TRADEGUIDER ®

FOR WINDOWS

Getting Started
START HERE TO GET UP TO SPEED FAST…

POWERFUL ANALYSIS FOR SERIOUS TRADING & INVESTMENT

 Getting Started
Helping you every step of the way…

Third Edition

All Rights Reserved

Copyright © 2003 – 2005 by TradeGuider Systems Ltd

Printed in the UK & USA

Burnhill Business Centre,

Provident House, Burrell Row,
High Street, Beckenham,
Kent, UNITED KINGDOM, BR3 1AT

www.TradeGuider.com

Getting Started 3
TradeGuider, VSA and Volume Spread Analysis are trademarks of TradeGuider Systems Ltd. IBM is a trademark of
International Business Machines Corporation. MS-DOS, Microsoft Windows, Microsoft Windows 95, Microsoft
Windows 98, Microsoft NT, Microsoft 2000, Microsoft Me, Microsoft xp, Microsoft Intellimouse, Microsoft Office,
Microsoft Word, and Microsoft Excel are all trademarks of Microsoft Corporation. All other product names or services
mentioned are trademarks or registered trademarks of their respective owners.

No part of this publication may be reproduced or used in any form or by any means, including (but not limited to) –
graphic, electronic, mechanical (including photocopying, mimeographing, recording, taping, or copied to information
storage/retrieval systems), without written permission from TradeGuider Systems Ltd.

Information in this document is subject to change without notice and does not represent a commitment on the part of
TradeGuider Systems Ltd. The software described in this document is furnished under a license agreement and a
disclosure/disclaimer agreement. The TradeGuider software may be copied only in accordance with the terms of these
agreements.

Getting Started 4
 TradeGuider Software License Agreement
READ THE FOLLOWING CONDITIONS CAREFULLY BEFORE OPENING THE SEALED SOFTWARE PACKAGE. OPENING THE
SOFTWARE PACKAGE AND/OR USING THE SOFTWARE INDICATES YOUR ACCEPTANCE OF THESE CONDITIONS. IF YOU DO NOT
AGREE WITH THESE CONDITIONS, PROMPTLY RETURN THE SOFTWARE PACKAGE UNOPENED AND THE ACCOMPANYING
ITEMS (INCLUDING DOCUMENTATION AND CONTAINERS) WITH PROOF OF PURCHASE TO THE PLACE YOU OBTAINED THEM
AND THE MONEY WILL BE REFUNDED.

1. License

The enclosed software (“Software”) and accompanying documentation (“Documentation”) are licensed, not sold, to you under the following
conditions by TradeGuider Systems Ltd (“TradeGuider Systems”.) TradeGuider Systems reserves to itself any right not expressly granted to you
under this non-exclusive licence agreement (“License Agreement”.)

TradeGuider Systems retains all rights in the Software and Documentation, including, but not limited to, copyrights and trade secret rights. These
rights are protected under United Kingdom law and international agreements including, without limitation, the Berne Convention, the Universal
Copyright Convention, and Title 17 of the United States Code.

You agree not to copy or modify the Software and Documentation except as expressly allowed by this License Agreement. You may make one
backup copy of the Software, provided that you reproduce and place our copyright notice on the backup copy. However, the Software may only be
used on one computer at a time. If you install the Software on a computer connected to a network, you must purchase a separate license for each
computer that could be used to run the software at the same time as another computer on the network.

You may not lease, rent, or distribute the Software or the Documentation.

All Updates are subject to this License Agreement unless otherwise agreed. If you fail to register the Software and Documentation with TradeGuider
Systems, we will be unable to notify you about, or provide you with Updates, and you assume the entire risk in that event.

2. Term

This License Agreement is effective until terminated. You may terminate this License Agreement by returning the unused Software and
Documentation to TradeGuider Systems. TradeGuider Systems may terminate this License Agreement if you breach any of the conditions. Upon
termination of this License Agreement for any reason, you agree to return all copies of the Software and Documentation to TradeGuider Systems or to
the authorised TradeGuider Systems dealer from whom you purchased it. All provisions of this License Agreement relating to disclaimers or
warranties; limitation of liability, remedies, or damages; and TradeGuider System’s proprietary rights shall survive termination.

3. Object Code

The Software is delivered as object code only. You agree not to decompile, disassemble, or otherwise reverse engineer the Software.

4. Limited Warranty and Liability

THIS LICENSE AGREEMENT GIVES YOU SPECIFIC LEGAL RIGHTS. YOU MAY HAVE OTHER RIGHTS WHICH VARY FROM PLACE
TO PLACE. IN ADDITION, YOUR LOCAL LAWS MAY NOT ALLOW CERTAIN LIMITATIONS TO APPLY TO YOU.

TradeGuider Systems warrants that the Software will perform substantially in accordance to the Documentation for a period of ninety (90) days from
the date of delivery (“Warranty Period”.) TradeGuider Systems does not warrant that the functions contained in the Software and Documentation will
meet your requirements or that the operation of the Software will be uninterrupted or error-free.

TradeGuider Systems also warrants that the CDs or other media on which the Software is furnished will be free from defects in materials and
workmanship under normal use during the Warranty Period. Any other software and any hardware furnished with, or accompanying the Software, is
not warranted by TradeGuider Systems.

Your only remedy under this limited warranty is, at TradeGuider System’s discretion, either (a) the replacement of any defective CDs or other media
on which the Software is furnished, or (b) refund of the price paid. To request replacement CDs or a refund, contact TradeGuider Systems or the
authorised TradeGuider Systems dealer from whom you purchased the Software. You may be required to present your receipt or other proof of
purchase. The Warranty Period for replacement CDs or other media shall not extend beyond the original Warranty Period for the original CDs or
media.

Getting Started 5
EXCEPT AS PROVIDED ABOVE, THE SOFTWARE AND DOCUMENTATION ARE PROVIDED “AS IS” WITHOUT WARRANTY OF ANY
KIND, EITHER EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE, AND THE ENTIRE RISK OF THE QUALITY AND PERFORMANCE OF THE SOFTWARE
AND DOCUMENTATION IS WITH YOU.
TRADEGUIDER SYSTEMS’ SOLE OBLIGATION OR LIABILITY UNDER THIS AGREEMENT IS THE REPLACEMENT OF DEFECTIVE
MEDIA OR REFUND OF THE PURCHASE PRICE WITHIN THE WARRANTY PERIOD AS STATED ABOVE. IN NO EVENT WILL
TRADEGUIDER SYSTEMS BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES, INCLUDING, WITHOUT
LIMITATION, ANY CLAIM BY ANY THIRD PARTY, ANY LOSS OF DATA, ANY LOSS OF PROFITS, OR ANY LOST SAVINGS, ARISING
OUT OF USE OF, OR INABILITY TO USE THE SOFTWARE OR DOCUMENTATION, EVEN IF TRADEGUIDER SYSTEMS HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL TRADEGUIDER SYSTEMS BE LIABLE FOR ANY
DAMAGES, NOR SHALL TRADEGUIDER SYSTEMS’ LIABILITY EXCEED THE MAXIMUM OF THE SUGGESTED RETAIL PRICE OR
THE PRICE PAID FOR THE SOFTWARE AND DOCUMENTATION.

5. General

You agree that anything provided to you by TradeGuider Systems shall not be exported or re-exported in violation of any export provision of the
United Kingdom or any other applicable jurisdiction. This License Agreement shall be governed by and interpreted under the laws of the United
Kingdom, and any litigation arising from this License Agreement shall be pursued only in the courts of the United Kingdom.

If you purchased or obtained the Software or Documentation from someone other than TradeGuider Systems or your authorised TradeGuider Systems
dealer, TradeGuider Systems reserves the right to deny you support, Updates, or remedies that would otherwise be available under this License
Agreement.

If you have any questions, please contact TradeGuider Systems:

TradeGuider Systems LLC

One South Wacker Drive
Suite 3875
Chicago
IL. 60606

Telephone: 877-392-3895

BY OPENING THIS PACKAGE, YOU ACKNOWLEDGE THAT YOU HAVE READ THIS AGREEMENT, THAT YOU UNDERSTAND THIS
AGREEMENT, AND THAT YOU AGREE TO BE BOUND BY THIS AGREEMENT. YOU FURTHER AGREE THAT THIS LICENSE
AGREEMENT IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN YOU AND TRADEGUIDER
SYSTEMS, AND THAT IT REPLACES ANY PROPOSAL OR PRIOR AGREEMENT, ORAL OR WRITTEN, AND ANY OTHER
COMMUNICATIONS RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT.

Getting Started 6
 Disclosure and Disclaimer
The information presented in this manual is confidential and proprietary to TradeGuider Systems Ltd. This information
cannot be used, disclosed, or duplicated without the prior written consent of TradeGuider Systems Ltd. The work is
protected by Copyright laws and no unauthorised copying, adaptation or distribution is permitted.

The material presented in this document is believed to be accurately presented. However, this work is not guaranteed as
to accuracy or completeness, and is subject to change without notice, at any time.

Trading in stocks, futures, options, mutual funds, and currencies is a speculative and high-risk activity, which should not
be undertaken without serious study.

Neither TradeGuider Systems, LLC (or LTD) companies, nor its employees, resellers, or other affiliates, recommends
any security, either for purchase or sale. All securities that are shown in the manuals are for illustrative and educational
purposes only.

The TradeGuider software is designed to be used as a decision support tool by investors and traders to evaluate
opportunities and also to augment other trading approaches (software or otherwise). TradeGuider can be used to
significantly enhance many different methods of trading and investing.

TradeGuider is a non-optimised system, which means that the mechanics which produce the indicators are not subject to
past performance. This ensures that your software will continue to work effectively and produce high-quality indicators,
irrespective of market conditions at the time. However, despite our efforts to provide you with the best volume
indicators in the world today, you need to be aware that there is a risk of loss in trading (or investing), due to factors
which may be outside your control.

There is no guarantee that the systems, trading techniques (or methods), indicators, and/or other information presented in
the documentation, videos, or CD ROMS will result in profits, or that they will not result in losses.

In common with any other speculative venture, only risk capital that you can afford to lose. Neither TradeGuider
Systems Ltd, nor any other party representing our Company, makes any guarantees or any specific trading
recommendations, in the current version of TradeGuider, or any additions, revisions, and addenda. All trading and
investment activities carry risk, and all speculative decisions made by an individual remain the responsibility of that
individual.

The client acknowledges and agrees that TradeGuider Systems Ltd does not make any representation, warrantee or
guarantee regarding the information and techniques described in our documentation (or training media), or regarding a
client’s ability to utilise the information and techniques described in the aforementioned products, or regarding a client’s
likelihood of success in attempting to utilise the same.

In the event that any liability is alleged or awarded in any forum notwithstanding the aforementioned, such liability shall
be limited to the price paid by the client for the goods in relation to the alleged liability.

Getting Started 7
Getting Started 8
 Contents
WELCOME LETTER ………………………………………………………………………………. 13

VOLUME 1 – GETTING STARTED GUIDE

INTRODUCTION …………………………………………………………………………. 17

ABOUT THIS SECTION …………………………………………………………………. 18

TRADEGUIDER IS DIFFERENT ………………………………………………………. 19

STEP 1 – INSTALLING TRADEGUIDER ……………………..……………………. 25

STEP 2 – RUNNING TRADEGUIDER FOR THE FIRST TIME ………………… 31

STEP 3 – COLLECTING DATA ……..……………………………………………….. 33

STEP 4 – DISPLAYING A CHART ………….………………………………………. 41

STEP 5 – A QUICK LOOK AT CHARTS ...…………………………………………. 49

STEP 6 – THE TRADEGUIDER INDICATORS …………………………………… 51

STEP 7 – PLOTTING TECHNICAL ANALYSIS INDICATORS ……………….. 55

STEP 8 – DRAWING A LINE STUDY ………………………………………………. 59

STEP 9 – CHANGING PROPERTIES ………………………………………………. 65

STEP 10 – REMOVING CHART OBJECTS …………………………………………. 67

STEP 11 – GETTING HELP …………………………………………………………… 69

ADVANCED TOPICS

STEP 12 – RANKING & SCREENING SECURITIES ……………..…………….. 75

THE STOCK SCANNER ……………………………………………………… 76

THE INDICATOR SCANNER ………………………………………………… 93

THINGS TO REMEMBER ………………………………………….………………………………. 103

NOTES ……………………………………………………………………………….………………… 104

Getting Started 9
 VOLUME 2 – BASIC TRADING GUIDE

INTRODUCTION ………………....………………………………………………………………..................... 109

ABOUT THIS SECTION ……………..…………………………………………………………………………………. 110

BASIC TECHNIQUES THAT CONSTANTLY WORK …..………………………………………………. 111

TRADING vs. INVESTING ………………………………………………………………………. 113

SUPPORT & RESISTANCE ……………………………………………………………………………….…………. 129

Drawing Manual Support & Resistance ………………….…………………………………………. 130
Showing Automatic Support & Resistance ………………………………….………….………… 130
Showing Highs & Lows …………….………………………………………………………………..………. 130
Automatically Displaying Highs & Lows ………..……………………………………………..…… 132
Trend Clusters ……….………………………………..….…………………………………………………….. 132
Displaying Trend Clusters ………………………………………………………………………………….. 134
Pivot Point Levels …………………………………….…………………………………………………………. 134
Displaying Pivot Point Levels …………………………………………………………………………….. 136

TRENDS ……………………………………………………………………………………………………………………….… 137

The Last Active Trend ……………………………………………………………………………………….. 137
Displaying the Last Active Trend ……….……………………………………………………………… 138
The Trend Indicators ………..…….………………………………………………………………..………. 138
Displaying the Trend Indicators …………………..……………………………………………..…… 139
Short Term Trend Changes – The Diamonds ……….………………………………………….. 140
Interpreting Trend Status Using the Diamonds ……………………………………………….. 141
Taking an Overall View of the Diamonds …………………………………….……………………. 144
Displaying the Diamond Indicators ………….……………………………………………………….. 144
Medium Term Trend Changes – Bar Colouring …………….…………….……………………. 145
Displaying the Trend Bar Colouring System …………………………………………………….. 145

SUPPLY & DEMAND ……………………………………………………………………………………………….……. 147

The TradeGuider Indicators …………………………….……………………………………………….. 147
Understanding the Indicators …………………………………………………………………………… 148
The Relative Volume Indicator …….…………………………………………………………..………. 150

TRADE MANAGEMENT ……………………………………………………………………………………………….… 151

Displaying the ‘H’ Stops …………………………………..……………………………………………….. 152

BRINGING IT ALL TOGETHER ……………………………………………………………..……………………. 153

Basic Trading Set-Ups ……………………………………………………………………………………….. 153
Position Trading ……….………………………………………………………………………………………… 153
Selecting Stocks for Position Trading ………..…….…………………………….………..………. 153
Analysis Regime for Position Trading …………………………………………………………..…… 154
Trading Set-Up for Position Trading ……………………..………………………………………….. 155
Analysing the Cisco Systems Daily Chart …………………..…………………………………….. 156
Analysing the Cisco Systems Weekly Chart ………….…………………….……………………. 156
Analysing the Parent Index ……………………..……………………………………………………….. 156
Exiting the Position ………………………………………………….…….…………….……………………. 157
Real-Time Trading ……………………………………………………….…………………………………….. 158
Analysis Pre-Check for Real-Time Trading …………………………….…….……………………. 158
Trading Set-Up for Real-Time Trading ……………………….…………………………………….. 159
Exiting the Position …………………………………….……………….…………………………………….. 161

CONCLUSION …….……..…………………………………………………………………………………………………. 163

NOTES ………………………………………………………………………………………………… 164

Getting Started 10
 APPENDICES
Appendix A – The History of TradeGuider Systems …………………………. 169
The Future of TradeGuider ………………………………………. 172

Appendix B – Acknowledgements …………………………………………………. 175

NOTES ………………………………………………………………………………………………… 176

Getting Started 11
Getting Started 12
The world leader in supply and demand analysis

Thanks for Choosing TradeGuider® as Your Partner for Success

Dear New TradeGuider User,

Welcome! You have just joined the growing ranks of TradeGuider users… investors and traders who count on
our software to provide them with the vital decision support required to execute profitable trades. We are
pleased that you have chosen us to help you reach your trading goals – you’ll love how TradeGuider gives you
the analysis power you need to refine your decision making.

The TradeGuider software embodies an original concept that can be used on its own, or in conjunction with
your current trading software or system. Our software combines ease of use with the best supply and demand
analysis in the business.

If you are new to trading or investing, you’ll be amazed at how accurately TradeGuider can pick out movements
in the stock and futures markets. No one can dispute the fact that it is the forces of supply and demand that
truly move prices – so if you possess a software tool that can correctly read the imbalances in these forces, you
will have a big advantage over other traders.

TradeGuider represents the cornerstone of logical and sensible trading. Only a very small proportion of traders
have acquired the chart reading skills embodied in this program, which means that you will see opportunities to
trade that will pass most people by.

TradeGuider is capable of generating around 400 separate indicators, which are triggered by the combination of
many different circumstances – it is this analytical ability which is the strength of TradeGuider.

The path to successful trading is a hard one, with many lessons to learn along the way, but with careful
diligence you will begin to understand the true value of what you have purchased. Please read the
comprehensive and easy-to-understand documentation that is included with TradeGuider. You’ll find your
manuals to be a useful reference guide, generously illustrated to help you fully understand the software.
Always refer to your manuals first – most of your questions will already have been answered there. As you
become more familiar with TradeGuider, review your manuals (and the videos) from time to time to ensure
you’re using the program in a productive way.

Please start with this guide for more information on how to begin. You’ll soon see for yourself how
TradeGuider will change the way you trade forever.

Sincerely,

Roy Didlock
President, TradeGuider Systems Group

TradeGuider Systems is proud to be associated with the following companies:

Getting Started 13
Getting Started 14
 Volume 1

Getting
Started Guide

Getting Started 15
Getting Started 16
 Introduction
Welcome to TradeGuider
Congratulations! You are about to learn how to use TradeGuider, recognised as ‘the best
intraday signals ever seen’ by Stocks and Commodities Magazine, and considered an
essential tool by many successful traders.

Why is everyone so excited about TradeGuider? What’s so great about it and why is it
so different from all other pieces of trading software?

It’s a fact that technical analysis is a useful component in the professional trader’s
toolbox. Many traders and investors use a variety of technical analysis techniques to
bring clarity and method to their decision making. There is one thing that is common to
just about all technical analysis methods that have been constructed over the last few
decades: they are nearly all based around mathematical formulas that represent a
historical study of price. Such a one dimensional approach is akin to attempting to
predict the weather tomorrow by observing the weather of the past few days. Whilst this
method of forecasting may work fine in the desert, it would represent severe limitations
when attempting to predict the weather in a country that has a changeable climate. And
this is one of the reasons why there are so many mathematical formulas out there to help
us make sense of the constantly changing market. Some formulas work best for trending
situations, some for cyclic moments, whilst other indicators are designed to work during
periods of volatility.

However, despite the complexity of the stock market, there is one constant that is
continuously driving prices every second of every day, and that constant, of course, is the
force of supply and demand. So if we are able to interpret the forces of supply and
demand in the markets, we will have a significant advantage over other traders.
TradeGuider will give you an edge by employing an expert system to interpret the
interrelationships between price, spread and volume. This proprietary technology is
called VSA and stands for Volume Spread Analysis.

TradeGuider is your radar screen and compass, alerting you to imbalances of supply and
demand, enabling you to see professional activity directly on your chart. You have now
embarked on a new journey, which will change the way in which you view the markets.
The possibilities are limited only by your desire to get the most out of TradeGuider. This
manual and the accompanying Video User’s Manual is designed to help you do just that.

Thank you for using TradeGuider.

Getting Started 17
 About This Section
This Section is designed to get you up and running with TradeGuider as quickly as
possible. So if you’re ready to start right now, you can begin by reading Step 1 –
Installing TradeGuider on page 25. Step 3, on page 33, explains how to feed data into
the software. Steps 4 to 10 walk you through the tasks that are required to use the charts
that are at the heart of TradeGuider. Step 11, on page 69, describes the different types of
help and support resources that are available to you.

These step-by-step instructions leave out a lot of details so that you can make a start with
TradeGuider right now.

IMPORTANT: Make sure that you take the time to refer to the Read Me First!
document. It contains vital information about any known issues that
you should be aware of.

This manual is part of a documentation suite that helps you become acquainted with the
software. For more help with the TradeGuider indicators and methodology, read the
Master the Markets book (or e-book).

The Glossary section at the back of the Master the Markets book will help you come
up to speed with various terms that are frequently used as part of the Volume Spread
Analysis (VSA) methodology.

For help with finding an EOD data vendor, refer to the EOD Data Directory, which will
enable you to locate a data provider in your country.

The Basic Trading Guide (see Volume 2 of this book) is a simple guide to trading,
which will teach you a number of common-sense techniques to get started in your trading
or investing.

For a quick tour around the screen, you’ll find the Quick Reference Card useful to help
you learn what the various buttons and toolbars do.

For more detailed information regarding the TradeGuider product, please refer to the
Video User’s Manual, which is on the CD that came with your software.

There is also a separate video series (on our website) to provide you with a walkthrough
of using TradeGuider’s tools to good effect.

Getting Started 18
 TradeGuider is
Different
A Revolutionary Approach to
Trading & Investing
You have purchased the most sophisticated financial analysis system ever invented.
Fortunately, the complexity of the analysis and the display of several hundred indicators
is fully automatic. Before we progress to explaining how to use the software, it is
important to explain how TradeGuider differs from all the other trading software
systems.

Although the market has become saturated with many tools to help traders and investors,
most of this software is designed with the assumption that users will be comfortable in
doing lots of research to arrive at an investment decision.

TradeGuider automates market analysis and can also give you a list of prospective
buy and sell candidates each day.

The great thing about TradeGuider is that it is designed to do all the hard analysis work
for you. The indicators within the software are completely automated, and will alert you
to areas of important price and volume activity that go unnoticed by most other traders.
Thousands of hours have been spent researching the several hundred indicators within
TradeGuider – you will be amazed at the number of trading opportunities that arise at the
point a VSA (Volume Spread Analysis) indicator is displayed on your chart (especially if
you use confirmation over different timeframes – more on this later.)

In addition to the VSA indicators, you’ll find that the Stock Scanner is a great tool that
distils down the primary weak and strong stocks within your portfolio – showing
prospective buy and sell candidates in one easy-to-use list.

Trading software generally falls into one of two camps: “toolbox” programs and “black
box” programs. At this juncture, we will briefly explain the difference between these
two approaches and then illustrate where TradeGuider sits.

Getting Started 19
 Toolbox Programs
With the advent of the first Technical Analysis software in the late 1970’s, the vast
majority of trading software fell into the “toolbox” category. These programs provided
lots of different Technical Analysis indicators (like MACD, Stochastics, RSI etc) and
line studies (like Fibonacci retracements and trendlines). It was very much up to the user
to work out how to use all these indicators, lines and arcs in their actual trading. Often,
traders and investors who used these programs would find themselves purchasing a
whole host of Technical Analysis books to learn the theory and application behind these
various indicators. It can take a long time to gain an understanding of how the many
Technical Analysis indicators work and how to apply them in real-world situations to
make money. Even today, nearly all trading and investment software is based on the
toolbox “do-it-yourself” concept.

There is certainly a place for toolbox software within the armoury of an investor or trader
to improve their trading. But since none of these Technical Analysis indicators or studies
has yielded consistent results across all markets, a lot of time can be wasted tinkering
with the parameters to make them work.

Toolbox trading programs consist of a large collection of technical analysis indicators. It is your responsibility
to find out how all these different indicators work and to create trading systems based on them.

Attempting to use these do-it-yourself technical analysis programs is similar to building a

car without any plans. All the tools and components are before you, and you know that
you have to build a car, but you may not have a complete grasp of which tools are to be
used, when to use them, and how to put the components together – a daunting prospect!
Often, the only way to use toolbox programs is with much trial and error, sat at your
computer screen for many hours, and even if you do find a strategy that appears to work,
it will tend to fail as soon as the market changes its behaviour.

Although many toolbox programs have built-in automated system testing facilities, you
still have to decide which technical analysis indicators, parameters and studies to apply
to the markets you invest or trade in. It is not uncommon to find more than 100 technical
analysis indicators in a toolbox program, so this task is not to be underestimated!

TradeGuider is different from all these toolbox programs. Rather than present you with
an overwhelming array of technical analysis indicators, we have built a complete
methodology into the software, based on common-sense price and volume observations.
All the VSA (Volume Spread Analysis) indicators are displayed automatically – there are
no parameters to select.

Getting Started 20
 Black Box Programs
The phrase “black box” is an engineering term that is used to describe a system that
generates signals without disclosing the underlying logic. Imagine a box with wires
going into it (the inputs) and wires coming out (the outputs). If the output wires were
attached to some sort of input device, the user would find it very difficult to work out the
logic behind the output signals – the internal workings of the box are hidden from the
user.

Black box trading systems are just the same: data is input into the program (the black
box) and signals emerge out of the other side. The parameters in program can be
changed, but the fundamental principles of the system or methodology are unexplained.
This situation would be more acceptable if black box programs worked consistently, but
none has ever done so – and this is one thing that black box programs have in common
with most toolbox programs. To be fair, it is extremely difficult for any computer
program to completely understand the huge number of variables that affect the financial
markets. Such a complete forecasting model would require a tremendously powerful
computer to process the massive amount of data required. This sophisticated program
would also need to understand how hundreds of factors interact with each other. To date,
no commercial program with this level of sophistication has been made available to the
general public, and even if it had, you would need a powerful industrial mainframe
computer to run it.

Black box programs generate signals without disclosing how.

TradeGuider automatically outputs indicators similar to a black box program. However,

unlike a black box program, TradeGuider is capable of explaining why it has chosen to
display an indicator from the VSA (Volume Spread Analysis) methodology, so in this
respect it doesn’t resemble a black box. You can learn more about the indicators in Step
6 – The TradeGuider Indicators, on page 51.

Getting Started 21
 The TradeGuider Difference
As you can see from the previous explanations, TradeGuider is neither a toolbox nor a
black box program, although it does share aspects from each type. TradeGuider is both a
prospecting tool (by virtue of the in-built scanners) and an automatic Decision Support
System, with a robust common-sense methodology. The tools within TradeGuider allow
a great deal of flexibility, so the program can be used as a ‘stand-alone’ trading platform,
as well as a great confirmation tool (based on our proprietary VSA technology) if you
use it alongside other trading software.

TradeGuider will automatically:

1. Collect real-time data and import end-of-data

2. Display Volume Spread Analysis indicators (no configuration required)
3. Scan your stocks for the best prospects
4. Show short and longer term trends
5. Plot the last active trend and show support and resistance levels (including floor
trader’s pivot levels for real-time trading)

As soon as you start using TradeGuider, you’ll begin to see opportunities identified
straight away, which means you’ll spend significantly less time tinkering with program
settings and more time trading.

Getting Started 22
Getting Started 23
Getting Started 24
 Step 1
Installing TradeGuider
IMPORTANT: Your installation CD is valuable. Please keep the CD in its protective
case and store in a safe place.

Please consult the Read Me First! document for any important pre-
requisite information and known issues that you may need to know
about prior to installing TradeGuider.

The installation process normally takes just a few minutes.

To Install TradeGuider From a CD:

1. Insert the program CD into your drive. The setup starts automatically. The first
thing you’ll see is the Welcome Screen. At this stage, it is recommended that you
close down all Windows programs, including antivirus software, and then click the
Next button to continue with the installation.

Getting Started 25
 2. The next screen shows the Software License Agreement. By clicking the Next
button, you agree to the terms of the Agreement.

3. It’s now time to choose the destination folder for the TradeGuider software. We
recommend that you accept the default of “C:\Program Files\TradeGuider”. To
continue with the installation, press the Next button.

Getting Started 26
 4. The next screen enables you to choose which Program Manager group to install
TradeGuider into. We recommend accepting the default of “TradeGuider Systems”.
Click the Next button to continue with the installation.

5. The final screen gives you one last chance to go back and change your settings
before commencing with the installation. To continue the installation with your
chosen settings, click the Next button.

Getting Started 27
 6. The installation then commences. You’ll see a separate screen that keeps you
informed of the installation progress. If you want to stop the installation before it is
complete, press the Cancel button.

7. Towards the end of the installation process, the system configuration is updated.

8. Once the installation has completed, click the Finish button to exit the installer
program.

Getting Started 28
 NOTE: If the auto-run feature of Windows isn’t enabled on your system, click the Start
button and choose the Run command.

Type “D:\Setup.exe” in the Open box, as illustrated in the picture below, and click the
OK button. The “D:” represents the letter assigned to your CD-ROM drive. If your
drive is denoted by a different letter, use it instead of “D”.

Follow the on-screen instructions to complete the installation.

IMPORTANT: Once installed, you’ll need to start TradeGuider and enter you User ID
and Password. Please refer to the next section, Step 2 – Running
TradeGuider for the First Time.

Please refer to the Read Me First! document for important last-minute

information, known issues, and any extra information that you need to
know with respect to installing the TradeGuider software.

System Requirements
TradeGuider EOD
TradeGuider EOD requires a Pentium 166 MHz (or faster) computer, about 20MB of
hard disk space for installation, and at least 32 MB of RAM. A Pentium 233 MHz
computer, 128 MB of RAM and Windows XP is recommended.

You may also use any third party data feed that is able to supply EOD (End-of-Day) data
in MetaStock or CompuTrac format.

TradeGuider RT
TradeGuider RT requires a Pentium 1 GHz (or faster) computer, about 20MB of hard
disk space for installation, and at least 256 MB of RAM is required for real-time data
collection.

A Pentium 2 GHz computer and 512 MB of RAM is recommended, together with the
Windows XP operating system is recommended.

TradeGuider’s Data on Demand technology requires an internet connection and an

eSignal subscription. If you have not yet received or installed your eSignal client
software, go ahead with the TradeGuider installation anyway – you can then install your
eSignal client software when it arrives.

IMPORTANT: If you experience any problems with the installation, please refer to the
Read Me First! document for any known issues that were discovered
too late to include in this manual.

Getting Started 29
Getting Started 30
 Step 2
Running TradeGuider for the
First Time
This chapter describes how to start TradeGuider and what to expect from the software
when it’s run for the first time.

Starting TradeGuider

1. Choose Programs from the Start menu.

2. Choose TradeGuider

Alternatively, double click the shortcut icon which has been placed on your desktop.

Logging On
The first time you run TradeGuider, a Login screen is displayed.

Type in the User ID and Password that has been supplied to you and then click the Log
On button. TradeGuider will then contact the security server and verify you as a
customer before starting the software.

If you are using TradeGuider in a trading office and there is a proxy server, click the
Internet Settings button to provide the proxy server settings. If you don’t know these
settings, TradeGuider can attempt to retrieve them automatically when you click the Get
Settings From Registry button.

Getting Started 31
 Conditions of Use Screen
Once your ID and password have been authenticated, a Conditions of Use screen is
displayed. The screen basically states that all trading decisions are your responsibility.
You also agree not to hold TradeGuider Systems Ltd liable for any losses you may make
whilst trading. To use the software, you must accept the conditions of use.

Tip
If the Conditions of Use screen begins to irritate you, it can be turned off by ticking the
checkbox.

Tip of the Day

TradeGuider has a built in database of tips to help you get the most out of the software.
A helpful tip is displayed each time you begin a new session. If you don’t want to see
the tips, just uncheck the check box (i.e. click the box to remove the tick.) If you change
your mind and decide to turn the tips back on at a later stage, just place a check (i.e. tick)
in the “Show Tips on Start up” box.

If the Tip box is shown just click the Close button for now, so that we continue with your
introduction.

Getting Started 32
 Step 3
Collecting Data
Everything you do in TradeGuider revolves around the data for the securities you follow.
Therefore, it’s vital that the data is accurate, well organised, and current.

What is Data?
TradeGuider uses two basic building blocks: data files and charts.

• Data Files
You already know what a file is; a Microsoft Word document is a file, the picture you
use for your desktop wallpaper is a file. A data file just contains information about a
security (stock or symbol) – things such as the opening and closing price for the day,
and the highest and lowest price for the day. The data file also stores other things,
such as the volume of transactions, and the symbol name (e.g. MSFT for Microsoft
Corporation.) All this information is known as a data file.

• Charts
If you’ve been going through the exercises in this guide, you’ll already be familiar
with charts. A chart in TradeGuider is just a graph that shows all the information in a
data file. There are all sorts of different charts, but most traders will settle on using bar
charts and candlestick charts. The following is a candlestick chart:

Getting Started 33
 Since you now understand what a data file and a chart is, you should keep the following
in mind:

• The information you see displayed on a chart comes from a data file.
• The information in a data file comes from a data vendor.

Retrieving Real-Time Data (eSignal)

Real-time data collection for eSignal is achieved by typing your desired symbol into the
toolbar. For instance, typing “%ES #F=2,10” would retrieve data for the S&P Emini
(ES), continuous contract (#F), day session modifier (=2), with a ten minute timeframe
(,10). The graphic below shows how this looks in the toolbar.

The general format for entering a real time eSignal symbol is below (the elements shown
in upper case are mandatory):

<prefix> <SYMBOL NAME><space> <contract> <modifier> <COMMA> <TIMEFRAME>

If you specify a symbol name and a contract, you MUST separate these two
elements with a single space (see the example above.)

So, a 30 minute chart of Microsoft could be retrieved by typing “MSFT,30”.

To retrieve a daily chart of Cisco Systems, type “CSCO,D”.

Similarly, a weekly chart of Dell can be acquired by typing “DELL,W”

In a similar way, a suffix of “,M” would retrieve a monthly chart, so “ORCL,M” would
display a monthly chart of Oracle Corporation.

Important
TradeGuider derives its periodic volume from the total volume of business for the
instrument being traded. Sometimes this total volume is reported by the exchange in
thousands or millions, and short period charts will appear not to update the volume,
which will accumulate until the next 1,000 or 1,000,000 mark is hit and then
increment in one big jump. This tends to happen more with the CME contracts.

If you find that volume is not being reported in real-time for a specific instrument,
you will need to retrieve traded volume by including the “%” prefix when typing in
the symbol name.

You MUST use the “%” prefix when retrieving RT data for the S&P Emini and the
NASDAQ.

Getting Started 34
 Retrieving Real-Time Data (RealTick)
Real-time data collection for RealTick is achieved by typing your desired symbol into the
toolbar. For instance, typing “/ESM4,5” would retrieve data for the S&P Emini (ES),
June contract (M4), with a five minute timeframe (,5). The graphic below shows how
this looks in the toolbar.

The general format for entering a real time RealTick symbol is below:

<FORWARD SLASH> <SYMBOL NAME> <CONTRACT> <COMMA> <TIMEFRAME>

Unlike the eSignal version of TradeGuider, it’s not possible to specify a tick volume
prefix or day session modifier. Aside from this, the mechanics of entering symbol
requests is similar to eSignal, so you can still specify different timeframes in the same
way.

Status of Data Request (eSignal & RealTick)

When receiving data, TradeGuider will keep you informed of progress by providing
status messages and / or colour coding. There are three possible colours and the
meanings are below:

• Yellow = “Requesting Data”

• Green = “Retrieving Data”
• Red = “No Data, Invalid Symbol, or Request Timed-Out”

Note: Depending on the version of TradeGuider, you may see the logo change
colour instead of the title bar (or chart tab), but the meaning of the colours
is the same as the descriptions above.

This is what a chart looks like when it’s loading data.

Getting Started 35
 If a symbol request times-out and “NO DATA” is displayed, just type the symbol in
again. The reason for the time-out is probably because the data network is busy, or you
may have mistyped the symbol name.

Tips
1. If your symbol request times-out with the “NO DATA” message, the quickest way
to reload the chart is to right-click the Title Bar of the chart that has timed-out and
choose “Reload Data” from the pop-up menu. If you’re using tabbed charts (rather
than tiled charts), just right-click the appropriate tab and select the “Reload Data”
menu option.

2. You’ll notice a small coloured circle in the bottom right of the program window.
The colour of the circle indicates the status of your data feed:

• Green means that the data feed is connected and working correctly
• Red means that there is a problem with the connection to the data feed.

Retrieving Day Session Data

If you’re retrieving data from a Globex market (i.e. 24 hour) and are only interested in
seeing charts for the day session, there are a couple of things that you can do to ensure
that charts are displayed correctly.

If you’re using eSignal, use the day session modifier (=2) to show the day session only.
For instance, “%ES #F=2,5” will retrieve a day session chart for the S&P Emini.

If you’re using RealTick, use the procedure below:

1. Select Open from the File menu. Make sure you click the “QS” folder (short for
QuoteServer) so that the Real Time toolbar options are shown at the top of the
dialogue.

Getting Started 36
 2. Type in the symbol name and the Start and End times that should be used to collect
the day session data. The Start and End times should be entered as your local times
(your time zone), not the time zone of the exchange.

3. Now, click the Add to List button. You’ll see the new symbol appear in the list.

4. Select the symbol from the list and click the Open button to retrieve the chart.

Tip
You can use this facility to collect data from any time window – it doesn’t have to be the
day session.

This facility can be used in both the eSignal and RealTick versions of the software.

Help With Symbol Names

If you need help finding out which symbol name to use for a particular instrument, please
contact your data vendor for the correct name:

eSignal

• Go to www.esignalcentral.com/support/symbol/default.asp

RealTick

• Go to www.realtick.com
• Choose Support from the homepage
• Choose Prices + Symbols from the sub-menu

Getting Started 37
 Retrieving EOD Data
There are many data vendors around and the EOD Data Directory will list the primary
MetaStock data vendors in your country. TradeGuider will read CompuTrac and
MetaStock format data directly (both basic and extended formats.)

In addition, there are various methods that can be used to convert ASCII text and CSV
data into the MetaStock format, so that TradeGuider can read it. For more information
on software tools that can do this, please refer to the accompanying EOD Data
Directory.

NOTE: The EOD Data Directory can be found on the CD ROM that came with your
software.

Telling TradeGuider about Your EOD Data

If you’re using end-of-day data, you’ll need to tell TradeGuider that data is present on
the computer. TradeGuider should perform a data scan the very first time it is run, so if
you already have data on your computer, TradeGuider will already have found it.

However, if you decide to add new data folders in the future, you’ll need to perform a
new scan so that TradeGuider can ‘see’ the data. The following steps will show you how
to scan for fresh data folders:

1. Choose Open from the File Menu. The following dialogue is displayed.

2. Now click the Scan / Rescan Drive button.

Getting Started 38
 3. Next, click on the drive letter where the EOD data resides.

4. TradeGuider informs you that it is now scanning the disk. Once this process is
complete, you’ll notice the new symbols in the File > Open dialogue that were found
during the scan.

You can now open a chart for any of the new symbols as normal. See Step 3 –
Displaying a Chart for more information on opening charts.

Getting Started 39
Getting Started 40
 Step 4
Displaying a Chart
1. In TradeGuider, choose Open from the File menu.

The following dialogue appears, listing your securities. If the security you need to
display is in a different folder, just click the folder to open it and you’ll see the respective
securities listed on the right.

2. Select the security from the list on the right of the dialogue.

3. Click the Open Chart button.

Tips
1. As a short-cut, you can double-click a security to display the chart immediately.

2. If you would like to display a group of charts, you can select the desired securities
by holding down the CTRL key and clicking each security you would like to open.

3. If you are only interested in opening one chart at a time, make sure that Replace
Last Chart is ticked.

Getting Started 41
 Searching for a Security
If you have several thousand data files on your computer, you may not actually know
where a security is stored. In circumstances such as this, you can use the search facilities
(on the search toolbar) to find the desired security.

NOTE: If you can’t see the search toolbar, you can switch it on by selecting Search Bar
from the View menu.

You can perform a search of your whole drive for a specific security or symbol. Even if
you’re not sure of the exact name or symbol, it doesn’t matter, as only part of the name is
required. TradeGuider will do the hard work of checking all the files for potential
candidates that meet your search criteria.

For instance, to search for a security that has “micro” as part of the name, just:

1. Click the Name check box

2. Enter “micro” into the search box
3. Click the magnifying glass ( ) button

A list of search results will be displayed below – in this case, all securities containing the
word “micro”.

The Symbol name can be searched in exactly the same manner. So, by clicking the Sym
checkbox, entering “CSCO”, and then clicking the magnifying glass ( ), we will be
able to find all charts for ‘Cisco Systems Incorporated.’

Whichever search method you choose, to display the chart, select the desired security
from the list and the chart will be automatically opened.

Tips
• Remember that the search is case sensitive, so “Micro” is different from “micro”.
• See the Video User Manual for a demonstration of how to search for files.

Getting Started 42
 Once a chart is displayed, all the commands within the program are available to you.
Any changes that you make to the chart are automatically saved by TradeGuider, which
is a convenience that saves you time, allowing you to focus on your analysis.

Each security within TradeGuider can be displayed as a separate chart. Each chart can
be divided into multiple inner windows.

Here are a few examples of how a chart can look (we’ll cover how to do this later…)

This is a chart showing a volume histogram on the bottom, with the RSI indicator above
it.

Getting Started 43
 Here we can see three charts on the same screen….

… and this is what five charts look like.

No matter how may charts you would like on the screen. TradeGuider can arrange them
automatically for you.

IMPORTANT: Please refer to the Read Me First! document for any specific
limitations there may be for the number of simultaneous charts.

Getting Started 44
 Multiple Charts
There are two ways to display multiple charts; you can tile them or tab them.

Tiling Charts
Imagine we want to display three separate S&P Emini charts, with different timeframes,
together on the same screen. To do this, follow the steps below:

1. Type the symbol name and the required timeframes (separated by commas) into the
TradeGuider toolbar. As you can see, the timeframes that have been requested are 2
minute, 5 minute and 15 minute durations.

The example shows how you would enter a symbol formatted for RealTick.
However, if you have the eSignal version, you would type %ES M4,2,5,15.

2. Now press the <ENTER> key on your keyboard, or click the ‘enter’ button on the
toolbar (to the right of the symbol entry box – as shown in the example above). You
should see the charts tile in a similar way to the graphic below.

Tips
If the charts don’t tile, check the following:

1. Select Open from the File menu and make sure that the ‘Replace Last Chart’
checkbox is blank.

2. Make sure that the View > Chart Tabs menu option is unchecked.

3. Make sure that Auto is selected from the tiling toolbar.

4. Select the 5 minute chart and click the tile to pattern button.

Getting Started 45
 Tabbed Charts
Tabbing your charts enables you to load several charts at once, and to allocate each chart
to a separate ‘page’, which is accessed by clicking a tab. To load tabbed charts, follow
the steps below:

1. Click on the Chart Tabs option from the View menu and make sure that this option
is checked (i.e. ticked).

2. Now type the required symbols and timeframes into the toolbar at the top of the
screen. Step 1 on the previous page describes how to do this.

3. Now press the <ENTER> key on your keyboard, or click the ‘enter’ button on the
toolbar (to the right of the symbol entry box – as shown in the example above). You
should see the charts are loaded and displayed in tabbed ‘pages’ in a similar way to
the graphic below.

Tips

If the charts don’t tab, check the following:

1. Select Open from the File menu and make sure that the ‘Replace Last Chart’
checkbox is blank.

2. Make sure that the View > Chart Tabs menu option is checked.

Getting Started 46
 Closing Charts
There a number of of ways to close charts:

1. The quickest way to close a tiled chart is to click the close button (i.e. the white
cross on a red background) in the top right corner of the window.

2. The second way to close a chart is to select the chart and then select Close from the
File menu.

3. If you’re using the chart tab feature, the quickest way to close the chart is to right-
click the tab and then select Close Chart from the pop-up menu.

Getting Started 47
Getting Started 48
 Step 5
A Quick Look at Charts
Charts are the most visible part of any technical analysis program. TradeGuider’s comes
equipped with some of the classic technical analysis indicators, such as MACD, RSI, and
ADX, and there are also many other proprietary tools which you will find useful in your
study of the markets.

By default, charts are divided into two main parts. The larger part shows the security’s
price plot, and the smaller part shows the volume.

Changing the Price Plot Style

The price plot is formed on the chart by the security’s price data. It’s possible to change
many aspects of the price plot, such as the chart style (bars, candlesticks, kagi, point &
figure), the colour, and the thickness. When a real-time chart is displayed, the Kagi and
Point & Figure chart facilities are disabled.

To change the type of chart is easy; just select an option from the Chart Style menu.

Alternatively, you can use the Chart Style toolbar to toggle between bar and candlestick
charts. This toolbar also enables you to switch between thick or thin price plots.

Getting Started 49
 Zooming In or Out of a Chart
Sometimes you may wish to zoom out of a chart to get a better perspective of the longer
term price action, and other times you need to see things up close so that you can better
judge what will happen in the short term.

The chart can be sized by using a number of preset adjustments which are available on
the Chart Width toolbar.

If you need to zoom in/out for a specific number of bars, just click the magnifying glass
to display the chart size dialogue. Types in the number of bars (or candles) required and
click the OK button.

Tips
If the Chart Width toolbar isn’t available, just select it from the View menu (i.e. the
toolbar should be ticked.)

Changing the Beginning or End Date

Suppose you’re looking at a chart, and you want to see the data from a date before the
earliest date on the chart. To do this, select Load to Date from the Chart menu.

The dates in this example are in the

British format of dd/mm/yy.

This feature enables you to load data from any position in the file. Just select the end
date from the calendar and click the Load to End button.

Getting Started 50
 Step 6
The TradeGuider Indicators
TradeGuider constantly analyses your charts for imbalances of supply and demand.
Once an imbalance is found, a red or green indicator is displayed, alerting you to the
likely strength or weakness in the market.

The chart below shows a number of green symbols, indicating strength (demand) in a
stock. Displaying supply and demand graphically on a chart is one of TradeGuider’s
major benefits. Following the cumulative effect of this build up of demand, the stock
responds with a positive and sustained price rise

The chart below shows a number of red symbols grouped together, indicating weakness
(supply) in a stock. The stock falls in price following each supply cluster.

Getting Started 51
 Understanding the Indicators
NOTE: This section is a basic introduction to the TradeGuider indicators. For more
information, please consult the Master the Markets book (or e-book).

TradeGuider is armed with several hundred supply and demand indicators, which
make it a sophisticated and effective guidance tool. TradeGuider can even give a
visual indication of the approximate imbalance of professional activity and show
where this appears on your chart.

All of the indicators can be grouped into two broad categories:

1. Indicators that show weakness are coloured red. Weakness is indicative of

supply, professionals selling in the market or professionals withdrawing
from the market (i.e. no participation.)

2. Strength is indicated by green symbols. Strength is indicative of demand

(i.e. professionals buying into the market.)

The red and green indicators can visually express the estimated amount of residual
strength or weakness in the market and this is communicated by using different
symbols:

Red/Green Rectangles
Rectangles represent strong weakness (red) or strength (green) respectively. When
TradeGuider displays a red or green rectangle, there is a good chance that the current
price move will stop and reverse. If this does not happen, the market will usually
stop trending and move sideways for a while. Sometimes rectangles are seen during
a trending market as the professionals are either buying into or selling into the
market. In the chart above, note how the professional money sells the market at the
top left of the chart, which causes prices to fall (see the red rectangle amongst the
other signs of weakness.) At the bottom of the downtrend, note the three green
rectangles denoting heavy buying at this price level. The market rises as a
consequence of this strength and is later countermanded by a red rectangle, which
causes a resumption of the downtrend.

Getting Started 52
 Red/Green Triangles
These symbols denote an intermediate probability of a correction (down move) or a
reaction (up move) in the market. Clusters of strength or weakness symbols often
appear together on your charts, especially at certain price levels. This type of
clustering is highly significant, especially if it appears in new high or low ground, or
at areas of support or resistance (including pivot points.) In the chart on the
previous page, the principle is demonstrated by 4 signs of weakness (top left), which
results in a large fall in price.

Pale Red/Green Triangles or Pale Red/Green Small Rectangles

These symbols all denote subtle changes in supply and demand factors. More than
likely, there will not be an immediate move in the market when these symbols are
shown. In the chart on the previous page, note the subtle signs of weakness left of
centre – the market falls off soon after. There are more subtle signs of weakness
right of centre and this time the market drops immediately. Also, you will see two
additional subtle signs of weakness that appear before the red rectangle at the right of
the chart: these should act as warnings, especially, when followed by a red rectangle
as in the example chart.

Tips

• The indicators are not buy and sell signals (or entry and exit points.) It is a mistake
to use the indicators in isolation, without taking any other factors into consideration.
You must view the market holistically, looking at what has gone before and also
reading the market as it unfolds. Each signal is like a word in a sentence - it is only
when all the words in the sentence have been read, that the information is imparted.
Look at the signals in context – consult the help from the onboard Expert System
(see next section on Getting Indicator Help.) Also, take a look at the
accompanying “Master the Markets” book (which may have been supplied as an e-
book) for further assistance.

• Indicators can be used as part of a ‘trading set-up.’ So, once an indicator has
appeared, you may wish to wait for the trend to change in the direction of the
indicator, or you may take an entry point once the market has moved up or down by
a certain number of points. For more information, see the “Master the Markets”
book (which may have been supplied as an e-book.)

• TradeGuider’s Indicators can be used in conjunction with other trading tools, such as
TradeStation, MetaStock, TC2000 and OmniTrader, as a confirmation tool.

• You can use TradeGuider to analyse any liquid, well-capitalised market. So, it will
work well with major world indices, the component stocks in the DOW, S&P, and
NASDAQ and popular commodities (as long as volume is present.)

• The logic built into the TradeGuider software will work in any timeframe, so it is
equally suitable for intraday traders, position traders, or investors looking at weekly
or monthly charts.

Getting Started 53
 Getting Indicator Help
TradeGuider is not a ‘black box’ system, so it is able to explain why it decided to
show a signal and what you should be aware of as the market unfolds. In this way,
the software can act as a teacher, educating you to the ways of the market, and
highlighting the tricks and tactics used by the market-makers, which often force the
unwary trader out of a perfectly good position.

TradeGuider will show you feedback from the Expert System in two ways:

1. An abridged version of the signal narrative is displayed on the Status Bar.

2. If an indicator symbol is clicked on the Status Bar, or on the chart itself, a

verbose signal narrative is displayed in a ‘speech bubble.’ This feedback will
describe the particular indicator, with reasons why it has been shown, together
with comments of what to expect, or what to look out for over the next few bars.

To exit from the verbose signal narrative, you can either press the Esc button, or click the
bottom of the speech bubble.

IMPORTANT:
• When using TradeGuider, you must use data that contains volume information.
Without accurate volume information, the signals will not work properly.
• As with all trading software, better results will be obtained by using good quality
data.
• Be wary of using TradeGuider to analyse illiquid markets, such as penny shares.
Thinly traded markets are particularly dangerous – the price can be quickly marked
against you and it can be difficult to sell your holding.

Getting Started 54
 Step 7
Plotting Technical Analysis
Indicators
In addition to the TradeGuider indicators, it is possible to plot a number of Technical
Analysis (TA) indicators to aid you in your decision making. A technical analysis
indicator is a mathematical formula calculated using the underlying security’s price data.
The results are usually plotted alongside the chart of the associative security and are used
to “indicate” the present or future conditions of the security’s price. TradeGuider
contains a number of predefined TA indicators to help you. Teaching technical analysis
is outside the scope of this manual – you can learn more about this subject from a good
technical analysis book. We recommend ‘Technical Analysis from A to Z’ by Steven B.
Achelis.

The fastest way to plot an indicator is to use the Technical Analysis toolbar. As an
example, we will plot an indicator called RSI, which is an abbreviation for Relative
Strength Index:

1. Click on RSI

2. The RSI Parameters dialogue is displayed. For now, ignore the various properties
and click the OK button. The RSI indicator will be plotted at the bottom of the
screen, above the volume histogram.

3. When the RSI triggers a new signal, TradeGuider is able to display special indicators
on your chart, which are shown as yellow triangles to differentiate them from
TradeGuider’s own indicators. Click the small black triangle to modify the RSI
parameters.

4. Click on Indicators from the Commands/Option menu that appears to the left of the
RSI parameters dialogue.

Getting Started 55
 5. A new dialogue is displayed which gives you various options for generating the
indicators on your chart.

Most traders prefer to generate a signal only if the smoothed RSI crosses the upper
and lower trigger lines. So, in step 1 (Check the items that will generate a signal),
tick the last two check boxes that relate to the smoothed RSI.

6. Next, we need to tell the software that RSI indicators are to be shown on the chart.
So, in step 2, make sure that the box is ticked (Check this box if signal creates a
chart indicator.)

7. For now, ignore the remaining options, as they will be covered later in the Users
Manual. Click the OK button. You should now be looking at a chart that has an
RSI plot, together with yellow indicators showing where the RSI indicators have
fired.

Tip
The technical indicators can be toggled on or off by simply clicking the relevant button
on the technical analysis toolbar. So, in this example, clicking RSI would turn off the
plot, whilst clicking it again would display the indicator once more.

Getting Started 56
 Plotting a Moving Average
Another popular technical indicator is the moving average. There are several types of
moving average, including simple, exponential, variable and weighted. Many traders use
a moving average cross-over to give an indication of a likely change in price direction.
This section will show you how to plot one on your chart.

1. Click the MAv button on the Technical Analysis toolbar. The Moving Average
dialogue is displayed.

Choose Exponential as the type of moving average. Change the Period Length to
“5” and select black as the colour. Then click the OK button to plot the moving
average on the chart.

2. Since, we want to create a moving average crossover, click on the small black
triangle to modify the moving average properties.

3. The click on “New Single Mvg Avg”. Again, choose Exponential as the type of
moving average. Change the Period Length to “25” and select red as the colour.
Change the pen width from “1” to “2” to differentiate it from the fast moving
average. Next, click the OK button to plot the second moving average on the chart.

4. Now we have the crossover plotted on the chart, all that is left to do is to display the
indicators.

Click on the fast moving average (i.e. the first one that was plotted.) This will be
labelled as “Single Mvg Avg 1”. A small menu will be presented – select Indicators.

Getting Started 57
 5. Once Indicators has been clicked, a new dialogue is displayed which gives you
various options for generating the indicators on your chart.

6. In step 1 (Select the moving average tool to use as a trigger), you will find that only
the slow moving average is listed, because the fast moving average cannot act as a
trigger for itself. So, this option can be left as it is.

7. In step 2 (Check the items that will generate a signal), tick both check boxes.
TradeGuider will now log all instances where the fast moving average (5 period
exponential) crosses the slow moving average (25 period exponential.)

8. Next, we need to tell the software that the moving average indicators are to be
shown on the chart. So, in step 3, make sure that the box is ticked (Check this box if
signal creates a chart indicator.)

9. For now, ignore the remaining options, as they will be covered later in the Users
Manual. Click the OK button. You should now be looking at a chart that has a
moving average crossover plot, together with yellow indicators showing where the
indicators have fired.

Getting Started 58
 Step 8
Drawing a Line Study
Line studies help you to see trends and patterns in a chart, which can give you an edge
when making trading or investment decisions. A simple example is the trend line, which
is used to identify support or resistance levels.

Have a look at this chart:

Where are the support and resistance levels? To answer this question, we need to draw
trend lines to make it easier for us to visualise where they are.

To make the line studies easily accessible, a Drawing Toolbar is displayed at the top of
the screen. Each of the line studies can be accessed with a single mouse click.

To learn what a particular button does, hold the mouse motionless for about a second
over any button, and a “ScreenTip” will appear showing the name of the button.

To draw a trend line, follow the steps below:

1. Click the Trend Line button. The Status Bar at the bottom of the screen is replaced
by the Trend Drawing Wizard.

Getting Started 59
 The Trend Drawing Wizard is designed to help the complete novice draw trend lines,
channels, or horizontal support and resistance lines. Rather than go through all the steps
in the wizard, we are going to learn the point and drag method, which is a quicker way to
draw a trend.

If you are new to technical analysis, you need to understand the basics of trend drawing
before starting to draw the line. To properly draw a trend line, the following principles
must be applied:

• To draw a line of support, the line must pass through at least two lows, where the
line is not penetrated by the price.

This picture shows a perfect example of support in action. Note how the price
touches the trend line and rebounds several times. Finally, the price gaps down and
through the trend line to the downside.

• To draw a line of resistance, the line must pass through at least two highs, where the
line is not penetrated by the price.

Here we can see an example of resistance. The price bounces off of the line on a
number of occasions until there is a break-out to the upside.

Tip
Try not to be too strict when drawing trend lines, as there will be many instances where
you can’t apply the principles exactly. Drawing trend lines is a bit of an art which takes
practice. It doesn’t matter if a high or low doesn’t quite touch the line, as long as it is in
close proximity to it. Similarly, sometimes prices will slightly penetrate the line, but as
long as they retrace, the trend line is still valid.

Getting Started 60
 2. To draw the trend line, position the mouse crosshair at the starting point of the line,
this is usually the first point of support or resistance. Then click and hold the left
mouse button whilst moving the mouse crosshair to the end point, which is normally
the last point of support or resistance. The trend line will stretch as you move the
mouse.

3. Now release the left mouse button to anchor the trend line. The trend line is plotted
and flashes to differentiate it from other line studies which you may have previously
drawn on the chart. The Trend Attributes dialogue box is shown, which enables you
to change the colour and style of the line if you wish. For now, click the OK button
to complete the process.

After carrying out this procedure for the support and resistance lines, you will be able to
clearly visualise what is happening to the price action on your chart.

In the example below, we can see that a ‘wedge’ pattern has formed. The price that
people are prepared to pay for this stock has narrowed over the course of time. Prices
have now reached a point where they are severely congested. In this situation the price
can break away explosively to the upside (or downside.)

Drawing a Trend Channel

Getting Started 61
 Drawing a Trend Channel
Trend channels are another popular line study. A trend channel is drawn to highlight a
trading range, where prices are contained within a ‘channel’. This is a particularly good
study for highlighting overbought and oversold levels. To draw a trend channel, follow
the steps below:

1. Click the Trend Channel button. The Status Bar at the bottom of the screen is
replaced by the Trend Drawing Wizard.

The Trend Drawing Wizard is invoked. We’ll skip using the wizard and use the point
and drag method instead, which was used in the previous section to draw a trend.

If you are unfamiliar with technical analysis, you need to understand the basics of how to
draw a trend channel before starting to draw the line. To properly draw a trend channel,
the following principles must be applied:

• To draw an upwards trend channel, the bottom line must pass through at least two
lows and the top line must be drawn from an intervening high.

This picture shows a good example of an upwards trend channel. Note how the price
touches the bottom trend line and rebounds from it. A parallel line is drawn from the
intervening high to show the expected resistance level. As can be seen from the
example, the price bounces off of resistance, gapping down through the support line on
wide spreads, accompanied by high volume.

Getting Started 62
 • To draw a downwards trend channel, the top line must pass through at least two
highs and the bottom line must be drawn from an intervening low.

Here we can see a downward trend channel. The price touches the top trend line twice
and rebounds from it. A parallel line is drawn from the intervening low to show the
projected support level. The above chart shows how the price is contained within the
bounds of the channel and refuses to penetrate through the support level.

2. To draw the trend channel, position the mouse crosshair at the starting point of the
line, this is usually the first point of support or resistance. Then click and hold the
left mouse button whilst moving the mouse crosshair to the end point, which is
normally the last point of support or resistance. The trend line will stretch as you
move the mouse.

3. Now release the left mouse button to anchor the trend line. The trend channel is
plotted and flashes to differentiate it from other line studies that you may have
previously drawn on the chart. The Trend Attributes dialogue box is shown, which
enables you to change the colour and style of the line if you wish.

Getting Started 63
 Tip
The mid-point (i.e. the intervening high or low) is automatically selected by
TradeGuider. If you prefer to select this manually, click on the left and right arrows to
move the mid-point left or right.

4. There are a number of properties in the Trend Attributes dialogue that can be
changed, including colour and line style options. For now, click the OK button to
finish drawing the channel.

In the example below, we can see a clear and well defined trend channel (sometimes
referred to as a trading channel.) You will notice that the top and bottom quarters of the
channel have also been plotted – these lines often act as support and resistance within the
confines of a channel. Note how well the top and bottom quarters (dashed lines) act as
either support or resistance. Eventually the price breaks out of the channel, but retraces
soon after, using the top line of the old channel as support.

Notes: Trend channels and trend lines are just a couple of examples of line studies.
There are many more, with many ways to interpret them. There are lots of
technical analysis books that will help you to understand how to properly draw
line studies and the methods of reading them.

There are plans to set up a comprehensive bookstore at our website

(www.TradeGuider.com) to supply you with a wide range of books on various
subjects - check our site regularly.

Please refer to the Basic Trading Guide for examples of how to apply:

• Pivot Points
• The Last Active Trend feature

Getting Started 64
 Step 9
Changing Properties
Most items that can be displayed on the screen have some kind of property that can be
changed. Examples of properties include colours, line styles, time periods, or a whole
host of other parameters that are used for the calculation of the technical analysis
indicators. Making changes to an item is normally one or two clicks away.

Earlier in this manual we displayed the RSI indicator – the next exercise will show you
how to change the properties of an indicator:

1. Position the mouse on the small downward facing triangle next to the RSI button
and click it with the left mouse button.

The RSI parameters box is displayed, which enables you to create and manage the
properties of several RSI indicators if required. This Multiple Command Dialogue
concept is the same for all the technical indicators in TradeGuider.

2. On the left side, in the Commands/Options area, click on RSI 1 to display its
properties.

3. Change the period to “9”, the upper trigger line to “70” and the lower trigger line to
“30”. Click the OK button. The Relative Strength Index is redrawn to reflect the
changes you have made to its properties. If you chose to display the RSI indicators
on the chart, you will see these change position too.

Getting Started 65
 Modifying a Line Study
In the previous chapter we drew a trend channel – this exercise will show you how to
change the properties of the channel to reflect your preferences:

1. Position the mouse on the small downward facing triangle next to the Trend
Channel button and click it with the left mouse button.

2. The Trend Channel menu is shown, which lists all the trend channels that have been
drawn on the current chart. The channels are listed by colour and number to make it
easy for you to identify the one that needs to be changed. Select the channel that
needs to be changed and then click the left mouse button.

3. A small sub-menu is shown – select Modify.

4. The Trend Attributes dialogue is displayed.

Make the following changes:

• Change the colour to blue by selecting it from the “Colour” drop-down list.
• Make the trend channel lines bold by ticking the check-box for “Heavy Line(s)”
• Display a line that runs down the centre of the trend channel by ticking the check-
box for, “Show Centre Line”.
• Display the top and bottom quarters by ticking the box for “Show Quarter Lines”.

5. Click on the OK button to finish the task.

Tip
In a short space of time, you have learned how to change the properties of a technical
analysis tool and line study. To change a property, all you need to remember is to click
the small downward facing triangle that appears on any button on the toolbars.

Getting Started 66
 Step 10
Removing Chart Objects
Note: There are two ways to remove items, such as line studies and indicators from a
chart.

• Items can be deleted, which means that the plot is completely removed from the
chart.

OR

• Items can be temporarily hidden and brought back into view when required.

Deleting an Indicator
In previous exercises we have plotted a RSI indicator - the next exercise shows you how
to remove it from the chart:

1. Position the mouse on the small downward facing triangle next to the RSI button
and click it with the left mouse button.

The RSI parameters box is displayed, which enables you to create and manage the
properties of several RSI indicators if required. This Multiple Command Dialogue
concept is the same for all the technical indicators in TradeGuider.

2. On the left side, in the Commands/Options area, click on RSI 1 to display the
available commands.

3. Now click Delete.

4. TradeGuider will request confirmation that you want to delete the RSI plot from the
chart. To complete the process, click the Yes button.

Getting Started 67
 Deleting a Line Study
Earlier in this manual, we drew a trend channel – this exercise will show you how to
delete it from the chart:

1. Position the mouse on the small downward facing triangle next to the Trend
Channel button and click it with the left mouse button.

2. The Trend Channel menu is shown, which lists all the trend channels that have been
drawn on the current chart. The channels are listed by colour and number to make it
easy for you to identify them. Select the channel that needs to be deleted and then
click the left mouse button.

3. A small sub-menu is shown – select Delete.

4. TradeGuider will prompt you to confirm the deletion of the trend channel. Click
Yes to complete the operation.

Note: The Trend Channel menu offers two more options to delete channels from a
chart.

• All Items can be deleted by selecting, “Delete All Trend Channels”.

OR

• It’s possible to be more selective, and delete trend channels that appear on the
chart before a specific date. This can be achieved by selecting, “Delete All
Trend Channels Before Date”.

Tips

• The technical indicators can be toggled on or off by simply clicking the relevant
button on the technical analysis toolbar. So, in this example, clicking RSI would
turn off the plot, whilst clicking it again would display the indicator once more.

• If you would like to temporarily hide line studies, do not tick the Show option on the
respective line study menu.

Getting Started 68
 Step 11
Getting Help
There will be many times when you need help with a certain feature; several sources are
readily available within the TradeGuider software. Perhaps the quickest way to find
answers is with TradeGuider’s online documentation suite.

All the documentation is available online from the Help Menu. The menu choices you
see may be different from the illustration on the left, since we are continually modifying
and expanding the level of documentation. As of writing, the current documentation list
is below.

Documentation
IMPORTANT: Make sure that you take the time to refer to the Read Me First!
document. It contains vital information about any known issues that
you should be aware of.

1. The Getting Started manual is what you’re reading now. This is your starting point
and introduces you to the basic operation of the software.

2. The Glossary (at the back of the Master the Markets book) will help you come up
to speed with various terms that are frequently used as part of the proprietary
Volume Spread Analysis (VSA) methodology that is used in the TradeGuider
software.

3. The EOD Data Directory will help you to locate an EOD data provider in your
country.

4. The Basic Trading Guide (see Volume 2 of the Getting Started Guide) will teach
you a number of common-sense techniques to get started in your trading or
investing.

5. The Quick Reference Card gives you a quick tour around the screen and is useful
to help you learn what the various buttons and toolbars do.

IMPORTANT:
To ensure that you see the manuals presented in the way they were written, we have also
made them available in the PDF (Portable Document Format). This allows you to read
the documentation online, using any computer, regardless of your operating system or
Word Processor.

You’ll need Adobe Acrobat to see the manuals, so if you don’t have this software on
your computer, you may download a free trial version by selecting Download Adobe
Acrobat from the Help menu in TradeGuider.

Tips
Since the documentation is retrieved online, you can be sure that you’re always looking
at the most up-to-date versions. Don’t forget that you can print the manuals, or save
them to your hard disk once the manual has been downloaded.

Getting Started 69
 Videos
The paper documentation is supplemented by the following video series:

1. The Video User’s Manual provides visual demonstrations (with audio commentary)
of the features available within the TradeGuider software.

2. The TradeGuider Toolset video provides you with a walkthrough of using

TradeGuider’s tools to good effect, so that you can start using TradeGuider to make
money.

3. The Volume Spread Analysis video, featuring Tom Williams, the ‘Inventor of
VSA’, explains some of the major concepts behind the TradeGuider software.

Books
You will also find a book included with TradeGuider, which is entitled “Master the
Markets” (it may have been supplied as an e-book). This book was written by veteran
trader Tom Williams (Chairman of TradeGuider Systems) and revised and re-illustrated
by Roy Didlock (Managing Director of TradeGuider Systems Ltd and President of the
TradeGuider Systems Group). This valuable book gives you an ‘insider’s view’ of what
is really happening in the markets when you’re trading. The book gives detailed
examples of the definitive principles behind the Volume Spread Analysis (VSA)
methodology. It is amply illustrated with lots of charts and provides commentary to
explain the principles behind the TradeGuider software.

Within the Software

• Choose TradeGuider on the Web (depending on your version, you may see different
wording, such as “Multimedia Support Suite”) to connect you to the Online Support
Resources on our website (your internet connection will need to be active to use this
facility.) The graphic below shows an example of the sort of resources that are
available online.

Getting Started 70
 • Choose Tip of the Day to access the Tips Database – you’ll be able to access trading
and software specific tips by selecting this option. To access this feature, select Show
Next Tip from the Help menu.

• Choose About TradeGuider for information about your software, such as the Version
Number, which we will usually require if you contact technical support. The About
box will also give you information about where to go for technical support. To access
the About dialogue, select About TradeGuider from the Help menu.

• To get Indicator Commentary for the red or green indicators, just click the indicator
symbol (triangle or rectangle) and a ‘speech bubble’ will appear with a commentary
and advice about the sorts of things to look out for.

Web Help
We plan to offer you a whole range of help from the website, which includes the
following support facilities:

• A User Forum, which enables you to exchange ideas with other TradeGuider users.
• A Knowledge Base which enables you to search our support database for help.
• A FAQ Section to answer your Frequently Asked Questions
• Free Online Webinars
• Multimedia Training Course(s)
• Market Scanning Service(s)

Please note that the multimedia training course and market scanning services might not
be free of charge.

More Places to Get Help

If you’ve checked the TradeGuider Manuals and other support resources, and still cannot
find the answer to your problem or question, please contact technical support at the
following email address:

support@tradeguider.com

When contacting technical support, it is helpful if you can provide the name (e.g.
TradeGuider EOD) and Version Number for your software. This information is
displayed by choosing About TradeGuider from the Help menu.

Getting Started 71
Getting Started 72
 Advanced
Topics

Getting Started 73
Getting Started 74
 Step 12
Ranking & Screening Securities
There are two types of scanner built into TradeGuider, a Stock Scanner and an Indicator
Scanner. Both of these scanners are accessed from the Scanner menu. A brief
description of each scanner is shown below:

1. The Stock Scanner is a great tool that is used to prospect for stocks that are strong
or weak. It compares the performance of stocks against their parent index. For
example, Microsoft Corp could be compared against the performance of the S&P
500 index to check whether it is under or over performing against the other stocks
that make up the S&P. The Stock Scanner uses proprietary relative strength analysis
techniques to carry out various checks, and is unique in its ability to assess
combined performance over both the up and down legs of a stock’s price movement
– the result is one of the most powerful and accurate stock scanners on the market
today.

Tip
If you have business sector (or industrial sector) data, it is also possible to use the Stock
Scanner to compare the performance of a stock against its sector, or the performance of a
group of sectors against an index. For more information on these techniques, see
Volume 2 – The Basic Trading Guide (Selecting Stocks for Position Trading, page
153).

Note: If you would like to include business sectors in your analysis regime, we
recommend the use of a good quality data feed which includes this sort of
information, such as Reuters DataLink (www.reutersdatalink.com) or CSI Data
(www.csidata.com). These data feeds are a little more expensive than the
regular data feeds, but it is important to remember that like most things, you get
what you pay for!

2. The Indicator Scanner helps you to save time by:

• scanning a folder of stocks or commodities to look for candidates that have just
experienced a change of trading activity (as measured by observations in
Volume Spread Analysis)

• scanning a folder of stocks or commodities to see if there are any candidates that
have just experienced a trend break-out, or a continuation of trend indicator.

Tip
A favourite way of using the Indicator Scanner is to look for situations where there is a
VSA sign of strength (green indicator) and an upwards-facing trend indicator (blue
triangle) that coincides at the same time, or is in close proximity. The opposite is true for
a VSA sign of weakness (red indictor) and a downwards-facing trend indicator.

Getting Started 75
 The Stock Scanner
As described on the previous page, the Stock Scanner is the primary tool you should use
to prospect and rank strong or weak stocks. The scanner utilises a unique Wyckoff
relative strength algorithm to perform a complex amount of analysis for both the up and
down legs of a stock’s price movement. You have the freedom to tell the scanner how
far back in time you want the analysis to take place, and the number of up and down legs
to use when carrying out the relative strength comparisons. At the end of the scan, you’ll
be presented with a report that shows the best and worse performing stocks in your
chosen folder.

The Stock Scanner is designed to be easy to use, yet extremely powerful – everything is
controlled by a simple Wizard, which guides you through the various steps.

Before you attempt to do your first stock scan, we urge you to take a few moments to go
through the following short tutorial.

Creating a New Scan Profile

A Scan Profile has to be created the very first time the Stock Scanner is used. A
different profile can be set up and customised for each of your scanning tasks. Here are a
few examples of the type of Scan Profile you may wish to create:

• Performance of Dow Jones Industrial stocks over the short term

• S&P stocks which have shown the largest price swings over the medium term
• The best performing Industry Sectors
• The worst performing NASDAQ stocks (e.g. you may want to short with options)

To create you first Scan Profile, follow the steps below:

1. Choose Stock Scanner from the Scanners menu.

2. The Stock Scanner Wizard will be displayed (See picture below.) Select Create a
new scan profile.

3. Click the Next button to continue onto the next stage of setting up the Scan Profile.

Getting Started 76
 Selecting the Comparison Index
When the scan is performed, TradeGuider will compare the performance of a stock with
its Parent Index to check whether the stock is over-performing or under-performing. The
Parent Index is simply the industrial index the stock resides in. For example, most
technology stocks, such as Microsoft and Oracle can be found in the NASDAQ index.
To continue with setting up your Scan Profile, follow the steps below:

1. Click the Load Index button (see below).

2. Select the index from the list and then click the Open button.

Tip: If you already have an index chart loaded, this step can be skipped and you may
progress to the next section in this tutorial (Setting the Scan Date, page 78).

Getting Started 77
 Setting the Scan Date
The next step is to choose the date for the scan – the default will be either today, or the
last day on your chart if you haven’t updated your data for a while. Selecting a date is
simply a matter of clicking the calendar or the scroll buttons to move the chart cursor
(see below).

When you’re ready to move on to the next step, just click the Next button to continue
setting up the Scan Profile.

Choosing the Stocks to Scan

Now is the time to choose the stocks to be scanned.

Note: The Stock Scanner is designed to work with daily charts only.

When you’re ready to move on to the next step, just click the Next button to choose the
stocks you wish to scan.

Getting Started 78
 You will be presented with a dialogue box that shows the Folder List (top left). This list
shows all your folders; one or more stock folders can be selected from this list. When
you select a Folder, its contents are displayed directly underneath in the Stocks List.

On the right side you’ll see the Scan List, which shows all the stocks that have been
selected for comparison against the parent index. There are two ways to transfer stocks
to the Scan List:

1. Select the Stock Folder from the left and transfer all the contents over to the Scan
List by pressing the button.

OR

2. Select individual stocks from the Stocks List and transfer all individual stocks over
to the Scan List by pressing the button.

Once you’ve selected the stocks to be used in the scan, the next task is to supply the
wizard with a couple of parameters and then the scan can commence. Press the Next
button to continue.

Tips

• In the interests of efficient performance, we would recommend setting up an

individual stock scan for each of the indices that you are interested in, rather than
combining multiple indices and stocks into one global scan that contains potentially
thousands of stocks.

• You may transfer the contents of the Scan List back to the Folder / Stock Lists by
clicking the button.

Getting Started 79
 Setting the Number of Reference Points
The next step is to specify the number of Reference Points to be used in the scan. A
Reference Point is simply the place where an up move (or known move) starts and ends.

The default value is “2”, which signifies two up moves and two down moves. When you
change this parameter, TradeGuider will show the resultant up and down legs on the
chart.

Once you’ve adjusted the Number of Reference Points to be used in the scan, the next
task is to set the Percentage Price Change. Press the Next button to continue.

Tips

• Choosing the default value of “2” for the number of up and down moves is a good
setting to use, which will produce reliable results in the majority of circumstances.

• You may choose between two and five reference points. A larger number of points
produce more reliable results, but this can be at the expense of running the
comparison against a period that goes back too far. Generally, you are advised not
to go beyond six months when setting this parameter. We would recommend that
you try to select reference points that cover up and down moves for three to four
months of price action.

Getting Started 80
 Setting the Percentage Price Change
The next step is to specify the Percentage Price Change to be used in the scan. Having
chosen the number of moves to analyse, the Percentage Price Change represents the size
of those moves.

The default value is “1.25”, which is a good setting to use for most circumstances. When
this parameter is altered, TradeGuider will recalculate and show the effects of the
percentage change on the chart. The chart below illustrates what happens when the
Percentage Price Change is increased from 1.25 to 2.25. Compare the changes in the up
and down price moves with the chart on the previous page to see the differences.

Once you’ve set the Percentage Price Change, the next task is to name the Scan Profile
so that you can re-use it on a daily basis. Press the Next button to continue.

Tips

• Choosing the default value of “1.25” for the percentage change is a good setting to
use until you become more experienced with the stock scanner.

• Watch the index chart as you change this parameter so that you can see how the
comparison will be made. If no lines are shown on the chart, it is likely that the
value used for the Percentage Price Change resulted in a starting point that was
before the first date of your index chart. In this case, choose a smaller value.

Getting Started 81
 Naming Your Scan Profile
The final step is to name your Scan Profile so that it can be retrieved and run whenever
you wish. You may type a descriptive name that is up to 40 characters in length.

Press the Done button when you are ready to start the stock scan.

The Stock Scanner in Motion

When the Stock Scanner is running you will see each chart momentarily displayed on the
screen and compared against the parent index (see below). You will also see a Progress
Gauge displayed in the top left corner of the screen. Despite the advanced algorithms
employed within the stock scanner program, the whole process will be complete within a
minute or so for the 500 stocks within the S&P 500 index.

Getting Started 82
 Analysing the Stock Scanner Results
Once the scan has completed, you’ll be presented with the best opportunities in a filtered
list of the 10 strongest stocks on the left and the 10 weakest stocks on the right. The
stocks are sorted by a ‘rating’ that indicates how strong or weak the stock is.

If you would like to visually compare any of these stocks against the parent index,
simply click the stock you are interested in and the relevant chart will be immediately
loaded for you to scrutinise.

The full set of scan results are available for you to analyse, since there will be many
other potential trading candidates amongst the verbose list. To see the unfiltered list
click the Raw Results button.

If you have a printer, the ten strongest and weakest stocks can be printed by clicking the
Print button.

Tips

You should be wary of any stocks with excessive ratings (i.e. higher than 5.0 or lower
than -5.0). Stocks that fall into this category may be:

• Flat (thinly traded) and trading in a narrow sideways price range

• Overbought and ready to fall
• Oversold and ready to rise

In all the above instances, we advise checking the VSA indicators and any other of the
TradeGuider tools that you use for confirmation.

Getting Started 83
 The Unfiltered Stock Scanner Results
By clicking the Raw Results button from the filtered list of scan results, you will have
access to the full analysis report from the Stock Scanner. This report also shows a more
detailed view of the ratings for each stock and gives you the option to sort the report by
Upside, Downside and Combined ratings. To sort the report in this manner, just click the
relevant heading at the top of the report.

To compare any of the stocks in the full report against the parent index, just select the
stock you are interested in and the relevant chart will be loaded so you can visually check
how much a stock has over or underperformed the index.

If you have a printer, the full report can be printed for your records by clicking the Print
button.

Note: The Combined rating is always used when producing the filtered list of the 10
strongest and weakest stocks.

Getting Started 84
 Printing the Stock Scanner Results
Both of the filtered or unfiltered Stock Scanner reports can be printed to aid further study
and analysis. To print either of the reports, press the Print button, which causes the
report to be displayed on the screen for you to preview before being printed (see below.)

Along the top of the screen is a toolbar with several buttons to assist you in previewing
the report and setting up the printer.

The function for each of the buttons is set out below (from left to right):

• Zoom to Fit: Changes the screen display to accommodate a whole page.

• 100%: Displays a full size version of the report on the screen.
• Zoom to Width: Uses the full width of your monitor to display the report.
• First Page: Displays the first page of the report.
• Previous Page: Shows the previous page.
• Next Page: Shows the next page.
• Last Page: Displays the last page of the report.
• Printer Setup: Enables you to set up the printer, choose which pages to print
and the number of copies to print.
• Print: Prints the report to the selected printer.
• Save Report: Saves the report to disk.
• Load Report: Enables you to load a previously saved report.
• Close: Exits the printing facilities.

Note: The Stock Scanner reports are saved as a QuickReport format file, which can
only be retrieved by using the Load Report facility in TradeGuider.

Getting Started 85
 Comparing Other Charts to the Index
You may also compare the performance of other charts to the index, such as related
Industry Sectors, or other commodities, such Gold or T-Bonds. Since the index is
already loaded from the previous scan, just click the OK button on either the filtered or
unfiltered Stock Scanner results dialogues to gain access to the dedicated chart
comparison buttons on the top left of the chart. There are three buttons to enable you to
carry out the various comparison functions – the purpose of these buttons is set out
below:

• Remove Comparison Chart: Removes the current comparison chart.

• Make a New Comparison: Loads a new comparison chart.
• Comparison at Cursor: Compares the index and related chart at the current
cursor position.

Note: You can also access the chart comparison buttons by choosing Make
Comparison from the Chart menu.

On the next page we will discuss what to look for when comparing stock charts with
their parent index. We will demonstrate a simple principle that will help you to choose
profitable stocks consistently and these rules can also be reversed if you wish to profit
from shorting weak stocks.

Getting Started 86
 What to Look for When Comparing a Chart
Stock selection for buying is relatively easy. Only trade stocks that make up a major
index, since these will be highly capitalised, and will generally have a high level of
stability and liquidity, enabling you to get into and out of your positions quickly. It is
these stocks that will be actively traded by the trading syndicates and market-makers.
This is good news for us because we can usually see the results of their activity on our
charts: observations of the price action (between a stock and its parent index) and volume
is the key to good stock selection.

You will need a benchmark when selecting stocks – something to compare a stocks
performance with, and you will use the associated index for this purpose. When the
market is rising, it is normal for most stocks that make up an index to rise too. However,
when the index is falling, a strong stock will resist a price drop and may even rise. The
screen-shot below illustrates this phenomenon perfectly.

This type of price action is an indication that the stock is bullish. Professional money is
active in the stock and you know that this is a good candidate because they are not selling
it – in fact, they are buying the stock on each subsequent fall of the index and the price is
being supported as a result. Alternatively, weak stocks will have no support from
professional groups and they will fall easily, in tandem with the index. This simple
principle can be observed frequently, and it is a principle that can make a significant
difference to your success as a trader. Remember, professional buying makes a stock
resistant to falls. Reverse these principles if you wish to trade the short side of the
market.

Tips
• You should only trade stocks that make up a major index, such as the Dow
Jones, NASDAQ, FTSE 100, and S&P 500.

• It helps to get a better view of a stock if you convert it to a weekly time period.
Do the same for the index and compare the charts, looking for price support (or
rises) whilst the index is falling. Use a daily chart when selecting the entry
point for a trade.

• A ‘buy’ signal will be seen as a low volume down-day or a ‘Test’ in the parent
index. For more information about ‘Tests’ and other volume-related
indications, see the Master the Markets book.

Getting Started 87
 Re-using a Previously Saved Scan Profile
If you have already saved a scan profile and would like to re-use it, follow the steps
below:

1. Choose Stock Scanner from the Scanners menu.

2. Select Re-use a previously saved scan profile

3. Press the Next button to continue.

4. Choose the scan profile you wish to use from the list. In the example below, we
have chosen the “NASDAQ 100 Stock Scan”.

5. Then click the Next button to run the scan.

Getting Started 88
 Modify a Previously Saved Scan Profile
If you have already saved a scan profile and would like to modify it, follow the steps
below:

1. Choose Stock Scanner from the Scanners menu.

2. Select Modify a previously saved scan profile

3. Press the Next button to continue.

4. Choose the scan profile you wish to use from the list. In the example below, we
have chosen the “NASDAQ 100 Stock Scan”.

5. Then click the Next button.

6. Load the Comparison Index as described earlier on page 77 (Selecting the

Comparison Index)

7. Set the Scan Date as previously described on page 78 (Setting the Scan Date)

8. Choose the stocks that you wish to use in the scan, as detailed on pages 78 – 79
(Choosing the Stocks to Scan).

9. Now select the Reference Points you wish to use, according to the procedure set out
on page 80 (Setting the Number of Reference Points).

10. The next step is to set the Percentage Change, which is described on page 81
(Setting the Percentage Price Change).

11. The penultimate step is to name the Scan Profile, as described on page 82 (Naming
Your Scan Profile).

12. Finally, click the Done button to finish.

Getting Started 89
 View Previous Scan Results
If you have already saved a scan profile and would like to view the results of it, follow
the steps below:

1. Choose Stock Scanner from the Scanners menu.

2. Select View a previous set of scan results

3. Press the Next button to continue.

4. Choose the scan profile you wish to use from the list. In the example below, we
have chosen the “NASDAQ 100 Stock Scan”.

5. Then click the Next button to see the analysis report from the last time the scan was
run.

Getting Started 90
 Deleting a Scan Profile
If you have already saved a scan profile and have no further use for it, follow the steps
below:

1. Choose Stock Scanner from the Scanners menu.

2. Select View a previous set of scan results

3. Press the Next button to continue.

4. Choose the scan profile you wish to delete from the list. In the example below, we
have chosen the “NASDAQ 100 Stock Scan”.

5. Click the Delete the selected list button to remove the Scan Profile.

6. Finally, you’ll be asked to confirm your decision to delete the Scan Profile. Just
click the Yes button.

Getting Started 91
Getting Started 92
 The Indicator Scanner
The Indicator Scanner is the tool you should use to screen stocks for potential movement,
due to:

• Imbalances of supply and demand

OR

• Changes in trend.

The scanner utilises our unique Volume Spread Analysis (VSA) technology to perform a
complex amount of analysis for all the stocks in your portfolio. You have the freedom to
tell the scanner how far back in time you want the analysis to take place, although we
would advise you accept the default value of 20 days (or whatever the timeframe is that
you’re using). At the end of the scan, you’ll be presented with a report that shows all the
VSA and trending indicators for the stocks in your chosen folder.

The Indicator Scanner is designed to be easy to use, yet extremely powerful – everything
is controlled by a simple Wizard, which guides you through the various steps.

Before you attempt to do your first indicator scan, we urge you to take a few moments to
go through the following short tutorial.

To summarise, the Indicator Scanner helps you to save time by:

• scanning a folder of stocks or commodities to look for candidates that have just
experienced a change of trading activity (as measured by observations in
Volume Spread Analysis)

• scanning a folder of stocks or commodities to see if there are any candidates that
have just experienced a trend break-out, or a continuation of trend indicator.

Tip
A favourite way of using the Indicator Scanner is to look for situations where there is:

• a VSA sign of strength (green indicator)

AND

• an upwards-facing trend indicator (blue triangle) that coincides with it, or is in

close proximity to it.

The above guideline can be reversed if you wish to screen for movements to the short
side (i.e. a VSA sign of weakness (red indictor) AND a downwards-facing trend
indicator.)

Getting Started 93
 Creating a New Indicator Scan Profile
A Scan Profile has to be created the very first time the Indicator Scanner is used. A
different profile can be set up and customised for each of your scanning tasks. Here are a
few examples of the type of Scan Profile you may wish to create:

• Dow Jones Industrial stocks that have shown a change of supply or demand over the
last few days.
• S&P stocks which have shown short-term changes in supply or demand AND have
started to trend.
• Industry Sectors that have started to trend and are showing signs of professional
buying or selling.
• Commodities that are experiencing volume-related strength or weakness.

To create you first Scan Profile, follow the steps below:

1. Choose Indicator Scanner from the Scanners menu.

2. The Indicator Scanner Wizard will be displayed (See picture below.) Select Create
a new scan profile.

3. Click the Next button to continue onto the next stage of setting up the Scan Profile.

Setting the Indicator Filters

When the scan is performed, TradeGuider is able to apply the following filters:

• Volume-related supply or demand changes, by using our Volume Spread

Analysis (VSA) technology. This analysis method is looking at changes in
volume, spread and price, to assess the likelihood of professional activity in the
market, which would imply the potential for a price change soon after.

• Trend-related changes, which combines price change with volatility break-outs,

to give you an accurate method of assessing probable trending movements.

To continue with setting up your Scan Profile, you will need to select the Indicator
Filters that you would like to use during the scanning process (see below).

Getting Started 94
 Choosing the Scan Period
Now is the time to select how far you would like to go back when performing the scan.
You can select any period between the last 5 and 30 bars. However, for most purposes
the default value of 20 is sufficient (see below).

Click the Next button to continue onto the next stage of setting up the Scan Profile.

Note: You don’t need to set a Scan Date when using the Indicator Scanner, because
TradeGuider is only interested in looking at what has happened during the most
recently collected data.

Choosing the Stocks to Scan

Now is the time to choose the stocks to be scanned.

Note: The Indicator Stock Scanner is designed to work with any timeframe.

When you’re ready to move on to the next step, just click the Next button to choose the
stocks you wish to scan.

Getting Started 95
 You will be presented with a dialogue box that shows the Folder List (top left). This list
shows all your folders; one or more stock folders can be selected from this list. When
you select a Folder, its contents are displayed directly underneath in the Stocks List.

On the right side you’ll see the Scan List, which shows all the stocks that have been
selected for comparison against the parent index. There are two ways to transfer stocks
to the Scan List:

1. Select the Stock Folder from the left and transfer all the contents over to the Scan
List by pressing the button.

OR

2. Select individual stocks from the Stocks List and transfer all individual stocks over
to the Scan List by pressing the button.

Once you’ve selected the stocks to be used in the scan, press the Next button to continue.

Tips

• In the interests of efficient performance, we would recommend setting up an

individual stock scan for each of your stock (or commodity) folders, rather than
combining multiple stock folders into one global scan that contains potentially
thousands of stocks.

• You may transfer the contents of the Scan List back to the Folder / Stock Lists by
clicking the button.

Getting Started 96
 Naming Your Scan Profile
The final step is to name your Scan Profile so that it can be retrieved and run whenever
you wish. You may type a descriptive name that is up to 40 characters in length.

Press the Done button when you are ready to start the stock scan.

The Indicator Scanner in Motion

When the Indicator Scanner is running, you will see each chart momentarily displayed on
the screen. You will also see a Progress Gauge displayed in the top left corner of the
screen. Despite the complexity of the analysis employed within the indicator scanner, the
whole process will be complete within a few minutes for the 500 stocks within the S&P
500 index.

Getting Started 97
 Interpreting the Indicator Scanner Results
Once the scan has completed, you’ll be presented with a table showing a screened list of
stocks (or commodities) according to your criteria. The table is sorted in alphabetical
order to make it easy to find particular stocks you are interested in.

If you would like to visually analyse any of the stocks (or commodities) in the list,
simply click the symbol you are interested in viewing and the relevant chart will be
immediately loaded for you to scrutinise.

To search the list, use the scroll bar, or the Page Up and Page Down buttons.

Tips
The screen list of VSA and trending indicators is showing you all the stocks (or
commodities) that are poised for a move. You will find some general guidelines below
which will help you to interpret the scanner results:

• You should be wary if you observe a conflict between a VSA and trending
indicators. Generally, you should give more bias to the VSA indicator, which tends
to be the more accurate.
• A stock (or commodity) is more likely to rise or fall when the VSA and trending
indicators point in the same direction.
• When you see clustering of VSA/trending indicators, you should take this as a more
serious indication that a price change is afoot. So if you saw 2 or 3 green indicators
together on the same row of the table, there is a strong chance that the stock will rise
in price.
• If you see a column in the table that shows many green indicators, then this shows
strength coming in across all these stocks at the same time (the opposite is true if
you see a column of red VSA indicators). In this example, the clustering of
indicators is evidence that the stock will rise in price.
• Use other techniques as confirmation, such as the Diamonds, support & resistance,
trend clusters etc.

Getting Started 98
 Re-using a Previously Saved Scan Profile
If you have already saved a scan profile and would like to re-use it, follow the steps
below:

1. Choose Indicator Scanner from the Scanners menu.

2. Select Re-use a previously saved scan profile

3. Press the Next button to continue.

4. Choose the scan profile you wish to use from the list. In the example below, we
have chosen the “NASDAQ 100 Stock Scan”.

5. Then click the Next button to run the scan.

Getting Started 99
 Modify a Previously Saved Scan Profile
If you have already saved a scan profile and would like to modify it, follow the steps
below:

1. Choose Indicator Scanner from the Scanners menu.

2. Select Modify a previously saved scan profile

3. Press the Next button to continue.

4. Choose the scan profile you wish to use from the list. In the example below, we
have chosen the “NASDAQ 100 Stock Scan”.

5. Then click the Next button.

6. Choose the types of indicators to include in your scan as described earlier on page
94 (Setting the Indicator Filters)

7. Set the Scan Period as previously described on page 100 (Choosing the Scan
Period)

8. Choose the stocks that you wish to use in the scan, as detailed on pages 100 – 101
(Choosing the Stocks to Scan).

9. The penultimate step is to name the Scan Profile, as described on page 97 (Naming
Your Scan Profile).

10. Finally, click the Done button to finish.

Getting Started 100

 View Previous Scan Results
If you have already saved a scan profile and would like to view the results of it, follow
the steps below:

1. Choose Indicator Scanner from the Scanners menu.

2. Select View a previous set of scan results

3. Press the Next button to continue.

4. Choose the scan profile you wish to use from the list. In the example below, we
have chosen the “NASDAQ 100 Stock Scan”.

5. Then click the Next button to see the analysis report from the last time the scan was
run.

Getting Started 101

 Deleting a Scan Profile
If you have already saved a scan profile and have no further use for it, follow the steps
below:

1. Choose Stock Scanner from the Scanners menu.

2. Select View a previous set of scan results

3. Press the Next button to continue.

4. Choose the scan profile you wish to delete from the list. In the example below, we
have chosen the “NASDAQ 100 Stock Scan”.

5. Click the Delete the selected list button to remove the Scan Profile.

6. Finally, you’ll be asked to confirm your decision to delete the Scan Profile. Just
click the Yes button.

Getting Started 102

 Things to Remember
If you only take away three things from this manual, please remember the following:

1. Click your right mouse button on any item on the screen if you are unsure what to do.
Most items will display a special pop-up menu showing the options available to you.
If you have TradeGuider RT, be aware that some of the pop-ups are disabled when the
software is analysing real-time charts. However, when looking at end-of-day charts,
all of the pop-ups will be accessible. You can also float your mouse cursor over the top
of any button to see a quick description of what the button does (also check out the
Quick Reference Card that came with the software).

2. Watch the Video User Manual and the video training series for the TradeGuider tools.

3. Read the accompanying manuals that came with your software – they are there to help
you in times when you don’t know what to do. Please refer to the Read Me First!
document, which will highlight any known issues that were discovered too late to
include in the regular documentation.

Thanks again for choosing TradeGuider! We hope you find the software useful.

Getting Started 103

 Notes

Getting Started 104

Getting Started 105
Getting Started 106
 Volume 2

Basic Trading
Guide

Getting Started 107

Getting Started 108
 Introduction
Putting TradeGuider in Context
Now that you’ve had chance to settle in, it’s time to put TradeGuider into context.
You’ve probably read the Getting Started section of this manual, and you may have
glanced through the “Master the Markets” book (or e-book). At the moment, you’re
probably wondering how TradeGuider fits into your current trading methodology, or if
you’re new to trading, you’ll want to know how to use the tools in TradeGuider so that
you can approach your trading in an objective way.

There are two basic ways to use the TradeGuider software package:

1. The software can be run on a separate monitor screen alongside your other trading
software, technical indicators, or proprietary systems. In this mode, TradeGuider is
adding value to your trading, by allowing you to see the extra dimension of volume
beside your current systems. When used in this way, TradeGuider can be referred to
as a Decision Support System, enabling you to make more effective and timely
decisions throughout the trading session. Indeed, this concept of Trade Guidance
forms the basis behind the name of the software - TradeGuider.

2. Alternatively, you may not have any other trading systems and you’re looking to
TradeGuider to help you to approach your trading in a definitive and objective way.
You need a solution to remove the guesswork from your trading decisions.

Whichever category you fall into, we think you’ll find the Basic Trading Guide Section
is useful as an introduction to using TradeGuider to make your trading more profitable,
and ultimately, more enjoyable.

On the next page you’ll learn more about what lies ahead …

Getting Started 109

 About This Section
This section will provide you with some common-sense ideas for use in your trading and
is aimed at the beginner who is just starting out, rather than the accomplished expert. So,
the first thing to do is read the Introduction on page 109, which explains the two basic
ways of how you should use the TradeGuider software. This guide sets out to achieve
three objectives:

1. explain the basic tools that are available to you

2. provide you with various hints and tips to help you use the tools effectively
3. suggest a possible way of using the tools for position or intraday trading.

Don’t forget to refer to the “Things to Remember” section at the end!

This manual is part of a set that helps you become acquainted with the software:

IMPORTANT: Make sure that you take the time to refer to the Read Me First!
document. It contains vital information about any known issues that
you should be aware of.

Getting Started 110

 Basic Techniques
That Constantly Work
IMPORTANT: Before we go any further, you need to understand that trading,
especially in the futures markets, is a high risk activity. Although we
are presenting strategies that will help you to become more effective as
a trader, you must keep in mind that unless you’re properly capitalised,
disciplined, and willing to exercise protective measures to manage your
risk (such as implementing a stop loss), you should seriously review
your circumstances before continuing any further.

Four Commonsense Principles

This guide is about looking at your trading from a commonsense viewpoint to make
money. Hence, you’ll find nothing in here about astrology, planetary conjunctions,
moon phases, arcane mathematical formulas, or complex geometrical patterns. We are
here to tell it like it is. There are four basic principles in trading that continuously stand
the test of time. Taking note of these principles will pay large dividends for you – they
are as follows:

1. Trading in accordance with areas of Support & Resistance

2. Trading with the Trend direction
3. Taking note of the forces of Supply and Demand
4. Protecting your profits with a Stop-Loss Strategy

There are tools within the TradeGuider software to help you take advantage of all these
commonsense principles. The following pages explain the various tools available to you,
with good advice on how to use them in order to minimise your risk and maximise your
chances of success.

Before we continue further, let’s explore the differences between different styles of
analysis and how TradeGuider should be placed in the context of your trading
experience.

Getting Started 111

Getting Started 112
 Trading vs. Investing
Most traders actually start out their careers as investors. They may have saved up some
money, had a windfall, or used the proceeds from a retirement fund to begin taking
investment opportunities in stocks that were hyped by the media to make explosive
gains. The fledgling investor normally begins by calling a discount broker, setting up an
account, and buying a familiar stock, such as Microsoft Corp. At this stage, the main
reason for choosing a stock is because the budding investor has read something
favourable in the press, or they may have seen a stock hyped on the TV.

The usual story is that the hyped stock rises explosively and the investor is very happy
with the results of their speculative efforts. Then, for no apparent reason, the price takes
a nosedive! The rookie investor remembers the hyped articles in the newspaper and
stories on the TV, and decides that the decision to buy is basically sound - the fall in
price is just a ‘blip’. The price continues to falls over the course of the next week, to
such an extent that the stock is now worth less than what was paid for it. At this point,
the investor sells out at a loss, and questions how such a sure thing turned out so badly.
They embark on a period of learning, purchasing books on technical analysis and other
methods of forecasting market prices – they may even attend a stock trading course.

Most investors will become users of technical analysis in their quest to become better
traders, and some will also use fundamental analysis (see later for an explanation of the
two approaches). However, very few investors will learn to appreciate how important
the observation of trading volume is, and how to correctly interpret the interaction of
price and volume – the most crucial indicator of all and the foundation stone of
TradeGuider. You can learn a lot more about the importance of volume analysis in the
accompanying book, called Master the Markets.

Incremental vs. Long Term Gains

The charts on the next page show the differences in speculative gains that can be
achieved when trading or investing a stock called Altera Corporation (ALTR). Both of
the charts show the period of June 2003 to February 2004. You can see from the first
chart that a return of 24% was posted by using a ‘buy and hold’ strategy. This nice gain
is significantly better than the return available from a bank. However, by adopting an
incremental trading strategy we can achieve much better results, which are shown for
comparison in the table below.

Trading Strategy Total

Buy and Hold 24%
Incremental Trading 176%

By trading the individual moves, we would have potentially made more than 7 times
the gain that would have been possible over the eight month period with a ‘Buy and
Hold’ approach.

Getting Started 113

 Buy and Hold Strategy
Adopting a ‘buy and hold’ strategy results in a potential 30.8% return for the period.

Incremental Trading Strategy

We can see that it is possible to improve the gains over the same eight-month period by
using an incremental trading strategy. In this example, there has been an excellent total
return of 176%.

Getting Started 114

 Technical vs. Fundamental Analysis
There are two main approaches to trading and investing:

1. Fundamental Analysis
2. Technical Analysis

Our proprietary Volume Spread Analysis (VSA) methodology is really a sub-set of

Technical Analysis, but because the concepts are so radically different, and because of
the sophistication of our approach, we like to think that VSA is actually a separate way
of analysing the market in its own right. We believe that our approach to analysing the
market is superior to other methods. However, there is value in adopting a holistic
approach to trading, especially when VSA indicators in TradeGuider also confirms other
forms of technical analysis, such as the study of support and resistance (more on this
later.) For the time being, let us look in more detail at the two main types of analysis
method that are available to the trader and investor.

Technical Analysis
Technical Analysis is the application of mathematics to try to make sense out of
historical price and volume movements. Any mathematical analysis method that requires
market data (price, volume, open interest etc) to predict price can be included under the
category of Technical Analysis. The theory is that by analysing historical prices, it
should be possible to predict future prices – the truth, however, is that the financial
markets are not quite this simple! There are literally hundreds of technical analysis
formulas, such as MACD, ADX, RSI etc. The vast majority of these mathematical
formulas are concerned with analysing the price of a stock or commodity, rather than
what is happening to the underlying trading volume. As you advance in your career as a
trader, you’ll learn how important volume observation is to accurately time the correct
entry and exit of your trades; TradeGuider will be a crucial tool in your trading arsenal.

Technical Analysis is a crude attempt to predict future price direction by looking at

past price behaviour. It is akin to forecasting the weather tomorrow by looking at
the weather over the past few days.

Technical Analysis is also known in trading circles as the study of market psychology
(akin to crowd psychology.) The financial markets are driven by two powerful and very
primitive emotions: greed and fear. Since these emotions are so deeply ingrained in all
of us, it is very difficult not to be ruled by them unless we have learned to trade with a
high level of discipline, which will effectively disconnect us from trading in an
emotional way. Due to the fact that most traders have not learned to be emotionless, they
tend to enter and exit trades at the same time as everyone else – they are ruled by the
dictates of fear and greed. So, as markets rise, greed takes a hold until mania sets in
(everybody wants the item.) Then, when there are no more buyers at the current price,
the market tends to stagnate (i.e. go flat) or it might even collapse, plummeting out of
control as fear takes over.

Each Technical Analysis method was created through observing market behaviour and
noting basic mathematical conditions that seemed to occur as prices turned up or down,
or trended, or stalled. For instance, in a crude example, observation tells us that when
prices rise above a moving average, it can be a bullish sign, and when prices fall below
the average, it tends to indicate that a decline might be underway.

Getting Started 115

 Despite the many different types of Technical Analysis formula, they all tend to fall into
pre-defined categories and perform similar functions (such as oscillators, trending
indicators, counter trend indicators, or cyclic indicators). The formulas within each
category are variations on a theme and do not differ much from each other. One of the
reasons why there is such a large range of Technical Analysis methods to choose from is
because many of them have been invented by ‘trading personalities’ as a PR exercise to
lend them kudos. Existing formulas are often tweaked by trading personalities, which
further adds to the range of indicators available. As time goes by, more formulas are
created, which makes it difficult to choose Technical Analysis methods that match your
trading personality and the prevailing market conditions – most traders have spent
hundreds of hours assessing the vast range of Technical Analysis indicators available to
them, and even more time trying to optimise these indicators so that they perform better.
In contrast, TradeGuider is designed to be a non-optimised, automatic, and very stable
analysis method.

The majority of technical trading methods are sensitive to the period being studied. For
instance, different entry and exit signals will be seen for a 30-day moving average period
versus a 100-day time frame. In this regard, you’ll find that Volume Spread Analysis
techniques are no different to other trading methods – this is why we recommend
viewing charts over different time periods to look for confirmation (more about this
later.)

When someone uses Technical Analysis techniques, they will be using techniques from
three primary areas to analyse their chart:

1. Chart Patterns – recurring patterns that alert the technician to a potential change in
price trend (things like areas of consolidation, double tops or bottoms, signifying
strong price resistance or support).

2. Indicators – there is a huge array of technical analysis indicators available to the

technician (e.g. MACD, Stochastics, DMI, RSI …)

3. Systems – Systems bring together different elements of technical analysis (such as

patterns and indicators) so that trading signals can be generated to enter and exit a
trade.

The chart on the following page demonstrates each of these ideas:

1. The triangular wedge chart pattern bound by the two straight lines shows a period
of consolidation, where the stock is traded within an increasingly narrow and less
volatile price range. Eventually, prices tend to break-out explosively, either to the
upside or downside. In this example the price gaps upwards and finds support on the
upper line of the consolidation wedge, before accelerating rapidly upwards. By
observing the action of price and volume, and by observing the Volume Spread
Analysis indicators generated by TradeGuider, it is usually possible to predict which
way the price is going to turn.

2. The lightly shaded (yellow) triangular indicators show where the Stochastics
Technical Analysis formula has triggered a signal. The Stochastics indicator is
actually a mathematical oscillator which, in this example, calculates the range of
price movement over a pre-defined number of days. If the current price is within the
top of the range, the oscillator will be above 80, and if it is within the bottom of the
range, the value of the oscillator will be below 20. The program looks at the relative
values of the oscillator and then determines where the potential overbought or
oversold levels of the market are likely to be.

Getting Started 116

 The software is looking for peaks and valleys in the oscillator in order to produce
signals. When the oscillator rises to a high point to form a peak and then falls, a
downward movement in price is expected – a signal is shown on the chart to indicate
that the stock is possibly overbought. Similarly, when the prices dives below 20 and
then rises to form a valley, a signal is displayed to indicate that the stock is
potentially oversold.

Technical analysis indicators give the trader an idea of whether prices are going to
rise or fall. The stochastics formula is quite a good way of showing potential turning
points, but its effectiveness can be significantly increased by implementing a system
which combines one or more high probability factors to improve the odds of
catching larger, more profitable price moves.

3. The circled areas on the chart show the buy and sell opportunities that are available
when combining stochastics and the VSA indicators into a basic system. When
there is confluence between the VSA indicators and stochastics, we have the basis of
a system that is capable of identifying turning points that result in good price
movements.

One thing that is common with all successful traders and investors is that they have
at least one system that they follow in a disciplined fashion. Most traders will have
accumulated several favourite systems that they have created over the course of their
trading careers.

Systems can be made up of many different elements, including:

• Divergences in slope between the price and a plotted indicator

• Moving averages and cyclic indicators
• Oscillators and other overbought/oversold indicators
• Reversal formations (such as candlestick patterns)

Each approach has its own strengths. Different techniques can be used to confirm or
complement each other. TradeGuider can be used as an effective trading system on its
own, or you can supplement the powerful VSA indicators within TradeGuider by using it
alongside a good technical analysis package (such as MetaStock or OmniTrader.)

Getting Started 117

 Fundamental Analysis
Fundamental Analysis is an attempt to decipher what should happen in the financial
markets, based on economic data, events, and analyst’s expectations. As with Technical
Analysis, it is not an exact science, but forecasting future price direction by employing
Fundamental Analysis techniques is arguably an indefinite practice best left to the
experts in the city, who have an ear close to the ground. Typically, fundamentals include
both quantifiable and unquantifiable indications of a company’s prospects, such as:

• Actual revenue and potential earnings

• Growth
• Asset value
• Market share
• Director’s share trading statistics
• Untapped markets
• Products currently in research and development

Generally speaking, Fundamental Analysis tells us what should happen in the

markets, whilst Technical Analysis tells us what is happening right now.

An analyst that uses fundamental data is attempting to forecast whether future earnings
will be higher or lower than they are today. Unfortunately, there are some serious
problems with taking this approach:

1. It is difficult to quantify fundamental data. For instance, a company may have a

new product in development, maybe for an untapped market. Although the
Company will have carried out market research to gauge whether people will find
the new product attractive, nobody actually knows for certain whether the product
will be a success or failure until it has been introduced and marketed.

2. The markets often do the opposite of what one would expect on the
announcement of fundamental data. For example, it is a very common occurrence
to see the price of a stock fall, despite the publication of a favourable earnings
projection. The market will often react completely opposite to expectations when
news is released; on the announcement of good news, stocks will often fall in price,
and vice versa. The reason for this phenomenon is that professional groups have
already bought or sold large blocks of stock ahead of the news. Once the news has
been released, it is in many respects too late for the general public to be involved –
stock is often ‘dumped’ on unwary buyers who have read great news in the papers,
only to find that the stock price quickly stagnates and falls, since there is no
professional support. There is a well-worn saying in the city, “Buy the rumour, sell
the news!”

3. The future effects of various fundamental aspects of a Company have already

been analysed and used to “discount” the price of a stock. If a Company’s
earnings are improving, the stock price will already reflect the expectation that this
will continue.

4. A News Feed is a poor barometer to judge future prices. Based only on a news
feed, it would be a difficult task to predict which way a stock would move on
fundamental data alone.

5. Fundamental Analysis techniques do not automate easily. Although computers

are able to access fundamental data, there is no standardised format, and no reliable
way to quantify the data for analysis.

Getting Started 118

 Volume Spread Analysis
Volume Spread Analysis (usually shortened to VSA) is a computerised analysis
technique that was invented by Tom Williams (a retired veteran trader) in the 1980’s.
His sophisticated techniques were the first to truly integrate price and volume into a
robust methodology – these algorithms formed the ‘Analysis Engine’, which was built
into his popular software, called “VSA”. Tom also wrote a book in 1993 called “The
Undeclared Secrets That Drive The Stock Market”, which encapsulated the reasoning
behind his VSA methodology.

TradeGuider Systems Ltd subsequently bought the rights to this “VSA Analysis Engine”
and has built the technology into TradeGuider. Even to this day, despite Tom being in
his mid 70’s, he still plays an active role in the Company, and is involved in both training
seminars and product development.

Volume Spread Analysis takes a three dimensional approach to examining the

markets. It seeks to make decisions on market strength or weakness based on three
basic components: Price, Volume, and Spread.

VSA falls into the Technical Analysis category of looking at the markets, although the
computerised techniques are significantly more advanced than any indicator or formula
that is used in popular trading software. TradeGuider is a specialist piece of software
that has been designed specifically to show the trader (or investor) where strength or
weakness exist in the market. It will amaze you to see how often the market will change
direction when a VSA indicator is displayed on your chart!

The sophisticated VSA system built into TradeGuider will show you when professional
activity is present in the markets (either buying or selling) and it will also display
indicators when professional support has been withdrawn. TradeGuider will give you a
unique insight into the way that professional money ebbs and flows in the financial
market place.

The reason why TradeGuider is able to give such an informed insight into the financial
markets is because of the unique way that the software looks at the available technical
data. Unlike other trading software, TradeGuider looks at the following things:

1. The current price and how this relates to the past price.
2. The level of trading volume (activity) and how this has changed over time.
3. The trading range for a particular day (or period) and the dynamics over time.
4. How the price relates to the spread
5. How all these factors are interacting with each other.

Although the analysis methods within TradeGuider are extremely complex, the
main thing to remember is that the analysis is done automatically for you.

TradeGuider also looks at many other subtle changes in market dynamics, but the main
factors are listed above. Despite the complexity of the methods used, there is no
configuration or parameters to change when using the software – all of the analysis is
carried out automatically.

The reason why TradeGuider is such a robust methodology that has stood the test of
time, over any timeframe, is because it has been designed to observe the basic forces that
drive any market: supply & demand.

Getting Started 119

 Does Technical & Volume Spread Analysis Work?
Probably the most popular question posed by people new to trading is whether the
application of Technical Analysis or Volume Spread Analysis techniques will make
money for them. The answer to this question very much depends on their personality
and whether they have the discipline and money management skills required to be a good
trader. If the pre-requisite skills to be a good trader are prevalent, then we strongly
believe that VSA and Technical Analysis methods will make a great deal of money.

Maximise your chances of becoming a good trader by combining Volume Spread

Analysis with standard Technical Analysis.

TradeGuider Systems believes that your best chance of success in the markets will be
achieved by using a combination of standard technical Analysis tools, such as those
included in software such as MetaStock and OmniTrader, and our Volume Spread
Analysis techniques, as implemented in TradeGuider. You will find that the combined
techniques will complement each other, enabling you to enter a trade with a high level of
probability. To reiterate the points in the previous section, we believe you should
concentrate your focus on the following commonsense methods:

1. Trade in accordance with areas of Support & Resistance. You can use the built-
in tools within TradeGuider to do this, such as the Pivot Points, Trend Clusters, and
Highs & Lows tools. You may also wish to investigate the Fibonacci Retracement
tools that are included with TradeGuider (See Fib button on the Technical Analysis
toolbar).

2. Trade with the Trend direction. Unless you are an experienced trader, it pays not
to call the turns – instead, learn to trade within the direction of the trend. There are a
number of tools within TradeGuider to help you ascertain the trend direction:

• The short term trend is show by the coloured diamonds.

• The intermediate / long term trend is indicated by the colour of the price bars.
• The Last Active Trend facility will display the currently active trend for you.
• If you prefer to plot trend lines and channels manually, there are also facilities to
do this.

3. Only trade in accordance with the forces of Supply and Demand. TradeGuider
excels at making sense out of volume information, which in tandem with price
information, enables the software to give you valuable insights into the inflow and
outflow of professional money in the markets. You will not reach your full
potential as a trader if you ignore what supply and demand is telling you!

4. Protect your profits with a Stop-Loss Strategy. This last point should go without
saying, but it’s surprising how many people make profits and then give them all
back to the market because they haven’t used a stop loss! Facilities are already built
into TradeGuider to help you manage your trades – you will see the ‘H’ stops
referenced at various places within this Basic Trading Guide.

Getting Started 120

 Trading Styles
Each one of the areas mentioned on the previous page is covered in more detail later in
this manual.

The Way to Trading Success – 2 Additional Points:

1. Find a trading system or method that matches your personality.

2. Trade the system with discipline and consistency – DO NOT ‘cherry pick’!

All successful traders develop their own trading style and system(s) that match their
personality. Your trading style will also be partly governed by the amount of capital at
your disposal. For instance, if you cannot afford the possibility of large draw-downs, it
would be unwise to hold overnight positions in a volatile commodity. There are many
different trading styles, some of which are shown below:

Scalping – This style involves trading for small gains. It involves entering and exiting
a trade quickly, within a short timescale of a few minutes. Trades are
usually finished within the space of an hour. People who trade in this way
are referred to as “scalpers” and most traders who fall into this category
will make many trades a day – some scalpers trade in excess of 100 trades a
day. This type of trading style suits those who can think quickly and
lucidly under pressure. Since trading in this manner will result in large
commissions, it is wise to be well capitalised before considering a career as
a scalper. Serious scalpers will trade large lot sizes, sometimes in excess of
100 contracts, so that they can leverage the small price moves to their best
advantage.

Position – Position traders and swing traders will attempt to catch an upwards or
downwards change in direction (or “swing”) in price. The swings can be
intraday, but many traders who fit into this category are looking for trades
that last for five-to-ten days duration, and sometimes longer. This style suits
people that require more time to think when entering a trade – it also suits
people with an analytical temperament. Since the number of trades entered
when position trading will be significantly less than a scalper, your
commissions will be proportionately lower. However, remember that holding
overnight positions will expose your account to the occasional unexpected
move against your position, so you must protect yourself with a suitably
placed stop.

Investing – If you prefer to be less active or are more sensitive to commission costs,
you may wish to trade every few weeks, or even every few months. This
longer-term approach to trading is referred to as “investing”. You will need
to set wider stops to give your trades enough breathing room so that you
can ride out the “resting phases” which occur when a stock is trending
upwards.

Apart from these different trading styles, you will also need to consider whether you
would feel comfortable trading opportunities against the trend (referred to as “contra
trend” or “contrarian approach”), or whether you would rather focus taking trades within
the general market direction. If you would like to explore different trading styles in more
detail, you should read “Trade Your Way to Financial Freedom” by Van K. Tharp.

There are many different approaches to trading – our aim when creating TradeGuider
was to supply you with a tool that gives the best supply and demand indicators available,
via our proprietary Volume Spread Analysis technology.

Getting Started 121

 Market Personality
We have talked about your own personality and how that affects your approach to
trading – now it’s time to turn our attention to how markets can exhibit different
personalities, and how those personalities can change. Individual stocks tend to move
with the following types of characteristics:

1. Trending. Blue-chip stocks (such as Microsoft), which are well-capitalised and

frequently traded by the institutions, will often move in nicely defined wave-like
trending patterns.

2. Ranging. Growth stocks commonly move in clear trends, or within distinct

channels, called trading ranges.

3. Volatile. Many new issues exhibit a volatile nature, with no easily discernable
trend, or trading range.

It’s important to be aware of these different ‘personalities’ so that you can choose stocks
that fit into your trading style. Furthermore, stocks with certain types of ‘personality’
suit specific types of trading style (as covered on the previous page). Let’s take a look at
a few examples.

This first chart of CDW Corporation (CDWC) has a trending personality. You can see
from the chart that it trended upwards for nine months, from June 2003 through to March
2004. Stocks that show this sort of behaviour make good investment candidates (‘buy
and hold’ strategy). When stocks trend over long periods of time, you’ll notice ‘resting
areas’, where the price moves sideways before resuming upwards or downwards in the
direction of the trend. This period of rest is often referred to as consolidation – see the
areas marked on the chart.

Getting Started 122

 This chart is of Bed Bath & Beyond Inc (BBBY) and it reveals a very different market
‘personality’. This stock is in the process of ranging – the price is oscillating within the
confines of a tightly bound trading range, marked by lines of support and resistance. The
circled areas show where the price has bounced off from the boundaries of the trading
range (sometime called a channel).

The final chart shows Biogen Idec Inc (BIIB) displaying a volatile ‘personality’. BIIB is
neither showing a clear trend nor range bound movement. This type of characteristic is
often seen in low capitalisation stocks, such as those of manufacturing companies or
small banks.

Getting Started 123

 No Trading System is Failsafe
The majority of trading systems are sold on the following basis:

• The customer is left to explore many different technical analysis indicators

(maybe over 100) and find a suitable combination that works. However, few
customers are adept enough at understanding all these technical indicators in
sufficient detail to construct a viable system. Then there is the question of what
parameters should be used for these mathematical indicators. The main problem
with this approach is that the system stops working when the market dynamics
change (i.e. the ‘personality’ of the market).

• The customer is provided with a set of Black Box indicators. There is an

assumption here that a mechanical system will continue working indefinitely on a
given market, or collection of markets. However, we have already demonstrated in
the previous section that market ‘personality’ alters over time – at this point, these
systems and indicators either stop working altogether, or become significantly less
effective.

Even a poor trading method, with no scientific basis, can be optimised to appear
‘good’!

• The customer supplied with an optimised system. Although optimised systems

sound like a good solution to changing market behaviour, they are not as effective as
one might expect:

a) In common with any analysis method, the first weakness of optimised systems
is that their accuracy tends to be governed by the amount and the quality of data
available to them. If there is insufficient data available, the results of the
optimisation will be ‘statistically insignificant’, which means that the system
will be of no value when applied to the real world.

b) The second limitation with optimised trading software is that although a back
test is performed, many do not carry out a forward test. What this means is that
the software thinks it has an optimised solution via the back test, but because the
accuracy of the resultant system hasn’t been forward tested against a second
data sample that it has never seen before, the actual system has little relevance
in a real world situation.

c) The third limitation is that optimised trading software often changes its mind, so
signals that were valid three days ago are now invalid as a result of the
optimisation process. Any trades that you took a few days ago on a given signal
will now be viewed as incorrect by the re-optimised system. This is probably
one of the most disconcerting traits of optimisation software.

No trading system works consistently well

As we have shown from the points above, no trading system works well all of the time
and all trading software is flawed in some way. The complexity of the financial markets
cannot be reduced down to a set of simple mathematical technical analysis formulas.
However, our point is not to say that trading software is useless – far from it. We simply
want you to recognise that, on its own, possessing a piece of trading software will not
make you a great trader. Software is a tool and it is how you use it that will determine
how effective you will be as a trader. On the next page, we will explore this idea in more
detail.

Getting Started 124

 TradeGuider: The Best Volume Analysis
Software in the World.
TradeGuider does not fall into any of the categories listed on the previous page – it is
unlike any other piece of trading software you have used before: it is not a vast
collection of technical analysis indicators, neither is it a black box system, an optimised
system, or a ‘curve-fitted’ system.

TradeGuider utilises a unique approach to give you valuable insight, like no other
trading software can.

TradeGuider is a sophisticated computer model that uses a pattern recognition system,

with the help of artificial intelligence, to alert the trader to important changes in price and
volume. It does this by engaging a powerful Volume Spread Analysis Engine that
automatically analyses near-term, medium-term and long-term changes to see how price
and volume interact. This is TradeGuider’s biggest strength and main difference
between every other trading system.

We believe that despite the fact that every computerised trading system has flaws, it is
still possible to become a truly competent trader with the aid of computer software. To
maximise the chances of success, we think that you should serious consider adhering to
the following principles:

• Use a methodology with a solid scientific basis – this means focussing on

recurring patterns that precede a price move or a continuation of a move. Our
philosophy in creating TradeGuider, revolves around a method based on the
interaction of price and volume, because our research has shown this approach to be
the most reliable and robust solution.

• Confirm your trading decisions with a group of commonsense principles. For

instance, when an indicator is displayed, does it occur close to a support or
resistance level, a pivot point, or retracement level? Does a VSA indicator occur in
the vicinity of other chart patterns that indicate a break-out from congestion, or
maybe there are other technical factors that indicate a price reversal?

• Know when to get out of a trade. Entering a trade is one side of the equation, but
if you get your exit wrong, you may make a loss when you could have made a profit.
TradeGuider will help you to manage your trade to maximise your chances of
making a profit.

TradeGuider has many facilities to help you become a competent trader. Additionally, if
you already have a trading system that you like to use, TradeGuider is invaluable as a
price/volume confirmation tool to enhance your current set-up.

On the next page, we will discuss the principle of confirmation.

Getting Started 125

 Confirmation Principle
The Confirmation Principle states that you should enter a trade when you have seen
multiple factors confirming each other. In this section, we will illustrate the principle in
action.

The chart below shows several systems running together. There are a number of positive
factors occurring at the same time, providing the confluence required to confirm the
likelihood of a good entry into a long trade:

• One of the first things we see is that price breaks through resistance at the end of
November. This in itself is not something particularly significant, so we need to see
more evidence before taking a trade.

• At the same time as price broke resistance, the bar colour changed to green,
indicating the possibility of an upward trend taking place. This is another positive
factor, but we really need to observe bullish changes in volume before taking the
prospect of a long position more seriously. Until we see bullish volume, it is
impossible for the price to rise very far, and from late November to early December,
this is borne out by the stock being ‘flat’ (moving sideways).

• At the end of the first week in December, we see the first signs of the volume
activity we have been waiting for. A green VSA indicator appears, which is the first
evidence of the market gaining strength through professional buying activity. Now
we can take the previous factors much more seriously.

• At the same time, we see a surge in bullish volume activity (above the 50% mark) on
the specialised volume indicator at the bottom of the screen. Since the price is also
closing on the high of the bar, which adds further confirmation to our ‘buying
hypothesis’, we decide to enter a long trade.

After entering the trade, the price immediately surges forward and continues doing so for
two months – by using the Confirmation Principle, we have entered the trade at the right
time and have made a very healthy profit.

Getting Started 126

 There are many different ways to confirm a trade and rather than be prescriptive and
dictate what factors you should consider, we think it makes more sense for you to study
the basic suggestions in the rest of this Basic Trading Guide, which are perfectly good
techniques to get started with. As you grow and develop in your trading career, you will
naturally extend the range of confirmation factors to fit your individual trading style.

Volume is THE most important Confirmation Factor: it must NEVER be

underestimated, ignored, or overridden.

Whatever confirmation techniques you settle with, we would hope that you come to
understand the sheer importance and immense value of using ‘volume’ as one of the
essential factors which must never be underestimated, ignored or overridden.
Volume confirmation is what TradeGuider excels at, so we hope it remains in your
trading arsenal for the rest of your career.

Summary
We have covered some very important point in this chapter:

• You should now understand the difference between investment and trading.
We demonstrated that active (incremental) trading can be far more profitable
than a simple ‘buy and hold’ strategy.

• We illustrated the differences between Technical and Fundamental Analysis,

and then showed where TradeGuider, with its Volume Spread Analysis
approach, can be placed in context with these two classic analysis methods.

• We covered the subject of trading style and why it’s important for you to
understand your own trading style before you begin trading.

• We explained that each market has a ‘personality’ and an individual market can
also temporarily switch ‘personality’. We built on this point by describing why
this is the primary reason why most trading systems fail and that no trading
software is failsafe.

• We then showed why TradeGuider is regarded as the premier volume analysis

tool and how you can maximise the probability of winning trades by using the
Confirmation Principle.

What’s Next?
Now that you appreciate the philosophy behind TradeGuider, we are in a good position
to continue with the rest of the Basic Trading Guide. The next chapter covers the subject
of Support and Resistance.

Getting Started 127

Getting Started 128
 Support & Resistance
Take a chart of any instrument you care to mention. Draw a horizontal line from any
point where price failed to go higher (resistance), or any point where price failed to go
lower (support.) These price areas are highly significant and you should always be aware
of them.

Keep in mind that:

• Prices will nearly always reverse from a resistance (or support) area when the spreads
narrow and volume drops.

• Conversely, prices will nearly always penetrate a resistance (or support) area when the
spreads widen to penetrate the resistance and volume increases substantially (usually
seen as a spike in the volume histogram at the bottom of the chart.)

The following graphic is an example of support and resistance:

Getting Started 129

 Drawing Manual Support & Resistance
To draw manual support and resistance levels, click the horizontal line drawing tool as
shown in the toolbar below:

Then, just follow the prompts to complete drawing the line.

Showing Automatic Support & Resistance

There are several ways to show potential support and resistance levels automatically:

1. The Show Highs & Lows feature

2. The Trend Clusters feature
3. The Pivot Points feature

Showing Highs & Lows

TradeGuider is capable of automatically drawing highs and lows (support and resistance)
on a chart, and projecting these lines forward into the future. The chart below shows a
typical example of this feature.

Getting Started 130

 When analysing support and resistance in this way, you’ll begin to notice various
phenomena:

• Lines of historical support or resistance will often band together. The effect of
support and resistance levels is cumulative. In other words, several lines that occur
around the same price level represent stronger support or resistance, which forms a
barrier to price penetration. In the example above you can see 3 lines of historical
support which act as solid ‘ground-level’ support. In order to penetrate this band of
support will require a lot of ‘effort’ in the form of significantly higher trading
volumes. You would also expect to see much wider spreads that punch through the
banding, or the price may even gap over the banding entirely.

The other cumulative factor is time. The longer a line of support or resistance has
been in effect, the more resistant it will be to price change.

• Price action will sometimes meander around a support or resistance level, and will
occasionally congest around these areas. In this instance, prices will move
erratically, with rapidly fluctuating spreads and volume levels, as the bulls and bears
fight it out. When prices exhibit these indications, it’s advisable to stay out of the
market until this stabilise. The rectangular area that has been marked off at the
bottom of the chart demonstrates how price action can move along an old level of
support in a tight congestive range.

• In order to successfully pierce through a support or resistance level, ‘effort’ is

required in the form of a significant volume surge, accompanied by a much wider
price spread. In the example on the previous page, this sort of price action is shown
just right of centre, and is labelled as, “Rising thru resistance on a wide spread.”

• Finally, you may also notice areas where a line of support switches to becoming a
line of resistance (or vice versa). This sort of action can be seen on the chart below:

Getting Started 131

 Knowing the aforementioned principles, whilst watching narrowing or widening
spread sizes, coupled with the associative volume (effort), will provide you with a
fresh insight into price mechanics.

Automatically Displaying Highs & Lows

To draw automatic highs and lows:

• Select Tools > Show Highs & Lows > Show from the menu.

A number of lines will be drawn on the screen, and you will most probably find that
there are too many to begin with.

To adjust the number of lines drawn, select:

• Tools > Show Highs & Lows > Adjust Sensitivity from the menu.

Use the spin control to adjust the sensitivity level from 1 to 20, where 1 is the least
sensitive and 20 is the most sensitive.

Trend Clusters
Trend clusters are discussed in the “Master the Markets” book (or e-book) in some depth.
Basically, these areas are an extension of support and resistance, but applied to trends,
rather than highs and lows. Where historical trend lines intersect, we call this a ‘trend
cluster’, and display a rectangular block on the chart to signify this. Trend clusters
represent strong areas of resistive price levels. The chart below shows the clusters and
the highs/lows features displayed together.

Getting Started 132

 There are a number of things to look out for when using the cluster facility:

• When the price is in the vicinity of a trend cluster, there will be a good chance that
price action will retreat from the cluster, on narrowing spreads and a reduction of
volume.

• If the prices break past the cluster, they will tend to continue in the same direction,
until further support or resistance is encountered. There are examples of this sort of
thing happening in the chart on the previous page.

• In situations where the clusters and the show high/lows feature are displayed at the
same price level, one can assume that there is a greater possibility of prices
reversing.

• Prices can often be seen to meander between a narrow, confined area, such as in the
chart below.

• On occasion, the price will punch straight through the cluster on a wide spread with
significantly increased volume (see chart below.)

• When prices are in the vicinity of a cluster, they will normally be extremely resistive
to price penetration – see the rectangular area that is shown top centre in the
following chart for an example of this sort of observation.

Getting Started 133

 Displaying Trend Clusters
To display trend clusters, click the cluster drawing tool as shown in the toolbar below:

Then, choose the desired sensitivity level from the drop-down menu.

Tip
For more detailed information regarding the use of trend clusters, refer to the “Master
the Markets” book (or e-book).

Pivot Point Levels

Pivot points are a popular means of showing where the limits of trading ranges are likely
to be. Prices tend to revolve around a pivot, which is calculated in accordance with the
previous day’s action.

Above the pivot are key points of resistance, which are marked as R1, R2, and R3 (which
is the most extreme point of resistance that is likely to be met during the current trading
session.)

Below the pivot are key points of support, which are marked as S1, S2, and S3 (which is
the most extreme point of support that is likely to be met during the current trading
session.)

The chart below shows what pivot points look like:

Getting Started 134

 Pivot points can be used to gain insight into potential price direction, just like the
support/resistance tools that have been discussed previously. Similar sorts of principles
apply:

• When the price is in the vicinity of R1, R2, or R3, there is a good chance that price
action will turn downwards if the spread narrows and the amount of volume reduces.

• Similarly, when the price is in the vicinity of S1, S2, or S3, the price action is likely to
turn upwards if the spread narrows and the amount of volume reduces.

• If the price penetrates through a level, especially on high volume and a wide spread,
one can usually use the next level as a price target. For example, if the price moves
down through R2, one could expect the price to carry on moving down to a price
target indicated by R1.

• In the same way, if the price moves up through the Pivot (P), one could expect the
price to carry on moving up to the price target indicated by R1. If price continues to
move up through R1, one would then use R2 as the next price target. Lastly, if the
price continues to move up through R2, one would then consider using R3 as the next
price target. An example of this sort of price movement can be seen in the left side
of the chart on the previous page.

IMPORTANT: Keep in mind that the further the price moves to the extreme price
targets represented by R3 (or S3 if moving down), the less likely it is
for those price objectives to be met.

• If the price reverses from a level, especially on high volume and a wide spread, one
can usually use the next level as a price target. For example, if the price reverses
from R2, one could expect the price to carry on moving down to a price target
indicated by R1.

• In situations where the pivot levels and the trend cluster features are displayed at the
same price level (red circles), one can assume that there is a greater possibility of
prices reversing. The chart below shows how these two features can work together,
and it also demonstrates how the pivot point levels can act as price targets (black
circles.)

Getting Started 135

 • Prices can often be seen to meander (in a state of congestion) between a narrow and
confined area. Note how the price moves in a congested area bounded by R1 and R2
in the chart on the previous page (just right of centre.)

• On occasion, the price will punch straight through a pivot level on a wide spread
with significantly increased volume. A good example of this is shown on the
previous page, where the price rises through R1 to the left of the chart.

Displaying Pivot Point Levels

The Pivot Points for the current trading session can be displayed by pressing the PIV
button (labelled Pivot in more recent versions of the software). This button is found on
the Technical Tools toolbar.

When using the Pivot Point feature, it’s important to make sure that the levels are
calculated properly. To ensure this, follow the steps below:

1. Click the chart (with the left mouse button) at any point of today’s trading session.

2. Then click the small black triangle to the right of the PIV button, which will show a
small pop-up menu.

3. Click on the “New Pivot Point from Cursor Position” option.

4. A dialogue will be displayed that shows the pivot point levels for today’s trading
session. Click OK to accept these levels. You will now see the levels on your chart.

NOTE:
The Pivot Point feature is for day trading use only. Therefore, this feature is disabled in
TradeGuider EOD.

Tip
Sometimes you may find that TradeGuider is unable to display the pivot points because
there is insufficient data available to calculate the levels. In this situation, you may enter
the levels manually. Follow the procedure below to display pivot levels on a chart that
has insufficient data to calculate them:

Click on the area of the chart where you would like the pivot point levels to be displayed.
Then click the small black triangle to the right of the PIV button. A small pop-up
menu will be displayed.

Click on the “New Pivot Point from Cursor Position” option.

A dialogue will be displayed that shows the pivot point levels for today’s trading session.
Enter values for the “High”, “Low” and “Close”.

Click OK to display the levels on your chart.

Getting Started 136

 Trends
Most people have heard of that overused phrase, “the trend is your friend.” This next
section is all about using the automated trending tools in TradeGuider to keep you on the
right side of the market. Drawing manual trends has already been covered in the Getting
Started manual (Step 7 – Drawing a Line Study.) We’re going to continue our tour with
a very useful feature called the Last Active Trend.

The Last Active Trend

Knowing the current trend direction, along with the trend boundaries (often referred to as
a trend channel), is a useful starting point in your analysis. The chart below shows a
trend channel that has been automatically calculated by the TradeGuider software:

The boundaries of the trend channel are shown by the dotted blue line. The following
points are useful observations that will help you to judge potential moves:

• The chart above shows that strength appearing (denoted by the green rectangle) at
the bottom of a trend channel is usually a significant event that results in an upward
price move.

• Similarly, if weakness appears (denoted by red indicators) at the top of a trend

channel, this normally indicates that a downward price move is imminent.

Getting Started 137

 • Irrespective of whether an indicator is present or not, prices are usually seen to
bounce off the sides of channel.

• If prices break out of the channel, especially if they gap over the channel
boundaries, this is normally indicative of an explosive move in the direction of the
gap. In the example on the previous page, prices are seen to gap down, over the
bottom of the channel in an effort to quickly break through the support level. The
price moves downward in a steep and determined move to the downside. This
principle is just as applicable if a gap to the upside is witnessed.

Tip
For more detailed information regarding the use of trend channels, refer to the “Master
the Markets” book (or e-book).

Displaying the Last Active Trend

To draw the last active trend:

• Select Trends > Last Active Trend from the menu.

You should immediately see a trend channel superimposed over the chart. If this isn’t
the case, it could be that you need to adjust the sensitivity for this feature. To adjust the
sensitivity:

• Select Trends > Sensitivity from the menu.

• Use the spin control to change the sensitivity level from 1 to 20, where 1 is the
least sensitive and 20 is the most sensitive.

The Trend Indicators

TradeGuider has a volatility-based, trend break-out system, which displays blue
indicators when trends breach an automatically calculated price level.

Getting Started 138

 The effectiveness of the trend indicators can be improved by combining them with other
systems, such as the “Show Highs & Lows” feature (see below.)

… or, you could add the volume spread analysis (red/green) indicators for an extra
dimension that takes volume into account.

Displaying the Trend Indicators

To display the trend indicators, click the trend indicator button, which can be found on
the Analysis toolbar.

If the trend indicator button is pressed again, the blue trend indicators are turned off.

Getting Started 139

 Short Term Trend Changes - The Diamonds
If you’re an active trader, you should find the ‘diamonds’ particularly useful as a simple
and quick visual guide as to whether the trend is up (green), down (red), or about to
change (white). The diamonds are an attempt to normalise and smooth the price action.
Whatever your trading style, it’s a flexible indicator that can be set up to aid you in
‘scalping’ or swing trading on intraday charts, position trading on daily charts, or even in
medium/long term investing on weekly or monthly charts.

Apart from the changing colour of the diamonds, one of the great things about this
indicator is the way it levels out, as prices become slow to progress. If prices suddenly
surge forward, this indicator will also accelerate upwards or downwards, smoothing out
the fluctuations caused by minor corrections or reactions.

The chart below shows what the diamond indicator looks like when it’s superimposed
over a chart.

In common with other tools and indicators in TradeGuider, the diamonds can be used on
an individual basis, but they are more effective when used as part of a trading set-up, in
combination with other features. We shall be looking at a suggested set-up later on in
this guide.

Getting Started 140

 Interpreting Trend Status Using the Diamonds
When attempting to trade with the trend, one question that has always posed a problem is,
“How do I know when a trend is in progress?” And similarly, “How do I know when a trend
has reversed?” The diamond indicators can be used in a definitive and objective way to
answer these questions, helping you to trade in a more informed and less emotional way.
Below is a brief description of the definition for a trend, a pause in trending, and a trend
reversal.

1. Trend in Progress

The graphic below shows a downward trending market. This is characterised by the
following:

- Red diamonds
- Falling diamonds
- Closing price below the diamonds

The graphic below shows an upward trending market. This is characterised by the following:

- Green diamonds
- Rising diamonds
- Closing price is above the diamonds

Getting Started 141

 2. Trend is Stalling

The graphic below shows a pause in a downward trending market. This is characterised
by the diamonds turning colour from red to white:

The graphic below shows a pause in an upward trending market. This is characterised
by the diamonds turning colour from green to white:

Getting Started 142

 3. Trend is Reversing

The graphic below shows a trend reversal from long to short. This is characterised by
the diamonds turning colour from green/white to red:

The graphic below shows a trend reversal from short to long. This is characterised by
the diamonds turning colour from red/white to green:

Getting Started 143

 Taking an Overall View with the Diamonds
The next graphic shows the diamonds operating over an extended period of time. You can
see very graphically how this indicator can help you to recognise when a trend is changing
from one direction to another. Moreover, you can also see how the colours tend to lock
onto the trend and absorb minor adverse moves that are against the trend.

Displaying the Diamond Indicators

To display the trend indicators, click the diamonds button, which can be found on the
Analysis toolbar.

If the diamonds indicator button is pressed again, the diamonds are turned off.

It’s possible to change the setting of the diamonds to take into account your own personal
preferences. To adjust the settings, click the small black triangle that appears next to the
diamond button. Change the Period setting using the spin control. The larger the number,
the more smoothing (and lag) will be introduced.

Tip
When using the Diamond Indicators, you’ll achieve better results from markets that trend in
a consistent way – look at the bonds (T-bonds etc.)

Getting Started 144

 Medium Term Trend Changes – Bar Colouring
There is a second trending system in TradeGuider that is designed to be a lot more
insensitive to minor trend changes. It’s a volatility-driven system which takes into account
how much a market moves. The more a market moves, the more forgiving the system
becomes to adverse price excursions against the trend. However, if a market isn’t that
volatile, the trending system becomes more responsive to movement. Have a look at the
chart below for an example of this system in action:

As can be seen from this chart, this type of trending system is more forgiving with regards
to adverse moves, or a temporary slowing of price momentum (unlike trending systems that
are based on moving averages.)

This system can be used in conjunction with other features (according to your preferences),
as part of an overall trading set-up. A suggested set-up is demonstrated later in this guide.

Displaying the Trend Bar Colouring System

To display the trend bars, click the trend bar button, which can be found on the Analysis
toolbar.

If the trend bar button is pressed again, the coloured bars will be turned off.

Getting Started 145

Getting Started 146
 Supply & Demand
Not many people would disagree that free markets move to the dictates of supply and
demand. For the sake of completeness, this next section has been replicated from the
Getting Started manual. For a more comprehensive discussion of supply and demand,
and the various indicators in TradeGuider, please refer to the “Master the Markets”
book (or e-book).

The TradeGuider Indicators

TradeGuider constantly analyses your charts for imbalances of supply and demand.
Once an imbalance is found, a red or green indicator is displayed, alerting you to the
likely strength or weakness in the market.

The chart below shows a number of green symbols, indicating strength (demand) in a
stock. Showing supply and demand graphically on a chart is one of TradeGuider’s major
strengths. In the chart below, we can see that following the cumulative effect of a build
up of demand, the stock responds with a positive and sustained price rise.

Getting Started 147

 The chart below shows a number of red symbols grouped together, indicating weakness
(supply) in a stock. The stock falls in price following each cluster of supply.

Understanding the Indicators

NOTE: This section is a basic introduction to the TradeGuider indicators. For more
information, please consult the “Master the Markets” book (or e-book).

TradeGuider is armed with several hundred supply and demand indicators, which
make it a sophisticated and effective guidance tool. TradeGuider can even give a
visual indication of the approximate imbalance of professional activity and show
where this appears on your chart.

Getting Started 148

 All of the indicators can be grouped into two broad categories:

1. Indicators that show weakness are coloured red. Weakness is indicative of

supply, professionals selling the market, or professionals withdrawing from
the market (i.e. no participation.)

2. Strength is indicated by green symbols and is indicative of market demand

(i.e. professionals buying into the market.)

The red and green indicators are all able to visually express the estimated amount of
residual strength or weakness and this is communicated by using different symbols:

Red/Green Rectangles
Rectangles represent strong weakness (red) or strength (green) respectively. When
TradeGuider displays a red or green rectangle, there is a good chance that the current
price move will stop and reverse. If this does not happen, the market will usually
stop trending and move sideways for a while. Sometimes rectangles are seen during
a trending market as the professionals are either buying into or selling into the
market. In the chart on the previous page, note how the professional money sells the
market at the top left of the chart, which causes prices to fall (see the red rectangle
amongst the other signs of weakness.) At the bottom of the downtrend, note the
three green rectangles denoting heavy buying at this price level. The market rises as
a consequence of this strength and is later countermanded by a red rectangle, which
causes a resumption of the downtrend.

Red/Green Triangles
These symbols denote an intermediate probability of a correction (down move) or a
reaction (up move) in the market. Clusters of strength or weakness symbols often
appear together on your charts, especially at certain price levels. This type of
clustering is highly significant, especially if it appears in new high or low ground, or
at areas of support or resistance (including pivot points.) In the chart on the
previous page, the principle is demonstrated by 4 signs of weakness (top left), which
results in a large fall in price.

Pale Red/Green Triangles or Pale Red/Green Small Rectangles

These symbols all denote subtle changes in supply and demand factors. More than
likely, there will not be an immediate move in the market when these symbols are
shown. In the chart on the previous page, note the subtle signs of weakness left of
centre – the market falls off soon after. There are more subtle signs of weakness
right of centre and this time the market drops immediately. Also, you will see two
additional subtle signs of weakness that appear before the red rectangle at the right of
the chart: these should act as warnings, especially, when followed by a red rectangle
as in the example chart.

Getting Started 149

 Tips

• The indicators are not buy and sell signals (or entry and exit points.) It is a mistake
to use the indicators in isolation, without taking any other factors into consideration.
You must view the market holistically, looking at what has gone before and also
reading the market as it unfolds. Each signal is like a word in a sentence, but it is
only when all the words in the sentence have been read, that the information is
imparted. Take a look at the accompanying “Master the Markets” book (or e-
book) for further assistance.

• Indicators can be used as part of a ‘trading set-up.’ So, once an indicator has
appeared, you may wish to wait for the trend to change in the direction of the
indicator, or you may take an entry point once the market has moved up or down by
a certain number of points. For more information, see the “Master the Markets”
book (or e-book).

• TradeGuider’s indicators can be used in conjunction with other trading tools, such as
TradeStation, MetaStock, TC2000 and OmniTrader. The idea is to use the
TradeGuider indicators, which take into consideration the added dimension of
volume, as an additional confirmation tool in combination with the indicators or
systems that you have already learnt to trust.

• You can use TradeGuider to analyse any liquid, well-capitalised market. So, it will
work well with major world indices, the component stocks in the DOW, S&P, and
NASDAQ, and popular commodities (that have accurate volume).

• The logic within TradeGuider will work in any timeframe, so it is equally suitable
for intraday traders, position traders, or investors looking at weekly or monthly
charts.

The Relative Volume Indicator

TradeGuider is continuously sampling the volume, looking at the relative amount of
bullish and bearish volume at any particular time. The results of this analysis are shown
on a gauge to the right of the chart.

The amount of green that appears on the gauge is ‘bullish’ volume and the amount of red
is ‘bearish’ volume. So, in the example shown to the left, we would consider this
situation to be more bullish, and may even be looking to enter a trade based on this
information.

• If the amount of green is above the 50% mark, this is considered a bullish sign.
• If the amount of green is below the 50% mark, this is seen as a bearish sign.

It is best to use the relative volume gauge as part of a trading set-up to aid you in your
entry or exit. Later in this guide, we’ll be looking at a potential set-up that you might
consider using. However, we encourage you to experiment with the various features and
decide what’s best for you and you’re trading style.

NOTE: If you can’t see the volume gauge, you’ll need to turn it on. To do this:

Select View > Volume Indicator from the menu

Getting Started 150

 Trade Management
Once you’ve decided to pull the trigger and enter a trade, you’ll need to manage your
position so that you make the maximum amount of profit from it. TradeGuider has a
number of different stop systems built into it for locking in your profits, but for now,
we’re going to look at just one of them – the ‘H’ stop. The screenshot below
demonstrates how the ‘H’ stops work and how they can be used to keep you in a
trade until its full potential has been reached.

Here are some interesting facts about the ‘H’ stop:

• It is volatility based, which mean that it adjusts quickly to price moves, and is more
sensitive in calmer markets.

• The ‘H’ stop is actually a pair of stops, comprised of a near and far stop. The near
stop can be used by more cautious traders to get out early, whilst the far stop can be
used by traders who don’t mind risking the possibility of being taking out with a
bigger loss, but with the potential for a far larger return.

• The ‘H’ stops can separate, so that one of the stops sits above the bar, whilst the
remaining stop sits below the bar. This is useful for marking off potential areas of
congestion. In these circumstances you should be watching the trade extra close.

Getting Started 151

 • When both stops switch from being below the bar, to above the bar, this can be seen
as a potential short position.

• Similarly, when both stops switch from being above the bar, to below the bar, this
can be seen as a potential long position.

• The ‘H’ stops operate on a ratchet, so they will move in the direction of your trade
and then stick at a certain level to lock in profit and protect your exposure.

• The ‘H’ stops are always ‘in the market’ and can be used as a basis for a trading set-
up.

Displaying the ‘H’ Stops

To display the ‘H’ Stops, click the ‘H’ Stop button, which can be found on the Analysis
toolbar.

If the ‘H’ Stop button is pressed again, the ‘H’ stops will be turned off.

It’s possible to change the setting of the ‘H’ stops to take into account your own personal
preferences. To adjust the settings, click the small black triangle that appears next to the
‘H’ stop button. Change the parameter settings using the spin controls for either the near
or far stops.

Tip
When using the ‘H’ stops, you’ll achieve better results from markets that trend in a
consistent way – look at the bonds (T-bonds etc.)

Getting Started 152

 Bringing it All Together
Basic Trading Set-ups
Trading is such a personal thing. We have tried to cover the primary TradeGuider tools in
this Basic Trading Guide that will help you to use TradeGuider more effectively. It’s
never a good idea to dictate a certain way of doing things, as everyone has there own
preferences and styles, but we think there is value in going through a possible trading set-
up for educational purposes. Remember that we are giving you the tools - it’s up to you
how you use them to give yourself an ‘edge’ in what is probably the most competitive,
mercenary, unforgiving, and merciless business of all.

Position Trading
Taking positions by using a daily chart offers several advantages over intraday trading:

• It’s less stressful than intraday trading

• It allows more time for analysis
• It enables you to pursue other businesses or interests during the day.

The first thing to do before considering any trades is to select your stocks or other trading
instruments. If you’re trading stocks, you would be well advised to follow the rules below:

• To consider taking a long position (i.e. to buy), you need to select stocks that are acting
stronger than their parent index. For instance, “Cisco Systems” belongs to the NASDAQ
100 index.

• To consider taking a short position (i.e. to sell), you need to select stocks that are acting
weaker than their parent index.

Tip
When trading stocks, always trade in harmony with the parent index.

Selecting Stocks for Position Trading

Selecting potential candidates for trading is fully automated via the Stock Scanner facility.
To use the stock scanner wizard:

• Select File > Stock Scanner from the menu

• Then follow the prompts from the wizard, which will take you through the whole process
of stock selection. Once the scan is complete, you’ll have a list of the 10 strongest stocks
and the 10 weakest candidates for trading purposes.

Getting Started 153

 Tip
The process described on the previous page is most definitely sufficient to select
great trading candidates. However, if you’re a perfectionist, and you have a good data
vendor that can supply business sector indices, you could actually follow the alternative
process below, which is known as a ‘top-down’ scan:

1. Scan the business sector indices against the primary industrial indices for your
country. This would produce a list of the strongest and weakest business sectors.
For instance, the Telecommunications Sector Index may show that it is weaker that
the NASDAQ 100 Index, and the DOW Industrial Average.

2. From the business sector scan, you’ll have a list of the 10 strongest and the 10
weakest business sectors.

3. You now need to scan the component stocks from the various business sectors
(identified above) against their parent indices. So, if the Telecommunications Sector
Index is the weakest sector, we now need to scan the Telco Sector Index against the
NASDAQ 100 (and maybe the Dow Industrial), to produce a list of the weakest
companies from the weakest business sector.

4. This scan would theoretically show the weakest stocks in the market. In this
example, you would know at the end of the procedure, that out of all the business
sectors, the Telecommunications market was the weakest, and that Cisco Systems
Inc was the weakest stock from this sector.

Analysis Regime for Position Trading

Once you have a list of potential candidates (say 10) from the stock scan, we need to
analyse each one to see whether it represents a viable trade at the moment.

Step 1 – Support & Resistance Checks

We can check the stock for areas of support and resistance by using the Show High &
Lows and Trend Cluster features. You may need to adjust the sensitivity of these
features. See the Support & Resistance section on page 129. These facilities will give
you a good idea as to whether the price is trading in the vicinity of support or resistance.
In addition, you may actually want to manually draw your own support/resistance lines
across double tops, double bottoms, or extreme high/low points.

Step 2 – Trending Checks

Next, we can check the Last Active Trend feature to see whether the stock is currently in
a trend channel, the direction of the trend channel, and the size of the trading range. See
the Trends section on page 81. Also, you may want to switch on the Blue Trending
Indicators, the Diamond Indicators or the Trend Bar Indicator to help you in your
decision making (again, see the Trends section on page 137.) All these facilities will all
help you to properly gauge the trend.

Step 3 – Supply & Demand Checks

The next thing we can do is to check out the Relative Volume Gauge to see if there is
more bullish or bearish volume at the moment (see the Supply & Demand section on
page 147.) We should also look to see if there are any red/green indicators in the
vicinity, which would represent latent imbalances of supply or demand in the
background. You need to take particular note of rectangular symbols, or groups of
triangular indicators, as these signs are often more significant. The “Master the
Markets” book (or e-book) explains more about the various supply and demand
indicators.

Getting Started 154

 Step 4 – Trade Timing Checks
Whenever you first consider participating in a trade, it’s always better initiate the trade
near the start of a move. The ‘H’ Stops are always ‘in the market’ and they give you a
good idea of (a) when a potential trade starts and (b) how long to stay in the trade.

Basically, you are looking for both stops to switch above the bar (a short trade) or both
stops to switch below the market (a long trade.)

For more information regarding the ‘H’ Stops, see the Trade Management section on
page 151.

Trading Set-up for Position Trading

The charts below show a possible trading set-up and entry for initiating a short position
trade for Cisco System Inc.

The first thing to do is to set up your screen so it looks like the one below. This is
achieved by making sure that Auto is selected from the tiling toolbar. Now, load up two
daily charts for Cisco Systems Inc and convert one of these to weekly by selecting
Chart > Convert > Weekly from the menu. Finally, load up a daily chart of the parent
index (in this case the NASDAQ 100 index.)

Finally, click the Cisco Systems daily chart and press the Tile to Pattern button. Your
screen should now be laid out like the one below.

Getting Started 155

 Analysing the Cisco Systems Daily Chart
The stock scanner identified Cisco Systems as a weak stock. Here we can see a daily
chart of Cisco Systems on the right of the screen. The red vertical cursor shows the start
of the trade.

• Note the band of heavy resistance that appears above the market. This tells you that
there is more chance that prices will fall, rather than rising to penetrate the resistance
area.

• The blue, downward facing trending indicator tells you that a possible short trade is
about to start.

• Also, note that the diamonds are red and that they have actually been red for the last
5 bars, indicating that a down trend is now underway.

• Next, look at the ‘H’ Stops; both of the ‘H’ Stops have just switched to being above
the bar. The evidence is accumulating and the timing is now looking OK for the
start of a short trade.

• The Relative Volume Gauge is showing that the amount of bullish volume (seen in
green) is well below the 50% mark, and that the closing price on this bar is below
the opening price, which is also a bearish indication.

Analysing the Cisco Systems Weekly Chart

The weekly chart (see bottom left of the screenshot on the previous page) shows a
startling fact: Cisco Systems Inc has been in free-fall for at least 30 weeks! The red
vertical line on the weekly chart is synchronised to the red line on the daily, so this really
puts into context how badly this stock has been performing.

• Both the ‘H’ Stops and the Diamonds confirm the poor performance. The ‘H’ Stops
have been above the bars all the time and the Diamonds have been red nearly the
whole time too.

• Also, note similar resistance levels on the weekly chart, which confirms what we see
on the daily chart. The chances of this stock rising up and taking out a potential
short are minimal.

• As the weekly chart has been short for a long time, we now have an even better
indication that now is a good time to short Cisco again. However, we’re not quite
finished with our analysis – it’s now time to look at the parent index.

Analysing the Parent Index (Daily Chart)

The daily NASDAQ 100 index is shown in the top left of the screenshot on the previous
page. If our analysis of the parent index confirms the bearish indications that we have
seen in the other two charts, it’s time for us to take up a short position. Let’s take a look.

• The first interesting thing we can see here is the resistance (again.) We can now say
that as far as we can comfortably ascertain, there is no way this market is going to be
going up very far.

Getting Started 156

 • It’s also interesting to note the action of the Blue Trend Indicator, the red Diamond,
and the both the near/far ‘H’ Stops switching position to be above the market. The
action of these indicators in the NASDAQ 100 index completely mirrors the
behaviour of the indicators on the Cisco daily chart. This observation is highly
significant – the time is now right to enter a short trade in Cisco Systems Inc.

Exiting the Position

Once you’ve decided to enter the trade, all you need to do is track the position with a
stop-loss system until completion. The example below shows the “H Stop” system that
is locking in profits as the price moves downwards.

Getting Started 157

 Real-Time Trading
Intraday trading is much faster paced and demands a quick brain and an unemotional
approach.

• Live trading is far more stressful than position trading

• There’s not much time for analysis
• In a fast-moving market, live trading can be mentally exhausting
• Real-time trading leaves little scope for other business interests during the day.

Before setting out as an intraday trader, you need to decide on which financial
instruments to trade. We recommend you specialise in one area and stick to it, rather
than trying to trade everything. The major world indices, such as the FTSE 100, Dow
Jones Industrial, S&P 500, NASDAQ and the Dax are a good place to start. If you’re
trading indices, you would be well advised to follow the rules below:

• To consider taking a long intraday position in an index (i.e. to buy), it’s a good idea
to check that the trend on the daily chart is UP. If the trend is up, only take long
intraday trades. Do not risk taking short trades in a long market - wait for the
trend in the index daily chart to change direction first.

• To consider taking a short intraday position in an index (i.e. to sell), it’s a good idea
to check that the trend on the daily chart is DOWN. If the trend is down, only take
short intraday trades. Do not risk taking long trades in a short market - wait for
the trend in the index daily chart to change direction first.

Analysis Pre-Check for Real-Time Trading

For the sake of this example, let’s imagine that you like to trade the S&P Emini 1 minute.

Trending Pre-Checks
The first thing to do is check the direction of the trend on the daily chart of the Emini.
You need to look at the EOD chart of the Emini to ascertain how you should be trading
the following day. We can check the Last Active Trend feature to see whether the Emini
is currently in a trend channel, the direction of the trend channel, and the size of the
trading range. See the Trends section on page 137. Also, you may want to switch on the
Blue Trending Indicators, the Diamond Indicators or the Trend Bar Indicator to help
you in your decision making (again, see the Trends section on page 137.) All these
facilities will all help you to properly gauge the trend.

Getting Started 158

 Trading Set-up for Real-Time Trading
The charts below show a possible trading set-up and entry for initiating a short position
trade for the S&P Emini.

The first thing to do is to set up your screen so it looks like the one below. This is
achieved by making sure that Auto is selected from the tiling toolbar. Now, load up the
following three charts:

1. S&P Emini (1 minute)

2. S&P Emini (2 minute)
3. S&P Emini (5 minute)

Tip
The quickest way to load these three charts is to type “%ES #F=2,1,2,5” if you’re using
eSignal or “/ESM4,1,2,5” if you’re using RealTick. If you require more detail on the
formatting of the symbols, please refer to the Getting Started manual.

Click the S&P Emini 1 minute chart and press the Tile to Pattern button. Your screen
should now be laid out like the one below.

Getting Started 159

 Step 1 – Support & Resistance Checks
When trading in real-time, the last thing you want is a screen that is cluttered with lots of
line studies and indicators, as this is tiring to watch over extended periods of time.
Whatever tools we use for checking support and resistance areas, they need to be quick to
set up and easy on the eye. Although not shown on the above chart, we recommend using
the Pivot Points to show us where the key support and resistance areas are likely to be. See
the Support & Resistance section on page 129 for more information on how to display and
interpret the Pivot Points. These facilities will give you a good idea as to whether the price
is trading in the vicinity of support or resistance.

Step 2 – Trending Checks

The next thing to do is to set up all your charts with the trending tools, so that it’s easy to
see the trend direction across the different timeframes. In this example, we’ve set up the
Diamond Indicators and the Trend Bar Indicator to give a visual indication of the
short/medium term trend (see the Trends section on page 137 for more information.) You
may want to switch on the blue trend indicators as a further visual cue to indicate a
potential change in trend direction.

• In the example above, you can see that the both the 2 minute and 5 minute charts (on
the left), are showing established down trends, indicated by the red diamonds and red
bars.

Step 3 – Supply & Demand Checks

In the example on the previous page, all the charts have the red & green VSA indicators
switched on. These indicators can be activated by clicking the VSA indicator button on the
Analysis toolbar, shown on the left.

• Ideally, before initiating a trade, we’re looking for a consensus indication of strength
(green indicators) or weakness (red indicators). In the example on the previous page,
you can see that weakness is present at the same time on all of the different
timeframes.

The next thing we can do is to check out the Relative Volume Gauge for the one minute
S&P Emini chart, to see if there is more bullish or bearish volume at the moment (see the
Supply & Demand section on page 147.) You may also see red/green indicators in the
vicinity, which would represent latent imbalances of supply or demand in the background.
You need to take particular note of rectangular symbols, or groups of triangular indicators,
as these signs are often more significant. The “Master the Markets” book (or e-book)
explains more about the various supply and demand indicators.

In Summary
So far, we have seen the following evidence for a short trade:

• The daily EOD S&P Emini chart for the previous day is in a downtrend situation (and
weakness was also present.) This means that the intraday opportunities should be to
the short side of the market.

• The Diamonds and Trend Bar indicators are red on the 2 and 5 minute timeframes,
showing that a downtrend is in progress on the longer intraday charts.

• The Trend Bar is red on the 1 minute chart, which matches the 2 & 5 minute
timeframes. The Diamond is white, which means that the short term trend is now
changing. The evidence is now looking good for a trend change across all three
timeframes. We could wait to check for the diamond to change red on the 1 minute for
further confirmation if required.

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 • There is a consensus of red VSA indicators (showing weakness present) across each
timeframe. Based on these observations, we’re now expecting the market to drop.

• The Relative Volume Gauge for the 1 minute S&P Emini is showing that there is far
more bearish volume in the market at the moment and the closing price is lower than
the opening price.

Based on the evidence above, the time is now right to enter a short trade.

Exiting the Position

Once you’ve decided to enter a trade, all you need to do is track the position with a stop-
loss system until completion. The position can be tracked very satisfactorily with the ‘H’
Stop system, as shown on page 151. As seen below, the ‘H’ Stops remain above the
market and keep you in the trade through a couple of adverse reactions.

The settings of the near and far ‘H’ stops can be adjusted in accordance with your
preferences. This type of stop system is designed to keep you in the trade as long as
possible, sticking like a ratchet at points where your trade is under most risk.

Most traders will liquidate a position under one of the following conditions:

• Both ‘H’ Stops switch to the opposite side of the market

• The Near Stop is breached and the Diamond is white
• The Far Stop is breached and the Diamond is green (for a short position)
• The ‘H’ Stops straddle the bar (one above and one below) and either stop is
breached.

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Getting Started 162
 Conclusion
We hope that you’ve found this manual useful. If you’re new to trading or investment,
you’ll find the good advice below will help you to become more effective:

1. Keep it Simple! Simple systems based on commonsense factors are nearly always
the most effective. The more complex your system is, the more room there is for
error.

2. In any speculative venture, your main concern is to always put the odds of winning
in your favour. That means, adhering to a set of trading rules, or a regime, that
constantly favours your position. For example, if a stock is rising, but its parent
index has been falling for the last 5 weeks, you should not be tempting failure by
going long! Instead, locate stocks that are acting weaker than their parent index (by
using the stock scanner facility) and short these instead.

Note: The stock scanner facility is designed to use EOD data only.

3. Once you have your trading rules together – stick to them! When the system says
“Get out!” - DO IT! If you can’t operate with discipline, it’s time to quit; otherwise
you’ll blow yourself out of the market.

4. Money management should be something that is pretty high up on your agenda.

Over exposing your capital base when trading will very quickly leave you with
nothing to trade with. Everyone has periods where they seem to lose several trades
in a row, no matter what they do. To the savvy trader or investor, losses are
considered part of the operating costs of the business. The subject of money
management is outside the scope of this guide. There are many books on the
subject, so if money management concepts are unfamiliar to you, our advice it to
arm yourself with a good book.

Good luck with your trading and investing.

Getting Started 163

 Notes

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Getting Started 165
Getting Started 166
 Appendices

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Getting Started 168
 Appendix A – The History of
TradeGuider Systems
The Company’s President and co-founder, Roy Didlock, describes his history, how
TradeGuider Systems began, and evolved to where it is today.

As a teenager in 1981, computers were only just starting to make an appearance in the
home. It was an exciting time and it became apparent that computers were going to be
part of a technological revolution which was to touch all of our lives. At the age of
thirteen I saved up my paper-round and odd-job money, and bought a popular home
computer called a ZX Spectrum, which was the first computer in the UK capable of
outputting a colour video signal. After hurrying home and eagerly opening the box in
front of my somewhat curious working class parents, I had no idea how much this 1 inch
thick piece of metal, plastic and silicon was about to change my life.

I became totally absorbed in this small piece of computing technology and became a
virtual recluse, locked away in my bedroom, teaching myself how to write computer
programs in BASIC (Beginners All-purpose Symbolic Instruction Code). After school, I
spent hours typing away at the flimsy rubber membrane keyboard, and became an expert
at fitting complex programs into just 16Kb of memory! In just a few short weeks, word
spread at school of my new-found gift and I found myself attaining almost God-like
status at the school’s Computer Club! Little did the teachers know, that I was writing
programs for my friends so that they could pass their Computer Studies exams!

After leaving school I went to college to study a Diploma in Business and Computer
Studies at Rother Valley College, and it was at this stage that I became keenly interested
in AI (Artificial Intelligence.) I attained the highest marks the college had ever seen on
the course, which enabled me to pass with a Distinction in Computer Programming. It
also enabled me to become an Honouree Member of the Technology Board at the college
– a place I still hold to this day.

At this juncture of my life, I really wanted to go to university to study Computer Science

at Oxford or Cambridge. Unfortunately, this aspiration was a little too grandiose for the
expectations of my old-school working class father, and he ripped up the university
application forms right in front of my eyes, complaining that I had ‘ideas above my
station’ and that it was now time to get a job. Undeterred, and with the help of an
excellent reference from my lecturer, I secured a graduate job as a Trainee Analyst
Programmer at British Steel plc, so the end result was the same anyway – in fact, I had a
graduate job 3 years early, so my father had unwittingly given me a great head-start!

All of a sudden I had a graduate salary and I was looking for places to invest a part of it.
It wasn’t long before I got interested in stocks and shares, and I started to look for
software to help me make investment decisions. I was very naïve and didn’t realise what
I was getting into!

I received a mailshot from a company called Interdata that sold a piece of software called
the RX Series for £6000. This is a lot of money to pay for a piece of trading software
today, and back in the late 1980’s, it was a small fortune, especially for a young man
who was just getting started in life. The high price was justified by the ‘fact’ that the
software was designed by an ex Morgan Stanley financial executive. I decided to pay a
visit to the plush offices in the middle of London to see the program, and to speak to the
people behind the system.

Getting Started 169

 They gave me coffee and sat me down with a very attractive girl that demonstrated the
RX Series software. At the end of the demonstration by the pretty girl, I was then shown
back-tested results of how I could easily turn a £2000 investment into £20,000. I was
hooked and I purchased the program there and then! I was going to be rich! In just two
years, from a small investment of £2000, I would be able to completely pay off the
mortgage on my first house. Unfortunately, purchasing the RX Series turned out to be a
very poor investment decision – the software failed to generate the sort of money
illustrated in the back-tested results. Due to the high number of complaints, the company
was investigated and later wound up by the DTI (Department of Trade & Industry) for its
malpractice. It was obvious that I had been subject to a very cleverly executed con-trick
and I learnt some expensive lessons in the process:

1. If it sounds too good to be true, it probably is.

2. Beware of very expensive software.
3. Exercise caution with any software that is sold on the basis of back-tested results.

I was angry with myself for letting greed get the better of me. Despite this being a very
bad experience, I carried on looking for software to help me invest. My father said that I
was stupid and stubborn, but I’d rather say that I was unrelenting and tenacious – it
depends on ones viewpoint. To cut a long story short, I came across a lot more software
that proved to be either useless or of limited value, and I probably spent in the region of
£25,000 trying to find something that could help me make good investment decisions.

I was starting to lose faith and became disillusioned with the trading software business –
it would have been much better to have put my money in a mutual fund and left it to
grow. In fact, I decided it was best to do just that, and from this point, I invested any
surplus cash in a well respected fund.

Time passed. Several promotions later, I joined Cap Gemini as an IT Consultant.

Having a glamorous job enabled me to travel the world on several high-profile
assignments and lead an expat lifestyle that many aspire to, but few attain. For the first
time in my life I was earning a really great salary, which in turn meant that I could invest
the surplus for a ‘rainy day.’

Just by chance, I read an article in the Financial Times about a piece of software called
VSA. The ideas behind the software intrigued me and I decided to call Tom Williams,
the inventor of the VSA software (and Volume Spread Methodology.) At the time, the
VSA software was sold on a quarterly subscription plan until the full amount was paid
off. I duly asked Tom if I could pay for a three month lease to try out the software, to
which he replied, “Are you sure? Trading is a very difficult game you know!” I must
admit to being completely taken aback by Tom’s response, but any of his old VSA
customers will know that Tom is well known for his honesty. Here was a guy wanting to
buy his software and he was asking me if I was sure! Presented with this somewhat
unconventional salesmanship, I was now even more interested to try out the software! I
laid awake that night, wondering how a business could survive with such a poor sales
approach. Tom seemed like a decent chap and I thought that he at least deserved a phone
call in the morning with some friendly advice to hire a good sales guy. Alas, Tom
seemed such a nice guy, that in the end that phone call never happened – I just didn’t
have the nerve to risk insulting him.

The VSA software was delivered promptly the very next day in a brown jiffy bag, with a
copy of Tom’s book, “The Undeclared Secrets That Drive the Stock Market.” I started to
read the book and it immediately grabbed my attention – this was different. This made a
lot of sense.

Getting Started 170

 But what about the software? Well, VSA was a real ‘eye opener’! The indicators were
fantastic and now I understood how Tom’s small ‘cottage business’ could survive,
despite the lack of advertising and poor salesmanship – VSA was obviously selling due
to the sales generated by word of mouth!

I decided to purchase the software and proceeded to trade. Needless to say I made a
LOT of mistakes, just like all traders do when they’re learning, but I stuck it out. I went
to a couple of Tom’s seminars and continued to study his book. I traded and I made
losses; I learnt from my mistakes and persevered with practising and honing my chart
reading skills. Over the course of time, the number of losing trades became less frequent
and the magnitude of the losses became progressively less, to the point where I could
comfortably position trade with very little error. I had achieved my goal of becoming a
successful trader. I was no George Soros, but I could survive the rigours of the market
and make a respectable profit – in my book, that is success.

A couple of years later, I started to work on an AI (Artificial Intelligence) research

project alongside Tom, to build a computer model that could even more accurately
predict the residual strength and weakness in the markets. 1The results of this project
were so stunning that Tom and I decided to work together to develop a whole range of
extra volume tools.

A few months after starting our joint research project, I was laid off from the consultancy
job at Cap Gemini (in June 2001), due to the major downturn in the global economy. At
this juncture, I started working full time with Tom, and I began to fund the further
development of the VSA software. This included work to give the program a modern
look, to improve stability, and to develop the indicators so that the software could
visually communicate the approximate level of strength or weakness at any one time (this
is the idea of using the red and green rectangles or triangles.)

After around a year of struggling to manage all the tasks in the business on my own
(since Tom was now effectively retired), it became clear that I needed to grow the
company and we also needed to start promoting the VSA software to a much wider
audience so that other traders could benefit from the unique insight it provided.

In June 2002, I started looking for potential people to join me, and soon began
negotiations with Gavin Holmes and Richard Bednall – two very capable guys who had
the skills and resources to help develop the company further. In February 2003 we
forged our alliance on paper and a new company called TradeGuider Systems Ltd was
established, together with a re-branded VSA (now called TradeGuider.)

In November 2003, we brought onboard another very accomplished and academically

excellent guy called Todd Krueger, who also happened to be a previous VSA customer,
like me. And the US firm, called TradeGuider Systems LLC was born.

Many of you will know Gavin and Todd, who are very much ‘front men’ for the
company, which is something they both enjoy. Meanwhile, Richard and I keep a lower
profile and work on the technical and strategic parts of the business, which suits our
aptitudes.

1
None of this amazing volume research has been implemented into the TradeGuider software, and because of
its effectiveness, will most probably only be released to members of the forthcoming TradeGuider Systems
Club. This exclusive club will provide members with access to the very best of our research.

Getting Started 171

 The Future of TradeGuider
With a long pedigree that stretches back over 15 years, VSA / TradeGuider has been
through 9 major revisions and prides itself as an expert in the field of volume analysis.
Over the course of the coming years, you can expect to see more refinements in our
proprietary Volume Spread Analysis technology, which will enable you to track changes
in the level of supply and demand with even more accuracy. You’ll see the introduction
of new and innovative volume tools that will give you even more of an edge – you won’t
believe the exciting volume-based technology that we have in our R&D lab! You can
also expect to see improved support and resistance tools, and a specialised volume-based
‘scanning module’ that will be like nothing you’ve ever seen before. In future versions,
you can also come to expect tighter integration with the web to link you to the expanding
support resources, and we’ll put you in touch with the ever-increasing TradeGuider
community so that you can share ideas with your trading colleagues.

Every year (usually in January), we’ll aim to introduce a new version of TradeGuider
with advanced volume-based decision support tools that you won’t find anywhere else. I
wish you all the best in your trading endeavours and if you have any ideas that you
would like us to consider building into TradeGuider, please write to my personal email
address at roydidlock@tradeguider.com. I look forward to hearing from you.

With very best regards,

Roy Didlock
President, TradeGuider Systems Group

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Getting Started 173
Getting Started 174
 Appendix B -
Acknowledgements
It’s great to look back at the humble beginnings of TradeGuider Systems to see how
things have evolved over time.

Today, in mid 2004, we have offices in the UK and the US, and have grown from small
beginnings to a company that now has an on-board programming team, customer service,
technical support and sales capability. The thing that really makes the hard work
worthwhile is working with such a great bunch of people who share a passion to make
the company the best it can be – a team that shares a common goal to put you, the
customer, first.

Apart from the regular team at TradeGuider Systems, it would be wrong not to mention
those specific individuals that have gone out of their way to help us. Of these people, we
would like to specifically mention Jim Mooney (President of Infinity Brokerage) – you
were there from the start Jim and have remained by our side the whole time. We owe
you big time!

Perhaps the biggest compliment is due to YOU, our customers, who have remained
patient and loyal during all the teething troubles of setting up this complex operation.
For your encouragement and support, I say THANK YOU. You’re a great crowd – you
really are! Some of you have gone beyond the call of duty whilst testing our software;
those customers that deserve a special mention are Oliver Schmalholz, Bob Roeske and
Roger Tng – thank you for your gargantuan efforts during the beta test phase!

A BIG thank you is due to our programmers, Bob and Noel, for turning a concept into a
reality.

Finally, we thank Tom Williams for conceiving the VSA methodology in the first place.
Tom, you’re research was not wasted!

Getting Started 175

 Notes

Getting Started 176