This guide will show you some tips and tricks on building an awesome Trade-Ideas Alert Window. Once you’ve completed this guide, you will have a good understanding of some quick ways to make effective Alert Windows and move on to the next step of optimizing them with the OddsMaker backtesting tool.
1. Finding The Pattern You Like
If you have already have a Top List that you want to convert then you can simply convert the Top List to an Alert. However, you’ll need to find the right Alert that will give you the buy/sell signal you are looking for. For this case, I will show you the method that you can use if you have your Trading Plan and you want to automate it based on a candlestick pattern you frequently play.
For this example we are going to look at this candlestick formation:
So here we have a stock that ran up a lot from the open and has reached a limit of overbought and you can see traders are taking profit. At one point we have a red candle forming a temporary top and this can signal other traders that they should also sell to close their long trades. This can commonly be called a Fade. Now we want to trade this but what alert shall we use?
2. Which Alert to use?
First, let’s load up our trusty Stocks Like This page. put in the details of the stock ticker and the time you want to pull up the details for that stock.
The 5-minute red bar reversal. seems like the best choice. It’s always a good idea to only pick alerts that have only 1 count or very few counts. If you pick alerts that have multiple counts, you will certainly be getting a lot of alerts all the time in your window for the same stock and this could make automation harder if you plan on doing so in the future.
3. Now for the Filters
Now its time to filter out the bad stocks and only pick the good ones. First, let’s build a new Trade-Ideas Alert Window and select the 5-minute red bar reversal. Next, add all the filters that your trading plan states. For my example, I will start with the basic.
If you are unfamiliar with any of the filters click here to see all the details of each filter
- I’m looking for stocks in play so I want to see lots of volume today
- I only trade stocks above $20
- I only trade stocks with an average volume of 500,000 shares daily. Liquidity is the key for algo trading
- Because I’m Fading, I want a high RSI of at least 80
Now save this and you should have completed the first step of your Trade-Ideas Alert Window. As you can see in the screenshot, our example of the ticker NOV is in this list. But now we need to start optimizing and using the Oddsmaker tool so we can get the perfect trade setups. This tool is only available if you subscribe to the professional version of Trade-Ideas.
Time to optimize this Alert and prepare it for automation using the Oddsmaker Backtesting Tool