My goodness we have a lot to share with you this week (including new feature announcements, Expo updates, articles, etc.) and we are already behind – it being Tuesday!

Let’s start with a big thank you for the informative article Dr. Brett Steenbarger wrote on Saturday,

Stock Screening for Index Traders: A Best Practice in Trading

The doctor is a machine with no ‘off’ switch (luckily for all his readers). We thank him for his regular contributions to the use and understanding of our Trade-Ideas tools.

Brett identified a trading best practice, part of his rapidly popular series, using Trade-Ideas’ opening range breakout/breakdown alerts. He describes the best practice in a nutshell,

“Index traders may not be stock pickers, but they can benefit by taking a look under the hood and seeing how the stocks in their index are really trading.”

Trade-Ideas can reveal the activity behind the index to help a trader understand the depth or shallowness of a particular move in the index. This is important because many indices can be misleading in that they are capitalization weighted – allowing a relative few stocks to move the index. This would be a shallow depth of activity in the index if all the others stocks were not participating.

There’s also a great number of comments generated from the post. All are intelligent and well-informed questions.

Here’s one:

“Do you know of a way using Trade Ideas to quantify the number of stocks that are trading above/below the opening range? It seems a little tedious to just visually estimate the difference in advancers/decliners using this method.”

Veteran traders will appreciate the fact that Trade-Ideas automates a lot of the ancient art of tape-reading for traders by alerting to the real-time patterns forming that used to hide in the scrolling ticker of information everyone accessed. Looking at the information in a ‘meta’ way of interpreting the quantity of red breakdowns and green breakouts can be a useful measure of assessing the big picture of who’s winning the battle. If you need a more specific measure, here’s a tip: separate the breakouts in one window and the breakdowns in another window – both looking at the same universe or stock list. You can then determine whose winning by the number of alerts in each strategy.

It’s a great article from Brett. Read the entire post for a more nuanced understanding of this practice.

There’s one last footnote to mention – in Brett’s own words

“Please note that I have no commercial relationship with Trade Ideas; nor have they solicited this post or been involved in its writing”