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Phil's Stock World is a stock and options trading site that teaches the art of options trading to both newcomers and expert traders. Through the efforts of our excellent team of writers, traders, partners and members, we provide an diverse assortment of resources for traders, investors and... More
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Phil's Favorites - by Ilene
    Jan 7, 2011 1:06 PM

    By Ilene is an intriguing new trading signal service developed by John F. Ehlers.  Ehlers is a veteran trader and author of Rocket Science for Traders. The StockSpotter service analyses over 3,000 stocks daily, gives you daily short-term buy/sell signals in advance, and then tracks its subsequent performance. It’s features include:  

    1.  Precision – Exact entry and exit timing for both long and short positions.

    2.  Simplicity – Easy to learn. 

    3.  Accountability – 100% tracking and simulation of all trading signal performances. 

    4.  Team Work -- StockSpotter and you.  Join forces in this time-saving approach to trade selection. While StockSpotter performs the analysis, you select the trades, manage position sizes, and, perhaps, design appropriate option strategies.

    Because StockSpotter provides daily ideas for going long or short specific stocks, it is complementary to option strategies used routinely at Phil's Stock World. Its trades last for 10 days or less. The strategies employed are typically the outright buying of a long call (put), or a bull (bear) call spread (also known as a vertical spread), with one or two months until expiration.

    For technical details, Dennis D. Peterson's article in 'Technical Analysis of Stocks & Commodities' magazine explains more about how the system works:

    What’s different and remarkable about the site is its openness about their performance. As you will see, equity curves and Monte Carlo simulations demonstrate how successful StockSpotter is in recommending trades. You can expect an average profit of 3.34% per trade using the highest-rated recommended trades. The maximum time of a position is 10 trading days. Alerts to exit a position may come earlier.

    It’s not simple, but it’s all coded up and therefore the same algorithms are applied every day. At the heart of this system, the code wants to find trend retracements and locate the point where price will start to move with the trend again.

    It starts with looking at all North American optionable stocks and eliminating those that do not meet minimum price and volume requirements. What the algorithms are looking for are stocks with a statistically interesting price. A probability density function (Pdf) is used to find a price that is statistically interesting, meaning it is at an extreme, and for StockSpotter, this means one that is at a three-sigma value.

    Read more here

    StockSpotters daily signals for when to go long or short a specific stock can be used as a premise for constructing options trades using option strategies such as those taught at Phil's Stock World. As Peterson notes, the trades are for two weeks or less, and a basic option strategies work very nicely with these quick trades, e.g., "an option strategy might be to buy a vertical spread two weeks before expiration with the buy leg at-the-money and the sell leg for a few dollars more." 

    For the Phil's Stock World special 30-day, 30 dollar trial plus a 20% discount, be sure to use promo code PSW6922 if you sign up.  

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Comments (9)
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  • AllAboutCheating
    , contributor
    Comments (13) | Send Message
    What in the heck is a guassian distribution? Sounds like something my grandmother has. A fisher transform? I never felt so dumb in my life trying to understand this.
    7 Jan 2011, 02:28 PM Reply Like
  • Market Shadows
    , contributor
    Comments (121) | Send Message
    Author’s reply » Thank you for your input.
    8 Jan 2011, 05:22 PM Reply Like
  • AllAboutCheating
    , contributor
    Comments (13) | Send Message
    Not sure what you are reading but that was a question and not input.
    11 Jan 2011, 12:46 PM Reply Like
  • User 113523
    , contributor
    Comments (2) | Send Message
    Gausian distribution = Bell Curve
    11 Jan 2011, 09:47 PM Reply Like
  • OptionTrader2011
    , contributor
    Comment (1) | Send Message
    Thanks user 113523. Bell Curve I understand. Some people think if you use bigger words you sound smarter and in fact it is competely the opposite.
    12 Jan 2011, 05:46 PM Reply Like
  • Market Shadows
    , contributor
    Comments (121) | Send Message
    Author’s reply » What John Ehlers's program is doing is complicated, you can read the article linked to in Stocks and Commodities (above) if you want to understand the details.
    12 Jan 2011, 09:53 PM Reply Like
  • CramerFactor(SellWhatHePumps)
    , contributor
    Comments (208) | Send Message
    What ever happened to this? Your instablog is spotty as it seems to wander all over the place with no real point. Reminds me of Jim Cramer each night on the tube. His mouth never stops or the sweat on his bald head but nothing worthwhile ever comes out. Do you keep track of all these things? Most of the stocks seem about as wrong as Cramer. Do you work with Cramer?
    22 Apr 2011, 10:39 PM Reply Like
  • Market Shadows
    , contributor
    Comments (121) | Send Message
    Author’s reply » Here's the statistics for Stock Spotter currently:
    23 Apr 2011, 03:40 PM Reply Like
  • CramerFactor(SellWhatHePumps)
    , contributor
    Comments (208) | Send Message
    Thanks for the link. Can you explain in a few english sentences what it means though. What should we be buying based on this? I was hoping for a little more analysis than just a link telling me to go figure it out.
    25 Apr 2011, 02:07 PM Reply Like
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