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ShadowTrader Video Weekly

The video below is produced by ShadowTrader.net founder, Peter Reznicek. Each video contains a look ahead at what the market is going to do next week, along with what sectors/stocks are about to move, and specific trading ideas for the coming week ahead.


At ShadowTrader.net we believe that every investor's success begins with a good trading plan. For maximum benefit, please review the enclosed video prior to start of your trading week.


Grab some popcorn and enjoy!

Shadow Trader Video Weekly 08.07.11

Broad Market Support Levels

Reversal Indicators

GLD and AAPL

Intermediate / Advanced Webinar

Date/Time: Wednesday-July 13th at 12:00pm ET/11:00am CT
Key Topic: Discover how to create and find powerful Pattern set-ups using Wizard Lab!
Presented by: Prodigio Chief Architect - Bryan Wagner
Chat Location: Prodigio Chat Room (thinkorswim platform)

Beginner / Intermediate Webinar

Date/Time: Wednesday-July 20th at 12:00pm ET/11:00am CT
Key Topic: Back to the Basics: An introduction to Wizard Lab using Logic, Time and Adapters!
Presented by: Prodigio Chief Architect - Bryan Wagner
Chat Location: Prodigio Chat Room (thinkorswim platform)

Beginner / Intermediate Webinar

Date/Time: Wednesday-July 27th at 12:00pm ET/11:00am CT
Key Topic: Prodigio's latest platform Release: Let's take a Tour and where from here... & Q & A!
Presented by: Prodigio Instructor- Barry Viljoen
Chat Location: Prodigio Chat Room (thinkorswim platform)

Intermediate / Advanced Webinar

Date/Time: Wednesday-August 3rd at 12:00pm ET/11:00am CT
Key Topic: Be First to the Party: How to Build a professional powerful $Tick Fade strategy in Prodigio!
Presented by: Prodigio Chief Architect - Bryan Wagner
Chat Location: Prodigio Chat Room (thinkorswim platform)

Beginner / Intermediate Webinar

Date/Time: Wednesday-August 10th at 12:00pm ET/11:00am CT
Key Topic: Learn how to develop a simple RSI/ Bollinger Band Strategy for Bull or Bear Markets!
Presented by: Prodigio Chief Architect - Bryan Wagner
Chat Location: Prodigio Chat Room (thinkorswim platform)

Intermediate / Advanced Webinar

Date/Time: Wednesday-August 17th at 12:00pm ET/11:00am CT
Key Topic: Trade like the pro's with high probable trades & Less Risk: ShadowTrader Pairs Trader and Wizard Lab!
Presented by: Prodigio Chief Architect - Bryan Wagner
Chat Location: Prodigio Chat Room (thinkorswim platform)

Beginner / Intermediate Webinar

Date/Time: Wednesday-August 24th at 12:00pm ET/11:00am CT
Key Topic: Prodigio Wizard Lab Made Easy: Tips, Tricks, & Common Techniques!
Presented by: Prodigio Chief Architect - Bryan Wagner
Chat Location: Prodigio Chat Room (thinkorswim platform)

Ask the ShadowTrader

Each week, we select one email from the hundreds of thousands that we receive each week (slight exaggeration), and answer it live here in this forum thereby educating readers and making one lucky person famous for the day.


Email your questions in to asktheshadow@shadowtrader.net and we'll take it from there. If your question is selected for publication, you will receive a ShadowTrader T-shirt and coffee mug!

Dear Shadow,

Peter, I constantly cannot figure out how you calculate your pivots on the ES. My figures are always different from yours. What is the "secret sauce" that makes yours slightly different from the others?

Thanks,

Ralph M. in Tulsa, OK

My pivot calculations are based on standard floor trader pivots except for one major difference and that is that I only use "trading hours only". On top of that, there is also a special twist to it that I only use the hours of 9:30 - 4pm EST, even though the futures don't officially shut down until 4:15. Me being an equities guy, I'm more than likely halfway to the bar by that time.

The main reason why I started getting interested in pivots that were not calculated using 24 hour data is that when markets are very volatile and have enormous overnight gaps in the futures, you are often left with High and Low readings that push your pivots way out into the wild blue yonder into areas that they would never hit. The main thing is to play with multiple approaches and keep detailed notes on what is hitting at what levels and how often, etc. Like with anything in the markets I truly believe that the only "holy grail" out there is to "trade it and write it down". History is worthless unless you can learn from it!

The other thing that may be making your pivots kind of screwy is that you may not be using settlement value for the close. Remember, the secret sauce is applying the formulas to High, Low (only measured between 9:30 and 4pm EST) and Settlement Value (not Close). If you check the CME Group site, you'll see that this Sett Value is almost never the same as the closing tick at 4:15pm.

The complete formula along with the link to the CME Group website which you will need to get the "Settlement Value", is right at our site under the glossary section. Scroll down to the p's and look for "pivot points".

ShadowTrader Weekly FX Recap

ShadowTrader Weekly FX Recap is your weekly scoop on all things Forex, with fresh content catering to both the experienced FX trader and those just starting to get their feet wet. ShadowTrader Pip Academy is a weekly online lesson where traders will learn the basics of the Forex market, technical analysis, and fundamental analysis as it applies to trading currency. ShadowTraderPro FX Trader Live Call of the Week will highlight as actual trade taken in the newsletter over the past week and recap the setup and successful execution of the trade from start to finish. Things You Should Give a Pip About is a look at ahead at the news and markets that you should be paying attention to in the coming week to improve your chances of success in the currency markets.

ShadowTrader Pip Academy

Counter Trend Scalping

In pip academy, this week, we continued our discussion of scalping with pivots but we add a variation to the S2 and R2 levels for scalping purposes.

Last week, we discussed the idea of buying with price is above the pivot and targeting R1 and selling when price is below the pivot and targeting S1. We also discussed the idea that when price hits the R2 and S2, a correction usually occurs. Today we are going to combine support and resistance trend lines to define when to go counter trend to those extremes.

Instead of simply selling at a R2 level, we are going to confirm the signal. Previously we have discussed using a stochastic to confirm the sell signal at R2 but now we are going to use the test of R2 to tell us that we are in a trend and likely overbought. When the R2 is tested, we will add a trend line, starting at the last candle that touched the pivot and extend it up touching the lows up to the candle that tested R2. When this trend line is broken, we will set up the trade as a short back to the pivot point as support.

The test of S2 will also set up a downward trending resistance line that will be used to trigger a buy with a target of the pivot on the upside as well.

Notice in the chart below how every time the signal was reached and the trend line was broke, price returned to the pivot either the same day or the next. This is not 100% accurate but a highly probably scalping methodology for most pairs.

ShadowTrader FX Live Call of the Week

The trade of the week was on the GBP/NZD. This pair had continually sold off over the past couple of months becoming more and more overextended. We watched the pair start to coil at a long term support area and knew it was time to set up our trade.

Price bounced off of support, cleared the previous week’s highs and triggered us into our trade. We had a target at the 38% retracement level which hit two days after we entered the trade, netting us a profit of 480 pips or $409 in two days. We expect price to pull back and to give us a chance to reenter this trade and look for similar gains.

To get daily FX analysis of major pairs, economic data, and live, real-time trades on currencies every day, follow the ShadowTraderPro FX Trader on MyTrade. This service is now available for FREE. All you have to do is click on "Tools" tab on your TOS platform or go to www.MyTrade.com and "follow" ShadowTraderPro FX Trader.

Things You Should Give A Pip About

In things you should give a pip about this week, we look into the abyss. The S&P downgraded the U.S. credit rating from a AAA rating to an AA+ rating. This may not seem like a big deal but it is a huge deal. This is the first time since the ratings were used that the U.S. has not held the highest rating. It is the first time in history that China not only has indicated they would not be buying our debt but insisting the world selects a different world reserve currency.

With the downgrade of the U.S. credit rating, billions of dollars of bonds will have to be sold as investors and banks will adjust their portfolios to hold AAA rated securities and dump the U.S. less than perfect bonds. The seriously of this situation and the severity of the damage that could be done is so significant, it is hard to put into words, so I will lean on lines from movies (most of them from horror movies) that best express how we got here and the concerns for the next few weeks.

”Pay no attention to the man behind the curtain”, ”That’ll do pig, that’ll do”, “Anything this hideous must be stopped from breeding.”, “Just when you thought it was safe to go back into the water.”, “Humans are such easy prey.”, “Who will survive and what will be left of them?”, “Be afraid, be very afraid.”, and finally, “You must admit, you brought this on yourself.”

ShadowTrader Free Weekly Trade Idea

Each week Peter and his minions scour the markets to find the best equity and forex setups for the followers of the Swing Trader and FX Trader. Premium subscribers get 2-5 of these daily. Every weekend we present one trade idea from either the equity or the forex side here. Note: Free weekly trade ideas are strictly DIY (do it yourself!) and are not actively managed or updated once presented and may or may not be stocks that are currently in play in our newsletters. For a more "full service" feel, with real-time email alerts and updates, please check out the ShadowTraderPro Swing Trader and ShadowTraderPro FX Trader

Caterpillar, Inc. (CAT) - Long
Entry - 93.00
Stop - 86.38
Target - 112.40

After missing estimated earnings and following the majority of stocks lower in last week's broad market selloff, CAT is down approximately 20% from recent highs.

On Friday, the stock put in a bottoming reversal bar on big volume (blue oval) at a descending trendline level (black line). If the broad market snaps back higher in the short term, CAT is geared to join the rally. We have placed an entry alert trigger just over Friday's high with a protective stop under Friday's low. With the target at the prior high level of 112.40, this trade offers an approximate 2:1 risk reward ratio.

For an average of 2-5 trade ideas like this every day along with daily market analysis and trading guidance, follow the the ShadowTraderPro Swing Trader. This service is now available for FREE. All you have to do is click on "Tools" tab on your TOS platform or go to www.MyTrade.com and "follow" ShadowTraderPro Swing Trader.

ShadowTrader Pairs Trading Corner

Prodigio Pairs Scan By Popular Demand!

I though it might be enjoyable for everyone to feature our Prodigio Pairs Scan for this weekend. I have had several new and seasoned folks excited about our very cool Prodigio Pairs Scan Strategy.

This is a strategy to be used with "Wizard Lab's" Tab Three "Back Test" in order to run a scan to easily find a sector of stocks against a single stock. Our parameters are to find stocks that are $100 or less and that have 60 day correlation to our single stock of 0.85 or greater. You will find that in the "Prodigio Public Watch List" there are prepared drop down lists of specific sectors. In our example for "INTU" Intuit we would scan for correlated stocks in the DJUSSW Software Industry.

To begin our quest we would open our Prodigio "Symbol List Editor" then (1) click new, (2) then click the blue arrow to populate, and then (3) we choose a single stock like "INTU". Now, you're almost there, just go to "Wizard Lab Tab One" and open your "Rule Builder" and type INTU into the nodules and save as shown in the nodule example above. You may choose any number of different symbols and sectors with your new tool. Here is the link to download your very own super cool Prodigio Pairs Scan......

STRATEGY - 110602ProdPairsScan (buy).wiz

Want to know more, just email me at pairstrader@shadowtrader.net

"Good Luck Mr./Mrs. Phelps, Should You Decide To Take On This Mission".......

Be sure to catch any new pending trades coming out Sunday evening for Monday's Newsletter and to download your wiz files and import the strategies into your Prodigio Platform.

For the newbies:, Peter has created this short video to get you started. You can watch it here.

Any questions, email us at pairstrader@shadowtrader.net and Tom Cook will get back to you with a reply.

The Pairs Hour with Tom "The Southern Gentleman" Cook is happening on Thursdays at 4:15pm EST in the ShadowTrader chatroom on the TOS platform. Last week's show is archived here. We enjoy and encourage everyone to bring your suggestions, comments and questions to us each week during this program.

You can get real-time text messages sent to your phone every time we trade or post a new newsletter. Just text "follow st_pairs" (without the quotes) to 40404 on your cellphone. No twitter account is needed. Enjoy.

ShadowTrader Stock Challenge

Play the ShadowTrader Stock Challenge! Email your best stock pick (priced over $10) either long or short to squawk@shadowtrader.net on Friday mornings before 11:30am. Squawk host, Brad Augunas will pick 10 players on Friday afternoon for the following week. The entrant whose stock pick has risen or fallen the greatest amount on a percentage basis from Monday's open to Friday's close is the winner and will receive a ShadowTrader t-shirt and coffee mug!

Make sure to check out official rules here


Challenge contestants and stock picks for 8/15 - 8/19
namefromstockdirection
Frank G Stamford, CT A Long
Sammy123 Houston, TX BA Long
John Bekemeyer Sarasota, FL PLCE Long
Nala Cameron, NC CREE Long
Gamblerx7 Las Vegas, NV CVX Long
Charles Pleasant Alexandria, VA FCX Long
Buttermilk Fort Lauderdale, FL AKS Long
Phil A Johnsburg, IL WYNN Long
Long Island Jerry Massapequa, NY SINA Long
Matt Jacob Britton, MI WTW Long

Stock Challenge Hall of Fame
WeekNamestockdirection%move
8/8-8/12 Nala CREE Long +0.0%
8/1-8/5 Ray NFLX Short +10.21%
7/25-7/29 TradeonJohn WFT Long +10.15%
7/18-7/22 AirRun CREE Long +9.55%
7/11-7/15 Sukhush LNKD Long +12.50%
7/4-7/08 Mike from OKC OPEN Long +5.04%
6/27-7/01 Rob Weiss X Long +12.66%
6/20-6/24 Russ TNA Long +7.50%

What's New at ShadowTrader.net

ShadowTrader wecomes back Brad Augunas to the SquawkBox! - If you've been listening to the big show, you've been hearing the dulcet tones of Brad Augunas moderating alongside Peter. He will continue to co-host through July and then take the reins back over in August. We're glad to have him back in the fold! Peter will continue to call the /ES remotely from his cave in Nepal.

New ShadowTrader website! - ShadowTrader has revamped its website yet again. More features, more functionality, an online store for the exclusive ST t-shirts and coffee mugs, and a bold, new look. Check it out now!

ShadowTrader has moved to MyTrade - All three ShadowTraderPro newsletters have moved from RedOption to MyTrade and are posted FREE daily. Click on "Tools" tab on your platform, or go to www.MyTrade.com.

ShadowTraderPro Pairs Hour with Tom "the Southern Gentleman" Cook - Thursdays, live on the TOS platform. A 1 hour program on the basics of pairs trading. Tune into the ShadowTrader chatroom under the Support/Chat tab on your platform at 4:15pm EST.

ShadowTraderFX Hour with Blake Young - Tuesdays, live on the TOS platform, Blake is hosting a 1 hour program on all things Forex. Tune into the ShadowTrader chatroom under the Support/Chat tab on your platform at 4:15pm EST.

Twitter & Facebook - Did you know you can get real-time tweets when ShadowTrader advisories send out newsletters or trades? Just text the following (without the quote marks) to 40404 on your cellphone. Twitter account not necessary.

For Swing Trader text "follow st_swing"
For FX Trader text "follow st_fx"
For Pairs Trader text "follow st_pairs"
For Weekend Update text "follow st_weekend"

ShadowTrader is also on FaceBook at the link below

Prodigio RTS

thinkorswim the premier online broker, as rated #1 overall by Barron's, offers a truly revolutionary trading experience. Introducing Prodigio RTS, powered by thinkorswim technology. Prodigio is more than a trading platform, offering a cutting edge approach to equity & futures trading. With Prodigio, users have the capability to create, analyze, and test real-time strategies, create rules based trade-idea-generation alerts, and create trading rules and strategies using drag-n-drop-point-n-click. Prodigio also delivers active-trader order entry functionality, low latency back testing, and advanced customizable analytics. All are supported by a professional fully automated and/or semi automated robotic system to execute your trading, on one seamlessly integrated trading platform. To request activation or to learn more about thinkorswim Prodigio, email prodigio@thinkorswim.com.

Training videos

Every Wednesday at 12pm EST, we host live "learn-n-trade" webinars teaching users all the nuts and bolts of Prodigio and its unique functionality. Everything from basics to advanced automated strategies is covered. Last Wednesday's webinar can be viewed below. To access the entire list of archived webinars, please visit ProdigioRTS.com.

08/03/11 - "Be First to the Party: How to Build a professional powerful SPY/ ES $Tick Fade strategy in Prodigio!- Bryan Wagner

What's New

Scheduled software releases, Prodigio Learn-N-Trade scheduled shows, and upcoming feature enhancements.

Prodigio News!

Swing Traders may want to take a close look at Prodigio's most recent new feature release offering the new "RTS Auto Trading Expiration Date". This function allows traders to extend their Auto trading schedules by manually setting a trade date window using the new calendar setting. This is perfect for swing trader's who may for example may want to see their strategy run continuously for say 6 weeks straight or any time duration defined by you so not to chance missing a trade due to inadvertently forgetting to Enable RTS Auto Trading each morning. This great new feature can be found under the RTS Strategies tab. When deploying RTS strategies and or extending your RTS Auto Trading Expiration date, please"be sure to remember to depress your "Enable Auto Trading" button atop the platform in order to activate your auto trading permissioning or you will not see/ receive any trade generation!" For more education and information on all Prodigio happenings please visit About Prodigio.

We invite you to join us this week on Wednesday at 12:00pm ET on the thinkorswim platform for the Prodigio Learn-N-Trade webinar chat. This week's topic hosted by Prodigio Chief Architect - Bryan Wagner is:"Learn how to develop a simple RSI/ Bollinger Band Strategy for Bull or Bear Markets!

To Activate your no-charge Live or PaperMoney Prodigio platform account, simply email support@thinkorswim.com with the subject line: Prodigio Activation Request. Please be sure to include your thinkorswim Demo/Live Username & Account number for expedited activation.

Prodigio Platform Q/A Support Questions can be discussed/ answered by Prodigio staff members each trading day between 9:15AM - 11:30AM EST in the Prodigio Chat room on your thinkorswimin platform.

The entire Prodigio team wishes you successful trading in the coming week.

Visit ProdigioRTS.com to interact with other Prodigio users. The Prodigio Forum is a great place to Ask questions, Share strategies, and Collaborate on ideas using our live, interactive forum.