Intraday Multi-View Suite (IMV) For Stocks and Futures

Transcription

1 Intraday Multi-View Suite (IMV) For Stocks and Futures Release Notes Thank you for purchasing the PowerZone Trading IMV custom indicator suite for TradeStation. The following notes are intended to act as a guideline to assist you in effectively using these intraday indicators. Please note that these indicators were developed to help traders analyze intraday markets and are not intended to provide trading advice or definitive trading signals. In addition, traders should consult a broker or financial advisor before engaging in any intraday trading activity. Please read the disclaimer at the end of this document. All PowerZone Trading custom indicators are programmed to be fast, reliable, and perform in volatile intraday markets. If you are having difficulties using any of these indicators, please contact us so we may help you get the most out of this custom package. It is our hope that these indicators will help you spot unique opportunities in the markets and become a more profitable trader. Good trading, Lee Leibfarth PowerZone Trading, LLC 1

2 Intraday Multi-View Suite Indicators PZT TEXT ALERTS PZT ADAPTIVE MA PZT MARKET STRENGTH PZT PIVOTS PZT MULTI CHART The IMV Indicator Suite includes: 1. PZT MULTI CHART allows traders to view multiple timeframes and establishes the condition of price movement using an adaptive phase indicator. Price phase (bullish, bearish or neutral) is displayed for five different time intervals: 5-minute, 15-minute, 30- minute, daily and weekly. This indicator allows traders to view market information in a way that is easy to process and that takes up significantly less space than traditional charts. 2. PZT MARKETSTRENGTH displays the relative strength of four market indicators that are significant to intraday traders. The daily changes of the Dow Jones Industrial Average and Nasdaq Composite, as well as the current levels of NYSE and Nasdaq TICK indices, display a changing color gradient as they pass key threshold levels. This tool quickly and easily allows traders to determine the strength or weakness in the overall market. 3. PZT ADAPTIVE MA is an adaptive moving average that is plotted using statistical calculations to determine an optimal look back period. This indicator displays different colors depending on whether it has a positive or negative slope, and can even display an adaptive channel that highlights strong trending price moves. This moving average tracks price very quickly and can be a great intraday tool for determining the strength and direction of a price trend. 4. PZT PIVOTS are used to display seven important support and resistance levels that are projected as a series of horizontal lines on the price chart along with accompanying text. 2

3 In addition, the previous day s high, low, open, and closing prices can be displayed as horizontal lines and text. 5. PZT TEXT ALERTS provides two lines of text that alerts traders as unique conditions in the market develop. The top line alerts traders to critical points in the trading day where price reversals are likely to occur. The second line alerts traders to dynamic short-term market moves that may lead to strong trends or key market reversals. Installation Notes Please begin installation of the PowerZone Trading IMV Indicator suite by completing the following steps: 1. Download the most current version of TradeStation. 2. Unzip the attached folder somewhere on your computer or desktop. 3. Click on the ELD file named PZT IMV SUITE. This should auto execute and load all of the indicators and functions directly to TradeStation. 4. Copy all of the workspaces to the MyWork file in the main TradeStation folder (C:\Program Files\TradeStation x.x (Build xxxx)\mywork). This will allow easy access to any of these workspaces in the future. 5. Open one of the workspaces (File - Open Workspace - the name of the workspace beginning with - PZT ) 6. Copy the release notes to a convenient location for quick reference. 7. Customize the indicator inputs and workspaces to meet your specific trading needs. Below is a reference chart for indicators that may be used in the intraday analysis of the broad markets. 3

4 Market Indicators Most Important for IMV Intraday Analysis and Used in the calculations for PZT MARKETSTRENGTH Indicator 4

5 PZT MULTI CHART Symbol Last Price Transaction Net Change (From Previous Session) 5 Minute Chart Interval 15 Minute Chart Interval 60 Minute Chart Interval Daily Chart Interval Weekly Chart Interval PZT MULTI CHART displays data from several price charts onto a single multi-chart window. An adaptive phase indicator determines the condition of relative price. Using a simple colorcoding system, it is easy to spot bullish (green), bearish (red) or neutral (yellow) market conditions over a range of five time intervals: 5-minute, 15-minute, 30-minute, daily and weekly. Day traders often use multiple price charts to gain a larger view of the market(s) they are trading. While these charts represent the same trading instrument or symbol, they can give a much broader picture of the dynamics for that market. Multiple charts help verify the overall market trend, since what may look like a reversal on a shortterm chart may only be a small retracement on a longer interval chart. In general, the more confirmation multiple charts provide for a price move, the better the chance for a successful trade. Many traders use longer-term charts to identify favorable trade conditions, and then use shorter, intraday intervals to pinpoint their entries. Traders may also monitor longer-term, secondary charts for trade exits, as this can help traders avoid jumping out of a trend too early due to minor price fluctuations With the PZT MULTI CHART indicator, each horizontal series of bars represents the history of an individual charting interval and is labeled on the right edge of the chart. To change symbols or add multi-chart windows to a workspace, it is recommended to copy an existing multi-chart window and re-format the symbol. Please note that five individual symbol changes must be made to the multi-chart window to accommodate each time frame. The input variables for PZT MULTI CHART are as follows: Name Value Description MarketClose 1600 Closing time for market session (1600 = 4:00pm EST) PhaseInterval 21 Statistical lookback period Decimal 2 Amount of decimal places to display (stocks = 2) 5

6 PZT MULTI CHART Window Formatting Formatting multi chart windows from scratch requires six steps: 1. Open a 5-minute chart for the desired symbol. 2. Select Format symbol Scaling use fixed scale: 0 to 6 (The price chart will no longer be visible). Symbol Formatting 3. With the active chart selected, choose format window color tab and set the background color to black. 4. Select insert symbol (ALT + S) and insert four more of the same symbol but with the following intervals: 5. Format each of these four additional symbols to be scaled to sub-graph: Hidden. 6. Select insert indicator (ALT + C) and choose PZT MULTI CHART, the chart should now look like the example on the previous page. It may be necessary to adjust the bar spacing for the desired appearance. 6

7 PZT MARKETSTRENGTH PZT MARKETSTRENGTH provides a composite window of four key intraday market indicators. Each horizontal bar consists of a 1-minute color gradient that measures the degree of movement in each market indicator. At a glance, the net change in the Dow Jones Industrial Average and the Nadaq Composite Index as well as the actual value of the NYSE and Nasdaq TICK indexes can be determined. Popular intraday market indicators can be used as a temperature gauge to determine the current strength or weakness in the markets. Understanding the characteristics and becoming familiar with the behavior of these indicators, both individually and as a collective, can help traders recognize favorable market conditions. Too much data can easily lead to information overload; as such, market indicators are best used in the background. Traders only need to glance at them to assess the overall market direction. PZT MARKETSTRENGTH focuses on four of the most important intraday market indicators used in the US equities market, with colors providing guidelines on how to evaluate each. The relationship between these indicators can indicate strong market-wide moves, and can be a useful tool in effective intraday market forecasting. Remember, none of these indicators is, in itself, predictive but rather a reaction to what has already happened in the market. The chart on page 3 of this user guide provides a reference for the color codes and thresholds for these intraday market indicators. This window should be copied and pasted from one of the included workspaces instead of formatting from scratch. Please note, symbol or interval changes should not be made to this indicator. The input variables for PZT MARKETSTRENGTH are as follows: Name Value Description TextColor white Color of descriptive text StartTime 0930 Local time of exchange open EndTime 1600 Local time of exchange close 7

8 PZT ADAPTIVE MA PZT ADAPTIVE MA is an adaptive moving average that is based on the principle of normal distribution. A moving average simply provides a reference for where price has been and whether it is moving up, down or sideways. An adaptive moving average uses statistical calculations to determine the optimal look back period, and has significantly less lag time than traditional or other types of adaptive moving averages. This high performance adaptive moving an average reacts very quickly to price action and can be a great tool for analyzing an intraday market. The initial setting for this indicator is a period of 21 and it will display different colors depending on whether it has a positive or negative slope. A solid color can be displayed by simply setting the up, down and unchanged color inputs to the same value. Bands surrounding the Adaptive MA value may also be displayed, but are initially disabled. These adaptive bands can be displayed by setting the input for ShowBands to true. The initial value for these bands is 2 standard deviations from the source and may also be changed as an input. Once enabled, the bands will display a colored ball signaling a price violation of the upper or lower thresholds. Blue dots signify crossing the lower band while red dots illustrate crosses above the upper band. The color of the bands may also be specified. The input variables for PZT ADAPTIVE MA are as follows: Name Value Description Price close Price that calculations are based on Period 21 Statistical lookback period UpColor green Indicator color for positive slope DownColor red Indicator color for negative slope UnChangedColor green Indicator color for zero slope BandColor yellow Indicator color for the bands ShowBands false Display the bands StandardDV 2 Number of standard deviations to draw adaptive bands 8

9 PZT PIVOTS PZT PIVOTS are used to automatically display 7 key levels that are projected as a series of horizontal lines on the price chart along with accompanying text. Originally calculated by floor traders and market makers at the exchanges, pivots can provide significant support and resistance levels. These custom pivots points are calculated by determining an high, low and closing price from the previous days trading session. In addition, the previous day s high, low, open and closing prices can be displayed as a horizontal line and as text. This indicator will not resize or otherwise interfere with the normal scaling of a price chart. Descriptions of the pivot levels are listed below: 9

10 PZT PIVOTS include variety of display options including the ability to display an Analysis Commentary window for all of the pivot point and previous day s levels. Using the view menu and choosing Analysis Commentary will enable this feature. In addition, the previous day s high, low, open, and closing prices may be displayed or turned off. This indicator may only be used with intraday charts with the symbol session time set to: Regular Session. Optional Analysis Commentary Window Symbol Formatting for PZT PIVOT Calculations The input variables for PZT PIVOTS are as follows: Name Value Description PivotColor blue Color of Pivot level lines (R1, S1, R2...etc) PPColor red Color of Pivot Point line PrevDayColor black Color of previous day's OHLC ShowYesterday true Display previous day's OHLC TextPosition 0 Justification of text (0 = Left, 1 = Right, and 2 = Center) 10

11 PZT TEXT ALERTS PZT TEXT ALERTS can be used to identify bullish or bearish conditions in the market that may provide positive trading opportunities. In addition, the text display will point out particular times in the day that often produce significant or minor reversals. This indicator is designed to work in a live, intraday market and will provide up to 22 different warnings and alerts depending on the condition of price, time of the day and current market activity. Using a combination of Emini, NYSE and Nasdaq tick index data, this indicator generates market strength alerts by flashing a color-coded message on the screen. While the default settings provide information about the direction of the market, it is possible to customize this indicator by adjusting specific reversal, bullish, and bearish thresholds for both the $TICK and $TIKQ. The default settings for market strength alerts are as follows: Due to the complexity of formatting this indicator, it is recommended to copy a PZT TEXT ALERT screen from one of the included workspaces and paste it into a current workspace. Changes may be made to the pasted alert window. Traders who are using local time zones other than EST (NY exchange time) will need to edit the TimeAdjust input to correct for time differences. Simply add 100 for every hour away from EST, for instance: EST=0, CST=100, MST=200, PST=300. The input variables for PZT TEXT ALERTS are: Name Value Description TickBull 500 $TICK Threshold level for strong market TickReverse 1000 $TICK Threshold level for possible reversals TikqBull 300 $TIKQ Threshold level for strong market TikqReverse 600 $TIKQ Threshold level for possible reversals ExchangeClose 1615 EST Time of exchange close (ex ES-Globex close time 1615 EST) TimeAdjust 0 Adjusts for local time zones (EST=0, CST=100, MST=200, PST=300) HorizontalText 0 Moves text to the left specified amount of bars VerticalText 0 Vertical Location of text 11

12 IMV Workspaces Three individual workspaces are included with the IMV Suite. The names of each workspace appear in all capital letters with a header of - PZT While these are designed to either work with stocks or futures, both may be used simultaneously on a multiple monitor setup. Most of these workspaces utilize multiple charts with multiple time frames and are formatted to fit on a small 15-inch monitor. These are intended to serve as a starting point for developing personal custom workspaces, utilizing the power of the IMV indicators. - PZT DAILY ANALYSIS workspace Notes: The quote screen is symbol linked to chart and indicators. Clicking on any of the symbols on the quote screen will automatically change the chart settings. - PZT MULTI CHART STOCK workspace Notes: This workspace is designed to work with stocks and ETFs. The candlestick chart is symbol linked to the quote screen. Clicking on any of the symbols will change the chart and associated indicators. New symbols can easily be added to the symbol list and new multi-charts can be formatted. - PZT MULTI CHART EMINI workspace Notes: This workspace is set up specifically for the E-mini futures contracts. The quote screen is symbol linked to the chart and each multi-chart is formatted for electronic exchange intervals (CME- GLOBEX 2 and CME). 12

13 Tips for using IMV Indicators Use the included workspaces as a starting point for developing individual preferences. Double right click on any chart to enlarge it to full screen. Double right click a second time to return to the original workspace formatting. Single right click while the cursor is over an indicator and select format to quickly change the inputs on that indicator. It is advised to copy existing multi-charts and paste them into a workspace to modify or change it. This will minimize the formatting necessary for many of the IMV Indicators. In each intraday workspace, charts may be linked to the quote screen by left clicking on the colored tab on the top right edge of the window and choosing a symbol link color. This allows all charts to change to the highlighted instrument in the quote window. Recommended articles on using intraday indicators: Jean Folger and Lee Leibfarth [November 2010]. Volatility Indicators: Techniques for Profiting from the Market s Moves. Marketplace Books. Jean Folger and Lee Leibfarth [October 2007]. "Make Money Trading: How to Build a Winning Trading Business," Marketplace Books. Lee Leibfarth [January 2006]. Charting for Day Traders, Futures Magazine. Lee Leibfarth [January 2006]. Developing Your Own Indicators, Technical Analysis of Stocks & Commodities. Lee Leibfarth [March 2006]. "The Automated Daytrader," Technical Analysis of Stocks & Commodities. Lee Leibfarth [August 2006]. Intraday Market Forecasting, Technical Analysis of Stocks & Commodities. Lee Leibfarth [August 2006]. Day Trading with Support and Resistance, Trader s Journal. Jean Folger [September 2006]. Trading as a Business, Futures Magazine. Lee Leibfarth [September 2006]. Trading with and Adaptive Price Zone, Technical Analysis of Stocks & Commodities. Lee Leibfarth [October 2006]. Forecasting Techniques, Active Trader. Lee Leibfarth [November 2006]. Measuring Risk, Technical Analysis of Stocks & Commodities. Jean Folger [December 2006]. Day Trading Then and Now, Futures Magazine. Lee Leibfarth [February 2007]. Tuning Intraday Strategies, Technical Analysis of Stocks & Commodities. Lee Leibfarth [July 2007]. Intraday Hybrid Strategy, Active Trader. Lee Leibfarth [September 2007]. Sharpening a Countertrend Strategy, Active Trader. Lee Leibfarth [February 2008]. Fibonacci Pivot Points, Futures & Options Trader. Lee Leibfarth [August 2008]. Premier Stochastic Oscillator, Technical Analysis of Stocks & Commodities. Lee Leibfarth [August 2008]. "Improving the Three-bar Pullback Pattern," Futures & Options Trader. Lee Leibfarth [March 2009]. "Using Probability as a Guide," Futures & Options Trader. 13

14 Disclaimers All information contained in the PowerZone Trading, LLC website, indicators, instructional sessions and literature is for educational purposes only. PowerZone Trading, LLC makes no guarantee that you will become a successful trader, even with the best education, tools and guidance. PowerZone Trading, LLC does not make any trading recommendations, and nothing should be construed as such. You are responsible for any and all trading activities in which you engage, including any resulting losses. You should consult your broker or financial advisor before placing any trade. PowerZone Trading, LLC assumes no responsibility for your trading and investment activities or results. Required USA Government Disclaimers: Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site or during instructional sessions. The past performance of any trading system or methodology is not necessarily indicative of future results. CFTC RULE HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN ACTUALLY EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN PowerZone Trading, LLC. All Rights Reserved. 14