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| Streaming
Charts |
LIVE CHARTS: REAL-TIME STREAMING CHARTS
I use a split screen system to trac the market. On one
screen, I run real-time streaming quotes from Interactive brokers, which
is integrated with their trading platform. On the other screen, I run
real-time streaming charts from LiveCharts.com.
I find streaming charts essential for swing trading success. Despite
several drawbacks to LiveCharts, they are so far the best vendor I've
found for this purpose. Let me describe what I like about their charts
and why I subscribe to their service, before I itemize its drawbacks.
Again my disclaimer from last week applies. I derive no financial
benefit from LiveCharts for discussing their service.
LiveCharts has several excellent features. For me, the first is that
their candlestick charts are the clearest I have found on the internet.
The candles are extremely easy to read. They have been formatted for the
screen so they are immediately clear in all time frames and are very
easy to decode. Down bars are in red and up bars in white. Both are
surrounded by a thin black outline and "pop" out from the
background. This feature allows them to be interpreted at a glance. As
the market moves, they update instantly in real time. Since candles are
a key part of my decision-making process when trading, vivid, easily
read candles are essential to my success.
The feature that has me hooked on LiveCharts, however, is the ability to
go almost instantly from one time frame to another. Charts are available
in the following time frames: 1-, 5-, 10-, 15-, 30-, 60-minute, daily,
weekly, monthly, quarterly and yearly. If I am in a trading position, or
thinking of taking one, typically I will toggle back and forth between
time frames as I "watch" the stock. The ability to do this
quickly, without waiting several seconds for a chart to reload, is
essential to me.
Let me give you an example. Early this past trading week, I was thinking
of taking a long position in Infosys Technologies (INFY, $46.53), a
software stock which has been demonstrating excellent relative strength.
(For more on INFY see this week's Stocks To Watch.) I had spotted the
stock in my nightly scans on StockCharts.com,
a service I will write about next week. I put INFY into my Interactive
Broker streaming quote system and noticed it was strengthening. The
stock was just below $50 at that time.
My first step was to go to the hourly chart. I put my standard
"studies" on the chart: moving average and volume, lengthening
the moving average from the default period of 10 out to 30 periods. I
saw that INFY had bottomed below $45 on July 26th and was in a steady
uptrend. A quick verification on the screen with my ruler confirmed the
stock was well above a rising uptrend line. My interest was further
aroused. What did the other time frames say about the chart?
A click on the monthly chart showed INFY had been above $150 during the
bubble days of early 2000. It had come down to the mid-20's in early
2001 and had been in an uptrend since. The stock had hit round-number
resistance at $50 in early January 2004 and was trading just below that
level now. INFY, despite recent market weakness, was attempting to form
a base.
I clicked on the weekly chart. It loaded in about a nanosecond and I saw
a magnification of the monthly pattern. In mid-May INFY had bottomed at
$35. It was again testing key resistance. The candle of the previous
week had a shaven bottom and almost-shaven top, meaning that the stock
opened that week on the weekly low and closed at the weekly high. So far
the situation looked very bullish.
The daily chart showed me there had been five white candles in a row.
Volume had been strong on the advance. INFY had encountered resistance
near $48 and should have support at that level. I had already analyzed
the hourly chart. To view the recent price action with even greater
detail, I now pulled up the 5-minute chart.
There was clear recent support at $49.75 and resistance at $50.50. An
examination of the 1-minute chart showed that INFY was in a small
rectangle with resistance at $50.20. In almost all time frames, INFY was
above a rising 30-period moving average, a key part of my swing trading
decision-making. My analysis was complete. I determined I would take a
position if INFY broke resistance on the 1-minute chart. I then went
back to watching it and other stocks of interest on Interactive Brokers.
The entire exercise described above took perhaps one to two minutes of
analysis time. I was able to move rapidly between INFY's time frames
without losing track of the rest of the market. In the last hour of
trading Monday, the stock penetrated $50.20 and I took a long position.
The shares reached $51 and closed near that level. On Tuesday, the
market was weak at the opening. INFY fell in the first hour back to near
where I bought it and I exited the trade at about breakeven. For the
time being, the breakout had failed.
When I am not following specific stocks like INFY, I am watching the
S&P 500 very closely. That is because I always want to trade in
harmony with the direction of the overall market. Typically I follow the
five-minute chart, although at the opening I will often toggle to the
one-minute view to see how the day’s directional bias is starting to
unfold. Although I sometimes use the studies LiveCharts provides, such
as MACD and Bollinger bands, typically I follow volume in conjunction
with the 30-period moving average. As I've stated previously, this
moving average for me best defines the trend in all time frames
including the one and five-minute charts.
A subscription to LiveCharts, which includes real time data fees for the
Nasdaq and New York Stock Exchanges, costs about $30 a month. I will be
the first to emphasize the site has its drawbacks. First, it tends to be
"glitchy." The Market Watch screen which incorporates several
major averages including the S&P 500, will often switch to another
screen without warning. In order to get back to the S&P screen I
must reload the site (it is my home page). This is a waste of time and
energy.
Second, there are times when the chart has big holes in it over various
time frames. On an hourly chart, for example, the first and last days of
information may be present, but the middle is missing. These gaps make
analysis frustrating and difficult. At times they will
"disappear" if I reload the site and the chart; at other times
they will persist.
Another recent annoyance is that if I don't actively work with the site
by changing the stock or the time-frame, the site will "time
out." If I even go for a glass of water, I will have to reload the
site, and re-input the volume and moving average study. LiveCharts also
allows only one study to be used at a time. I cannot for instance, put
on Bollinger bands and MACD. If I want that information, I must load the
same chart twice. Finally, Livechart's support is, in my judgment, very
poor. When I have written LiveCharts for tech support or about my
account I have received delayed answers or in some cases they have not
written back at all.
Despite these limitations, the ability to instantly
toggle between time frames is a huge plus for me when making a trading
decision. If you are not already running streaming charts where you can
go back and forth across time frames very quickly, LiveCharts is a site
to investigate.
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