Market Breadth Gauge Strategy Pivot Breakout Strategy

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Market Breadth Gauge Strategy Pivot Breakout Strategy Issue 12, December 2015 In this issue: Market Breadth Gauge Strategy Pivot Breakout Strategy Ready to expand your TradeStation horizons with EasyLanguage ®? Creating your own indicators and strategies will give you new perspectives on markets and on your trading. TradeStation’s Client Training and Education Department has taught thousands of traders how to use EasyLanguage and would like to count you among them. We can guide you through all the steps in creating indicators, ShowMe™ and PaintBar™ studies and trading strategies. And if you’re thinking “but I’m not a programmer,” well, most of the thousands of people we’ve taught weren’t programmers either. But, like you, they were passionate about markets and willing to spend a few hours working with us to learn. You’ll be surprised by how quickly you can get up to speed and begin writing your own indicators and trading strategies in EasyLanguage, and how this will open up a whole new world of market analysis. Beginners Course Advanced Users Course For the EasyLanguage beginner, the same course work can be For advanced users, step up to the latest in EasyLanguage by accessed LiveOnTheWeb and in a self-paced home study course. incorporating objects in your studies and strategies. Here, too, the same course work can be accessed LiveOnTheWeb and in a self- EasyLanguage Boot Camp paced home study course. A two-day LiveOnTheWeb class Implementing Objects in EasyLanguage $249 SCC Member Price: $124.50 A two-day LiveOnTheWeb class Register with promo code ELBC4SCC $249 SCC Member Price: $124.50 Your instructor will guide you step by step through more than 30 Register with promo code IOEL4SCC practical exercises covering such topics as creating indicators, ShowMes™, PaintBars™, and trading strategies, including indicators In this course, your instructor will guide you through exercises using designed specifically for use with TradeStation’s RadarScreen® the latest in EasyLanguage features, including price series providers, feature. You will learn how to: timers and accounts providers. These open up possibilities beyond the already formidable capabilities of conventional EasyLanguage. • Use inputs for flexibility and optimization In this advanced course, you’ll learn how to: • Design indicators specifically for RadarScreen • Create real-time alerts based on your custom market conditions • Create multi-data analysis in RadarScreen • Write market, limit and stop orders into strategies • Access real-time account and position updates • Incorporate money-management exits in your strategies • Place and track real-world orders • Read and write to Excel files Exclusive webcast bonus: • Build your own interactive windows • Ask questions and interact with your instructor in real time • Review the recordings of the course at any time Exclusive webcast bonus: • Retake the LiveOnTheWeb class any time it is offered • Ask questions and interact with your instructor in real time • Review the recordings of the course at any time • Retake the LiveOnTheweb class any time it is offered EasyLanguage Home Study Course A self-paced home-study book EasyLanguage Objects Home Study Course $99 SCC Member Price: $49.50 A self-paced home-study book Complete and return the order form $99 SCC Member Price: $49.50 This book covers the same range of material as the EasyLanguage Complete and return the order form Boot Camp, in an easy-to-follow format that takes you through each exercise in the course, with instructions and explanations. This book covers the same range of material as the Implementing The book is printed in vibrant color and is spiral bound, making it Objects in EasyLanguage web class, in an easy-to-follow easy to work through each exercise right on your computer. format that takes you through each exercise in the course, with instructions and explanations. The book is printed in vibrant color and is spiral bound, making it easy to work through each exercise right on your computer. Contents Issue 12 IN THIS ISSUE STAFF Market Breadth Gauge Strategy ................2 PUBLISHER The Market Breadth Gauge strategy uses a value-based measure of the advance- Michael Burke VP, Client Training and Education decline line. EDITOR Stanley Dash, CMT Pivot Breakout Strategy ...........................9 VP, Applied Technical Analysis The Pivot Breakout strategy uses the pattern for a set-up, requires price SENIOR CONTRIBUTING EDITOR confirmation for entry and includes two exit techniques. Frederic Palmliden, CFA, CMT Senior Quantitative Analyst PRODUCTION DOWNLOAD FILES Kristina Hunt Media Content Coordinator EDITOR’S MESSAGE Welcome to the December 2015 issue of TradeStation Labs’ Strategy Concepts Club. TradeStation Labs 8050 SW 10th Street, Suite 2000 This issue marks the end of our first year of publication. Your engagement Plantation, FL 33324 with the content and with us has been very gratifying – including challenging us [email protected] to be creative in our content and responsive to your needs as readers. All support, education and training services and materials on the This month, Frederic Palmliden, CFA, CMT, and Senior Quantitative Analyst, TradeStation website are for informational purposes and to help cus- provides a strategy for stock indexes that employs a market breadth index tomers learn more about how to use the power of TradeStation soft- calculated by TradeStation. The Market Breadth Gauge strategy uses a value- ware and services. No type of trading or investment advice is being made, given or in any manner provided by any TradeStation affiliate. based measure of the advance-decline line. This material may also discuss in detail how TradeStation is For my contribution, I looked at a bar pattern widely used in TradeStation designed to help you develop, test and implement trading strate- and a topic of inquiry from many clients: pivot highs and pivot lows. The Pivot gies. However, TradeStation does not provide or suggest trading Breakout strategy uses the pattern for a set-up, requires price confirmation for strategies. We offer you unique tools to help you design your own strategies and look at how they could have performed in the past. entry and includes two exit techniques. While we believe this is very valuable information, we caution This month, the downloadable files include a pdf that itemizes each issue you that simulated past performance of a trading strategy is no guarantee of its future performance or success. We also do and its contents. We hope this will be an easy way to browse the material not recommend or solicit the purchase or sale of any particular you have accrued as a subscriber and perhaps prompt you to revisit some of securities or derivative products. Any symbols referenced are used the strategies. And any back issues that pique your interest but predate your only for the purposes of the demonstration, as an example—not a subscription can be purchased on our Back Issues page. (In case you didn’t recommendation. notice or are a new subscriber, the pdf version can be accessed via the link on Finally, this material may discuss automated electronic order place- ment and execution. Please note that even though TradeStation the cover and from the download button at the lower left of the flipbook viewer.) has been designed to automate your trading strategies and deliver Allow me to take a moment to acknowledge our colleague Kristina Hunt. timely order placement, routing and execution, these things, as well Her name is in the masthead as Media Content Coordinator, but that understates as access to the system itself, may at times be delayed or even fail due to market volatility, quote delays, system and software errors, her importance to our team. Kristina turns our submissions into the Strategy Internet traffic, outages and other factors. Concepts Club you see each month. Her contributions are invaluable. TradeStation Group, Inc. Affiliates: All proprietary technology in Our best wishes to all for health and prosperity in 2016 and, as always, TradeStation is owned by TradeStation Technologies, Inc. Equities, equities options, and commodity futures products and services are thanks for being a subscriber! offered by TradeStation Securities, Inc. (Member NYSE, FINRA, NFA and SIPC). TradeStation Securities, Inc.’s SIPC coverage is available only for equities and equities options accounts. Forex products and services are offered by TradeStation Forex, a division of IBFX, Inc. Stanley Dash, CMT (Member NFA). Copyright © 2001-2015 TradeStation Group, Inc. STRATEGY CONCEPTS CLUB | 1 Market Breadth Gauge Strategy Frederic Palmliden, CFA, CMT Senior Quantitative Analyst BACKGROUND STRATEGY TRADING USUALLY EMPLOYS Features technical tools based on price and volume data. u Strategy Style: Trend-following While these traditional tools are applied to indi- u Markets: Stock index futures and vidual securities and indices, there is another ETFs dimension to strategy trading and market u Trading Horizon: Swing trading analysis designed to determine the overall health of the stock market. This type of anal- ysis – known as market breadth – utilizes such Studies/Files Included data as advancing versus declining issues and up u Strategy volume versus down volume. Although market u Indicator breadth is typically associated with longer-term u Workspace market signals – such as early warning signals after an extended stock market rally – it can also DOWNLOAD FILES be used with shorter-term time intervals, as this article will illustrate. The Market Breadth Gauge strategy utilizes STRATEGY ELEMENTS
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