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Derek A. Barrett's  Instablog

Derek A. Barrett
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I buy established, good companies with strong management, solid balance sheets, free cash flow, growing earnings, and increasing dividends. This is a long strategy, which buys value situations, combining the fundamentals of Growth at a Reasonable Price, with Dividend Growth Investing. This style... More
My blog:
Fully Informed by Teddi Knight
My book:
Generate Thousands by Dr. Samir Elias
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  • Using Thinkorswim Scan Tool With The 10-20-30 Strategy

    Overview

    The 10-20-30 averages strategy, developed by Dr. Samir Elias, and practiced by Teddi Knight, is a great method for find Put Selling options candidates. Being a lead indicator, the strategy is a great tool for finding stocks which may have hit a technical bottom, which are often ready for a reversal.

    I personally have found this indicator easy to use, and combine it with RSI, Chaikin Money Flow [CMF], MACD, and Volume as a simple and easy to use system.

    Note: As a conservative investor, I throw out the "20 EMA", part of the strategy, as that to me is more of a "get ready but don't do anything yet" indicator. I wait until the 10SMA actually does cross below the 30EMA before getting ready to take actions.

    Thinkorswim has a powerful Scan system for finding a list of candidates.

    Using the Tool

    1. Login to the thinkorswim desktop application and click the "Scan" tab

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    2. On the right side, click the X buttons to remove all the existing Filters.

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    3. Click the "Add Study Filter" button

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    4. In the "Study" drop down box, select "Custom…"

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    5. Click the "Edit" button

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    6. Select "Study" in the drop down box

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    7. Choose "SimpleMovingAvg" in the "Lookup a study…" drop down box.

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    8. Now choose the following values in the Edit Condition box:

    Left column - under "Inputs", "length" should be 10
    Middle column - set to "crosses below"
    Right column -- drop down box, choose "Study", then Choose "MovAvgExponential"
    Right column - under "Inputs", "length" should be 30

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    9. Click Save

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    10. Your screen should now look like the following rule. Go ahead and click OK to save the filter.

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    11. Notice the Study you just created is now a part of your Scan

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    12. Now click the Scan button to populate your list!

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    13. The Search Results will now present all known stocks that meet your filter condition.

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    14. You can add additional Filters as well to your Scan, such as Volume indicators, or Corporate Actions like Earnings or Dividends.

    NOTE: If you would like to add a study you don't see on the initial menu (like RSI), check the "Custom…" menu at the bottom for more choices.

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    15. Make sure to save your Scan so you can use it later without having to redo all the steps above. Go to the Scan Query Menu and "Save scan query".

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    16. Later, you can load the Scan query from the same menu. Chose "Load scan query", "Personal", and then find your Previous Scan.

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    17. Finally, as a way to "audit" our results, I used the actual technical chart from Stockcharts.com, and sure enough, as indicated by the purple highlighted area on the right hand side of the graph, you can see where the 10SMA has indeed crossed the 30EMA.

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    Tags: Tools
    Mar 08 5:18 PM | Link | 4 Comments
  • Quote Of The Week
    Diligence is the mother of good fortune, and idleness, its opposite, never brought a man to the goal of any of his best wishes.

    - Miguel de Cervantes

    Nov 16 12:41 AM | Link | Comment!
  • New Hyperloop Transportation System Could Lead To Economic Boom 10 Times Bigger Than .COM

    Recent press hype over a Twitter post from Tesla (TSLA) / Space X entrepreneur Elon Musk discusses an upcoming August 12th special announcement.

    Musk will be publishing his alpha specifications for a futuristic transportation system called "Hyperloop", an exciting attempt to solve many of the problems of the decades old and stale transportation system.

    Our entire transportation network has become a broken system. In the US, inter-city travel typically only takes place through the overcrowded, dangerous freeway system, and the very safe, but overcrowded and increasingly unpleasant air transportation system. Some locations, such as the Northeast, do offer rail options, but these are few and far between.

    Many large cities such as New York, Washington DC, and yes, even LA, have public transportation options for intra-city transit. While these increase quality of life, they are extremely expensive to build and maintain.

    The Hyperloop, a system of vacuum tubes, claims costs 1/10 of high speed rail, with mind-boggling speeds up to...4,000 miles per hour, making a trip from New York to LA only take 45 minutes.

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    Source: CNN.com

    Think of the ramifications of such a technology if it were adopted in mass use.

    The global economy is fast running out of ideas for the next big thing. Mobile was great, but that was just another branch of the extremely disruptive Internet. To really achieve another economic boom, something truly disruptive, that can alter the fabric of the way people live, has to take place. Think along the lines of the Railroad, electricity, or modern medicine. These amazing inventions dramatically altered our ways of living and consequently lead to economic booms.

    An idea like this is sure to be a target for naysayers. You really need someone bold with the courage to follow the vision through, win or lose, and that is why Musk is the perfect candidate to bring something like this to fruition.

    Our transportation system has been at a critical stage for over 15 years, where it has exceeded its ability to handle itself. This is why now is the perfect time for something truly disruptive to emerge.

    Maybe as investors, we'll see some specialist companies producing the network, sort of like the way MLPs operate now (MLPL) .

    I'm still waiting for the Moller Skycar, Space Elevator, and Cold Fusion. Let's hope this becomes a reality.

    Personally, I will warmly welcome our new magnetic vacuum tube overlords.

    The Moller Skycar, Source: Wikipedia

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    The Space Elevator, Source: Gizmodo Australia

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    Cold Fusion Experiemental Reactor, Source: Exohuman

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: TSLA, MLPL
    Jul 18 7:59 PM | Link | 3 Comments
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