Recent Articles
A Look Under the Hood At Carrot Trader
Email This Article
⋅ 
Print This Article
⋅ Post a comment ⋅ Subscribe to Free Daily Update
Since I’m not adding much new to the site this week while the whole Gumshoe family vacations in the sun and sand, I asked the man behind Carrot Trader if he would write up a description of how it works for you, and give a few examples of trades that the Carrot Trader system has triggered recently.
Carrot Trader is a system that takes the “Gumshoe Universe” of touted and teased stocks and uses a proprietary scanning and charting system to pick entry and exit points for trades. There’s a special link at the bottom of this article that will give you the special “Stock Gumshoe” deal from Carrot Trader (OK, you don’t have to wait — the link is here, too) — that special deal includes a ten day free trial if you’d like to check it out for yourself.
It won’t be for everyone, I’m sure, but I am sure that it’s worth at least taking advantage of that free trial to have a look. Your credit card won’t be billed until after the free trial period is over.
So, without further ado, here’s the explanation that Carrot Trader contributed for you today:
An Inside View of How Carrot Trader Works
To illustrate the inner workings of Carrot Trader, we’ll review a summary of the trades it has generated over the past two weeks and provide an explanation of the Prime-Line Matrix charts.
Of the eleven trade setups discussed in the Carrot Timer section over the past two weeks, eight trades were triggered, and three were not. Of the eight trades entered, all remain as open positions; seven of the eight trades are currently profitable.
The largest open position winner is LDK which was entered as a long position on August 12th; LDK has gained $2.95 per share. The one open position loser is NM which was bought on August 14th; NM is down $0.26 per share.
The Matrix chart of LDK provides insight into how the trade was generated. The system’s Trade State on the day the latest trade was signaled is shown by the chart price bar colors:
Yellow: Trade entry
The following trade data was shown in Carrot Radar for LDK Solar Co Ltd (LDK):
Entry Date: 08/12/08
Entry Price: $39.85
Initial Stop: $26.96
LDK’s latest Matrix chart is shown below. Carrot Radar now shows the following data:
Close Price: 42.80
Trade State: Long 8/12/2008 39.85 (green price bars)
Stop: 33.97 (Green dot – stop price has automatically moved up)
Profit/Loss: +2.95
Next, let’s look at the one open position loser which is Navios Maritime Holdings (NM), which was bought on August 14th; NM is currently down $0.26.
The following trade data was shown in Carrot Radar for Navios Maritime Holdings (NM):
Entry Date: 08/14/08
Entry Price: $9.81 (yellow price bar)
Initial Stop: $7.90
NM’’s latest Matrix chart is shown below. Carrot Radar now shows the following data:
Close Price: $9.57
Trade State: Long 8/14/2008 $9.81 (green price bars)
Stop: 8.11 (Green dot – stop price has automatically moved up)
Profit/Loss: – 0.26
What goes on behind the Carrot Radar printout and the Matrix charts is a complicated set of proprietary harmonic algorithms. What’s displayed is easy to interpret and follow.The “Neutral” Trade State (magenta price bars) says Matrix parameters are not aligned – to hold-off trading until they do. Red price bars designate the Trade State is Short. Green bars designate Trade State is Long. The yellow bar signifies an alignment shift and new trade setup. The stop price (dot) shows the current protective stop and trade risk.
As part of this special offer, Carrot Trader will also, as a special bonus for the first hundred subscribers, pay for your membership in the Stock Gumshoe Irregulars if you like (once you’re a paid Carrot Trader subscriber, you just have to pay a small setup fee and you’ll get an Irregulars membership, free, for as long as you remain a Carrot Trader subscriber).
Note that Stock Gumshoe does not run the Carrot Trader system or contribute to their development, other than providing them a universe of stocks to work with, but I am compensated by them if any of my readers — that means you! — choose to become paid subscribers to Carrot Trader.
——————–
Is Your Bank Safe?
More than 130 banks will have failed by the end of 2009. What if your bank fails?
Did you know you could be left in the lurch for days, weeks, even months before you get your money back from the FDIC? What happens if the FDIC can’t cover your funds? How do you find a safe bank to protect your deposits right now? Find answers to these questions and more in the original “Safe Banks” report from one of our advertisers, Elliott Wave International.
Learn more and download your free 10-page “Safe Banks” report now.
The author will always disclose any direct long or short equity, debt or option position in any stocks written about as of the day of publication, and will not trade in any stocks mentioned for three days (72 hours) after publication. Full disclaimer is at the bottom of the page.
Related Articles:
Email This Article
⋅ Print This Article
⋅ Subscribe to Free Daily Update
Discussion
14 comments for “A Look Under the Hood At Carrot Trader”
Post a comment
Recent Forum Posts
-
Gold, Gold, Gold
by Will on November 20, 2009 at 4:14 pm
-
Market Outlook
by Darrell on November 20, 2009 at 9:06 am
-
THE best performing U.S. stock market sector in 2009?
by asafp on November 20, 2009 at 8:00 am
-
The Inescapable Law of Equilibrium
by stockcrazy10 on November 19, 2009 at 5:10 pm
-
Has Anybody Heard of this Bank System Shutdown ??
by shredmonster on November 19, 2009 at 10:29 am
Support Stock Gumshoe Today!
Stock Gumshoe is supported both by advertising and by voluntary member contributions -- investors like you keep this site going.
Joining the Stock Gumshoe Irregulars for $4.50 a month or $49 a year is, first and foremost, a way to support StockGumshoe.com -- but becoming an Irregular also gives you access to the members only section of this site (which is currently in beta release -- more info about that here).
Click here to choose a membership level and sign up.
If you cannot or don't wish to make payments online through PayPal, Contributions by check or other paper correspondence can be sent to:
Stock Gumshoe
PO Box 9751
Washington, DC 20016-9751.
Donations of any amount are also always welcome -- thanks!
Thanks to all of you who have contributed so far -- you're keeping the Stock Gumshoe going!THIS SITE DOES NOT OFFER FINANCIAL ADVICE. PLEASE READ THESE IMPORTANT DISCLAIMERS AND POLICIES:
Disclaimer * Privacy Policy * Email Privacy Policy
Looking for information about the “1-2-3-Trader” aka, “The DaVinci Code,” by Jim Stanton of Smart Profits offerings. Anyone who has experience with this method, gentleman or organization and wishes to share would be greatly appreciated.
Thanks,
Eric
[Reply]
Hope Gummy will look into this one when he gets back!
Thx
[Reply]
The DaVinci code has been discussed on the forum, but I don’t think has been given the full treatment. Basically, it’s Fibonacci trading.
[Reply]
I am trying to learn about this whole stock world. could someone translate some of these terms for me
initial stop
stop
trade state: long, short, etc.
entry price (is that like user specific?)
close price (is that just for the day?)
HElp thanks
[Reply]
investapedia.com is a good place to start,most on line trading co,s have the termonology(scottrade etc.) stocks start off simple going right into options termanologys. my trading bible is “japanese candlestick charting techniques” by STeve Nison
[Reply]
so I found what a protective stop is, but of these terms that’s the only one I could find. I assume that is the stop they’re talking about here, but what is that compared to an initial stop??
and can anyone help with the rest of the terms as they’re used by carrot trader?
[Reply]
Loraine
Entry Price – is the price you first purchased the stock at.
Close Price – shoud be the price of the stock at the end of the day (what it closed at).
Initial Stop or STOP – is an order to sell the stock (you usually already own this stock)at a certain price. ex. if you buy a stock at $10, and it goes to $20, you have made a $10 profit per share in the stock. You think some bad news will make the price drop $5.00,but you do not want to sell the stock, so you put in a STOP at say $18. That way you will at least make an $8 per share profit.
Long – means you own this stock, but you think it will be at least six months to a year or more before you make a profit in the stock
short – you already own this stock too, but you talk to other people about it. In the short run, you believe you will make money on this stock.
[Reply]
shawn disney Reply:
August 19th, 2008 at 10:48 pm
I always thought “short” means you sold it when you didn’t own any, hoping the price would rise. Very dangerous.
[Reply]
shawn disney Reply:
August 19th, 2008 at 10:49 pm
Sorry, I meant fall.
[Reply]
Derek Blain Reply:
August 19th, 2008 at 11:05 pm
Hi Loraine,
Just to elaborate a little on what Raymond said. Entry and closing definitions are dead on, closing being the average price for all shares sold (or bought to cover) after the transaction has completed. I.e. I bought 1000 shares (long position) at 15.00/share, and sold 500 at 16.00 and the other 500 at 17.00/share. My average closing price is 16.50/share.
There are a few types of “stops”. One is a stop-loss. This means that I have decided beforehand exactly how much money I am willing to lose. This is the “stop” that is being referred to here – In position 1, the stop is 26.95, where you are going in to the position at 39.85/share. This means that if the price of the stock hits 26.95 or lower (on the possibility it’s making a wide run down and jumps right over that price), you will sell your shares because you don’t want to lose any more money.
The only reason it says “initial stop” is because that is what you are inputting when you first take the position. The “stop” for part 2 of the first trade has moved up because Carrot uses, I am just guessing, a sort of sliding scale to judge risk based on its algorithms, and will tell you to raise or lower your stop-loss accordingly.
Long and Short positions are very simple. Once you can wrap your head around them once you never have to think about it again.
LONG – I have bought the shares, and in order to make money they have to go up in value, when I will sell them to another buyer for a higher price than I initially paid. i.e. entered LONG position at 15.00, stock rises up to 20.00/share in value and i sell them for 5.00/share profit.
SHORT – I am “lending” the shares to someone else – meaning that I have pre-sold the shares. In order to make money the shares have to go down in value so that I can buy them back cheaper. i.e. I have short-sold the shares to someone for 20.00/share and the prices goes down to 15.00/share. I then buy the shares back (called buying to cover since you really don’t actually own the shares) for 5.00 profit.
Hopefully that makes sense. Raymond’s definition of short fits into the LONG category, he’s just thinking a short-TERM LONG position lol.
Derek.
Happy trading all! P.S. I have posted some picks on SocialPicks.com under the name Coreadrin_47 if anyone is interested in some technical and/or fundamental analysis on a few companies.
Cheers!
[Reply]
Yes, that is “shorting” a stock and you are correct. You hope the price will FALL so you can make money. “you sell stock athat you do not own, hoping it will fall. Then you buy the stock at a lower price.” However, I never believe in shorting a stock, as it is playing a gamble. To me, being Short on a stock is different that SHORTING a stock.
Sorry for the confusion.
[Reply]
Long – means you have a bullish outlook for the stock, you believe the price will rise, and you may have a long position, ie have bought the stock
Short – means you have a bearish outlook for the stock, you believe the price will fall, and you may have a short position, ie you have sold the stock or have options to make money when the stock falls
[Reply]
Thank you all so much for your contributions in answering these questions. Derek’s definitions are correct with the exception of Carrot Trader’s usage of “Close”. Our Close simply refers to the end-of-day closing price for the stock. In the last example in the article above we show NM’s close as $9.57. You can see this value printed on the right side of the chart.
[Reply]
thanks everyone who responded! That really helped
[Reply]