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Scanning for Stock Trading Ideas: Using Themes to Develop Winning

Strategies

David Aferiat

Managing Partner

Trade Ideas LLC

December 2010

Philadelphia IED

© 2010 Trade Ideas LLC, All rights reserved

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Why Do I Need It?

What Makes ‘Great Technology’ Valuable:

Manages risk: Helps a trader make better trades

Maintains discipline: Keeps a trader ‘On the Path’

Evens Playing Field: Creates ‘information leverage’

Promotes independent thinking

Increases time for the important things in life

Simple to use

© 2010 Trade Ideas LLC, All rights reserved

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Real-Time Strategy Examples

Stocks up over $1.00 in the last 5 minutes on unusually high volume

Stocks down the last 5 days in a row but making a new 3 day high

Stocks crossing above and below their 200 day moving average

Stocks trading up forming V bottom

Stocks up and down 3 standard deviations

© 2010 Trade Ideas LLC, All rights reserved

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Not Just for Stock Traders

See stocks that have unusual Put / Call ratio

See stocks with very unusual options volume

Restrict your data to stocks that a meet a range of option volume traded today

© 2010 Trade Ideas LLC, All rights reserved

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Modeling Techniques: Rules of Thumb

Don’t start from scratch at the beginning; Consider modifying an existing strategy to fit your trading plan

Articulate clearly the pattern you wish to identify – writing it down first (like a grocery list) can help clarify your purpose (vs. shopping while hungry)

Draw your best trade on a chart and clearly label each axis – this works in selecting the correct alerts and filters for your timeframe

Separate bullish or up-trending strategies from bearish or down-trending strategies – this allows for more ways to ‘stack the probabilities’ of movement in a certain direction

Use the many support resources available! Definitions, video tutorials, etc.

© 2010 Trade Ideas LLC, All rights reserved

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Back-testing Techniques: Rules of Thumb

© 2010 Trade Ideas LLC, All rights reserved