Is Investing in the Stock Market Gambling?

Is Investing in the Stock Market Gambling?

 wp-content-uploads-2013-01-is-investing-in-the-stock-market-gambling1-300x112 Is Investing in the Stock Market Gambling?

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wp-content-uploads-2013-01-robertburan1 Is Investing in the Stock Market Gambling?

Is Investing in the Stock Market Gambling?  Stock Trading and Casino Gambling Compared; In my opinion you can be the House.

I have argued for a long time that trading stocks and gambling are very similar.  So is investing in the stock market gambling ?

By definition, gambling means to play a game of chance for money or other stakes. And a game of chance is one in which the outcome is determined by chance rather than by the skill of its players .And by definition chance means that events happen without cause.

In trading we often see events that happen by chance, but regardless if they happen by chance we know that there are certain probabilities that some things are more likely to happen than other things.  And in Gambling probability is also a factor and that is why there does exist a link between stock trading and gambling.

Well what if investing in the stock market IS gambling?  I do not think that means that you should stop trading stocks, it only means that you need to understand something regarding probability of winning when you trade stocks.  You need to learn how to put the odds in your favor when investing in the stock market.

We trade a system, JORDI ( see automated stock trading software).  It is a very good trading system and it consistently yields good returns on our investment over time.  But as good as that may sound if we test our system in numerous markets over many years involving say about 10,000 trades, we find that it only wins about 56% of the time.

I have been studying these market statistics for nearly two decades and without presenting an argument here I will state simply that given that market movement is predominantly random, no practical trading system can be expected to do better than 60%.  If somebody brags that they have a trading system or that they can predict market behavior with 90% accuracy, I assume they are either idiots, charlatans or both.

So we work with a system that has about 56% accuracy.  In this article I will show how a system with 56% accuracy can still make tons of money and do it with little risk.  In order to do this I am going to compare stock trading with casino gambling with one significant difference: WE ARE THE HOUSE!

In order to understand the casino side of my argument you have to understand at least one popular casino game, roulette.  The roulette table has 36 numbers, half are red and half are black.  It would appear that if you put $10 on one number that your odds of losing would be 36:1.  But you could lose many times and still break even because eventually the ball will fall on your number and the house will pay you 36:1 or $360.

HOWEVER, there is a catch.  If you examine the roulette table there is not just 36 numbers, there are 38 numbers.  There are in fact two extra slots, both green, 0 and 00.  When the ball lands on one of those slots the house gets everything.

How does this change the odds?  What this means is that the house advantage at the roulette table is 5.3%.  What 5.3 percent house advantage means is that the house will make $5.30 for every $100 bet at the roulette table.

No person can win at roulette if they keep playing.  Over time the house ALWAYS wins and they will always win at least $5.30 for every $100 bet.

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OK, now if we are trading stocks how do we become the house?  We become the house by trading a system accurately that consistently wins with 56% accuracy.  This assumes of course that our average wins and our average losses are about the same.  If our system is 56% accurate our house advantage is 6 % and we will make $6 for every $100 bet.

Now that we know that how should we trade?  Well obviously we need to trade a lot.  Our profits are going to be a percentage of how much we bet and so we want to bet a lot.  Presently we are trading 96 markets.  We usually get in one day and out the next.  We probably average around ten trades a day, but each one has a 56% chance of winning.  We make good money with this strategy.  We are the house.

I will give you another extreme example from my trading past.  Over a two year period I made over 5 million dollars profits, (see Big Trading), trading an account of about 2 million.  I made over 11,000 trades, the average trade was only $385, but I pushed nearly TWO BILLION DOLLARS through the stock market with all that trading.  You can make a lot of money with a low house advantage when you are taking a percentage of two billion dollars!

So how do you become the house when stock trading?  Well first of all forget about brokers, financial experts and stock pickers.  You need a solid computer-driven trading system that you have tested with many markets in many different market conditions.  You want to see accuracy between 50% and 60%.  If its more than 60% there is a problem with your data or the system is a hoax.  You need to diversify across many markets and you need to trade a lot.

And if you do all those things you can run your own Wall Street Casino and become rich!  You are now the house!

So is investing in the stock market gambling?  Gambling and stock market investment are similar because both involve odds of winning and loss and both involve probability theory.  But the fundamental difference is that the odds are always against you when you gamble in a casino whereas you can literally turn the tables with stock market investment and put the odds always in your favor. With stock market investment you can enjoy the house advantage.

 
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I am a trading system pro and have been trading markets and have been involved with trading system development and the programming of trading system software for 25 years. “Today Stock Market” is my opportunity to share with you some of my trading experience while discussing stock market news and giving my daily stock market update.

Big Trading

Big Trading

 wp-content-uploads-2013-01-robertburan1 Big Trading

 

 

 

Yes I have done some Big Trading.

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In fact I have traded many millions of dollars.  I started my trading career with just $6,000 and even wrote a book about that memorable but modest start.  I called the book,    “How I Quit My Job and turned $6000 into a Half Million Trading”.   So I got off to a fast start and my success and writings attracted some attention.  With respect to big trading I initially traded overseas markets, Europe and Asia, for Linda Bradford Rashke (LBR Group) with around 35 million dollars and later I traded a US stock account of several million dollars for several years for a gentleman living in Germany .  So in spite of my modest beginning as a trader I am very familiar with big trading, large positions and big money in the markets.

The stock trade positions I post every day on this web site approximate very closely both the size and trading style I did for the German gentleman.  In fact the trading system I use is virtually identical.  This is an Excel graph of some of those trades:

click to enlarge graph:

Stock-Trading-Millionaires3-300x195 Big Trading

This Excel spreadsheet graph represents the accumulated profits of the account I traded for the German gentleman from 7/19/99 through 10/31/2001.

I am including some limited information and statistics on this million dollar account for several reasons.  First of all the system that made this five million dollars is essentially the same system as JORDI’S INTRADAY2, the results of which I post on this web site daily, and which you can buy for $1,000. (see automated trading software)

The second reason is that I do not wish to be tagged as knowing only how to trade small amounts of money.  Personally I think it is tougher to trade a  small account than to trade all these millions, but nevertheless there are some people out there who might disparage my trading skills if it was believed that my only skill was in learning and studying the art of trading an account of less than $5,000.

wp-content-uploads-2013-02-trade-hit-and-run-300x208 Big Trading

And the third reason is to demonstrate that trading 5 million is not that much different than trading 5 thousand and the successful trader of both those accounts must follow similar rules and statistically should expect similar results.

Statistics from Big Trading

 

I will hit on just a few of the mind boggling statistics behind this five million dollars in profits.  A great deal of money was moved out of this account and its size fluctuated wildly.  The account started at 1.5 million and ended at a half million and was at one time as high as six million.  So I am estimating that the average size of the account was two million.  Based on that estimate this account yielded an average annualized return of about 100%.  Not bad and very similar to the returns I reported in my book, How  I Quit My Job and Turned $6,000 into a Half Million Trading.  These systems really work!

Some more interesting statistics from this Excel spread sheet:  Number of trades = 11,689  Amount of money moved in and out of these markets in just 27 months = $1,946,770,083 (Just shy of TWO billion dollars).  Average profit of each trade = $385.  Best Trade = $69,484  Worst Trade = – $37,022

I will not dwell on these statistics except to draw attention to the average trade making only $385.  Even though nearly five million dollars was made with annualized returns of 100% the average trade was only $385!  We make our money by trading a lot even though our average profits may seem low.

If you look at the daily trades of JORDI’S INTRA-DAY2 you will see a lot of trades that are rather small.  We take a lot of small trades to find the big one.  We make 60% to 70% of our profits from less than 5% of the trades.  The average trade with this system that commits about $25,000 in cash to each trade may only be a few hundred dollars.

Big Trading in 2014 in JRJC (click to enlarge)

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Big Trading in 2013 in NFLX (Click to Enlarge)

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We have to take a lot of small trades to get a few big ones like these that make over $30,000 in just two or three days.  But these big trades do happen and are keys to our successful trading.  “Jordi” works as well today as it did 10 or 15 years ago.

  By posting these real time trades every day I hope to demonstrate that “Jordi” is just as robust as ever and there is both safety and good returns behind this unusual style of trading we employ.

So I say stick with a good robust system, take all the trades and excellent profits will follow.  It does not make any difference whether you are trading five million dollars or five thousand dollars, the basic trading strategy remains the same.

 

And who know knows?  Follow the system carefully and consistently and you may find yourself, like me, going from small trading to Big Trading.

 

Automated Trading From Home

Automated Trading From Home

 

wp-content-uploads-2013-03-robertburan Automated Trading From Home

 

by Robert Buran

Automated Trading from Home
similar to what banks and hedge funds do

I have been trading for a living from home for about 25 years and entering most of my trades manually, but what about AUTOMATED trading from home?   This is indeed now possible and is fairly easy to do with automated trading software that you can run on a desk top personal computer.  First of all what exactly is automated trading?  Automated trading is sometimes called algo trading.  Algo means algorithmic.  In mathematics and computer science, an algorithm is simply a step-by-step procedure for doing calculations.  A simple algorithm for stock trading would be to buy a stock when the three day moving average goes from below the twelve day moving to above the twelve day moving average.

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In order to get that trade executed with a broker and have true automated trading execution we must program trading instructions that include all the variables such as the price at which to buy and how many shares to buy.  And to qualify as fully automated trading we must use some kind of electronic or computer platform so that this trade is executed without any human intervention.

I am a trading system pro and can write just about any stock trading algorithm using TradeStation Easy Language ™.   In fact I have some of the best automated trading systems around.  Please see Automated Stock Trading Software.   And so then by using the TradeStation software platform it is fairly easy to make a trading strategy fully automated for executing all stock trades with a broker.

This technology is relatively new for the stay-at-home stock trader.  But the trading industry has been doing fully automated trading longer. Automated stock trading has been widely used by investment banks, mutual funds, pension funds and other buy-side (investor-driven) institutional traders for some time.

Financial researchers estimate that over half the trades in the US stock market today, in 2013, are fully automated and are executed by algorithmic trading programs.

But fairly recent advances in software technology make it possible for anybody with a computer to do fully automated trading from home.  You can do at home exactly what the banks, pension funds and hedge funds do.  Why let all these institutions make all of the money? You can do it yourself and not pay someone to do it for you.

Automated trading vs manual trading

Making trading decisions can be stressful and I have argued for a long time that there are many advantages to letting the computer do your thinking for you.  Computers do not get flustered in fast markets and can execute many orders with lightening speed.  Computers function without emotion and are fearless.  These are just a few of the advantages of automated or robotic trading.

In early 2012 I started trading a couple accounts with the TradeStation 9 computer platform and it has been a real eye opener for me.  But for starters I would like to say that I have no business relationship with TradeStation Securities and I get no kickbacks from them of any kind for referring customers to them.  My comments here are nothing more than my opinions based on my own work with their company and with their software, TradeStation 9.1.

One beef that I used to have had with this company was bad data.  With older versions of TradeStation, that I use to post charts on the web site, the data was stored on the hard drive on your computer and when there was bad data it was possible to correct it immediately.  However, with TradeStation 9.1 the data was not on your hard drive; the data was on their server in Miami and one had to wait for THEM to correct it.  This used to create all kinds of problems for me as a systems trader.  I preferred the older versions of TradeStation that allowed me to correct my own data.

Well I am happy to report I no longer experience this difficulty.  I do not know what they did, but in six months or so of trading I have yet to have a problem with bad data and TradeStation 9.1.  As far as I am concerned bad data is no longer an issue with TradeStation Securities.  Problem Solved!

Let us look at some of the things that can be done with TradeStation 9.1 when trading my algorithms using this software.  Although I have been working with TradeStation for over 20 years I am basically writing this article for people who know nothing about TradeStation.

First let me tell you about the thing that I like best about TradeStation 9.1 and the thing that puts it heads and shoulders above all previous versions. With this software I can run any of my systems or strategies on full automation.  I can easily do automated trading from home using nothing more than my desk top computer.  By full automation I mean that after loading my systems into TradeStation 9.1 and setting up the charts, I can, if I wish, let the computer do all the trading for me.  This means several things for me as a trader.  First of all it means that I do not have to sit in front of the computer while I am trading; the computer will execute all the trades and if I have my speakers turned on, every time a trade is executed an automatic voice will say “order filled”.  So if I want I can go golfing while the computer is trading I can.  Or I may wish to trade overseas markets all night long while I sleep.  In the morning I can be confident that the computer has flawlessly executed all the trades.

Are automated trading fills any good?  Do you see a lot of slippage, that is a large difference between the system price and the actual price?  My studies with real time trading would suggest not at all.  I have kept spread sheets on this for several months and am happy to report that slippage with automated trading is quite minimal; the fills are in fact almost instantaneous with the system price being hit.  Whatever tiny slippage might be incurred is more than offset by flawless trading.  You can be a total novice and still after having me help you get this all set up, you can be trading exactly how I trade without making a single mistake.  You do not have to worry about trading discipline and fear of “pulling the trigger”.  You can fall asleep and let the computer do the work for you.

This is a screen shot of the TradeStation page dealing with fully automated trading :

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You can see that the system we have automated is highlighted and has been applied to the market GOOGLE (GOOG).  Note also that we have set the system up to trade only from the long side, but we can change this with a click.

But the most important part is the check marks at the bottom.  The Generate strategy box in combination with the Automate execution using account with confirmation TURNED OFF means that our orders will be sent to the trading desk automatically.  If we set the box to TURNED ON the system will generate the orders but will prompt us first and will not execute the order until we click a prompt that yes we want to execute that order.

I do not use this last option.  I trade exactly as this screen shows and I let the orders go automatically to the trading desk.

Another great advantage of trading with TradeStation 9.1 is the ability to test all systems and track system performance with all stocks.  TradeStation Securities has a data base that is unequaled by anybody and with just a few clicks of the mouse one can test 100 years of market data in less than an hour.  This is a fantastic research tool and is great assistance in choosing the right strategies and right markets for maximum profits.  This is just a little example of this testing capacity:

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This shows a chart of the market EXPE.  This is a trade we actually took in real time at the end of May 2012.  The chart shows where we bought the market and where we sold the market.  But the trade list window shows us exactly what we did.  We bought 40 shares of EXPE on 5/19 at 43.37 and sold 40 shares on 6/1 at 46.07 for a profit of $108.00.  The trade list also shows that we have a net profit in EXPE of $1,208.60 trading 40 shares of EXPE over a given time period.

With TradeStation 9.1 you have the advantage of almost instantly checking the system performance in any market for virtually any time period.  With TradeStation 9.1 you do not have to trade blind.

If you are totally unfamiliar with TradeStation Let me show you some screen shots of pages I use every day to do my real time trading :

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The above page is my main page and is what I watch most of the time.  If I want to switch from this page I click one of the tabs at the bottom.  For Example #1 AAPL-APC displays the markets AIV, AMD, AAPL, ANR, AMGN, APC, ADSK, AIG, and AV and to each of these charts I have applied one of my systems and set it for fully automated execution.  I am presently trading 72 markets.

Down at the right hand bottom of this work space I see this:

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This tells me how I am doing at any given minute of the market day.  It shows that I am presently about break even with my open positions, but that I have closed out positions for this same day worth $146.65 after commissions.

If you turn on your speakers with the automated trading every time an order is executed you will hear an automated voice say “Order filled”.  But if you want to see all NEW executions on any given day you just have to click the average price tab to see:

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From this we can see that we have sold, that is taken profits on four positions, NOV, NWL, ZAGG and F on the same day we are looking at it.

TradeStation offers endless brilliant and graphic displays and ways of looking at the markets we are trading:

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In the above trade we have going in HP we can see clearly not only where we bought 40 shares, but we can see where our profit point is, 47.94, represented by a red line on the chart.

Here is a real nail biter in KSS.  After establishing a nice profit objective on Friday the market appears to be retreating from the red line on Monday (Click image to enlarge):

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Fortunately the market did regain its momentum and we did, after some white knuckle time, reach our profit objective.

This shows just a tiny slice of what this powerful software can do for your trading.  But working with the greatest software in the world can also save you money.  You do not need to buy this software.  You get it to work with when you open an account with TradeStation Securities.  And you can open an account with as little $5,000.  AND you get your data free as well after paying exchange fees.

But there is another dirty little secret about TradeStation Securities I do not think many traders realize.  Their commission rates are rock bottom especially for the small trader.  You can opt to pay commissions on a penny per share basis rounded up to the nearest dollar.  So for example in the above examples involving only 40 share trades the commission rate is 40 cents rounded up to a dollar going in and out or a total of only two dollars per round turn.  You just can’t beat that anywhere and furthermore I think TS Securities is now letting you trade the first 60 days for free.  So when you add up the benefits of the best trading software in the world, plus nearly free data, plus rock bottom commissions, it is hard to justify going with any other brokers.

By the way again I am not employed by TradeStation Securities and I get no kickbacks for making these recommendations.

BUT if you do open an account with them using my trading package there is a lot I can do for you.  You do not have to struggle alone and in the dark.  I can hold your hand if need be and get you set up so you are trading exactly like I do.  I can give you a list of good markets, suggest systems that fit your finances and trading style and help you set up every market and chart.  And you can call me or E-mail me anytime because I am trading with real money the same systems and markets that you are.  When you are in trouble I am in trouble and when you are making hay I am making hay also.

In any case I consider TradeStation 9.1 and TradeStation Securities a fantastic way to trade my systems and strategies.  All of my materiel is 100% compatible with TradeStation 9.1 and furthermore I can give you all the technical support you need, for life, when working with my materials and TradeStation 9.

In any case I consider this automated trading system software and TradeStation Securities a fantastic way to trade my systems and strategies.  All of my materiel is 100% compatible with TradeStation 9.1 and furthermore I can give you all the technical support you need, for life, when working with my materials and TradeStation 9.  With this software it is possible to trade just like the hedge funds do and do fully automated trading from home.

 
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I am a trading system pro and have been trading markets and have been involved with trading system development and the programming of trading system software for 25 years. “Today Stock Market” is my opportunity to share with you some of my trading experience while discussing stock market news and giving my daily stock market update.

Flash Crash

Flash Crash

 Flash-Crash-1-300x151 Flash Crash

Flash Crash

The Day the Machines of Wall Street Took Over

  wp-content-uploads-2013-01-robertburan1 Flash Crash    

Did the Flash Crash of May 6, 2010 Foreshadow the Last Apocalypse?

This is the way the world ends, Not with a bang but a whimper. -The Hollow Men (1925) T.S. Eliot

The poet T. S. Eliot had his own prophetic ideas about how the world might end but scientists have recently seriously speculated on what kind of events could wipe mankind from the universe.  Of course an untreatable epidemic is usually mentioned along with encounters with a rogue black hole or an asteroid like the one that killed all the dinosaurs.  But one interesting and unusual scenario that results in the destruction of all of mankind is the “Hal Scenario” in which machines of our own creation take over the world and destroy us all.  Could Eliot’s Hollow Men be machines?

Could this really happen?  Well personally I think it COULD happen and I think we need to look more carefully at what is being done with our “machines of the mind” today while we still have some control.

We may have had a taste of the “Hal Scenario” as recently as May 6, 2010. On that fateful day Wall Street experienced its first machine driven Flash Crash.  On May 6, 2010 the machines were, for a few terrifying minutes, in charge of the largest economy on earth.

On May 6, 2010 the financial world saw the entire US equity market collapse, and recover, in about 20 minutes.  Never in the history of US markets had price dropped so low and so fast.  On May 6, the day of  the Flash Crash”, more than 19 billion shares were traded across multiple markets and investors lost billions.

This is what it looked like on a chart (click to enlarge):

Flash-Crash-2-300x155 Flash CrashFlashCrash 2

Traders were numbed by the pace of selling and many froze like deer caught in the headlights of an oncoming truck.

At 2:20 p.m. EDT the Dow was down 400 points.

This was bad, but then the DOW fell another 600 points in just seven minutes, the fastest and largest drop in the stock market’s history.

One stock, Accenture, fell from $42.17 to 4 cents.

But the overall market did not stay down long and by 3:09 p.m., the Dow had regained 700 points. Prices continued to fluctuate wildly until the markets mercifully closed.

After the close traders walked around in a daze, with vacant looks in their eyes, not unlike soldiers who had just been beaten by a vastly superior and unseen enemy.

Flash Crash, “I think the machines just took over”

“I think the machines just took over. There’s not a lot of human interaction,” said Charlie Smith, chief investment officer at Fort Pitt Capital Group. “We’ve known that automated trading can run away from you, and I think that’s what we saw happen today.”

Was the flash crash a precursor to the Hal Scenario?

Initially the flash crash attracted some attention and President Obama commented briefly on the largest stock market drop in history.

But then the whole event seemed to disappear from the public consciousness.  Newspapers stopped running stories about it and three years after the flash crash the many government investigations have failed to explain what really happened.

But there have been some interesting rumors:

Machines can mimic human thought processes AND emotions through a process dubbed by some as Androgenic Syntactic Analysis or ASA.  ASA allows for a smooth conversion between the ways humans think and communicate into binary code which is the way machines and computers think and communicate.

Using androgenic syntactic analysis the most sophisticated aspects of human intelligence are converted into usable machine language where it can be parsed at lightening speed, networked and compounded.  “It’s like taking 100 of Einstein’s brains, networking them, and then having them capable of outputting a life time of Einstein’s ideas in a millisecond” said an unidentified source alleged to be close to the government investigations.

I have been unable to verify any of this or for that matter establish the true source of this information.  I offer it here only to stimulate discussion of the role (and danger) of machines in our society.

But IF it were true it might suggest that the Flash Crash of May 6, 2010 was a precursor of the Hal Scenario and that for a few terrifying minutes the machines had total control over the American economy.  Furthermore the machines might have thought about and knew what they were doing.

Or perhaps it was just a mistake made by the programmers of these machines, a case of the research animals briefly escaping from their cages and raising a little hell.

Or perhaps it was just aberrant market behavior or random market theory on steroids.

I have argued that machines can understand Wall Street whereas the human mind cannot. Furthermore I have suggested that traders should not try to make subjective stock trading decisions, but should let their computers do the thinking for them.

We traded through the flash and crash with our computers running hot and we emerged more or less unscathed.  But perhaps we were just lucky.

But regardless of whether or not you buy into the possibility of the “Hal Scenario” I think it is clear that thinking machines are alive and well on Wall Street and these thinking machines can and will at times take over our markets.

And if robots are running Wall Street you are going to need a robot if you want to make money!  I hope the Flash Crash taught us something.

 Copyright 2010-2015 Short Term Stock Trading        

 

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I am a trading system pro and have been trading markets and have been involved with trading system development and the programming of trading system software for 25 years. “Today Stock Market” is my opportunity to share with you some of my trading experience while discussing stock market news and giving my daily stock market update.

Weekly Trading System

Weekly Trading System

 

wp-content-uploads-2013-01-robertburan1 Weekly Trading System  By Robert Buran

The second system that is not posted daily is my weekly system which is longer term and holds trades typically 2 to 4 weeks.  This system takes much fewer trades.  One reason I like it is that it lends itself well to running in full automation with TradeStation 9.1.

 I traded this system with real money for about 7 months in intraday-4 Weekly Trading System2012 and liked it.  It is not really a new system at all.   It is actually my oldest system which has been adapted to work with weekly bar charts.  It uses a 75 % retracement  stop that I discuss in my manuals.

If anybody wishes to attempt to replicate these results you should understand that I ran the tests on Christmas day 2012 and went back a little over 13 months.  I did not cherry pick these markets.  These markets were selected BEFORE I started trading in real time and were based on positive performance prior to 2012.

 

WEEKLY SYSTEM  November 2011 to 12/24/12 and tested on TradeStation 9.1  These results show net profit (loss) and number of trades during the 13 month period.

AAPL – APC

 AV  +6247  10T

ANR  -1028  8T

ADSK  +3456  11T

AIG  +15498  10T

AMD  +2357  9T

AAPL  +12214  14T

AMGN  -5280  15T

APC  -6,071  10T 

 APH – DV

 ARG  +2073  10T

CI  +1730  9T

CLF  -806  9T

CMCA  +12127  +10

DELL +6359  9T

DHI  + 8270  11T

DNR -1280

DV +13900 9T

APH +13556 11T

 ESRX – GNW

 ESRX  +8167  10T

EXPE +28343  12T

F  +7518  11T

FDO  +2732  11T

FFIV  -3048  10T

FITB  +609  10T

FLS  +6199  11T

GCT  +9751  11T

GNW  +1309  11T

 GOOG – JCP

 GOOG  +8432  9T

HAR  +11738  11T

HBAM  +4247  9T

HOG  +10792  11T

HP  +4358  6T

IRM  +9203  9T

JBL  +3127  10T

JCI  +7330  6T

JCP  +11254  13T

 JDSU – MRO

 MRO  +10025  8T

MOS  -2736  10T

LSI  +13038  8T

LEN  +12219  10T

KSS  -11244  13T

KMX  +15079  10T

JEC  -3767  10T

JDSU  +7306  11T

 PCLN  –  SYK

 PCLN  +13852  11T                 

PHM  +24515  10T                                                                   

PLL  +3705  9T

RHT  13776  8T

  The Chart below shows $13,776 profits in RHT during the testing time period:

ROST  7281  8T

RSG  3199  12T

SBUX  4508  9T

SHLD  18855  13T

SYK  -254  15T

 MU – OXY

 MU  +5577  11T

MUR  +11360  11T

NBR  +4336  11T

NFLX  +32663  7T

NKE  +3664  9T

NOV  – 5932  10T

NSC  +3111  8T

NWL  9370  10T

OXY  -7412 7T

 THC – ZION

 ZAGG  -78  13T

TIE  -7742  8T

ZION  +12468  9T

WYNN -1950 8T

WY  +9509  8T

WMB +3051  10T

UNH  +5386  9T

TXT  +6353  9T

THC  -78  13T

 Final Totals for WEEKLY SYSTEM

 Profits before slippage and commissions = $427, 395

Total number of trades = 697

Estimated slippage and commissions = $69,700

Profits after slippage and commissions = $357,695

Annual % return on one million dollars = 36%

I was nevertheless gratified to see the good performance with the weekly system.  Obviously this algorithm performs better in the low volatility environment by taking fewer trades and holding them longer.

As mentioned previously The Weekly System also lends itself well to fully automated trading using TradeStation 9.5 or Multi Charts.

 
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I am a trading system pro and have been trading markets and have been involved with trading system development and the programming of trading system software for 25 years. “Today Stock Market” is my opportunity to share with you some of my trading experience while discussing stock market news and giving my daily stock market update.
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Latest posts by Robert Buran (see all)

Trading

Trading is done by a person who buys and sells various financial instruments

These financial instruments include commodity futures, bonds, stocks and wp-content-uploads-2013-01-today-stock-market-3s Tradingderivatives.  I have been trading profitably for a living for about 25 years.  But I have had my ups and downs and consider trading a kind of financial blood sport.   These are articles I have written about trading and my experiences that I hope will help aspiring traders.

Trading Articles By Robert Buran:

Big Trading – Yes I have done some big trading.  In fact I have traded many wp-content-uploads-2013-01-robertburan1 Tradingmillions of dollars.  I started my trading career with just $6,000 and even wrote a book about that memorable but modest start.  But I got off to a fast start and my success and writings attracted some attention.  With respect to big trading I initially traded overseas markets, Europe and Asia, for Linda Bradford Rashke (LBR Group) with around 35 million dollars and later I traded a US stock account of several million dollars for a gentleman living in Germany for several years.  So in spite of my modest beginning as a trader I am very familiar with big trading, large positions and big money in the markets. Read the whole article

wp-content-uploads-2013-01-stock-investors-s TradingStock Investors – Stock Investors, a psychologist’s perspective: Stock Investors come and all sizes, shapes, styles and colors!  And some stock investors are very successful and some are not so successful.  How does the psychological profile of these two groups differ?   Before I became a professional trader I was a psychologist.  And so naturally I am not just interested in the obvious attributes of stock investors; I am also interested in the psychology of different investors and what really makes them tick.  Read the whole article

wp-content-uploads-2013-01-rule-of-the-screw-small TradingStock Market Price – If you are going trade stocks you are going to have to understand stock market price, how stock market price changes, and in short, what moves the stock market.  My ideas about stock market price are unique and so let me expound a little on this subject.The Rule of the Screw: Stock Market Price must move in such a manner so as to Frustrate, undermine and defeat the best interests of the majority of market players. According to this rule of stock market price movement the majority cannot make money in the stock market.   Read the Whole Article

wp-content-uploads-2013-01-stock-trading-stop-lossthumb TradingStop Loss Order – It may sound like trading heresy, but I think stops are not as important as many traders think.   There is a lot of nonsense written about trading, but one of the more amusing things I have read is about the importance of “loving your stops”.  Read the Whole Article

wp-content-uploads-2013-01-flash-crash3thumb TradingFlash  Crash – The Day the Machines of Wall Street Took Over. This is the way the world ends: Not with a bang but a whimper.  -The Hollow Men (1925) T.S. Eliot The poet T. S. Eliot had his own prophetic ideas about how the world might end but scientists have recently seriously speculated on what kind of events could wipe mankind from the universe.  On May 6, 2010 the financial world saw the entire US equity market collapse, and recover, in about 20 minutes.  Never in the history of US markets had price dropped so low and so fast.  On May 6, the day of  the Flash Crash”, more than 19 billion shares were traded across multiple markets and investors lost billions. Read the Whole Article

wp-content-uploads-2013-01-how-to-trade-s TradingHow to Trade   In this article I will disclose fully a critical theory of stock market behavior.  And I will debunk “The Atomic-Bomb- Instruction-Book theory” of market behavior.  And finally I will disclose fully, highly profitable programmable stock trading systems along with an explanation of the theory that makes them profitable.  This article is a must for any frustrated small stock investor. Read the Whole Article

wp-content-uploads-2013-01-in-and-out-trading-s TradingIn and Out Trading – I call In and Out Trading short term stock trading and I have been using this strategy for the better part of 25 years.  I hold trades two to three days and do not day trade.  Although conventional wisdom would have that in and out trading is risky I would argue quite to the contrary.  I believe that In and Out Trading reduces risk by limiting the time that a trader is exposed to adverse market action.  This article examines In and Out Trading and the relative effectiveness of long term vs. short term strategies for trading stock markets.  The article introduces an entirely original concept I call  “margin efficiency” to explain how relatively simple short term, in and out trading systems can realize high levels of profit while at the same time reducing risk. Read the Whole Article

wp-content-uploads-2013-01-finding-hot-stocks-sm TradingFinding Hot Stocks to Build a Hot Stock Trading Portfolio   You need a good trading system, but that is only half the battle; you also need a good stock trading portfolio and be skilled at finding hot stocks.   I do not like day trading stocks.  But I am short term stock trader and I DO like In and Out Trading Read the Whole Article

wp-content-uploads-2013-01-simple-stock-trading-sm TradingSimple Stock Trading is the key to making the big money.  The randomness of short term stock behavior can only be tamed with simple trading systems using very limited parameters; trading and making money is easier than you think.  KEEP IT SIMPLE STUPID.You have probably heard of KISS, “keep it simple stupid”.  When it comes to stock trading no advice could be better. Read the Whole Article

wp-content-uploads-2013-01-trading-system-and-trading-strategy-sm TradingTrading System and Trading Strategy What is the difference between a trading system and a trading strategy? This is the curious story of how government regulation, over a decade ago, changed the use and meaning or the words trading systems and trading strategies. On the Google search engine nearly 1,000 people per month type in the words Automated Trading Strategies.   For me this phrase brings a smile to my face because I do not believe you can automate a strategy..  Let me tell you why.  Read the Whole Article

wp-content-uploads-2013-01-stock-trading-signals-sm TradingTrading Signals  A trading signal must be mathematical and precise in nature.  A trading signal must be programmable into a computer so the computer and not the trader can track the relevant markets and alert the trader to when the trading signal has been hit.  This allows the trader to diversify and to trade many markets simultaneously.  Finally the trading signal must be of such a nature that it can be tested in all kinds of markets and in all kinds of market environments to establish its accuracy and validity. Read the Whole Article

wp-content-uploads-2013-01-trading-13 TradingTrade the System – I am always telling trader wannabes to just trade the system.  Sometimes I think that either they are deaf or must not understand my English.  Few people seem to be able to understand the importance of trading the system.  And to that observation I might add it would seem that few people can or want to work at home for five to eight years in order to make one million dollars. I am serious. Read the Whole Article

wp-content-uploads-2013-01-trading-14 TradingHow do you get Rich? – Trading $10,000 into a small fortune is clearly the ultimate challenge.  But regardless I am a little uncomfortable writing this article because it sounds a little sleazy.  But this is not about selling snake oil.   I am just trying to give some practical advise based on my personal experience. Read the Whole Article

wp-content-uploads-2013-01-trading-15 TradingTrading Tips – Turn Your Stock Trading Hot with Normal Distribution Theory.  If you are looking for stock market trading tips let me give you one from a place that will surprise you, my college statistics book.  Yes, normal distribution patterns, taken from a dry statistics text book, may help you turn your trading hot.  I have been trading for nearly 25 years and consider any year that I do not make at least a 50 percent return on my investment a bad year. But I am cautious and I do not take big risks. So how can I have my cake and eat it too?  Read the Whole Article

wp-content-uploads-2013-01-trading-16 TradingComputer Trading – What I am really saying is that using a computer and an effective mechanical trading system to make consistent real money in the stock market is the only way to go.  Your brain, no matter how brilliant you think it is, cannot do it.  Your brain cannot follow enough markets plus data and process that data fast enough.  But the greatest problem that the human brain has when competing` with computer stock trading programs is that the human brain is infected with the most nefarious of viruses, human emotions.Read the Whole Article

wp-content-uploads-2013-01-trading-17 Trading Manual Trading – If you want to go with full automation you are just going to have to accept a small amount of slippage for every trade.  But if you like to sit in front of the computers as I do watching markets and writing and reading, you may want to try something else. The solution that I have worked out over years of trial and error is something I call MANUAL TRADING or MANUAL ORDER EXECUTION. I still use a computer online order placement system to do this manual order execution. But I call it manual trading because I DO NOT place resting orders with my broker that allow him to play around with my orders and to execute those orders to HIS advantage. Read the Whole Article