Third Party Spotlight
Introducing PowerTools Trading System for eSignal
If you make a bad trade and you have money management, you are really not in much trouble. However, if you miss a good trade, there is nowhere to turn. If you miss good trades with any regularity, you’re finished. -- William Eckhardt
PowerTools Trading System is a highly effective, fully adaptive trading system that automatically generates buy and sell signals for any market and can be used on intraday and daily charts. Visually stunning and intuitive to use, the system is now available as a complete trading system for eSignal Advanced Charting.
Money management is included: Optimal long and short position size is calculated according to your account equity, margin requirements and appetite for risk.
Features and Pricing
PowerTools Trading System for eSignal is available on a monthly basis at 49 dollars per month.
What is a fully adaptive trading system?
There are no settings to adjust, nothing to optimize. Previous editions of PowerTools Trading System contained a StopFactor that required some degree of judgment. Our main competitor still requires users to specify how tight the stops should be while PowerTools Trading System is now 100 percent adaptive to market conditions.
What is the PowerTools money management system?
The user specifies the amount of capital, the amount of margin used and the amount of the equity to risk on each trade. PowerTools has a built-in margin calculator that computes how many shares (stocks), contracts (futures) or currency (Forex) to buy or sell based on user input.
Can I perform strategy back testing?
Yes, users can back test PowerTools on intraday and daily data for any market, for as far back in history as data allows.
Can I monitor entire portfolios?
Yes, PowerTools Trading System for eSignal includes DDE to Excel. Users can take advantage of this powerful application to monitor the system stops for every single position in their entire portfolio. Mix and match time frames on the same spreadsheet to monitor risk.
How do PowerTools compare with the competition?
We originally performed a comparison of PowerTools Trading System versus the leading system. PowerTools is hard to beat.
Why are PowerTools so reasonably priced?
Teresa's new clients are usually referred by existing, satisfied clients. She does not buy glossy ads in magazines, use direct mailing programs or maintain an army of support personnel. You pay for research, development and programming -- not for sales and marketing.
Using PowerTools
In eSignal, the complete trading system is contained within one file: PT-TradingSystem.efs.
Right click on the chart you wish to apply PowerTools. From the menu, select Formulas > Advanced > PowerTools > PT-TradingSystem.efs. That's all.
Why are the price bars colored?
When the trading system is on a buy signal, the price bars are colored blue. When the trading system is on a sell signal, the price bars are colored magenta. Users can change the default colors.
What are the dots above and below the price bars?
When the trading system is on a buy signal, magenta-colored dots will appear below the blue price bars to indicate the stop loss; if price *closes* below the dot, a sell signal will be issued. When the trading system is on a sell signal, blue-colored dots will appear above the magenta price bars to indicate the stop loss; if price *closes* above the dot, a buy signal will be issued.
In the example shown previously, if AAPL closes below 79.6246622, the trading system will issue a sell signal. If price fluctuates above and below a dot on an intrabar basis, this is your signal to prepare to make the trade as close to the last tick of the price bar as possible.
What is in the cursor window?
Other than the usual price information, you will also find the stop price for the current position, how many shares the system is long or short based on your criteria, the number of trades the system has made based on your time template (in this case, 10,000 bars) and the cumulative profit and loss. In the example shown previously, the system began with 10,000 dollars of initial capital, 50 percent margin, with each trade risking 1 percent of initial capital.
On a swing trading basis, a trader can typically hold 10 positions simultaneously, based on these calculations. For swing traders and investors, I strongly suggest using RiskGrades.com to evaluate your portfolio to ensure adequate diversification.
How do I conduct back testing?
Right click on the chart you wish to back test. From the menu, select Tools > Backtesting. Be sure to point to PT-TradingSystem.efs as the formula. By default, the file is in C:\Program Files\eSignal\Formulas\Advanced\PowerTools. Please note that for back testing purposes, the trading system evaluates the last tick of each price bar to determine buy or sell status and records the closing price of the bar as the entry or exit price.
Your Personalized Inputs
The trading system requires some information from the user. Right click on the chart and select Edit Studies. Use the drop-down menu to select PT-TradingSystem to input your information.
Initial Capital ($)
Enter the amount of capital you plan to contribute to the account.
Own Capital (%)
This is the margin calculation. For stocks, a margin account typically consists of 50 percent of the trader's own capital. This is the default setting. For futures contracts and Forex, the minimum requirement is usually smaller. For example, day trading margin for most stock index futures contracts is typically 3 percent.
Equity Risk (%)
This is where you specify the percent equity risk (excluding margin) per trade you wish to take. For swing trades, I suggest taking no more than 1 percent risk. You will be better served to diversify (i.e., trade more stocks or markets) rather than make bigger bets on a small number of stocks or markets.
Equity Point Value
For stocks, each 1 point move = $1.00. For futures and Forex, this is not so; in order to calculate proper position sizing for futures and Forex, you need to input the equity point value. For example, if you are trading the CME E-mini S&P 500 futures, each tick = .25 points or $12.50; therefore, each whole point = $50.00. For the CME E-mini Russell 2000 futures, each tick = .10 points or $10.00; therefore, each whole point = $100.00. For the CBOT mini-sized Dow Futures $5, each tick = 1 point; therefore, each whole point = $5.00.
Alarms and Colors
You can adjust almost anything -- from the color of everything, to fonts, stop dot shape and thickness. You can customize alerts to use sound, popup or email, and even change the sound file.
DDE To Microsoft Excel
PowerTools Trading System for eSignal is pre-coded for quick dynamic data exchange with Microsoft Excel. You can track your entire portfolio in real time and know exactly how far your position is from a buy or sell signal. You can also use Excel to calculate and hedge your exposure. For additional information regarding the DDE to Excel feature in eSignal Advanced Charting, please visit the eSignalCentral Knowledge Base.
To obtain the sample market summary worksheet and workspace provided in this article, please contact PowerSwings.com.
CreditsWhile I owe the eSignal engineering team many thanks (Todd P., Todd G.) for their help, this upgrade would have been impossible without Chris Kyrza of Divergent Software. His dedication and excellence in EFS programming is unparalleled.
About Teresa:
Teresa Lo is the founder of PowerSwings.com. Originally a discretionary technical trader, she now trades a number of diversified markets with a quantitative approach that focuses on risk reduction. She is currently an independent market strategist for institutional clients and advisors. Individual investors and traders can access her expertise by using PowerTools Trading System for eSignal, an eSignal add-on at $49 / month.
