DOCSLIB.ORG

Charting in Active Trader Pro®

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Charting in Active Trader Pro® T R A N S C R I P T Charting in Active Trader Pro® Sam Short: Thank you Jonathan, definitely welcome everyone to join us for an hour to talk about Active Trader Pro. As Jonathan mentioned, I’m with Fidelity’s Trading Strategy Desk, so is Nick here. And really, we’re here to help with education, to make you a self-directed investor who has a more repeatable process that you can work with. And certainly, Active Trader Pro is a really essential tool for a lot of active traders who are utilizing technical analysis and utilizing charting as part of their process. So the focus today on charting in Active Trader Pro definitely very much toward that end. The representatives on our Trading Strategy Desk all are either chartered market technicians or chartered market technician candidates. We all have years of experience here at Fidelity. Personally, I’ve been here for just a little over nine years, over eight of those years working with Fidelity’s active trader clientele. And we do also offer four-week courses for people who are beginners, who are new to both technical analysis and for those who are just starting out with option trading. In addition to those classes, we also offer standalone courses, which you can access at Fidelity.com/coaching. Usually we have three or four of those a day, so certainly these webinars are a fantastic resource, but really 1 on top of these webinars, you have these additional classes that you can attend, these coaching sessions, for sort of more specialized learning on different topics. As Jonathan mentioned, you can access the install file for Active Trader Pro on Fidelity.com, and a really common question we often get is how do I log in? And it uses the same login credentials as on Fidelity.com. You don’t lose access to Fidelity.com, nothing of that sort, but you’re able to use both interchangeably and even at the same time, if you wish. So, for the session today, we’re going to try to cover really all of the charting functionality in Active Trader Pro. Especially with an eye toward using that functionality to help with risk management in your trading process. If there are follow-up questions, certainly reach out to us here at Fidelity. You can reach out to your local branch, you can reach out to us at the Trading Strategy Desk, and with our active trader team. And we’re a fantastic ongoing resource that you should utilize, you’re never really on an island with your trading, we want to make sure that you’re able to maximize everything that we have to help you be the most successful trader that you can be. With that, let me let Nick introduce himself, and then let’s get started on taking a look at looking at some of the charting tools in Active Trader Pro. 2 Nick DeLisse: I really appreciate that Sam, and good afternoon everybody on the East Coast, good morning to everybody else. My name is Nicholas DeLisse, I’m with Fidelity’s Trading Strategy Desk. And I just have a passion for education just like Sam does. Haven’t been with Fidelity quite as long, I’ve been with Fidelity for about seven years, but my journey to the Trading Strategy Desk kind of mimics Sam’s. I’m also a chartered financial analyst, in addition to pursuing the CMT designation, and I really see that, you know, charting, understanding price movement, can really help with that timing decision, and also with risk management. And it’s tools that a lot of traders, they forego, because they -- you might focus just on security selection, rather than that timing decision. Now, we’ve gone ahead and we’ve shared our Active Trader Pro screen, and let’s go ahead and get into the swing of things when it comes to, you know, when it comes to charting. Active Trader Pro really is a powerful platform and a powerful tool. One really quick and easy thing that a lot of traders, they might miss when it comes to Active Trader Pro, is our linking tool. If you look at the very top left-hand corner of the chart, you’re going to see something that says unlink, or change link, if it’s not linked. Currently, this is, of course, set to the gray link tools. The importance of this being gray is a default. So 3 let’s say you have a watchlist or a positions list, you can just double click on the positions list, and it will then automatically load that in the chart, you see the stocks change to OEX, and we can change it to SPX, and even go back to the semiconductor select sector. So it’s just something that’s really quick, easy to use, from, you know, looking down your positions if you’re charting. But let’s go and jump into some of the other really important settings of a chart. Very bottom left-hand corner, this will control your timeframe. In essence, what this part of the chart is doing is, this kind of zooms you in, and zooms you out. Right now, we’re just on a six-month basis, but if you wanted to go out to a one-year, you know, two-year basis, or even, you know, jump into a one- month basis, you have that ability to do that down here. Now if your chart is smaller, or if it’s not quite as expanded like ours is, you might actually have to click and have a little bit of a dropdown menu. Let me go ahead and make this a little bit smaller, that you see that right now, it’s set on today, you might have to click on this dropdown menu like this, to actually get that change. So kind of expanding this out, just the right of this, you can see something that says frequency. What this is going to control is the different bars up here. Right now, we do have it set up to be candlestick versus the default open high/low close, that you might actually see when you log into Active Trader 4 Pro for the first time. This frequency is very important, because this is what any indicators you might add to Active Trader Pro are going to be based on. Right now, the frequency is set at daily, meaning each of these bars represent one day’s worth of information, of course, over the last six months. Now we can change this frequency to a minute, so that each of these bars now represent one minute’s worth of information. The important part of this is that let’s say you have a simple moving average on your chart. It’s a 20 period simple moving average. Well if we change the frequency to one minute, that moving average is now a 20-minute moving average. It is no longer a 20-day moving average. The same thing if you change frequency to maybe an hour. It’s now a 20-hour moving average, and it’s definitely something important that you have to keep in mind. Now, if you noticed when I changed the frequency to one minute, I’m no longer on that six-month time horizon. That’s because different timeframes allow different frequencies. Of course, you can’t look back and have one minute bars going back three months, and so it’s going to reduce that to the appropriate timeframe, where you can get those one minute bars. And to really get that sub-day, to see a frequency less than one day, you need to be on a one month or less. So as we go to one month, we see we have this 60- minute frequency, but as soon as we kick it up to three months, this frequency 5 drops to daily. And what this will also do is you get this warning, frequencies below will change the timeframe, and you’ll notice we change the 30 minutes, this of course adjusts that timeframe appropriately so that you’re able to see the information you’re looking for. So kind of coming back to a six month, one other thing that a lot of traders will notice is there’s a histogram, there’s this history viewer down here. Sometimes, Sam and I will speak with clients, and they’ll say, we see this mountain graph at the very bottom, what does it mean? Is it special? And all this is, is this is just a different viewer, showing you different information. So what this has done is this picture right here represents this information we get up in the top screen. And as opposed to changing the date and timeframe in the bottom right, we can actually drag this left and right to see different times. We can drag this wider, if you want to. And it’s just a different way to enable us to see the data that we want to, to zoom in data that we want to, that maybe we specifically want to take a look at this little peak part right here, well we can do this with the history viewer. So if you want to hide the history viewer, you’re simply looking at the little triangle in the bottom left-hand corner of the chart. I’m going to go ahead and go back to six months.
Load more

Recommended publications
  • Estimating 90-Day Market Volatility with VIX and VXV
    Estimating 90-Day Market Volatility with VIX and VXV Larissa J. Adamiec, Corresponding Author, Benedictine University, USA Russell Rhoads, Tabb Group, USA ABSTRACT The CBOE Volatility Index (VIX) has historically been a consistent indicator of 30-day or 1-month (21-day actual) realized market volatility. In addition, the Chicago Board Options Exchange also quotes the CBOE 3-Month Volatility Index (VXV) which indicates the 3-month realized market volatility. This study demonstrates both VIX and VXV are still reliable indicators of their respective realized market volatility periods. Both of the indexes consistently overstate realized volatility, indicating market participants often perceive volatility to be much higher than volatility actually is. The overstatement of expected volatility leads to an indicator which is consistently higher. Perceived volatility in the long-run is often lower than volatility in the short-run which is why VXV is often lower than VIX (VIX is usually lower than VXV). However, the accuracy of the VXV is roughly 35% as compared with the accuracy of the VIX at 60.1%. By combining the two indicators to create a third indicator we were able to provide a much better estimate of 64-Day Realized volatility, with an accuracy rate 41%. Due to options often being over-priced, historical volatility is often higher than both realized volatility or the volatility index, either the VIX or the VXV. Even though the historical volatility is higher we find the estimated historical volatility to be more easily estimated than realized volatility. Using the same time period from January 2, 2008 through December 31, 2016 we find the VIX estimates the 21-Day Historical Volatility with 83.70% accuracy.
    [Show full text]
  • Copyrighted Material
    Index 12b-1 fee, 68–69 combining with Western analysis, 3M, 157 122–123 continuation day, 116 ABC of Stock Speculation, 157 doji, 115 accrual accounting, 18 dragonfl y doji, 116–117 accumulated depreciation, 46–47 engulfi ng pattern, 120, 121 accumulation phase, 158 gravestone doji, 116, 117, 118 accumulation/distribution line, hammer, 119 146–147 hanging man, 119 Adaptive Market Hypothesis, 155 harami, 119, 120 Altria, 29, 127, 185–186 indicators 120 Amazon.com, 151 long, 116, 117, 118 amortization, 47, 49 long-legged doji, 118 annual report, 44–46 lower shadow, 115 ascending triangle, 137–138, 140 marubozu, 116 at the money, 192 real body, 114–115 AT&T, 185–186 segments illustrated, 114 shadows, 114 back-end sales load, 67–68 short,116, 117 balance sheet, 46–50 spinning top, 118–119 balanced mutual funds, 70–71 squeeze alert, 121, 122, 123 basket of stocks, 63 tails, 114 blue chip companies, 34 three black crows, 122, 123 Boeing, 134–135 three white soldiers, 122, 123 book value, 169 trend-based, 117–118 breadth, 82–83, 97 upper shadow, 115 breakaway gap, 144 wicks, 114 break-even rate, 16–17 capital assets, 48, 49 breakout, 83–84, 105–106 capitalization-based funds, 71 Buffett, Warren, 152 capitalization-weighted average, 157 bull and bear markets,COPYRIGHTED 81, 174–175 Caterpillar, MATERIAL 52–54, 55, 57, 58, 59, 131 Bureau of Labor Statistics (BLS), 15 CBOE Volatility Index (VIX), 170, 171 Buy-and-hold strategy, 32, 204–205 Chaikin Money Flow (CMF), 146 buy to open/sell to open, 96 channel, 131–132 charting calendar spreads, 200–201
    [Show full text]
  • Asset Allocation POINT WHAT DOES a LOW VIX TELL US June 2017 ABOUT the MARKET? Timely Intelligence and Analysis for Our Clients
    PRICE Asset Allocation POINT WHAT DOES A LOW VIX TELL US June 2017 ABOUT THE MARKET? Timely intelligence and analysis for our clients. KEY POINTS . The financial press has been paying considerable attention lately to the Chicago Board Options Exchange Volatility Index (VIX), with many financial pundits citing recent low readings on the VIX as evidence of investor complacency and rising equity risk. Robert Harlow, CFA, CAIA . Quantitative Analyst Media coverage often implies that a low current VIX is a strong signal of expected Asset Allocation future volatility and will be followed by a sell-off in U.S. equities and other risk-seeking assets. Historical evidence shows that, over the near term, investors typically overestimate the next 30-day volatility of the S&P 500 Index. Further, when the VIX has been low, U.S. equities have outperformed U.S. bonds on average over the next 12 months, regardless of the change in the VIX over that horizon. Without a meaningful and prolonged catalyst, we do not believe a low level of the VIX David Clewell, CFA alone implies investor complacency or an immediate danger of a risk-off event. Research Analyst Asset Allocation BACKGROUND There has been much discussion in the financial press recently about the danger of investor complacency—with a low VIX frequently cited as compelling evidence that equity investors have grown too relaxed about potential risks. The problem is that it is difficult to determine whether markets are truly complacent or not; we can’t survey all investors and, even if we could, how many investors would admit that they were complacent? Instead, we take a mental shortcut and presume that something we can measure is a good proxy for the thing we actually care about.
    [Show full text]
  • Futures & Options on the VIX® Index
    Futures & Options on the VIX® Index Turn Volatility to Your Advantage U.S. Futures and Options The Cboe Volatility Index® (VIX® Index) is a leading measure of market expectations of near-term volatility conveyed by S&P 500 Index® (SPX) option prices. Since its introduction in 1993, the VIX® Index has been considered by many to be the world’s premier barometer of investor sentiment and market volatility. To learn more, visit cboe.com/VIX. VIX Futures and Options Strategies VIX futures and options have unique characteristics and behave differently than other financial-based commodity or equity products. Understanding these traits and their implications is important. VIX options and futures enable investors to trade volatility independent of the direction or the level of stock prices. Whether an investor’s outlook on the market is bullish, bearish or somewhere in-between, VIX futures and options can provide the ability to diversify a portfolio as well as hedge, mitigate or capitalize on broad market volatility. Portfolio Hedging One of the biggest risks to an equity portfolio is a broad market decline. The VIX Index has had a historically strong inverse relationship with the S&P 500® Index. Consequently, a long exposure to volatility may offset an adverse impact of falling stock prices. Market participants should consider the time frame and characteristics associated with VIX futures and options to determine the utility of such a hedge. Risk Premium Yield Over long periods, index options have tended to price in slightly more uncertainty than the market ultimately realizes. Specifically, the expected volatility implied by SPX option prices tends to trade at a premium relative to subsequent realized volatility in the S&P 500 Index.
    [Show full text]
  • COVID-19 Update Overview
    COVID-19 Update 03rd April 2020 Overview With the ongoing situation around the Covid-19 pandemic, all of our lives are currently being impacted. Governments around the world have imposed some form of lockdown to contain the spread of the pandemic. Financial markets are not being spared. Central Banks have intervened with monetary and fiscal measures aimed at shoring up the state of the global economy. Table 1 provides an overview of the performance of the major markets. As can be seen, equity markets have been significantly down since the onset of the crisis, ranging from -9.8% across China, -20.0% across the US (S&P500) and -26.5% across France. The YTD performance was mitigated by a strong rebound seen during the last week of March (see our “Dead Cat Bounce” section later in this article). Oil prices fell significantly over the quarter with a YTD performance of -66.5%, largely in part due to the price war between Saudi Arabia and Russia as well as the decreased global demand due to several areas of the world going into confinement. Undoubtedly volatility spiked with the VIX, an indicator of perceived risk in the markets, reaching levels higher than those seen during the financial crisis of 2008. Since Since Index 23-Mar-20 19-Feb-20 YTD 1Y 3Y 5Y 10Y S&P 500 15.5% -23.7% -20.0% -8.8% 9.1% 23.9% 120.3% Dow Jones 17.9% -25.3% -23.2% -15.5% 5.7% 21.9% 100.9% Nasdaq 12.2% -21.6% -14.2% -0.4% 30.2% 55.6% 219.4% UK 13.6% -23.9% -24.8% -22.1% -23.0% -17.7% 0.0% France 12.3% -28.1% -26.5% -17.8% -13.6% -13.5% 10.3% China 3.4% -7.6% -9.8% -11.0%
    [Show full text]
  • The DB Currency Volatility Index (CVIX): a Benchmark for Volatility
    Global Foreign Excahnge Deutsche Bank@ October 2007 Deutsche Bank Guide To Currency Indices Global Markets Saravelos Global Hzead Global Head FX StrategyBilal Jason Rashid James Torquil George Hafeez Batt Hoosenally Malcolm Wheatley Editor Contributors George Saravelos Mirza Baig Jason Batt Bilal Hafeez FX Strategy EM FX Strategy Global Head Global Head FX Index Products FX Strategy Rashid Hoosenally Caio Natividade James Malcolm Global Head FX Derivatives Strategy EM FX Strategy Global Risk Strategy Deutsche Bank@ Guide to Currency Indices October 2007 Table of Contents Introduction............................................................................................................................. 3 Overview ................................................................................................................................ 4 The Deutsche Bank Menu of Currency Indices...................................................................... 7 Currency Markets: Money Left on the Table?........................................................................ 9 Tactical Currency Indices DB G10 Trade-Weighted Indices: From Theory to Practice.................................................. 18 DB EM Asia Policy Baskets .................................................................................................. 22 The Emerging Asia Reserves, Liquidity and Yield (EARLY) Index......................................... 26 The DB Currency Volatility Index (CVIX): A Benchmark for Volatility ...................................
    [Show full text]
  • VIX Futures As a Market Timing Indicator
    Journal of Risk and Financial Management Article VIX Futures as a Market Timing Indicator Athanasios P. Fassas 1 and Nikolas Hourvouliades 2,* 1 Department of Accounting and Finance, University of Thessaly, Larissa 41110, Greece 2 Department of Business Studies, American College of Thessaloniki, Thessaloniki 55535, Greece * Correspondence: [email protected]; Tel.: +30-2310-398385 Received: 10 June 2019; Accepted: 28 June 2019; Published: 1 July 2019 Abstract: Our work relates to the literature supporting that the VIX also mirrors investor sentiment and, thus, contains useful information regarding future S&P500 returns. The objective of this empirical analysis is to verify if the shape of the volatility futures term structure has signaling effects regarding future equity price movements, as several investors believe. Our findings generally support the hypothesis that the VIX term structure can be employed as a contrarian market timing indicator. The empirical analysis of this study has important practical implications for financial market practitioners, as it shows that they can use the VIX futures term structure not only as a proxy of market expectations on forward volatility, but also as a stock market timing tool. Keywords: VIX futures; volatility term structure; future equity returns; S&P500 1. Introduction A fundamental principle of finance is the positive expected return-risk trade-off. In this paper, we examine the dynamic dependencies between future equity returns and the term structure of VIX futures, i.e., the curve that connects daily settlement prices of individual VIX futures contracts to maturities across time. This study extends the VIX futures-related literature by testing the market timing ability of the VIX futures term structure regarding future stock movements.
    [Show full text]
  • Technical Analysis, Liquidity, and Price Discovery∗
    Technical Analysis, Liquidity, and Price Discovery∗ Felix Fritzy Christof Weinhardtz Karlsruhe Institute of Technology Karlsruhe Institute of Technology This version: 27.08.2016 Abstract Academic literature suggests that Technical Analysis (TA) plays a role in the decision making process of some investors. If TA traders act as uninformed noise traders and generate a relevant amount of trading volume, market quality could be affected. We analyze moving average (MA) trading signals as well as support and resistance levels with respect to market quality and price efficiency. For German large-cap stocks we find excess liquidity demand around MA signals and high limit order supply on support and resistance levels. Depending on signal type, spreads increase or remain unaffected which contra- dicts the mitigating effect of uninformed TA trading on adverse selection risks. The analysis of transitory and permanent price components demonstrates increasing pricing errors around TA signals, while for MA permanent price changes tend to increase of a larger magnitude. This suggests that liquidity demand in direction of the signal leads to persistent price deviations. JEL Classification: G12, G14 Keywords: Technical Analysis, Market Microstructure, Noise Trading, Liquidity ∗Financial support from Boerse Stuttgart is gratefully acknowledged. The Stuttgart Stock Exchange (Boerse Stuttgart) kindly provided us with databases. The views expressed here are those of the authors and do not necessarily represent the views of the Boerse Stuttgart Group. yE-mail: [email protected]; Karlsruhe Institute of Technology, Research Group Financial Market Innovation, Englerstrasse 14, 76131 Karlsruhe, Germany. zE-mail: [email protected]; Karlsruhe Institute of Technology, Institute of Information System & Marketing, Englerstrasse 14, 76131 Karlsruhe, Germany.
    [Show full text]
  • An Introduction to the VIX Index and Volatility Instruments Alexander Ryvkin Pace University
    Pace University DigitalCommons@Pace Honors College Theses Pforzheimer Honors College 2019 Volatility Products and their Uses: An Introduction to the VIX Index and Volatility Instruments Alexander Ryvkin Pace University Follow this and additional works at: https://digitalcommons.pace.edu/honorscollege_theses Part of the Business Commons Recommended Citation Ryvkin, Alexander, "Volatility Products and their Uses: An Introduction to the VIX Index and Volatility Instruments" (2019). Honors College Theses. 230. https://digitalcommons.pace.edu/honorscollege_theses/230 This Thesis is brought to you for free and open access by the Pforzheimer Honors College at DigitalCommons@Pace. It has been accepted for inclusion in Honors College Theses by an authorized administrator of DigitalCommons@Pace. For more information, please contact [email protected]. Volatility Products and Their Uses 1 Volatility Products and their Uses An Introduction to the VIX Index and Volatility Instruments Pace University, Lubin School of Business Pforzheimer Honors College Majoring in Finance Presenting May 9th, 2019 Graduating May 18th, 2019 Examiner: Andrew Coggins By Alexander Ryvkin Volatility Products and Their Uses 2 Volatility Products and Their Uses 3 Abstract Volatility instruments are complex investment products that can be used to hedge or speculate based on changes in market sentiment and fluctuations in the S&P 500. These products offer a unique approach to protecting one’s portfolio and making strategic bets on future market volatility. However, lack of understanding of these products can be potentially dangerous as they can change dramatically in value within extremely short time-frames. Investors must be wary of using these products improperly; failure to adequately assess the risk of using volatility products can deliver devastating losses to one’s portfolio.
    [Show full text]
  • Candlestick Patterns
    INTRODUCTION TO CANDLESTICK PATTERNS Learning to Read Basic Candlestick Patterns www.thinkmarkets.com CANDLESTICKS TECHNICAL ANALYSIS Contents Risk Warning ..................................................................................................................................... 2 What are Candlesticks? ...................................................................................................................... 3 Why do Candlesticks Work? ............................................................................................................. 5 What are Candlesticks? ...................................................................................................................... 6 Doji .................................................................................................................................................... 6 Hammer.............................................................................................................................................. 7 Hanging Man ..................................................................................................................................... 8 Shooting Star ...................................................................................................................................... 8 Checkmate.......................................................................................................................................... 9 Evening Star ....................................................................................................................................
    [Show full text]
  • Investing with Volume Analysis
    Praise for Investing with Volume Analysis “Investing with Volume Analysis is a compelling read on the critical role that changing volume patterns play on predicting stock price movement. As buyers and sellers vie for dominance over price, volume analysis is a divining rod of profitable insight, helping to focus the serious investor on where profit can be realized and risk avoided.” —Walter A. Row, III, CFA, Vice President, Portfolio Manager, Eaton Vance Management “In Investing with Volume Analysis, Buff builds a strong case for giving more attention to volume. This book gives a broad overview of volume diagnostic measures and includes several references to academic studies underpinning the importance of volume analysis. Maybe most importantly, it gives insight into the Volume Price Confirmation Indicator (VPCI), an indicator Buff developed to more accurately gauge investor participation when moving averages reveal price trends. The reader will find out how to calculate the VPCI and how to use it to evaluate the health of existing trends.” —Dr. John Zietlow, D.B.A., CTP, Professor of Finance, Malone University (Canton, OH) “In Investing with Volume Analysis, the reader … should be prepared to discover a trove of new ground-breaking innovations and ideas for revolutionizing volume analysis. Whether it is his new Capital Weighted Volume, Trend Trust Indicator, or Anti-Volume Stop Loss method, Buff offers the reader new ideas and tools unavailable anywhere else.” —From the Foreword by Jerry E. Blythe, Market Analyst, President of Winthrop Associates, and Founder of Blythe Investment Counsel “Over the years, with all the advancements in computing power and analysis tools, one of the most important tools of analysis, volume, has been sadly neglected.
    [Show full text]
  • Identifying Chart Patterns with Technical Analysis
    746652745 A Fidelity Investments Webinar Series Identifying chart patterns with technical analysis BROKERAGE: TECHNICAL ANALYSIS BROKERAGE: TECHNICAL ANALYSIS Important Information Any screenshots, charts, or company trading symbols mentioned are provided for illustrative purposes only and should not be considered an offer to sell, a solicitation of an offer to buy, or a recommendation for the security. Investing involves risk, including risk of loss. Past performance is no guarantee of future results Stop loss orders do not guarantee the execution price you will receive and have additional risks that may be compounded in pe riods of market volatility. Stop loss orders could be triggered by price swings and could result in an execution well below your trigg er price. Trailing stop orders may have increased risks due to their reliance on trigger pricing, which may be compounded in periods of market volatility, as well as market data and other internal and external system factors. Trailing stop orders are held on a separat e, internal order file, place on a "not held" basis and only monitored between 9:30 AM and 4:00 PM Eastern. Technical analysis focuses on market action – specifically, volume and price. Technical analysis is only one approach to analyzing stocks. When considering which stocks to buy or sell, you should use the approach that you're most comfortable with. As with all your investments, you must make your own determination as to whether an investment in any particular security or securities is right for you based on your investment objectives, risk tolerance, and financial situation. Past performance is no guarantee of future results.
    [Show full text]