This guide will show you how to use to the Trade-Ideas Oddsmaker to improve your Alert Windows. For this tutorial we are going to continue from the article building awesome alert windows. If you wish to follow along then I’d recommend you first read that article. By the time you finish this you’ll be able to quickly optimize your windows in a few simple clicks.
1. Configure the Trade-Ideas Oddsmaker
Before I started this I added another filter to help reduce the number of signals. I added the Time of Day filter and put a minimum value of 30 and a maximum value of 180 minutes. I only trade in the morning session as volume usually
Start and Ending time matches my Time of Day filter
I want the Time Exit 60 minutes after the entry
I will use a target of 3%. This means that the stock needs to fall 3% from the entry to reach my target. I’m also going to set the stop below the high of the day as it would invalidate the Fade
I won’t trail my stop but I want 65 days of test data. Also make sure you check the “USE ALL AVAILABLE COLUMNS”
And we lost all our money! Well not exactly. We have LOTS of things to fix in this and the Trade-Ideas Oddsmaker is going to tell us what. Remember we made the basic frameworks of the Alert window. We want to capture a lot of data and then filter out the Garbage.
2. First Things to Check
First thing we will do is to remove all ETF’s from this list. This is as simple as adding the filter EPS and putting a minimum value of 0.01 and a maximum value of -0.01.
Second thing I always look at are some of the following filters:
If you are unfamiliar with any of the filters click here to see all the details of each filter
Stock Composite Rating:
So we can instantly see that stocks that have a Composite Rating of 95. We will put a filter for a maximum of 95 for this filter.
Let’s take a look at Position in the Daily Bollingers Bands
Right away we can see that anything above 120% brings back terrible returns. Sure there a “few” good trades but if you calculate the total returns of everything below 120%, you can see we are losing a lot more money then winning.
So we’ve made 3 changes to our Alert window, its time to run a new backtesting.
Huge improvement! Now what do we do?
3. Go over EVERY Filter
This sounds tedious and sometimes it can be. But if you want to trade with automation, nothing comes simple. Each and everyone of my strategies that I have in production trading with my real money have several hours of building and rebuilding. I keep a version tracking of all the changes and I can go back to older saves that I saved on my cloud and compare results and make changes. I have spend 1000’s of hours tweaking all my of strategies. The Trade-Ideas Oddsmaker is probably the most powerful tool they can offer to help improve your trading and I can help you go over every filter quickly.
- Click on the column and then you can press the down arrow on your keyboard to quickly go down the list
- Focus on Win% and Total% with multiple trades. If its just 1 trade forget about it for now.
- Open up notepad and take notes of each filter that you might use
- Work on removing the stocks that are at the extreme of a filter value, don’t worry about the ones in the middle until you have applied 10+ filters
4. Breakdown the Filters even further
Sometimes you’ll get something like this. But there is more details you need to explore. The Trade-Ideas Oddsmaker will try its best to make the data visual but sometimes you gotta dig a little deeper and as you can see in this example, you can change 15 minute range (%) value to a minimum of 1.3 instead of just 1.0
5. Sometimes after all your filters, the results are just not good
This happens all the time. luckily in this example and several hours of work I managed to make something “okayish”
click to enlarge
Don’t worry if your first few strategies don’t work out. It’s very normal. After some time you will get the hang of the Trade-Ideas Oddsmaker tool. The more you practice with it, the better you will get.
6. What to watch out for in the Trade-Ideas Oddsmaker
There are a few other key items to look for when building your strategy. I’m going to show you one of my best performing Strategies that I have in production and why it makes it so good.
- First the equity curve is pretty much on a 45 degree angle.
- I have over 130 trades over a 65 day period which means I get signals frequently
- Of those 130+ trades 76.6% of them are winners
- My average Winner/Loser is really good. I have well above a 3:1 which means for every $3 I make I Lose $1.
REMEMBER: Back-testing results do NOT represent future performance.
So how did I make this so good? Well by following all the above steps, once I got to around a 60% win ratio on the back-testing I started looking at each of the bad trades in Optimization Tab
Go to the bottom of the list, and start looking at the stock in your favorite charting software. Why did this trade not play out. Would you have manually traded this? What’s wrong with the picture? Once you ask yourself these questions you’ll know right away which filters you need to address. Even if that means that the filter you need to change shows that you actually would make money in that case, you need to really decide “is this actually a good trade, or just lucky?” Don’t use luck in trading, you will eventually run out of luck. Trade with logic and with proper risk management.
7. Don’t forget exclusion lists!
While you are searching the loser tickers maybe you’ll notice that 1 stock was traded several times and you lost each time. Perhaps its time to blacklist that stock all together for this strategy. This is where exclusion lists become very useful. I have 2 exclusion lists for my trading, one being my black list. The other is stocks that gap all the time and provide many false signals.
Now well on your way of mastering the Trade-Ideas Oddsmaker. Practice will make perfect and in no time you’ll be making more profitable strategies than your buying power can handle!
DISCLAIMER: Past performance is not an indicator of future results. Just because you have created a strategy in the Trade-Ideas Oddsmaker with amazing back-testing results, it does not and will never guarantee future results. For more details click here