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Time your trades to perfection

Created:

8 September 2009

Written by:

Dominic Picarda

Timing is everything in trading. While it barely matters at all for long-term investing, entering and exiting the market at the right moments will determine whether you make profits or get wiped out as a trader. Doing so involves first figuring out which are likely to be the most favourable technical conditions for a successful trade and then opening your position when those conditions next appears on the chart.

Of course, there's no guarantee that when your ideal trading set-up next occurs that you will necessarily be watching the screen. timetotrade is a service for private traders that specifically addresses this problem. You specify a set of technical conditions for a particular market and then get an alert as soon as they next occur. The alert arrives as a text message on your mobile phone and/or as an email or instant message on your computer.

For instance, you might study recent trends and decide that a certain share is worth short-selling whenever the price strays above its upper Bollinger band, accompanied by a daily and hourly relative strength index reading above 72. Simply by clicking on the relevant indicators on the share's chart on timetotrade’s website, you can set up an alert to be sent the exact moment that those criteria are satisfied.

The ability to do everything via the chart rather than by learning some fiddly programming language is a huge advantage and something I have not come across elsewhere. I was able to set fairly complex alerts within minutes of starting with timetotrade. By contrast, I have yet to grasp the tools on my usual charting packages that allow users to search for trading set-ups, even though I’ve been using them for years!

The range of indicators on offer allows you to finesse your terms of entry and exit to a much greater extent than in this basic example, however. Other tools include the stochastic and MACD momentum oscillators, as well as moving averages, the Williams percent range and true strength index. And, you can adjust the settings on each of these indicators according to your needs. So, you might specify a 5-period relative strength index, rather than the customary 14-period one.

There is no limit on the number of conditions you can set. As a result, you can watch out for some really sophisticated set-ups. You might thus scan for situations where a negative MACD crossover occurs on the hourly, 15 minute and 5 minute charts, accompanied by at least a certain decrease in the relative strength index within a 5-minute time-frame!

On the latest version of timetotrade - launched this week - you can also get alerts when a price breaches a line drawn by you on the chart. This could simply be a support or resistance level running horizontally across the screen, or a sloping line, such as a trendline or even a "wedge" or "triangle" pattern.

At present, you can follow and get alerts in real-time on an impressive variety of foreign exchange pairs, as well as UK shares and indices. Prices for American and Indian shares come on a 15-minute delay, while end-of-day data is available for the Singapore and Nairobi stock exchanges.

Overall, I am extremely impressed with this service, which takes very little effort or learning to use and has few obvious rivals in the retail trading market. It also contains an impressive range of other facilities that I haven't yet tested out, including portfolio tracking, tax calculators, news and chat. According to the company, future releases will contain further improvements, such as the ability to refine your charting alert conditions to include "if" and "or" criteria.

The service is easily within reach of even the smallest private traders. The full version of timetotrade costs just £19.99 a month, which allows you up to 50 text-message alerts within that period.