified beginning and ending date range. OmniTrader User Guide 140 nirvanasystems.com

153 Chapter 9 OmniTrader Portfolio Schedule D Lists all the closed positions in the selected account over the given time period and within the specified term length. You can specify whether the report will contain short- or long-term transactions, and you can specify a beginning and ending date range to display/print. For more information on the Portfolio Reports, refer to the OmniTrader Help file by selecting Help»Contents in OmniTrader. Nirvana Systems Inc. 141 OmniTrader User Guide

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155 Portfolio Simulation Mode 10 OmniTrader s Portfolio Simulation Mode allows you to see how different position sizing techniques (also called allocation methods) affect trading results. You can run Portfolio Simulations using OmniTrader Trading Strategy results and you can also run simulations on actual trading results in your OmniTrader Portfolio. OmniTrader allows you to run simultaneous simulations on any (or all) of the allocation methods at once, and then you can view the resulting equity curve and the corresponding statistics for each method individually or in a summary format. Note The Portfolio Simulation settings are specific to a Profile. This means that if you change profiles in OmniTrader (i.e. you switch from the Stocks Profile to the Futures Profile), then you can define different settings for the simulation runs. Portfolio Simulation Interface There are three main areas to the Portfolio Simulation Interface: 1 The Simulation Parameters section shows the settings that were used for the simulation run. These settings are defined in the Portfolio Simulation Settings that can be accessed by clicking on the Run Analysis button. 2 The Equity Curve Display shows the equity curves of all active allocation methods when you are on the Summary Tab. You can click on the individual methods tabs to see only the selected equity curve and statistics. 3 The Simulation Statistics section shows the statistics for the selected allocation method. Nirvana Systems Inc. 143 OmniTrader User Guide

156 Chapter 10 Portfolio Simulation Mode port sim win Figure Portfolio Simulation Interface The Summary Tab shows a grid of the results of all of the active allocation methods. You can configure the grid to show different statistics by right-clicking in the grid. The statistics that will be displayed have a checkmark next to them. Simply click on a stat to add it to your grid, or you click on a checked stat to have it removed from the grid. OmniTrader User Guide 144 nirvanasystems.com

157 Chapter 10 Portfolio Simulation Mode image105.gif Figure Right-Click Menu to Remove Statistics You can have any methods statistics displayed on the right of the Summary view simply by highlighting it in the grid. image106.gif Figure $ to Equity Statistics Selected for Display Allocation Methods OmniTrader s Portfolio Simulation feature includes seven different allocation methods. Each method has a unique set of parameters that allow you to configure the way it will handle position sizing. These parameters are located at the top of the individual method tabs. Each of the parameters can be optimized to find the best value to be used in order to maximize final return. Nirvana Systems Inc. 145 OmniTrader User Guide

158 Chapter 10 Portfolio Simulation Mode Fixed Trade Size The Fixed Trade Size allocation method always attempts to trade a fixed number of shares. fixed trd sz Figure Fixed Trade Size Tab in the Portfolio Simulator The Fixed Trade Size method has the following parameter. Trade Size Specifies the number of shares or contracts traded for each trade. Fixed $ Amount The Fixed Dollar Amount allocation method always attempts to trade a fixed dollar amount per each trade. fixed $ amt Figure Fixed $ Amount Tab in the Portfolio Simulator The Fixed Dollar Amount method has the following parameter: Amount Specifies the amount in Dollars to allocate toward each position. OmniTrader User Guide 146 nirvanasystems.com

159 Chapter 10 Portfolio Simulation Mode % of Equity The Percent of Equity allocation method always attempts to trade a fixed percentage of the account s current equity. As equity rises, the amount invested per trade also goes up in proportion to the equity amount. % of eq Figure % of Equity Tab in the Portfolio Simulator The Percent of Equity method has the following parameter: Percentage of Equity Specifies the percentage of Equity to use for each trade. $ to Equity The Dollar to Equity allocation method begins by trading at a fixed dollar amount. A series of equity levels defined by the parameter's function triggers allocation changes as they are crossed. Trade size will increase and/or decrease based on when the gains or losses of the Trigger Amount are realized. $ to eq Figure $ to Equity Tab in the Portfolio Simulator The Dollar to Equity method has the following parameters: Initial Amount Specifies the starting allocation in dollars. Trigger Amount Specifies the amount of equity gain or loss required to increase or decrease trade size. Nirvana Systems Inc. 147 OmniTrader User Guide

160 Chapter 10 Portfolio Simulation Mode Increment/Decrement Specifies the amount (in dollars) the allocation changes when an Trigger Amount is realized. Size to Equity The Size to Equity allocation method begins by trading with a fixed trade size in shares or contracts. A series of equity levels defined by the parameters trigger allocation changes as they are crossed. Trade size will increase and/or decrease based on when the gains or losses of the Trigger Amount are realized. size to eq Figure Size to Equity Tab in the Portfolio Simulator The Size to Equity method has the following parameters: Initial Quantity Specifies the starting allocation in number of shares or contracts. Trigger Amount Specifies the dollar increment of equity gain or loss to be realized in order to increase or decrease trade size. Increment/Decrement Specifies the amount (in number of shares or contracts) the allocation changes when an equity level is crossed. Kelly Criteria The Kelly Criteria allocation method attempts to find the optimal allocation size (as a percentage of equity) based on J. L. Kelly s famous formula. The new portfolio simulator implements this calculation on a bar by bar basis, allowing position size to be calculated without hindsight. OmniTrader User Guide 148 nirvanasystems.com

161 Chapter 10 Portfolio Simulation Mode kelly crit Figure Kelly Criteria Tab in the Portfolio Simulator The Kelly Criteria method has the following parameters: Initial Amount Specifies initial allocation amount in dollars. This amount is only used during the warm-up period, while the Kelly Formula calculation is warming up. Warmup Trades Specifies the number of trades which must complete before the Kelly Criterion is applied to the trades. Multiplier Specifies the multiple of the Kelly allocation which is used for the actual position sizing in the simulation. This allows users to replicate popular techniques such as Half Kelly. Optimal f The Optimal f allocation method attempts to maximize equity growth. The method first finds the optimal allocation (as a fixed percentage of equity) based on all the trades in the simulation. The method will then apply the optimal fixed fraction to the complete series of trades. optimal f Figure Optimal f Tab in the Portfolio Simulator The Optimal f method has the following parameter: Multiplier specifies the multiple of Optimal f allocation which is used for actual position sizing in the simulation. Nirvana Systems Inc. 149 OmniTrader User Guide

162 Chapter 10 Portfolio Simulation Mode Running the Simulation Manual simulation runs can be done in Portfolio Simulation Mode by clicking on the Run Analysis button. OmniTrader will run all active allocation methods on the selected Trade Source. Portfolio Simulation Settings When you run a portfolio simulation, there are settings applied that are global to all of the allocation methods. You can access the global settings that will be used in simulation runs by clicking on the Edit Settings button in the lower right hand corner of the Portfolio Simulator. The Portfolio Simulation Settings dialog box contains the following tabs: Trade Source Account Settings Trading Parameters Test Period Simulation Constraints Commissions Portfolio Simulation Settings Trade Source Tab OmniTrader allows you to select the trade source to be used for the simulation. You can either use the results of OmniTrader s analysis, or you can use an account in your OmniTrader Portfolio. Note If you are going to use the results of OmniTrader s analysis for the simulation run, you will need to have run your To Do List before hand so that results are available for the simulation. OmniTrader User Guide 150 nirvanasystems.com

163 Chapter 10 Portfolio Simulation Mode port sim setts Figure Portfolio Simulation Settings Trade Source Tab If you select Portfolio, you can choose which account you want OmniTrader to use for the simulation run. This means that simulation will be run on the trade results in that account. If you choose Single Issue or Focus List, then you will be using the results of OmniTrader s analysis for the simulation. Single Issue lets you select any of the symbols that have been analyzed in the Focus List. Focus List allows you to select any of the lists that are active in your Focus List. For example, the screen above shows that we are going to run the simulation on the S&P 100 stocks. The Strategy option allows you to select which strategy's results you want to use for the simulation. If you select All Strategies, then the results of all active strategies will be used. Timeframe gives you the ability to have the simulation run on either Daily or Weekly data in End of Day Profiles, or different minute increments in Real Time Profiles. Nirvana Systems Inc. 151 OmniTrader User Guide

164 Chapter 10 Portfolio Simulation Mode Portfolio Simulation Settings Account Settings You can specify the starting balance, leverage, and advisor rating cutoff used in the Portfolio Simulator. port sim acct Figure Portfolio Simulation Settings Account Settings Tab The Account Settings tab contains the following options: Starting Balance The Starting Balance field defines the amount of equity that is in your account at the beginning of the simulation run. Leverage Leverage defines the amount of Buying Power you have in your account. For example, if you have $ in equity in your account and your leverage is 2x, then you have two times the amount of equity available to trade with, which would be $20,000. Advisor Rating Cutoff The Advisor Rating Cutoff feature will only allow trades to be taken if they the signal that generated the trade has an Advisor Rating that exceeds the defined value. (This setting does not apply if a Portfolio Account is used for the Trade Source.) OmniTrader User Guide 152 nirvanasystems.com

165 Chapter 10 Portfolio Simulation Mode Portfolio Simulation Settings Trading Parameters Tab The Trading Parameters Tab allows you to define the characteristics of your trading account and set limits on how trades are handled. trad params Figure Portfolio Simulation Settings Trading Parameters Tab The Trading Parameters tab contains the following Allocation Constraint options: Min Allocation % The minimum percentage of buying power to be used for all trades. Max Allocation % The maximum percentage of buying power to be used for all trades. Min Shares The minimum number of shares or contracts to be purchased for each trade. Max Shares The maximum number of shares or contracts to be purchased for each trade. Min Amount The minimum dollar amount to be used for all trades. Max Amount The maximum dollar amount to be used for all trades. Trade in Increments of Trade size will be rounded to the nearest multiple of this value. Nirvana Systems Inc. 153 OmniTrader User Guide

166 Chapter 10 Portfolio Simulation Mode The Trading Parameters tab contains the following Allocation Method options: Per Trade Allocation Specifies that the allocation method is applied to each trade. Total Allocation Specifies that the allocation method is dispersed (based on the trading parameters) across all of the trades in the simulation. Portfolio Simulation Settings Test Period Tab The Test Period Tab allows you to define the date range that a trade must occur in order to be considered in a simulation run. If a trade is still open at the end of the defined range, then the trade is handled as if it closed at the end of the range. test period Figure Portfolio Simulation Settings Test Period Tab The Test Period tab contains the following options: Back Test Only trades that occurred in the date range that is defined by the Back Test will be used. Forward Test Only trades that occurred in the date range that is defined by the Forward Test will be used. Both Trades that occurred in both the Back and Forward test will be measured. The equity curve ignores the crossover from the Back Test to the Forward Test range, so only one equity curve is generated for both test periods. Date Range Only trades that occurred within the defined range are used. OmniTrader User Guide 154 nirvanasystems.com

167 Chapter 10 Portfolio Simulation Mode Portfolio Simulation Settings Simulation Constraints Tab The Simulation Constraints Settings give you the ability to have the allocation methods optimize to the highest gain while adhering to the defined constraints. In order for the constraints to have an effect on an allocation method, you must have put a check mark in the Optimize box in allocations parameters, as shown below. optimize Figure Optimize Option Enabled The simulation will run tests within the range of parameters, and then find the most lucrative setting without exceeding the defined constraint settings. Note If a method is unable to find any solution that falls with the constraints, it will not be shown on the Summary Tab. It will also show as a gray equity curve in its individual tab. sim constraint Figure Portfolio Simulation Settings Simulation Constraints Nirvana Systems Inc. 155 OmniTrader User Guide

168 Chapter 10 Portfolio Simulation Mode The Simulation Constraints tab contains the following options: Worst Drawdown Less Than This constraint will not allow position size to exceed a value that would cause a total equity drawdown over the defined percentage. Worst Trade Less Than Position size will not be allowed to exceed a value that would cause one trades loss to exceed the defined percentage of equity. Profit Factor at Least Profit Factor is defined as Total $ Gained/Total $ Lost. This constraint will optimize position size to the highest gain while not allowing Profit Factor to fall below the defined value. Return:Drawdown Ratio at Least Return:Drawdown Ratio is defined as the ROI%/Max Drawdown %. This constraint will optimize position size to the highest gain while not allowing this ratio to fall below the defined value. Portfolio Simulation Settings Commissions Tab You can specify the commissions assigned for Stocks, Funds, and Futures in the Portfolio Simulator. comms Figure Portfolio Simulation Settings Commissions Tab OmniTrader User Guide 156 nirvanasystems.com

169 Chapter 10 Portfolio Simulation Mode The Commissions tab contains the following options: Stocks Specifies the following commission settings for stocks in your portfolio. You can choose the appropriate settings to match the types of fees charged by an actual broker. Specifies that the commission is a flat dollar amount or percentage per share or per trade. In this example, you will pay one cent per share. This option is used in conjunction with the following options. For example, many brokers charge a set fee per share or trade for the first x number of shares. The following options allow you to set up the fee schedule for additional shares. Specifies that the commission is a flat dollar amount or percentage per share for the number of shares that exceed the specified amount. In this example, you will pay half a cent per share if you purchase more than 500 shares. Specifies that the commission will be a minimum flat dollar amount per trade. In this example, the minimum charge for any trade is $1. Specifies that the commission will max out at the specified flat dollar amount or percentage per trade. In this example, you will not pay more than $10 commission for any trade. Funds Specifies that the commissions for funds in your portfolio are either a flat dollar amount or percentage per trade. Futures Specifies that the commissions for the futures in your portfolio are either a flat dollar amount or percentage per contract or trade. Portfolio Simulation Statistics You can view a report of the statistics for each allocation method by clicking on the View Statistics button. The report contains the following Position Size statistics. Position Size The amount that would be allocated (using the current allocation method) to the next trade after the simulation is complete. Nirvana Systems Inc. 157 OmniTrader User Guide

170 Chapter 10 Portfolio Simulation Mode Position Increment If applicable, the increment of change to position size. Position Threshold If applicable, the Trigger Value (expressed in dollars) that will result in a change to position size. The report contains the following Equity statistics: Starting Equity The initial account size in dollars. High Equity The largest value of account equity during the simulation. Low Equity The smallest value of account equity during the simulation. Final Equity Value of account equity after the simulation has completed. The report contains the following Equity Analysis statistics: Net Profit The difference between Starting Equity and Final Equity. Return on Investment The Net Profit expressed as a percentage of Starting Equity. Max Drawdown ($) Largest retracement of equity in dollars. Max Drawdown (%) Largest retracement of equity as a percentage decline. Profit Factor The sum of the profits incurred through the winning trades during the simulation divided by the sum of the losses incurred. Return-Drawdown Ratio The Return on Investment divided by the Max Drawdown %. Modified Sharpe Ratio Average Profit of all trades, as a percentage, divided by the standard deviation of these profits as a percentage. The report contains the following Trades statistics: Number of Trades Total number of trades taken during the course of the simulation. Percent Profitable The number of winning trades as a percentage of the total number of trades. Win-Loss Ratio The average winning trade as a percentage divided by the average losing trade as a percentage. Max Size The largest allocation for a single trade during the course of the simulation (expressed in number of shares or dollar amount depending on allocation method). OmniTrader User Guide 158 nirvanasystems.com

171 Chapter 10 Portfolio Simulation Mode Largest Win The profit in dollars of the largest winning trade. Largest Win (%) The largest percentage win (% calculated as a percentage of the dollar amount allocated to the position). Average Win The average profit in dollars of all the winning trades. Average Win (%) The average percentage win (% calculated as a percentage of the dollar amount allocated to the position). Max Number Consecutive Wins Largest number of winning trades in a row. Largest Loss The loss in dollars of the largest losing trade. Largest Loss (%) The largest percentage loss, (% calculated as a percentage of the dollar amount allocated to the position). Average Loss The average loss in dollars of all the losing trades. Average Loss (%) Average percentage loss, (% calculated as a percentage of the dollar amount allocated to the position). Max Number Consecutive Losses Largest number of losing trades in a row. Average Profit Average of all trades, where the trades are expressed in dollars. Average Profit (%) Average of all trades, (% calculated as a percentage of the dollar amount allocated to the position). Nirvana Systems Inc. 159 OmniTrader User Guide

172 Chapter 10 Portfolio Simulation Mode Equity Curve You can adjust the price and time scale on the equity curve by clicking and dragging in the applicable area. eq curve price time copy Figure Click and Drag to Adjust the Time and Price Scale Click in the chart and drag it in any direction to move the price chart and create additional room or show more data. drag left Figure Drag Left to Display Additional Chart Area OmniTrader User Guide 160 nirvanasystems.com

173 Chapter 10 Portfolio Simulation Mode drag right Figure Drag Right to View Additional Data You can view additional chart area by clicking in the chart and dragging to the left. This will add blank space to the right of the chart. If you move the chart in such a manner that it causes the latest data not to be displayed, you will see a Border Alert. This ensures that you are aware of the fact that you are not viewing the latest price data. If you want to return the chart to the right edge and original scale, click the scale menu and select Automatic. eq curve auto Figure Scale Menu Nirvana Systems Inc. 161 OmniTrader User Guide

174 Chapter 10 Portfolio Simulation Mode When you adjust the scale of an individual chart in any direction, the scale of that chart will automatically switch to Custom. By clicking on the Scale button and selecting Automatic, the chart will return to the right edge and automatic data amount setting. You can also change the line styles of the equity curve for each of the allocation methods. Double-click on the equity curve you want to change and make your modifications to the Equity Curve Settings dialog box. eq curv sett Figure Equity Curve Line Properties OmniTrader User Guide 162 nirvanasystems.com

175 Trade Plans 11 Trade Plans are a visual trade management tool that you can apply to your OmniTrader chart. They allow you to define conditions that will trigger orders for the targeted security. Trade Plans interact directly with your OmniTrader Portfolio. How Trade Plans Work Trade Plans use a step-by-step process to manage a trade. Each step contains conditions that define what to do if that condition is met. The following flow chart illustrates this process for a hypothetical Trade Plan: Figure Flow Chart of the Trade Plan Process When the Trade Plan moves to a new step, the conditions from the previous step are no longer active. A Trade Plan can have a single step (sell/cover 100% of the initial order) or multiple steps. Nirvana Systems Inc. 163 OmniTrader User Guide

176 Chapter 11 Trade Plans Activating Trade Plans You can activate a Trade Plan by dragging and dropping the Trading Chevron found in the top right corner of your chart. Figure Trade Plan Order Entry Chevron Once you release the chevron, you may see a dialog box asking if you want to convert the initial order to a Stop Market order. The Trading Chevron has the following abbreviations: BE Indicates a Break Even Stop entry. ES Indicates an Eighths Stop entry. FL Indicates a Fixed Loss Stop entry. FP Indicates a Fixed Profit Stop entry. L1 Indicates a Limit Order entry. MA Indicates a Market Order entry. MC Indicates a Market on Close entry. OmniTrader User Guide 164 nirvanasystems.com

177 Chapter 11 Trade Plans MO Indicates a Market on Open entry. SL Indicates a Stop Limit entry. SM Indicates a Stop Market entry. TP Indicates a Trailing Profit Stop entry. OmniTrader plots the stops that are defined for Step 1 of the Trade Plan, and the Trade Plan interface is displayed. trade plan setup Figure Trade Plan Interface with Initial Stops Displayed Nirvana Systems Inc. 165 OmniTrader User Guide

178 Chapter 11 Trade Plans Selecting a Trade Plan Nirvana Systems provides seven different Trade Plans that are designed to emulate a particular type of trade management. Default Uses a simple Fixed Loss Stop (2 ATR s) and a Fixed Profit Stop (2 ATR s) to manage a trade. Eighth s Stop Uses a Fixed Loss Stop (3 ATR s) as a protective stop and an Eighth s Tool Stop (1.5 ATR s) as a profit stop. Eighth s Stop-Partial Exit Uses a Fixed Loss Stop (3 ATR s) as a protective stop and exits half the trade once price hits a Fixed Profit Stop (1.5 ATR s). This Trade Plan manages the remaining half of the trade with a 1.5 ATR Eighth s Stop. Long Term Trending Uses a Fixed Loss Stop (3 ATR s) as a protective stop and a Trailing Profit Stop (Threshold = 4 ATR s, Cushion = 3 ATR s) as a profit stop. It will also activate a Break Even Stop (1.5 ATR s) once price exceeds 2 ATR s to the gain side. Medium Term Trending Uses a Fixed Loss Stop of 3 ATR s as a protective stop and a Trailing Profit Stop (Threshold = 3 ATR s, Cushion = 2 ATR s) as a profit stop. Partial Exit Uses a Fixed Loss Stop (2 ATR s) as a protective stop, and it will exit 50% of the initial position if price hits a Fixed Profit Stop of 2 ATR s. The remainder of the trade is managed with a Trailing Profit Stop (Threshold = 2 ATR s, Cushion = 2 ATR s). Short Term Trending Uses a Fixed Loss Stop (2 ATR s) as a protective stop, and a Trailing Profit Stop (Threshold = 2 ATR s, Cushion = 1.5 ATR s) as a profit stop. OmniTrader User Guide 166 nirvanasystems.com

179 Chapter 11 Trade Plans Click the arrow to select a Trade Plan from the Template drop-down menu in the Template Selection dialog box. trade pln stp Figure Trade Plan Source Selection Button Nirvana Systems Inc. 167 OmniTrader User Guide

180 Chapter 11 Trade Plans Trade Plan Setup The Trade Plan Setup dialog box allows you to select the type of trade you are entering (Long or Short), which portfolio account you will use to track the trade, the initial number of shares or contracts purchased, and which Trade Plan to use. You can also view the individual steps and conditions associated with the selected Trade Plan. Global Order Information You can define the initial trade conditions in the Global Order Information section. Trade Specifies whether it is a long or short trade. The default trade type is defined by the Trade Plan in the initial order. When you select a different trade type, OmniTrader automatically adjusts the conditions (stops) that are defined in Step 1 of the Trade Plan. Figure Long Trade Selected as Trade Type OmniTrader User Guide 168 nirvanasystems.com

181 Chapter 11 Trade Plans Figure Short Trade Selected as Trade Type Account Specifies which account in your OmniTrader Portfolio OmniTrader will use to track the progress and results of the trade. Initial Quantity Defines the number of shares or contracts for the initial purchase. The initial quantity can be a simple numeric value (i.e. 100 shares) or a percentage of your account s Buying Power, as specified in the Trade Calculator dialog box. To access the Trade Calculator, click the Trade Calculator button next to the Initial Quantity option. Nirvana Systems Inc. 169 OmniTrader User Guide

182 Chapter 11 Trade Plans trade calc Figure Trade Calculator Dialog Box Trade Plan Source The Trade Plan Source section of the Trade Plan Setup dialog box allows you to select and manage the templates in OmniTrader. OmniTrader User Guide 170 nirvanasystems.com

183 Chapter 11 Trade Plans Figure Trade Plan Setup Dialog Box You can select a Trade Plan template using the arrow button in the Trade Plan Source section. Once a Trade Plan is selected, click the Edit Trade Plan button to modify that instance of the Trade Plan. Once you edit a Trade Plan Template from the setup window, the Trade Plan is no longer associated with the original template, the changes are only valid for the trade your are placing. This also means that any changes you make in the Trade Plan will not be made in the template and vice versa. Nirvana Systems Inc. 171 OmniTrader User Guide

184 Chapter 11 Trade Plans Figure Trade Plan Template Manager OmniTrader User Guide 172 nirvanasystems.com

185 Chapter 11 Trade Plans Trade Plan View The Trade Plan View shows you the conditions, orders, and steps in the selected Trade Plan. Virtual Condition A virtual condition is an event that either triggers an order or causes the Trade Plan to move to a different step. Order The buy or sell order that is placed when the associated condition is met. Next Step The Trade Plan Steps contain conditions and orders. These conditions and orders are all active if the Trade Plan is on that step. If a condition in the active step is met, the Trade Plan will either move to another step or end, as defined in the Next Step column. Once a Trade Plan moves to a new step, the conditions and orders in the previous step become inactive. Figure Trade Plan View Section Nirvana Systems Inc. 173 OmniTrader User Guide

186 Chapter 11 Trade Plans The percentage reported for each step refers to the amount of the original trade that is still open. The Trade Plan in Figure has two steps defined. Once we enter the order, we are managing the trade with a Fixed Loss Stop and a Fixed Profit Stop. If price hits the Fixed Loss Stop, it will sell 100% of the initial order at market, which then ends the Trade Plan. But if we hit the Fixed Profit Stop, we are only going to sell half of the position, and then move to Step Two. This step shows 50% Long, meaning that we are now managing the remainder of the initial position with an Eighth s Stop. Once that stop has been triggered, we will end the Trade Plan by exiting the remaining 50% of the initial trade. Figure Partial Exit Trade Plan OmniTrader User Guide 174 nirvanasystems.com

187 Game & Lab Mode 12 Trading is a skill developed from learning about the market, having the proper tools, and learning how to use those tools. OmniTrader is a powerful tool that can be used by beginners to learn about markets and by experts to hone their skills. OmniTrader offers simulation modes to help you get started learning about the market. Running in Game Mode The Trading Game facilitates continual learning about markets, Technical Analysis, and your emotional reaction to the trading environment. Purpose of Game Mode The Trading Game is a true trading simulation. OmniTrader picks a security for you from your current Focus List and displays the chart, together with Trendlines, Candle patterns, and technical systems that OmniTrader has found to be useful in analyzing that security. OmniTrader does not tell you the name of the security so you do not have any preconceived ideas about the security s behavior. Your mission: To run your trading account as high as you can without taking too much risk! Put some money in your account and start the clock. The Game automatically moves forward, one day at a time, showing the next day s price action as the clock comes around. At the start of each day you decide whether you want to buy, sell short, or close your position. The Game displays your bank account as you go, letting you know how you are doing over time. You can also set profit stops and loss stops and experiment with various money management styles. Each new security you play presents you with new and different challenges. It is fun! Nirvana Systems Inc. 175 OmniTrader User Guide

188 Chapter 12 Game & Lab Mode Goals of the Trading Game The Trading Game helps you in all of these areas: Understanding markets Watch trends and patterns unfold, see advances, retracements, calm days, and panics. Once you have worked with the live charts in The Trading Game for a while, you will begin to anticipate market action instinctively. Understanding Technical Analysis Watch oscillators, Trendlines, Candle patterns, and volume. You will begin to see their strengths and weaknesses. It is often easy to identify Trendlines, triangles, and heads and shoulders by looking at completed charts. Learning to do it in Real Time (real life) is much more challenging. Understanding yourself Even though you are not using real money, you will find yourself excited as your choice proves correct, anxious in a retracement, frustrated when a stop is hit just before a stock takes off, and increasingly confident as your knowledge and judgment improve. Understanding money management Money management skills are vital to successful trading. Knowing when to cut losses and let profits run is easier said than done. Setting profit targets and loss stops will help you develop skills in money management. OmniTrader User Guide 176 nirvanasystems.com

189 Chapter 12 Game & Lab Mode About the Game Mode Interface Once you start a game, you will see the Game Mode window. Figure Game Mode Window You will use the following features in a Game Mode session. Date Advance You can advance the date manually to the next bar by clicking on the arrow next to the date at the top of the screen, or you can have the date automatically advance by using the Automatic Play feature. Position Icons Enter a long or short trade, or close out all current trades using the Position Icons. Account Summary Tracks your gains and losses and displays the results numerically. Equity Line Tracks your gains and losses over the course of a game and displays them as a graph. Game Controls Controls various aspects of the game, including starting a new game, setting the speed, ending the game, and undoing an order. Nirvana Systems Inc. 177 OmniTrader User Guide

190 Chapter 12 Game & Lab Mode Trading in Game Mode The Trading Game uses symbols and settings from the profile that is open at the time the game mode started. To play the Trading Game, you will need to open a profile containing symbols with at least 250 days of data. The data file must be long enough to accommodate the back test period length plus the length of the game you want to play. 1. Select Mode»Game from the OmniTrader menu or press <Ctrl + G>. Figure Game Mode 2. On the New Game dialog box, accept the defaults or change the parameters of the Game. Figure New Game Dialog Box 3. In the Starting Capital drop-down menu, choose the amount of money in your account. The default amount is $10,000, but you can choose amounts as large as $1 million. 4. In the Initial Trade Size drop-down menu, set your standard trading unit for the Game. The default is 100 Shr (100 shares), but you can also choose size in terms OmniTrader User Guide 178 nirvanasystems.com

191 Chapter 12 Game & Lab Mode of dollars (i.e., $1,000 per trade) or in terms of percentage of your capital (i.e., 5% of your capital). Each time you click the Long or Short buttons, a trade of the size specified here will be placed. 5. In the Game Period section, choose the time span that you want to play. The default play time is 1 year of data for an End-of-Day game (200 bars), but you can choose time spans up to 5 years (1000 bars). For Real Time games, the bars will refer to the periodicity that you had your profile set to when you entered game mode. Note You must have enough data to satisfy both the back test length and the desired length of game. For instance, if you want to play a 1 year game and the back test period is set to 250 days (the default setting), you must have 2 years of data for at least one symbol in the Focus List. 6. Once you have established your basic game parameters, click Begin, and you will see the Game Board. Figure Game Mode Window Nirvana Systems Inc. 179 OmniTrader User Guide

192 Chapter 12 Game & Lab Mode Starting a New Game 1. Once in Game Mode, select End Game to end the game for the current security and then select Start Game to begin a new game with another security. 2. Select OK from the dialog box to begin trading a new game. Figure End Game Dialog Box Controlling the Speed of the Game 1. Once in Game Mode, select Speed to specify how fast the date clock will advance the chart. 2. Select how fast you want the game to advance on the Game Speed dialog box. Select from 5, 10, 15, 20, 25, and 30 seconds per bar or 1 minute per bar. 3. Click OK to accept your selection. Figure Game Speed Dialog Box OmniTrader User Guide 180 nirvanasystems.com

193 Chapter 12 Game & Lab Mode Ending a Game The game continues for the length of time you chose when you entered the Trading Game. You may end the game at any time by clicking on End Game in the Game Control box. The Trading Game displays a Results dialog box. Figure Results Dialog Box for Trading Game Once you end a game, the symbol that you were trading is revealed, as well as the statistics of your performance during the game. Nirvana Systems Inc. 181 OmniTrader User Guide

194 Chapter 12 Game & Lab Mode Placing an Order The Orders toolbar is in the upper right-hand corner of the Game Board and is where you make your trades. Enter a position by clicking on the options in this section. Figure Orders Toolbar Undoing an Order Once in Game Mode, select Undo to undo an order. You may not undo an order after the day has advanced. Viewing Profit & Loss Stops Only when you have an open position, the Profit and Loss Stops will appear as a red or green arrow on the right edge of the chart, indicating where the profit and loss stops have been set. Figure Profit and Loss Stops Displayed on Chart OmniTrader User Guide 182 nirvanasystems.com

195 Chapter 12 Game & Lab Mode Running in Lab Mode The Trading Game, while great for teaching you about emotions and technical analysis, is only one tool available to assist in your trading education. Portfolio Theory indicates that risk is reduced by trading a number of stocks that are not in the same or similar industry groups. When you start trading, you may not want to trade only one market every day the way Game Mode does. That approach can generate a lot of anxiety. It may be difficult to go many days without placing any trades! If you are just trading one stock or futures contract, it becomes overwhelmingly tempting to trade too soon, and that can be disastrous. Lab Mode is designed to give you the experience of trading a real portfolio of securities using OmniTrader. All of the tasks of OmniTrader are available. Lab Mode gives you the same trading experience as using the program from day to day in real trading. However, Lab Mode will automate some tasks allowing you to focus on your trading. This will give you confidence when it comes time to move on to Real Mode for real trading. Creating a Lab Mode Profile You can use any profile in Lab Mode that you would in Real Mode; however, Nirvana Systems strongly recommends that you create a special profile for Lab Mode containing fewer symbols. The symbols should have enough data for the trading periods you select. Why fewer symbols? Since you will be simulating trading, you want to generate trading signals from day to day. With a small number of securities in the list, you will wait for the Focus List to update for only a few seconds when you advance the market date. If you have hundreds of symbols in the list, you might have to wait several minutes between market days. Running a Lab Session Now that you have established a profile with symbols and settings for your Lab Mode session, enter Lab Mode by completing the following steps. Nirvana Systems Inc. 183 OmniTrader User Guide

196 Chapter 12 Game & Lab Mode The Main Screen in Lab Mode looks almost exactly like the Main Screen in Real Mode, except for the addition of a Advance Date feature at the top of the screen that you can use to advance the charts to a later or earlier date. Figure Advance Date Feature in Lab Mode In Lab Mode, the market date is the trading day your session starts on. The only way to see the next day is to click on the arrow to the right of the market date to move the program to the next day. That is the other main difference between Lab Mode and Real Mode the market date is fixed in time and moves forward when you decide. In all other respects, Lab Mode works exactly the same as Real Mode. 1. Select Mode»Lab from the OmniTrader menu or press <Ctrl + L>. Figure Lab Mode Note When you have a Lab Mode running, you cannot open a new one without closing the one you are in. OmniTrader User Guide 184 nirvanasystems.com

197 Chapter 12 Game & Lab Mode 2. If you already have a Lab Mode session in progress, OmniTrader will display the following dialog box. Figure Lab Mode Profile Dialog Box 3. OmniTrader then displays the Lab Mode Startup dialog box. In the Market Date field, select the date you want Lab Mode to start its simulated trading. By default, OmniTrader fills this field with an estimate of the optimum start date. Figure Lab Mode Startup Dialog Box 4. In the Start Balance field, enter the amount of the trading account. 5. Click OK to start the Lab Mode session. OmniTrader will set up the Lab Mode simulation by running Test and Update Focus List for the market date you specified. Nirvana Systems Inc. 185 OmniTrader User Guide