Hi Gimmepips
Forgive me if I don't remember you by our phone call - this message just appeared in my inbox so I thought I'd have a try at replying parts of it for you.
Any EOD trading method is going to have its quiet times as well as its busy times. That can make it tricky in terms of buying a system like Flag-Trader because if the patterns aren't showing when you first subscribe, frustration can understandably kick in.
However, that's part of the beauty of trading breakouts like this. The market tells you when it's hot and when it's not, and that in turn protects you in choppy whipsawy times. Sure, it can require some patience, but any trader will tell you that, much like hunting, a vast percentage of trading time is "stalking one's prey", and the big profits come in spurts. My successful students have got that nailed and that's why they'll have absurd returns very quickly, followed by periods of inertia. With intraday trading the same thing occurs but in a more condensed time frame which satisfies the more trade-hungry folks.
Now, I realize that many EOD folks are trade-hungry and I've had my own frustrations too. To that end, I wanted to include S&R breakouts (from non flag patterns) to my repertoire but with added safety. That's now happened.
One of my strengths in this field is the deep options knowledge I've gained over the years and the data I've been collecting.
For many years I've been seeing transaction patterns in the options markets that can often reveal a high probability of what's going to happen next, provided it's dovetailed with a tradeable chart pattern. You must have a chart pattern present (like a flag or channel) because you need to distinguish between likely hedging or position accumulation prior to the expected breakout.
From all this data, last year I developed an indicator (the OVI) that measures the options trading activity of stocks and displays the information as a simple line - it works best with highly liquid stocks (and ETFs) with highly liquid options. There are literally 100s of millions of rows of data that are analyzed every night, and some of the best signals have revealed the cheaters in the markets positioning themselves before a significant breakout. If you check my blogs, you'll see a pretty impressive record of calling the market, and there's no secret that the OVI-Pattern combination has contributed massively to this.
Make no mistake, cheating DOES go on in the markets but in the options markets it requires expertise and massive amounts of data to spot it, so those who cheat there tend to get away with it. You should realize also that many "sophisticated" traders will gravitate to options partly because of this, and they know how to play the game.
Ok, so what does this mean? Well, combining the OVI with flags and channels for liquid stocks (with liquid options) has been a revelation for those folks who have that application. We're going to deploy it onto Flag-Trader hopefully by the end of the year, together with OVI scans which are already on my TradeTheBanks application, which covers around 1,000 stocks.
Forgive some of the marketing (over which I have little input and wish we didn't have to do, but the software development business isn't cheap!) but if you want to learn more, take a look at some of my blogs on
www.tradethebanks.com. And for my market calls, look at
www.flag-trader.com in the Blogs section. We're going to consolidate everything pretty soon, and as promised, deliver the forum (later than hoped but it is a commitment).
Talking of software development, it's a perfectly reasonable question to ask, why not just trade 100% of the time, rather than have a software business. Well there a two answers to that. The software side, and being answerable to customers, is the catalyst that has led to the massive improvements in my trading arsenal.
For example, the OVI started as an image in my mind because of all the options chains I was regularly surveying. When students asked me how I could make consistently good calls in the market I explained that it was partly the patterns and partly the options activity. Looking at an options chain is like looking at the Matrix - numbers everywhere - though I knew what to look for and where to look. Then it occurred to me that in my mind it was a bit like a line going up and down ... so from there I thought, well, how about we create that line for real so we can all see it - it would save me a lot of time and be useful for all of us.
Well, from there even my eyes were opened, and I now have interest from hedge funds to develop it further. But its origins lay in the premise that my students were asking me to explain something that was very difficult to explain, and hence I had to find an easy, more visual way to explain it to them. The result is that we all benefit.
The second answer to the question is that trading exclusively can be a lonely business and I didn't like what it was turning me into, even though that was the time where I made my biggest returns.
Ok, this has turned into a tome - the coffee they served me this morning definitely wasn't decaf and I've been on the ceiling ever since!
Anyway, I hope this helps. If anyone's interested I'm going to open up the Private Traders Club again soon - it's a cheap way of getting to know my methods. I'd say one of the main benefits will be that you'll acquire a very sharp intuition and feel for the markets. That's a real gift in itself, even if you use it with a totally different strategy to mine.
All the best
Guy