TC2000 Introduction

1
TC2000 Introduction

• TC2000.com
• 1-800-776-4940
• Vas Madhava
• vas_at_pobox.com
• Aug. 12, 2006

2
Overview

• Background
• Technical Analysis
• Basic TC2000 Functions
• EZScans PCFs
• My favorite setups
• Current setups/Recent Real trades
• Questions

3
Why Bother ? Compounding
LOSSES
GAINS
EFFECT OF LOSSES EFFECT OF LOSSES EFFECT OF LOSSES
Original Loss of of Gain
Capital Capital Required to
1,000   Recoup Loss
900 10 11.1
850 15 17.6
800 20 25.0
750 25 33.3
700 30 42.9
650 35 53.8
600 40 66.7
550 45 81.8
500 50 100.0
400 60 150.0
300 70 233.3
200 80 400.0
100 90 900.0
50 95 1900.0
EFFECT OF RETURNS EFFECT OF RETURNS EFFECT OF RETURNS EFFECT OF RETURNS EFFECT OF RETURNS EFFECT OF RETURNS EFFECT OF RETURNS EFFECT OF RETURNS
               
  Various Growth Rates - 1000 Various Growth Rates - 1000 Various Growth Rates - 1000 Various Growth Rates - 1000 Various Growth Rates - 1000 Various Growth Rates - 1000 Various Growth Rates - 1000
Periods 2 10 20 30 40 50 100
0 1,000 1,000 1,000 1,000 1,000 1,000 1,000
1 1,020 1,100 1,200 1,300 1,400 1,500 2,000
2 1,040 1,210 1,440 1,690 1,960 2,250 4,000
3 1,061 1,331 1,728 2,197 2,744 3,375 8,000
4 1,082 1,464 2,074 2,856 3,842 5,063 16,000
5 1,104 1,611 2,488 3,713 5,378 7,594 32,000
6 1,126 1,772 2,986 4,827 7,530 11,391 64,000
7 1,149 1,949 3,583 6,275 10,541 17,086 128,000
8 1,172 2,144 4,300 8,157 14,758 25,629 256,000
9 1,195 2,358 5,160 10,604 20,661 38,443 512,000
10 1,219 2,594 6,192 13,786 28,925 57,665 1,024,000
4
Investment Success
Selection Strategy
Money Management/ Portfolio Design
Psychology
5
Primary Uses of Technical Analysis
Risk Management
Identifying Opportunities

• Define Entry and Exit Points
• Initial Stop
• Trailing Stop
• Time Stop Loss
• Profit Target

• Support and Resistance
• Moving Averages
• Candlestick patterns
• Trend line breaks
• Chart Patterns
• Indicators Stochastics
• Identify market psychology

6
Charting Packages
Factors to Consider

• Functionality
• Cost of Program
• Cost of Data Feed End of Day and Real Time
• Ease of Use
• Wide user community
• Extensibility

Low End
Middle End
High End
Telechart
MetaStock eSignal, QCharts Advanced GET
TradeStation
Pgm Free Data 30/month EOD 99/mo
Real Time
Pgm 500-1K Data 50/month
Pgm Free Data 99/month RT
7
TC2000 Pricing

• Current Name TeleChart 2005
• Company Worden Brothers, Inc.
• Two versions
• Gold
• End of Day/20 Mins Delayed data
• Cost 29.99/mon 299/year 539/2 years
• Platinum
• Real Time
• Cost 99.99/mon 999/year 1799/2 years
• Groups, Live Chat with Wordens, News

8
TC2000

• s

• -s

Speed Easy to use and master
Cheap
Great Support
Widely used
Useful for Screening New Buys
Industry Analysis
Indicator Sorts
Watchlist tracking
Proprietary Indicators MS, BOP and TSV
Custom Indicators
Yahoo Group
Worden Reports
PCFs and EZScans
Data can be exported
Very little fundamentals
No OTC Stocks, No Options
No systems development
No back testing (TC Companion available)
No programming SDK available
Few idiosyncrasies No Elliott Wave - (Fib Lines Avail)
No portfolio management Cant compare more than 2 symbols Can be slow to recalculate if many PCFs.

9
TC2000 Resources

• Online Resources http//www.worden.com/training
• Discussions, Videos, PCF issues, etc.
• Worden Books, Videos, Advanced Training
• PCFs and Ideas tradeon.com
• Yahoo Groups telechrt2005Users at
  groups.yahoo.com. Also has primers on various
  concepts. (2K users, 8K msgs)
• Backtesting Tool TCCompanion Traids.com
  (25/month)

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My Take on Selecting Stocks
IBD
IBD
IBD
IBD
Fundamental
Technical
Returns
Stock Criteria (Price, Cap,IndusG,
fromHi) Lists IBD, Value Line, Tobin Smith
Psychology (slightly contrarian)
IBD
Recent IPOs
TC2000
lt30 mins/day
View/Manage Existing Positions
11
Triple Stochastics Entry Setup
Risk
My Entry (Triple Stochs)
Loss Point 1-5 Below Low
Stochastics Xover 20
12
Applying the Setup Probability ?? Reward

• Long Term Investing vs. Short Term Trading
• Buying into a Trend Established Trends
• Go Long on dips in a Rising Trend
• Short Rallies on a Declining Trend
• Getting into a newly developing Trend
• Breakouts and Breakdowns Low Prob, High Reward
• Breakdowns on overbought conditions

13
Favorable Conditions

• Mid/Big Cap stock
• High Return Stocks
• I00P stock
• IBD Stock
• In Trend
• Bouncing off a major moving average
• 40MA, 50MA, 200MA, 500MABe careful Volume surges
• Volume on the recovery
• High Vol Above 20 day or gt3xs Average Volume
• Above all major MAs
• Reversal Candlestick patterns
• Abandoned babies, Doji, Bullish Engulfing,
  Hammers, Spinning Tops
• Past Failures look for Double Bottoms
• Look for Divergences (TSV)
• Favorable Industry Group
• Oversold on Weekly Time Frame
• Misc BOP

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Reversal Candlestick Patterns
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Things I look for

• Volume surges at oversold and overbought areas
• Topping and Bottoming patterns
• Way overbought conditions (esp. IBD stocks)
• Moving average crossover failures
• Emerging trends
• Recent IPOs being accumulated
• High Probability candlestick patterns

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Lessons Learned

• Always be critical of anything/everything you
  hear
• Learn to be both Long and Short
• Low Dollar Real Trading beats Paper Trading
• Dont have too many positions on
• Smart stop management
• Focus on low risk entries
• Learn to take profits
• Really understand charts and investor psychology
• Have a good system to manage your positions (I
  prefer Access)