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1. x 3 Vrrrvi 2 10 13 Aug 2008 Sap 2008 Oot 2008 Now 2006 Dec 2008 Track n Trade 5 0 207 ep e O 2 qv M O Cc gt O gem D gt O Chapter 8 Calculation The calculation for the top or Plus Band is here 2 ATR over 10 periods 20 period exponential moving average The calculation for the bottom or Minus Band 1s here 2 ATR over 10 periods 20 period exponential moving average Preferences Open the Preference tab from the Control Panel on the left of your screen Select the Keltner Bands line on your screen The preferences will appear in the Control Panel Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To All Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Keltner Bands Period Specify the number of days used Period Type Simple Type Select Simple Linear Weight or Exponential Band Calculation fe Original en day SMA of High Low Band Calculation Select Original or ATR and enter ATR E n day ATR x ATR multiplier als your own n y 2 50 Upper fl Blue Upper Middle Lower Choose the color line style Middle Red and line thickness of your
2. 260 Gecko Software Inc 14 Bulls n Bears Trading Green Light Red Light Blue Light Track n Trade 5 0 261 Chapter 13 D v gt ep O Le U U I V U qu D aa c KL 2 aa 262 Gecko Software Inc Bulls n Bears Trading introduction Bulls n Bears is the first trading system designed for Track n Trade 5 0 users This trading system includes easily usable tools to see if the market is bullish or bearish Bulls n Bears allows you to change the sensitivity of the system according to your trading style whether you are an aggressive trader or a more traditional trader The plug in also comes with the Advantage Lines indicator With the Bulls n Bears Red Light Green Light Blue Light trading method system you have simple to understand entry and exit signals displayed visually on the chart Red Light Bearish Trend Indicates the beginning of h a bearish trend and that 4 the contract has started to N 9 Bea rs h M a rket move downward therefore TS m identifying a possible short i tu b entry point oh hh Mil alt Green Light Bullish Trend AL Indicates the trend of a market Bullish Market has begun to move upward identifying a possible long entry point WW nN WW D Q ep Q 2 e CD lt ep bb D 3 LNP b kml wh ul Track n Trade 5 0 263 Chapter 13 Yellow
3. Canadian Dollar Euro Fx Combi Japanese Yen To remove the selected item click Delete Maint 34 00 n 1350 00 1000 0 2025 00 1500 0 7 1523 00 1350 0 1215 00 900 0 34 00 n 1060 00 800 0 00 00 2000 0 1620 00 1200 0 1060 00 800 0 466 00 350 0 34 00 n 1590 00 1400 0 1620 00 1400 0 sx M mil Restore Factory Defaults 254 Add Modify Cancel To modify a margin Click on the margin in the list make changes to the margins and then select the Add Modify button To add a new margin Select the commodities for the spread and then type in the values for the Initial and Maintenance amounts and then click the Add Modify button To restore factory defaults To restore the margins to software defaults click on the Restore factory defaults button Gecko Software Inc 13 Commitment of Traders Know What the Industries are Trading Track n Trade 5 0 255 Chapter 12 E D ES au di O Le qu pu uc O c 0 256 Gecko Software Inc Commitment of Traders Plug in Introduction arag 15238286 m COT f Percent aur p pa a ER A o r Small In this graph the lighter red bars that represent the commercials are all selling or going short while the trend of the market is going up The commercials are using the futures market to hedge either the cash market or their current inventory by goi
4. Commitment of Traders Plug in Gives you the overall picture of what is happening behind the scenes of each market It actually tells you who s buying and who s selling from large professional trade commercial traders and small speculators This information is a great indicator for which way the market will turn Bulls n Bears Trading System The first trading system designed for Track n Trade 5 0 users This trading system includes easily usable tools to see if the market is bullish or bearish Bulls n Bears allows you to change the sensitivity of the system according to your trading style whether you are an aggressive trader or a more traditional trader So before ever attempting to trade in the futures market develop a strategic plan Your trading plan should be realistic and well tested over past history Once it has been developed take six months and paper trade simulate trading in real time using Track n Trade 5 0 If the plan still holds up then remember the mantra of futures traders Plan your Trade and Trade Your Plan Good Luck Lan H Turner CEO Gecko Software Inc 28 Gecko Software Inc Getting Started Navigating Your New Software Track n Trade 5 0 29 Chapter 1 Le D pun Av ep O r QD O 30 Gecko Software Inc Getting Started installation Whether you purchased Track n Trade 5 0 by downloading it from the internet or to be installed by CD ROM
5. E yellow the 100 location to be changed to the highest point T3 aoo s veiw Seem m value in the indicator ES O 00 Li Yellow View up to four Thresholds at values and colors of your choice C o Q 5 2 O Q O PR ep Track n Trade 5 0 157 N pe O qu Le e E 77 D Chapter 7 Know Sure Thing KST The Know Sure Thing KST Indicator is an oscillator developed by Martin J Ping that gives bullish and bearish momentum signals The difference between this indicator and other oscillators is that it takes into consideration four time periods instead of only one Each time period is smoothed using a moving average Also each time period is weighted differently depending on length so a longer time period would have greater weight Because of the consideration of the various time periods the KST is able to react quicker to price moves Watch for bullish and bearish momentum signals in the KST indicator When the KST turns upward this is a bullish signal and when the KST turns down this is a bearish signal More confirmation is given when the trigger line crosses the KST line as a result of the change in direction There are two lines the trigger line and the KST line The KST line is a result of the four moving averages smoothed as well as the Rate of Change or ROC The trigger line is a moving average of the KST Buy Sell Signals A buy signal occurs when the KST line
6. Iw Hon Reportable Small Speculators Iv Open Interest Use Options Data Display as p Bearish Bullish as Histogram Thresholds if eo w mv re eo w Era af ww w A JBCOT Moving Average 28 MA1 Bl blue r i BuySell Arrows when Indicator is visable B Fed m Moving Average 2 Show Arrow Arrow Color Track n Trade 5 0 Lines Select the color type and thickness of your lines Select the box in front of the name to show or hide each component of the commitment of traders Display as Bearish Bullish displays COT by calculating the number of Long positions minus the number of Short positions If it is positive more trades are long If it is negative more trades are short If it is zero they are equal Long amp Short Positions display COT as a stacked column The long position number on top and the short position number on bottom Thresholds View up to four thresholds at a value that you type in and a color that you choose JBCOT Select if you would like to view the JBCOT lines Moving Averages Specify the number of weeks used in calculating the JBCOT buy sell indicator Select the color type and thickness of your line Select when you would want Buy Sell Arrows to show and what color 259 C e 3 2 D O C Q D RJ o U c G m Chapter 12 E D ES au di O Le qu pu uc O c 0
7. Taj oof E Yellow thickness of your KST and trigger lines 4 0 00 E Yellow Buy Sell Arrows View up to four Thresholds at values and colors of your Show Arrow When Indicator is visable v choice Choose when you want Buy Sell Arrows to show Arrow Color Bi and what color Calculation Choose between Simple Linear Weight C o Q 5 2 O Q mp O PR ep Track n Trade 5 0 159 N pu O m v Le e 77 D Chapter 7 Moving Average Convergence Divergence MACD MACD was created in an attempt to determine the strength of a trend along with the direction of that trend Gerald Appel created a system that looked at two exponential moving averages and the difference between those two averages Looking at these moving averages of the market we are able to see clear buy and sell signals We are also able to get a more accurate signal by averaging the difference in the two moving averages Computing this indicator requires the use of exponential moving averages Exponential moving averages are different than simple moving averages instead of looking at only the last few days and averaging them the exponential averages look at all the prices and puts more weight on the most recent data This type of weighted average gives a smoother average price that reacts quickly to market moves The two averages of MACD move above and below a base line which gives indication of the strength of
8. The Profitability of Option Strategy at Expiration The OS Calculator enables you to enter an Option Strategy to see the potential profit loss of that strategy order O O 5 O v C e L 237 E O E A v Q er Q Chapter 9 OSV STRK Indicators The Options Plug in contains two indicators used to determine if an option is over or under valued The indicators available are Options Strike Value and Strike Price Select to view these indicators from one of these locations The Indicator Toolbar OSV STRK The OSV and STRK buttons have been added to your Indicator Toolbar at the bottom of your screen Click on the indicator you would l ke to view You can also change the put call strike that the indicator is based on from the dropdown menu next to the buttons Right Click Chart Right click the Indicator Window to view the dropdown menu All your indicators are listed in alphabetical order Highlight and click the indicator you would like to view Selected indicators will have a checkmark next to their name 238 Gecko Software Inc Options Plug in Options Strike Value OSV This indicator displays the theoretical option values versus the actual option price value for a specific put call strike price as a histogram The positive values represent over valued and the negative values represent under valued options Example of the OSV in the Indicator Window EFE VENT ARRETE I
9. 4 Preferences T EN Restore Settings TNT Defaults My Defaults Apply To All Charts Save As My Default Chart Properties Mane On Screen Text I Smooth Scrolling Buy Sell Arrows t Full Contract Last jg Months Symbol 5 Mame 5avbeans Combined Group GRAINS Exchange Contract Size Contract Units Tic Size Minimum Move Tic Units Full Point Value Init Margin Maint Margin FAD First Notice Day LTO Last Trading Day Market Oper Market Close 6 000 00 Bushels 1 4 0 250000 50 00 1350 00 1 000 00 5 23 2007 13 2007 18 31 00 13 15 00 One contract represents 5 000 00 Bushels A tick or minimum move is 1 4 0 250000 per Bushels and worth 12 50 per contract full point movement is 1 1 00 per Bushels and worth 50 00 per contract 40 Commodities This section of the Control Panel gives you the ability to open a chart add a chart to your Chartbook and to select between the charts that are open See the Chartbooks section for more details Preferences The Preferences Tab will help you customize how your chart looks and information on your chart It defaults to chart settings but will also show the options for customizing Technical Tools and Indicators This is where you can change colors fonts and line type for your chart and indicators Key This section displays the key details and data from the contract displayed in the Cha
10. Before starting a business it is important to have a business plan and have adequate capital Most new businesses start off with a dream and the proprietor s willingness to work hard Despite hard work they can fail because of unforeseen difficulties poor preparation or lack of capital Remember this when starting your trading business try to have adequate capital and plan for the unforeseen by developing and testing a trading plan Before trading it is imperative that you develop a trading plan Your trading plan should be capitalized with money you can afford to lose Generally trading funds are categorized as genuine risk capital if it is money that you can afford to lose Again this is not your child s college education fund the mortgage money or grocery money Proper planning and adequate capitalization are the cornerstones of any new venture The first step in building a house is drawing up plans for the completed house The workmen who erect the house consult the blueprints when placing walls sinks appliances and electrical outlets The transition from bare ground to a finished home is laid out in the blueprints or the plan for the completed structure Trades should be planned with as much detail Every situation should be planned for so decisions are not made in the heat of the moment when money is on the line The goal of your trading plan is to allow you to make decisions before things happen giving you a blueprint for trad
11. if you own the Options Plug in and the Futures amp Options r Data Subscription service LU 1 144 10 Select dl eines doi me dn E i PONT Te ns Remember you can open this window often and download ve cannectn seed Bauer 2 more commodities in the future If you would like to select Ca or deselect all commodities click on the or button at the end of each column Note Saved Chartbooks containing charts from commodities that you have removed from the Chart Window will not be affected by the Commodity Chooser This utility will not delete data from your hard drive The Commodity Chooser will only hide the commodity from the Commodity tab and from the daily data downloads Le Q pun U Par ep le E 5 D O 42 Gecko Software Inc Getting Started Commodity Symbols Track n Trade 5 0 will accept contracts typed in the following format Commodity Symbol Contract Month Contract Year Symbol Name Exchange Group AD AustraiianDollar c CME MM currencies AD jAustraianDollar o CME MM currencies BP British Pound CME c CME MM currencies BP British Pound CME o CME MM currencies CD Canadian Dollar CME c CME MM currencies CD Canadian Dollar CME o CME MM currencies EC EuoFX CMEIMM eurrencies JY Japanese Yen CME c CME MM currencies JY Japanese Yen CME o CME MM
12. Inc Using Indicators For a histogram drawing a buy signal occurs when the CCI value crosses from below the 0 line to above the 0 line A sell signal occurs when the CCI value crosses from above the 0 line to below the 0 line 3t Buy ce Mill i Selll Preferences Right click on the CCI button in your Indicator toolbar and select CCI Settings The Preferences Tab will open in the Control Panel and the CCI preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To All Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings C Commodity Channel Index CCI Period The number of bars or interval used to Q CCI Period 20 calculate the study Default is 20 3 ccr Black 71 S Standard line e CCI Choose the color line style and line thickness of D ao us your line Select Standard and choose between a line Q Up Color or a histogram from the dropdown menu Select W CCI ig Down Color Bree to display a histogram divided in the middle and choose Thresholds two colors from the dropdown menu B 100 00 Value E Yellow View up to four Thresholds at values and colors of your E
13. Light Grid Lines Custom H In this tab you can customize every detail of how your iw Dark Grid Lines Bi Custom chart looks You can specify colors and sizes of all the MW Gridlines in Indicator Window features on vour chart Day Line E Silver First of Month se Restore Settings TNT Default will change your settings NW us CEE back to the original software settings My Default will First Notice E HDI change current settings to your personalized default Option Exp Bl Purple settings Apply To All Charts will apply your selected Ruler Text Marks settings on all open charts Save As My Default will save Ruler Background white your current personal settings Chart Background Location Lines Iw Cursor Line B SeaGreen Price Bars Na Change E Silver d Closed Lower Gray E Closed Higher I Gray Highlight E DimGray Color Change Compare Previous Clc To Close MW Autoscale Price Bars Le Q pun U Par ep le E 5 D O i Proportional Width Price Bars Fill All Candles Price Bar Type MHL T 52 Gecko Software Inc Getting Started Themes Track n Trade 5 0 gives you the ability to save your personal settings as a theme With different themes you can apply many pre set characteristics quickly to a chart When you have your settings how you like them select Save Themes from your View menu The Save settings to file window will appear Choose where
14. NO CONSEQUENTIAL OR OTHER DAMAGES Your exclusive remedy for any breach of this Limited Warranty is as set forth below Except for any refund elected by Gecko YOU ARE NOT ENTITLED TO ANY DAMAGES INCLUD ING BUT NOT LIMITED TO CONSEQUENTIAL DAMAGES if the SOFTWARE PRODUCT does not meet Gecko s Limited Warranty and to the maximum extent allowed by applicable law even if any remedy fails of its essential purpose The terms Exclusion of Incidental Consequential and Certain Other Damages below are also incorporated into this Limited Warranty Some states jurisdictions do not allow the exclusion or limitation of incidental or consequential damages so the above limitation or exclusion may not apply to you This Limited War ranty gives you specific legal rights You may have others that vary from state jurisdiction to state jurisdiction YOUR EXCLUSIVE REMEDY Gecko and its suppliers entire liability and your exclusive remedy shall be at Gecko s option from time to time a return of the price paid if any for or b repair or replacement of the SOFTWARE PRODUCT that does not meet this Limited Warranty and that is returned to Gecko with a copy of your receipt You will receive the remedy elected by Gecko without charge except that you are responsible for any expenses you may incur e g cost of shipping the SOFTWARE PRODUCT to Gecko This Limited Warranty is void if failure of the SOFTWARE PRODUCT has resulted from accident abuse misapplication
15. O c Q a O gt O O um E Introduction to Futures Meats The contracts are quoted in cents per pound If Live Cattle is trading at 74 00 the price is actually 0 74 cents per pound Meat prices move in 0 025 cents per pound increments but usually the last 0 005 cent per pound is dropped so a price quote of 74 02 is really 74 025 while a price quote of 74 17 1s actually 74 175 Live Cattle Lean Hogs and Pork Bellies contracts call for delivery of 40 000 pounds making a 0 025 cent per pound worth 10 00 before commissions and fees The profit or loss of a one cent move is 400 00 before commissions and fees Feeder Cattle prices are quoted the same way except they call for 50 000 pounds making a 0 025 cent move is worth 12 50 and a one cent move in Feeder Cattle worth 500 00 before commissions and fees Softs or Exotics Coffee Sugar and Orange Juice are all quoted in cents per pound but each has a different contract size A Coffee price of 50 40 is 50 40 cents per pound an Orange Juice price of 89 95 is 89 95 cents per pound and a Sugar price of 762 is really 7 62 cents per pound prices in Sugar are quoted in cents per hundred weight Cocoa prices are quoted in dollars per metric ton so a price of 1301 is really 1301 per metric ton The contract size for Coffee is 37 500 pounds making a 1 cent move worth 375 00 before commissions and fees Orange Juice futures call for delivery of 15 000 pounds making a
16. O qu Le i e E 77 D 162 Gecko Software Inc Using Indicators Preferences Right click on the MACD button in your Indicator toolbar and select MACD Settings The Preferences Tab will open in the Control Panel and the MACD preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Moving Average Convergance Divergance EMA Periods The first box is used to specify the first EMA Periods kef a EMA with a default of 12 The second box is for the Bearish LightGrey second EMA with a default of 26 Bullish Elbakaay gt I Trigger Period Bearish Bullish Choose the color line style and line v Trigger NM ForestGreen gt n thickness of your line Display as Histogram wy Calculation standard Trigger Period Specify the number of days Thresholds r2f 000 Ar F sf oof j webw Display as The MACD indicator can be displayed 4 oo 9 E Yellow differently From the dropdown menu choose either to Buy Sell Arrows view it as a line or as a histogram Show Arrow When Indicator is Visable Y IT Ns EUR z
17. Options Subtotal otal Upen Total Closed FL Options Plug in Options Tab When you purchase the Options Plug in An Options section will be added to your My Account tab in the Control Panel The options orders that are placed are also listed in the My Account tab The Options tab is located in the Control Panel after the Spreads tab It looks like a green up arrow and purple down arrow When you first click on the Options tab it defaults to the Date View which contains the options Total Cammissions ta 82 B A Options Esport Calc Stike Fate Options Strikes in Cattle Feeder Combined Aug on Friday U8 of June 2007 Exp 83 days Chane 122 000 Call 0 025 1290 0 Strikes Type Premium Value Change Diff oil Deka Gamma Theta Wega Aho Strike The price at which the futures contract underlying an option is to be bought or sold upon exercise data available Open the corresponding futures chart in the Commodity tab for the options pricing that you are interested in viewing You will notice that the Options tab is now populated with values Type Type of options order Put or Call Premium Value in points to purchase the option Value Dollar amount for the premium value Change The difference between yesterday s and today s strike Diff Dollar amount for the Change IVol Implied Volatility of the underlying futures contract Delta Measures how
18. Q O Chapter 1 34 Keyboard Shortcuts Quick Reference Ctrl and f Ctrl and 4 Ctrl and Ctrl and gt Page Up Page Down Ctrl and Page Up Ctrl and Page Down lt Home End Shift Delete Tab Shift and Tab Ctrl F9 Ctrl and F9 H Ctrl click Screen Capture Ctrl Shift click Screen Capture Shift click Screen Capture Scroll Chart Up Scroll Chart Down Scroll Chart Left scroll Chart Right Scroll Screen Half Up Scroll Screen Half Down Scroll Screen Quarter Up Scroll Screen Quarter Down Step Chart Back 1 Tick Step Chart Forward 1 Tick Move Chart to Beginning Move Chart to End Highlight Day Under Cursor Delete Selected Object or Tool Move to Next Open Chart Move to Previous Chart Lock Tool to 45 or 90 Degrees Increment Calculator Decrement Calculator Show Text on All Overlay Indicators Move Overlay Indicator Text Show and Hide Control Panel Copy Chart to Clipboard Copy Chart and Control Panel to Clipboard Save Chart Control Panel to File Gecko Software Inc view Help Mew Ctrl M Open Ctri o Save Chri4 5 Save s Remember Last Book Print Setup Download Data 1 charkbaak Ent Exit Yie Toolbar Status Bar Play Controls Charting Tools Motation Tools Accounting Tools Advanced Tools Indicator Buttons Sizing Controls Current Frice Bar Tool Button Lock Show Drawing Tools Commodity Chooser Long Term Settings Spread Margins
19. Specify the number of days in a Donchian Period 14 period Upper E RosyBrown er a Blueviolet gt Upper Lower Choose the color line style and line thickness of your indicator line 206 Gecko Software Inc Overlay Indicators Keltner Bands Kelter Bands were developed by Chester Keltner and Modified by Linda Raschke They are traditional moving average envelopes based on Exponential Moving Averages The probability is that prices will remain within the channel as with all band type indicators A break above the channel is an anticipation of higher prices When prices close below the lower band we anticipate lower prices The middle line 20 period EMA in a rising market should provide support In a falling market the middle line should provide resistance Keltner Bands as with any moving average indicator seem to work great in strongly tending markets but not so well in sideways markets Just like all trend following systems the Keltner Bands are not meant to spot tops or bottoms Use the Keltner Bands in conjunction with other indicators such as RSI or MACD Using it in combination with either of these will help provide verification of the strength of a market Example of Keltner Bands Hogs Lean Combined Jul 07 previene 72075 SJ0 29IpU BJI AO ue ae g E Fes zi
20. fax email or any other Track n Trade 5 0 13 method preferred by Gecko DATA DOWNLOAD DATA SERVICE IS DEFINED AS This is a non guaranteed service with no rights or privileges whatsoever and is only an extension of the service provided by Track n Trade and Gecko Software Inc not a standard feature SUBSCRIPTION BASED DATA DOWNLOAD IS DEFINED AS Data in which Gecko Software provides by computer transmission services to their subscribing customers This service is not a guaranteed service and may be discontinued off line or late for any given period or amount of time without warranty or restitution Data subscription services and fees are a non refundable non guaranteed extension of service provided by Gecko Software Inc Data has been provided from sources believed to be reliable but no guarantee is made as to its accuracy when trading real markets consult a licensed brokerage firm to confirm ALL price action All orders placed through the live trading platform are at your own risk Gecko Software makes no claim that any order ever placed through our live platform s will be properly executed since this is beyond the realm of our control lability This license does not give any recipient the right to re transmit or re distribute this data in any format whatsoever LIMITATION OF LIABILITY AND REMEDIES Notwithstanding any damages that you might incur for any reason whatsoever including without limitation all damages referenc
21. n The value you specify C o Q 2 O Q O n ep Once you obtain the K value you start computing the D value which is an accumulative moving average Since the 6D is a moving average of a moving average it requires several trading intervals before the values are calculated properly If you specify a 20 period stochastic the software system requires 26 trading intervals before it can calculate valid K and 96D values The formula for the 96D 1s here DT DT 1 x 2 96Kt 5 DT The value for D in the current period DT 1 The value for D in the previous time period Kt The value for K in the current period The values 2 and 3 are constants You specify the constants and the length of the time period to examine for the trading range Track n Trade 5 0 187 N pe O qu Le i e E 77 D Chapter 7 Once the K and D values for the normal stochastic are derived the slow stochastic can be computed The formula for the slow stochastic is here KSLOW DNORMAL DSLOWt WD SLOW1 1 x 2 OK SLOWIt I 3 KSLOW The D for the normal stochastic DSLOWt Slow D value for the current period DSLOWt 1 The slow 96D for the previous period KSLOWt 1 The slow 96K for the previous period The values 2 and 3 are the smoothing constants You may select different values Buy Sell Signals A buy signal occurs when the 96K line crosses from below 96D to above
22. since the ROC is on a relative scale and scales against historical rates What is equilibrium today will not be the equilibrium line down the road and what is not equilibrium today will appear to be so from a historical point of view Comparing the ROC s of different time spans improves the accuracy of the analysis A 12 month period is usually the most reliable for long term trends and a 3 or 6 month period works well for intermediate trends A 10 or 12 day ROC is a good short term indicator oscillating in a fairly regular cycle The lower the ROC the more undersold the market and the more likely a recovery Although the opposite may hold true in that the higher the ROC the more overbought the market both extremes can indicate the formation of a sideways channel Calculations The calculation for the ROC is here ROC 100 x Today s close Close 10 periods ago Close 10 periods ago Example of the ROC in the Indicator Window C o Q 5 2 O Q mp O PR ep MALUM LIS LLLI IN A ER VA Track n Trade 5 0 179 Chapter 7 Preferences Right click on the ROC button in your Indicator toolbar and select ROC Settings The Preferences Tab will open in the Control Panel and the ROC preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change cur
23. your line 25 00 E Yellow 3 ooo C Yellow EE View up to four Thresholds at values and colors of your 4 99 s E choice When calculating buy sell signals Threshold 1 is used as the upper threshold and Threshold 2 is used at the lower threshold default values set at 75 and 25 BuySell Arrows Show Arrow When Indicator is Visible Arrow Color Oo ForestGreen Lu Choose when you want Buy Sell Arrows to show and When calculating Bury j Sell arrows For MFI Threshold 1 is used as the upper threshold what color Threshold 2 is used as the lower threshold C o o 5 2 O Q mp O PR ep Track n Trade 5 0 165 N pu O m v Le e 77 D Chapter 7 Momentum MOM The momentum indicator describes how price changes occur It is a measure of the price change and shows if prices are increasing or decreasing at a continuous rate Momentum can help gauge the current market trend This indicator will sometimes shift ahead of a price change It is both an indicator of trend as well as an indicator of a changing trend The main thing to look for when using it is a divergence or difference between price behavior and the indicators behavior Momentum measures the rate of change in prices rather than actual price levels themselves By measuring this rate of incline or decline momentum tells whether the current trend is strengthening or weakening If prices are rising and the momentu
24. 1 9 20 Deposit Amount 478 00 E02 Buy lm 95 587 1 8 2004 BP20 Sell 194 23 British Pound CME Combined Jun EP 200 7 Cattle Live Combined Jun L LC200 M Euradallar Combined Jun 04 E 0 2004M Modify an Order Right click the entry and select Settings from the dropdown menu Cancel or Delete an Order Select the order by clicking on it Hit the Del Delete button on your keyboard This will hide the order but not delete it Orders need to be deleted in the My Account tab of the Control Panel Also if you delete a chart in the Commodities window any orders placed on that chart will not be deleted from your book Hide Show an Order on a Chart Right click on the order listed in My Account and select Hide Show from the menu If you would like to hide show all orders use the Hide All Show All from the menu Accounting amp Simulator Plug in From the My Account window users can place orders and make deposits and withdrawals This window also has overall totals for the trading account and for the current contract that you have open in the Chart Window Accounting Date Date the current chart is played to Open Order P L Profit Loss on trades that are open Closed Order P L Profit Loss on completed trades Order Commissions Total commissions paid Account Balance All closed Profit Loss Commissions Withdrawals and Deposits Margins Requirements in placing and maintai
25. 1 cent move worth 150 00 before commissions and fees Sugar is traded in 112 000 pound increments making a 1 cent move in Sugar equal to 1 120 00 before commissions and fees Cocoa contracts call for 10 metric tons at delivery making a 1 move in Cocoa worth 10 00 before commissions and fees Metals Gold and Platinum prices are quoted in dollars per troy ounce Most quote vendors display their prices in this format as well so prices are easy to read A Gold price of 285 10 is 285 10 per troy ounce while a Platinum price of 475 5 is 475 50 per troy ounce However each contract has a different contract size Each Gold futures contract represents 100 troy ounces so a 1 00 per troy ounce move equates to 100 00 before commissions and fees Platinum futures represent only 50 troy ounces as Platinum is much more rare than Gold Each 1 00 per toy ounce move in Platinum is equal to 50 00 before commissions and fees Silver and Copper Futures are quoted in cents cents per troy ounce in Silver and cents per pound in Copper A Silver price of 452 5 is actually 4 525 per ounce while a Copper price of 70 20 is really 0 7020 per pound Each Silver contract represents 5 000 ounces making a 1 0 cent move equal 50 00 before commissions and fees Copper contracts control 25 000 pounds of copper making a 1 00 cent move equal 250 00 before commissions and fees Petroleum Crude oil is quoted in dollars per barrel bbl A price of 20 50 is 20 50
26. 100 alue allow H vel choice When calculating buy sell signals Threshold 1 3 000 E Yew is used as the upper threshold and Threshold 2 is used as 4 oo E Yellow the lower threshold default values set at 100 and 100 BuySell Arrows Show Arrow When Indicator is Visible Choose when you want Buy Sell Arrows to show and Arrow Color L VioletRed bul what color When calculating Buy Sell arrows For CCI Threshold 1 is used as the upper threshold Threshold 2 is used as the lower threshold Track n Trade 5 0 141 N pe O qu Le e E 77 D Chapter 7 Chaikin Money Flow CMF The Chaikin Money Flow Indicator is an oscillator developed by Marc Chaikin An oscillator is an indicator that is used as a counter trend showing when the market is overbought or oversold These indicators are momentum based The CMF is based largely on the Accumulation Distribution Line it compares the close value with the high and the low for that same day By comparing the close to the high and low the CMF is determining if the market has pressure to sell or buy In doing this the CMF is giving an indication of overbought and oversold by using these comparisons If the market is consistently closing in the top region of the price bar and there is an increase in volume showing an increase in the number of trades then CMF exhibits a positive value If the market is consistently closing in th
27. 64 90 26 Paint 1 Price Point 2 Price Dollar Calculator Tool Choose the color line style and line thickness of your line Quantity By default the dollar calculate the price between two points as if you were buying one contract Default is set to 1 with the calculation between the two prices standing for contract By changing the number next to Quantity in your preferences the middle price will be calculated to show the value of multiple contracts Font Select the font size and color of the text Select Show Text to hide or show your text on the chart Select how you would like to view the values on your dollar calculator Value will show you the size of the move in dollars points x point value ROI stands for Return on Investment and calculates the return on your investment against the grand total of your account at the time you run the calculator Points will show you the size of the move in points Select Snap to have your lines snap to price bars when moved 120 Gecko Software Inc Calculator Tools Risk Reward Calculator The Risk Reward calculator is used to find the difference between two points of the risk and reward zone Select the Risk Reward tool on your Calculators Toolbar Click on your chart where you want your technical formation to begin and drag to cover the area between your initial order and your risking stop loss order The calculator will create an equal sized reward area that c
28. 96D and both lines are less than the lower threshold A sell signal occurs when the K line crosses from above the D line to below the 96D line and both lines are greater than the upper threshold 00 00 SSIO 14 oh Buy 50 00 Preferences Right click on the SSTO button in your Indicator toolbar and select SSTO Settings The Preferences Tab will open in the Control Panel and the SSTO preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings 188 Gecko Software Inc Using Indicators Slow Stochastics SSTO Period The number of periods used to determine Fa the highest high and lowest low Default is 14 Smoothing rok 3 D wk ck D C Gray Calculation Thresholds K D Choose the color line style and line thickness Maf 8000 Yellow of your K and D lines E 20 00 C Yellow 3 oo veio E VE On Choose between Exponential Simple and Wilder s Smoothing calculations EI O 00 sg C Yellow Buy Sell Arrows View up to four Thresholds at values and colors of your Show Arrow When Indicator is Visible
29. A buyer enters into a long position when he she purchases a futures contract Long positions are profitable if the underlying futures contract increases in price during the holding period Selling the same quantity and contract month that one initially purchased offsets a long position Long positions are typically used by consumers to hedge against rising prices and initiated by speculators in anticipation of higher prices A short position entails the sale of futures contracts in anticipation of lower prices A short position is entered into by initially selling a futures contract In the futures market unlike the stock market it is just as easy to establish a short position as a long position Short positions are profitable if the underlying futures contract decreases in price during the holding period Buying the same quantity and contract month that you initially sold offsets your short positions If the resulting purchase price is less than the original sale price a profit is achieved However if the resulting purchase price is greater than the original sale price a loss is incurred Commodity producers who wish to avoid potentially lower prices as a short position increases in value and prices decline usually establish short positions Calculating Profit Loss Determining the profit or loss associated with a position is the same regardless of either a long or short position The profit or loss from a futures position is calculated as follo
30. Arrow Arrow Color 168 MOM Period The number of bars or period to be used to calculate the study You must determine a value suitable to your trading needs and methods Some technicians argue that the length of the momentum indicator should equal the normal price cycle The best method is to experiment with different lengths until you find the length that works best for that particular commodity you are trading MOM MA Choose the color line style and line thickness of your line Uncheck the Show MOMMA box if you would like to hide the Momentum Moving Average line You can also specify the number of days used in calculating the MOMMA line Display as The MOM indicator can be displayed differently From the dropdown menu choose either to view it as a line or as a histogram View up to four Thresholds at values and colors of your choice Choose when you want Buy Sell Arrows to show and what color Gecko Software Inc Using Indicators On Balance Volume OBV The OBV indicator adds a period volume when the close is up and then subtracts the period s volume when the indicator closes down An accumulated volume total forms the OBV line When comparing this calculated price line with the underlying security we look for areas of convergence and divergence to confirm our market s directional movement The concept behind the OBV is that changes will be reflected in the OBV prior to the markets change A rise in volume is
31. Calculation Select Standard or Extra Smoothing to choose how you would like your chart to be calculated Extra Smoothing is a proprietary formula developed by Lan H Turner president and CEO of Gecko Software Inc This method increases the movement in the MACD indicator and has shown to be more accurate in Gecko Software s market testing than the standard calculation Its relationship to the MACD is similar to the relationship between the Fast and Slow Stochastics think of this indicator as the Fast MACD Trigger Check this box to hide the Trigger line You can also change the color and line style of the Trigger C o Q 5 2 O Q mp O PR ep View up to four Thresholds at values and colors of your choice Choose when you want Buy Sell Arrows to show and what color Track n Trade 5 0 163 N pe O qu Le i e E 77 D Chapter 7 Money Flow Index MFI The MFI is a momentum based indicator similar to the RSI R and CCI The MFI incorporates a more rigid calculation giving the tell tale signs of a more rigid line and a better indication of money flowing in or out of any given security The theory says that as money flows into the equity or volume increases the MFI will increase its rate of climb As money flows out of the equity volume decreases and the MFI will decrease its rate of climb The MFI is a classic overbought oversold indicator based on a 0 100 scale When t
32. Feeder Combined Sep 07 En ind 1x3 1x2 Gann Fan i 4 a M i UP hy TEE P e o O E ja re O O D C gt Le c 92 Gecko Software Inc Advanced Charting Tools Andrews Pitchfork Theory Dr Alan Andrews developed a channel technique to show areas of support and resistance from a baseline This use of a median line is the key to using the Andrews Pitchfork Buying near lows and selling near highs that are identified by the tines of the pitchfork The basic premise is to trade the channel from one level of support or resistance to the next Interpretation The first element to draw the Andrews Pitchfork is the centerline The middle tine or median line begins at the most recent contract low or high To plot the direction of this point we must attain the other two points The top tine is determined by looking at the highest move made from the origin of the contract low or high The next point is found by looking at the retracement of that move For example a contract begins at point A rallies to point B and sells off from point B to point C A line is drawn from point B to point C and the line originating at point A splits those two lines equally This pitchfork shows continuing points of support and resistance The general use of this tool is to sell when the market rises to line B take profits once prices reach line A and buy when prices dip to line C This series of movemen
33. Inclining Wedges with a prior downtrend are anticipated to break down and out rather than up and out Declining Wedge The Declining Wedge formation occurs when the slope of both lines is down the top line being steeper then the lower one This formation is opposite the Inclining Wedge Trade the Declining Wedge the same as the Inclining Wedge Declining Wedges with a prior uptrend are anticipated to break up and out rather than down and out Symmetrical Triangle A Symmetrical Triangle is likely to resume the previous trend after the pause forming the triangle Notice the price bars form a perfect symmetrical triangle shape To trade a Symmetrical Triangle place a buy order on a break up and out of the triangle or a sell order on a break down and out of the triangle D O pes qu am O Non Symmetrical Triangle A Non Symmetrical Triangle is exactly the same as the Symmetrical Triangle except lacking symmetry The formation resumes the previous trend when a break occurs Trade a Non Symmetrical Triangle just as you would a Symmetrical Triangle 76 Gecko Software Inc Charting Tools Wedge and Arange Tool Identify any type of wedge or triangle by selecting the Wedge tool from your Charting toolbar Position the mouse pointer where you would like to place the top point of the triangle and click Move to the bottom point of the triangle and click again Position the mouse pointer where you w
34. Indicator Window JA aa Bi AA lll Ll LLILLL MEL PET tt ty Preferences Right click on the AD button in your Indicator toolbar and select AD Settings The Preferences Tab will open in the Control Panel and the AD preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To All Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Williams Accumulation Distribution Index Line Choose the color line style and line thickness of ane Black your line and MA line You can also choose to show MA Line C Aquamarine 3 zl hide the MA line and use Williams AD Show M M Use Wiliams AD View up to four Thresholds at values and colors of your Thresholds choice Choose when you want Buy Sell Arrows to rif ooo l El Yellow show and what color E 0 00 E Yellow 3 ooo velw 4 0 00 Yo E Yellow BuySell Arrows Show Arrow When Indicator is Visible Arrow Color E Cyan m 134 Gecko Software Inc Using Indicators Average True Range ATR The Average True Range Indicator was developed by Welles Wilder to work with the commodity industry The purp
35. Lights Neutral or Sideways Trend Indicates the trend of the a M market has entered a sideways N eutral lui rk et or neutral time frame j iM j e p t il Blue Lights Stop Loss Placement The Parabolic stop is used within the Bulls n Bears system as the key point for managing your stop loss risk while trading helping you to identify exit and stop loss placement points after entering a trade Q r i gt ep O Le qu U V e qu D aa c 2 aa 264 Gecko Software Inc Bulls n Bears Trading Preferences Open the Preference tab from the Control Panel on the left of your screen Right click on your chart and highlight Overlay Properties from the dropdown menu Select Bulls n Bears from the list and the preferences will appear in the Control Panel Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings RE Boa Sensitivity Adjust what you would like the sensitivity 0 Sensitivity level to be Low Ji High Style Select Lines Dots Crosses Squares or Price Bars from the dropdown menu Style Price Bars Formula Traditi
36. Load Themes Save Themes Getting Started File Menu Open a new blank chartbook by clicking on New or open an already saved chartbook by clicking on Open Save the current chartbook with existing name by clicking Save If the chartbook hasn t been saved the Save As window will open for you to name the chartbook that you are working on Remember Last Book will load the last chartbook you had open The last eight chartbooks you have opened are listed below Data Download Print the chart window by selecting Print Print Preview will open a window showing what the chart will look like when it is printed Print Setup gives options for printing the chart Download Data will open the Data Download window in your browser Exit closes the program View Menu Use this dropdown menu to select which toolbars you would like to appear on your screen The toolbar is selected when a checkmark appears beside it Toolbars you can choose to show or hide are Main Toolbar Status Bar Play Controls Charting Tools Notation Tools Accounting Tools Advanced Tools Indicator Buttons Sizing Controls and Current Price Bar You may also select Tool Button Lock that gives you the ability to use the tool you have selected an unlimited amount until you select another tool If this option is not selected your tools will only last for one drawing and default back to the pointer tool Deselecting Show Drawing Tools will hide any drawn tools on
37. O Q O gt Q m 5 Track n Trade 5 0 219 Chapter 14 O i T qu am x ur v O Le Cc 280 Gecko Software Inc
38. SE evo ROC RSI snsi ssro TRIX LT Mz OI Track n Trade 5 0 131 N pe O qu Le e E 77 D Chapter 7 You can also display an indicator by right clicking in the Indicator Window and selecting the indicator you would like to view Select Show All to view all selected indicators in the Indicator Window at the same time Selecting Properties will open the current indicator preferences in the Preferences tab of your Control Panel One Button The One Button on the left end of your Indicator toolbar allows you to have as many indicators selected as you like but only view them one at a time in the indicator window To switch between each selected indicator click the Indicator Information Display to the right of the Indicator ee JE Ty 59 Percent N NT AT MATE TNT L100 00 Twos Aum 7100005 L100 00 DMI DM m HVOLI HvoL E NI t T 14 B000 amp 50 00 Volatility volatility When you click on the Indicator Information Display window the indicator information will rotate to the next indicator you have selected as simulated above All Button The All Button will display all the indicators you have selected on the Indicator toolbar in the Indicator Window You will still be able to rotate the information for each indicator to the right of the Indicator Window Note The One and All buttons can be specified for each chart you have open 132 Gecko Software Inc Usi
39. Trade 5 0 have buy sell signals You will be able to select the indicator to view these signals on the chart The indicators that have buy sell signals are indicated by an asterisk in the following list of indicators included in your program AD Williams Accumulation Distribution ATR Average True Range e BW Bollinger Bandwidth e CCI Commodity Channel Index e CMF Chaikin Money Flow DMI Directional Movement Index e FSTO Fast Stochastics e GTR Gator e HVOL Historic Volatility e KST Know Sure Thing MACD Moving Average Convergence Divergence e MFI Money Flow Index e MOM Momentum e OBV On Balance Volume PPO Percent Price Oscillator R Williams Percent R B Percent Bollinger Bands PVO Price Volume Oscillator e ROC Rate of Change RSI Relative Strength Index e SRSEI Stochastic Relative Strength Index e SSTO Slow Stochastics TRIX Triple Exponential Average ULT Ultimate Oscillator e V OI Volume Open Interest C o Q 5 2 O Q O PR ep Displaying Indicators in the Indicator Window The Indicator Buttons are found on the bottom of your screen below the chart window The Indicator toolbar can be closed or opened by selecting View on the Menu bar and clicking on Indicator Buttons Display an indicator by clicking on its corresponding button OME ALL AD ATR Ei CCI CM hl rsro GTR vot KST maco MFI MoM oew PPO HR
40. a list of some individual candlestick terms It is important to realize that many formations occur within the context of prior candlesticks What follows is merely a definition of terms not formations The Black Candlestick The White Candlestick The Shaven Head The close was lower than the The close was higher than the A candlestick with no upper open open shadow The Shaven Bottom Spinning Top Doji Line A candlestick with no lower A candlestick with small real A candlestick with no real shadow bodies When appearing in a body but instead have a sideways choppy market they horizontal line This shows the represent equilibrium between Open and Close are the same the bulls and the bears They or very close The length of the can be either white or black shadow can vary le T qu on as prar v O C qu 214 Gecko Software Inc Candlestick Charting Candlestick Reversal Patterns Just as many traders look to bar charts for double tops and bottoms Head amp Shoulders and technical indicators for reversal signals candlestick formations can also be looked upon for the same purpose reversal does not always mean that the current uptrend downtrend will reverse direction but merely that the current direction may end The market may then decide to drift sideways Candlestick reversal patterns must be viewed within the context of prior activity to be effective In fact identical candlesticks may have
41. agree to the terms of this EULA do not install or use the SOFTWARE PRODUCT you may however return it to your place of purchase for a full refund No verbal or written agreement may supersede this agreement SOFTWARE PRODUCT LICENSE The SOFTWARE PRODUCT is protected by copyright laws and international copyright treaties as well as other intellectual property laws and treaties The SOFTWARE PRODUCT is licensed not sold 1 GRANT OF LICENSE This EULA grants you the following rights Track n Trade 5 0 You may install as many copies of Track n Trade 5 0 on as many computer systems as you so desire Track n Trade 5 0 requires a login and password to gain access you are not allowed to share your login and password with anyone else whosoever in so doing you will be in violation of this agreement You may not allow remotely connected COMPUTERS nor to invoke application sharing of the software This connection includes any indirect connections made through software or hardware which pools or aggregates connections This license agreement allows you to personally use the software while at home work or on the road this is not the right to lend out copies of this software to your friends and family Even though you are allowed to install the SOFTWARE on multiple workstations the SOFTWARE can only be executed and running on one COMPUTER at a time no simultaneous use is allowed without the purchase of additional licenses Logging in from any o
42. appear In the Open window select the file you would like to open and click on the Open button You will also find that a recently saved chartbook will be in the bookmark section at the end of the File menu Saving Charts as an Image Many Track n Trade 5 0 users include Chartbooks and images of their charts in emails websites presentations etc To save a current chart as it appears on your screen as an image click on the Screen Capture button in your Main toolbar The Save Chart Image window will open You may specify the file name location and file type the standard web file types are gif or jpg Once the image is saved you are ready to email it or import it into a document Le Q pun U ep le E 5 D O Printing a Chart To print a chart in Track n Trade 5 0 click on the File menu and select Print The Print screen will open for your default printer You can also print a chart by clicking on the Print button on your Main toolbar The printed chart will always have the Indicator Window printed at the bottom of the chart The size of the chart will depend on the size that it is when you press the Print button To change from Portrait to Landscape click on Print Setup from the File Menu Selecting the Landscape button will print a full page chart while Portrait will print a half page dikaki i ra chart 50 Gecko Software Inc Getting Started For an idea of what the
43. are placed below the market A customer wishing to buy July Soybeans at 485 when the current market price is 475 would place a stop order as follows Buy one July Soybean at 485 stop If the Soybean market trades as high as 485 or is bid at 485 the order would become a market order and would be filled as quickly as possible A customer wishing to sell July Soybeans at 465 when the market is currently priced at 475 would place a stop order as follows Sell one July Soybean at 465 stop If the Soybean market traded as low as 465 or was offered at 465 the order would become a market order and would be filled as quickly as possible Example Stop orders are usually used to liquidate earlier transactions to cut losses or protect profits Let s assume that a speculator bought three July Corn at 210 and the market is currently trading at 225 He may wish to protect some of his 15 cent profit per contract 2 250 00 profit before commissions and fees by placing a sell stop at 220 to protect 10 cents 1 500 of the profit before commissions and fees Placing the following order would do this Sell three July Corn at 220 stop There are many other different types of orders such as stop limits and market if touched orders but the above orders are the most commonly used and are really the only orders a beginning trader needs to learn 26 Gecko Software Inc Introduction to Futures Look Before You Leap A Message from the CEO
44. by selecting the Options Call or Options Put order tools in your Accounting Toolbar Click on your chart and hold down the mouse while you drag the order tool along the futures chart Release the mouse button when you have reached your desired position The Options Order window will open Options Orders x Commodity Date Type in the commodity symbol and date for the chart The values Commodity FC20070 Date Friday June 08 2007 7 Quantity Strike Brokerage fee this trade each 60 00 are pre filled when placing on chart m l jozo Cal x Premium 3 475 Buy or Sell Select from the dropdown menu Contingency Order Value 1737 50 Futures price breaks Total 1737 50 Quantity Enter the value you would like to use The default is set at 1 aS ess Strike Price Enter the value of the strike price The value is pre filled when placing on chart Call or Put Select the order type from the dropdown menu The value is pre filled with type of option order tool chosen Brokerage Fee Enter the value you would like to use The default is set at 0 00 Premium Enter the point value for the strike price O O 5 O v C e L Value Enter the dollar amount of the Premium Contingency Order Check this box if you want the option order executed based on a specific futures price Note Once you place an option order on your chart window it will be filled on yesterday s close Track n Tr
45. chart will look like printed select Print Preview from the File menu or your Main toolbar to view the output before printing the chart The last day s open high low and close will also be printed on the chart Charting Preferences You can specify how your chart looks by using the Preferences tab in your Control Panel or by right clicking in your chart window and using selections from the dropdown menu Right click Menu When you highlight Tick Style a menu will appear to the right of the dropdown window From here you can select which style of ticks you would like to appear on your chart OHLC will show the open high low and close tick marks for the day HLC will be the same without the initial open tick Close will take the closing prices for each day and turn your chart into a line graph Close EX stands for Close Extended It will look like Close with the close price as an extended horizontal line Candle will show your price pars as candlesticks Candlesticks are explained in the Candlesticks chapter at the end of the manual dedic ime Selecting Proportional Width will make your price bar width Tick Style proportional to the scale of your chart w Proportional Width Autascale Charts Show Buy Sell Arrows Autoscale Charts forces the chart to scale the price bars displayed VERSIO OPE in the chart window based on the highest and lowest point available Chart Properties in this set of price bars It will rescale th
46. choice Threshold 1 is used for Trend Strength default value set at 40 Trend Strength Extreme Point validation Turning Point Validation Point Validation Trend Strength or Turning Point Validation filters 148 Gecko Software Inc Using Indicators Fast Stochastics FSTO The Stochastic Process was invented by Dr George C Lane under the basic premise that during periods of decrease daily closes tend to accumulate near the extreme low of the day and conversely during periods of increase daily closes tend to accumulate near the extreme highs of the day This indicator is designed to show conditions of overbought and oversold markets Stochastics are divided into two types Regular Stochastics often referred to as Fast Stochastics and Slow Stochastics Fast Stochastics are more sensitive to price changes and can give a lot in the short term hence the need for Slow Stochastics Stochastics display two lines that move in a vertical scale between O and 100 representing percentiles from 0 to 100 Think of the level of Stochastics as where the most current close is within a specific range If Stochastics are reading 50 the current close is in the middle of the price range for a specified period of time If Stochastics are reading 100 the close is at the high of the range and 096 represents the current close price being at the low of the range This will help you to understand why Stochastics are a counter trend
47. currencies MP MexicanPeso c CME MM currencies MP MexicanPeso o CME MM currencies SF SwissFranc o CMEIMM currencies SF SwissFranc o CME MM J currencies RZ Euro SwissFranc e NYBOT FINEX currencies DX US Dolar o NYBOT FINEX currencies DX U S Dollar NYBOT FINEX currencies Oil Heating c MB MunicipalNote 1 yr c CBOT financials US U S T Bond30yr CBOT financials US US T Bond30yr o CBOT financials TY U S T Bond 10 yr c CBOT financials Track n Trade 5 0 43 o D e QD r Q m D ei O Q pun Av Par ep le E gt D O Chapter 1 U S T Bond 10 yr o CBOT financials Tu US rBondzyr osor fnancals Tu Us rBondzyro osor financials FV US TBondsyr osor fnancals Fv US rBondsyr o osor financials MED Euredolar CMEIMM fimancias ED Eurodollar omenmm financials MEM LBOR tmo o CMEIMM financials EM LIBOR tmo o 1 CMEIMM financials sc feom emor Jorans avo com mini cor grains Com esor Jorans aso fesor forans foats fesor Jorans Rice Roun CBOT orans Rice Rough o esor orains Soybean mear CBOT orains Soybean meato esor orains Soybean on esor orains Soybean oito esor grains Soybeans osor
48. delivery month March at an exchange recognized facility If the purchaser of the March Corn contract wishes to exit his position on February 15th he can do so by selling one March Corn contract Assuming that the contract was sold at 2 45 per bushel the holder of the March Corn contract would receive 1 000 00 before broker commissions and fees for holding the position for six weeks Profit or Loss Sale Price Purchase Price x of bushels 2 45 2 25 0 20 x 5 000 1 000 00 The person in this example is 1 000 00 richer for the experience and has no further obligation in the Corn market because the sale of the March Corn futures contract at 2 45 per bushel offset the earlier purchase at 2 25 per bushel Track n Trade 5 0 17 be O O C O c O 5 bb O TI C bb D On v D um 2 LL O c Q a O gt O O um a E Introduction to Futures Notice in the previous example that all of the features of the contract were predetermined by the exchange except the price Quantity 5 000 bushels for Corn futures Quality of the Corn 2 Yellow Delivery time 7th to last business day of the contract month Location exchange recognized warehouse or transfer station Because futures contracts are standardized with price as the only variable buyers and sellers are able to exchange one contract for another and actually offset their obligation to deliver or take deliv
49. different meanings depending on where they occur within the context of prior trends and formations Hammer Hammer A candlestick with a long lower shadow and small real body The shadow should be at least twice the length of the real body and there should be no or very little upper shadow The body may be either black or white but must occur within the context of a downtrend to be considered a hammer The market may be hammering out a bottom Hanging Man Identical in appearance to the Hammer but appears within the context of an uptrend Hanging Man Engulfing Patterns Bullish This occurs when a white real body completely covers or engulfs the prior day s real body The market should be in a definable trend not chopping around sideways The shadows of the prior candlestick do not need to be engulfed O Q ex D on O Q O gt Q m 5 Track n Trade 5 0 2 5 Chapter 14 Engulfing Pattern Bearish This occurs when a black real body completely covers or engulfs the prior day s real body The market should be in a definable trend not chopping around sideways The shadows of the prior candlestick do not need to be engulfed Dark Cloud Cover Bearish A top reversal formation where the first day of the pattern consists of a strong white real body The second day s price opens above the top of the upper shadow of the prior candlestick but the close is at or near the low of the day and wel
50. e E 77 D Choose when you want Buy Sell Arrows to show and what color 186 Gecko Software Inc Using Indicators Slow Stochastics SSTO The slower version of Stochastics is commonly believed to be a more reliable indicator In this version of Stochastics the more sensitive K line is dropped The original D now becomes the slower line K The new 96D is a 3 day moving average of the 6K This basically gives you a smoothed version of the original indictor This modified counter trend indicator is less reactive but considered to be more accurate Slow Stochastics are interpreted the same as Fast Stochastics Quite often the faster of the two indicators moves in and out of the overbought oversold regions quickly Calculation The calculations for the slow stochastic are similar to the normal stochastic The first step in computing the stochastic indicator is to determine the n period high and low Suppose you specified twenty periods for the stochastic Determine the highest high and lowest low during the last twenty trading intervals It determines the trading range for that time period The trading range changes on a continuous basis The calculations for the 96K 1s here Kt Closet Lown Highn Lown x 100 Kt The value for the first K for the current time period Closet The closing price for the current period Lown The lowest low during the n periods Highn The highest high during the n time periods
51. entered into After the position is entered into a balance of 300 00 per contract the Maintenance Margin must be maintained in order for the position to be left open If the available funds in the account funds deposited open position profit or loss are less than the Maintenance Margin Requirement then more funds must be deposited or the futures positions will be liquidated or offset by taking an opposite position in the futures market Reminder Long or buy positions are offset or closed by selling while short or sell positions are offset or closed out by buying Track n Trade 5 0 19 v D um 2 LL O c Q a O gt O O um E Introduction to Futures The dual margining system initial and maintenance of the futures market ensures that all positions are adequately financed and the integrity of the futures market is secure The exchanges set the minimum margin requirement based on the volatility and dollar value of the contract Margin levels are subject to change both up and down at the discretion of the Exchange Most brokerage firms charge the exchange minimum margin but they are entitled to charge more Be sure to check with your broker before entering into any futures transaction The Long and Short of Trading There are two basic positions one can have in the futures markets a long or short position A long position entails the purchase of futures contracts in anticipation of rising prices
52. graphic Click on one of the boxes and drag it to the desired length Release the mouse button to place Moving the Rectangle Select the rectangle drawing by clicking on it Click on the drawing not an end box and drag it to the new location Release the mouse button to place Deleting the Rectangle Select the rectangle drawing by clicking on it Press the Del Delete key on your keyboard You can also right click the drawing and select Delete from the dropdown menu Preferences Select the drawing by clicking on it The properties will appear in the preferences section of your control panel Or right click on the drawing and select properties from the dropdown menu Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Rectangle Tool Rectangle Tool You can choose the color line style Line IL Yelow and line thickness of your box frame You can also determine the color of your background To make your ri ose background transparent deselect Fill Background at the Snap bottom of your preferences v Fil Background Z O Q F ie o o Select Snap to have your lines snap to price bars when moved Track n Trade 5 0 11
53. hide or show your text on the chart White Sma m in B Select Snap to have your lines snap to price bars when nap moved gt Q lt o Q D Q O 5 V mi e O O 77 Track n Trade 5 0 101 Chapter 3 Example of a Fibonacci Time Zone Soybeans Combined Movi s T Fibonacci Time Zone Ld all DL ee E E Lu F A E o O E ja re O O D C gt Le c 102 Gecko Software Inc Advanced Charting Tools Calculating Trading vs Actual Days In the futures industry trading days are scheduled around holidays and weekends When looking at a futures chart it is difficult to determine how many actual days have passed while working a trade The number of trading days is also significant for traders using the number of trading days as a rule in conjunction with a formation For example with the 123 Top or Bottom formation many traders use the 10 20 50 rule This rule defines a 123 if there are 10 trading days between the 1 and 2 and 10 days between the 2 and 3 points To calculate the actual or trading days on a chart use the Day Offset Tool Days Higher and Lower Another statistic used alongside formations and other theories is the day higher and lower calculation This calculation determines how many days in a defined set of price bars were higher or lower A day is considered a Higher Day if the close is
54. indicator line Lower I Blue 208 Gecko Software Inc Overlay Indicators Moving Average Lines The moving average or simple moving average represents the average of the last several closing prices The moving average is simple to compute easy to understand and reliable under tests This simplicity is the strength of the moving average The basic moving average is computed the same as any other mathematical average The most common way of determining the moving average of a market is to take the closing price over a certain number of days add them together and divide by the select number of days Moving averages are generally thought to be indicators of trend For example conventional interpretation is that once prices cross from below the moving average to above it the trend is considered up On the other hand if prices go from above the moving average to below it the trend of the market is considered down The purpose of the simple moving average is to track the progress of the trend Moving averages can potentially keep you in the trend for a long time The moving average gives you an indication of the trend being up prices above the moving average or down below the moving average However the moving average gives you no indication of the length or duration of the trend Double Moving Average Double moving averages use two different averages in tandem The first average is generally a faster reacting average usin
55. is below the O line and crosses from below the trigger line to above the trigger line A sell signal occurs when the KST line above the 0 line and crosses from above the trigger line to below the trigger line Preferences Right click on the KST button in your Indicator toolbar and select KST Settings The Preferences Tab will open in the Control Panel and the KST preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings 158 Gecko Software Inc Using Indicators Know Sure Thing MA Specify the number of days used in calculating Period Roc Period the period and ROC period of the 1 2 3 and 4 moving M 1 a 5 average lines MA 2 io a MA 3 10 25 Trigger Period Specify the number of days used MA 4 15 30 in calculating the trigger period Choose between a Trigger Period 3 histogram or line Tvpe Line ee Exponential Type Choose if you would like to see KST as a ree Mim histogram or line Trigger Bl ned Thresholds if coje Eva and Exponential r2 ooo f At 7 KST Trigger Choose the color line style and line
56. it all if properly or improperly positioned The power of trading on margin is that a small move in the price of the underlying equates to a large return either positive or negative on the money posted Track n Trade 5 0 23 v D um 2 LL O c Q a O gt O O um E Introduction to Futures Just as physical leverage increases the amount of force used like a pulley lifting very heavy objects financial leverage increases the amount of money which can be made or lost in the markets As they say in Chicago The futures markets have made millionaires of more young men than Rock and Roll However we want to point out that leverage is a two edged sword Over leveraging your trading is a sure fire way to lose your money Because of the leverage of a roulette wheel each bet on a specific number pays off at 35 to 1 If you bet 6 and the ball bounces and lands on 6 every 1 you bet is paid back to you with 35 dollars Let s say you start off with 1 and bet 6 and win You now have 35 and bet it all on 6 which comes up again You take your 1 225 winnings and let them ride on 6 again and win reaping 42 875 Let it ride again making a phenomenal 1 500 625 You let it ride one more time and up pops 00 You lose everything Though roulette is strictly a game of chance the above results are possible with futures because of the leverage involved If you buy 1 Corn futures contra
57. keeps you safe and is important to have In order to speed up the downloading process Track n Trade 5 0 s FIDO does not use conventional means to download data Because of this Track n Trade 5 0 may encounter problems downloading through the firewall It may appear that the downloader is idle for a long period of time and then it will display an error stating it could not find the server This is because the firewall does not allow the server to send the new data to your computer Track n Trade 5 0 has a new feature to allow for both standard and non standard methods for downloading data The standard method uses Port 80 which is accepted by most firewalls as regular traffic but this method is slower The non standard method uses Port 60184 and will need to have an exception made in order for this method to work with a firewall this method is much faster than Port 80 in downloading data Configuring Track n Trade 5 0 for Firewalls 1 Click on the Data Update button from the Main toolbar to start FIDO 2 Click on the button located in the far right called Options 3 If you are working with a firewall select Port 80 and then click the OK button 4 Close FIDO then restart by clicking on the Data Updates button o D e Y lm Q D O Track n Trade 5 0 AT Le Q pun U ep le E 5 D O Chapter 1 Chartbooks Just like a novel is made up of many single pages a chartbook cont
58. left point Hold the mouse button and drag to the bottom right position Release the mouse button to place Resizing the Fibonacci Time Zones Select the drawing by clicking on it You will know the drawing is selected when boxes appear at the corners Click on a box and drag it to your desired location Release the mouse button to place Moving the Fibonacci Time Zones Select the drawing by clicking on it Drag to the new location and release the mouse button to place Deleting the Fibonacci Time Zones Select the drawing by clicking on it Press the Del Delete key on your keyboard You can also right click the drawing and select Delete from the dropdown menu Preferences Select the drawing by clicking on it The properties will appear in the preferences section of your control panel Or right click on the drawing and select properties from the dropdown menu Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Fibonacci Time Tool Fibonacci Time Tool You can choose the color line tine ves H gt style and line thickness of your lines Fant z ee Font Select the font size and color of the text Select m Arial Whitesmoke ss Show Text to
59. list Click on the chart window Title Bar Click on the current chart and press the Tab key on your keyboard Saving and Closing a Chartbook When you are content with how your Active Chart list is setup you can save it as a chartbook to open later Click on the File menu and select Save or click the Save button on your Toolbar The Save As window will open It is recommended that you rename your chartbook to avoid accidentally overwriting the file next time a chartbook is saved h EE el ole adm fa et LP ars Bika a we oe D EL Rp f Ara qd Puri f o D e QD r Q D ei To save over or replace a chartbook that has already been saved select Save As from the File menu Type in a new name or select the chartbook you want to save over Note that the default folder is My Documents If you choose to save your chartbook into a different folder remember that this is the location in which your chartbook will be saved Some Track n Trade users have named Books according to Groups Commodities or Exchanges based on the charts that they are saving in the Book As you become familiar with Track n Trade 5 0 you will be able to develop a system of your own Track n Trade 5 0 49 Chapter 1 Opening an Existing Chartbook To open an existing chartbook you can click on the File menu and select Open or click on the Open button on your Main toolbar The Open window will
60. msn ri of the ATR in the Indicator Window Preferences Right click on the ATR button in your Indicator toolbar and select ATR Settings The Preferences Tab will open in the Control Panel and the ATR preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings Track n Trade 5 0 135 N pe O qu Le e E 77 D Chapter 7 Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To All Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Average True Range Period a Line E HoneyDew Thresholds E 0 00 oO Yellow 2 0 00 C Yellow Taf oo vew 4 0 00 E Yellow 136 Period Specify the number of days to be used in calculating the ATR Line Choose the color line style and line thickness of your line View up to four Thresholds at values and colors of your choice Gecko Software Inc Using Indicators Bollinger Bandwidth BW Bollinger Bands measure volatility by placing bands on either side of a moving average These bands are charted two standard deviations away from the average As the average changes the values of the two standard deviations also change The Bollinger Bandwidth devel
61. much the options price changes when the underlying futures contract changes by one point Gamma Measures how much the delta changes when the underlying futures contract changes by one point O 5 7 U e L Theta Measures time decay of an option Vega Measures how a change in volatility affects the price of an option when all other factors remain the same Rho Measures how a change in a short term risk free interest rate affects the price of an option Track n Trade 5 0 235 Chapter 9 Note If you do not have a contract open the only item available in Options Tab is the Interest Rate History Strike and Rate History Export Calc Date Strike Rate The Options Tab defaults to the Date View which i shows a list of all strike prices available for that day To view the history for a particular strike price click on the Strike button and select the specific Put Call Strike price Date Fremium Value Change Dif eum _S vale change from the dropdown menu Once this value is selected the history for that price is generated Select Strike Price ms EI MOntons jE To view the historical interest rate data click on the Rate button to the right of the Strike button The rate Espot Ca Date St ke Rate displayed is the average monthly interest rate of the Periodic Interest Rates three month Treasury Bill secondary market rates Delete Selected Rate AddInterestR
62. not as well in sideways moving markets Donchian Channels measure volatility by placing bands at a specified period deviation These bands are charted two standard deviations from the market price As the market price changes the value of two standard deviations also changes This value is what comprises the Donchian Channel s band width representing the expanding and contracting of the bands based on recent price volatility Calculation The calculation of the DON is here Donchian Channel High MAX HI n Donchian Channel Low MAX LO n Example of Donchian Channels Hogs Lean Combined Jul 07 O lt D Y lt 5 Q O a r O a 2 18 13 Aug 2008 Sep 2006 Oct 2008 Now 2006 Dec 2006 Track n Trade 5 0 205 ep e O 2 qv M O Cc gt O gem D gt O Chapter 8 Preferences Open the Preference tab from the Control Panel on the left of your screen Select the Donchian Channels line on your screen The preferences will appear in the Control Panel Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To All Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Donchian Channels Donchian Period
63. occurs when the MOM value crosses from above the MOMMA line to below the MOMMA line and the MOMMA line is greater than 0 MOM C o o 2 O Q io o If we draw MOM without the MOMMA line a buy signal occurs when the MOM value crosses from below the 0 line to above the 0 line A sell signal occurs when the MOM value crosses from above the O line to below the O line p Mh i AU L Momentum Track n Trade 5 0 167 Chapter 7 Preferences Right click on the MOM button in your Indicator toolbar and select MOM Settings The Preferences Tab will open in the Control Panel and the MOM preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings N pe O qu Le i e E 77 D Momentum MOM Period l4 MoM C Medium5Sea MOMMA o OrangeRed a E iw Show MOMMA Display as Histogram Thresholds 0 00 E Yellow E 0 00 E Yellow E 0 00 So E Yellow 4 0 00 E Yellow BuySell Arrows when Indicator is Visable I Lightreen E Show
64. of 300 00 per contract or 600 00 our speculator is on a Margin Call In order to keep the position the speculator must either send enough money to bring the account back above the Initial Margin Requirement of 810 00 or liquidate the position The Maintenance Margin Requirement is the minimum amount of money which must be in the account including open position profits and losses to maintain an open position in the futures market If the value of the account dips below this level then the account holder must either send additional funds to his broker or liquidate the position Usually traders have 5 business days to get funds posted to the account but in some cases the brokerage firm may liquidate the futures positions in order to meet the Margin Call Reminder Brokerages have the right to liquidate your position immediately and many may require you to wire funds right away to avoid liquidation Be aware that margin requirements are subject to change without notice gt r ER O O C O c O 5 lm O TI C lum ER D N Initial Margin is the minimum amount of money you must have in your account to open up a futures position Maintenance Margin is the minimum amount of money you must have in your account to maintain the position In the Corn example the initial margin was 405 00 per contract meaning that a trader must have at least 405 00 per contract in his margin account before a Corn futures position can be
65. of technical traders use a value that is less volatile or in other words a larger value Many traders find it better to use a strategy where the market leaves the areas of overbought oversold before entering a trade position In either case using solid exit strategies 1s important with this indicator Calculation You must first determine the highest high and lowest low for the length of the interval This is the trading range for the specified interval Rt Highn Closet Highn Lown x 100 Rt The percent of the range for the current period Highn The highest price during the past n trading periods Closet The closing price for the current period Lown The lowest price during the past n trading periods n The length of the interval C o o 5 2 O Q mp O n ep Example Assume the market is Treasury Bills The high for the past ten trading intervals is 92775 and the low is 9125 The closing price in the current period is 9267 This is what you get if you substitute those values in the equation YR 9275 9267 9275 9125 x 100 86 150 x 100 550 97 Rt Closet Lown Highn Lown x 100 Track n Trade 5 0 173 Chapter 7 Buy Sell Signal A buy signal occurs when the R line crosses from below the lower threshold to above the lower threshold A sell signal occurs when the R line crosses from below the upper threshold to below the upper threshold Prefe
66. of these two indicators where the K within the Stochastics formula is replaced by the RSI The formula is then set on a 0 to 100 scale for both the Stochastics indicator as well as the RSI is read in much the same manner as the traditional RSI When the SRSI reaches up into the upper region above the upper threshold line the market is considered overbought and anticipate a reversal of the trend When the SRSI reaches down into the lower region below the lower threshold the market is considered oversold and a reversal is anticipated Traditionally the upper threshold marker is set at 7096 and the lower marker is set at 3096 Calculation The calculation for the SRSI 1s here StochRSI RSI LowRSIn HighRSIn LowRSIn RSI The current level of the RSI indicator LowRSIn The lowest level the RSI reached over the last n periods HighRSIn The highest level the RSI reached over the last n periods Buy Sell Signals A buy signal occurs when the SRSI line crosses from below the lower threshold to above the lower threshold into the channel A sell signal occurs when the SRSI line crosses from above the upper threshold to below the upper threshold into the channel C o o 5 2 O Q mp O PR ep Relative strength Buy D Track n Trade 5 0 185 Chapter 7 Preferences Right click on the SRSI button in your Indicator toolbar and select SRSI Settings The Preferences Tab will open in the Control Panel and
67. orans Soybeans minie CBOT orains Soybeans esor grains Wheat BoT CBOT grains Wheat BOT minie esor orains Wheat cBOT o esor orains Wheat KGBT o KCBT orains Wheat MGEX 0 MGEX orains Canoa WcE gran Bows ia esor indices indices indices indices indices GSCI c CME IOM NASDAQ 100 c CME IOM NASDAQ 100 mini e CME IOM Dow J IASM 5 mini e CBOT 44 Gecko Software Inc Getting Started NK Nikkei 225 o CME IOM indices FRL Russell2000 c CME OM indices SP S amp P500 c CME OM indices Cattle Live c Legend for the Commodity Symbols Combined Contract c Combined Data 0 Open Outcry Session e Electronic Session Cattle Feeder c ISP indices ES indices indices MD indices indices indices meats meats PBR meats meats meats ini metals av Siver minie esor metas i metals metals metals metals metals softs softs softs SB softs softs softs Track n Trade 5 0 45 o D e QD r Q D ei Le Q pun U Par ep le E 5 D O Chapter 1 Commodity Month Symbols F January N July Q August U September V October Data Update The Data Update button is located next to the Commodity Chooser button in your Main toolbar Click on this button to open the data download progra
68. period of time A 10 20 and 40 day moving average system would be considered a triple moving average The first average the 10 day is the quickest to move when prices show a change The second average the 20 day is the medium average that does not show change until the prices have moved for a longer period of time Finally the slowest moving of the averages is the 40 day This slow average will not indicate a difference until prices have made a significant move Shorter term moving averages being more sensitive to changes in price are said to follow the trend more closely The middle or medium average would follow less closely and the slowest or least sensitive average would lag the most The use of the triple moving average is to buy when all three averages move to be in an upward trend or to sell when these averages are in a downtrend The upward trend appears when the fastest average is higher than both of the other averages the medium is above the slowest and the longer term moving average is on the bottom This look would be reversed for a strong down trend with slow average on top followed by the medium average and the fastest on bottom Calculation The calculation for the moving average is here Mat PI Pn n Mat The moving average for the current period Pn The price for the nth interval n The length of the moving average Compute the average of the past n intervals using the price specified for that peri
69. place Deleting the 123 Drawing Select the 123 drawing by clicking on it Press the Del Delete key on your keyboard You can also right click the 123 drawing and select Delete from the drop down menu Preferences Select the 123 drawing by clicking on it The properties will show up in the preferences section of your control panel Or right click on the drawing and select properties from the dropdown menu Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings 64 Gecko Software Inc Charting Tools 123 ABC Tool 123 ABC Tool You can choose the color line style Line Will Black and line thickness of your lines Font nz fan Font Select the font size and color of the text You can also choose to see numbers or letters Select Show Text B l to hide or show your text on the chart Iw Show Text 123 B Eu W Snap Select Snap to have your lines snap to price bars when Iw Show Arcs moved Select if you would like to Show Arcs or Always Show Lines on your drawing Always Show Lines i 2ja B Fibonacci User Defined 20 3 40 50 1 2 A B 2 3 B C Select if you would like to see Fibonacci Retracements on eit
70. present when the market makes a higher high than the previous high but the MACD histogram fails to make a corresponding higher high This is considered to be a sign of weakness and a sell signal when the MACD breaks below the lowest point in between the divergent highs 160 Gecko Software Inc Using Indicators Bullish divergence is seen in an exact opposite fashion Assume a market has been trending downward The market has been consistently making lower lows as has been the MACD histogram indicator However eventually the MACD fails to make a lower low corresponding to the lower low in price If the MACD histogram line crosses above the highest high in between the divergent lows then technical lore says higher prices should follow You also have the choice to view the MACD indicator in a simple line style instead of the histogram In this view there is no trigger line The line style MACD gives buy and sell signals based off of the crossing of the two moving averages Calculation In this study the oscillator is the simple difference between the first two exponential moving averages OSCt EMAI EMA2 OSCt The oscillator for the current period EMAIT The first exponential moving average EMA2 The second exponential moving average The second part of the study computes an exponential moving average of the oscillator EMAosct EMAosct 1 k x OSCt EMAosct 1 EMAosct The exponential moving average of the oscillator
71. r Q 236 Gecko Software Inc Flip CH ears A ia IH a imd m ja LOEO Probe of Uere ven Lege H7 dii Pmi riag umm An Pe eart E EET ld om Fr jaa dI Tua JTE C o Paty GA om CSS Hamid rre d IH El rajh Fpi m jante EO Praisie or ore ven Lege 17 iui Fer bri Lees Pas Vc i Place Orders To place the orders from the calculator on the underlying futures chart click the Place Order s button or Cancel to exit the Options Strategy Calculator Profitability of Option Strategy at Expiration 83 days 19600 00 1 3066 67 otential Profit f0533 33 0 00 Breakeven Point b533 33 Potential Loss 130565 57 4 1 9600 00 Track n Trade 5 0 Options Plug in OS Calculator The OS Calculator determines profit loss on an option or option strategy Click on the Calc button to open Click on the Add New button to add an option order to the calculator and the Option Order window will open Specify the details of the options order and click OK to add the order to the calculator The options order details have now been added to your option strategy list on the left side of the OS Calculator and the Profitability Graph of the Option Expiration is available on the right side Modify Delete Orders Select the order you would like to change and click the Modify Selected button To delete orders from the calculator click on the order and click the Delete button
72. s Accounting systems allows entering deposits and making withdrawals in your trading account as well as placing orders Deposit Placing a Deposit skis rupe A cruce Click on the Deposit button in the My Account tab of your RH January 2004 s nn Control Panel The Deposit window will appear Select Sun Mon Tue Wed Thu the day of the deposit and enter the amount Click OK to So sb 5 HB X Jeu is enter deposit or Cancel to dismiss the Deposit window 18 19 20 21 22 25 26 27 28 29 Cancel E O E A U O amp E E ep o le i r Cc O O oO t TE Making a Withdrawal Withdraw Amount m Click on the Withdrawal button in the My Account tab KM January 2004 s m y of your Control Panel The Withdrawal window will rn appear Select the day of the withdrawal and enter the 11 12 4 14 15 16 amount Click OK to enter deposit or Cancel to dismiss the 18 19 20 21 22 23 25 26 27 28 29 30 Withdrawal window Cancel 228 Gecko Software Inc Accounting amp Simulator Plug in Deleting Deposits Withdrawals Right click on the deposit or withdrawal and select Delete from the dropdown menu Editing a Deposit Withdrawal Right click on the deposit or withdrawal and select Settings from the dropdown menu From here you can change the date amount or order type Trade Log The Accounting and Simulator Plug In also includes a trade log that track
73. select Delete from the dropdown menu Preferences Select the drawing by clicking on it The properties will appear in the preferences section of your control panel Or right click on the drawing and select properties from the dropdown menu Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Es sl Fibonacci Ruler Tool You can choose the color line style and line thickness of your lines as well as Line Black RE the color of your background To make transparent Background El Silver deselect Fill Background below show selections User Defined 20 3 40 50 oo Select User Defined to enter your own values for the Show Retracements l m lines in your drawing Select Show Retracements or e Show Projections to view default extensions You can also enter your own values in the User Defined fields Show Projections gt Show You can also choose to show ABCD Predictions Show ABCD Predictions Time Zones and 23 6 and 76 4 Show Time Zones M Show 23 6 and 76 4 v Fill Background Font Select the font size and color of the text Select Font Show Text to hide or show your text on the chart 12 Arial
74. software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings gt 5 O O Multi Line Tool Multi Line Tool You can choose the color line style A Nux m I m and line thickness of your lines Fant 12 E Arial Font Select the font size and color of the text You can also choose to see numbers or letters Select Show Text L Black R to hide or show your text on the chart M Show Text Pag B 7 W Snap Show Arcs Iw Always Show Lines Select Snap to have your lines snap to price bars when moved Select if you would like to Show Arcs or Always Show Lines on your drawing Track n Trade 5 0 61 Chapter 2 Example of Multi Line Tool im Eat mE ui E r1 q4 c i Li zl d 3 d sjoo Burseuy Gecko Software Inc 62 Charting Tools 123 Formations Technical Analysis The 123 formation anticipates a change in trend There are both top and bottom formations 123 Top Formation The 123 top formation anticipates a change in trend from up to down on a break below the number two point This formation is easily identified because the number 1 point is the annual price high for the contract To trade a 123 top formation place a sell or
75. such information for its business purposes including for product support and develop ment Track n Trade 5 0 11 Software Transfer The user of the SOFTWARE PRODUCT may make a one time permanent transfer of this EULA and SOFTWARE PROD UCT only directly to an end user This transfer must include all of the SOFTWARE PRODUCT including all component parts the media and printed materials any upgrades this EULA and if applicable the Certificate of Authenticity Such transfer may not be by way of consign ment or any other indirect transfer The transferee of such one time transfer must agree to comply with the terms of this EULA Both parties must contact Gecko Software to make the transfer complete Even though we have given the right to transfer the software application license we do not give the right to transfer data subscription services Data subscription services are non transferable Termination Gecko Software Inc may terminate your license and this EULA at any time for any reason what so ever without the obligation of reimbursement or compensation Therefore if Gecko gives notice of termination of your license or you fail to comply with the terms of use set forth in this agreement you must destroy all copies of the SOFTWARE PRODUCT and all of its component parts 3 UPGRADES If the SOFTWARE PRODUCT is labeled as an upgrade you must be properly licensed to use a product identified by Gecko Software Inc as being eligible for
76. the moving average calculation This gives you a list of deviations from the average Square each deviation and add them all together Divide this sum by the number of periods you selected 4 L8 MAY Pa MA s P MAJ H Take the square root of d This gives you the standard deviation 8 4d 202 Gecko Software Inc Overlay Indicators Compute the bands by using the following formulas Upper Band MA 76 Mgadle Band MA Lower Band MA 2 Pn The price you pay for the nth interval n The number of periods you select Buy Sell Signals A buy signal occurs when a chart bottom is below the lower band followed by a bottom above the lower band A sell signal occurs when a chart top is above the uppermost band followed by another top that is below the upper band Hogs Lean Combined Jul 07 SJOJeoipu e JoAQ s Se A hae BA ac sie ce ae c c ae os bat A oe ae e ur e Track n Trade 5 0 203 Chapter 8 Preferences Open the Preference tab from the Control Panel on the left of your screen Select the Bollinger Bands line on your screen The preferences will appear in the Control Panel Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected setting
77. the n period high and low Suppose you specified twenty periods for the stochastic Determine the highest high and lowest low during the last twenty trading intervals It determines the trading range for that time period The trading range changes on a continuous basis The calculations for the K is here Kt Closet Lown Highn Lown x 100 Kt The value for the first K for the current time period Closet The closing price for the current period Lown The lowest low during the n periods Highn The highest high during the n time periods n The value you specify Once you obtain the K value you start computing the D value which is an accumulative moving average Since the 6D is a moving average of a moving average it requires several trading intervals before the values are calculated properly If you specify a 20 period stochastic the software system requires 26 trading intervals before it can calculate valid K and 96D values The formula for the 96D is here DT 96DT 1 x 2 96Kt 3 DT The value for D in the current period DT 1 The value for D in the previous period Kt The value for K in the current period The values 2 and 3 are constants You specify the constants and the length of the time period to examine for the trading range Buy Sell Signals A buy signal occurs when both lines are below the lower threshold and the K line crosses from below the D line to above the D line A sell
78. the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings 10x8 and 3x3 Moving Average Convergance Display 10x8 MAC 3x3 MAC Check the boxes to EEE Moe display the lines you would like to see 10 x 8 Line 1 period 10 Line E Plum Line Choose the color line style and line thickness of Type Simple your indicator line Data High 10 x 8 Line 2 period 8 Type Select Simple Linear Weight or Exponential Line salmon b d r Data Select Open High Low Close Mean Median or Mode Type Data Display 3x3 Mac 3 x 3 Line 2 period 3 Type simple Data High 3 x 3 Line 2 period 3 Line BH MediumBlue g Data Lowy O lt D i Y lt 5 Q O a r O RJ a Track n Trade 5 0 219 Chapter 8 Zig Zag The Zig Zag Indicator acknowledges minimum price changes and ignores those that do not fit the criteria Calculation A Zig Zag set at 10 with OHLC bars would yield a line that only reverses after a change from high to low of 1096 or greater All movements less than 1096 would be ignored If a commodity traded from a low of 100 to a high of 109 the Zig Zag would not draw a line because the move was less than 10 If the stock advanced from a low of 100
79. the slider Period 1 EEE 3 up or down Period o Line 1 B Black Lines Choose the color line style and line thickness of Line 2 E Gray your lines Predict I Silver BuySell Arrows Show Arrow When Indicator is Visible what color Arrow Color ser Choose when you want Buy Sell Arrows to show and WW N WW D Q ep Q 2 e CD lt ep bb D 3 Track n Trade 5 0 267 Chapter 13 D v gt ep O Le U U I V U qu D aa c KL 2 aa 268 Gecko Software Inc Candlestick Charting Introduction to Japanese Candlestick Charting Track n Trade 5 0 269 Chapter 14 O i T qu am x ur v O Le Cc 270 Gecko Software Inc Candlestick Charting Introduction Would you like to learn about a commodity price chart that is possibly more effective than the type you are currently using If you are brand new to the art of chart reading don t worry This stuff is really quite simple to learn Technical Analysis A Brief Background Technical analysis is simply the study of prices as reflected on price charts Technical analysis assumes that current prices should represent all known information about the markets Prices not only reflect essential facts they also represent human emotion and the pervasive mass psychology and mood of the moment
80. to a high of 110 then the Zig Zag would draw a line from 100 to 110 If the commodity continued on to a high of 112 this line would be extended to 112 100 to 112 The Zig Zag would not reverse until the commodity declined 1096 or more from its high From a high of 112 a commodity would have to decline 11 2 points or to a low of 100 8 for the Zig Zag to reverse and display another line Example of a Zig Zag ep e O 2 qv M O Cc gt O gem D gt O 13 4 47 7 d 13 g har 2007 Apr 2007 May 2007 Jun 2007 Jul 2007 220 Gecko Software Inc Preferences Open the Preference tab from the Control Panel on the left of your screen Select the Zig Zag line Overlay Indicators on your screen The preferences will appear in the Control Panel Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings 19 24g Change Sensitivity 2 00 soo S 00 Line B black sl Retracments Line Azure Show Retracment Target Show as Percent Show Retracments d Font o rz ws I MN Iw Show Text BI I When Indicator is Visible Azu
81. to above the DMI line A sell signal occurs when the DMI line crosses from above the DMI line to below the DMI line Filters to Adjust Buy Sell Signals C o Q 5 2 O Q O PR ep Extreme Point Validation This filter delays the buy sell arrows at least a day by requiring that the market move higher or lower than the high or low on the day the DM DM crossover happened If a new high or low is not obtained before the next DM crossover the buy sell arrow is suppressed completely for that previous period The filter does not require the use of DX ADX although it does stack with the other filers if they are used Trend Strength The DX or ADX line must be above the target number before a DM cross will give a buy sell arrow The theory is the DX ADX lines indicate trend strength not direction and if it is below 20 there is practically no trend Values above 40 indicate a strong trend Different articles would use values between 20 and 40 as targets to look for This box must be selected for this rule to be available Track n Trade 5 0 147 N pe O qu Le i e E 77 D Chapter 7 Turning Point Validation The directional index line DX or ADX must be above the point where DM crossed This is like a variable trend strength filter The directional index can indicate any trend strengths as long as the trend strength is greater than the value of the DM crossing point This indicator
82. to all Fixed Width Extensions i rs other extensions You can also choose the color line W m style and line thickness of your sliding extensions EX E 41 8 Sliding Extensions Line Bl custom Extension One Extension Two Distance Markers Select to show Fibonacci retracements or define your own distance markers Schiff Color Select what color you would like your Schiff before drawing it Distance Markers Fibonacci User Defined 20 3 40 50 Font Select the font size and color of the text Select Show Text to hide or show your text on the chart Schiff Color L Black Font Select Snap to have your lines snap to price bars when a bu Arial moved Oo WhiteSmoke Show Text B T W Snap Example of Andrews Pitchfork Latile eeder Combinesd May Of Andrews Pitchfork gt Q lt Q O D Q O 3 Q 2 O O 77 Track n Trade 5 0 95 o s O E ja re O O D C gt Le c Chapter 3 Fibonacci Retracements Fibonacci Retracement levels correspond with percentage retracements that occur in the ebb and flow of a market trend According to the Elliott Wave Theory market trends tend to occur in five distinct waves See the Elliott Wave section for more information Elliott asserted that these counter trend waves will usually retrace against the trending waves by 38 2 50 and 61 8 perce
83. to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Z O Q F ie o o Flag Tool You can select a different flag and change or import a custom flag Importable formats wmf jpeg and gif Track n Trade 5 0 113 o S C Oo qu O Z Chapter 4 Text Tool The Text tool enables you to type text on the Chart Select the Text toll in the Notation toolbar Click on the chart where you would like to place the upper left corner of the text box Drag the text box to the lower right corner of your desired text box Release the mouse button to place Once the box is drawn the Text Tool Options window will open Enter the text set the font i a size position color and style of the text Select Insert Text Here a border and background if you would like Click OK when finished and text will be place on your chart lasi lex Upim Fann Arial Moving the Text Select the text box by clicking on it Continue Diete en a s ar holding down the mouse button to drag text to the new location Release mouse button to place Deleting the Text Select the text box by clicking on it Press the Del Delete key on your keyboard You can also right click the text box and select Delete from the dropdown menu Preferences Select the text box by click
84. trade on as they do not follow a single convention Margins Cents Points amp the Power of Leverage Before entering into either a long or short position one must post a performance bond or have the initial margin requirement Because it is only necessary to post a fraction of the underlying value of the worth of the underlying contract futures are a highly leveraged trading vehicle Initial margin requirements vary from market to market but are generally only 396 to 1896 of the value of the underlying contract value be O O C O c O 5 bb O TI C bb D On Example If March Corn is trading at 211 per bushel 2 11 bushel the current initial margin requirement is 405 per contract Each Corn futures contract represents 5 000 bushels of Corn so the underlying value of a contract of Corn at 211 is 10 550 In other words for 405 you can control 10 550 worth of Corn By putting up just 3 9 of the value of the contract you can control 5 000 bushels of Corn Margin requirements are subject to change without notice In this example a 1 cent move in the price of Corn 50 00 before commissions and fees represents a 12 3 return on the Initial Margin Requirement This is the power of leverage A small move in the price of the futures contract can mean a large move in your account Because of this kind of leverage a 3 9 move in the price of Corn could give you a 100 return double your money or a loss of
85. you would like your themes to be saved name your theme and click on Save Select Load Themes from your View menu to apply a saved theme The Settings Load Confirmation window will appear Click Yes if you want to replace all user default settings with your theme and have your theme apply to all active charts Click No if you only want to replace your user default settings with your theme but don t want your theme to apply to your active charts Load settings will replace all of your user default uu E M Clicking Cancel will exit the window and no theme will Would you like to also change all your active charts settings bo this theme be applied Replace active charks settings as well Repl ONLY User DefulE settings a SEDE e The Open window will appear if you select Yes or No SEE Find your saved theme and click Open o D e QD r Q D ei Track n Trade 5 0 53 Chapter 1 Le D pun Av ep O r QD O 54 Gecko Software Inc Charting Tools Analyzing Charts with Charting Tools Track n Trade 5 0 55 Chapter 2 D O pes v Kan O 56 Gecko Software Inc Charting Tools Introduction Track n Trade 5 0 has a complete set of charting tools that enable the futures trader to apply concepts from technical analysis to their charting Take a look at some of the technical analysis formations and trends in this chapter and see how t
86. your installation process will be the same The installer will guide you through the steps required to install Track n Trade 5 0 on your computer EULA Please read through the End User License Agreement If you agree to the terms of use select the circle next to I Agree and you will be able to click Next to view the ESD ESER LICE GERAST FOR GECKO SOFTET ANS 2 next window Leones Agrocmont Finem bebe ced ee Par ere cere roses H gg qood Ug orm Deko ZR CI dr wl Rin limum mh Lore Dro LE AEP ELE Tz Dei Ceo i LO ir St rat FELU Gaba ay merani ee roce jad mr uam rud LL DITE of Coco See Ih compas qoo pes acis sir a rect nn s P MAAA Fi an erint iate Iit iru oli Location ger mx AUF ES T m Tha seat CET ole ai aia ar ine gi he SOFTWARE FEGCOCT Pats d Read the instructions and select which installation process Dakar ga aT you would like to follow and where to install it on your C creu net re computer s hard drive if that is your choice Then select the shortcuts you would also like to install Click the Next EE SEE button when you are finished Select in tataton Folder euh ar rrisin edd acini Frac sd onde s Cim eae Log in m The start up screen will appear the first time you open O A tomi iaa Track n Trade 5 0 Select whether you own Track n D Trade 5 0 or if you are using a trial version Enter your sherpa CA co aes VR username and password on the next
87. 0 182 Gecko Software Inc Using Indicators Use the general formula with the above values RSI 6 67 6 67 3 89 x 100 63 16 Assume the market continues the downward trend The next DIF value is 15 which sets the UP value to 0 and the DOWN value to 15 Calculate the next up and down average by using Wilder s accumulative moving average technique UT UT I x n 1 UPt n 6 67x 9 1 0 9 5 93 DT DT I x n 1 DOWNt n 3 89 9 1 15 9 5 12 The value for the new RSI equals 53 67 RSI 5 95 5 93 5 12 x 100 53 67 Buy Sell Signals A buy signal occurs when the RSI line crosses from below the lower threshold to above the lower threshold A sell signal occurs when the RSI line crosses from above the upper threshold to below C Q 5 Q the upper threshold T O PR o Preferences Right click on the RSI button in your Indicator toolbar and select RSI Settings The Preferences Tab will open in the Control Panel and the RSI preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings Track n Trade 5 0 183 Chapter 7 Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current person
88. 00 yellow Thresholds View up to four thresholds at a value that CIEN 0 00 E Yellow you type in and a color that you choose E 000 I Yellow 4 0 00 E Yellow D 5 A D qu Cc O v v O ep 246 Gecko Software Inc Seasonals Plug in Market Probability The historic Market Probability indicator shows the cumulative number of times the market in question has settled higher lower or the same on a specific date compared to the previous trading day s settlement price For example if you are looking at a five year market probability indicator with a reading of 1 then the market in question may have historically settled higher three times and lower two times on this trading day than the previous trading day or settled higher twice lower once and the same twice The 1 reading is derived by subtracting the number of negative settlements from positive settlements resulting in a net number of positive or settles In other words the 1 reading in these examples would be indicative of a market which has settled higher one more time than it has settled lower If the market settled at the same price as the previous day the total is not changed Displaying the Market Probability Indicator Click on the PROB button located in your Indicators toolbar Preferences Right click on the PROB button in your Indicator toolbar and select PROB Settings The Preferences Tab will open in the Contro
89. 4 wave cycle broken down into an 89 wave bull cycle and a 55 wave bear cycle This is based on his observation of Fibonacci s Golden Ratio The series of numbers Fibonacci describes shows a relationship of 1 0 618 Elliott further showed that a market usually rises or falls based on this wave cycle Each wave in the cycle has its own characteristics Five Wave Advance One Normally very short and easy to miss Two retracement wave Gives back all or most of what the first one gained Three Usually very prominent Follows a period of what appears as a consolidation most people trade this wave Four Noted to be very intricate yet still a consolidation One of Elliott s main rules is that in a five wave advance cycle wave four can t overlap wave one Five Often very active At some point declines and lead to the three wave corrective cycle Three Wave Decline A Normally seen as a minor pullback of wave five of the advance cycle B Follows A of the downtrend and is often hard to spot Should result in a third wave continuing down C Usually quite significant and many traders see this as a selling opportunity The price bars form a perfect symmetrical triangle shape Track n Trade 5 0 85 gt lt Q O D O O 5 Q 2 O Oo 77 o O E ja C Z O O D C gt Le c Chapter 3 Elliott Wa UP i Say foe 5 A Eig SY To identify an Elliott W
90. 5 KL S C Q r qu O Z Chapter 4 Circle Tool The Circle tool enables you to draw circle shaped drawings on the chart Select the Circle tool in the Notation toolbar Click on the chart where you would like the circle to start Continue holding down the mouse button and drag the tool until it has formed a circle Release the mouse button to place Resizing the Circle Select the circle drawing by clicking on it The circle is selected when boxes appear at the corners of the graphic Click on one of the boxes and drag it to the desired length Release the mouse button to place Moving the Circle Select the circle drawing by clicking on it Click on the box not an end box and drag it to the new location Release the mouse button to place Deleting the Circle Select the circle drawing by clicking on it Press the Del Delete key on your keyboard You can also right click the drawing and select Delete from the dropdown menu Preferences Select the circle drawing by clicking on it The properties will appear in the preferences section of your control panel Or right click on the drawing and select properties from the dropdown menu Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save
91. Buy Sell Signals A buy signal occurs when the PPO line crosses from below the trigger line to above the trigger line A sell signal occurs when the PPO line crosses from above the trigger line to below the trigger line 2895 Percent C o Q 5 2 O Q O PR ep Price Osillatar 3 8596 Preferences Right click on the PPO button in your Indicator toolbar and select PPO Settings The Preferences Tab will open in the Control Panel and the PPO preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Track n Trade 5 0 171 N pe O qu Le e E 77 D Chapter 7 Percent Price Oscillator PPO Periods j c Trigger g Line El Siver r Build with Clase Thresholds Bi 0 00 E Yellow E 0 00 E Yellow E 0 00 Oo Yellow 4 0 00 E Yellow BuySell Arrows When Indicator is Visible Bl parkOliveareen Show Arrow Arrow Color 172 PPO Periods Specify the number of days to be used in calculating the PPO PPO Choose the color line style and line thi
92. CRIPTION OR NON INFRINGE MENT WITH REGARD TO THE SOFTWARE PRODUCT EXCLUSION OF INCIDENTAL CONSEQUENTIAL AND CERTAIN OTHER DAMAGES To the maximum extent permitted by applicable law in no event shall Gecko or its suppliers be liable for any special incidental indirect or consequential damages whatsoever including but not limited to damages for loss of profits or confidential or other information for business interruption for personal injury for loss of privacy for failure to meet any duty including of good faith or of reasonable care for negligence and for any other pecuniary or other loss whatsoever arising out of or in any way related to the use of or inability to use the SOFTWARE PRODUCT the provision of or failure to provide Support Services or otherwise under or in connection with any provision of this EULA even in the event of the fault tort including negligence strict liability breach of contract or breach of warranty of Gecko or any supplier and even if Gecko or any supplier has been advised of the possibil ity of such damages Gecko Software Inc at its discretion may from time to time contact you by telephone fax email paper mail express mail etc By agreeing to this EULA and installing this software you are giving digitally written consent to receive telephone calls from Gecko Software its affiliates and associated vendors and you wave your rights to any laws prohibiting Gecko from contacting you via telephone
93. D em oO Qe o Table of Contents Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Advanced Charting Tools Introduction Elliott Wave Theory Gann Fan Theory Andrews Pitchfork Theory Fibonacci Retracements Fibonacci Ruler Tool Fibonacci Arc Tool Fibonacci Time Zones Tool Day Offset Tool Calculating Trading vs Actual Days Rounded Top amp Bottom Formations Arc Tool Notation Tools Introduction Notes Window Arrow Tool Flag Tool Rectangle Tool Circle Tool Calculator Tools Introduction Dollar Calculator Risk Reward Calculator Long Term Charts Introduction Creating Long Term Charts Long Term Chart Options Long Term Settings Using Indicators Introduction Williams Accumulation Distribution AD Average True Range ATR Bollinger Bandwidth BW Commodity Channel Index CCI Chaikin Money Flow CMF Directional Movement Index DMI Gecko Software Inc 109 111 111 112 113 115 116 117 119 119 121 123 125 127 127 128 129 131 133 135 137 139 142 144 Table of Contents Fast Stochastics FSTO 149 Gator GTR 152 Historic Volatility HVOL 153 Know Sure Thing KST 158 Moving Average Convergence Divergence MACD 160 Money Flow Index MFI 164 Momentum MOM 165 On Balance Volume OBV 169 Percent Price Oscillator PPO 171 Williams Percent R R 173 Percent Bollinger Bands B 175 Price Volume Oscillator PVO 177 Rate of C
94. I Black CMF CME Choose the color line style and line Display as Histogram 5 thickness of your lines Thresholds maf oo fs l C nem Display as Choose between displaying CMF as a ref em w Ov histogram or a line Yo i Pn H Yelow View up to four Thresholds at values and colors of your Taf oof H veu choice Choose when you want Buy Sell Arrows to show Buy Sell Arrows and what color Show Arrow When Indicator is Visable Arrow Color B ForestGreen C o Q 5 2 O Q O PR ep Track n Trade 5 0 143 N pu O m v Le O S 77 D Chapter 7 Directional Movement Index DMI Wilder s DMI is similar to the historic volatility indicator because it shows market tendencies The main use of this tool is to show the strength of a trend This could direct the trader to use a trend following system or a counter trend system in their trading It also indicates possible price reversals Directional Moving Index is plotted as three lines on a scale of 0 to 100 This scale is a measure of market trend The two lines of DMI show the amount of positive and negative movement The positive line is called D and the negative D The direction of these lines and the use of crossovers can show the changes in the current market The key to this indicator is the ADX or average of the difference of these two lines The ADX is the main factor in using this indica
95. NT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Bollinger Bandwidth Period Specify the number of days to be used in Period calculating the BW Deviation Type Simple Deviation Define the displacement between the bands Data Close Type Choose from Simple Linear Weight or Line Blume z E Exponential Thresholds oo f xil m B uo Data Choose from either Open High Low or Close 0 00 E Yellow 3 oof l oO Yellow Line Choose the color line style and line thickness of 4 0 00 E Yellow your line View up to four Thresholds at values and colors of your choice N pe O qu Le e E 77 D 138 Gecko Software Inc Using Indicators Commodity Channel Index CCl The Commodity Channel Index CCI is designed to detect beginning and ending market trends The formula standardizes market prices to help spot market trend deviations Donald Lambert the creator of this indicator says that 70 to 80 of all price fluctuations fall within 100 and 100 as measured by the index The calculation for CCI measures the average daily price s distance from a moving average of average daily prices There are basic tradin
96. OSCt The oscillator for the current interval EMAosct 1 The exponential moving average of the oscillator for the previous interval k The exponential smoothing constant C o o 5 2 O Q mp O ER ep Since the second value EMAosct is an exponential moving average it rises and falls slower than the oscillator and the two lines generate crossover points These crossover points are the buy sell signals If the study is displayed as a histogram each value for the lines is calculated DIFFt OSCt EMAosct DIFFt The difference between the oscillator for the current interval and the exponential moving average of the oscillator OSCt The oscillator for the current interval EMAosct The exponential moving average of the oscillator Track n Trade 5 0 161 Chapter 7 Buy Sell Signals For a line drawing a buy signal occurs when the MACD crosses from below the trigger line to above the trigger line and the trigger line is less than O A sell signal occurs when the MACD line crosses from above the trigger line to below the trigger line and the trigger line is greater than 0 A histogram drawing with the trigger line works similarly Bearizh Trig 9 10 92 For a histogram drawing a buy signal occurs when the MACD value crosses from below the 0 line to above the O line A sell signal occurs when the MACD value crosses from above the 0 line to below the 0 line BL Bearish Sell N pe
97. Prices are in the end a function of supply and demand However on a moment to moment basis human emotions such as fear greed panic hysteria elation etc also dramatically affect prices Markets may move not based on facts but upon people s expectations A market technician attempts to disregard the emotional component of trading by making his decisions based upon chart formations He assumes that prices reflect both facts and emotion Standard bar charts are commonly used to convey price activity into an easily readable chart Usually four elements make up a bar chart the Open High Low and Close for the trading session time period A price bar can represent any time frame the user wishes from 1 minute to 1 month The total vertical length height of the bar represents the entire trading range for the period The top of the bar represents the highest price of the period and the bottom of the bar represents the lowest price of the period The Open is represented by a small dash to the left of the bar and the Close for the session is a small dash to the right of the bar O Q ex D on O Q O gt Q m 5 Candlestick Charts Explained You may be asking yourself If I can already use bar charts to view prices then why do I need another type of chart The answer to this question may not seem obvious but after going through the following candlestick chart explanations and examples you will surely see
98. Snap i Fill Background Select Snap to have your lines snap to price bars when moved Track n Trade 5 0 17 Chapter 2 Example of an Inclining and Declining Wedge Kil lalis Comin eld col rs Inclining Wedge Declining Wedge Example of a Symmetrical and Non Symmetrical Triangle imn r ambi pa Ea I Bop r mn Mal Symetrical Triangle Hon Symetrical Triangle D O pes qu C O 18 Gecko Software Inc Charting Tools Trend Fan Technical Analysis Trend Fans are an extension of the regular trend line They accent simple trend line trading concepts by extending the single trend line to multiple fan lines that give a better look at a trend its retracements and market reversals Trend Fan As a trend moves up in scale a chartist will draw a line across price bar lows or when a market is moving down across the price bar highs As the market continues to make its retracement we can draw another trend line across the next level of support or resistance The line is support if the market is moving up and resistance if it is moving down The last move of the trend was resistance for the first trend line and is now support for the second trend line The third trend line shows that the market has made a solid retracement down past this third fan line When the market crosses the third fan line 1t is considered to be confirmation of market retracement A market that was once con
99. Toolbar 4 DEGERE Center Chart Takes existing price bars on all charts open and centers them in your chart window Daily Chart Each price bar represents a day Long Term Daily Each price bar represents a day but the chart includes all available data Long Term Weekly Each chart price bar represents a week Long Term Monthly Each chart price bar represents a month Indicator Window This window displays the Indicators Indicator Toolbar ONE ALL AD ATR BYY CI CMF DMI FSTO GTR H OL KST MACD MFI MOM GE PPO RE 6 PO ROC RSI SRSI SSTO TRIR ULT Vol Use this toolbar to select the indicators you would like to be shown in the Indicator window G D Q ON CO D C Scaling Toolbar The first set of controls scales the vertical height of the price bar The middle set of controls scales the number of price bars displayed per inch on the chart The last set of controls scales the days along the bottom of the chart and the points displayed on the right side of the chart Track n Trade 5 0 39 Getting Started Chapter 1 Control Panel The control panel is on the left side of your screen It includes five tabs Commodities Preferences Key Data and Notes HH Commodities 2 El valable Charts Sort by Commadity Ascending Soybeans Combined 2007M Jul Symbol 52007N Canadian Dollar CME Combined J CD 2007M
100. Track n Trade 5 0 Users Manual Track n Trade 5 0 1 Gecko Software Inc A Special Thanks to Lan Turner Janie Russell Erik Larson Paige C Mehlhoff Nick Russell Joe Chambers Jacob Anawalt Kimberly Lyon Phillip Arnoldson Matt Langenheim Brad Dickson Kendell Fabricius Derrick Hathaway Erik Akins Todd Hendricks Dana Bigboy Published by PitNews Press Gecko Software Inc 271 N Springcreek Parkway Suite A Providence UT 84332 www GeckoSoftware com Copyright 2007 Gecko Software Inc All Rights Reserved Track n Trade 5 0 Gecko Software Inc Table of Contents Table of Contents Chapter 1 Chapter 2 Introduction to Futures Introduction What are Futures Margins and Guaranteeing Futures The Long and Short of Trading Calculating Profit Loss Points vs Cents Margins Cents Points amp the Power of Leverage Orders to Manage Your Future Types of Orders Look Before You Leap Getting Started Installation Log in Account Manager Getting Started Keyboard Shortcuts Quick Reference File Menu Main Toolbar Control Panel Data Downloads Commodity Symbols Chartbooks Charting Preferences Charting Tools Introduction Crosshair Tool Line Tool Multi Line Tool Narrow Sideways Channel Tool Inclining Declining Channel Tool N Tool Wedge and Triangle Tool Trend Fan Tool Trend Fan Technical Analysis Track n Trade 5 0 Sy o D O O O 5 bb D bb T Y C
101. W for weekly or LM for monthly Example Cotton 2 for Long Term Monthly would look like CT VLM Track n Trade 5 0 125 0 pes qu C O D O C O I Chapter 6 Examples of Long Term Charts in the Chart Window Cosa 2 hra Grd LE Dey Demija 82 pee Chto Oct LT Week Coie SE eee Davi Carl T kg 126 Gecko Software Inc Long Term Charts Creating Long Term Charts Because commodity contracts overlap over each other Track n Trade 5 0 creates Long Term charts by placing together the data from the front month contracts This method only shows the data for the section of the contract that is actively being traded and excludes the excess giving the contract higher volume and open interest The boxes represent the portion of the contract that Track n Trade 5 0 uses to Contract two create the long term chart Contract three A Contract four Long Term Chart Options Another way to create a long term chart is to take only the fat portion of each front month contract and paste them together With this method you are cutting off both the beginning of the chart where there is typically less volume and open interest and the end of the chart where it is cooling down from traders who are transferring their orders to the next month s contract Contract one Contracts tend to have more activity during the middle of the contract and less toward the end Track n Trade 5 0 can cut out the middle of
102. You may not loan rent lease lend or otherwise transfer the other medium to another user except as part of the permanent transfer as provided above of the SOFTWARE PRODUCT 6 BACKUP COPY After installation of the SOFTWARE PRODUCT pursuant to this EULA you may keep the original media on which the SOFTWARE PRODUCT was provided by Gecko solely for backup or archival purposes If the original media is required to use the SOFT WARE PRODUCT on the COMPUTER you may make one copy of the SOFTWARE PRODUCT solely for backup or archival purposes Except as expressly provided in this EULA you may not otherwise make copies of the SOFTWARE PRODUCT EDUCATIONAL LITERA TURE OR MULTIMEDIA PRODUCTS or the printed materials accompanying the SOFTWARE PRODUCT 7 U S GOVERNMENT RESTRICTED RIGHTS All SOFTWARE PRODUCTS provided to the U S Government pursuant to solicitations issued on or after December 1 1995 is provided with the commercial license rights and restrictions described elsewhere herein All SOFT WARE PRODUCT provided to the U S Government pursuant to solicitations issued prior to December 1 1995 is provided with Restricted Rights as provided for in FAR 48 CFR 52 227 14 JUNE 1987 or DFAR 48 CFR 252 227 7013 OCT 1988 as applicable 8 EXPORT RESTRICTIONS You agree that you will not export or re export the SOFTWARE PRODUCT any part thereof or any process or service that is the direct product of the SOFTWARE PRODUCT the foregoing collecti
103. abnormal use or a virus Any replacement SOFTWARE PRODUCT will be warranted for the remainder of the original warranty period of thirty 3 days Outside the United States nei ther these remedies nor any product support services offered by Gecko are available without proof of purchase from an authorized international source To exercise your remedy contact Gecko Software Inc Attn Gecko Sales Information Center at the Web address specified above DISCLAIMER OF WARRANTIES The limited warranty that appears above is the only express warranty made to you and is provided in lieu of any other express warranties if any created by any documentation packaging or outside reseller advertisements or claims Except for the limited warranty and to the maximum extent permitted by applicable law Gecko and its suppliers provide the SOFTWARE PRODUCT and Support Services if any AS IS AND WITH ALL FAULTS and hereby disclaim all other warranties and conditions either express implied or statutory including but not limited to any if any implied warranties or conditions of merchantability of fitness for a particular purpose of lack of viruses of accuracy or completeness of responses of results and of lack of negligence or lack of workmanlike effort all with regard to the SOFTWARE PRODUCT and the provision of or failure to provide Support Services ALSO THERE IS NO WARRANTY OR CONDI TION OF TITLE QUIET ENJOYMENT QUIET POSSESSION AND CORRESPONDENCE TO DES
104. ade 5 0 233 Chapter 9 Preferences Options preferences will open in your control panel when you place a put or call If it is not open select the order by clicking on it The properties will appear in the preferences section of your control panel Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Option Tool Call Line You can choose the color line style and line Lins thickness of your line You can also specify the Filled Color for when the option 1s filled Filled Color Custom E Font ni ex was Font Select the font size and color of the text Select D crane gt Show Text to hide or show your text on the chart Ghost white bul v Show Text RB 7 7 Buy B 7 Select or deselect Buy Quantity Strike Type W Quantity Premium Day s to Expiration and Value to show or id a hide their corresponding value on your chart ype Iv Premium Iw Davis to Expiration MW Value t Purchused or Liquadated s Current Market E O E A v Q er Q 234 Gecko Software Inc Accounting Date DB 8 2007 Open Order PL 0 00 Closed Order PL 0 010 Order Commissions roe ala Open Option PL Closed Option FL Option Commissions
105. ains many individual charts Each chartbook can contain several charts each individual chart becoming the pages of your chartbook Every time you open Track n Trade 5 0 a blank chartbook named Untitled Book will open You can either continue with this new chartbook or open a chartbook that has already been created and saved Hy Commodities e T 8 om Available Charts Sort by Commodity Ascendng dian Dollar CHE Combined J CD 2007M HH Commodities T IE Available Charts Sort by Commodity Ascending Click to choose commoditie xl symbol 48 Each chart that you open and view from the Commodities tab is listed below in the Active Charts list found on the left side of the screen This list is your Table of Contents for your chartbook Charts are listed in alphabetical order in this window To switch between charts simply double click on the different charts listed Creating a New Chartbook Track n Trade 5 0 will automatically open a new chartbook whenever you open the program This new chartbook needs pages or charts added to it You can add pages to your chartbook by opening charts in the commodity tab If you know the symbol for the chart you are looking for you can type it into the entry box next to Symbol and press enter You can look up a complete list of commodity symbols at help geckosoftware com A complete list of commodity symbols and commodity month
106. al settings Relative Strength Index RSI Period The number of bars or period used to RSI Period 14 calculate the study Default is 14 RSI B Black Bo rl Caladalion Exponential RST Choose the color line style and line thickness of er pis your line d 0 00 w IE v loue Calculation Choose between Exponential Simple and Er 0 00 E Yellow Wilder s Smoothing calculations a 000 s E yelow 4 000 E Yelow View up to four Thresholds at values and colors of your Buy Sell Arrows choice When calculating buy sell signals Threshold 1 Show Arrow When Indicator is Visible is used as the upper threshold and Threshold 2 is used as Arrow Color E LightPink the lower threshold default values set at 70 and 30 When calculating Buy Sell arrows for RSI Threshold 1 is used as the upper threshold Threshold 2 is used as the lower threshold Choose when you want Buy Sell Arrows to show and what color N pe O qu Le e E 77 D 184 Gecko Software Inc Using Indicators Stochastic Relative Strength Index SRSI The Stochastics indicator is an oscillator that compares a securities closing price in relationship to its price range over a given period of time The RSI indicator is also an oscillator which represents the internal strength of the equities price Both these indicators work on an overbought and oversold formula The Stochastics RSI 1s a combination
107. al tools and apply the technical concepts learned 58 Gecko Software Inc Charting Tools Support and Resistance Technical Analysis Markets have a tendency to move in troughs and peaks or more appropriately Support and Resistance Support These troughs are called support indicating that support is level This shows that buying interest is strong enough to overcome selling pressure A decrease in price is reversed and prices rise once again Typically a support level is identified by a previous set of lows Resistance Resistance is essentially the opposite of support Resistance is defined as a horizontal ceiling where the pressure to sell is greater than the pressure to buy An increase in price is reversed and prices revert downward Typically support can be located on a chart by a previous set of highs Line Tool Au To draw a support or resistance line also referred to as a trend use the Line tool Select the Line tool from your Charting toolbar Click on your chart where you want the line to begin Hold down the mouse button and move to the position you want your line to end Release mouse button to place Resizing the Line Select the line drawing by clicking on it The line is selected when boxes appear at the ends of the line Click on one of the boxes and drag it to the desired length Release the mouse button to place the end point of the line Moving the Line Select the line drawing by
108. also requires that the directional index line be on Preferences Right click on the DMI button in your Indicator toolbar and select DMI Settings The Preferences Tab will open in the Control Panel and the DMI preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Directional Movement Index DMI Period The number of bars or interval used to PURE calculate the study Default is 14 AD Period DMI B Black ADX Period Specify the number of price bars used in DMI C Gray calculating ADX DM T Silver E y sealing DMI DMI DM Choose the color line style and line Thresholds thickness of your line Select Use Relative Scaling to Ma 4000 C Yellow change the 100 location to the highest point value in af om Ek the DMI indicator E O 00 E Yellow 4 0 00 S I Yellow Buy Sell Arrows Show Arrow When Indicator is Visible Arrow Color uishtelue d Choose when you want Buy Sell Arrows to show and Threshold 1 is used For Trend Strength what color Select if you would like to view Extreme View up to four Thresholds at values and colors of your
109. an be stretched to the proper distance you expect the graph to retrace The numbers in the tool indicate the dollar amount of risk and reward When the chart is trading within the risk area negative number you are risking your own money When the chart is trading within the reward area positive number you are risking OPM or Other People s Money Use the Risk Reward calculator on all trades to calculate where your order entries and exits should be placed Example of the Risk Reward Calculator 1825 00 Reward i 337 12 50 Track n Trade 5 0 121 C Ju O Q i9 E Oo o o a O Mur amp ET au o Chapter 5 Resizing the Risk Reward Calculator Select the drawing by clicking on it You will know the drawing is selected when boxes appear at the corners Click on a box and drag it to your desired location Release the mouse button to place Moving the Risk Reward Calculator Select the drawing by clicking on it Hold down the mouse button and drag to the new location Release the mouse button to place Deleting the Risk Reward Calculator Select the drawing by clicking on it Press the Del Delete key on your keyboard You can also right click the drawing and select Delete from the drop down menu Preferences Select the drawing by clicking on it The properties will appear in the preferences section of your control panel Or right click on the drawing and select prop
110. ange in trend from up to down Double Bottom This formation includes two distinct bottoms and anticipates a change in trend from down to up This formation is the exact opposite of a Double Top Triple Top This formation includes three distinct tops and anticipates a change in trend from up to down Triple Bottom This formation includes three distinct bottoms and anticipates a change in trend from down to up This formation is the exact opposite of a Triple Top sjoo BuljeyD peaueApy Track n Trade 5 0 105 o O E ja re O O D C gt Le c Chapter 3 To illustrate a Rounded top or bottom formation on your futures chart select the Arc tool in your Advanced Charting toolbar Move the mouse pointer to the point on the chart that will be the corner of your arc Hold the mouse button and drag to your end point Release the mouse button to place Resizing the Arc Select the drawing by clicking on it You will know the drawing is selected when boxes appear at the corners Click on a box and drag it to your desired location Release the mouse button to place Moving the Arc Select the drawing by clicking on it Drag to the new location and release the mouse button to place Deleting the Arc Select the drawing by clicking on it Press the Del Delete key on your keyboard You can also right click the drawing and select Delete from the dropdown menu Preferenc
111. art a black s n s IB I select Snap to have your lines snap to price bars when moved Select if you would like to Show Arcs or v Show Arcs Ml one Always Show Lines on your drawing 68 Gecko Software Inc Charting Tools Example of Head amp Shoulders Top and Bottom Canle Lite Comhbimedi Fel o amp Shoulders Top Formation E a a uude or poc dp essa rt Sep 008 Ha ised Da coo gt 5 O 7 Track n Trade 5 0 69 Chapter 2 Channels Technical Analysis A trend channel consists of a section of price bars that are between parallel support and resistance lines There are three types of channels the Narrow Sideways Channel the Inclining Channel and the Declining Channel Narrow Sideways Channel A Narrow Sideways channel is a formation that features both resistance and support with a sideways movement Support forms the low price bar while resistance provides the price ceiling To trade a Narrow Sideways channel place an order to buy on a break up and out of the channel or sell on a break down and out of the channel Inclining Channel The Inclining channel is a formation with parallel price barriers along both the price ceiling and floor Unlike the Narrow Sideways channel the Inclining channel has an increase in both the price ceiling and price floor The breaking of the bottom trend line on this formation shows a change in trend from bull
112. ate Interest rates are used by the Black amp Scholes options formulas to determine the theoretical options price 2007 05 01 3 more information on Black amp Scholes at the end of this 2007 04 01 ir chapter Note Because most futures contracts expire in under a year we have not noticed the interest rate to make a large difference on the dollar value of an options price Adding an Interest Rate Interest rates are updated by Gecko Software Inc on Ta add an interest rate to the list enter the effective date of the intetest rate and the rate in percentage a regular basis If you want to add a new interest rate format ie 3 for 3 interest rate manually click on the Add Interest Rate button and Effective Date Interest Rate the Add Interest Rate window will open Choose the 6 12 2007 Ux date for the effective date dropdown menu and type the new interest rate in the input box Click OK to save or Cancel OK Ec Cancel to exit from the window Deleting an Existing Interest Rate To delete an existing interest rate select the interest rate that you would like to delete by clicking on it Click the Delete Interest Rate button and a window will open asking you to verify that you would like to delete this interest rate Click YES to continue or NO to cancel Add Interest Rate Contin Deletion of intoreaet ate afa iN Pre vou sure lal eu rond bo delete bres nr rade Rena E O E Q v Q
113. ate strikes above the highest high and below the lowest low in generated Black and Scholes data Data The Data tab will give you the historical data for each day a specific symbol had traded It will give you the open price l TEET close price highest price and lowest price on the day It also 11 16 2005 625 shows the volume traded Values for indicators are added D 114 7 2005 TETE when the indicator is open D 11 21 2005 zi 11 22 2005 614 The disk button is used to save any changes you have made Co 11 23 2005 A EBERT to the data so that they are available the next time you run OD e e e e et 11 28 2005 598 i the software The disk button with the red arrow on it is Q D ok for undoing any data changes you have made but have not saved If you have already saved the incorrect value this action will not recall the original value You can select to see all data in decimal or fractional format Most commodities are traded as decimal values and will be displayed as a decimal everywhere To customize the Data tab click on the Customize button and the Customize window will open In this window you can select which data is displayed in the Data tab To change the data column display order use the or keys on your keyboard to move the selected item up or down in the list Hy se f Notes Notes The Notes tab is for your convenience to use as a note pad for your research and trading s
114. ave on a chart select the Elliott Wave tool from your Advanced Charting toolbar Click on the first point to place Continue throughout the wave by clicking on each point 1 5 and ABC to place When you get to the last point C the drawing is complete ve Tool Resizing the Elliott Wave Select the drawing by clicking on it You will know the drawing is selected when boxes appear at the corners Click on a box and drag it to your desired location Release the mouse button to place Moving the Elliott Wave Select the drawing by clicking on it Drag to the new location and release the mouse button to place Deleting the Elliott Wave Select the drawing by clicking on it Press the Del Delete key on your keyboard You can also right click the drawing and select Delete from the dropdown menu Preferences Select the drawing by clicking on it The properties will appear in the preferences section of your control panel Or right click on the drawing and select properties from the dropdown menu Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To All Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Eliott Wave Tool Elliott Wave Tool You can choose the color line style ME g a E and line thickness of your lines Fon
115. been at its lowest value for the specified time range and scale period The averages use data from all previous years and are not affected by the current year s trend Displaying the Seasonal Trend Indicator Click on the SEAS button located in your Indicators toolbar 15 Year j Track n Trade 5 0 245 Chapter 10 Preferences Right click on the SEAS button in your Indicator toolbar and select SEAS Settings The Preferences Tab will open in the Control Panel and the SEAS preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Seasonals Trend 1 2 Select how many years you would like to Trend 1 Years 10 view and what color line thickness and line style you Bl blue would like the indicator to be You can also choose Fill V Trend 2 Years 15 Background and choose the color and which trend you es would like it to be applied to iv Fill Background Bee f Trendi C Trend 2 Scale Decide if you would like the indicator to be based Scale Entire Contract Last 12 Months on the Entire Contract or the Last 12 Months Thresholds 1 0
116. cal data gives you an advantage when you are trading a seasonal commodity The Seasonal Plug In consists of three separate indicators e Seasonal Trends Historical Averages Market Probability Seasonal Trends The seasonal trend indicator represents the normal historical behavior of the market The indicator is calculated on the specific contract month showing you behavior of that specific chart This is very important in agricultural markets with new and old crop contracts such as Wheat or Corn The charts depict behavior on a relative basis the actual prices are not forecasted just the relative position of the market versus its contract high and low On the seasonal charts the high is depicted as 1 0 or 100 while the low is depicted as 0 0 or 096 All similar trading days are lined up for X number of years the defaults in Track n Trade 5 0 are 10 years for Trend 1 and 15 years for Trend 2 and are analyzed in terms of where each day falls as a percentage of the highest and lowest price of either the last 12 months or the life of the contract for each specific contract These prices are then averaged and depicted in the indicator window When the trend line is at 100 or 1 0 it indicates where the contract has on average been at its highest value for a specified time range and scale period CD D a n O D a U C LI When the trend line is at 096 or 0 0 it indicates where the contract has on average
117. cation you would like to end the arrow Release the mouse button to place Resizing the Arrow Select the arrow drawing by clicking on it The arrow is selected when boxes appear at the ends of the line Click on one of the boxes and drag it to the desired length Release the mouse button to place the end point of the line Moving the Arrow Select the arrow drawing by clicking on it Click on the arrow not an end box and drag it to the new location Release the mouse button to place Deleting the Arrow Select the arrow drawing by clicking on it Press the Del Delete key on your keyboard You can also right click the drawing and select Delete from the dropdown menu Preferences Select the drawing by clicking on it The properties will appear in the preferences section of your control panel Or right click on the drawing and select properties from the dropdown menu Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings ERNEUT Line You can choose the color line style and line thickness of vour arrow Line Black y Arrow Fill L eae El Arrow Fill Select what color you want the point of your Arrow Point On end two arrow to be You can also c
118. choice When calculating buy sell signals Threshold 1 Arrow Color Bl Green is used as the upper threshold and Threshold 2 is used as when calculating Buy Sell arrows For SSTO the lower threshold default values set at 80 and 20 Threshold 1 is used as the upper threshold Threshold 2 is used as the lower threshold Smoothing The number of periods used to determine the moving average for the K and 96D values Choose when you want Buy Sell Arrows to show and what color C o Q 5 2 O Q mp O PR ep Track n Trade 5 0 189 N pe O qu Le e E 77 D Chapter 7 Triple Exponential Average TRIX The TRIX indicator is a momentum indicator designed to calculate the percent rate of change of a triple exponentially smoothed moving average It is very similar in the way the MACD indicator works Both indicators provide basically the same methodology behind generating market momentum and directional movement TRIX was designed to filter out the minor less significant moves within a market trend This is done just as other traditional indicators have done in the past by utilizing multiple moving averages Convergence and Divergence are common uses of the TRIX indicator Adding the trigger line crossover provides the trader with a Buy Sell Signal generated from the crossing of the two moving averages Calculation To calculate TRIX first pick a period with which to create an exponentia
119. ck Volume Bar Colors Choose the colors for your down Up Color E DarkGray m and up bars Same Scale v Volume in Status Bar Selecting Same Scale will make the volume and open Thresholds interest amounts on the same value scale rif ooo e Ares Taf oof l Mvi Volume in Status Bar Choose if you would like to see raf on fe z E veiw gt the volume amount in the status bar at the bottom of your screen By deselecting the Open Interest value will Taf ooo f Are appear in its place C o Q 5 2 O Q mp O PR ep View up to four Thresholds at values and colors of your choice Track n Trade 5 0 195 Chapter 7 N pu O qu Le C e 77 D 196 Gecko Software Inc Overlay Indicators Learn to Analyze the Signs and Signals Track n Trade 5 0 197 Chapter 8 V U O 2 qu O C gt U grum D gt O 198 Gecko Software Inc Overlay Indicators Introduction To display the Overlay Indicators right click on the Chart Window to view the dropdown menu Select the name of the Overlay Indicator that you would like to view A checkmark will appear next to any indicators you have selected and all selected indicators will show directly on your chart not in the indicator window To remove an overlay indicator from your chart click on the indicator in the dropdown menu again and the checkmark with disappear Right click Menu Tick Style Proporti
120. ck on Account Manager To log in to the Account Manager use the same username and password you use to access the Track n Trade 5 0 software program There are links below the log in to help you in case you forget this information If you do not Nm armur arme Lesley stinn have a password click on the Click Here to Sign Up button on the bottom of the screen It is helpful SSS to read the information given here Log a New ta the hccount Munager F PET rayer Ei mir ty Soh pa Once you have logged in a screen will appear with your information on it The top of the screen is amenu with Home Update Account Order History and Available Products tabs Home Update Account Order History Available Products From the Home page you can view your Account Details at the top left corner which include your current address and phone number You can change this information by clicking Review You will also see any Account Notices such as a notice that one of your subscriptions needs to be renewed Below will be a list of your current subscriptions and a list of the software programs you currently own The Update Account page is where you can update your Billing and Contact Information Shipping Information Payment Information and your Password It is important to keep this information up to date On the Order History page there will be a chronological list of all your orders To view them in detail click on the Details l
121. ckness of your PPO line Trigger Specify the number of days used in calculating the Trigger Line Choose the color line style and line thickness of your Trigger line Build With Choose either Close Open High or Low to build with View up to four Thresholds at values and colors of your choice Choose when you want Buy Sell Arrows to show and what color Gecko Software Inc Using Indicators Williams Percent R R Larry Williams used a ten day period and plotted where the current price was compared to that period He used it to measure conditions of overbought and oversold the overbought region being the area below 20 and the oversold region the area above 80 With the ability to invert the values it can be looked at in the same manner as other overbought oversold indicators Note We will use the traditional method not the inverted in our discussions Choosing the time period which the indicator looks at the interval is crucial to finding the optimal sensitivity Williams s basic rule is simple when the R is lower than 20 and becomes greater than 20 it is interpreted as a buy signal Conversely when the R is higher than 80 and becomes lower than 80 a sell signal is activated Changing the sensitivity of the indicator to work for you is essential to making the study a better tool The longer the period for the R the less sensitive it will be The indicator will move less but will be more smoothed A number
122. clicking on it Click on the line not an end box and drag the line to the new location Release the mouse button to place Track n Trade 5 0 59 gt 5 o O O D O pes qu am O Chapter 2 Deleting the Line Select the line drawing by clicking on it Press the Del Delete key on your keyboard You can also right click the line drawing and select Delete from the dropdown menu Preferences Select the line drawing by clicking on it The properties will appear in the preferences section of your control panel Or right click on the drawing and select properties from the dropdown menu Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Line Tool Line Tool You can choose the color line style and line Line Ml Black thickness of your line Parallel Extensi o Lock d cce E Parallel Extensions Select from the dropdown menu Linear Extensions te how many lines you would like to add Deselect Lock if you want to be able to move them independently Select Linear Extensions to extend your line to the edge of your chart window Select Snap if you want your crosshair to snap to price bars when mov
123. core of all risk management and trading is using the appropriate order for your market objective The following are some basic definitions of the common order types all of which can be replicated in Gecko Software s Track n Trade 5 0 charting software The market order is the most common type of order With a market order the customer states the number of contracts of a particular delivery month of a specific commodity he she wishes to buy or sell The price of the order is not specified as the market order is filled at the market or at the current price when the order enters the trading pit Market orders are placed when the speculator or hedger wants in or out of the market fast since time is the most important factor in this type of order not price Market on Close is a common variation of this type of order and is used when the trader wishes to have his her order executed during the closing of the market closing range The Market on Open is another common variation instructing the order to be filled during the markets opening price range The limit order specifies a price limit at which the order can be filled The limit order can only be filled at the specified price or better For example a customer wishing to buy two July Corn contracts at 210 when July Corn is trading at 211 would place the following order Buy two July Corn at 210 limit Buy limit orders must be placed at the current market price or lower The lower the
124. ct as support on future pullbacks as should the pivot point The opposite is true for support levels A violation of the daily pivot to the downside indicates that the daily trend is down with a downside target being the first support level If the market stalls then traders may wish to take profits on short positions or initiate long positions in anticipation of a retracement to the daily pivot However if the first support level is violated the day is said to be a strongly down trending day and as such should move down further to test the second support level As with the resistance numbers the support numbers once violated become resistance lines to trade with in the trend O lt D mi RY lt O a r O PR a Though originally used as a means for floor trading longer term traders can use pivot points for longer periods Try plotting the weekly pivot points on the daily chart and using it for shorter term positioning on the daily charts Pivot points can also be calculated using the monthly pivot points on the daily chart and used for longer term positions Track n Trade 5 0 215 Chapter 8 Example of Pivot Points hald COMES pU emhimedi Jini Calculation There are several methods used to determine the Pivot Point We have included the three different formulas in Track n Trade 5 0 Traditional formulas Pivot Point H L Cy 3 First Support Line 2 x Pivot Point H First Resistance Li
125. ct at 210 and the price goes up to 219 you have enough open position profit to post margin for a second contract Prices then rise another 04 cents and you buy a third contract With Corn prices having risen 13 cents you were able to buy 3 contracts with an initial investment of only 405 00 However all it takes is a 05 cent decline in the price of Corn and all your profits are gone If you were lucky enough to see another 5 cent rise you would yield a 1 450 00 profit or a 358 return on the initial margin It is possible to make highly leveraged and possibly highly profitable transactions in the futures markets by trading with relatively little financial cushion and pyramiding contracts However it has been our experience that those who practice this type of trading generally do not end up making money but losing it Most people are attracted to trading futures because of the leverage involved and it is the leverage that seems to ruin most traders Though futures trading should only be done with genuine risk capital this does not mean you should take undo risk As a general rule of thumb traders should learn to diversify their risk only placing a small percentage of their capital at risk at any given time Though this style of trade will reduce the largest bang for your buck in the short run it may prevent you from losing everything In order to learn this game you need to be able to stick around to learn all the rules both
126. ct properties from the dropdown menu Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings MS Tool Line C Yellow Background BN Custom Font E Arial n WhiteSmoke M Show Text B I Snap Iv Fill Background N Tool You can choose the color line style and line thickness of your lines as well as the background color To make the background transparent deselect Fill Background at the bottom of your preferences Font Select the font size and color of the text Select Show Text to hide or show your text on the chart Select Snap to have your lines snap to price bars when moved Track n Trade 5 0 19 gt 5 o o O Chapter 2 Wedges and Triangles Technical Analysis The wedge formation occurs when the slope of price bar highs and lows consolidate to a point The triangle formation occurs when there is a pause in the current trend Inclining Wedge The Inclining Wedge formation occurs when the slope of both lines is up with the lower line being steeper then the higher one To trade the Inclining Wedge place a buy on a break up and out of the wedge or a sell order on a break down and out of the wedge
127. ction of your control panel Or right click on the drawing and select properties from the dropdown menu Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Fibonacci Are Tool Fibonacci Arc Tool You can choose the color line line Biel gt style and line thickness of your lines Font e m wa Font Select the font size and color of the text Select Show Text to hide or show your text on the chart gt Q lt o Q D Q O 5 V mi e O O 77 E WhiteSmoke M Show Text B I Select Show 23 6 and 76 4 to view these two Show 23 6 and 76 4 i FE additional arc lines Select Snap to have your lines snap to price bars when moved Track n Trade 5 0 99 Chapter 3 Example of a Fibonacci Arc 2oybeans Combined Hev 03 Fibonacci Arc m a i o O E ja re O O D C gt Le c 100 Gecko Software Inc Advanced Charting Tools Fibonacci Time Zones Tool The Fibonacci Time Zone uses Fibonacci numbers rather than the percentages used in the Ruler and Arc tools Select the Fibonacci Time Zones from your Advanced Charting toolbar Click where you want the upper
128. depicted in this feature are based on price not a relative basis In essence what this feature does is give you the average price on a specific day This chart will have the same basic feel and theme as the seasonal chart except instead of prices being scaled on a relative basis 0 to 100 they are the average historical price for that day This feature may also help traders divine value in a commodity in that with a quick look not only can the trader see how current prices line versus average prices historically but they can also see seasonal trends By simply checking the Historical Average check box within the Seasonals tab it displays the average line in the main chart window You may also change the number of years the color and line style in which the indicator is displayed The weighted box can be selected to provide more significance to the latter years than the earlier years The un weighted is a simple average giving equal significance to each year included in the study Preferences Open the Preference tab from the Control Panel on the left of your screen Select the Historical Average line on your screen The preferences will appear in the Control Panel Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts wi
129. der on a break down past the 2 point Then place a stop loss order just above the 1 point an industry standard or just above the 3 point a more conservative stop loss placement 123 Bottom Formation The 123 bottom formation anticipates a change in trend from down to up on a break above the number 2 point A 123 bottom formation is easily identified because the number 1 point is the annual price low To trade a 123 bottom formation place a buy order just above the 2 point Then place a stop loss order just below the 1 point an industry standard or just below the 3 point a more conservative placement sjoo Burseuy Track n Trade 5 0 63 D O pes qu C O Chapter 2 123 Tool Use the 123 tool to chart both top and bottom formations To draw a 123 formation select the 123 tool from your Charting toolbar Position the mouse pointer over the spot you would like to place the 1 point and click to place Move to the 2 point and click to place Move to the 3 point and click to place Resizing the 123 Drawing Select the 123 drawing by clicking on it You will know the 123 drawing is selected when boxes appear on the corners Click on a box and drag it to your desired length Release the mouse button to place Moving the 123 Drawing Select the 123 drawing by clicking on it The drawing is selected when boxes appear at the 1 2 and 3 end points Drag to the new location and release the mouse button to
130. ds tab in the Control Panel Select the two futures contracts from the dropdown menu that you would like to use in generating a spreads chart When you have made your selections click the Open Chart button and the spreads chart will display ty pa 22 Spreads v E Spread Charts Buy 1 Soybeans Combine 2007N Sell i Sugar 11 D pen Dr 2007N Symbol S200 7H 15B2007M Spread Charts 1 FL2008H 1 L C 2008 1CT 2007H 1 02007N 1 52007N 18B2007M Cattle Feeder Corn Cotton 2 Open Soybeans Combine Spread Margins The spread will be listed in the Spread Chart list and the individual contracts will be listed in the Commodity tab These spreads that you open will be part of your chartbook when you save and close it In the View menu select Spread Margins and the Spread Margins window will open Spread Margins Le commodi 4Commmodty___ _iotal Australian Dalla Australian Dalla Australian Dalla Australian Dalla Australian Dalla British Pound British Pound British Pound British Pound British Pound CRB Open uk Canadian Dollar Canadian Dollar Canadian Dollar Qty Commatity e e e e i e e e e e re Australian Dolla British Pound Euro Fx Combi Japanese Yen Swiss Franc t0 British Pound Canadian Dollar Euro Fs Combi Japanese Yen Swiss Franc OO CRB Open uk
131. e bottom region of the price bar and there s an increase in volume CMF exhibits a negative value When the CMF indicator crosses the zero line either up or down this is an indication of a change in trend Traders use this indicator to help confirm breakout signals from either support or resistance trend lines Calculation The calculation of the CMF is here CMF SUM AD n SUM VOL n where n Period AD VOL x CL OP HI LO AD stands for Accumulation Distribution Buy Sell Signals A buy signal occurs when the CMF value crosses from below the 0 line to above the 0 line A sell signal occurs when the CMF value crosses from above the 0 line to below the 0 line Jie qo i Chalkin Money 142 Gecko Software Inc Using Indicators Preferences Right click on the CMF button in your Indicator toolbar and select CMF Settings The Preferences Tab will open in the Control Panel and the CMF preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Chaikin Money Flaw Period Specify the number of days to be used in Period calculating the CMF SE CMF ME
132. e boxes to view different support M Second Resistance and resistance lines Change the color style and Line GoldenRod thickness of the lines MW First Resistance Line E Yellow Calculation Select Traditional Variation 1 or W Pivot Point Variation 2 Line Bl red _ First Support Display Settings Check to display Historical Daily D s mI EII E Weekly or Monthly pivot points W Second Support E cocer Bl RT d Select if you would like to see the Moving average line Li G R F T ne E Goldenrod gt and enter the number of price bars you would like to be Calculation Traditional E used to calculate it O lt D i Y lt 5 Q O a r O RJ a Show Historical T Show Daily Font Select the font size and color of the text You can Iw Show Weekly Show Monthly Moving average 14 Font 8 b Arial Text Color B Red v Background B custom v Bi 1 also choose to bold or italicize your text and change the background color Track n Trade 5 0 217 ep e O 2 qv M O Cc gt O gem D gt O Chapter 8 10x8 Moving Average Calculation Just as it is easier to ride a bike downhill than uphill it seems prices fall faster than they rise Due to this perceived quirk in pricing the legendary market analyst author and seminar speaker Jake Bernstein developed the 10x8 mov
133. e chart as you go forward A or backward in time If you would like to center your chart without On Screen Text turning on the Autoscale feature click on the Center button in your Time Interval toolbar G D Ko ON CO D C Advantage Lines Bulls n Bears zig zag Select Show Buy Sell Arrows to view buy sell arrows on your chart v Aligator Bollinger Bands If this option is not selected buy sell arrows will not appear on your Donchian Channels chart even if you have an indicator selected that has buy sell signals Historical Averages Keltner Bands Mos fesrads Select Show Drawing Tools to view all the drawings you ve made on Parabolic SAR your chart Deselecting this option will not delete the drawings Once PE you re select this option your drawings will reappear on your chart 10 x 8 MAC ARRI ene If you select Chart Properties the chart preferences will open in Save Settings s My Defaults your control panel Track n Trade 5 0 51 Chapter 1 Chart Properties Preferences Tab On Screen Text Lower Left Ej The Preferences tab is located in the Control Panel Chart a l Up Arial B 7 preferences appear in the window by default Any time Smooth Scrolling you don t see chart preferences when your preferences W Buy Sell Arrows tab is open click on your chart in the chart window and C Full Contract Last cU 22e Neue the chart preferences will appear Iw Print Background Color
134. e drawing by clicking on it Press the Del Delete key on your keyboard You can also right click the drawing and select Delete from the dropdown menu Preferences Select the drawing by clicking on it The properties will appear in the preferences section of your control panel Or right click on the drawing and select properties from the dropdown menu Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Gann Fan Tool Gann Fan Tool You can choose the color line style Line Yellow and line thickness of your lines Select what color you want the background to be To make the background Background i Custom RENE transparent deselect Fill Background at the bottom of 5 lens 8 your preferences C WhiteSmoke Font Select the font size and color of the text Select z UD Bl Show Text to hide or show your text on the chart Snap M Fill Background Select Extend if you would like your lines to extend to the edges of your chart window Select Snap to have your lines snap to price bars when moved gt Q lt o Q D OQ O 5 V mi e O O 77 Track n Trade 5 0 91 Chapter 3 Example of the Gann Fan Cattle
135. e to determine if the option price is under or over priced Example of the STRK in the Indicator Window Preferences Open the Preference tab from the Control Panel on the left of your screen Click on the Indicator Information Display to scroll through the different Indicators you have open until you get to STRK The preferences will appear in the Control Panel Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Strike Price Strike Price Choose the color line style and line Black and Scholes Theroretical thickness of your Black and Scholes Theoretical and Bl nec r Reported Market Value lines Reported Market value H time Strike Price Enter the price you would like to use Strike Price 109 00 C Thresholds Thresholds View up to four thresholds at a value that 1 oof l E velw you type in and a color that you choose 2 oo v D velw 3 oo x EO Yeow Taf oo x EO yellow E O E A v Q r Q 240 Gecko Software Inc Options Plug in Black and Scholes Calculations Modern option pricing techniques are of
136. each contract and paste the contracts together as a long term chart O 3 e o E 3 gt A T Using options available in Track n Trade 5 0 traders are able to specify the Contract two number of days at the end of a contract that they would Contract three like excluded from a long term chart Contract four A Track n Trade 5 0 127 Contract one Chapter 6 Long Term Settings You can find the settings for Long Term charts in the View menu from the top of your screen When you click on Long Term Settings the Dialog window will appear 0 pes qu C O D O C O I 128 Daily Contract Month Daily Long Term Build Long Term From Front Month Data ki Read ahead to next contract month before the end of the current contract month Ignore the last Davis Weekly Long Term Build Long Term Fram Front Month Data 5 Read ahead to next contract month before the end of the current contract month Ignore the last Davis Monthly Lang Term Build Long Term Fram Front Month Data 5 Read ahead to next contract month before the end of the current contract month Ignore the last Davis Cancel The window is divided into Daily Weekly and Monthly options Modify the Long Term Settings for the type of chart you want to use Select from the dropdown menu if you would like to build long term charts from front month data or contract month data Selec
137. ecified time span HV PT ATP SSD The sum of the squared differences n The number of periods for the specified time span TP The total number of trading periods for the year Due to the complexity of the formula it is preferable to use a scientific calculator when attempting to manually calculate the historical volatility of a futures instrument Example of Historical Velocity in the Indicator Window volatility 156 Gecko Software Inc Using Indicators Preferences Right click on the HVOL button in your Indicator toolbar and select HVOL Settings The Preferences Tab will open in the Control Panel and the HVOL preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Historical volatility HVOL Period The number of bars or period used HVOL Period 14 to calculate the study Default is 20 You may use any HvoL E GoldenRod v number greater than 1 for the close Show Relative Sacling Thresholds H VOL Choose the color line style and line thickness Caj 000 s E yellow of your line Click to Show Relative Scaling if you want T2 000
138. ed Example of the Line Tool Gold CROT dElectionich im 60 Gecko Software Inc Charting Tools Multi Line Tool Some contracts will have a continuous line or trend of alternating support and resistance To illustrate these multi lines select the Multi Line tool from your Charting toolbar Click on the chart where you want your line to start Move your mouse to the next point on your multi line and click to place Repeat this until the last point When placing the last point on the multi line right click to finish Resizing the Multi Line Select the multi line drawing by clicking on it You will know the multi line is selected when boxes appear at the ends of the multi line Click on a box and drag it to your desired length Release the mouse button to place Moving the Multi Line Select the multi line drawing by clicking on it Click on the multi line not a box and drag it to the new location Release mouse button to place Deleting the Multi Line Select the multi line drawing by clicking on it Press the Del Delete key on your keyboard You can also right click the multi line drawing and select Delete from the dropdown menu Preferences Select the line drawing by clicking on it The properties will appear in the preferences section of your control panel Or right click on the drawing and select properties from the dropdown menu Restore Settings TNT Default will change your settings back to the original
139. ed above and all direct or general damages the entire liability of Gecko and any of its suppliers under any provision of this EULA and your exclusive remedy for all of the foregoing except for any remedy of repair or replacement elected by Gecko with respect to any breach of the Limited Warranty shall be limited to the amount actually paid by you for the SOFTWARE PROD UCT The foregoing limitations exclusions and disclaimers described above shall apply to the maximum extent permitted by applicable law even if any remedy fails its essential purpose Trading foreign exchange stocks equities on margin carries a high level of risk and may not be suitable for all investors You should be aware of all the risks associated with such trading and seek advice from an independent financial advisor if you have any doubts Options traders should be aware that the exercise of a long option will result in a position in the underlying asset and therefore will no longer entail limited risk In addition traders should be aware of the large potential of loss of capital and therefore only genuine risk capital should be used in all speculative trading endeavors Currency Stock trading involves substantial risk of loss and thus is not suitable for all investors You should carefully consider your financial situation before opening a trading account and speculating and only genuine risk capital should be used when trading in the markets Leverage can work against you a
140. eems reliable no warranty can be given as to the accuracy or the completeness of any of the information provided or as to the results obtained by those using such informa tion While Gecko Software Inc believes the information contained herein is accurate Gecko Software Inc cannot be held responsible for the accuracy of the information the timeliness of the transmissions errors or omissions in the transmission of such information Any reliance on the information contained within this website in making investment decisions is solely at the risk of the user and each user shall be solely responsible for any and all losses resulting from such investments In no event shall Gecko Software Inc nor any of its employees agents or affiliates be liable for any direct indirect actual special or consequential damage or losses resulting from the use of the information provided herein 14 Gecko Software Inc Introduction to Futures The Basics of Futures Trading Track n Trade 5 0 15 Introduction to Futures QJ D Lum 2 LL O Cc Q r Le O i 16 Gecko Software Inc Introduction to Futures introduction Originally the stock market was created as a way for companies to raise capital By exchanging ownership in a company for cash early business ventures were able to raise capital to buy equipment or build factories Companies hundreds of years ago as well as today primarily use the stoc
141. eferred to as the oversold region Simply selling in the overbought region and buying when the RSI is in the oversold region is not a consistent method of trade Trade signals are not generated until the RSI leaves these regions A sell signal would not be present until the RSI has begun sloping down and leaves the 70 region A buy signal in the simple methodology associated with this pattern is derived when RSI leaves the oversold region crosses from below 30 to above it Just like sell signals RSI buy signals are present when the market begins to turn and the indicator leaves the oversold region Another use of the RSI is to look for a divergence in prices in the case of a market making higher highs or lower lows and the RSI failing to follow suit This difference in the indicator and the market could be a signal that the market lacks the momentum to continue its current price direction So you may be able to take a position sooner using this strategy than you would with the previous way Wilder says that this divergence is the single most indicative characteristic of the RSI C o Q 2 O Q O n ep In its calculation the RSI indicator uses a moving average of price changes over the period You can select which type of moving average is used to produce the desired amount of smoothing on the RSI indicator Calculation The RSI computations are not difficult but they are tedious You first calculate the differe
142. electing the N tool from your Charting toolbar Position the mouse pointer where you would like to place the top left point of the channel and click Continue to hold down the mouse button and drag to the bottom right point of the channel Release mouse button to place The default on this charting tool is 50 For more information on retracements see Fibonacci Time Zone and Fan tools in the Advanced Charting Tools section 14 Gecko Software Inc Resizing the N Channel Charting Tools Select the channel by clicking on it You will know the channel is selected when boxes appear on the corners Click on a box and drag it to your desired location Release the mouse button to place Moving the N Channel Select the channel by clicking on it Drag to the new location and release the mouse button to place Moving the Line in the N Channel Select the channel by clicking on it Notice the box in the center of the middle line Click and drag the box to move the line As you change the position of the percentage line the percentage value to the left will change as well Deleting the N Channel Select the channel by clicking on it Press the Del Delete key on your keyboard You can also right click the channel and select Delete from the dropdown menu Preferences Select the channel by clicking on it The properties will appear in the preferences section of your control panel Or right click on the drawing and sele
143. else who lives on planet earth You agree to use this software totally and 100 at your own risk as is therefore you take upon your self the total and entire risk of loss if you decide to actually use this software in an attempt to trade real money User recognizes that the list of support technologies provided by numerous companies is long and the ability to bring all these capabilities together in a workable solution is magic at best and the user recognizes that any failure of any of these technologies along the way could cause any part of or all of this program and associated features to fail and agrees to hold Gecko harmless in all respects If an implied warranty or condition is created by your state jurisdiction and federal or state provincial law prohibits disclaimer of it you also have an implied warranty or condition BUT ONLY AS TO DEFECTS DISCOVERED DURING THE PERIOD OF THIS LIMITED WARRANTY THIRTY 3 DAYS AS TO ANY DEFECTS DISCOVERED AFTER THE THIRTY 3 DAY PERIOD THERE IS NO WARRANTY OR CONDITION OF ANY KIND Some states jurisdictions do not allow limitations on duration of an implied warranty so the above limitation may not apply to you Any supplements or updates to the SOFTWARE PRODUCT including without limitation any if any service pack or hot fixes provided to you after the expiration of the thirty 3 day Limited Warranty period are not covered by any warranty or condition express or implied LIMITATION ON REMEDIES
144. eory behind them is that markets tend to have overlap from one period to another On most days the daily high or low is within the previous day s range as with the previous week s extremes and previous month s extremes In this sense pivot points are a counter trend indicator However many traders believe that once one point is violated the next point will be tested making a violation of these support and resistance levels a clue in trend following Though we cannot vouch for the truth of this statement the popularity of pivot points amongst floor traders tends to make these points worth watching The popularity of these numbers can be seen on any day when the exchanges are cleaned up The trading floor is literally piled high with folded pieces of paper that contain pivot points calculated on them The uses of pivot points varies greatly by trader The most common function of the daily pivot is as a guide If prices are trading above the pivot point then the trend is considered up Traders may wish to take short term positions on a violation of the daily pivot to the upside with an initial upside objective of the first resistance level If prices stall or slow at the first resistance level then aggressive traders may wish to take profits However if the first Resistance level is violated to the upside then the market should go on to test the second resistance level If prices have violated the Ist resistance level then this level should a
145. erties from the dropdown menu Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Risk Reward Tool Risk Reward Tool Choose the color line style and line v Nu 5 E thickness of your line Quantity 1 Quantity Select how many contracts you would like to be calculated s Price Difference Point Difference Font No Arial Price Point Difference Select whether you want the Black tool to calculate between price or points iw Show Text IB d w Snap Font Select the font size and color of the text Select Show Text to hide or show your text on the chart Select Snap to have your lines snap to price bars when moved 122 Gecko Software Inc Long Term Charts Generating and Customizing Long Term Charts Track n Trade 5 0 123 Chapter 6 0 pes qu C O D O C O I 124 Gecko Software Inc Long Term Charts Introduction Track n Trade 5 0 generates weekly and monthly long term charts from more than 30 years of historical data Open the chart you would like to view as a long term chart The chart is automatically set to open as a daily chart for the month you specified Click on the appropriate button to t
146. ery of the commodity underlying the futures contract Offset means to take an equal and opposite position in the futures market to one s initial position Margins and Guaranteeing Futures The exchanges and their members are able to guarantee all trades because they require all parties in a transaction to deposit performance bond margins Performance bond margins are financial guarantees required of both buyers and sellers of futures contracts to ensure fulfillment of the contract obligations That is buyers and sellers are required to take or make delivery of the commodity or financial instrument represented by the futures contract unless the position is offset before the contract expiration Before entering into a transaction both parties have to post an Initial Margin Requirement The initial margin requirement is the amount of money a party must have on account with a clearing firm your broker at the time the order is placed Initial margin funds must be on deposit before any trade can be accepted Maintenance Margin is a set minimum margin per outstanding futures contract that a party to a futures contract must maintain in his margin account to hold a futures position Initial margin requirements vary from commodity to commodity but are generally between 5 and 10 of the total value of the contract Example If March Corn futures are trading at 2 11 bushel the initial Margin Requirement for CBOT Corn futures is 405 00 per contract wi
147. es Select the drawing by clicking on it The properties will appear in the preferences section of your control panel Or right click on the drawing and select properties from the dropdown menu Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Arc Tool Arc Tool You can choose the color line style and line imi SII aE thickness of your line Snap Select Snap to have your lines snap to price bars when moved 106 Gecko Software Inc Advanced Charting Tools Example of the Arc Tool Wheat CBOT Combined Sep 22 a 7 h Rounded Bottom a sS May 1000 gt Q lt Q O D Q O 3 Q 2 O O 77 Track n Trade 5 0 107 Chapter 3 i O v O O D C gt Le lt L 108 Gecko Software Inc Notation Tools Personalizing Your Charts with Notation Tools Track n Trade 5 0 109 Chapter 4 o S I Cc Q pra qu o Z 110 Gecko Software Inc Notation Tools Introduction In Track n Trade 5 0 you have a variety of tools available to you to help personalize notate and analyze your futures charts Type text make drawings import flags and keep
148. f the three values TP Hight Lowt Closet 3 TPt Represents the typical price Hight The highest price for this interval Lowt The lowest price for this interval Closet The closing price for this interval Track n Trade 5 0 139 N pe O qu Le e E 77 D Chapter 7 Next calculate a simple moving average of the typical price for the number of periods specified TPAVGt TPI TP2 TPn n TPAVGt The moving average of the typical price TPn The typical price for the nth interval N Number of intervals for the average Compute the mean deviation MDt TPAVGI TPI TPAVGI TPn n MDT The mean deviation for this interval TPn The typical price for the nth interval N Number of intervals Note The symbol designates absolute value Negative differences as well as positive differences are treated as positive values Final computation CCIt TPt TPAVGt 015 x MDT CCIt The Commodity Channel Index for the current period TPt The typical price for the current period TPAVGt The moving average of the typical price 015 A constant MDT The mean deviation for this period Buy Sell Signals For a line drawing a buy signal occurs when the CCI line crosses from below the lower threshold to above the lower threshold A sell signal occurs when the CCI line crosses from above the upper threshold to below the upper threshold 140 Gecko Software
149. for each price in the specified time span of n periods LOGSi LOG Pi Pi 1 LOG The logarithm function Pi The current price Pi 1 The previous price Now that you have the logarithms of the price changes calculate the total logarithms for the time span you are reviewing T ios gt LOGS i i C o o 5 e O a O RI ep Tlogs The total of the logarithm price ratio for the time span S Indicates to sum all n logarithms LOGSi The logarithm of the price change for period 1 N The number of periods for the specified time span The next step is to calculate the average of the logs by dividing the total logarithm by the number of periods ALOGS Tlogs n ALOGS The average of the logarithms Tlogs The total of the logarithm for the time span N The number of periods for the specified time span Track n Trade 5 0 155 N pe O qu Le e E 77 D Chapter 7 The last calculation 1s to sum the squares of the difference between the individual logarithms for each period and the average logarithm 2 SSD 5 LOGSi ALOGS i 1 SSD The sum of the squared differences S Indicates to total the squares of all n differences LOGSi The logarithm of the price change for period 1 ALOGS The average of the logarithms Now that the elements of the final formula are complete the following formula calculates the historical volatility for a given period over a sp
150. g a shorter period of time usually 10 days The second average is a slower reacting average that will indicate longer term price movement Using these two averages together helps to alleviate whipsaws by giving a basis of comparison The faster average breaking above the slower average is a buy signal the faster average breaking below the slower average is a sell signal When using two different moving averages the trader gets a clearer picture of price indications By combining a slower moving 20 day average with a quicker reacting 10 day average you can see where the long term indications are going O lt D mi RY lt O a r O TR a You would sell once the faster moving average crosses below the slower trend because that s an indication of change in trend Near term prices should be rising at a greater rate than longer term prices in a good upward trending market and vice versa for a down trend Track n Trade 5 0 209 ep O 2 qu O Cc gt v g D gt O Chapter 8 Triple Moving Average The system of triple moving averages is employed by plotting three different moving averages together The first of these averages is a faster average that only looks at the short term price direction The second average is a medium average that reacts to a longer period of time but not as long as the final average The third average is the slowest to react because it takes an average of the longest
151. g rules for the CCI buy when the CCI exceeds 100 and sell when the CCI drops below 100 In other words a buy signal is generated when the indicator enters the channel or exceeds 100 coming up from the bottom A sell signal is generated when the indicator enters the channel from the top or drops below 100 Followers of the CCI generally look to establish long positions when the CCI exceeds the 100 level indicating that prices are in a strong up trend Most users of this indicator also try to look for patterns within the indicator such as higher highs and look for CCI movements to be confirmed by general price readings as well The purpose of the CCI index is to keep you out of the market during consolidation or weak trending periods By measuring the difference between average prices and mean average prices this indicator attempts to isolate only strongly trending markets similar to momentum and MACD When CCI is viewed in the Indicator window of Track n Trade 5 0 100 1s 3396 of the window and 100 is 66 of the window Guides could be set at these two points for ease in tracking CCI You could also say that 85 would be roughly 36 and 85 would be roughly 64 of the window C o Q 2 O Q O n ep Calculation The proper calculation of the CCI requires several steps in the proper sequence You must first compute the typical price using the high low and close for the interval Simply take the average o
152. g them to recreate or clone a dinosaur our computer scientists here at Gecko Software fill the gaps in the live options market data stream with Black amp Scholes theoretical prices giving a more accurate representation of the actual options value This allows our users the ability to have a more complete and highly accurate representation of what actual market data would have been on any given day To differentiate the fictitious theoretical data within the data stream we tag it with an asterisk so our users will know when they are looking at actual market data reported by the exchange or a theoretical value inserted into a gap by the Black amp Scholes model In keeping with the Jurassic Park theme the process that creates and inserts the theoretical data into the actual data stream 1s code named Frog Data 242 Gecko Software Inc oeasonals Plug in Improve Your Trading by Watching the Seasons Track n Trade 5 0 243 Chapter 10 D E au D v Cc O v qu O ep 244 Gecko Software Inc Seasonals Plug in Introduction The seasonal markets are the commodities that began the futures industry Wheat was the first commodity traded as a futures contact on the futures market Commodities like Crude Corn Gold Cattle etc have been around longer than financial commodities Because they have been around longer the seasonal commodities have more historical data Being able to analyze that histori
153. g to know the markets and testing different trading strategies This Plug in also allows you to play charts forward and backward using play buttons This is called simulation Requirements In order to place futures orders or simulate trading using Track n Trade 5 0 you will need to purchase the Accounting and Simulator Plug In Call us at 1 800 862 7193 to reach the sales department and order the plug in today Placing a Futures Order Once you have opened a chart using the Commodity tab in the Control Panel you are ready to place an order There are two ways in which an order can be placed in Track n Trade 5 0 the Place Order tool on the Account Toolbar or the Order button in the My Account tab of the Control Panel Using the Accounting Toolbar Click on the Place Order tool on your Accounting Toolbar Click on your chart and drag the cursor until you find your order point Release the mouse button to place The Place an Order window will appear Fill out the information in the Place an Order window Specify the brokerage fee per side Select the details of pour order in the form below date order placed buy or sell quantity of Brokerage Fee This Trade each contracts symbol of contract order type Placement Detail and the price on the order Help options are sm Sl available to give instructions on the different Gy Symbol Order Type Price GTC Place an order types of orders 2 Sep las Iv Trail
154. hange ROC 179 Relative Strength Index RSI 181 Stochastic Relative Strength Index SRSI 105 Ew Slow Stochastics SSTO 187 Fo Triple Exponential Average TRIX 190 Eo Ultimate Oscillator ULT 192 o Volume Open Interest V OI 194 O O 5 Chapter 8 Overlay Indicators 197 Ki Introduction 199 Alligator 200 Bollinger Bands 202 Donchian Channels DON 205 Keltner Bands 207 Moving Average Lines 209 Parabolic Stop and Reversal PSAR 213 Pivot Points 215 10x8 Moving Average Calculation 218 Zig Zag 220 Chapter 9 Accounting amp Simulator Plug in 223 Introduction 225 Using the Accounting Toolbar 225 Using the Accounting Tab 226 Modify an Order 22 Preferences 228 Deposits and Withdrawals 228 Trade Log 229 Simulation 230 Track n Trade 5 0 7 Y C D em oO Qe o Table of Contents Chapter 10 Chapter 11 Chapter 12 Chapter 13 Chapter 14 Chapter 15 Options Plug in Introduction Placing an Options Put Call Order Options Tab Strike and Rate History OS Calculator OSV amp STRK Indicators Options Strike Value OSV Strike Price STRK Black and Scholes Calculations Seasonals Plug in Introduction Seasonal Trends Market Probability Spreads Plug in Introduction Opening a Spreads Chart Spread Margins Commitment of Traders Introduction COT in the Indicator Window Preferences Bulls n Bears Trading Introduction Preferences Advantage Lines Candles
155. he months that have the highest open interest are usually the best to be in because they are the most liquid The months that have higher volume will afford the trader a better opportunity to enter and exit the market 194 Gecko Software Inc Using Indicators Calculation This study has no computations The values for the volume and open interest are transmitted from the exchanges However the actual volume and open interest figures are always one day behind price information You will not know Monday s volume and open interest until Tuesday at approximately noon for U S markets central time That is due to the exchanges and their reporting requirements Example of V Ol in the Indicator Window Preferences Right click on the V OI button in your Indicator toolbar and select V OI Settings The Preferences Tab will open in the Control Panel and the V OI preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Filma ps OI Line Choose the color line style and line thickness Ol Line E Silver of your line Volume Bar Colors M Use Both Down Color C Bla
156. he MFI reaches up above the top threshold which is traditionally set at 75 80 the equity is considered overbought and a retracement is anticipated When the MFI line reaches below the 20 25 threshold the underlying equity is considered oversold and a reversal is anticipated once again Calculation The calculation of MFI s here Money Flow Typical Price x Volume Buy Sell Signals A buy signal occurs when the MFI line crosses from below the lower threshold to above the lower threshold A sell signal occurs when the MFI line crosses from above the upper threshold to below the upper threshold Preferences Right click on the MFI button in your Indicator toolbar and select MFI Settings The Preferences Tab will open in the Control Panel and the MFI preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings 164 Gecko Software Inc Using Indicators Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To All Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Maney Flow Index Period Specify the number of days to be used in Period 14 calculating the MFI Line ai black Thresholds Line Choose the color line style and line thickness of 1 75 00 yellow
157. he contract that is viewed as expensive or dear is sold a short position is established If market prices move as expected meaning the long position gains in value relative to the short position the trader profits from the change in the relationship between the prices The concern for a spread trader is the change in the relationship between a long contract and a short one not the absolute price level of the commodity in question Of course just because you are trading a spread does not guarantee or eliminate losses If the long contract decreases in value relative to the short position then the spread trader will incur losses The key to spread trading is in the relative performance of one futures contract to another Though some spreads have a basic market bias known as bull and bear spreads the absolute price level of the underlying commodity contracts is not important only the relative performance of one contract versus the other In other words a spread trade is a speculation that one contract will out perform another contract Available online Introduction Video to the Spreads Plug in Visit us at http www trackntrade com tour htm and select the Spreads video To view this video you will need a copy of Microsoft s Media Player Track n Trade 5 0 253 e D ER D a Q a U i E D an N O C D LEE Q ep Chapter 11 Opening a Spreads Chart To open a spreads chart select the Sprea
158. he extreme price for the two intervals The extreme price is either the lowest price or highest price for the two trading intervals The short position uses the high and the long position uses the low The calculation for the PSAR is here SARt SARt 1 ax EPtrade SARt 1 SARt The stop and reverse price for the current interval SARt I The stop and reverse price for the previous interval a The acceleration factor EPtrade The extreme price for the trade The SAR is always the stop and reverse price point This is the point you would want to liquidate your current position and establish the opposite position The acceleration factor a is a weighting factor In Wilder s work the initial value for the acceleration factor is 02 The acceleration factor increases by a value of 02 each time the extreme price changes for the trade You do not increment the acceleration factor if the extreme price fails to change The value for a the acceleration factor never exceeds 20 in Wilder s methodology O lt D i RY lt O a r O PR a The extreme price EP for the trade is the highest or lowest price achieved during the trade If you have a long position use the new highs as the extreme price When you have a short position use the new lows as the extreme price The extreme price concept allows for normal market corrections without immediately triggering the SAR price It keeps the SAR price moving in the di
159. he market change open interest The key to this indicator is to look at volume as a percentage of open interest V OI does not give straight buy or sell signals or have set trading rules Rather it shows the cyclical tendencies of the market The flow of the underlying market can be represented Looking at V OI shows whether new buyers or sellers are entering the market or if they are liquidating positions There are basic common sense rules for this indicator If the prices are up and V OI is increasing the market is strong If the prices are up and V OI is declining the market is getting weaker If the prices are down and V OI is rising the market is getting stronger If the prices are down and V OI is declining the market is getting weaker In bull markets volume tends to increase during rallies and tends to decrease on reactions In bear markets volume tends to increase on declines and decrease during rallies Trading volume usually increases dramatically at tops and bottoms Looking at the volume and open interest will show you which contract month to be in When looking at trading a specific commodity it is important to know which contract month to be in Commodities expire or are delivered several times a year This creates a situation where traders are constantly rolling over from one contract month to the next This means that traders need to know which month to be in V OI is the tool that shows us which contract month to be in T
160. he right of the chart window to view a Daily Weekly or Monthly Long Term chart Center Chart Centers the chart in your chart window how it is right now Clicking on this button will not autoscale your chart if you play forward or backward Daily Chart Sets your current chart so each price interval represents one day Long Term Daily Sets your current chart as daily but includes all available data Long Term Weekly Sets each price interval as one week Long Term Monthly Sets each price interval as one month Comparison of Chart Ticks Chart Price Interval Open High Low Close Represents Weekly One Week Ist Day s Open High forthe Lowforthe Last Day s Close Week Week Monthly One Month Ist Day s Open High for the Low forthe Last Day s Close Month Month When you click on the Daily Long Term button the Catton 2 Open Outer LT Daily CT LD new chart will open in the chart window The chart will apicc acer Mr bir also be listed as a new chart in your control panel under i9 e o E 3 gt A T Cotton 2 Open Outcry Oct LT M CT TVLM Cotton 2 Open Outer Oct 07 CT2007V Active Charts The symbol will be generated by using the commodity symbol followed by a dollar sign and LD for Long term Daily Example Cotton 2 would be CT LD Weekly Long Term and Monthly Long Term symbols will be generated the same way with commodity symbol a dollar sign and the month letter followed by L
161. her line or type in your Labels Reverse own values in User Defined Choose from the Labels NES dropdown menu to view the marks as price percent 123 ABC Retracement or both Select Reverse to change the direction of your f Fibonacci values User Defined 20 3 40 50 3 4 C D Select if you would like to see a third Labels x M Reverse prediction line after point C You can view Fibonacci Retracements on this line or type in your own values 3 4 C D in User Defined Choose from the Labels dropdown f Fibonacci menu to view the marks as price percent or both Select f User Defined 20 3 40 50 Labels Reverse Reverse to change the direction of your values Select Projections to view a projected line extended from the C D line You can view Fibonacci Retracements on this line or type in your own values in User Defined gt 5 o o 7 Track n Trade 5 0 65 Chapter 2 Example of the 123 Top and Bottom Soybeans jOpen Careryi Juil 417 123 Top Formation D O pes qu Le O pi Bii 66 Gecko Software Inc Charting Tools Head amp Shoulders Formations Technical Analysis This formation can appear anywhere in the chart and is made up of the Head Left Shoulder and Right Shoulder There are both top and bottom formations Head amp Shoulders Top Formation In this formation the middle peak the Head H is higher than either shoulde
162. higher than any previous close in the set of price bars selected Conversely a day is considered a Lower Day if the close is lower than any previous trading day in the defined set of price bars Day Offset Tool The Day Offset tool enables you to measure the number of trading days versus actual days that are between two points on the chart Also calculated on this tool is the number of days that the market closed high or lower in comparison with the previous day Select the Day Offset tool from your Advanced Charting toolbar Click where you would like to start and drag the horizontal line to where you would like it to end Release the mouse button to place Resizing the Day Offset gt lt Q O D O O 5 Q 2 O Oo 77 Select the drawing by clicking on it You will know the drawing is selected when boxes appear at the corners Click on a box and drag it to your desired location Release the mouse button to place Moving the Day Offset Select the drawing by clicking on it Drag to the new location and release the mouse button to place Track n Trade 5 0 103 o O E ja re O O D C gt Le c Chapter 3 Deleting the Day Offset Select the drawing by clicking on it Press the Del Delete key on your keyboard You can also right click the drawing and select Delete from the dropdown menu Preferences Select the drawing by clicking on it The properties wil
163. hoose the color line style and line thickness of your lines as well as the background color To make the background transparent deselect Fill Background at the bottom of your B preferences Iw Fill Background Trend Channel Tool Line E Yellow Background B Custom Select Snap to have your lines snap to price bars when moved 12 Gecko Software Inc Example of Inclining Declining Channels Cotten 2 Open Outcry Deco Coffee C Open Outcry Juhar Declining Channel Track n Trade 5 0 Charting Tools ii IESIEL FESTE T LER ii I lisi h i i L O gt 5 O 7 E E E 13 Chapter 2 50 Retracements Technical Analysis Markets move in waves called retracements These waves have up and down trends Up Trend Bull Market In the diagram to the right the market is in an overall uptrend however within the uptrend are small areas where the market falls back or retraces each time establishing a new higher high Down Trend Bear Market This chart shows how the market made lower highs and lower lows while still maintaining the overall down trend Each retracement was about 5096 of the last move before they continued on in their original direction Markets have a tendency to retrace half of the last move in overall long term trends D a O pes qu C O N Tool You can measure a retracement by s
164. hoose which end you want M Snap the Arrow Point or if you want it on both ends Select Snap to have your line snap to price bars when moved 112 Gecko Software Inc Flag Tool Notation Tools The Flag tool enables you to place a flag or a graphic on your chart There is a basic set of flags available to choose from or you can import custom flags Select the Flag tool from the Notation toolbar Click on the chart where you would like the top of the Flag The default flag will be placed in this location Resizing the Flag Select the flag drawing by clicking on it The flag is selected when boxes appear at the corners of the graphic Click on one of the boxes and drag it to the desired length Release the mouse button to place Moving the Flag Select the flag drawing by clicking on it Click on the flag not an end box and drag it to the new location Release the mouse button to place Deleting the Flag Select the flag drawing by clicking on it Press the Del Delete key on your keyboard You can also right click the drawing and select Delete from the dropdown menu Preferences Select the flag drawing by clicking on it The properties will appear in the preferences section of your control panel Or right click on the drawing and select properties from the dropdown menu Restore Settings TNT Default will change your set tings back to the original software settings My Default will change current settings
165. hree candlesticks compose the evening star the first being long and white The second forms a star followed by the third which has a black real body that moves sharply into the first white candlestick O Q ex D on O Q O gt Q m 5 Doji Stars When a Doji gaps above a real body in an uptrend or gaps under a real body in a falling market that particular Doji is called a Doji star Two popular Doji stars are the evening star and the morning star Track n Trade 5 0 217 ie S T v AG v O c v Chapter 14 2 8 Shooting Star Evening Doji Star This is a Doji star in an uptrend followed by a long black real body that closed well into the prior white real body If the candlestick after the Doji star is white and gapped higher the bearishness of the Doji is invalidated Morning Doji Star This is a Doji star in a downtrend followed by a long white real body that closes well into the prior black real body If the candlestick after the Doji star is black and gapped lower the bullishness of the Doji is invalidated Shooting Star A small real body near the lower end of the trading range with a long upper shadow The color of the body is not critical Not usually considered a major reversal sign only a warning Gecko Software Inc Candlestick Charting Candlesticks Conclusion It is important to realize that this introduction is just that an introd
166. idea of speculating in the futures market is to buy low and sell high In the futures market this can be done in any order You can initiate a long position by buying the futures first and offsetting by selling at a later time If the sale price exit price is higher than the purchase price entry price you profit Or you can initiate a short position by selling the futures first and then offsetting the contract s at a later time by buying them A profit will always occur if the sale price is higher than the purchase price r O O C O c O 5 bb O TI C bb D On Points vs Cents The profit or loss amount is determined by the contract you are trading Each futures contract is quoted in a slightly different manner and as such your profit or loss calculation for most markets is slightly different The following highlights the major markets and how they are quoted Of course Gecko Software s Track n Trade 5 0 will convert price moves to profit or loss for you but these examples will help you understand how it is done Grains Corn Wheat Oats and Soybeans are quoted in cents per bushel with a contract size of 5 000 bushels A Corn price of 235 is really 2 35 per bushel Each of these grains moves in 1 4 cent increments which equates to 12 50 before commissions and fees The profit or loss of a one cent move is 50 00 before commissions and fees Track n Trade 5 0 21 v D um 2 LL
167. indicator in that the underlying principle behind Stochastics is that prices will move back to the center of the trading range or the opposite extreme When both lines move to an area below 20 on this scale they are said to be in an oversold zone Conversely when both K and D move to above 80 on this same scale they are indicating an overbought zone It is this indication of market sentiment that makes this counter trend indicator useful George Lane emphasized that the most important signal generated by this method was the difference or divergence between 96D and the underlying market price He said that the divergence is where D line makes a group of lower highs while the market makes a series of higher highs This would indicate an overbought condition The reverse would be true of an oversold market with D making higher lows and prices making lower lows C o Q 2 O Q O n ep As with a dual moving average system when the faster reacting indicator crosses the slower moving indicator a buy or sell is signaled Because Stochastics give an indication of either overbought or oversold you would first want to see both lines in the above 80 or below 20 range and sloping out of that range back to the middle before looking for these trade triggers Track n Trade 5 0 149 N pe O qu Le e E 77 D Chapter 7 Calculation The first step in computing the stochastic indicator is to determine
168. ines W Snap Du ae Select Snap to have your lines snap to price bars when moved Select if you would like to Always Show Lines on your drawing Example of a Dart Up and Down Gasoline Unleaded Combine Feb gt Q lt NY O D Q O gt mA O a ep Track n Trade 5 0 89 Chapter 3 Gann Fan Theory W D Gann designed several techniques for studying price charts One of these included the use of geometric angles in conjunction with time and price Gann believed that specific geometric patterns and angles had unique characteristics that could be used to predict price action Gann s techniques require that charts be drawn with equal time and price intervals so that a rise run of one price unit for each time unit called a x trend or angle will equal a 45 degree angle anywhere on the chart Gann believed that the ideal balance between time and price exists when prices rise or fall at a 45 degree angle relative to the time axis Interpretation A Gann Fan is used to define a market direction or a new trend For example a bull market exists if prices are maintaining strength between the 1x2 lower line and 1x2 higher line A bear market would be the exact opposite of the previous scenario The Gann Fan is made up of nine angles based on this concept These trend lines are used to indicate support and resistance levels When one line is broken by the entire days price range prices should
169. ing Stop D When you place an order using the Place Order tool on your Accounting toolbar the Place an This order has not been placed vet Order window will be pre filled with default settings You will not be able to change the date or the symbol Help gt gt gt Cancel Click OK to place the order or Cancel to dismiss the order screen Track n Trade 5 0 225 gt Q O O C 5 5 e Qo a 3 Q F O ER U C e m E O E A U O amp E ep o le i r Cc gt O O oO lt L Chapter 8 Using the Accounting Tab Select the details of your order in the Form below Open the My Account tab in the Control Panel Bidkerage Fee This Trade each 9 Click on the Order button and the Place an Order Flacement Detail window will appear 672772007 gt x Qty Symbol Order Type Price GTC Fill out the information in the Place an Order e rd eLc2007 Stop 0 000 M window Specify the brokerage fee per side Tra ing Stop Dollars ef date order placed buy or sell quantity of contracts symbol of contract order type and the This order has not been placed yet price on the order Help options are available to ee Cancel give instructions on the different types of orders When you place an order using the Order button in the My Account tab of the Control Panel the Place an Order window will not be pre filled and you can change the date and symbol Place a
170. ing average system This system uses two simple moving averages but they are calculated in a slightly different manner than those traditionally used The first moving average is a moving average of the daily highs as opposed to that of the daily settlement The second moving average is calculated using the daily lows Though Mr Bernstein recommends using a 10 period moving average of the daily highs and an 8 period moving average of the daily lows based on his observation that prices tend to fall about 20 faster than they rise any combination would do the trick Generally accepting market lore that prices fall faster than they rise the moving average of the lows should be of shorter term duration than that of the highs The most basic use of the 10x8 Moving Average is to look for a breakout above the upper moving average to initiate a buy signal When the daily settlement price exceeds the average high of the last 10 days this indicator flashes a buy signal indicating that the trend of the market should be up Example of a 10x8 MAC Hogs Lean Combined Jul do 218 Gecko Software Inc Overlay Indicators Preferences Open the Preference tab from the Control Panel on the left of your screen Select the 10x8 MAC line on your screen The preferences will appear in the Control Panel Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to
171. ing before entering the market A basic trading plan should include the following features as a minimum Trade entry nitial risk or stop loss point Criteria for stop loss movement Criteria for profitable trade exit be O O C O c O 5 bb O TI C bb D N Once you have developed your trading plan put it to the test by Paper Trading Paper trading is fictitious trading or simulated trading best done using Gecko Software s Track n Trade 5 0 market simulator program in which you simulate buying and selling futures contracts without risking real money The whole purpose of paper trading is to be as realistic as possible when doing it It does no good to practice trading with a million dollars if you are going to start with 10 000 Don t practice your trading in the S amp P if you are intending to actually trade Corn Keep your practice as realistic as possible The one major downfall to paper trading is that it does not involve real money It is very easy to live through a fictitious losing streak but quite different to live through it when it is your money on the line Because paper trading does not involve real money your emotions are kept at bay but tend to creep up when real money is involved Track n Trade 5 0 21 v D um 2 LL O c Q a O gt O le um E Introduction to Futures Gecko Software s Track n Trade 5 0 comes with over 30 years of histo
172. ing on it The properties will appear in the preferences section of your control panel Or right click on the drawing and select properties from the dropdown menu Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Text Tool Text Tool You can choose the color line style and line Line IF WE thickness of your text frame You can also determine the color of your background To make your background or line transparent deselect Display Border or Fill Background at the bottom of your preferences Background Azure Rd Font 24 T Arial C Black Display Border I fill Background Font Select the font size and color of the text 114 Gecko Software Inc Notation Tools Rectangle Tool The Box tool enables you to draw square or rectangle shaped drawings on the chart Select the Box tool in the Notation toolbar Click where you would like to place the top left corner of the box hold down the mouse button and drag to the location of the bottom right corner of the box Release the mouse button to place Resizing the Rectangle Select the rectangle drawing by clicking on it The drawing is selected when boxes appear at the corners of the
173. ink on the right side of the screen The last page on the menu is Available Products Here you can view all the Gecko Software products you do not own Please browse through and make purchases from this window 32 Gecko Software Inc Getting Started Getting Started This section will introduce you to the basic functions and features of Track n Trade 5 0 First we ll take a look at your workspace The screenshot below is what you will see when you open Track n Trade 5 0 Use this as a reference for the rest of the manual The following pages will explain each Toolbar and Menu labeled here and their functions Advanced Charting Charting Toolbar Toolbar Notation Toolbar Navigation Toolbar ETT ind isak freodifia h Track n Trade 0 FETE DE A ESSERE ESTE TE Ed sd Fale oi hi Lara E B as Carle Lite Combi Jie FA Main deities CARE Tool bar CR pe je m m T I E Un enda sana ni Air Crary Ambos 1 Lane Live dared Sane LIT Control Panel Indicator Window 1 Hs Indicator anis ma pn un BE Toolbar DAD ML BS AR Ee CD CU A PRE RE Scaling pe Toolbar J mar W m bi PEE zi 35 Pro PEL EI NO TS PR 1 Se Let Foi un ON CT x P3 T8 bi Sonn i Son Track n Trade 5 0 Calculators Toolbar Time t J Interval Toolbar Indicator Display LE o D e 9 r SY D ei F mim 33 Le Q pun qu Par ep le E 5
174. ish to bearish To trade an Inclining channel place an order to sell on the break down and out of the channel Declining Channel The Declining channel is the exact opposite of the Inclining channel formation The Declining channel has a decrease in both the price ceiling and price floor The breaking of the top trend line on this formation shows a change in trend from bearish to bullish D a O pes qu am O To trade a Declining channel place an order to buy on the break up and out of the channel TO Gecko Software Inc Charting Tools Narrow Sideways Channel 790 Illustrate a Narrow Sideways channel in a chart by selecting the Narrow Sideways Channel tool from your Charting toolbar Position the mouse pointer where you would like to place the top left point of the channel and click Continue to hold down the mouse and drag it to the bottom right point of your channel Release the mouse button to place Resizing the Narrow Sideways Channel Select the Narrow Sideways channel by clicking on it You will know the channel is selected when boxes appear on the corners Click on a box and drag it to your desired location Release the mouse button to place Moving the Narrow Sideways Channel Select the Narrow Sideways channel by clicking on it Drag to the new location and release the mouse button to place Deleting the Narrow Sideways Channel Select the Narrow Sideways channel by clicking on it P
175. k market as a means to raise capital The modern futures market evolved not from a need to raise capital but from a need to transfer risk The futures market makes it possible for those who want to manage price risk hedgers to transfer that risk to those who are willing to accept it in the hopes of a profit speculators Futures markets are first and foremost a risk transference vehicle They also provide price information that the world looks to as a benchmark in determining value of a particular commodity or financial instrument on any given day or at any specific time of the day These benefits risk transference and price discovery reach every sector of the world economy where changing market conditions create economic risk in the diverse fields of agricultural products foreign exchange imports exports financing and investment vehicles What are Futures Futures contracts are standardized to meet the specific requirements of buyers and sellers for a variety of commodities and financial instruments Quantity quality and delivery locations are pre established The only variable is price which is discovered through an auction like process on the trading floor of an organized futures exchange Example An individual buys one contract of March Corn at 2 25 per bushel on January 2nd initiating a long position This contract calls for the delivery of 5 000 bushels of Number 2 Yellow Corn seven days before the last business day of the
176. ko Software Inc has incorporated concepts and theories from leading technical and fundamental educators in the futures industry in Track n Trade 5 0 allowing you as a trader to apply their studies easily to your trading In this section you will learn basics of their theories and how to apply them in Track n Trade 5 0 using the advanced charting tools provided you For more detailed information on the different theories and concepts see the educational products also offered by Gecko Software Inc at www trackntrade com Elliott Wave Theory The Elliott Wave theory was developed by Ralph Nelson Elliott He suggested that market behavior is based on waves rather than random timing He believed that market prices rose and fell in a series of waves based on the same Golden Ratio or Golden Mean that Fibonacci proved Interpretation The basic idea of the Elliott Wave theory is that a market rises in a series of five waves as he called them and a market declines in a series of three declines Elliott s said the market rises on the first wave declines on the second begins to rise again on wave three has a period of decline again on wave four and finally completes the rise on wave five The period of correction is referred to as a three wave correction where the market declines for wave A begins to rise for wave B and falls again for wave C Elliott went on to further explain that a complete market cycle consisted of a 14
177. l Panel and the PROB preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Market Probability Market Probability Select how many years you would Years 20 m like to view and what color you would like the indicator Color EES to be Thresholds ri ooo f Elvelw Thresholds View up to four thresholds at a value that 2 oo f l m m you type in and a color that you choose 3 0 00 FE E Yellow 4 0 00 m Yellow Track n Trade 5 0 247 Y D a n O D a U C G m D 5 A D qu Cc O v v O ep Chapter 10 Historical Averages The Historical Average indicator is very similar to a Moving Average indicator except that it is based on the average price of the specific contract lined up by date The charts are made for specific contract months so that the trader can see the behavior of the specific contract they are looking at This detail is important in a market with new and old crop contracts such as the agricultural commodities Unlike the seasonal average prices the Historic Average lines
178. l appear in the preferences section of your control panel Or right click on the drawing and select properties from the dropdown menu Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Day Offset Tool Day Offset Tool You can choose the color line style tine E vew and line thickness of your line Fant E Arial Font Select the font size and color of the text Select oto 1m Show Text to hide or show your text on the chart Ire nma Ww 3 n fs B 7 Select Snap to have your lines snap to price bars when nap moved Example of the Day Offset Tool Viheat CHOT Combined Dec IF Trading Daya 11 higher T lows 59 Achaal Tags 104 Gecko Software Inc Advanced Charting Tools Rounded Top amp Bottom Formations The Rounded Top amp Bottom formation is a very gradual change in trend Rounded Top The Rounded Top formation consists of a gradual change in trend from up to down Rounded Bottom The Rounded Bottom formation consists of a gradual change in trend from down to up This formation is the exact opposite of a Rounded Top Formation Double Top This formation includes two distinct tops and anticipates a ch
179. l into the prior white real body Piercing Pattern Bullish This is opposite of the dark cloud cover and occurs within a downtrend The first candlestick has a black real body and the second has a long white real body The white day opens sharply lower under the low of the prior black day Then prices close above the 5096 point of the prior day s black real body Stars These candlestick formations consist of a small real body that gaps away from the real body preceding it The real body of the star should not overlap the prior real body The color of the star is not too important and they can occur at either tops or bottoms Stars are the equivalent of gaps on standard bar charts le E T v AF prar v O C au 276 Gecko Software Inc Morning Star Formation Candlestick Charting Stars make up part of four separate reversal patterns Morning Star Evening Star Doji Star e Shooting Star Inverted Hammer Morning Star This is a bullish bottom reversal pattern comprised of 3 candlesticks The first candlestick is a tall black real body and is followed by a small real body candlestick that gaps opens lower The third candlestick is a white real body that moves well into the first period s black real body This is similar to an island pattern on standard bar charts Evening Star This is a bearish top reversal pattern and counterpart to the Morning star T
180. l moving average of the closing prices For a 15 day period the calculations would look like this Calculate the 15 day exponential moving average of the closing price Calculate the 15 day exponential moving average of the moving average calculated in step 1 Calculate the 15 day exponential moving average of the moving average calculated in step 2 The result is triple exponentially smoothing the moving average of closing prices greatly reducing volatility Finally calculate the 1 day percent change of the moving average calculated in step 3 Buy Sell Signals A buy signal occurs when the TRIX value crosses from below the trigger line to above the trigger line A sell signal occurs when the TRIX value crosses from above the trigger line to below the trigger line 190 Gecko Software Inc Using Indicators Preferences Right click on the TRIX button in your Indicator toolbar and select TRIX Settings The Preferences Tab will open in the Control Panel and the TRIX preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Period Specify the number of days to be used i
181. latility are strangles and regular short option positions C o Q 2 O Q O n ep Obviously historic volatility is only one component of option pricing Any changes in the underlying futures market could negate the changes in option prices due to volatility For example if you were to buy a low volatility Put option and prices go higher that option will lose value but not as quickly as a higher volatility option For the futures trader the basic concept is to expect market changes during periods of increased volatility George Soros the trading legend said Short term volatility is greatest at a turn around and diminishes as a trend becomes established Track n Trade 5 0 153 N pe O qu Le e E 77 D Chapter 7 This indicator is commonly viewed as very mean regressive What this term means is that the historic volatility indicator tends to return to the opposite end of the spectrum and therefore return to an average If volatility is great it will eventually cool off and return to that place If volatility is low it will not stay quiet forever What this means to traders is that a market that is erratic will sooner or later calm down and a market that is quiet will eventually get loud again Calculation The calculation for the historical volatility is rather involved The number of periods per year vary depending on the type of price chart used for the study The following table list
182. lculation DI DM TR x 100 On a down interval use this formula DI DM TR x 100 The plus and minus directional indicator values are computed as percentage figures You are expressing the percentage of the average true range for both up and down trading intervals If you have followed this process so far the last few steps are relatively simple You compute the difference between the DI and the DI Remember to use the absolute value of this difference Convert any negative value into a positive number Dldiff DI DI Compute the sum of the directional indicator values using this formula Disum DI DI 146 Gecko Software Inc Using Indicators Once you compute the Dldiff and the DIsum you can calculate the DX or directional movement index This value is always a percentage DX Dldiff DIsum x 100 The DX is always a value between 0 and 100 If your calculations exceed this range you have made an error Wilder was not comfortable using just the directional movement index It could become very volatile during periods of extreme price movement especially markets that rise and fall quickly He implements his accumulated moving average technique to smooth the DX The result is the ADX or average directional movement index This is the computational procedure ADXt ADXt 1 x n 1 DXt n Buy Sell Signals A buy signal occurs when the DMI line crosses from below the DMI line
183. ld 2 is used as the lower threshold Choose when you want Buy Sell Arrows to show and what color 174 Gecko Software Inc Using Indicators Percent Bollinger Bands B Bollinger Bands are calculated as a simple moving average shifted up and down by a number of standard deviations Percent Bollinger Bands relate the underlying price of an instrument to the range of these Bollinger Bands This gives the user an adaptive measure of volatility which can be used in the same way as other momentum indicators Buy when the indicator bottoms below 0 00 and turns up and sell when the indicator peaks above 100 00 and turns down You can also use the indicator by looking for divergence between the indicator and the charts Sharp price advances and declines usually accompany market tops and bottoms and as a market climbs or falls toward a bottom the indicator will tend to initially follow the price trend and then fall off leading to bullish or bearish divergences with the chart Buy Sell Signals A buy signal occurs when B value crosses from below the 0 line to above the 0 line A sell signal occurs when B value crosses from above the 0 line to below the O line 20 Percent Bollinger Preferences Right click on the B button in your Indicator toolbar and select B Settings The Preferences Tab will open in the Control Panel and the B preferences will be displayed Once you click on the chart the Preference tab will go back t
184. led the activation code and the plug ins installed Click on Check for Updates for new updates for the software or to update your version of the software to include any new plug ins you may have purchased Gecko Software Inc Getting Started Main Toolbar New Closes your current chartbook and opens a new blank chartbook Open Closes your current chartbook and opens a window for you to choose a previously saved chartbook Save Saves your open charts as a chartbook Screen Capture Saves your open chart as an image Shift click saves your chart window plus your control panel Ctrl click copies the screenshot to your clipboard and makes it ready to paste Shift Ctrl will copy your chart window plus your control panel Print Prints the chart window Print Preview Opens a window showing what the chart will look like when its printed Commodity Chooser Opens the Commodity Chooser window Data Update Opens the Data Download window in your browser Navigation Toolbar Pointer Default tool used for selecting tools and features in the software Scrolling Hand Used in chart window to click and drag a chart G D e a Q Charting Toolbar Q Crosshair Used to draw a line vertically and horizontally on a chart Line Used to draw support and resistance lines Multi Line Used to draw an alternating support and resistance line 123 Used to chart a 123 top or bottom formation Head and Shoulder
185. ll apply your selected settings on all open charts Save As My Default will save your current personal settings Historical Averages Historical Averages Select which averages you would V Average Weighted Years 3 like to view if you would like them Weighted and how E Maroon many years you would like to see Choose the color line style and line thickness of your indicator line W Average 2 IM Weighted Years 5 248 Gecko Software Inc Seasonals Plug in Example of Historical Averages CD D a n O D a U C G m Track n Trade 5 0 249 Chapter 10 D E au D v Cc O v qu O ep 250 Gecko Software Inc opreads Plug in Expand Your Trading Options Track n Trade 5 0 251 Chapter 11 252 Gecko Software Inc Spreads Plug in Introduction The futures market provides a variety of trading opportunities In addition to profiting from rising prices by purchasing futures options or from falling prices by selling futures contracts there is an opportunity to profit from the relationship between different contracts or spread A spread refers to the simultaneous purchase and sale of two or more different futures contracts When establishing or putting on a spread a trader looks at the price differential of the spread rather than the absolute contract price levels The contract that is viewed as cheap is purchased a long position is established T
186. lower we should see a change in market direction You should also look to ADX for confirmation This application is much the same as momentum showing a change in the market sentiment Wilder also says that a trend following system should not be used when the ADX line is below both D lines as this means that the market has no discernible direction When using the D and D crossover method Wilder stresses the use of an extreme point On the day the crossover occurs the extreme point is the high or low of the day high for a buy and low for a sell The market should be able to take out that price and stay beyond it for several days before the trade is initiated or exited This use of extreme points should keep the trader from getting into whipsaws or false breakouts 144 Gecko Software Inc Using Indicators Calculation The computations needed to generate the final figures for the DMI are not complex but are numerous and lengthy The following discussion attempts to unravel the computational mysteries of the DMI If you need further explanation please refer to the author s original work The book titled New Concepts in Technical Trading Systems by J Welles Wilder Jr explains this indicator and several others You must first compute the directional movement DM for the current trading interval Directional movement can be up down or zero If directional movement is up it is labeled as DM and DM refers to downward directional mo
187. m FIDO Before opening FIDO Track n Trade 5 0 will check for product updates If an update is available you will be notified and given a window to choose Yes or No on the update It is recommended that you install each update as it becomes available After you are finished with the program update you will be returned to FIDO a eee e f the data update does not begin Pa Lat Mese NN ng automatically click on Begin to i Start the data update A window will appear when the data update is completed Click on OK and exit out of the FIDO window to return to Track n Trade 5 0 MT LAT apy a H arm di TUE i m ET Avslab e Daria for Sep 17 hs AA Fes Port ccn allege F i z Car beep raa ra po mue mice 7 bo iam Note Do not press the power or reset ee TT buttons on your computer if FIDO 130 off Coupon Coca ROBEGUNSO freezes and you are unable to close S the window If this happens press the buttons Ctrl Alt Delete at the same time to open the Windows Task Manager only press them ONCE Select FIDO exe from the list and click on the End Task button This will close FIDO and allow you to restart Track n Trade 5 0 46 Gecko Software Inc Getting Started Firewalls A firewall is a piece of software or hardware that protects your computer from being accessed by other people on the Internet A firewall only allows basic types of Internet and network communications But it
188. m indicator is above the zero line then the trend is gaining strength If prices were rising but the indicator was sagging or went below the zero line then we would interpret this as a sign of a coming change in trend This is true because although prices were still increasing they are doing so at a decreasing rate The reverse would be true during a declining market For example think of a race car gaining 20 miles an hour each lap until it starts to only gain 15 miles an hour then 10 mph then 5 mph until eventually it reaches its top speed Like a race car a market can not sustain growing momentum forever and in many occurrences momentum slows before prices change direction Typically the trade signals are to buy when the momentum indicator crosses from below the zero line to above it This indicates that a new upward trend has begun as the market is able to violate resistance levels and continue higher with increasing speed The sell signal would be to sell when the line crosses from above the zero line to below it This indicates that the market is picking up speed to the downside and should be able to violate support areas It is in this way that this unique indicator is a trend following tool Another way to use momentum is to establish regions of overbought or oversold For example in a declining market the prices continue downward and the momentum indicator moves toward more negative but begins to level out We would be looking fo
189. meant to indicate a rise in money inflows to the security Once the public continues to add money the price of the equity should continue to rise Directional movement in the indicator gives foresight into the market direction A rise in the OBV indicator gives the trader the indication that markets are on the rise a dropping OBV is an indication of a weakening market and lower prices are soon to follow When market divergence is seen within the OBV indicator one must take heed that the market is either weakening in a bullish trend or strengthening in a bearish trend and a market reversal is about to occur The actual calculated value of the line itself 1s of little use but the visual movement of the line is what s important to the trader An inclining line is the indication of a strengthening market and a declining line is representative of declining market strength Exam ole of the OBV in the Indicator Window Balance olme 1097 C o Q 5 2 O Q O PR ep Preferences Right click on the OBV button in your Indicator toolbar and select OBV Settings The Preferences Tab will open in the Control Panel and the OBV preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Char
190. move to the next line The drawing of these lines should start from either a market top or bottom It is important to note that this theory is based on a squared 45 degree angle on the chart Obviously a 45 degree angle drawn on a chart is no longer 45 degrees when the scale is changed without a change to the opposite scale as well To square the Gann Fan to the current chart s scaled settings hold down the CTRL key on your keyboard while clicking and rescaling with the mouse pointer Some Gann experts have reported that to get a truly squared chart one must set the scaling to 8 price bars per inch for the width and 4 price bars per inch for the height Gann Fan Tool o O E ja re O O D C gt Le c You can apply this theory to your charts by selecting the Gann Fan tool from your Advanced Charting toolbar Click where you want the Fan to start and continue to hold down the mouse button until reaching the top right position of the fan Release the mouse button to place 90 Gecko Software Inc Advanced Charting Tools Resizing the Gann Fan Select the drawing by clicking on it You will know the drawing is selected when boxes appear at the corners Click on a box and drag it to your desired location Release the mouse button to place Moving the Gann Fan Select the drawing by clicking on it Drag to the new location and release the mouse button to place Deleting the Gann Fan Select th
191. n calculating the SRSI Trigger Period Line Choose the color line style and line thickness of ie Hrm v your line Display as Histogram Thresholds Trigger Period Specify the number of days used in rif ee v avew calculating the Underlying RSI E 0 00 E Yellow E 0 00 E Yellow 4 0 00 E Yellow Buy Sell Arrows Display as Choose if you want to see a histogram or Show Arrow When Indicator is Visable line Arrow Color E Feru Line Choose the color line style and line thickness of your trigger line View up to four Thresholds at values and colors of your choice Choose when you want Buy Sell Arrows to show and what color C o Q 5 2 O Q O PR ep Track n Trade 5 0 191 N pe O v Le i e E 77 gt Chapter 7 Ultimate Oscillator ULT This is another indicator introduced by Mr Larry Williams It seems to be another modification of the RSI indicator as is his R indicator If you lay the three indicators on your chart you ll see many similarities The advantage of the ULT indicator is that the trader is given two additional variables in the formula to modify and finetune the action and reaction to the market price This indicator as with the RSI indicator works on an overbought and oversold region Mr Williams states that the upper threshold should start at 70 and the lower threshold at 30 but depending on
192. n order Click OK to place the order or Cancel to dismiss the order screen Editing an Unfilled Order To edit an order on your chart select the order by clicking on it and select Settings to view the Place an Order window A Filled Order When your order is filled the triangle will fill in red on your chart In the My Account tab the icon will fill green and an F will appear after the icon Red Cancelled Green Filled Yellow Placed White Placed in the future t I 1 1 3 Faded Order exists but was ar deleted from the chart lk TE Gray The chart that this order 7 NT E was placed on was deleted 7 from the Chartbook Unfilled Order Filed Order D Deposit B Buy S Sell W Withdrawal 226 Gecko Software Inc Hy My Account T a zc Is Deposit Withdraw Order Trade Lag Accounting Date 01 04 2004 Open Order FL 337 50 337 60 Closed Order PL 0 00 D OC Order Commissions 60 00 50 00 Orders Subtotal erl erl Open Option PL 0 00 0 00 Closed Option PL 0 00 0 00 Option Commissions 0 00 0 00 Options Subtotal 0 00 0 00 Total Open PL 33r Bl 33r Bl Total Closed P L 0 00 0 00 Total Commissions 50 00 0 00 Account SubT otal erl 2r 7 50 Account Balance 55 50 Margin Requirement 43 00 743 00 Available Funds 12 50 Current Position Long Long Shor Call Options Buy Sell Buy Sell Put Options Buy Oy Sall Buy Sell Date Comm Details Placed On Ag
193. nce between the current closing price and the previous closing price DIFt Closet Closet 1 If that difference is a positive value then it is an up period which means the current close is higher than the previous close If the difference is negative then it is a down period which means the current close is below the previous close The DOWN value is always a positive number for all computations It is the absolute value of a negative DIF The worksheet on the next page shows the calculations needed to create a 9 period RSI Track n Trade 5 0 181 V e O qu O O v D Chapter 7 Close Close 1 faso 7430 po po p 2 460 aso pio Jo p 3 4r pg40 pio po p 4 paso p47 pio po p 5 pass paso ps p p 6 pao pss ps po p 7 paso pao po p o 8 pao p480 po p o D pas pao ps p ps5 OL feas po ps You now compute the up and down averages Ut UPI UPn n Dt DOWNI DOWNn n UT The up average for the current period DT The down average for the current period UPn The UP value for the nth period DOWNn The DOWN value for the nth period n The number of periods for the RSI Use the values from the worksheet to find the up average U 60 9 6 67 Use the same values to find the down average D 35 9 3 89 The general formula for the RSI RSIt UT UT DT x 10
194. nce you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings Period shift back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected Lips settings on all open charts Save As My Default will save Type Exponential your current personal settings Up Bim Jaws Teeth Lips Specify your periods and shift specifications xw Thresholds Pi cole ies Type Select Simple Linear Weight or Exponential ef ow f Iv Data Choose the data you would like to be calculated 3 0 00 E Yellow 4 oo f C yellow Up Down Select the color of the histogram when the value is up or down View up to four Thresholds at values and colors of your choice 152 Gecko Software Inc Using Indicators Historic Volatility HVOL The Historic Volatility indicator is used mainly as an option evaluation tool It does not give trading signals like those given with other technical indicators It gives the trader an idea of how volatile the market has been for a previous period of time Changing the period of time the study observes allows the trader to finetune options prices If a market has been extremely volatile for the past 3 months for example near term options should be more expensive If the market has been calm for an extended pe
195. ne 2 x Pivot Point L Second Support Line Pivot Point H L Second Resistance Line Pivot H L ep e O 2 qv M O Cc gt O gem D gt O Variation 1 This method changes the formula used to derive the Pivot Point The changes include adding the trading day s open and calculating the average of the four values With this variation one takes into account both opening gaps and overnight trading The calculation is here Pivot Point H L C O 4 Y esterday Today 216 Gecko Software Inc Overlay Indicators Variation 2 This method changes the formula used to derive the Pivot Point as well In this method you substitute yesterday s close with today s open Variation 2 also takes into account opening gaps and overnight trading The calculation is here Pivot Point H L O 3 Preferences Open the Preference tab from the Control Panel on the left of your screen Select the Pivot Points on your screen The preferences will appear in the Control Panel Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Pivot Points Pivot Points Check th
196. ng Indicators Williams Accumulation Distribution AD Larry Williams created this indicator in an attempt to measure market pressures It specifically looks for a difference in price and measures it through market sentiment and strength The key is to look for strong differences between what the market does and what the indicator does Looking for substantial divergence from the AD index versus the underlying chart is the key to future price direction The main thing to look for is a difference between the AD and the market trend If a market were to make a matching or lower low or a matching or higher high and the AD fails to follow the market trend this is divergence Divergence implies that a reversal in the dominant trend may be near A series of lower lows would read as a decreasing AD The pattern created by the AD and the differences in the chart are what the trader looks for Divergence or a difference from the pattern is what you want to see For example if the market continues to march to higher territory and the AD follows by doing the same then there is no divergence However if the market makes several new highs but the AD fails to make new highs it is a warning signal of a market about to reverse direction Calculation The AD index is computed several different ways Some computations normalize the index while others add extra smoothing factors through the use of moving averages The first comparison checks for accumula
197. ng short or selling during an uptrend The darker blue lines that represent the large speculators are following the trend of the market more closely That is because they are speculators not hedgers When the market goes up the large speculators go long or buy the market in an attempt to capture profits from buying low and selling high But the commercials go short in an attempt to price protect their cash crop or inventory The small green bars represent the small speculators Generally the large speculators and the professional traders will use the small speculators as a contrarian indicator If the small speculators are all buying the market lines extend above the zero line then the professionals begin to sell If the small speculators say sell then the professionals consider being a buyer This is not always true but unfortunately for the small speculator it is more true than not The best thing about COT is that it is not based on the market s price The JBCOT Jake Bernstein proprietary buy sell indicator does not even take the markets price into account This is strictly an indicator that looks at what the largest industry players are doing and then simply points out their actions O io 3 D O iV Q D ep U a The COT reports provide a breakdown of each Tuesday s open interest for markets in which 20 or more traders hold positions equal to or above the reporting levels es
198. ng toolbar Position the mouse pointer where you would like to place the top left point of the channel and click Move to the bottom left point and click again Move to the bottom right point and click again Position the mouse pointer where you would like to place the top right final point of your channel and click to place Resizing the Inclining Declining Channel Select the channel by clicking on it You will know the channel is selected when boxes appear at the corners Click on a box and drag it to your desired location Release the mouse button to place Moving the Inclining Declining Channel Select the channel by clicking on it Drag to the new location and release the mouse button to place Deleting the Inclining Declining Channel Select the channel by clicking on it Press the Del Delete key on your keyboard You can also right click the channel and select Delete from the dropdown menu Preferences Select the channel by clicking on it The properties will appear in the preferences section of your control panel Or right click on the drawing and select properties from the dropdown menu Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Trend Channel Tool You can c
199. ning an order Current Position Market position not in market long or short Orders are also noted on the commodity tab A gray ticket shows an open order on the chart A turquoise ticket shows a filled order with an overall long position A blue ticket shows a filled order with an overall short position gt O O C 5 5 Qo a 3 RY r O E v C G L Track n Trade 5 0 221 Chapter 8 Preferences Select the order by clicking on it The properties will appear in the preferences section of your control panel Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Order Taol Line You can choose the color line style and line T E aquamarine gt sj si thickness of your order You may also choose the Filled Color for an order that 1s filled Filled Color L Red Font m I A Font Select the font size and color of the text Select ra Show Text to hide or show your text on the chart You C Ghostwhite e may also choose what components of the text you would Show Text B I like to view Buy Quantity Type Price GTC Iv Buy MW Quantity W Type Iw Price W GTC Deposits and Withdrawals Track n Trade 5 0
200. not as important as the crossovers of the moving averages as well as a crossover above or below the zero line There are three additional methods on the next page of acquiring market strength and weakness information from the PVO When the PVO crosses above the zero line volume is increasing and an increase in price is anticipated When the PVO crosses below the zero line volume is decreasing and a decrease in price and a weakening market are anticipated e Simple directional movement can be one of the greatest strengths of the PVO indicator When the line is ascending volume is increasing so therefore markets should increase When the line is descending volume is decreasing therefore the market should weaken and decrease Track n Trade 5 0 177 Chapter 7 Buy Sell Signals A buy signal occurs when the PVO line crosses from below the trigger line to above the trigger line A sell signal occurs when the PVO line crosses from above the trigger line to below the trigger line volume Osillator 15 03 N pe O qu Le i e E 77 D Preferences Right click on the PVO button in your Indicator toolbar and select PVO Settings The Preferences Tab will open in the Control Panel and the PVO preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Defaul
201. notes on each chart The Notation tools as well as the Notes tab in the Control Panel enable you to record and remember what you learn from others tips and tricks In this section you will learn how to use these features Example of Personalizing a Chart D book modified Track a Trade 5 0 E mJ Flo Wew Hells al mea e ey RE Sa A lees KIERESEREH ILE Roter Copper High Grade Combined LT Daily m s x z E M ann bri bo bahia corn arte concepis and x x a r 4 LA Rectangles LU il Circles h j Ms Annotate your charts to better E communicate concepts and Ideas dol ELLE TE DL Gobi TELLE Connor TE LL liae OUT Agi FR uim Sel Mad Notes Window miel IE Notes The Notes window is the last tab in the Control Panel after the Data tab The Notes tab is for you to keep notes on the charts that are saved within your chartbook Each chart has a new Notes section available to keep notes for that particular chart Track n Trade 5 0 111 Z O r C ce O o o KL S C Q r qu O Z Chapter 4 Arrow Tool rial The Arrow tool is located in the Notation toolbar This tool enables you to draw arrows to help point out areas of interest on your chart Position the mouse pointer where you want to place the point of the arrow and click the mouse button Drag the mouse pointer to the lo
202. nt These retracement percentages correspond to natural ratios discovered by the Greeks called the Golden Ratio and rediscovered by Fibonacci a medieval Italian Mathematician Interpretation Commodity prices will frequently consist of an initial wave a second wave often retracing 61 8 of the initial move a third wave usually the largest another retracement and finally a 5th wave the last gap which would exhaust the movement In Track n Trade 5 0 you have three tools that you can use to apply these concepts Fibonacci Retracement Fibonacci Time Zones and Fibonacci Arc To measure the different retracement levels within a market select the Fibonacci Ruler tool from your Advanced Charting toolbar Click on the chart where you would like the ruler to begin Hold the mouse button down and move to the lower right position of the rule Release the mouse button to place Resizing the Fibonacci Ruler Select the drawing by clicking on it You will know the drawing is selected when boxes appear at the corners Click on a box and drag it to your desired location Release mouse button to place Moving the Fibonacci Ruler Select the drawing by clicking on it Drag to the new location and release the mouse button to place 96 Gecko Software Inc Advanced Charting Tools Deleting the Fibonacci Ruler Select the drawing by clicking on it Press the Del Delete key on your keyboard You can also right click the drawing and
203. nu Preferences Select the drawing by clicking on it The properties will appear in the preferences section of your control panel Or right click on the drawing and select properties from the dropdown menu Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To All Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Multi Fan Tool Multi Fan Tool You can choose the color line style D Ns s gt and line thickness of your lines Font e E wA e Font Select the font size and color of the text Select Show Text to hide or show your text on the chart mu WhiteSmoke W Show Text ic Bi 7 Select Extend if you would like your lines to extend to Extend mu the edges of your chart window Select Snap to have your lines snap to price bars when moved 80 Gecko Software Inc Charting Tools Example of a Trend Fan gt 5 O 7 Track n Trade 5 0 81 Chapter 2 D O pes v Kan O 82 Gecko Software Inc Advanced Charting Tools Fibonacci Elliott Gann and More 3 Track n Trade 5 0 83 Chapter 3 i O v O O D C gt Le lt L 84 Gecko Software Inc Advanced Charting Tools Introduction Gec
204. o apply these concepts in trading with Track n Trade 5 0 charting tools Crosshair Tool The first tool in the Charting toolbar is the Crosshair tool This tool is helpful when lining up your technical indicators and recurring price patterns Click the Crosshair button and position the crosshair on your chart and click your mouse The crosshair draws a line vertically and horizontally on the chart To help place the crosshair line on a specific value the cursor price is displayed on the vertical line of the crosshair Moving a Crosshair To select the drawing click on the center point of the crosshair and drag to the new location Release your mouse button to place The tool is selected when a box appears at the center point Deleting a Crosshair Drawing There are two ways to delete the Crosshair tool If your crosshair is selected you ve clicked on it and the box appears at the center point you can press the Del Delete key on your keyboard You can also place your mouse cursor over the crosshair and right click In the drop down menu select Delete If you only want to delete the horizontal or vertical line of the crosshair select the crosshair by clicking on it and view the preferences in the control panel Select or deselect Show Horizontal Vertical Line A check will appear in front of the item when it is selected gt 5 O O Preferences Select the crosshair by clicking on it The prope
205. o chart a Dart Blip Up or Down formation select the Dart Blip tool from your Advanced Charting toolbar Click your mouse on the Left Feather LF Move to the Tip of the dart and click your mouse again Click on the Right Feather to finish your Dart Resizing the Dart Blip Select the drawing by clicking on it You will know the drawing is selected when boxes appear at the corners Click on a box and drag it to your desired location Release the mouse button to place Moving the Dart Blip Select the drawing by clicking on it Drag to the new location and release the mouse button to place 88 Gecko Software Inc Advanced Charting Tools Deleting the Dart Blip Select the drawing by clicking on it Press the Del Delete key on your keyboard You can also right click the drawing and select Delete from the dropdown menu Preferences Select the drawing by clicking on it The properties will appear in the preferences section of your control panel Or right click on the drawing and select properties from the dropdown menu Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings E Dart Tool You can choose the color line style and line hi Nu m E thickness of your l
206. o chart settings C o Q 5 2 O Q O PR ep Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To All Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Track n Trade 5 0 175 N pe O qu Le e E 77 D Chapter 7 Percent Ballinger Bands Period ro Deviation 200 Data due Display as Thresholds af se v Av ref cofe A rs oo fe HE ral 00 lE BuySell Arrows When Indicator is Visable I lue E Show Arrow Arrow Color 176 Period Specify the number of days to be used in calculating the B Deviation Define the displacement between the bands Type Choose from Simple Linear Weight or Exponential Data Choose from Open High Low or Close Display as Choose to view as a Histogram or Line B B Choose the color line style and line thickness of your line View up to four Thresholds at values and colors of your choice Choose when you want Buy Sell Arrows to show and what color Gecko Software Inc Using Indicators Price Volume Oscillator PVO The PVO is primarily used to identify periods of expanding or contracting volume Centerline Crossovers The PVO oscillates above and below the zero line A PVO above zero indicates
207. od Now use real values to compute a five interval moving average If you assume the following prices the calculations are here MA 7380 7375 7385 7390 7395 5 36925 5 7385 210 Gecko Software Inc Overlay Indicators The calculation for the Linearly Weighted is here Mat PI x n 1 Pn x n n Denom n n 1 n 2 1 MA Mat Denom n The length of the moving average Pn The price for the nth interval MA The moving average for the current period The calculation for the Exponential is here fPerc 2 n I MAt P x fPerc MA t 1 x 1 fPerc MA The moving average for the current period t The current time period Example of Moving Averages Hogs Lean Combined Jul 07 O lt D Y lt 5 Q O a r O a 3 i 1 d 10 13 Aug 2006 Sep 2006 D ct 2008 How 2008 Dec 2008 Track n Trade 5 0 211 Chapter 8 Preferences Open the Preference tab from the Control Panel on the left of your screen Select the moving average line on your screen The preferences will appear in the Control Panel Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Defaul
208. onal B 1 h m o Bi L Lime Formula Select Traditional Progressive or Aggressive enia IE Yelow from the dropdown menu Bullish C Red Blue Light Bearish Neutral Bullish Select what color you would None m Cyan like each indicator to be Display History M Show Full Histroy Blue Light Select to display the blue light on a Bearish Show on HE or Bullish market and what color you would like it to Buy Sell Arrows appear Show Arrow When Indicator is visable Y Arrow Color Bl red d Display History Check if you would like to show Full History or specify how many price bars Choose when you want Buy Sell Arrows to show and what color UJ Oo E UJ D Q o Q 2 D e CD lt o r D 3 Track n Trade 5 0 265 Chapter 13 Advantage Lines Advantage lines were created in an attempt to help eliminate whipsaw from a short term moving average trading system The main advantage of a short term moving average trading system is that it provides early entry signals to potential trading opportunities and trend reversals This is also the disadvantage to the same system Due to the early entry notification you receive a lot of false signals better known as whipsaw To help eliminate many of these false signals Mr Turner created the Advantage Lines which significantly help in reducing whipsaw but also somewhat delayed the early entry signals To enhance and help in ge
209. onal Width Autoscale Charts and Show Buy Sell Arrows are explained in the Chartbooks section of the Getting Started chapter Play Ta 2 26 2007 Tick Style wv Proportional Width w Autascale Charts w Show Buy Sell Arrows Chart Properties Overlay Proporties On Screen Text Advantage Lines Bulls n Bears zig aq w Alligator Bollinger Bands Donchian Channels Historical Averages Keltner Bands Moving Averages Parabolic SAR Pivot Points 10 x 8 MAC Apply Settings To All Charts Save Settings s My Defaults Help If you select Chart Properties the chart preferences will open in the Control Panel You can use this to change how your chart price bars and rulers look See the Charting Preferences section of the Getting Started chapter To view the preferences for one of your indicators highlight Overlay Properties Any overlay indicators you have selected will appear in the menu to the side Select the indicator you would like to modify and the preferences will open in the Control Panel The Overlay Properties option will only appear in your right click menu if you have an indicator selected Highlight On Screen Text and select if you would like to view indicator values on the chart window and where you would like them to be located on your chart The Apply Settings To All Charts and Save Settings As My Defaults options work just like the similar buttons in the Preferences section of your control panel Apply Set
210. oped by John Bollinger represents the expanding and contracting of the bands based on recent volatility During a period of rising price volatility the distance between the two bands will widen BB Width will increase Conversely during a period of low market volatility the distance between the two bands will contract BW will decrease The tendency is for the bands to alternate between expansion and contraction When the bands are unusually far apart it is often a sign that the current trend may be ending When the distance between the two bands has narrowed it is often a sign that a market may be about to begin a new trend The BW gives an indication of how wide the Bollinger Bands are as a function of the middle band It is used to identify the squeeze at low values and the end of trends at high values Calculation The calculation of the BW is here Bollinger Bandwidth Top Bollinger Band x periods Bottom Bollinger Band x periods Simple Moving Average Close x periods Example of the BW in the Indicator Window IPS TRI CABE AR C o o 5 2 O Q mp O ep 0 16 Bollinger Preferences Right click on the BW button in your Indicator toolbar and select BW Settings The Preferences Tab will open in the Control Panel and the BW preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings Track n Trade 5 0 137 Chapter 7 Restore Settings T
211. ose of the ATR is to recognize the level of volatility in a market Volatility is a measurement of the change in price over a given period It is often expressed as a percentage and computed as the annualized standard deviation of the percentage change in daily price When a market is going sideways it typically exhibits low volatility and is difficult to trade A market with higher volatility is typically trending better which would produce more opportunities to get into a trade If a market s volatility is too high traders find that the market is too erratic and it becomes difficult to trade In using the ATR traders hope to measure the level of volatility to help them interpret the different markets they are watching It is important to remember to consult other indicators or analysis so that you are not relying on only one indicator to determine market entry or exit The ATR s value is a measurement of the market volatility When a market is increasing in volatility the ATR will have a higher value and when the market is decreasing in volatility the ATR will have a lower value Calculation The ATR is a moving average of the True Ranges defined below The default period interval in Track n Trade 5 0 is 5 days The ATR is calculated based on the largest of the three distances from the following Today s HIGH to today s LOW Yesterday s CLOSE to today s HIGH Yesterday s CLOSE to today s LOW C o Q 5 2 O Q O PR ep
212. ose the color line style and line T thickness of your indicator line O Teeth C Red ww T Lips Fen Lime Track n Trade 5 0 201 ep e O 2 qu O Cc gt v ge D gt O Chapter 8 Bollinger Bands Bollinger Bands are a type of trading envelope They are lines at an interval around the moving average They consist of a moving average and two different standard deviations represented as a line above the MA Moving Average and a line below the MA The line above is the MA plus two standard deviations the line below is the MA minus two standard deviations Bollinger Bands are used to determine overbought and oversold conditions and to project price targets John Bollinger created Bollinger Bands in an effort to gauge the volatility and condition of a market These bands are used to determine the trading range and give an indication of when to buy and when to sell Bollinger Bands are also used to indicate market volatility the wider the bands the greater the volatility Inversely the narrower the bands the lesser the volatility By plotting two lines at an interval around a moving average Bollinger bands give a good indication of market conditions and price relation The moving average which the band is based on works as an indicator to confirm trade signals Calculation Calculate the moving average with this formula ENG n Subtract the moving average from each of the individual data points used in
213. ot For Resell or NFR then notwithstanding other sections of this EULA your use of the SOFTWARE PRODUCT is limited to use for demonstration test or evaluation purposes and you may not resell or otherwise transfer for value or install the SOFTWARE PRODUCT on more than one single COMPUTER Limitations on Reverse Engineering Decompilation and Disassembly You may not reverse engineer decompile or disassemble the SOFT WARE PRODUCT except and only to the extent that such activity is expressly permitted by applicable law notwithstanding this limitation Separation of Components The SOFTWARE PRODUCT is licensed as a single product Its component parts may not be separated Rental You may not rent lease or lend the SOFTWARE PRODUCT Trademarks This EULA does not grant you any rights in connection with any trademarks or service marks of Gecko Software Inc Support Services Gecko Software may provide you with support services related to the SOFTWARE PRODUCT Support Services Use of Support Services is governed by the Gecko Software polices and programs described in the user manual in on line documentation and or other Gecko provided materials Any supplemental software code provided to you as part of the Support Services shall be considered part of the SOFTWARE PRODUCT and subject to the terms and conditions of this EULA With respect to technical information you provide to Gecko as part of the Support Services Gecko may use
214. ould like to place the final point of the triangle and click to place Resizing the Wedge Triangle Select the drawing by clicking on it You will know the drawing is selected when boxes appear at the corners Click on a box and drag it to your desired location Release the mouse button to place Moving the Wedge Triangle Select the drawing by clicking on it Drag to the new location and release the mouse button to place Deleting the Wedge Triangle Select the drawing by clicking on it Press the Del Delete key on your keyboard You can also right click the drawing and select Delete from the dropdown menu Preferences Select the drawing by clicking on it The properties will appear in the preferences section of your control panel Or right click on the drawing and select properties from the dropdown menu Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To All Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings O gt 5 O O Wedge Tool Wedge Tool You can choose the color line style and ins Meek gt line thickness of your lines as well as the background Hsc color To make the background transparent deselect Backargund MI siver Fill Background at the bottom of your preferences
215. page Co ous a rm n f you were already a customer of Gecko Software o when you purchased Track n Trade 5 0 use the D Waleem ia Truck n Trade Same username and password from your Account Q em Track g Trade e Manager Jo prr jit f you purchased Track n Trade 5 0 by phone your username and password will be in your confirmation email f you purchased Track n Trade 5 0 online use the uu username and password you set up Dar hern an Fimja Pasa Saving Username and Password The option to save your username and password is avail able in Track n Trade 5 0 Remember logging in gives you access to your financial information through Track n Trade 5 0 and others may use these saved passwords to access this information Diri iuis dicem Track n Trade 5 0 31 Le Q pun U ep O 5 D O Chapter 1 Account Manager The Account Manager was created to give Gecko Software customers a convenient resource to update their personal information with us such as your billing shipping and payment information To access the Account Manager log in to Track n Trade 5 0 click on the Help Menu and select Account Manager The Account Manager will open in your default browser You will not need to enter your email address and password if you are already logged in to the program Or access your Account Manager by visiting www trackntrade com or www geckosoftware com and cli
216. pe of data history to a typical user would simply put this capability out of reach for the common trader This is where the Black and Scholes pricing model comes into play Our skilled computer scientists at Gecko Software have created a way for us to use the data generated by the Black amp Scholes data formula to recreate on the fly historical options data as needed by the user This way a trader using our software can recall acutely accurate simulated options data from 30 years ago without actually having hundreds of megabytes of options data history stored on their computer The trader can then simulate trading the financial options market with unparalleled accuracy This unparalleled capability allows new traders the ability to learn and practice basic trading strategies that can then be taken to the actual markets It also allows experienced traders the ability to create and back test advanced simulated trading models and systems Another way in which Gecko Software computer scientists have implemented the Black amp Scholes formulas to help our traders is with two very unique indicators which sit below a chart of the underlying financial asset As the Black and Scholes formula dictates what the actual theoretical value of an option should be on any given day Track n Trade 5 0 will plot the actual value of the option along side the Black amp Scholes model This creates an overvalued or undervalued indicator which lets our users kno
217. per High Grade Combined Jun d C D O Q ie E o o Track n Trade 5 0 119 o a O Mur amp ET au o Chapter 5 Resizing the Dollar Calculator Select the drawing by clicking on it You will know the drawing is selected when boxes appear at the corners Click on a box and drag it to your desired location Release the mouse button to place Moving the Dollar Calculator Select the drawing by clicking on it Hold down the mouse button and drag to the new location Release the mouse button to place Deleting the Dollar Calculator Select the drawing by clicking on it Press the Del Delete key on your keyboard You can also right click the drawing and select Delete from the drop down menu Preferences Select the drawing by clicking on it The properties will appear in the preferences section of your control panel Or right click on the drawing and select properties from the dropdown menu Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Dollar Calculator Tool Line Black Quantity Font 12 MIE Arial C Black Iw Show Text IB Ej value 6 ROR C ROI Points W Snap Details 85
218. per barrel Each contract represents 1 000 barrels of oil making a 1 00 barrel move equal to a 1 000 00 profit or loss before commissions and fees 22 Gecko Software Inc Introduction to Futures Heating Oil and Unleaded Gasoline are the same as at the pump minus taxes and service station mark ups in cents per gallon A price of 52 46 is 0 5246 per gallon Both contracts call for delivery of 42 000 gallons therefore a 1 cent per gallon equates to 420 00 before commissions and fees Currencies Currencies represent an exchange rate or how many US Dollars it takes to buy one Swiss Franc Japanese Yen Euro or Mexican Peso Prices are quoted in many different fashions but the basic convention is that a 0 01 move in the Swiss Franc or Yen equals 12 50 before commissions and fees because of the contract size The Canadian Dollar US Dollar Index and Euro have a different contract size and a 0 01 move equates to 10 00 before commissions and fees Financials The same basic principles apply to the financial markets which are generally quoted in terms of points Prices are usually read as is though some like the treasury securities US TY FV TU are traded in different combinations of 1 32nd or 1 64th Each of these markets has the dollars per point already calculated into Gecko Software s Track n Trade 5 0 application and a list of the different contract sizes and pricing terms are available from the various exchanges they
219. price the better and limit orders can only be filled at the specified price or lower Track n Trade 5 0 25 be O O C O c O 5 bb O TI C bb D On v D um 2 LL O c Q a O gt O le um E Introduction to Futures A customer wishing to sell two July Corn contracts at 215 when July Corn is trading at 211 would place the following order Sell two July Corn at 215 limit Sell limit orders must be placed at the current market price or higher The higher the price the better and sell limit orders can only be filled at the specified price or higher When a buy limit is placed above the market it can turn into a market order and get filled immediately If the current price is below the limit price the market is in a better situation and the buy limit becomes a market order The same principle applies to sell limits when a sell limit is placed below the market it becomes a market order if the higher market price is better Gecko Software s Track n Trade 5 0 helps you learn all these rules by allowing you to simulate and practice placing these orders and making sure you have each order under your belt before ever moving on to trade the live markets A stop order is not executed until the market reaches the specified price level Once the stop level is hit the stop order becomes a market order Opposite of limit orders buy stops are always placed above the market while sell stops
220. r l Premium L pL fod bbb EE I ios Preferences Open the Preference tab from the Control Panel on the left of your screen Click on the Indicator Information Display to scroll through the different Indicators you have open until you get to OSV The preferences will appear in the Control Panel Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Options Strike Value Options Strike Value Choose the color of your Over Over Valued E custom Valued and Under Valued lines Under valued Custom Strike Price 109 00 C Strike Price Enter the price you would like to use Thresholds Can cools E mum Thresholds View up to four thresholds at a value that r 2 oole Eve gt als you type in and a color that you choose 3 0 00 El Yellow 4 0 00 oO Yellow Track n Trade 5 0 239 O O 5 O v C e L Chapter 9 Strike Price STRK This indicator also displays the theoretical option values versus the actual option price value However this indicator displays them as two lines By looking at these two lines you are abl
221. r LS RS This formation anticipates a drop in price below the Neckline shown by the red arrow To trade a Head amp Shoulders top formation place a sell order on the break of the Neckline Your stop loss order should then be placed just above the Head The stop loss order can also be placed above the Right Shoulder as a more conservative point Head amp Shoulders Bottom Formation This formation is an inverted version of the Head amp Shoulders top formation Head amp Shoulders bottom anticipates a rise in price above the Neckline To trade a Head amp Shoulders bottom formation place a buy order on the break up from the Neckline Then place a stop loss order just below the Head The stop loss order can also be placed below the Right Shoulder as a more conservative point Head amp Shoulders Tool To identify a H amp S top or bottom formation use the Head amp Shoulder tool Select the Head amp Shoulders tool from your Charting toolbar Position the mouse pointer where you would like to place the Left Shoulder LS point and click to place Move to the valley point between the LS and the Head H and click to place Move to the H point and click to place Move to the valley point between the H and Right Shoulder RS and click to place Move to the RS point and click to place Resizing the Head amp Shoulders Drawing Select the H amp S drawing by clicking on it You will know the drawing is selected when boxe
222. r M PM Beginning Moves to the first day in the chart Reverse Step 28 Moves back 28 price bars and stops Reverse Step 1 Moves back 1 price bar and stops Rewind Plays chart backwards quickly Play Plays chart backwards one tick at a time Stop Stops any play buttons Play Plays chart forward one tick at a time Fast Forward Plays chart forward quickly Step 1 Moves forward 1 price bar and stops Step 28 Moves forward 28 price bars and stops End Moves to the last day in the chart E O E A U O amp E ep o le i r Cc O O oO lt L 230 Gecko Software Inc Options Plug in Implementing Options Strategies Track n Trade 5 0 231 Chapter 9 E D E A v c Q prar Q O 232 Gecko Software Inc Options Plug in Introduction The Track n Trade 5 0 Options Plug in gives you the ability to place put call orders on the futures chart calculate profit loss on an option or on an option strategy calculate the Greeks and use two indicators that display the option as under or overvalued Requirements In order to place options orders or use any of the options tools you will also need to own the Accounting amp Simulator Plug in See the Accounting amp Simulator Plug in chapter for more information and call us at 1 800 862 7193 to reach the sales department and order the plug in today Placing an Options Put Call Order Option orders can be placed
223. r a buy signal when the indicator turned upward and out of that oversold region It is in this way that momentum can sometimes shift ahead of the price movement This use of the momentum indicator is a counter trend usage In either implementation of this indicator the key is divergence Seeing momentum make lower highs while prices are making higher highs or momentum making higher lows while prices are making lower lows Being aware of a difference in price movement and the momentum level can help the trader make informed trading decisions Calculation The general formula to calculate momentum is here MOMt Pi Pi n 166 Gecko Software Inc Using Indicators MOMt The momentum indicator for the current period Pi The price of the i interval Pin The price n intervals ago n The number of intervals or length specified Example Assume the current price is 7470 This example examines a momentum study using a length of ten trading intervals The price ten intervals ago is 7400 MOM 7470 7400 70 The momentum value can have a very broad range It is a function of the length you select for the momentum and the volatility of the underlying futures contract Thus it could swing very wide and wildly about the zero line Buy Sell Signals If we draw MOM with the MOMMA line a buy signal occurs when the MOM value crosses from below the MOMMA line to above the MOMMA line and the MOMMA line is greater than 0 A sell signal
224. r each candlestick component The body of the candlestick is called the real body and represents the range between the open and closing prices A black or filled in body represents that the close during that time period was lower than the open normally considered bearish and when the body is Shadow open or white that means the close was higher than the open normally considered bullish High a The thin vertical line above and or below the real Close body is called the upper lower shadow representing is the high low price extremes for the period Real open Body TS Lower Shadowy 212 Gecko Software Inc Candlestick Charting Bar Compared to Candlestick Charts Below is an example of the same price data conveyed in a standard bar chart and a candlestick chart Notice how the candlestick chart appears 3 dimensional as price data almost jumps out at you The long dark filled in real bodies represent a weak bearish close while a long open light colored real body represents a strong bullish close It is important to note that Japanese candlestick analysts traditionally view the open and closing prices as the most critical of the day At a glance notice how much easier it is with candlesticks to determine if the closing price was higher or lower than the opening price O Q D on O Q O gt Q m 5 Track n Trade 5 0 213 Chapter 14 Common Candlestick Terminology The following is
225. re BuySell Arrows Show Arrow Arrow Color Track n Trade 5 0 Change Sensitivity Change the percent of calculation Line Choose the color line style and line thickness of your indicator line Retracements Line Alt Choose the color line style and line thickness of the retracement lines Select Show Retracement Target Show as Percent Show Retracements or Show Alternative Retracements to show percents retracements and alternative retracements Number of Alternative Lines Enter the amount of alternative retracement lines you want to show on the chart Font Select the font size and color of the text You can also choose to bold or italicize your text Select the checkbox next to Show Text to hide or show your text on the chart Choose when you want Buy Sell Arrows to show and what color 221 O lt D i Y lt 5 Q O a r O RJ a Chapter 8 V U O 2 qu O C gt U grum D gt O 222 Gecko Software Inc Accounting amp oimulator Plug in Tracking Profits and Losses Track n Trade 5 0 223 Chapter 8 E O E A U O K E ep o le E prar Cc O O O t 224 Gecko Software Inc Accounting amp Simulator Plug in Introduction The Accounting amp Simulator Plug In enables you to place orders deposits and withdrawals using historical and or current data Traders will find this Plug In very helpful in gettin
226. rection of the market Track n Trade 5 0 213 Chapter 8 Example of PSAR 2 07 it Fir r jn n Nun Lil hy a TRV E prr LALA EYEYE ey EM ET EE TEE T frii PC 3 1 d 10 13 Aug 2006 Sep 2006 D ct 2006 How 2008 Dec 2008 Preferences Open the Preference tab from the Control Panel on the left of your screen Select the PSAR on your screen The preferences will appear in the Control Panel Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings ep e O 2 qv M O Cc gt O gem D gt O Wilder s Parabolic TimeyPrice Initial Additional Limit Specify the calculation Initial Acceleration number you would like each section of the indicator Additional Acceleration Style Choose how you would like the indicator Acceleration Limit displayed Select squares crosses dots or lines Style Squares C wm Pu L id E Color Select the color of the indicator 214 Gecko Software Inc Overlay Indicators Pivot Points Pivot points used to be referred to as traders numbers because of the popularity of these points amongst floor traders The th
227. rences Right click on the R button in your Indicator toolbar and select R Settings The Preferences Tab will open in the Control Panel and the R preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Williams SF R Period The number of price bars or the interval oR Period d used to calculate the study Default is 10 SR CET Calculation Common h c Ch 1 R Choose the color line style and line thickness of Threshalds your line 1 80 00 E Yeow 2 2000 vam H Calculation Choose between common or updated Iculations E 000 EHvkw E calculations Cal oo veiw gt Yellow View up to four Thresholds at values and colors of your BuySell Arrows N pe O qu Le i e E 77 D choice When calculating buy sell signals Threshold 1 is uM when Indicator is Visible used as the upper threshold and Threshold 2 is used as the Arrow Color I PaleGreen lower threshold default values set at 80 and 20 When calculating Buy Sell arrows For SR Threshold 1 is used as the upper threshold Thresho
228. rent settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Rate Of Change Period Specify the number of days to be used in Period 10 calculating the SRSI Line IE OrangeRed Thresholds Line Choose the color line style and line thickness of CN om f v Yelow your line E 0 00 I Yellow raf em Br ue m View up to four Thresholds at values and colors of your choice 4 0 00 oO Yellow N pe O qu Le e E 77 D 180 Gecko Software Inc Using Indicators Relative Strength Index RSI The RSI was developed by J Welles Wilder Jr as a measure of the market s strength or weakness The principle idea of this study is that it will indicate a general zone that the market is in either the buy zone or the sell zone This indicator is similar to Stochastics in that it shows regions of overbought and oversold This indicator should be incorporated into a system rather than using it by itself Wilder s popular indicator is known for its accuracy and its ability to compensate for erratic price movement RSI computes the difference in recent prices as a solid line and plots this line on a scale similar to the scale used by Stochastics The area above 70 is generally considered to be the overbought region and the region below 30 is r
229. ress the Del Delete key on your keyboard You can also right click the channel and select Delete from the dropdown menu Preferences Select the channel by clicking on it The properties will appear in the preferences section of your control panel Or right click on the drawing and select properties from the dropdown menu Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings gt 5 O O Channel Tool Channel Tool You can choose the color line style and line thickness of your lines as well as the background Line Yellow y 8 color To make the background transparent deselect Background BH Custom 8 p os Fill Background at the bottom of your preferences e wma d Font Select the font size and color of the text Select whtesmke rl Show Text to hide or show your text on the chart Iw Show Text B 4 Snap Iw Fill Background Select Snap to have your lines snap to price bars when moved Track n Trade 5 0 T 1 D O pes qu C O Chapter 2 Inclining Declining slang Tool Identify an Inclining or Declining Channel by selecting the Inclining Declining Channel tool from your Charti
230. rical data on over 50 different markets allowing you to learn the markets and develop a trading plan Four different plug ins are available for Track n Trade 5 0 to help you maximize your trading strategies The plug ins are listed below Accounting Plug in Enables Track n Trade 5 0 users to simulate placing life like orders applying deposits and making withdrawals Also it keeps track of commissions paid to your simulated or live broker tracks orders placed profits amp losses and even simulates margin calls Options Plug in The order tools included with this plug in automatically snap to the different strike prices to show you the actual dollar value of the option on that particular day Track n Trade 5 0 users who have this plug in keep track of options profit and losses concurrent with your futures orders allowing them to practice mixing futures and options strategies simultaneously Seasonal Plug in Comprised of three indicators for the seasonal market this plug in assists the Track n Trade 5 0 user to calculate seasonal trends and market probability and gives historical averages All this information is based on what has happened to a particular seasonal contract in the past Spreads Plug in Place orders directly on the spread chart and let Track n Trade 5 0 automatically simulate placing both orders in the opposing contracts and calculate your daily profits and losses in the Accounting and Simulation Plug in module
231. riod of time longer term options should be reasonable In futures we use it for observation It tells us if prices are calming down or becoming more erratic The key to using historic volatility is determining the correct period of time for each market The market you are looking at may show a history of volatility years ago but has been relatively calm the last few months Getting an idea of the markets behavior recently may be of no use to the trader that is looking at distant options For the futures trader this tool is useful as a guide for order placement Changing market volatility may indicate that it is time to move stops closer or farther away If the trader is profitable with the trend and volatility is changing it might be a time to move stops closer to protect profits If a trader 1s trading against the trend he might want to move stops further away to avoid getting bumped out prematurely Options traders could use this study to help them purchase profitable options The basic idea is to buy options when volatility is decreasing to take advantage of a change in that volatility Any rise in volatility will translate to an increase in option values Look at options strategies that take advantage of low volatility such as straddles or ratio spreads When volatility is high selling options would be better because any decrease in volatility will translate to a loss of option value Option strategies that take advantage of a decrease in vo
232. rmining the DMI is to compute the true range The true range TR is always a positive number According to the Wilder the true range is the largest value of three equations Hight Lowt Hight Closet 1 Lowt Closet 1 Track n Trade 5 0 145 N pu O m v Le O S 77 D Chapter 7 Continue this process for the specified trading interval In this example use a value of 14 This is the same value Wilder used on daily data His logic for using this value is that it represents an average half cycle period When this task 1s accomplished for the specified interval you compute the average value of the DM DM and TR Wilder prefers to use an accumulation technique rather than computing a pure moving average It is a short cut designed to save computational time and effort Averaget Averaget 1 Averaget 1 n Valuet When you substitute the above symbols you these equations DMt DMt I1 DMt I n DMt DMt DMt 1 DMt I n DMt TRt TRt I TRt 1 n TRt It is a timesaving convention This indicator was developed before microcomputers were invented The only tool available was the desktop calculator or adding machine You could spend a great deal of time and effort calculating averages You now have the average values The next step is to compute the directional indicator It can be either up or down depending upon the directional movement On up intervals use this ca
233. rt Window Terms are explained in depth in the Introduction to Futures chapter Symbol Gecko Software s symbol for the commodity Name Name of the commodity Group The group is a category for commodities Exchange The exchange is where the commodity s trades are processed Contract Size Number of units that one contract represents Contract Units The unit of measurement Tic Size The tic size 1s defined as the smallest increment the quote of a contract will fluctuate Minimum Move Tic size represented as a decimal value Tic Units The unit of measure for quotes This unit should be the same as the unit that the Exchange uses Full Point Value This value represents what a move in the ones place is worth Init Margin The initial margin for your account Gecko Software Inc Getting Started Maint Margin The maintenance margin for your account First Notice Day FND Date that the contract will expire Last Trading Day LTD Last day to trade the open contract Market Open The time that the market opens Market Close The time that the market closes Options Expiration The date that options will expire worthless or be automatically exercised into futures orders Options Strike Interval The value for the minimum spacing between options as listed by the Exchange Options Min Move The value of the minimum price fluctuation for the options contract No of strikes above below The value used to calcul
234. rties will appear in the preferences section of your control panel Or right click on the drawing and select properties from the dropdown menu Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To All Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Track n Trade 5 0 57 Chapter 2 Crosshair Tool You can choose the color line style and line thickness of your crosshair Deselect Show Horizontal Line or Show Vertical Line to hide your Crosshair Tool Line BH Black W Show Horizontal Line i W Show Vertical Line lines Font pz afa aa Font Select the font size and color of the text You us can also choose to bold or italicize your text Select the ac m R checkbox next to Show Text to hide or show your text on Iw Show Text IB Bi heci v Extend Snap Select Extend if you would like your line to extend into the Indicator window Select Snap if you want your crosshair to snap to price bars when moved Example of the Crosshair Tool Canadian Dollar CME Cornblmei Sopa D le pes qu C O The remaining technical tools are used to identify technical analysis formations and trends Take a look at the different patterns available then read about how to use each of the technic
235. s Used to chart a Head amp Shoulders top or bottom formation Narrow Sideways Channel Used to identify a horizontal channel N Ruler Used to measure a retracement Inclining Declining Channel Used to identify an inclining or declining channel Wedge Used to identify any type of wedge or triangle Trend Fan Used to identify a trend fan Track n Trade 5 0 37 Le Q pun U ep le E 5 D O Chapter 1 Advanced Charting Toolbar EIE e TIHE DAY ARC D ur Lal 4 Elliot Wave Used to chart an Elliot Wave Dart Blip Used to identify a Dart Blip Gann Fan Used to chart a Gann Fan Andrews Pitchfork Used to chart an Andrews Pitchfork Fibonacci Retracement Used to measure a Fibonacci Retracement Fibonacci Time Zones Used to measure a Fibonacci Time Zone Day Offset Used to measure the number of trading days versus actual days between two points Arc Used to identify a rounded top or bottom formation Notation Toolbar Ariano Notation Arrow Used to draw arrows to help point out areas of interest Flag Used to place a flag or graphic Text Used to type text Rectangle Used to draw a rectangle Circle Used to draw a circle Calculators Toolbar Dollar Calculator Used to find the dollar value between two points on the chart Risk Reward Used to find the difference between two points of the risk and reward zone 38 Gecko Software Inc Getting Started Time Interval
236. s appear on the corners Click on a box and drag it to your desired length Release the mouse button to place Track n Trade 5 0 67 gt 5 o o O D le pes qu C O Chapter 2 Moving the Head amp Shoulders Drawing Select the H amp S drawing by clicking on it The tool is selected when boxes appear at the LS H and RS end points Drag to the new location and release the mouse button to place Deleting the Head amp Shoulders Drawing Select the H amp S drawing by clicking on it Press the Del Delete key on your keyboard You can also right click the drawing and select Delete from the dropdown menu Preferences Select the H amp S drawing by clicking on it The properties will appear in the preferences section of your control panel Or right click on the drawing and select properties from the dropdown menu Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To All Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Head and Shoulders Tool Head amp Shoulders Tool You can choose the color line tine Beek ll style and line thickness of your lines Fant i2 md ma Font Select the font size and color of the text Select Show Text to hide or show your text on the ch
237. s before ever needing to make any kind of purchasing decision This allows our clients the added security and benefit of having a try before you buy satisfaction guarantee therefore no returns are available after purchase of these items Gecko warrants that the SOFTWARE PRODUCT will attempt to perform in accordance to our advertisements for a period of thirty 3 days 12 Gecko Software Inc from the date of receipt If it does not perform to your expectation the only guarantee Gecko Software gives is a refund of the purchase price paid of the said software application This warranty is only good for a period of 3 days from the date of purchase and only applies to software identified as Track n Trade amp its corresponding expansion packs and plug ins this warranty does not apply to any accompanying educational materials or supplies which carries no warranty whatsoever Gecko does not guarantee that any mathematical formulas are correct or that any data is correct or that any of the rules used to create the software to simulate real life situations are correct These are just our best guess and you as the licensee agree not to hold Gecko liable for any mistakes discrepancies inaccuracies or mathematical errors that may be included with the software application supporting materials manuals or supplemental products provided by Gecko Software Inc or its subsidiaries groups friends associates managers employee s spouses or anyone
238. s on all open charts Save As My Default will save your current personal settings Bollinger Bands Period The number of bars used to calculate the study Period ED John Bollinger the creator of this study states that those Type simple periods of less than ten days do not seem to work well Data Cos for Bollinger Bands He says the optimal period for most 24 Deviation 200 00 applications is 20 or 21 Default is 20 RES I MedumBlus H Type Select Simple Linear Weight or Exponential Middle E Red Lower a MediumBlue Data Select Open High Low or Close Deviation The percent of one standard deviation John Bollinger suggests that if you reduce the number of days used to calculate the bands you should also reduce the number of deviations and vise versa For example 200 percent of a standard deviation means two deviations above and two deviations below the moving average If you use a period of 50 you may want to use 250 percent of a standard deviation For a period of 10 you may want to use 150 or 100 percent ep e O 2 qv M O Cc gt O gem D gt O Upper Middle Lower Choose the color line style and line thickness of your indicator line 204 Gecko Software Inc Overlay Indicators Donchian Channels DON Donchian Channels were created by Richard Donchian an expert in trends The DON is a simple trend breakout system The channel works well in trending markets but
239. s that fluctuate only within certain price periods When the Jaw Teeth and Lips are closed or intertwined the Alligator is going to sleep or is asleep already As it sleeps it gets hungrier and hungrier the longer it sleeps the hungrier it will be when it wakes up The first thing it does after it wakes up is to open its mouth and yawn Then the smell of food comes to its nostrils flesh of a bull or flesh of a bear and the Alligator starts to hunt it Having eaten enough to feel quite full the Alligator starts to lose interest in the food price Balance Lines join together and this is the time to fix the profit Preferences Open the Preference tab from the Control Panel on the left of your screen Select the Alligator line on your screen The preferences will appear in the Control Panel Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Alligator Jaws Teeth Lips Specify your periods and shift specifications Jaws lt Teeth Type Select Simple Linear Weight or Exponential 4 Lips 2 E Exponential Data Select Open High Low or Close 5 Data close or en Ne Jaws Teeth Lips Cho
240. s the changes that you make to orders in a chartbook This trade log will list new orders placed orders cancelled as well as any order that you have moved Trade Log 5 From 1j 8 2004 To 1 13 2004 Wi History report generated successfully Filter all Charts Placement D ate Activity Date Contract Activity Detail Thu Jan 08 2004 Thu Jan 08 2004 ED2004M BUY 1 38 595 STP Thu Jan 08 2004 Fri Jan 09 2004 xED 2004h Fill 1 c 95 59 STP Fri Jan 09 2004 Fri Jan 09 2004 ED 2Z004M SELL 1 98 59 STP Tue Jan 13 2004 Tue Jan 13 2004 ED2004M BUY 1 98 76 STP To generate the trade log click on the Trade Log button in the My Account tab of your Control Panel Select the date range for the trade log from the dropdown menus This will give you the changes in the orders placed within that date range You also can filter the trade log by All Charts or by one of the contracts being traded You can print and or save this trade log by clicking on the corresponding button in the upper left corner Track n Trade 5 0 229 gt Q O O C 5 5 Q Qo a 3 Q F i9 ER U C m Chapter 8 Simulation The ability to play charts forward and backward using the Play Controls gives you the ability to go back in time and simulate the trading experience using historical data Play to End All Charts Displays all available data on both saved and new charts that are selected Hi M i 4 E H
241. s the number of periods for each type of chart Monthly Based on chart period see below Not available for this study When using variable charts you must first calculate the number of trading periods per year To do this you must determine the trading time of the selected commodity The formula is as follows TP Tt Pn x 262 TP The total number of trading periods per year Tt The total trading time in a day Pn The length of the period 262 The number of weekdays per year Example The S amp P 500 trades from 8 30 a m to 3 15 p m That is a total trading time of 6 hours and 45 minutes On a variable chart using 5 minute bars the number of periods for the day is 81 6 hours x 60 minutes 360 minutes 45 minutes Total minutes of trading 405 minutes 405 5 minute bars 81 trading periods per day 154 Gecko Software Inc Using Indicators Now that you have calculated the trading periods per day you now must calculate the number of periods for the year Since historical volatility considers every weekday of the year when calculating total periods for the year the multiplier 1s 262 TP 405 5 x 262 TP 81 x 262 IP 21727 Note This formula applies only to historical volatility on a variable chart It does not apply to other chart types Now that you have the total number of periods per year continue with the calculation of the historical volatility by calculating the logarithm of the price change
242. s well as for you Before deciding to trade you should carefully consider your investment objectives level of experience and risk appetite The possibility exists that you will sustain a loss of some all or more in the event that margin is used of your initial invest ment and therefore you should not invest money that you cannot afford to lose Genuine risk capital In addition we recommend you consult your financial advisor to help you determine if trading is appropriate for you Past market performance is not necessarily indicative of future results Past performance figures are derived with the benefit of hindsight and therefore do not account for actual trading risk For example the ability to withstand losses or to adhere to a particular trading program in spite of losses are material points which can adversely affect actual trading results There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of any past perfor mance research synopsis In addition the market conditions commissions bid offer spreads as well as other factors all can adversely affect actual trading results Gecko Software Inc does not provide personal trading advice and no information provided by Gecko Software Inc should be construed as personalized trading advice Although Gecko Software Inc obtains its information from sources that it d
243. sa j Select Snap to have your lines snap to price bars when W Show Text B 7 moved Snap gt Q lt o Q D OQ O 5 V mi e O O 77 Track n Trade 5 0 97 Chapter 3 Example of a Fibonacci Ruler Soybeans Combined How 01 P i a 5 E T45 1I4 689 1ld sossa TEA pa a is sp esee owed E qH nan 518 RIT LAN o O E ja re O O D C gt Le c 98 Gecko Software Inc Advanced Charting Tools To measure the different retracement levels within a market select the Fibonacci Arc tool from your Advanced Charting toolbar Move the mouse pointer to the point on the chart that will be the corner of your arc Hold the mouse button and drag to your end point Release the mouse button to place Resizing the Fibonacci Arc Select the drawing by clicking on it You will know the drawing is selected when boxes appear at the corners Click on a box and drag it to your desired location Release the mouse button to place Moving the Fibonacci Arc Select the drawing by clicking on it Drag to the new location and release the mouse button to place Deleting the Fibonacci Arc Select the drawing by clicking on it Press the Del Delete key on your keyboard You can also right click the drawing and select Delete from the dropdown menu Preferences Select the drawing by clicking on it The properties will appear in the preferences se
244. sidered bullish is now bearish or if bearish would now be considered bullish When the markets price bars cross above or below the third trend fan line this is your signal and confirmation that the market has shifted from bullish to bearish or bearish to bullish To trade a Trend Fan place an order to enter the market on the break out past the third Trend Fan line gt 5 o o 7 Trend Fan Tool Identify a trend fan within a chart by selecting the Trend Fan tool from your Charting toolbar Position the mouse pointer where you would like to place the main point of your trend fan Move the mouse pointer to the end of the first line and click Add as many lines of your trend fan as you would like To place the last trend position the mouse pointer at the end of the last line and right click to place Track n Trade 5 0 19 D O pes qu C O Chapter 2 Resizing the Trend Fan Select the drawing by clicking on it You will know the drawing is selected when boxes appear at the ends of the lines Click on a box and drag it to your desired location Release the mouse button to place Moving the Trend Fan Select the drawing by clicking on it Drag to the new location and release the mouse button to place Deleting the Trend Fan Select the drawing by clicking on it Press the Del Delete key on your keyboard You can also right click the drawing and select Delete from the dropdown me
245. signal occurs when both lines are above the upper threshold and the K line crosses from above the D line to below the D line 150 Gecko Software Inc Using Indicators Preferences Right click on the FSTO button in your Indicator toolbar and select FSTO Settings The Preferences Tab will open in the Control Panel and the FSTO preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To All Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Fast Stochastics FSTO Period The number of periods to be used to FSTO Period H determine the highest high and lowest low Default is 14 FSTO Smoothing erp 3 AK C Black FSTO Smoothing The number of periods to be used to xD E sive determine the moving average for the D value Calculation Exponential Threshold K D Choose the color line style and line thickness rif 2000 w Evekw of your K and D lines E 20 00 4 E Yellow x TA Calculation Choose between Exponential Simple and 000 s E velo E Wilder s Smoothing calculations B 000 C Yellow las View up to four Thresholds at values and colors of your Sho
246. symbols can be found in the Data Download section If you do not know the symbol of the market you want to see find your chart by choosing the market month and year Choose your commodity from the dropdown menu Choose the month and year from the dropdown menu to the right Click on the Open Chart button below Sorting the Commodity List Notice that you have sorting options above the Choose a Commodity drop down menu You can sort commodities by Group or Exchange and you can display them in Ascending or Descending order Gecko Software Inc Getting Started Removing Charts in your Chartbook AciveChats ml Now that you have charts in your chartbook you have Cocoa Open Outcry Jud CC2007N the ability to add and remove charts as you wish before Cotton 2 Oper Ojas Sonny AAR Bgm ou save it as a chartbook Right click on the chart you Gold COMEX D pe Miandad DD 7 M y 8 y Hogs Lean Comb Export Data 2007M would like to remove and select Delete Chart from Soybeans Combined Jul 07 sell the dropdown menu A Confirm Chart Deletion window will appear on your screen Click OK Switching Between Charts in your Chartbook When you have several charts open in your Active Click on Chart Window Title Bar ua to switch through open charts Charts window there are several ways for you to switch back and forth between them Double click the chart you would like to view in the Active Charts
247. t ER Font Select the font size and color of the text Select Show Text to hide or show your text on the chart a rack M Show Text axe B I Select Snap to have your lines snap to price bars when W Snap Iw Show Arcs M Always Show Lines moved Select if you would like to Show Arcs or Always Show Lines on your drawing 86 Gecko Software Inc Advanced Charting Tools Example of an Elliott Wave Elliott Wave Iz 1 Lire 2007 gt Q lt Q O D Q O 3 Q 2 O O 77 Track n Trade 5 0 87 o s O E ja re O O D C gt Le lt L Chapter 3 Dart Blip Formations Technical Analysis The Dart Blip formation occurs when there is a dramatic price change which is followed by an equally dramatic price change Dart Up This formation is a sudden dramatic price increase followed by an equally dramatic drop in price A dart formation can appear anywhere in a chart To trade a dart up place a sell order on the break down of the Right Feather RF along with a stop loss order just above the Tip Dart Down This formation is where a sudden dramatic price decrease occurs followed by an equally dramatic increase in price A dart formation can appear anywhere in a chart Place a buy order on the break up of the Right Feather and place a stop loss order right below the Tip Trading on a Dart Formation is extremely risky El TIME DAY ARC T
248. t will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Price Volume Oscillator PYG Periods 12 26 Py Bl os E Trigger Line LightSeaGre Thresholds E 0 00 E Yellow 2 0 00 E Yellow 3 0 00 E vello 4 0 00 C Yellow BuySell Arrows When Indicator is Visable E Crimson Lu Show Arrow Arrow Color 178 PVO Periods Specify the number of days to be used in calculating the PVO PVO Choose the color line style and line thickness of your line Trigger Specify the number of days used in calculating the trigger period Line Choose the color line style and line thickness of your trigger line View up to four Thresholds at values and colors of your choice Choose when you want Buy Sell Arrows to show and what color Gecko Software Inc Using Indicators Rate of Change ROC The ROC indicator is used to help a trader determine the rate at which a market is either increasing or decreasing in strength or weakness A rising rate of change indicates an advancing market while a decreasing rate of change indicates a declining market As the rate of change line approaches the centerline the rate of change is considered to be in equilibrium This is somewhat of a misnomer
249. t will save your current personal settings Moving Averages Line Choose the color line style and line thickness of M Average your indicator line Line E FireBrick Period Period The number of bars or interval used to Type Simple calculate the moving averages Data Close ates Type Select Simple Linear Weight or Exponential Line C Blueviolet Data Select Open High Low Close Mean Median or Mode Period 10 Type Simple Data Close Average 3 Line violet m Period Type Simple Data Close ep e O 2 qv M O Cc gt O gem D gt O 212 Gecko Software Inc Overlay Indicators Parabolic Stop and Reversal PSAR The Parabolic SAR developed by Welles Wilder creator of RSI and DMI sets trailing price stops for either long or short positions Also referred to as the stop and reversal indicator Parabolic SAR is more popular for setting stops than for establishing direction or trend Wilder recommended establishing the trend first and then trading with Parabolic SAR in the direction of the trend If the trend is up but the underlying price drops back below the trailing PSAR indicator then sell or liquidate your long position If the trend is down and the underlying price rises above the trailing PSAR indicator then buy or liquidate your short position Calculation Once the market establishes a direction the initial SAR becomes t
250. tablished by the CFTC The weekly reports for Futures Only Commitments of Traders and for Futures and Options Combined Commitments of Traders are released every Friday at 3 30 p m Eastern time Track n Trade 5 0 257 D ES au Qo 0 Le qu pu uc O c 0 E oO O Chapter 12 COT in the Indicator Window When shown in the Indicator Window the outer most numbers are the range of the largest of the three commitment of traders Commercial Large and Small The inner numbers are the range of the Open interest of all of the commitment of traders 27 0455 1522996 COT Fercent Open Interest Scale Displaying the Commitment of Traders Indicator Click on the COT button located in your Indicators Toolbar 258 Gecko Software Inc Commitment of Traders Plug in Preferences Open the Preference tab from the Control Panel on the left of your screen Select COT from the Indicators Toolbar The preferences will appear in the Control Panel Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Commitment of Traders v Commercial Iv Mon Commercial Large Speculators
251. ten considered among the most mathematically complex of all applied areas of finance Financial analysis are now able to calculate with alarming accuracy the fair market value of a financial option Gecko Software Inc employs the calculations developed in 1973 by Fischer Black and Myron Scholes This model is known as the Black and Scholes Options Pricing Model The Black and Scholes pricing model uses a sophisticated mathematical formula to calculate the theoretical value of an option using variables such as market open high low and close values interest rates volatility calculations and other such information to give us these all important values Track n Trade 5 0 is first and foremost a trading simulation software application where you are able to go back in time nearly 30 years and practice trading forward one day at a time In essence we are giving a trader 30 years of simulated trading experience in a matter of hours days or possibly weeks We allow the trader to use actual historical futures market OHLC Open High Low Close data to simulate trading the commodities market In that regard it would be nearly impossible for us to assemble a complete set of 30 years of historical options data which would allow users this same historical data training privilege Also due to the massive amount of data this would require and given today s limits of computer speeds hard drives and storage capacity trying to provide this ty
252. th a maintenance margin requirement of 300 00 Our speculator must have at least 405 00 on deposit with his broker before he could enter the market He would need to have an account liquidating value of at least 300 00 per contract in order to stay in the position Let s assume that our speculator has 1 000 in his account and decides to buy 2 contracts of March Corn at 2 35 bushel on January 2nd He is able to buy this because he has more than the initial margin requirement of 810 00 405 00 initial margin x 2 contracts 2 810 00 With a 50 00 round turn commission rate 25 00 in and 25 00 out our speculator s broker would charge him 50 00 in commissions as well 18 Gecko Software Inc Introduction to Futures If March Corn settled at his entry price of 2 35 bushel his account liquidating value would be 950 00 1 000 00 initial deposit 50 00 commission to buy 2 contracts of Corn Since the liquidating value of the speculators account funds on deposit open position profit or loss is greater than the maintenance margin requirement of 300 00 per contract or 600 00 for 2 March Corn he is able to stay in the trade The next day much to our speculator s detriment Corn prices drop by 5 cents Our speculator now has an open position loss of 500 00 and an account liquidating value of 450 00 1 000 00 50 00 commission 500 00 open position loss 450 00 Since this value is less than the Maintenance Margin requirement
253. that volume levels are generally above average and relatively heavy When the PVO is below zero volume levels are generally below average and light When PVO is positive the shorter EMA of volume is greater than the longer EMA of volume When PVO is negative the shorter EMA of volume is less than the longer EMA of volume Directional Movement The general overall direction of the PVO gives the trader a visual of market momentum and direction A rising PVO signals volume levels are increasing and a falling PVO signals volume levels are decreasing Moving Average Crossovers The last variable in the PVO forms the signal line For example PVO 12 26 9 would include a 9 day EMA of PVO as well as a histogram representing the difference between the PVO and its 9 day EMA When PVO moves above its signal line volume levels are generally increasing When PVO moves below its signal line volume levels are generally decreasing Movements in the PVO are completely separate from price movements Movements in PVO can correlate with price movements to assess the degree of buying or selling pressure Calculation The calculation of PVO s here Volume Oscillator 96 PVO Vol 12 day EMA Vol 26 day EMA Vol 12 day EMA x 100 C o Q 2 O Q O n ep Increasing and decreasing the exponential moving average variables changes the PVO to reflect a longer or shorter trading time period The absolute values of the PVO indicator are
254. the lower threshold A sell signal occurs when the ULT line crosses from above the upper threshold to below the upper threshold Ultimate Osillatoar 71 92 Preferences Right click on the ULT button in your Indicator toolbar and select ULT Settings The Preferences Tab will open in the Control Panel and the ULT preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To All Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Ultimate Oscillator ULT Periods Specify the number of days to be used in ULT Periods zi n c calculating the SRSI Line a black Thresholds Line Choose the color line style and line thickness of Mai 7000 s amp yellow your line E 30 00 IL Yellow Fa ooo Draw m 7 View up to four Thresholds at values and colors of your choice When calculating buy sell signals Threshold 1 is used as the upper threshold and Threshold 2 is used as the lower threshold default values set at 70 and 30 C o Q 5 2 O Q O PR ep 4 U DD sg C Yellow BuySell Arrows Show Arrow When Indicator is Visible Arrow Color n HoneyDew Choose when
255. the SRSI preferences will be displayed Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Stochastic Relative Strength Index SRSI Period Specify the number of days to be used in SRSI Period m calculating the SRSI LInderlving RSI Period 14 Calculation Exponential Underlying RSI Period Specify the number of days Line BH Black used in calculating the Underlying RSI Thresholds 1 7000 E Yellovi Calculation Choose from Exponential Simple or T2 3000 Yellow Wilder s Smoothing ES 0 00 E Yellow 4 000 Yell lues your line Bury Sell Arrows Line Choose the color line style and line thickness of when Indicator is Visible Show Arrow EE View up to four Thresholds at values and colors of your Arrow Color C LightPink choice When calculating buy sell signals Threshold 1 When calculating Buy f Sell arrows For SRST is used as the upper threshold and Threshold 2 is used as Threshold 1 is used as th threshold ipee ass SEE GEER ESTE the lower threshold default values set at 70 and 30 N pe O qu Le i
256. the current move This placement of the two averages in relationship to the base line 1s calculated by looking at the exponential moving average of the difference between the two averages Even though the two averages may cross the divergence or true indication of the signal is not shown until both averages cross the base line Keeping this in mind an ideal buy signal is seen on a move where the shorter term average moves above the other average and both averages cross above the base line of zero A sell signal would be the opposite of this The histogram method of MACD is read as a straight line above or below the zero base line This line represents the difference between the Moving Averages When the moving averages move above the base line they are indicating a buy and as the difference between the averages increases the lines will get taller The opposite is true of a sell signal Track n Trade 5 0 s ability to display MACD in this fashion is vital because it allows you to read the strength of the current trend along with the signal to buy or sell When MACD is plotted as a histogram the values used to plot the histogram are the differences between the two moving averages on each day The trigger line that appears on this chart is an average of the histogram data or a smoothed view of the histogram Using the MACD as a histogram will allow the trader to spot divergences between the indicator and the market price A divergence is
257. the market the volatility and the settings you may need to adjust the thresholds to either higher or lower settings to obtain signals Once the ULT line crosses above the upper threshold into the overbought region it is time to anticipate a reversal in price and lower prices to ensue When the ULT line crosses below the lower threshold it is time to anticipate a reversal in price and anticipate prices to rise once again Many traders like to use a 50 line to reconfirm price action Crossing the 50 line is a confirmation of the overall trend Calculation The True Low TL is the lower of today s low or yesterday s close Calculate today s Buying Pressure BP like this BP Today s close Today s TL Calculate today s True Range TR by finding the largest outcome of one of the following equations TR Today s High Today s Low Today s High Yesterday s Close Today s Close Today s Low Calculate BPSum1 BPSum2 and BPSum3 by adding up all of the BPs for each of the three specified time frames Calculate TRSum TRSum2 and TRSum3 the same way with the TR s The Raw Ultimate Oscillator RawUO is calculated here RawUO 4 x BPSuml TRSuml 2 x DPSum2 TRSum2 BPSum3 TRSum3 The Final Ultimate Oscillator is calculated here FUO RawUO 4 2 1 x 100 192 Gecko Software Inc Using Indicators Buy Sell Signals A buy signal occurs when the ULT line crosses from below the lower threshold to above
258. the upgrade in order to use the SOFTWARE PRODUCT A SOFTWARE PRODUCT labeled as an upgrade replaces and or supplements the product that formed the basis for your eligibility for the upgrade You may use the resulting upgraded product only in accordance with the terms of this EULA 4 COPYRIGHT All title and intellectual property rights in and to the SOFTWARE PRODUCT including but not limited to any images photographs animations video audio music text and applets incorporated into the SOFTWARE PRODUCT the accompanying printed materials and any copies of the SOFTWARE PRODUCT are owned by Gecko Software Inc or its suppliers AII title and intellectual property rights in and to the content which may be accessed through use of the SOFTWARE PRODUCT is the property of the respective content owner and may be protected by applicable copyright or other intellectual property laws and treaties This EULA grants you no rights to use such content All rights not expressly granted are reserved by Gecko Software Inc Flag images distributed with this software are copyright 2007 Gecko Software Inc and its licensors including but not limited to the Corel Corporation and the Microsoft Corporation All Rights Reserved 5 DUAL MEDIA SOFTWARE You may receive the SOFTWARE PRODUCT AND OR Educational materials in more than one medium Regardless of the type or size of medium you receive you may use only one medium that is appropriate for your computer
259. ther computer will automatically kick off any other active user logged in and using that same login and password The person who is logged into the system has complete access to all account information It is the user s responsibility to keep their login and password secure Gecko Software will not be liable for loss due to lost or stolen login information Gecko Software recommends users use highly cryptic login and password information If you feel your login and password information has been compromised contact Gecko Software immediately Storage Network Use You may also store or install a copy of the SOFTWARE PRODUCT on a storage device such as a network server used only to install or run the SOFTWARE PRODUCT on your other COMPUTERS License Pak If this package is a Gecko License Pak you may install and use additional copies of the computer software portion of the SOFT WARE PRODUCT up to the number of copies specified above as Licensed Copies 2 DESCRIPTION OF OTHER RIGHTS AND LIMITATIONS Academic Edition Software If the SOFTWARE PRODUCT is identified as Academic Edition or AE you must be a Qualified Educa tional User to use the SOFTWARE PRODUCT If you are not a Qualified Education User you have no rights under this EULA To determine if you are a Qualified Educational User please contact the Gecko Sales Information Center in the USA at 435 752 8026 Not For Resell Software If the SOFTWARE PRODUCT is labeled N
260. tick Charting Introduction Technical Analysis A Brief Background Candlesticks Price Bars Common Candlestick Terminology Candlestick Reversal Patterns Candlesticks Conclusion Gecko Software Inc 231 233 233 235 236 237 238 239 240 241 243 245 245 247 251 253 254 254 255 257 258 259 261 263 265 266 269 271 271 272 274 275 279 Table of Contents Sy o D O O O 5 lum D bb T Track n Trade 5 0 9 Table of Contents ep 2 Lem D em oO Qe o 5 10 Gecko Software Inc END USER LICENSE AGREEMENT FOR GECKO SOFTWARE IMPORTANT READ CAREFULLY This Gecko End User License Agreement EULA is a legal agreement between you either an individual or a single entity and Gecko Software Inc corporation for the Gecko software product identified above which includes computer software and may include associated media printed materials and online or electronic documentation and data SOFTWARE PRODUCT The SOFTWARE PRODUCT also includes any updates and supplements to the original SOFTWARE PRODUCT provided to you by Gecko Any software provided along with the SOFTWARE PRODUCT that is associated with a separate end user license agreement is licensed to you under the terms of that license agreement By installing copying downloading accessing or otherwise using the SOFTWARE PRODUCT you agree to be bound by the terms of this EULA If you do not
261. ting Front Month Data will use data from one contract month to the next in chronological order Jan 2006 Mar 2006 May 2006 Selecting Contract Month Data will use data from a contract month from each successive year Jan 2003 Jan 2004 Jan 2005 Charts opened with the Contract Month Data setting will have the letter month as part of the chart symbol in the Active Charts window To cut off the end of the contract used in your long term chart click on the empty check box in front of Read ahead to next contract month before the end of the current contract month Specify the number of days in the box that you would like to exclude This option is best used for historical data If you are looking at a long term chart that includes current data and you set this option to exclude 10 days the chart will roll over to the next contract 10 days early Gecko Software Inc Using Indicators Implementing Indicators into Your Trading Strategy Track n Trade 5 0 129 Chapter 7 N pu O qu Le C e 77 D 130 Gecko Software Inc Using Indicators introduction Track n Trade 5 0 includes twenty five indicators that are displayed in a window below the Chart Window This window is referred to as the Indicator Window There are also eleven Overlay Indicators that are displayed directly on your chart in the Chart Window that are explained in the next chapter Many of the indicators included in Track n
262. tings To All Charts will apply your selected settings on all open charts Save Settings As My Defaults will save your current personal settings Track n Trade 5 0 199 O lt D V lt 5 Q O a r O RJ a Chapter 8 Alligator A unique use of fractal geometry and nonlinear dynamics is used to create the method of calculations for the Alligator Indicator Used in combination with the Gator Indicator the Alligator has proved to be effective at pinpointing large market trends Example of the Alligator Hogs Lean Combined Jul 07 2 10 13 Aug 2008 Sep 2008 Oct 2006 Now 2006 Dec 2006 ep e O 2 qv M O Cc gt O gem D gt O Components Alligator s Jaw blue line The Balance Line for the timeframe that was used to build the chart 13 period Smoothed Moving Average moved into the future by 8 bars Alligator s Teeth red line The Balance Line for the value timeframe of one level lower 8 period Smoothed Moving Average moved by 5 bars into the future Alligator s Lips green line The Balance Line for the value timeframe one more level lower 5 period Smoothed Moving Average moved by 3 bars into the future 200 Gecko Software Inc Overlay Indicators The Lips Teeth and Jaw of the Alligator show the interaction of different time periods As clear trends can be seen only 15 to 30 percent of the time it is essential to follow them and refrain from working on market
263. tion Is the current close higher than the previous close If the market is accumulating subtract the difference between current close and low Add the difference to the Accumulation Distribution Index Traders perceive an undervalued market and they buy C o Q 2 O Q O n ep If Closet gt Closet 1 then ADt ADt 1 Closet Lowt The second comparison checks for no change in price If correct the AD index does not change If Closet Closet 1 then ADt ADt 1 The last and final comparison checks for a down market It looks for the current close below previous close If it s correct the market is distributing The software first computes the difference between current high and close Then it subtracts that difference from the AD index This measures market distribution Traders perceive an overvalued market and are selling If Closet Closet 1 then ADt ADt 1 Hight Closet Track n Trade 5 0 133 N pe O qu Le e E 77 D Chapter 7 ADt The accumulation distribution index for the current period ADt 1 The accumulation distribution index for the previous period Closet The closing price for the current interval Closet 1 The closing price for the previous interval Hight The true high price for the current interval current high or previous close Lowt The true low price for the current interval current low or previous close Example of the Williams AD in the
264. tor During periods of extreme price variation the two lines can become very volatile and the ADX is used to compensate for this The best application of DMI is present when used with another indicator DMI should either confirm or contradict the indicator being used It is also best to use DMI in long term trade situations Because the study is not as sensitive as other indicators it is appropriate to use it as a confirmation tool When the DMI is advancing the average is higher on the 0 to 100 scale trend following systems are best employed Likewise with a decreasing DMI average the line is lower on the scale closer to 0 so a counter trend system might be best These traits represent the fact that as the average line goes higher in the scale the strength of the trend is gaining and as the ADX goes lower the trend is losing strength It is also important to look at the individual lines for changes in price movement The other application for DMI is to look at the D and D lines themselves When the D line crosses above the D line a buy signal is initiated This indicates that the positive price direction is greater than the negative Conversely once the D line crosses below the D line a sell trigger is present The negative price movement is overtaking the positive Welles Wilder himself said that he was not comfortable using these two lines by themselves When looking at reversals the ADX should be above both lines and once it turns
265. trategy A separate note pad is provided for each chart Track n Trade 5 0 41 Chapter 1 Data Downloads Before you can look at any charts you need to download the specific commodities that you would like to view The data download utility in Track n Trade 5 0 is called FIDO and is simple to use Easily control the commodities that you download with the Commodity Chooser and keep current with FIDO Commodity Chooser t ommo diy E ce bi g g zoe You can bring up the commodity chooser window by Check ths bos gn ihe FU TUME F polum bo reos Hast commu an adabie E M UR E selecting the Commodity Chooser button from your Main Check Boe box b the FRACTION cnn in eher hache dole toolbar selecting Commodity Chooser from your View formes for tha commodis Decimal lai creme F Tc r menu or clicking Click to Choose a Commodity from the Lima Ha ni Usher Fraser dropdown menu in the Commodity tab of your Control Puchaban Della Deer ubere B Sater Westem Diecon J B panel Fach Pound CHE ob at Fr Fra CHE jijian Dres n ir Date CME Morbred Fe E Er 7 Lo D P In this window you can select which commodities you Abs a Leer fl Eti Fede pen Duae B would like to download The options data is only available Caas Lree Caniat lc Lire Fi pen urna Einari Cpa Cluicry cotes Uman Ci rai Caties mea JU pen Dunes sena High rasa oriei app Hah Giris DU pen ahi
266. ts will apply your selected settings on all open charts Save As My Default will save your current personal settings Track n Trade 5 0 169 Chapter 7 On Balance Volume Line Choose the color line style and line thickness of Line BH Crimson your line Thresholds Cai ooj vew View up to four Thresholds at values and colors of your r2 oco w v E veew choice 3 ee v F veew af sofe Br N pe O qu Le e E 77 D 170 Gecko Software Inc Using Indicators Percent Price Oscillator PPO The PPO indicator shows the relationship between two moving averages The PPO indicator is a modification of the highly regarded and effective MACD indicator This enhancement provides us the ability to receive the differences between the two moving averages as a percentage This allows the trader to easily compare stocks with different prices For example a PPO result of 20 means that the short term average is 2096 above the long term average Calculation To calculate the PPO subtract the 26 day exponential moving average EMA from the nine day EMA and divide this difference by the 26 day EMA The end result is a percentage that tells the trader where the short term average is relative to the longer term average PPO Fast EMA Slow EMA Fast EMA Additionally the PPO histogram can be calculated by using the MA of a PPO itself PPO Histogram PPO EMA PPO
267. ts within the pitchfork affords traders the opportunity to trade a channel system within a trending market Andrews Pitchfork Tool EV LA Eo TIHE DAY ARC C V ov pele enn You can apply this theory to your charts by selecting the Andrews Pitchfork tool from your Advanced Charting toolbar Click where you want the handle of the pitchfork to be at the end of the previous trend Your next two clicks will form the base of the fork or the tops of the next two trends You can elongate the pitchfork to the length desired Click to place Resizing the Andrews Pitchfork Select the drawing by clicking on it You will know the drawing is selected when boxes appear at the corners Click on a box and drag it to your desired location Release mouse button to place Track n Trade 5 0 93 gt lt Q O D O O 5 Q 2 O Oo 77 o s O v O O D C gt Le lt L Chapter 3 Moving the Andrews Pitchfork Select the drawing by clicking on it Drag to the new location and release the mouse button to place Deleting the Andrews Pitchfork Select the drawing by clicking on it Press the Del Delete key on your keyboard You can also right click the drawing and select Delete from the dropdown menu Drawing a Schiff To draw schiff pitchfork a pitchfork with the same base but with the median rooted at one of the square markers on your two dotted angle lines yo
268. tting back the early entry signals the projection part of this indicator actually projects forward where we anticipate tomorrow s lines to be and let us know if we are anticipating a crossover or not Example of Advantage Lines Hogs Lean Combined Jul 07 Bulls n Bears Trading System i i ia put pen _ Le eret gun ca cat Hori e i 14 10 13 d Aug 2006 Sep 2008 Oct 2008 Now 2006 Dec 2006 266 Gecko Software Inc Bulls n Bears Trading Preferences Open the Preference tab from the Control Panel on the left of your screen Select the Advantage Line on your screen The preferences will appear in the Control Panel Once you click on the chart the Preference tab will go back to chart settings Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To AII Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Advantage Lines Period 1 2 Specify your periods by dragging
269. u will use the schiff operation First you will want to specify in your Pitchfork preferences what color you would like the new pitchfork to be If you don t specify the schiff will be the same color as your original pitchfork Right click on one of the square markers on the two dotted lines Select Add Schiff Median from the dropdown menu The schiff will appear and you can resize as you would like Preferences Select the drawing by clicking on it The properties will appear in the preferences section of your control panel Or right click on the drawing and select properties from the dropdown menu Restore Settings TNT Default will change your settings back to the original software settings My Default will change current settings to your personalized default settings Apply To All Charts will apply your selected settings on all open charts Save As My Default will save your current personal settings Pitchfork Tool You can choose the color line style and line thickness of your lines Extensions Select the boxes next to the extensions you want to add to your pitchfork drawing The odd numbers are placed below the main line and the even numbers are placed above 94 Gecko Software Inc Advanced Charting Tools Andrews Pitchfork Tool Sliding Extensions Select to have one or two sliding fe CEE ur extensions Click on the extension on your chart and me drag it to where you want it It will stay parallel
270. uction to candlestick analysis After having read this you will have merely scratched the surface of the many patterns and variables that can go into candlestick analysis No attempt was made to provide a thorough analysis of each and every pattern In fact many formations were left out as they cross the border into a more complicated analysis For a more complete overview of candlestick analysis it is highly recommended that you read the book that is referred to below A large portion of the material in this introduction is taken from an excellent book called Japanese Candlestick Charting Techniques A Contemporary Guide to the Ancient Investment Techniques of the Far East You can find this book in The PitMaster s Bookstore www thepitmaster com In some cases sentences were taken almost verbatim as there was no better way to say what Mr Steve Nison the author already said In his book Mr Nison completely explains candlesticks and their formations but more importantly explains how to combine candlestick analysis with traditional technical analysis It is highly recommended that you consider purchasing this book As traders we need many trading tools in our arsenal and a basic knowledge of candlesticks provides a trader much needed ammunition Also remember that no matter what the trading tool no matter how advanced or ancient it is only effective when put into practice properly This is your job as the trader O Q ex D on
271. value in the different perspective candlesticks bring to the table In my opinion they are much more visually appealing and convey the price information in a quicker easier manner Track n Trade 5 0 271 ie T qu on EG v O C v Chapter 14 History of Candlestick Charts Candlestick charts are on record as being the oldest type of charts used for price prediction They date back to the 1700 s when they were used for predicting rice prices In fact during this era in Japan Munehisa Homma become a legendary rice trader and gained a huge fortune using candlestick analysis He is said to have executed over 100 consecutive winning trades The candlesticks themselves and the formations they shape were given colorful names by the Japanese traders Due in part to the military environment of the Japanese feudal system during this era candlestick formations developed names such as counter attack lines and the advancing three soldiers Just as skill strategy and psychology are important in battle they are also important elements in the midst of a trading battle Candlesticks Price Bars Candlestick charts are much more visually appealing than a standard two dimensional bar chart As in a standard bar chart there are four elements necessary to construct a candlestick price bar the open high low and closing price for a given time period Here are examples of candlesticks with definitions fo
272. vely referred to as the Restricted Components to any country person or entity subject to U S export restrictions You specifically agree not to export or re export any of the Restricted Components 1 to any country to which the U S has embargoed or restricted the export of goods or services which currently include but are not necessarily limited to Cuba Iran Iraq Libya North Korea Sudan and Syria or to any national of any such country wherever located who intends to transmit or transport the Restricted Components back to such country ii to any person or entity who you know or have reason to know will utilize the Restricted Components in the design development or production of nuclear chemical or biological weapons or iii to any person or entity who has been prohibited from participating in U S export transactions by any federal agency of the U S government You warrant and represent that neither the BXA nor any other U S federal agency has suspended revoked or denied your export privileges MISCELLANEOUS This EULA is governed by the laws of the State of Utah If this product was acquired outside the United States then local law may apply Should you have any questions concerning this EULA or if you desire to contact Gecko for any reason please contact Gecko on the World Wide Web at www GeckoSoftware com LIMITED WARRANTY Gecko Software provides a full 30 days to try our software plug ins and expansion packs and data service
273. vement Wilder defines directional movement as the largest part of the current trading range that is outside the previous trading range From a mathematical view it is the largest value between two equations Hight Hight 1 or Lowt Lowt 1 This is only true when the current low is less than the previous low or the current high exceeds the previous high Both of these conditions do not have to be met only one It is the largest portion of the trading range outside of the previous trading range It is possible for the directional movement to be zero This occurs when the current trading range is inside the previous trading range or when the trading ranges current versus previous are equal Directional movement is up or positive when the difference between the highs is the greatest It is down or negative when the difference between the lows is the largest value The up directional movement is DM and down directional movement is DM Do not let the plus and minus sign designation mislead you They only indicate upward or downward movement not values The directional movement value is always a positive number or absolute value regardless of upward or downward movement This concept is crucial to understanding the computations for the indicator If you are confused draw some illustrations or work with actual price data to determine the directional movement values C o o 2 O Q mp O ER ep The next step in dete
274. w from a simple graphical representation if the current price of an option is inline with market sentiment and trading at a premium or a discount O 5 77 v C e Track n Trade 5 0 241 E O E Q v Q r Q Chapter 9 Options data is often times very spotty and full of holes and due to the enormous amount of data generated by the options exchanges there is very little done to try and repair these holes or bad data ticks When options trade they begin a data stream where they generate an Open High Low and Close for each day s trading range but some options which are usually further out of the money don t trade every single day This causes gaps or holes in the data stream One way or another these gaps or holes are either filled or just left blank Often times these gaps are filled by data vendors who simply pull yesterdays values forward to today They ll do this for weeks on end which only serves to create a very inaccurate and unreliable value stream a stream of data that would be difficult to use in any kind of simulated trading environment or to provide much real market value Perfect Options Stream D Typical Options Stream CJC L iL BIL 1 Common Options Stream CACA Gecko Options Stream Market Data Black amp Scholes Just like the genetic scientists did in the classic movie Jurassic Park by filling the gaps in the dinosaurs DNA strand with frog DNA allowin
275. w Arrow When Indicator is visible choice When calculating buy sell signals Threshold 1 Arrow Color C Red is used as the upper threshold and Threshold 2 is used as When calculating Buy Sell arrows for FSTO the lower threshold default values set at 80 and 20 Threshold 1 is used as the upper threshold Threshold 2 is used as the lower threshold C o Q 5 2 O Q O PR ep Choose when you want Buy Sell Arrows to show and what color Track n Trade 5 0 151 N pe O qu Le e E 77 D Chapter 7 Gator GTR Fractal geometry and nonlinear dynamics is used to create the method of calculations for the Gator Indicator Used in combination with the Alligator an Overlay Indicator the Gator has proved to be effective at pinpointing large market trends The Gator was created on a relative scale what seems to be a large move in the market today may well be just a small move on the historical scale since the Gator graphically represents itself only against its own historical price line As the market trends the Gator will also trend causing historical representations of market momentum and movement to pale in comparison Example of the GTR in the Indicator Window INPSEN v cenar grata FP Preferences Right click on the GTR button in your Indicator toolbar and select GTR Settings The Preferences Tab will open in the Control Panel and the GTR preferences will be displayed O
276. written and unwritten and the only way to stick around is through prudent money management 24 Gecko Software Inc Introduction to Futures Orders to Manage Your Future The size of your account and the amount of risk you are personally able to bear is a completely personal matter Some very successful traders like Richard Dennis who is rumored to have parlayed 1 000 00 into several millions in the futures markets have made fortunes starting with relatively small sums of money Most professional fund managers risk as little as 1 of their account equity on any given trade Unfortunately both of these methods are probably out of the question for most people starting out in the futures market The odds of turning 1 000 00 into several million in a couple of years is akin to hitting 6 on the roulette wheel 5 times in a row but risking 1 of a 1 000 means only risking 10 00 per trade which is just not practical By postponing your entrance into the futures market until you have for example a 5 000 00 minimum of genuine risk capital not the kids college fund the rent or your next mortgage payment you could achieve a level of diversity and risk theoretically then risking 1096 of your account 500 00 before commissions and fees on any one trade realistically This would greatly reduce your risk of ruin and increase your ability to trade longer and hopefully become more proficient in the long run Types of Orders At the
277. ws Profit or Loss Sell Price Buy Price x Contract Size x Number of Contracts Example Assume a speculator thinks that Corn prices will go down in the coming weeks He sells 2 March Corn contracts at 235 cents per bushel 2 35 initiating a short position Having studied the behavior of Corn using his Track n Trade 5 0 our speculator was correct and Corn prices fell from 235 to 220 over the next two weeks Given the 15 cent drop in Corn prices our speculator has a 1 500 00 open position profit and decides to cash in his winning by buying 2 March Corn futures at 220 20 Gecko Software Inc Introduction to Futures Profit or Loss Sell Price Buy Price x Contract Size x Number of Contracts 235 220 15 cents 0 15 x 5 000 bushel contract size 750 00 per contract 750 00 per contract x 2 contracts 1 500 00 before commissions and fees Now assume that another speculator buys 2 March Corn at 235 initiating a long position After two weeks prices drop by 15 cents to 220 and he offsets the long position by selling 2 March Corn at 220 His loss from the transaction would be 1 500 00 before commissions and fees Profit or Loss Sell Price Buy Price x Contract Size x Number of Contracts 220 235 15 cents 0 15 x 5 000 bushel contract size 750 00 per contract 750 00 per contract x 2 contracts 1 500 00 before commissions and fees As you can see whether you are long or short the basic
278. you want Buy Sell Arrows to show and When calculating Buy j Sell arrows For ULT Threshold 1 is used as the upper threshold Threshold 2 is used as the lower threshold what color Track n Trade 5 0 193 N pu O m v Le e 77 D Chapter 7 Volume Open Interest V Ol Volume is a measurement of the number of contracts traded in a day It is a sign of market activity Open Interest is the number of contracts outstanding or those held overnight This is a measure of market participation In liquid markets these numbers will be consistently higher than in a thin or illiquid market These numbers are always a day behind because it takes the exchange that long to tabulate these figures When displayed Track n Trade 5 0 offsets these values to put them beneath their respective data in the chart consequently there is not a value for either volume or open interest for the most recent day of any contract Volume and Open Interest indicate participation and urgency This tells the trader which market is the correct one to be in based on its participation Volume measures the number of contracts that changed hands during that trading session This indicator of market activity can show whether trade was heavy or light giving you an idea of the possible volatility present in that market Contracts that have not been settled at the end of the day are represented by open interest New buyers and sellers entering or exiting t
279. your current personal settings Circle Tool You can choose the color line style and line thickness of your circle outline You can also determine the color of the background To make your Background Mos 7j background transparent deselect Fill Background at the Snap bottom of your preferences Iv Fil Background Circle Tool uine E Yellow s Select Snap to have your lines snap to price bars when moved 116 Gecko Software Inc Calculator Tools Calculators Made Easy Track n Trade 5 0 117 Chapter 5 D a i O Dur au O 118 Gecko Software Inc Calculator Tools Introduction Track n Trade 5 0 has included the Dollar calculator and the Risk Reward calculator to help simplify the trading process With both the Dollar calculator and the Risk Reward calculator simply click and drag between two locations on the chart to instantly know the value between the two points Dollar Calculator Use the Dollar calculator to find the dollar value between two points on the chart Select the Dollar calculator tool from your Calculators toolbar Click on your chart where you want the calculator to start and drag to where you want the calculation to be completed Release the mouse button to place The dollar amount of the chart movement will be calculated from the beginning and end point values and will be displayed in the center of the line Example of the Dollar Calculator Cop
280. your chart The Commodity Chooser option will open the Commodity Chooser window Select Long Term Settings to customize your long term charts or select Spread Margins to open the spread margins window Select Load and Save Themes to customize your themes Track n Trade 5 0 35 G D Ko ON CO D C Le Q pun U ep le E 5 D O Chapter 1 36 Online Manual Keyboard Shortcuts How To videos Online Online Help Live Tech Support Report Problem My Account Manager Reset Questions About Track n Trade Check For Updates Help Menu Online Manual Keyboard Shortcuts How To Videos Online Help Report A Problem and My Account Manager will open a window in your browser and link you to the appropriate website When you click on Live Tech Support a pop up window will direct you to call Gecko Software Inc at the appropriate phone number 435 752 8026 The tech support will give you a meeting ID that you can type into the appropriate box There are times when you will receive a pop up window asking if you want to finish an action such as deleting a chart If you select Don t ask me again in the window you won t receive the notification next time you complete the same action By selecting Reset Questions you will start receiving all pop up windows again Clicking on About Track n Trade will open a window with information about the version instal

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