Uncle Steve Presents:

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Uncle Steve Presents
The Whole Ball of WaxThe Sticks
According to Uncle Steve
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Whoopin Ass Cranes
The official sponsor of Teach Talk Trade
2004 Super Bowl Champions
From Extinction to Distinction
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Help Wanted
Striking it rich the hard way
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The Trader

• The symbol of all relationships among such men,
  the moral symbol of respect for human beings, is
  the trader.  We, who live by values, not by loot,
  are traders, both in manner and spirit.  A trader
  is a man who earns what he gets and does not give
  or take the undeserved.  A trader does not ask to
  be paid for his failure, he does not ask to be
  loved for his flaws.  A trader does not squander
  his body as fodder, or his soul as alms.  Just as
  he does not give his work except in trade for
  material values, so he does not give the values
  of his spirit -- his love, his friendship, his
  esteem except in payment and in trade for human
  virtue, in payment for his own selfish pleasure,
  which he receives from men he can respect.  The
  mystic parasites who have, throughout the ages,
  reviled the trader and held him in contempt,
  while honoring beggars and looters, have known
  the secret motive of their sneers  a trader is
  an entity they dread - a man of justice.
• --Ayn Rand

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Intergalactic Trading

• My brother-in-law knows a guy, who knows a guy,
  that says he heard, from a decent source that XYZ
  Pharmaceutical has a pill, in development, that
  will cure stupidity. Its going to really
  take-off.
• A buck ten, whoa a dollar twelve, you guys are
  missing it its up to a dollar eighteen you
  guys are going to miss this spaceshot.
• Its going to the moonI tell ya, its going to
  the moon.
• You better be carefulthis may be the moon shot
  that ends up in Uranus.

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Candlestick Review

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My Desktop
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Candles, MAs and Big Mo
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The Trend is Your Friend
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Up, up and away
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Beauty Eh?
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Clues in every time frame
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Daily
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I want my MP3
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Its all over nowbaby blue.
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The AAPL of my eye.
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Technical Analysis

• Candlesticks Works well on all issues
• Moving Averages (T3s) A new twist on moving
  averages
• Momentum Oscillators Reliable measurements of
  overbought and oversold situations
• Standard Error Bands A stunning intraday
  measurement of market momentum

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Momentum Oscillators

• I believe the most useful tools employed by
  technicians are momentum oscillators.  The
  momentum oscillator measures the velocity of
  directional price movement. When price moves up,
  at some point the market is considered to be
  overbought when it moves down, at some point the
  market is considered to be oversold.  In either
  case, a reaction or reversal is imminent. 

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Momentum Oscillators

• The slope of the momentum oscillator is directly
  proportional to the velocity of the move.  The
  distance traveled up or down by the momentum
  oscillator is proportional to the magnitude of
  the move.  The momentum oscillator is usually
  characterized by a line on a chart drawn in two
  dimensions. The Y axis (vertical) represents
  magnitude or distance the indicator moves the X
  axis (horizontal) represents time.

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Momentum Oscillators

• Moving Average Oscillator
• StochasticRSI Oscillator
• Chande Momentum Oscillator
• Standard Error Oscillator 
• Bollinger Band Oscillator

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Uncle Steves Oscillators

• T3Osc Mov(Fml("T3")- Ref(Fml("T5"),-1),3,S)
• StoRSI (Stochastic RSI)
• FibCMO (CMO3CMO5CMO8/3)
• SEBOsc (Standard Error Bands)
• AWEsome (MovAvg Osc)

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To Err is HumanTo Standard Error is Divine

• Standard Error Bands are a type of envelope
  developed by Jon Andersen. They are similar to
  Bollinger Bands in appearance, but they are
  calculated and interpreted quite differently.
  Where Bollinger Bands are plotted at standard
  deviation levels above and below a moving
  average, Standard Error Bands are plotted at
  standard error levels above and below a linear
  regression plot.

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Standard Error Oscillator

• During the past year, I have become fascinated
  with Standard Error Bands. Heres a formula that
  I use to determine overbought and oversold
  situations in the index futures markets.
• (C2STE(C,8)Mov(C,3,S))/(4(STE(C,8)))100

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Standard Error Bands
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Standard Error Band Mechanical
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SEB poop sheet
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Equity curve
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StochasticRSI Oscillator

• Roger Altman, William Blau, Stanley Kroll, and
  Tushar Chande have all improved on J. Welles
  Wilders Relative Strength Index.  I believe the
  best of these derivative indicators is the
  Stochastic RSI.  MetaStock offers one version of
  this indicator on their formula page. This
  version is just one of many I use.  I like
  substituting the numbers 3, 5, 8 in this
  formula. 
• Mov( ( RSI(8) - LLV( RSI(8) ,8 ) ) / ( ( HHV(
  RSI(8) ,8) ) - LLV(RSI(8),8) ),3,E) 100

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StochasticRSI Rules

• Initiate trades only if the 21 sma confirms the
  direction of the signal (the trend is your
  friend)
• Buy the opening after StoRSI closes below the
  trigger of 10
• Cover the long position if there is a close above
  the trigger of 90
• Sell short the opening after StoRSI closes above
  the trigger of 90
• Cover the short position if there is a close
  below the trigger of 10

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Fibonacci Chande Momentum Oscillator

• The Fibonacci Chande Momentum Oscillator (FibCMO)
  is a modification of the Chande Momentum
  Oscillator (CMO).
• The FibCMO is a great timing device for entry,
  especially if timing into swing tradeswith the
  trend.
• This indicator is an example how a trader can
  take a formula and improve its performance by
  thinking outside the box.
• ((CMO(C,3))(CMO(C,5))(CMO(C,8)))/3

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MasterBlaster Rules

• Initiate trades only if the 34 sma confirms the
  direction of the signal (the trend is your
  friend)
• Buy the opening after the FibCMO closes below the
  trigger of -34
• Cover the long position if there is a close above
  the upper standard error band
• Sell short the opening after FibCMO closes above
  the trigger of 34
• Cover the short position if there is a close
  below the lower standard error band

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AWEsome Rules

• Initiate trades only if the 21 sma confirms the
  direction of the signal (the trend is your
  friendagain and again)
• Buy the opening after the AWE closes below the
  trigger of -.4
• Cover the long position if there is a close above
  .4
• Sell short the opening after price closes above
  the trigger of .4
• Cover the short position if there is a close
  below -.4

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T3Osc Rules

• Initiate trades only if the 34 sma confirms the
  direction of the signal (the trend is your
  friend)
• Buy the opening after the T3Osc closes below the
  trigger of -1.5
• Cover the long position if T3Osc close is above
  1.5
• Sell short the opening after T3Osc closes above
  the trigger of 1.5
• Cover the short position if the T3Osc closes
  below -1.5

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CCT MAO Awesome

• The first formula I ever programmed was moving
  average oscillator (with my Tandy Model I1979). 
  Ive built many oscillators based on moving
  averages. This MAO is a 3-day simple moving
  average of the difference between a 3 and 13 day
  sma.
• Mov(Mov(C,3,S)-Mov(C,13,S),3,S)

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Theres a first time for everything
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Formulae

• SEB lin. reg8 2 std. err. 3sma
• SEBosc (C2STE(C,8)Mov(C,3,S))/(4(STE(C,8)))1
  00
• StoRSI Mov( ( RSI(8) - LLV( RSI(8) ,8 ) ) / ( (
  HHV( RSI(8) ,8) ) - LLV(RSI(8),8) ),3,E) 100
• FibCMO CMO3CMO5CMO8/3
• T3osc Mov(Fml(T3")- Ref(Fml(T5"),-1),3,S)
• AWE Mov(Mov(C,3,S)-Mov(C,13,S),3,S)

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Additional Comments Mechanical Trading the
E-Minis

• Stops and additional exit criteria can and should
  be used
• Any momentum oscillators can be usedthere is no
  best one
• Any trend identification is better than no
  trend identifier
• Over-optimizing is never a good idea

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