How to Use Zignals Trading Signals

If you are a subscriber to a Zignals trading strategy there are a number of different signal categories to consider. This post will tell you how to utilise them.

Buy Signals

When a position is initiated in a stock or forex pair it is triggered after the market close. These orders are listed in the end-of-day email delivered to subscribers and strategy previewers. In the case of strategy previewers these signals are delayed. Buy Signals refer to entry signal triggers for stocks which are already 'owned' in the strategy portfolio. Because Zignals strategies do not support compounding of positions, these additional Buy Signals are ignored. In effect, the Buy Signal is a confirmation ("Confirmed") order for an existing position.

However, new subscribers to a strategy will have portfolios which don't own stocks for which Buy Signals are triggered. In such cases, Buy Signals are used to time entries in strategy portfolios of new subscribers. The "Trigger Price" is then the price at which the order is filled and the earliest "Trigger Price" available is the next market open price. The caveat to this is performance of an individual strategy subscribed-to after inception will differ from strategy performance from inception.

Entry Signals

The difference between a Buy Signal and an Entry Signal is an Entry signal is a buy trigger for a stock which is not held in a strategy portfolio. All Entry signals are "Initial" positions. Because Entry Signals are generated after the market close the earliest price point to start a position is the next market open price. So the "Trigger Price" is considered as the next market open.

Short Signals

Short signals are split into "Confirmed" and "Initial" positions. As with Buy/Entry signals, a "Confirmed" short signal are for stocks already held short in a strategy porftolio. An "Initial" signal is a new short position opened at the next market open price. A "Confirmed" signal will act as an intial signal for new subscribers to a strategy for which the stock is not held in the portfolio.

Initial Buy/Short Update Signals

After a position is initiated, the first round of Target and Stop prices are calculated off the Market Open price. This information is delivered in the end-of-day email the day after an "Initial" entry or short position is triggered. For example, if a new stock trigger is intitiated after the market close on Monday, the stock will adopt a fill price at the next day open and calculate an initial Target and Stop price from this price. This information will be delivered in the Tuesday Signals Summary email (after the market close) and appear in Portfolio Positions (it may be necessary to rearrange the column order to view these prices).

The Target price represents the price at which the stop price rolls higher for a bought position or lower for a short position. The Stop is the initial protective price at which the strategy exits the trade if the market moves against the position.

Subscribers can track the current Target and Stop for any open position in the Portfolio of a purchased strategy.

Exit Signals

When a stock or forex position is closed the trade exits. Exits can either be at the "Stop", "Profit Target" or "Trailing Stop".

An exit at a "Stop" occurs when an initial position fails to reach its initial Target. An exit at a "Trailing Stop" occurs after the position reaches at least one Target price. A "Trailing Stop" may close for a profit depending on how many times the trailing stop has rolled forward. The "Profit Target" is the ultimate goal for a trade and is triggered as soon as the price is reached.

The majority of Exit signals come in two forms; an intraday email and end-of-day confirmation email. The intraday trigger occurs when the real-time price hits either stop, trailing stop or profit target. The end-of-day confirmation trigger occurs when the closing price qualifies to hit stop, trailing stop or profit target. This is an important distinction. Strategy trades only operate off the closing price, so a successful intraday stop, trailing stop or profit target trigger which fails to meet the trigger condition at the market close will not register as a trade in the strategy.

Updated Signals

Open positions which reach their Initial or Trailing Target price are updated with a new trailing stop and target price. This continues until the Profit Target is reached.

Unacted Signals

All strategies employ a Delay Between Trades to limit whipsaw signals. The length of this day can vary from strategy to strategy, but any stock or forex pair triggering an entry before the cool-off period has expired will have a listing under 'Unacted Signals'. The length of time to the "Last Exit" is also provided.

Leave any feedback or questions in the comments section of this post.

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Why not start your Zignals Trading Strategy Business with us today?

Learn How to promote your Zignals Trading Business with Twitter.

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Build a trading strategy in Zignals and potentially earn money too; download our Build a Trading Strategy PDF and get selling (and trading) today!

Dr. Declan Fallon, Senior Market Technician for Zignals.com, offers a range of stock trading strategies via his Zignals home page. Each Zignals member has an unique home page which they can share with friends and clients to sell their strategies.

Zignals offers a full suite of financial services including price and fundamental stock alerts, stock charts for Indian, Australian, Frankfurt, Euronext, UK, Ireland and Canadian stocks, tabbed stock quote watchlists, multi-currency portfolio manager, active stock screener with fundamental trading strategy support and trading system builder. Forex, precious metal and energy commodities too. Build your own trading system and sell your trading strategy in our MarketPlace to earn real cash.

Read what others are saying about Zignals on Investimonials.com.
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Profit with Zignals for free - Create and sell your own trading strategies

Why should I create a strategy on Zignals?

Let's be clear, by creating a strategy with Zignals you are essentially creating a sellable product. This product, which is a strategy that generates email trade signals for your subscribers, when sold, can generate new streams of revenue and income.

Create Managed Strategy - A realtime strategy. Your ongoing virtual trades in Zignals are used to generate realtime trade signals for your subscribers.

Create Rule-Based Strategy - An automatic strategy. Define the rules for your strategy and publish it once. The strategy is on 'autopilot' then and will generate trade signals into the future when your entry/exit criteria for a trade are met.

Apart from having a polished, professional, and reliable new product to sell, there are several other reasons for creating a strategy with Zignals:

• It costs nothing to build and sell rule-based strategies
• Strategies can be set up and published in minutes
• Potential subscribers can find your strategy using the Zignals marketplace
• There is a very transparent 50/50 revenue share structure in place
• You don't need programming experience to use our strategy builder
• Zignals manages everything for you including the delivery of strategy trade signals
• There is no limit to the amount of money you can make from subscriptions
• You receive the trade signals also! So that you can trade your strategy
• Subscription money goes directly to your paypal account
• Use our extensive range of expert investor tools

Sounds far too easy. I'm quite skeptical and generally pessimistic about fantastical promises made on the internet...

A very welcome observation!

Zignals is not a 'get rick quick' site. Quite the opposite. It's a site that offers you the opportunity to sell your own strategies to as many people you want at the price you want. Zignals offers you every tool necessary to create and sell expert trading strategies. We offer you a genuine and feasible way to increase your monthly income.

However, we cannot guarantee sales - that's your job! It's no secret that goods and services need to be promoted to attract buyers and drive sales. Strategies are no different. Luckily for you, it won't be hard. Think of the extensive networks of friends, family, and colleagues that you have built up over the years. If you have a website, you have a strategy selling platform. If you have a blog, you have a strategy showroom. If you have a few hundred followers and friends on social media sites (and the ability to type), you have a plethora of potential subscribers at easy reach.

In essence, your Zignals strategy can encapsulate your trading talent, knowledge, and industry experience in a single sellable product. A product that enables your subscribers to mirror your strategys' performance.

Leverage your connections to maximise your sales. You could create a great strategy for $5 and offer it to friends and family, or you could create a strategy for $100 and sell it to your existing clients/investors. You can package strategies in any number of ways to achieve your sales targets. Keep in mind that the strategy you are selling, if it's a good strategy, has real value to those who buy it and act on its signals.

How do I promote my strategy?

Websites and blogs are excellent places to start. Your goal is to make your strategy as visible as possible - especially if your strategy returns are great! Websites allow you to create your own promotional material so you should take advantage of that flexibility. Maybe create a strategy section on your site, describe your strategies, outline what investors they will suit, and ultimately offer links to subscribe to the strategy.

Get Social!
You've probably got hundreds of friends and followers on social networking sites like Facebook, Twitter, Buzz, MySpace and Linkedin. These are fantastic channels to use when promoting your strategies. From your the strategies on your Zignals homepage, you can click the Tweet or Like button to begin showcasing your strategies.

 

How do I differentiate my strategies?
Think - how are you going to reach people who need a great strategy to invest in? Get imaginative! Why not set up a dedicated Facebook page for your strategies? Why not create a video to explain and promote your strategies? Free resources such as the below offer ample options to showcase your strategy and reach a market of potential subscribers:

Example of a dedicated facebook page:

Find your USP
Ask yourself, 'why should someone choose your strategy when there are hundreds on Zignals'.
Have you got special expertise in a particular industry?
Have you managed money professionally?
Have you had previous successes with a personal portfolio?
Are you offering amazing value?
Have you years of experience?

These are just some of the questions you can ask yourself to determine what makes your strategy different and valuable to others. It's then up to you to let everyone know about it!

You can do it! A little effort could pay significant dividends. As there is zero financial risk and you probably don't manage a billion dollar portfolio - it makes sense to see if you have the skill and drive to create a successful strategy selling business.

Zignals will gladly be your new business partner.
Read more!

Momentum versus Trend Rules

The challenge for traders is knowing when to trade with the trend or switch and go with momentum swings. Rarely is the answer clear cut; trends can occur within channels and trending channels can have momentum swings within them. Certain indicators, like the Average Directional Index, can help differentiate between trending and non-trending markets; values below 20 favouring momentum indicators and above 20 trending ones.

In last week's article we looked at the structure of creating a simple Forex strategy, next we will look at applying some rules. We will review the initial Setup - we shall start with default settings which are more geared towards stock trading. We can change to Forex settings later.

Currency: US Dollar
Delay between trades: 0
Target Percentage: 15%
Stop Percentage: 10%
Use Trail
Trail Target Percentage: 10%
Trail Stop Percentage: 5%
Profit Target Percentage: 25%

Remember, the Forex strategy will invest fixed cash quantities and buy 'shares' but the signals are key.

We will start with two rules; a trend rule which will be a MACD Signal Buy (one of the default rules) and a momentum rule, RSI (Relative Strength Index). Both the MACD and RSI are set at default values.

The MACD is built around the difference between two moving averages (12-day and 26-day), with a third moving average (the trigger line, 9-day) built off the difference between the two averages. When the MACD crosses the 9-day trigger line you get a signal. Moving averages are one of the most simplest trend measures indicators and work across all time frames, from intraday to annual. The Relative Strength Index is different as it measures the rate of change between average up and down closes over the past 14-days (default) and converts it to an oscillator bound by 0 and 100. Values above 70 represent an overbought ('hot') market, values below 30 represent an oversold ('cold') market. A MACD has no fixed boundaries. When the RSI crosses above 30 you get a signal trigger.

First we will look to individual rule performance. Remember, when connecting rules there has to be a flow from top to bottom; when your strategy is set correctly the borders around the rules will stop flashing red.

The Back Test period is from 21st October 2008 to 21st October 2010.

When we have our Rules connected and our Back Test run the performance of our preliminary strategy will be given in the Result box. We can also view a Portfolio to see how the Strategy would have performed in practice. Differences between Total Signals in the Result box to Number of Trades in the Portfolio is because new signals for currently held positions are ignored (i.e. there would be no doubling of an existing position).

On initial inspection, it looks like the Relative Strength rule should have had a significant performance advantage over the MACD rule. But digging into the details of the two strategies, the MACD strategy saw 12 trades from 44 signals (58% winners), while the RSI strategy had only 7 trades from 43 signals (71% winners); the larger number of winning trades in the MACD strategy compensated for the lower win percentage.

If we place the two rules together, side-by-side, where a position is taken IF either condition is true, then the following returns are obtained:

In the dual rule scenario, the strategy was able to maximise the best of two worlds. From the 87 signals there were 10 profitable trades, 70% of which were profitable. So under the default Target&Stop condition there was a clear advantage of using the two rules together. Unfortunately, using this in practice this would leave you exposed to huge pip losses. Just as an example: a EURUSD trade bought on February 9th at $1.3673 was stopped out on May 17th at $1.2281, a 1,392 pip loss!

What if we changed the Target&Stop to something more geared towards a Forex trader.

Target Percentage: 1%
Stop Percentage: 0.5%
Use Trail
Trail Target Percentage: 1%
Trail Stop Percentage: 1%
Profit Target Percentage: 5%

So when the risk management is narrowed to a much tighter target and stop, the benefit of having the dual trend and oscillator rule was lost. Different rule combinations will have varying behaviours under different risk management conditions.

In the case of the strategy built using the best performing Relative Strength indicator, there were 31 trades from the 43 signals, 55% of which were profitable. To give the returns better context in a Pip scale. The most recent trade for EURUSD was a buy on June 8th at $1.1940 and a sell on June 15th at $1.2147, a 207 pip or 1.61% gain. The largest loss for the strategy was a GBPUSD trade bought at $1.4387 on May 21st and stopped out four days later at $1.4286 for a 101 pip or 0.82% loss. The largest gain was a AUDUSD trade bought October 28th at $0.6037 and sold on October 29th at $0.6425 for a 388 pip or 6.31% gain.

When all trades for the strategy were considered, the average return was +1.42%.

We will come back to rules and trying different combinations in later articles, but this will give you a grounding to start using your own rule combinations.

[i] Non-leveraged investment. $10,000 = $100 Forex trade
[ii] Two-Years Return; note - Net Return ignores signal triggers for existing positions.

Follow us on twitter here How to Get Started with Zignals

Build a trading strategy in Zignals and potentially earn money too; download our Build a Trading Strategy PDF and get selling (and trading) today!

Dr. Declan Fallon, Senior Market Technician for Zignals.com, offers a range of stock trading strategies via his Zignals home page. Each Zignals member has an unique home page which they can share with friends and clients to sell their strategies.

Zignals offers a full suite of financial services including price and fundamental stock alerts, stock charts for Indian, Australian, Frankfurt, Euronext, UK, Ireland and Canadian stocks, tabbed stock quote watchlists, multi-currency portfolio manager, active stock screener with fundamental trading strategy support and trading system builder. Forex, precious metal and energy commodities too.

Build your own trading system and sell your trading strategy in our MarketPlace to earn real cash. Read what others are saying about Zignals on Investimonials.com. JOIN US TODAY - IT'S FREE!
Read more!

Latest Zignals Trading Strategy Signals

With European markets taking a hit over Spain's credit rating and Irish bank bailout costs it might prove tough to be a buyer in this market. However, broader market action is not overwhelming negative as the FTSE 250 ETF, MIDD, demonstrates. While MIDD is obviously trading down on the day, it is caught inside a larger broadening pattern - while at the same time trading above key 1,025 support. Supply is unlikely to become a major issue until it makes it to 1,061-1,065.



In this light, opportunities remain on the long side and down days like today are best viewed as offering potential buys - at least until the range trading of the past couple of weeks is breached.

Yesterday's buy signals were relatively few with the likes of Nestor Healthcare and RWS Holdings offering buying opportunities at the open (strategy signals are sent after the prior markets' close). Even BP made the cut for strategy "UK Tempest".







In US Markets there is a market open 'buy' signal for Citigroup.



The short side also offered some possibilities. Wednesday's trading saw stop exits in Australian strategies (primarily) with a couple of others for an Irish and UK strategy.

You can find these strategies and more, covering US, UK, Ireland, Canada, Australia and India here.

Why not start your Zignals Trading Strategy Business with us today? Learn How to promote your Zignals Trading Business with Twitter.

Follow us on twitter here How to Get Started with Zignals Build a trading strategy in Zignals and potentially earn money too; download our Build a Trading Strategy PDF and get selling (and trading) today!



Dr. Declan Fallon, Senior Market Technician for Zignals.com, offers a range of stock trading strategies via his Zignals home page. Each Zignals member has an unique home page which they can share with friends and clients to sell their strategies.

Zignals offers a full suite of financial services including price and fundamental stock alerts, stock charts for Indian, Australian, Frankfurt, Euronext, UK, Ireland and Canadian stocks, tabbed stock quote watchlists, multi-currency portfolio manager, active stock screener with fundamental trading strategy support and trading system builder. Forex, precious metal and energy commodities too.

Build your own trading system and sell your trading strategy in our MarketPlace to earn real cash. Read what others are saying about Zignals on Investimonials.com. JOIN US TODAY - IT'S FREE!
Read more!

Melding Technicals and Fundamentals into a Trading Strategy

One of the key features of our stock screener is the Fundamental Trading System aka Active Stock Screen. This unique feature exclusive to Zignals stock screener will notify you on a daily basis (by email) of stocks which meet (or no longer meet) the criteria of your screen.

In addition, the stocklist created by the Fundamental Trading System will update every day AND you can use this stocklist as a basis for an alert e.g. when price crosses above the 20-day MA or price drops to within 2% of a 50-day MA + so much more.

So you can find out when the strongest stocks based on fundamentals are exhibiting the strongest technicals.

So how is a Fundamental Trading System set up?



How can I use my Fundamental System to generate trade ideas?
With a Fundamental Trading System created you can create a Stock Alert which acts on the list of stocks qualifying under the filters of the Fundamental Trading System. In the following example an alert is created for price moving within 3% of the 200-day MA and a second for a price cross of the 20-day MA. A more detailed video on using alerts can be found here.



Each day an email is sent showing new stocks which meet the criteria of the scan and those which no longer qualify.

If you have any questions on using fundamental trading systems and/or alerts simply reply in the comment section.

Dr. Declan Fallon, Senior Market Technician for Zignals.com, offers a range of stock trading strategies via his Zignals home page. Each Zignals member has an unique home page which they can share with friends and clients to sell their strategies.

Zignals offers a full suite of financial services including price and fundamental stock alerts, stock charts for Indian, Australian, Frankfurt, Euronext, UK, Ireland and Canadian stocks, tabbed stock list watchlists, multi-currency portfolio manager, active stock screener with fundamental trading strategy support and trading system builder. Forex, precious metal and energy commodities too.

Build your own trading system and sell your trading strategy in our MarketPlace to earn real cash. Read what others are saying about Zignals on Investimonials.com. JOIN US TODAY - IT'S FREE!
Read more!

Freetradingsystems.org Review

You may have gone looking for a free trading system and come across Freetradingsystems.org, run by David Jenyns. The site offers 12 steps in video and text format outlining the requirments for building a trading strategy. The 12 steps make for important reading and are a perfect complement for Zignals members looking to build solid trading systems. Not only that, but the trading strategies you create are available for purchase in the Zignals MarketPlace in a 50:50 revenue share with Zignals - a great opportunity for you to earn cash both from sales and trading.

David starts by introducing some of the key aspects of system development, including the importance of Psychology and Money Management in creating successful trading systems (referencing Dr Van Tharp).

All good trading systems start with a plan; the plan needs to accomodate entry, exit and money management rules - all of which need to be tested when developing a robust system.

David highlights research by Tharp which showed a trading system can be profitable when based on random entries, but only if money management rules are in place (in this case a coin toss + 1% stop adjustments).

The next chapter introduces the concept of Expectancy in Risk Management. In addition to aspects on trading float, maximum loss, trade size and initial stops.

His seventh point introduces trailing stops and when to set your exits.

His eight step talks above Software - the only software you need to create a trading system is already available at Zignals for FREE and only Zignals offers a 50:50 revenue share with the trading strategies you create.

The ninth step covers backtesting. One aspect David doesn't mention is the importance of out-of-range testing. Trading Systems should be developed within bull/bear cycles then run against three out-of-range timeframes for robustness.

The tenth step involves studying the performance of your trading system and looking at areas for improvement, e.g. win percentage, risk:reward, and drawdown. Maximising profitability is the primary goal of your strategy.

Step eleven discusses brokers and what features you should look for. The final step is about knowing yourself and understanding and developing a strategy which works best for you.

So how can Zignals help you build your free trading system?

* First we offer a FREE guide on building your first trading strategy on Zignals.
* Learn how to promote your trading system using Twitter.
* Start a Zignals Trading Strategy Business and earn 50:50 in a revenue share with Zignals
* Read what others are saying about Zignals on Investimonials.com.

Dr. Declan Fallon, Senior Market Technician for Zignals.com, offers a range of stock trading strategies via his Zignals home page. Each Zignals member has an unique home page which they can share with friends and clients to sell their strategies. Zignals offers a full suite of financial services including price and fundamental stock alerts, stock charts for Indian, Australian, Frankfurt, Euronext, UK, Ireland and Canadian stocks, tabbed stock list watchlists, multi-currency portfolio manager, active stock screener with fundamental trading strategy support and trading system builder. Forex, precious metal and energy commodities too.

JOIN US TODAY - IT'S FREE!
Read more!