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Market Wizard
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25.01.2022 I'm writing a book! Data Wrangling with JavaScript has just launched on the Manning early access program. Order now with code mldavis3 for a 50% discount before 8th Feb.
23.01.2022 Market performance update Welcome to 2018! After a tremendous upsurge starting in October the Australian market has settled into a very nice and steady uptrend. ... This is a very good time to be in the market. Let's hope this continues for many months.
23.01.2022 Market performance update The ASX 200 is currently forming a triangular pattern. I'm very uncertain which way it will go from here, it could easily breakout either to the upside or to the downside, but I wouldn't be surprised if there were more large drops in the ASX 200.
22.01.2022 Momentum Bot update The Momentum Bot has surged ahead to over 9% profit! It finally decided to sell some shares!... Last week it sold it's holdings in QAN and AGI. The reason for both sales is that these companies have fallen outside the top 20% of the Momentum Bot's ranking table. The strategy works by ranking all companies according to their upward momentum, but it only wants to hold the fastest moving companies, those that are in the top 20%. The bot cleaned up on AGI taking 5% profit and on QAN it took over 3% profit. The Momentum Bot now has over $23,000 in cash to spend, but it's not buying anything new! That's because the ASX 200 is trading below it's 100 day moving average (see chart below). This rule means that the bot is only allowed to buy when the market is rising. The Momentum Bot's real winner at the moment is A2M. It is currently holding a position on A2M that is 48% in profit. I really had to do a double take on this check that there wasn't an error. You can also see in the screenshot that the bot is also holding a position on BAL for a small profit and has quite a large open loss on FLT. The bot's profits more than make up for its current loss on FLT. This should be an important lesson. As traders we need to be able to take our losses and make sure we use trading strategies where the profits well and truly outweigh the losses. You might ask: why doesn't the Momentum Bot cut it's loss on FLT? Generally that's a good rule to follow, as per the well known saying cut your losses quickly, let your profits run, and it's a rule I'd normally like to follow - but it isn't a part of the Andrea's Clenow momentum strategy which simply rides the wave of the highest momentum companies and doesn't have any stop loss rules at all. Follow this link to keep up with the Momentum Bot yourself: https://www.market-wizard.com.au/app/
20.01.2022 2017 market review 2017 has been a very interesting year for the ASX 200! ASX 200 - 1 year performance (1st chart)... We started the year with a volatile uptrend. The uptrend ended in May - there was a reversal and a short downtrend that settled into a trading range in June. The market was then stuck in a sideways rut until the start of October when the ASX 200 suddenly burst very quickly out of its trading range. In November the market settled into a less pronounced uptrend and it looks like we could finish 2017 in an uptrend. The chart shows the diversity of market types we have experienced in 2017. ASX 200 - 10 year performance (2nd chart) We are coming to the end of the year and this is the last Market Wizard update for 2017, so it's a good time to have a look at the ASX 200 performance in a bigger context. The chart shows a fairly consistent uptrend since the big crash in 2008 and the market is currently headed towards its 10 year high. I believe that predicting the market is a fool's game - from here it can go any way - but if the market does make a new high I think it will be a sign of a strong market. Charts thanks to CMC Markets
19.01.2022 Market Wizard automatic company updates. The Market Wizard system for company updates is now finished and fully active. Market Wizard updates it's own company database as real companies are added, removed and renamed in the Australian Stock Exchange. Companies are occasionally delisted and renamed, but as yet this has not affected any Market Wizard users. Should this happen to a company that you own in Market Wizard you will be notified via email.... Market Wizard handles delisted companies by selling them for you at the most recent market price. This doesn't happen in real life! But realistic handling of delisted companies is currently beyond the scope of Market Wizard. If you ever notice missing companies, or companies that should be removed please let us know.
16.01.2022 Managing risk - part 1 - using a stop loss After the recent falls in the stock market it's high time we start talking about how to go about managing our risk. There are many ways to do this, here we'll talk about using a stop loss. When I say risk what do I mean exactly? It's clear cut. For us risk means the risk of losing money which means losing our trading capital. If we lose too much we go broke and we have to stop trading.... We can't expect to win on all of our trades and how we deal with our losers is a key driver of how good a trader we will be. You probably heard the phrase cut your losses quickly and let your winners run. If you subscribe to this philosophy what it means is that you must get out of losing trades quickly. This is more difficult than it sounds and our natural tendency is to hang onto losers (we hope they'll turn around) and get out of our winners (we are anxious to cash in some profit). Getting out of a loss quickly helps preserve our trading capital allowing us to stay alive and fight another day. A stop loss is something we use to help us limit our loss - it is like drawing a line in the sand. When planning a trade we choose a trigger price below our buy price and if our trade goes against us, the trigger price is where we will get out. You can see in the chart below how the stop loss (the red line) is positioned relative to the buy price. The difference between the buy price and the stop loss is how much we are risking. We can thus attach a dollar value to our risk. On the right-hand side of the chart below you can see when this trade ends. The price dips below the stop loss and we exit the position. This has put a limit on how much we can lose. In this example I'm using a fairly tight stop loss, in practice you will make this as tight or as wide as you like, depending on your risk tolerance and trading style. If you like the idea of this concept then you'll want to use Market Wizard's falling sell feature. This allows you to set up an automatic stop loss when buying virtual shares through Market Wizard. This instructs Market Wizard to automatically sell your shares should the price drop below the trigger price. This really is a legitimate type of order that is allowed by many real world brokers. It is often also called a stop loss order or a conditional sell order. http://market-wizard.com.au/
16.01.2022 New blog post: As a stock trader I need a ready of supply stock market data for analysis and visualisation. That data is needed for decision making and I often ...render it to a chart to better understand it. The free Yahoo financial API was the place to go for stock market data. However since it's demise a new data API from Alpha Vantage has arisen. It's also free and very easy to use. Alpha Vantage offer both daily and intraday data and I have created an open-source command line app for downloading it. This posts introduces alpha-vantage-cli. I'll show you how to use this tool to download stock market data. I'll give examples of use both from the command line and also using it as an API from your Node.js JavaScript code. Read more on the Data Wrangler: http://www.the-data-wrangler.com/acquiring-stock-market-dat
13.01.2022 Merry Christmas and all the best for your trading in 2018 It's been a huge year for Market Wizard. From building it, through the launch and now in open beta testing. We recently started promoting the web site more widely and have seen an influx of new users join the site. So welcome new traders! And thank you to everyone who has supported Market Wizard this year, it's been fantastic to have you all onboard. I'm not entirely sure where Market Wizard is heading in 2018, althou...gh I do know I'll be working to improve it and bring in more people. I've always thought that Market Wizard should be a social trading experience. I think we can all learn from each other and grow. To that end I'll be looking to create new and improved social feature such as: - Following particular traders so we can see their activity more clearly - Chat and discussion so that we can talk about the market, companies and what we are trading - Ongoing monthly competitions so we can test our skills regularly Well that's it from me for 2017. Please have a safe and happy Christmas holiday. Happy trading! Ashley Davis
12.01.2022 Just a quick update on the Market Wizard's Momentum Bot. It's currently sitting at just below 5% profit so far this month. You can see from the performance graph the profit almost entirely disappeared between August 17 and 22. The value of the portfolio fell from a high of $51,686 to down to just $50,152, this drawdown from peak to trough was almost a 3% loss. As traders we must be able to withstand significant drawdowns in order to eventually achieve a profit. The Momentum B...ot is currently in the top 10 ranking for all time, daily and weekly. Let's see if it continues to do well. Keep up with Momentum Bot on Market Wizard: https://www.market-wizard.com.au/app/
12.01.2022 Support for dividends has arrived! Market Wizard now has support for dividends! This makes it possible for you to try out income investing strategies using Market Wizard. When a dividend comes due for a company that you own, the amount of the dividend is paid into your Market Wizard virtual trading account. This adds to your available cash and can be used to purchase more shares.... The dividend is paid out in Market Wizard on the ex-dividend date for the company, provided you have the company in your portfolio on that date. When you are awarded a dividend you will be sent an email notification. Did you know that the price of company often falls by roughly the amount of the dividend on the ex-date? So be careful if you buy into a company just for the dividend - you might experience a capital loss of the same amount! That's something to think about if you are playing with strategies that combine capital growth and income. Support for dividends means that the basic feature set for Market Wizard is complete! There's still work to be done of course, like fine tuning the UI and more advanced features I'd like to add later.
10.01.2022 The Momentum Bot is retiring (for now) For the moment I've finished my paper trading with the Momentum Bot. I officially stopped the bot last week on the 16th November to coincide with end of the ASX share market game. The performance of the Momentum Bot has been great. When I terminated the bot it had made 18% profit which was slightly less than it's peak. I think that's a great result from only 3 months of simulated trading. It's performance in the ASX share market game wa...s similar to that in Market Wizard. For the moment the bot's portfolio is still open and has jumped up to 23% profit in the past week. Sooner or later I'll reset this portfolio in preparation for a larger test run of the bot. Click to have a look while it's still there. https://www.market-wizard.com.au/app/
10.01.2022 In case you didn't catch the news, the stock market has 'crashed' over the last few days, but what does this mean exactly? What happened? And what does it mean to us as traders. Read on to find out. Did it really crash? =============...Continue reading
09.01.2022 An update on Market Wizard's momentum bot... The Momentum Bot continues to show great performance. Peaking at over 6% profit on 6th September before declining subsequently (see the attached chart). Since it's first round of buying on the 8th of August the Momentum Bot hasn't bought or sold anything. Why is that?... The Momentum Bot keeps companies that are in the top 20% of its momentum ranking. So it's hanging onto its current holdings because they are still in the top 20% (although not necessarily still at the top of the ranking). The Momentum Bot isn't buying anything new for two reasons. Firstly it doesn't have enough spare cash to make another purchase. Secondly, even if it did have cash it still wouldn't be buying anything new. That's because the Andreas Clenow momentum strategy has a market filter that prevents the strategy from buying when the market is not trending up. This rule is designed to prevent the strategy being traded through a bear market. See for yourself in the chart below (thanks to Google Finance) that the ASX 200 is currently stuck in a trading range that started in June. Because the ASX 200 index is essentially flat at the moment, the momentum bot has suppressed new trading.
09.01.2022 The Momentum Bot has launched! This is Market Wizard's first autonomous trading bot that is trading a momentum strategy based on the work of Andreas Clenow in his book Stocks on the Move. The Momentum Bot has had a great first week of trading clocking up 3.2% profit in the first 4 days of profit before dropping back to 1.6% on the 5th day. Can the Momentum Bot continue these good profits? It seems like a great strategy, but we can only wait and see over the coming months. You... can keep up with the Momentum Bot through Market Wizard: https://www.market-wizard.com.au/app/ How does it work? The Andreas Clenow momentum strategy ranks companies by their momentum and then buys the companies that have been moving the fastest over the past 3 months. The ranking is penalized by volatility, so that highly volatile (and risky) stocks are ranked lower and thus you end up with high momentum stocks that have a smooth (rather than volatile) upward trajectory. The strategy is currently limited to the companies from the official ASX share market game. That's because I'm testing the strategy both in Market Wizard and the ASX share market game. This is just to test that the results are similar, it's a way for me to test the accuracy of Market Wizard. Sometime in the future I'll restart the Momentum Bot (or create a new bot) that can trade a wider variety of companies. Do you want to be able to create trading bots in Market Wizard? The Momentum Bot is hand-coded, but I'd love to add the feature to Market Wizard whereby you can create and run your own bots through a drag and drop strategy builder. It's a complicated feature to add though, so please get in touch and let me know if you have any interest in it.
08.01.2022 Market Wizard is go! Market Wizard has been opened to the public for an open beta testing phase. If you want to learn or practice stock trading please check it out. If you know anyone who wants to get into the share market please let them know about it!... https://www.market-wizard.com.au/
08.01.2022 What a difference a day can make! On Thursday a triangular pattern was forming in the ASX 200, but it was very uncertain which way the market would go from there. On Friday the uncertainty was resolved with a dramatic breakout to the downside as the market dropped in value by almost 2%!
07.01.2022 Market Wizard now has trader ranking! See how you rank against other traders!! https://www.market-wizard.com.au/
05.01.2022 Managing risk - part 2 - using a trailing stop. In Managing risk - part 1 I talked about using a stop loss on each of your trades to help manage risk. A stop loss helps you to limit your initial risk for a trade. But there is a problem with this... as your position moves in a positive direction and you accumulate more and more profit, you are also generating more and more risk! See the first chart below to see how this works. As you can see the more profit we have in a positi...on the more risk we are putting on the table and the more money we will lose if the market turns against us. A trailing stop loss solves this problem because it trails the current price of the stock following it upwards as shown in the second chart below. A trailing stop loss can only ever move up, never down. The fact that the trailing stop loss follows the stock price means that our risk remains constant over time, so we aren't allowing risk to accumulate. In Market Wizard you can use a falling sell order (as discussed in the previous update) and manually update the trigger price as the price of your stock rises. Just be sure that you don't update the stop loss as your stock prices falls, because doing that wouldn't achieve anything. The golden rule is that you should only ever increase a trailing stop loss, you must never decrease it.
