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Strategies & Market Trends : AIQ TradingExpert for Windows -- Ignore unavailable to you. Want to Upgrade?

To: Don Maher who wrote (586)	6/6/1998 5:42:00 PM
From: Bruce A. Bowman	Respond to of 1176

Hi Don- My response is in 2 parts and as you get into this you'll see why. This one addresses the mass of s/w, the other addresses what you're trying to do. When I first tried to trade by hooking up a piece of s/w between the stock market and my trading account, I bought nearly every piece of trading s/w out there. There's a lot of junk out there. The biggest problem with most of it is the proliferation of data formats. The programs for TA that I most respect are: Advanced GET AIQ Trading Expert Metastock TC2000 V3 TechniFilter Plus TradeStation You can make $$$ with any of these programs. How well you do is a function of how well the s/w fits your mindset and way of looking at charts. I stopped using TC2000 and Metastock because of the data format issue. The remaining 4 can all accommodate AIQ format for stocks, though GET doesn't support group/sector and market data in AIQ format. If you want to use AIQ, these 4 are all great choices, but none compete with the simplicity of TC2000. Here's a (very opinionated) rundown of strengths for the 6 as I see it: Advanced GET- support for Elliott wave analysis plus several proprietary indicators (they call them studies) for trading. This is a tool-box program in that there's nothing automated about the selection process, but there are a lot of tools (indicators/studies) for making trade decisions. You have to develop your own specific trading rules outside the program. It has limited scanning ability, no test capability, no custom indicators and no portfolio management features. It did allow group/sector analysis (by setting up spreads) in DOS, but that's not available 'till they add AIQ group/sector data handling to their new Windows version. AIQ Trading Expert- both a toolbox and an expert-system based trading system. Basic scans are limited, but EDS adds very sophisticated scan capability that falls short by not picking up the single most powerful feature of AIQ: general market signals. Trading Expert has no test capability, and the attempt to fill that gap with EDS fails miserably. AIQ TES has portfolio management that has unique stop systems that lend themselves to intraday trading (unfortunately you can't calculate the next days stops and enter the order ahead of time). EDS adds custom indicator support, but they can't be plotted (yet). Metastock- this product has done more for TA than anything else out there: good scans, great charting, easy to write custom indicators, test capability that's only a little better than EDS and no portfolio management. The test capability is handicapped by not being able to execute on your entire database: you have to do one stocks at a time then accumulate the results manually. TC2000- I used the Pro version which has CD-based historical data files managed in a Windows shell. Good charting for a DOS facitlity, scans that used to be sophisticated but which seem to diminish with each passing year, no test capability, no custom indicators and no portfolio management. Just a barebones charting program from a data vendor that has high quality data. TechniFilter+ - Excellent scan features that introduce the concept of "what-if" after the scan has been run. Data from the scan results are saved in a way that allow later parameter modification. Test capability is extended beyond what Metastock provides by allowing you to: - test a batch of stocks with daily or weekly data, - trade at a specific price (vs. open, high, low or close only) if specific price conditions are met, - add to or sell part of a position (vs. all or nothing style of trading), - generate sophisticated test results TF+ supports custom indicators with a rather esoteric language, but it's so powerful that it's worth learning. I think charting falls short of the others because I find it clumsy, but you can put any indicator on the chart in a template for viewing. No portfolio management. It has some supplied indicators that other s/w doesn't offer, e.g. beta and alpha, scannable P&F, scannable zig zags & others. There's a built-in batch processing feature that allows full automation of daily tasks of scanning and reporting plus saving results to a list for further (automated if you wish) processing. There's no portfolio management, but TF+ still has a lot of bang for the buck. TradeStation- nothing comes even close to TS for testing and scanning. The scans are also the system test, so there's nothing additional to write. Requires programming skills to use TS for anything beyond minimal use. Charting is excellent. Portfolio management is available in an add-on module. Custom indicators are limited only by your imagination. Available for either end-of-day use or real time data feeds. If you feel compelled to test what you're going to trade and want to do an accurate test, this is the only real answer. The test summaries that it provides are inadequate, imo, but there are 3rd party products that will improve this, or you can write your own by crunching test data files you create during execution. What I use... - Day-to-day I use AIQ plus a money management program for the AIM algorithm called Newport; I also use Yahoo! extensively. - When selecting stocks, I use AIQ's fundamentals module with Dial/Data fundamentals data, AAII's Stock Investor (may eventually replace using AIQ for fundamentals screening because the D/D has so many holes in their fundamentals data) and TechniFilter Plus. I use TF+ to calculate beta & alpha, relative strength analysis, and to do entry screening. - When doing market analysis I use AIQ and occasionally GET. TradeStation never gets used except for difficult testing. I'll also use GET occasionally for looking at charts because it's so quick and some of their indicators aren't available anywhere else. If I could only have 2 of the TA programs that I own today, they would be AIQ and TF+. If I could only have 1 of these TA programs and had to minimize other s/w and services it would be a difficult choice, but I'd either: - use Dial/Data, go back to Telescan Prosearch (only) and keep AIQ TES with the EDS add-on. I think the EDS add-on is so poor at testing that it's a tough decision. The AIQ seminar this fall will clear my head about group/sector analysis I hope. - use Telescan data + Prosearch with TF+. The drawback here is giving up AIQ general market signals and charting that isn't as good. On the long side, beta and alpha are very useful when you use AIM. There's even a chance I could eliminate Newport and mechanize the AIM algorithm in TF+, but I haven't tried yet. I don't think I could trade with AIM without having some sort of good quality TA program to assist in setting the next buy/sell point. That's a result of how I best image things... the chart is central. Plus AIM doesn't care about support/resistance or chart patterns or indicators. This is all very opinionated and begs the issue you're trying to address. That's in the next note. Bruce

To: Don Maher who wrote (586)	6/6/1998 7:05:00 PM
From: Bruce A. Bowman	Read Replies (2) \| Respond to of 1176

Hi Don- With the s/w stuff separated, I'll try to be a little more specific about you're usage. Keep in mind that this is only opinion and that there are a lot of ways to peel the onion. re: 4,300+ symbol database... maintaining 4,300+ symbols, you're spending too much time on data maintenance. And if you aren't spending a lot of time maintaining the data, you aren't reviewing the daily data variance reports and correcting all the errors. That means that the reports you're generating are as filled with errors as there are errors in the variance report (not all variances are legitimate errors, but they have to be tracked down and confirmed). It's mandatory to have clean data and then run the reports on the clean data. Running the reports then correcting the data does no good and that includes the market signals. AIQ recommends a minimum volume (which I think is a little too low) and they did most of their testing using the S&P 500. With 2,000+ symbols I was spending 1 to 2 hours per day correcting data errors and looking up symbol changes. Your numbers have to be higher than that. Once I went thru and got rid of every stock that didn't trade every day and stocks that were less than $2/sh. and more than $50 I was able to get it down to 1/2 hr per night. Another way to approach it is to do a fundamentals search using any of the search facilities (Prosearch, Stock Investor, Value Line, etc.). You can also go to IBD and copy into your database all the stocks that have an earnings rank (ER) of greater than some value you're comfortable with, say > 80 or 85. You'd like to end up with a list of 300 or more stocks that have had good earnings growth and meet a few loose criteria. The intent is to gain an unfair advantage over the average trader, so that if there's a price setback, you can trade with a wider range because you have a reasonable expectation that you're trading a stock that is likely to recover quickly when the market recovers. If you want to do group/sector analysis, add what's needed for that (I use the S&P 500, but then again I've already disqualified myself for that type analysis) and if possible, place your first list (fundamentally sound stocks) in the correct groups. I don't trade the AIQ ERs. I pick stocks with good fundamentals, then I trade these stocks using a money management scheme that has me add to a position or sell some of it, but never close it out. AIQ gets used to help decide where I set the next buy/sell point. I use a combination of chart patterns (standard old Magee & Edwards), AIQ bands and RSI to select the initial entry point, decide when it's time to move on to another stock and to adjust the next trade value. I usually trade 1 stock in excess of a year, a couple I've been trading for 2 years. So you can guess that I tend to look at weekly charts far more than I do daily charts. I've wrestled with entry/exit in AIQ using indicators only and found that the recommended ERs on the Weighted Action List + confirmation (Phase + DirMov) in conjunction with market signals can work. You can expect to see a lot of busted trades that are outweighed by winners. Overall I thought I hit around the market average unless I got a big winner. When I looked back at my track record, I realized I'd left a lot of $$$ on the table. To me that meant that I was being taken out of the market for the wrong reasons and it reflected on my judgement in evaluating indicators or setting stops in the short term. The very nature of ERs make them unreliable to trade by themselves. What parts of AIQ that you use are unimportant. They have to make sense to you. I have a friend that trades using only AIQ, he only uses AIQ bands and candles, and he trades both long and short. That's it. And he's making $$$. The only thing that he does outside AIQ is he puts some effort into what stocks he trades. There's that unfair advantage again. The bottom line to all this is that you aren't going to solve a money-loss problem with more s/w. I think you suspected that or you wouldn't have asked if s/w was actually getting USED. AIQ can do pretty much everything that you'd ever want. It's a very complete and powerful program. They're working on their deficiencies and I think they'll eventually have the EDS tests and scans worked out. But it won't be a universal answer to technical trading... nothing is. Bruce