Help for the target group: Active trader

I am an active trader; I have good knowledge of the way the market works, and I need appropriate tools for market analysis. I am also interested in short-term trades, and I would like to exchange opinions with similarly oriented people.

Apart from the basic tool selection described in the previous article, you will also be able to use a whole scale of other tools, especially when creating your own charts. We would also recommend the use of certain specific data, such as the information in the OVERVIEWS section.

  1. COT reports

  2. Market breadth indicators

  3. Smart Money - Dumb Money indicators

  4. FED open market operations

COT reports

The Commitment of Traders Report is a report that every large trader in futures markets must send once a week to the U.S. commodity futures trading commission: CFTC.  In the report he must reveal how many contracts he has sold (SHORT position), and how many he has bought (LONG position). You can find an explanation of the COT reports principle in the EDUCATION section. Our website allows you to analyze the positions of traders. The OVERVIEWS section contains charts that have been pre-prepared by us for all traded futures contracts in the U.S., which are published on the CFTC website. 

Figure: The first page of the section OVERVIEWS/COT reports shows all the futures contracts and positions of individual types of traders (Commercials, Noncommercials, Nonreportables), and the total Open Interest. By clicking on the name you can view charts concerning the given futures contract, and charts showing the historical development of traders' positions. 

Figure: Each futures contract has two related charts showing the three most important values - Net Short position of the Commercials group, Noncommercials (speculators), and Nonreportables (minor traders). These values are showed both in absolute values of thousands of contracts, and relatively as stochastic oscillators. The last illustrated value is the development of the Open Interest. In the middle is the price of the corresponding asset in the form of a surface chart.

The previous figure does not show stochastic oscillators. However, they are not regular stochastic oscillators, these are much more smoothed. I smoothed them so they wouldn't we so volatile. The time period that they process is 60 weeks. 

Figure: Indicator for COT reports - you can find the indicator in the graphics editor under the title COMP (composite). It can naturally be used with other charts as well, not only with COT reports.

Figure: An example of a stochastic oscillator COMP located in the main chart.  To insert another price we can use the functions ADD INDICATOR/CLOSEPRICE.  

Market breadth indicators

You can read more about the nature of market breadth indicators in the EDUCATION section. The following text will only discuss what your options are in relation to these indicators on the Finecharts website. The OVERVIEWS/MARKET BREADTH INDICATORS section offers a compact view of all market breadth indicators, and sectors for which these indicators are calculation on this website. The list of sectors currently contains three groups, and it is likely to grow in the future. Now it is the sector of technological stocks marked as  TECHNOLOGY (the calculation is carried out from stocks of the Nasdaq 100 index), the sector of energy stocks marked ENER, and the sector of gold stocks marked PMETAL. The price index is also calculated from the stocks that lie under the given synthetic symbols. It is calculated as the average of prices of all the stocks in the given group. We can see the percentage changes of these indices in the chart - in a month, a week, and a day.  The date in the chart shows the last known price from which the calculations are made. Market breadth indicators lie under the black letters, and line charts of the price of the given calculated synthetic index lie under the red words (ENER, PMETAL, and NASDAQ). When you click on the plus sign located completely on the left next to each symbol for a stock group, a list of all the stocks in the group opens.

The upper bar also contains the option LIST OF INDICATORS. Every time you open this option, one market breadth indicator appears, which is calculated for all the sectors of our database (currently ENER, PMETAL, TECHNOLOGY, SMARTIDX, DUMBIDX, FUNDSIDX). The last three refer to the market breadth indicators Smart Money and Dumb Money. You can read about the Smart - Dumb principle in the EDUCATION section.

Figure: List of indicators in the Market Breadth Indicators section.

Where else can you find market breadth indicators

You can insert market breadth indicators into your chart yourself, and not only for daily prices, but also 15, 30, 60, 120, and 180-minute, weekly, or monthly prices. You can do this in the CHARTS section. You can then save the created chart in any of your own directories (list of charts), and come back to it at any time in the future.

Figure: Market breadth indicators in the graphics editor - indicators from which you can chose are in the red box in the figure. The AD indicator is there, which is a classic Advance - Decline indicator; it is almost the same as the well-known McLellan Oscillator (only the calculation periods are different). Then there is the BVI oscillator, also used as a SMART-DUMB Money indicator. The HILO indicator is calculated as the difference between the number of stocks located in the area of their price maximums, and the indicator in the area of its minimums.  The MCF indicator is a composite indicator, in which both Advances and Declines, and New Highs and Lows are used for the calculation. The MOM indicator is an indicator that measures the market strength as Momentum (sum of the strength of individual stocks gives the resulting indicator). You can place the individual indicators into the main chart, and into secondary charts. You can combine multiple indicators in one chart; you can even combine various time frames - for example, the MCF calculated from 60-minute prices with the MCF calculated from daily prices.

Smart Money - Dumb Money

A number of articles deals with the nature of the indicators illustrated in this section; you can find them in the section EDUCATION/SENTIMENT INDICATORS. You can find the description of the SMART-DUMB MONEY page from the OVERVIEWS section here


Poslední aktualizace: 16.6.2011