Active-Trader - 2015 Week 1

Welcome back, Active Traders.

I am back from a week in sunny Cape Coral, FL.  Before you get too jealous. I was with my in-laws.  So what was I doing with all that free time on my hands?  Coding the Fib Lines indicator of course!

One question you might be asking is, does this indicator really help with trading?  Its a very relevant question since one of my resolutions for 2015 is to trade less.  In other words, don't take a trade unless the setup is so obvious you could explain the setup to someone who knows nothing about trading.  And with all these lines on the chart, some of them are bound to be meaningful and others are not.  How do you know which is which?  The answer is you never know for sure.  But sometimes when the signs appear, you have to act.

And along those lines, take a look at CBOE. As you know I have been a fan of this stock and long since my post CME back in December of 2014.  I was able to get some shares and stay long and ride a nice breakout.  This past week, I noticed the stock slammed into the 223.6% treeline and seemed to hit an invisible ceiling.

So I took the opportunity to take profits and since then the stock has pulled back almost $1. I don't expect the bull case is over in these shares, and I will reload on the long side if we can get a pullback to the 193.6% tree line just under $65 per share.

As for what else has been accomplished, I found (and coded in the DLL) the fib levels for the Dow-30 stocks.  Next step is to locate the Fib lines levels for the Nasdaq 100 and perhaps the SP-100. I would like to supply those Fib line levels when I release the indicator to members of my Yahoo group (for free of course).

As for ongoing challenges, I don't believe I will be able code the indicator for Thinkorswim.  As it turns out, the Think script environment has some serious limitations that I did not anticipate as follows:

• No ability to input data from the outside world except for simple parameters to the study.
• No file input or output, no ability to call Windows DLL files like in TradeStation
• Once you plot a value in ThinkScript, the price chart is scaled to always include the plot, which is pretty much a deal killer for Fib Lines in Think script which are very often out of view based on the time frame and Zoom level selected.

All this is pretty ironic considering I use Thinkorswim to discover the Fib line levels just to transfer them over the Windows DLL to include them into Tradestation.  Why don't I just do everything in Thinkorswim you might ask?  Because I prefer the programability of the TradeStation environment as well as the $1 pricing I for a trade of 100 shares or one option contract in Tradestation.

Overall, it has been a good start to 2015 and I started off the year with a good rest and a good running start of the Fib Lines indicator. I am feeling pretty good about my prospects and content to just watch events unfold and wait for great trading setups to occur.

So go ahead and relax and don't feel any pressure to act.  Let the market doing the talking and don't make any moves until your market declares itself one way or the other.  Don't guess, react.

And have a great week ahead.