From the July 01, 2010 issue of Futures Magazine • Subscribe!

Software review: TradeGuider V4.0

TradeGuider
111 West Jackson Blvd., Suite 2010
Chicago, IL 60604
Phone: (877) 392-3895
Website: www.tradeguider.com

System Requirements:
Windows 2000/XP or later (Vista, Windows 7)
Suitably configured, late model PC:
Pentium 1GHz, or later
512 MBytes - 1GByte RAM
150 MBytes Disk
Single high resolution monitor
Broadband internet connection

Price(s): (Does not include data feed subscriptions)
TradeGuider Real-Time V4.0: $4999 (includes $999 Getting Started course)
TradeGuider End-of-Day V4.0: $2495 (includes Getting Started course)
TradeGuider Real-Time 3-month Lease: $795 (includes Getting Started course)
TradeGuider End-of-Day 3-month Lease: $395 (includes Getting Started course)
(Leases include free 3-month membership in the VSA Club - regularly $149/month)

Overall Rating: 3 of 4

It is said that technical analysis relies solely on price and volume, as they are the only objective measures of market activity. While the trader interested in technical analysis often will find a wealth of indicators that are based on price, integrating volume in a trading program escapes most retail traders. Finding trading tools and a comprehensive trading program based on price and volume can be difficult. TradeGuider V4.0 offers technical analysis and indicators, trade strategy and instruction, and a user community for the stock, futures and forex trader interested in integrating volume in an active, real-time or end-of-day trading program.

TradeGuider, developed and supported by an experienced group of professional traders, offers a PC trading platform with a number of trade signal indicators based on proprietary price and volume software. "Volume Spread Analysis" (VSA) refers to an analysis of chart bar volume and spread (price bar HLC). While the current generation of trading desktops emphasizes easy development and integration of user and third-party tools to create an individualized trading platform, TradeGuider is a self-contained platform, both in terms of its tool set and the VSA trading technique it advocates.

The TradeGuider user interface has a professional finish and a good set of indicators. Importantly, it includes an integrated video introduction to educate the user in the VSA method. TradeGuider offers a moderately priced lease package so the novice trader can test the tools of the VSA authors. TradeGuider stands out as an offering that seriously addresses volume, giving the trader an opportunity to incorporate it in a trading program.

Installation, documentation and support: 4 of 4

Installation of TradeGuider software was straightforward. The product is first accessed by taking the new user through an online video and document tutorial. TradeGuider provides unique price-volume studies and techniques to use them, so the instructional materials are an important product feature. Many of today’s trading platforms are feature-rich with user-interface designs that can’t be navigated without instruction. TradeGuider’s incorporation of instructional materials within the software installation step was a nice touch.

TradeGuider offers an online "VSA Club" to support traders, and there are low-to-moderately priced books and courses covering the VSA method. A PC-based chart reading "master" class is $695, modestly priced in today’s trader education marketplace.

Features and Functionality: 3 of 4

The TradeGuider V4.0 interface consists of a single desktop area bordered by menu buttons that enable a fixed set of indicators and trade signal tools. The desktop is easy to use. Some menu items access the VSA proprietary indicators; others are for standard technical indicators (MACD, RSI, etc.). Multiple chart windows can be active. A separate subscription is needed for market data feeds. RealTimeData and eSignal currently are offered. There is an eSignal plug-in to add the VSA software to that platform. Order entry and execution is not integrated in the TradeGuider desktop.

The traditional volume histogram is prominently displayed below price bars and color-coded. An average volume line and what appear to be volume dispersion shadings overlay the histogram. At the right edge of the price chart is a proprietary volume "thermometer" with green (bullish) and red (bearish) colorings. Its design is simple and easy to interpret: A red-green midpoint and continuously rising and falling thermometer bar indicates current market bias. Because the thermometer is a proprietary VSA indicator, its implementation is not apparent, although obviously based on current price action and volume. Users who demand an in-depth understanding of indicator implementation may be disappointed in the opaqueness of some of the VSA indicators. Thermometer values are stored with price bars so the user can review readings historically.

Price bar trend coloring and indications are part of the VSA tool set, as are variously weighted market reversal indicators. Bar trend coloring looks to be standard. If the user includes reversal indicators incorporating price and volume in their implementation, then they offer additional information from standard bar reversal software.

The VSA methodology appears to have significant actual trade experience behind it. The instructional video and documentation materials emphasize the user apply an overall market perspective to the specific signals the VSA software generates. There are good checklists in the training materials to help the user understand the larger market view that accompanies trade setups. And there are specific long and short entry examples that highlight the volume and price spread analysis advocated by the VSA method.

Overall, the VSA method relies on Wyckoff principles and the fact that markets move when large institutional trading takes place. There is reliance on the Wyckoff accumulation-buy-distribution-sell cycle with well-known volume dynamics added to price action to determine market tops and bottoms. The novelty of TradeGuider lies in the software implementation of these interpretations of market activity.

As with any trading course, market price action and trade setups will appear easier in hindsight than in real-time. Many times it is difficult to discern when a volume bar is low or high enough to be a valid signal input – they all just look equally unremarkable to the novice. While relative volume is repeatedly mentioned, the volume histograms appear to be traditional absolute volume bars. The experienced trader may find that, in practice, well-defined price patterns trump the more elaborate price plus volume analysis. VSA trade setups tend to emphasize market reversals as opposed to with-trend trades. Picking market tops and bottoms is typically considered more difficult than trend trading.

Some of the educational materials appear dated, with charts from the late 1980s and early 1990s. It may be that trading principles never change, but the user looking for the latest trading technology may not feel comfortable with out-of-date examples. Similarly, the trading method relies on a market maker/specialist and professional versus amateur orientation. Again, in today’s high-frequency electronic markets, with large amounts of algorithmic trading, this emphasis may not be as relevant as in the past. Providing modern, electronic analogs to some of the market descriptions would give the user confidence that the latest software technology was being purchased.

None of these points detract too strongly from the overall product, which makes a good vehicle for the trader interested in adding volume analysis software to his or her trading.

Conclusion:

TradeGuider V4.0 offers the active or end-of-day trader software indicators and signals that incorporate volume. Their integration in a trading desktop, along with good trade education, make for a compelling product. The trader interested in an open platform for his/her own trade indicator and strategy development should look elsewhere. For the trader who has heard of the importance of volume and wants to determine if its application can generate improved trading results, TradeGuider is a good place to start.

For 20 years Michael Gutmann was a software engineer and manager at Intel Corporation. He trades the E-mini stock index futures daily and is the author of "The Very Latest E-Mini Trading: Using Market Anticipation to Trade Electronic Futures." Mike can be reached at mike@vgxcapital.com. His website is www.anticipationtrading.com

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