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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 11.06.11

/ES and the nifty twelve fifty

Update on leaders such as AAPL, AMZN, etc...

Trading inside value & Gold holding steady

Beginner / Intermediate Webinar

Date/Time: Wednesday-October 12th at 12:00pm ET/11:00am CT
Key Topic: Getting Started with Prodigio; Introduction to Trading features, Robotic Screening for precise Trade-Idea-Generation, integrated Charting, and expanded back testing!
Presented by: Prodigio Chief Architect - Bryan Wagner
Chat Location: Prodigio Chat Room (thinkorswim platform)

Beginner / Intermediate Webinar

Date/Time: Wednesday-October 19th at 12:00pm ET/11:00am CT
Key Topic: Developing a powerful Automated Bollinger Band trading strategy with Prodigio!
Presented by: Prodigio Chief Architect - Bryan Wagner
Chat Location: Prodigio Chat Room (thinkorswim platform)

Beginner / Intermediate Webinar

Date/Time: Wednesday-October 26th at 12:00pm ET/11:00am CT
Key Topic: Discover Prodigio's powerful scanning tools using TradeOptics and TradeVision!
Presented by: Prodigio Chief Architect- Bryan Wagner
Chat Location: Prodigio Chat Room (thinkorswim platform)

Intermediate / Advanced Webinar

Date/Time: Wednesday-November 2nd at 12:00pm ET/11:00am CT
Key Topic: Effective Spread Trading; Trade like the pro's with high probable less risk trades. ShadowTrader Pairs using Wizard Lab!
Presented by: ShadowTraderPro Pairs Equity Strategist-Instructor- Tom Cook
Chat Location: Prodigio Chat Room (thinkorswim platform)

Beginner / Intermediate Webinar

Date/Time: Wednesday-November 9th at 12:00pm ET/11:00am CT
Key Topic: Creating an RSI Mean Reversion Trading Stategy with Prodigio!
Presented by: Prodigio Chief Architect - Bryan Wagner
Chat Location: Prodigio Chat Room (thinkorswim platform)

Beginner / Intermediate Webinar

Date/Time: Wednesday-November 16th at 12:00pm ET/11:00am CT
Key Topic: Prodigio’s Big Release; Tour the new Features, Functionality, How to, and What to Expect moving forward!
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,

Love the show! I'm a swing trader and usually enter trades at the end of the day. This question refers to options, not stocks. If the market in general is not very strong I'll only buy 1/2 the position. What would you say is a good rule of thumb for entering the balance of the position the next day: would you wait until end of day or would you enter intraday, and what would be your signal?

I wrote 'legging in' in my subject line, should I have said 'scaling in'? Is there a difference?

Thanks,

Deanna from San Francisco, CA

Thanks for writing in, Deanna. I am going to assume here that even though you are talking about options and not stocks, you are trading directionally via straight puts and calls, and not using more complex spreads which might try to take advantage of positive theta. Your question sounds like you're just replacing stock with a call or put, which is just fine as long as you are deep enough in the money to have that almost 100% delta so your option acts like stock.

While I have no problem with the scaling in (more on that later), I don't think that I like the buying of the rest of the position the next day. I always enter intraday and the reason for that is that I want to be entering when the stock is breaking some key resistance or pivot area. The fact that another day has passed does not satisfy this criteria for me.

If splitting the trade up makes you more comfortable, then by all means. But, the second entry, to me, should have some sort of technical confirmation on it. For instance, you might buy the first half aggressively on some reversal on an hourly chart for instance. You could then set a plan and a buy stop to enter the second half over the high of the reversal day, or even over the high of a weekly bar whose pattern confirms your entry. Obviously, this can happen at any time.

As for the scaling versus legging discussion, what you are doing is scaling in. Legging refers to building an option spread by buying one part of it at a time. For instance, you could "leg into" a butterfly by buying a long vertical and then selling a short vertical.

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

LT Trends and ST Candles

In last week's pip academy , we discussed the concept of long term trends using long term moving averages in the forex market. We also discussed the fact that many of the dollar crosses were at or crossing the 200 period simple moving average.

Often we see price will approach and test a moving average but even the test and/or the break of the moving average can benefit from the use a single candle or short term price pattern as confirmation. It might be compared too turning approaching an intersection of a highway. When we get to the area where we can go left or right, we should stop and observe our surroundings, make sure we aren’t going to be hit by oncoming traffic.

Take a moment to look more closely at the chart as price approaches the intersection of price and the moving average. By doing this, we will be able to get a better sense of which direction we should be going and decrease the chance of getting hit by the semi hurtling down the road.

Note how the price has approached the moving average three different times. The first time, we saw a hammer formation and confirming bullish candle. The second time, we saw a break with no follow through followed by a bounce back higher without confirmation and then finally a bearish confirmation. The third time, we broke through bullishly, didn’t get a confirmation. Broke through bearishly, followed by a confirming bearish candle.

Each time we pause it can costs us a little time (and maybe some money that we could have had by getting the confirmation) but the costs are usually worth the confirmation and the safety that is provided by avoiding getting faked out by the chart.

ShadowTrader FX Live Call of the Week

The trade of the week is on the GBP/NZD. This trade is a multiple support trade setup with a break above the 61% Fib level.

As can be seen in the chart, the price on this pair has been running in a channel and pulled back to test the channel support followed by a quick bounce and a break through the 61% level. We can see the price levels have held as support and resistance multiple times.

We entered this trade at 2.0020 and price has climbed pulled back and has begun to climb again. We are currently up 135 pips and if we see any uncertainty on the weekend, we should see a continuation of the bullish trend as well as an opportunity to move out our target and add to this position.

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 continue to discuss the euro zone.

This week we saw a few more signs of desperation coming out of the euro. First we had Papandreou call for a referendum vote only to say he would take it off the table if he had support from the opposition party. Second, the ECB cut interest rates by 25 basis point in a surprise cut. Third, Italy agreed to be monitored by the IMF to help them maintain some stability. Forth, there has been a call for a confidence vote for Papandreou. There are probably more items we could mention but the sum of all of it simply states that those finance ministers and leaders of countries are not confident in the current state of the euro zone and yet investors keep buying the euro.

There is a strange grasping at individual straws of hope going on all the while those that make the decisions don’t trust their current situation. The G20 did not provide any financial support for the EZ only verbal support. That and a dollar will buy you a burger on the dollar menu.

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

Wabco Holdings, Inc. (WBC) - Long
Entry - 51.57
Stop - 48.90
Target - 60.60

Within the last two weeks, WBC has formed a triangle at the highs of mid August (orange line). A break higher out of the triangle will put the stock into an area of limited resistance up to the trade target of 60.60.

With the entry and stop points indicated on the chart above, this trade setup offers a 3.39 : 1 reward to risk 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 Contest"

"Welcome To Our Prodigio Pairs Contest" "One Small Step For Mankind, & One Large Leap For Pairs As We Know It".

We are about to begin a new journey with our "Prodigio Pairs Contest". The contest begins this Monday November 7th, 2011 and goes through to Friday December 2, 2011. Our five chosen contestants will battle on the field of trading combat to generate the most profit with their best weapon the "Prodigio Robotic Trading System".

Our Five Contestants for this Historic First "Prodigio Pairs Contest" shall be the following;

1. Bob, he will be trading his demo account with "paper money"

2. Harish, he will be trading his live account with "real money"

3. Dave, he will be trading his demo account with "paper money"

4. Liz, she will be trading her live account with "real money"

5. Jim, he will be trading his demo account with "paper money"

Our five contestants will be tracked through the month and their progress will be reported in the Sunday Weekend Updates. The chosen pair shall be ("PRU" Prudential Financial - "MET" Metlife Insurance). The contestants shall trade as many times, and in as many directions as they see appropriate, in order to generate their profits for the trading month.

The Winner will receive ShadowTrader T-shirt and coffee mug and also be listed in the Pairs Trading Hall of Fame in the Pairs Corner of the Weekend Update. If they are up to it and so choose, winners may be interviewed live on the SquawkBox to discuss their strategy....Good Luck Contestants!

Want to know more!, catch us on the "Pairs Hour Show" at 4:15 - 5:15 EST every Thursday.

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! Pick any stock priced over $10, either long or short. Use the Submission Form to send in your picks 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 & Coffee mug!


Challenge contestants and stock picks for 11/7 - 11/11
namefromstockdirection
MalaysiaMan Kuala Lumpur, Malaysia RBCN Long
Joy New Haven, CT MCP Short
Trendman San Antonio, TX OIH Long
KrazyKarl Olathe, KS DHI Long
Houston Arlington, TX PCLN Long
Tammy Rancho Santa Margarita, CA CLX Long
John OTRTW San Dimas, CA PZZA Short
Runner Carson, CA EBIX Short
Kristi Ball Houston, PA RL Short
David Ville Platte, LA CAM Long

Stock Challenge Hall of Fame
WeekNamestockdirection%move
10/31-11/4 MalaysiaMan RBCN Long +10.80%
10/24-10/28 Beck FFIV Long +20.83%
10/17-10/21 Kyle Anderson CMG Long +4.35%
10/10-10/14 Karen F Long +5.76%
10/3-10/7 Karen BIDU Long +13.91%
9/26-9/30 Zef Side SLW Short +5.28%
9/19-9/23 Deuce CLF Short +23.67%
9/12-9/16 Rainman RIMM Short +18.02%
9/5-9/9 Bob DNDN Long +10.14%
8/29-9/2 Mindcandy LNKD Long +4.56%
8/22-8/26 Mayday FOSL Long +28.04%
8/15-8/19 808Stockpikr DNDN Long +13.13%
8/8-8/12 Nala CREE Long +33.33%
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

New ShadowTrader website! - ShadowTrader has revamped its website yet again. More features, more functionality, new 60 second videos on the home page, 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.

11/02/11 - "Effective Spread Trading;Trade like the pro's with high probable less risk trades. ShadowTrader Pairs using Wizard Lab! presented by: Tom Cook

What's New

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

Prodigio News!

COMING SOON!!! We are pleased to update traders regarding Prodigio’s exciting future release! The entire Prodigio quant & development team have been hard at work for the past four months collaborating, planning and developing what is believed may be one of the most powerful and comprehensive Technical & Fundamental Stock & Futures Screener & Scanner applications available. We would like to offer you a sneak peak at "Prodigio-TradeVision” from thinkorswim by TD Ameritrade.

About TradeVision from thinkorswim by TD Ameritrade: ("Targeted/ Tentative" Release date of November 25th -Project release date assumption is based upon all project Development scope and Q/A testing being completed as schedule.)

If you are an investor or serious trader who seeks to manage (his/her) own investments, you know that Research and Qualified Trade Idea Generation TM is a full time effort. Introducing "Prodigio-TradeVision” from thinkorswim by TD Ameritrade possibly the most comprehensive and powerful Screening system available to meet investment needs or trading strategy. TradeVision is the latest in proprietary technology that is easy to use and will allow you complete flexibility in customizing your own asset instrument screens while monitoring thousands of securities 24/7 automatically uncovering trading opportunities “as they occur”. No programming script required! Trader Users will simply go to their Prodigio TradeVison tab, Select from one or more of the over 2,000 Search elements available, Run real-time “live” market data screens intraday or in the evening, Scroll through qualified screened results, Review charts, and Place trades that meet only your exact criteria across any TD Ameritrade platform of your choice. Dynamic analysis continuously occurs updating every 5 minutes 24/7 based on Prodigio’s trusted market analytics. We would like to offer you a sneak peak at "Prodigio-TradeVision” from thinkorswim by TD Ameritrade

Prodigio-TradeVision from thinkorswim by TD Ameritrade Product Feature Highlights:

• Easy to use, Click, Scan, See, and Trade functionality. No programming scripts.

• Powerful, flexible, real-time multi-symbol market scanner.

• Receive easy-to-read formatted (configurable) results on each user designed search.

• Live market data, not delayed or end of day like most other.

• Low latency Server-side professional (institutional level) scanning/ processing

• User friendly U.I. (user interface). No training needed.

• Work with the Largest Search array with over +2,000 Customizable scanning elements.

• Real-time continuous Scanning 24/ 7 with dynamic updating every 5 minutes.

• Run multiple simultaneous user defined scans supported by Save settings

• Utilize valuable informative In-line TA Study and Fundamental quote values in-side the market scan result quote pane.

• Large scanning universe covering entire U.S. markets covering over +50,000 securities (NYSE, AMEX, NASDAQ and OTC).

• Price Events- Select from over 300 Price Event scan elements.

• Technical Studies-Select from over 34 TA Studies offering 1,021 scan elements.

• Candlestick Patterns- Select from over 87 single/multi 1-10 bar Patterns offering 221 scan elements.

• Fundamentals- Select from over 700 Fundamental scan elements.

• Fully integrated Quick Chart/ Order Entry functionality from integrated search list.

• Level ll based trading

• Customize searches based on price, volume, industry, sector, market cap, and much more.

• See and be a part of every big move of the day.

• Access Pre-Built, Shared-User-Built and Custom-Built trading scans.

• 3-D Heat Maps- Multi-style 3-D heat maps dynamically scan markets quickly; spot opportunities, track trends, compare sectors for relative strength/ weakness and Money flow rotation.

tosProdigio Launcher Bug Update--The tos dev team has moved the thinkorswim Prodigio Launcher bug to a top priority. The tos dev team is working to resolve a known problem that is limited to “certain” cases (account holders) in which certain permissioned tosProdigio account holders may not be able to launch the Prodgio platform from the thinkorswim platform. We are hopeful and confident that this bug will be resolved soon. We will update all traders with this fix upon release. Please contact Prodigio Support at Prodigio@thinkorswim.com should you have any questions or require assistance.

Recently Prodigio released its 2nd phase in its overall plan to offer the largest available design, development and back-test data sets (equities, indices, & futures) for Prodigio algo traders. The latest phase II release expanded data sets back as far as 20 years where possible. Phase III is currently in development and we will keep traders posted as the project continues. 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 the trader. This is a great trade management tool that helps traders 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.

You don't want to miss this Wednesday's Prodigio chat featuring; Special guest - Tom Cook!!! 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 will be hosted by Tom Cook:"Discover Prodigio's effective spread trading using Wizard Lab!"

To Activate your no-charge Live or PaperMoney Prodigio platform account, simply email Prodigio@thinkorswim.com or Support@thinkorswim.com with the subject line: Prodigio Activation Request. Please be sure to include your thinkorswim Demo or Live Username & Account number for expedited activation. For platform assistance, questions, report problems , or simply how to use, please contact the Prodigio Support team at Prodigio@thinkorswim.com

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 or by emailing Prodigio@thinkorswim.com.

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.