My Trading Screens

I was asked recently about what I keep on my computer screens while trading and I thought that this would make a good post. These are the 3 screens that I keep up while day trading...I don't think this much is required all at once while trading in longer time frames (in fact, some day traders keep less than this on their screens while trading and would hate this much clutter). This is what works for me. It may change in the future, but I've kept this general setup for a little while now and have only changed minor things like changing my Up Volume v. Down Volume chart from lightspeed to thinkorswim, etc. (see below).

Screen Number 1: The Broker Software
As you can see above, this is my broker screen. This is all information that is provided by Light Speed Trading (my day trading broker). It is fully customizable and this is what I happen to be using right now. Some key points are the watchlists, the level 2 quotes in the lower left hand corner (which is where I also enter orders with hot keys), a 5 and 15 minute chart of whatever stock that I have pulled up in the level 2 box and a ticker alert in the top right hand corner (which wasn't working yesterday for some reason) that shows new highs and lows for stocks that I have entered into an alert list.

Screen Number 2: Trading ScreenThis screen is my actual trading screen. I use it to monitor the stocks that I'm trading or looking to trade. These charts are through thinkorswim's program...a very snazzy platform, especially for a retail program. I used to have eSignal, but the firm I trade with quit paying for it so I figured I'd try thinkorswim for a bit. So far its working pretty well. On the picture above, I have numbered my different chart windows and given a brief description or name for each chart. The most important thing about this screen is that charts 1-5 are linked, meaning that when a symbol is entered in one, it gets pulled up in all of the charts. I have these 5 charts setup to show me the multiple time frames that I use for trading.

A couple of other important things in this screen are the TICK chart, the VIX chart and the NYSE Advancers v. Decliners and the NYSE Advancing Volume v. Declining Volume. Then I've got two windows that I keep 15 minute charts of either ETFs (spy, qqqq, xlf, etc.) or sometimes I'll also keep a chart of a stock that I'm constantly watching (either to trade or to help manage my current trade). One last thing that I want to point out is that the 5 and 1 minute charts are small, the smallest on the screen. That's because I only use the 1 minute for exiting a piece of a trade and the five minute for pulling the trigger once there's a setup on the higher time frames. You can go crazy watching 5 and 1 minute charts for entries.

Screen Number 3: Futures and Forex Screen I keep this screen up at all times while trading. On it I have 15 minute charts of the ES futures contract (S&P emini), the NQ (Nasdaq 100) and the YM (the mini dow jones). I monitor these three markets to give me confirmation on break outs and just to keep an eye on the overall market. I also have down in the bottom left corner, a 15 minute chart of gold (YG). This is used the most when I'm trading a gold stock. Next to it is a 15 minute chart of the Eur/Usd pair as it's always good to know what this currency pair is doing. And finally, I keep the 30 year bond contract up in the bottom right hand. This isn't always up though, sometimes I'll put up oil or natural gas if I'm trading a stock that is involved with one of those commodities.

There you have it. Three screens that give me a lot of information with a quick glance.

Hope everyone is having a great week trading so far.

TLT

Recognizing a Range Bound Market: Key to avoiding the Chop

After the first hour of trading, it is clear that today is a range bound market with a high likelihood of chopping up anyone who attempts to trade it (unless your trading method is geared specifically for this type of market). I've made only one trade this morning, only because there is nothing to do right now. I've got JPM on my radar as a long and GG on my shortlist, it's just a matter of them properly setting up for the trade.

So instead of trying to trade and getting chopped up I thought I'd post about how I attempt to recognize these types of day. Learning how to recognize this type of poor trading environment and keeping myself out of the market when it's like this (sometimes that's the hard part) has positively affected my P&L way more than anything else. You can make some killer trades when conditions are good but it's all for nothing if you just end up giving all your profits back when the chop fest begins.

Ok, here's what I'm looking at this morning:So that's a pic of a choppy market that is likely going to continue to be range bound. On a good trading day, you want to see the opposite. The watchlist should be mostly one color. The line charts for the advancers/decliners, up volume/down volume, and VIX/SPY should all show the lines heading in opposite directions to indicate a trending market. Today they're just crossing back and forth over each other...a sign to go post on the blog instead of trading.

Another indicator that helps is the NYSE TICK. This indicator shows the NYSE stocks that are making upticks vs. downticks. Readings between -400 and +400 are generally considered neutral. Everyone has their own take on how to use the tick and what levels are important. I look at +-1000, 800, and 500. The other thing I do is keep an eye on whether the majority of the ticks are in the positive or negative zone. Having a moving average helps as well. Here's a chart of today's 2m tick chart:As you can see, today's tick chart has been all over the place. That's all I've got for now, hope everyone had a good weekend.

TLT

***Update***
The market literally broke down right when I hit the post button to publish this post. I was able to catch a piece of the GG short that I had planned (short below 39 with a profit target at 38.50). Unfortunately there is not much follow through for shorts right now as the market has been in an uptrend lately. Thankfully I grabbed a piece of the sell off, I just thought it was funny that the market sold right as I published the post about the market not doing anything.

Strong Market Today, Let's Take a Look At It

It's not too surprising that stocks are strong today as there were quite a few buy programs that hit the market in the last hour of trading yesterday. As of this writing, the SPY is up approximately 1.25% and IWM (small caps) is up 1.5%...which is significant because there has been a divergence between large cap and small caps lately. One notable divergence that is still in place today is with the financials (XLF) as it is down a little and not participating in the rally, making todays rally a little suspect. Here's a screen shot of my intra-day stock monitoring screen with the SPY and some annotations:As you can see, the SPY gapped up and is currnelty holding onto gains. It's currently in an uptrend on the 15 minute time frame, but there's some overhead resistance at the $111.75 level. We'll need to see that level taken out and for it to hold in order for the SPY to see higher highs...otherwise it will just continue to chop around in that 111.75-109 range that it's currently stuck in.

At the beginning of this post I mentioned buy programs...some might wonder what this means. I (along with most other traders) monitor the NYSE tick index or the TICK for short. Various people state that certain levels are important, such as 800, 1000 or 1250 and the corresponding negatives of these values. Others monitor an average of the values and watch that to see if there's more buying or selling. Personally, I just keep track of the number of readings above 1000 and below -1000 and I note if there are several readings that are close but not quite at these levels. I also keep an eye on the 20 and 50 period moving averages on the 5 min chart to look for consistent buying or sellling.

For example, lets look at today's 5 minute tick chart:There have been 6 readings of 1000 or more on the tick and there has not been a single reading at or below -1000, although there were a few close readings around -900. In fact, the majority of this morning's tick reading were positive as indicated by positive 20 and 50 period moving average readings. What does this mean? It means that buy programs have been hitting the market and the significance of this is that the big boys are trading to the upside, at least for now. This tells me to only trade to the upside and to let profits run because the trend is likely to continue...as opposed to a choppier day evidenced by extreme tick readings in both the positive and the negative that would warrant taking profits quickly.

This is how I follow and look at the TICK chart. Note that there are several interpretations on how to use and read the tick chart. Furthermore, this post has not gone into very much depth about the tick and it assumes that you are at least familiar with it. The tick index is merely the number of stocks on the NYSE that are trading on an up tick vs. the stocks trading on a downtick. If you're not familiar with the tick index and want to learn more, a good place to start for learning about the TICK index is Investopedia with this and then read some of the links as well.

Have a profitable trading day!

TLT