Ztrader

Ztrader – Trading Decisions

How do you decide to trade ? Give some examples:

 

Fundamentals

F1 – US bond yield going up, bet on # 0945

F2 – Coal price keep dropping, bet on electricity sector

F3 – Q3 result announced, out of expectations

 

Event

E1 – placement, market overreacted

E2 – IPO

E3 – Insider keep buying (selling)

E4 – special events (special dividend, change of ownership, injection of assets, …)

 

Other people’s advices, rumors

R1 – Financial actors, ibanks, newspaper, paid services, friends, famous blogger, sing good

R2 – insider information

 

Market situations

M1- market panic, 80% stocks oversold

M2- market too hot, too many 52 weeks new high stocks

 

Relative valuations

V1 – Corresponding sector is strong in US, HK is behind

V2 – stocks in a particular sector very behind

V3 – sector is relative behind compared with other sectors

 

TA

T1 – your indicators give a signal
T2 – a stock making new high / new low

 

Or, you would mix the above, say:

F2 + T1, you know the electricity sector shall be good on lower coal price, but you want to wait for the best time to enter.

 

M1 + T1, you know oversold situation can last long, you want to avoid risk of early entry.

 

V2 + T1, you don’t know the reason why that stock is so behind, you don’t want to be trapped. A famous example is # 0246, which is very behind before gameover.

 

F3 + T1, you know the result looks good, but you want to confirm the market reaction first.

 

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So is the above common trading decisions you want to make everyday ? Part of Ztrader is built to support the above decision processes. I don’t want to press 10 keys to find out which stock in a sector is behind. I don’t want to go to HKEX to search if an insider is selling or buying a stock recently, I want it display on screen immediately. I don’t want to check how Home Depot performed daily when I own 669, I want it display immediately. Part of Ztrader is just to integrate available data together to help making a trading decision.

Other than data integration, how do you know if a particular TA indicator is a good indicator for your trade decision ? What is the historical performance ? Can you tell if trade on a particulr oversold signal can give you how much return on average ?

 

Another part of Ztrader is trading system. To build a sound trading system, one may have to go through a design, testing, performance evaluation, risk evaluation, and implementation cycle. Trading system is a much bigger topic, will share more later, if it can be shared.

 

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5 thoughts on “Ztrader – Trading Decisions

  1. The data integration is very interesting. I believe it is quite time consuming if one starts from ground. Personally I spend much of my time on the trading system itself at this moment.

    By the way, I use VB and Excel only for my system without a database engine. Processing speed and data management will definitely be a problem if I want to add the functions you described above. Can you share your experience on different database engine and programming language ? Thanks.

    1. in stock trading system, most data is quite flat. So no need to use powerful engine. I use MySQL only. For real time scanning, data will be preprocessed and store as flat file rather taking directly from database, unless you have very powerful machine.

      VBA programming is not simple to do such a task. I use mostly python.

  2. Currently I store all stock price data in Excel. Data is updated semi-auto/manually. The biggest problem for me is the scanning speed. It takes too much time to open/close thousand files. It is ok for daily decision making ‘cos high frequency trading is not my (our ?) direction, however, it is really painful for back testing and strategy development or modification. That is why I want to move the system to a better platform back up by a SQL engine. I hope PHP can do the job though it is already considered “old”.

    Have read your blog for a certain period of time. It will be great if we can exchange idea and experience the other day.

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