MANUAL
HOW TO
INSTALL
OPERATE
INTERPRET


INSTALL

1. To download Scan Wizard, register, click on the link you receive by return email.

2. Double click on the installer. InstallShield walks you through a fast and easy installation.

3. After installation, open Scan Wizard from Start / Program Files / Scan Wizard / Scan Wizard .

YOUR 7 DAY VERSION IS FREE

Fully functional, including new optimization and risk management functionality in new Scan Wizard version 2.0. Expires after seven days.

30, 120 DAY SUBSCRIPTION AND FULL PURCHASE VERSIONS

Fully functional. These include our newest publication, Scan Wizard Trading Method, © 2001.


OPERATE

Scan List for buy-sell signals, Scan Stock for buy-sell signals, Chart, Find News.

Scan List

Scan Wizard was created to scan an entire list of stocks for significant change in force, trend and sentiment as measured by the price-volume Force Index developed by Dr. Alex Elder, as well as other attendant technical signals, e.g. moving averages, stochastics, volume/average volume, price % change and volatilities. We provide starter lists: Dow Jones 30, NASDAQ100,  SP500, and more. You can create your own lists, however, of your own symbols. Just open a starter list in any text editor, e.g. Microsoft Word, etc., "save as" to new name, overwrite with your symbols.

To scan a list, simply press the "Load Ticker List" button and select a text file of ticker symbols from your SW folder. Hit update button as often as you like to see price-volume signals emerge as the trading day progresses.

Data source in the 20 minute delay version is Yahoo, for real time, eSignal

If a ticker is outdated, or if data is otherwise unavailable, Scan Wizard skips over it, and lets you know at the end of the scan. From time to time, to groom your list and keep it updated, open your ticker list in any text editor, Ms. Word, etc., delete outdated ticker symbols, save file as text.


To create your own list:

In any text editor, e.g. Microsoft Word, open one of the supplied lists, e.g. DJ30.txt. Overwrite symbols with your own, e.g.:


AU
GG
NEM
etc.

Save in same folder at DJ30.txt, etc. as text file, i.e. mylist.txt.

Open in Scan Wizard.


Click on column header to sort that column: Click on L/S Force, to sort by buy-sell signals, for example.


Bull or Bear market?

Financial commentators often engage in debate/speculation on whether we are in a bull or bear market. Scan Wizard gives you a personal read on this, especially for the stocks you follow . . . another excellent use of the Scan List function. Signals predominately "long?" Bullish sentiment reigns. All "short"? The bears have the upper hand. Equally distributed? Sideways push and pull underway between the bears and bulls.

If you are of a mind to go long, of course it helps for a bullish sentiment to be prevailing; reverse for short side. Add overall market sentiment to fundamentals, technicals, news, etc. to put the odds of a successful trade in your favor.


Ticker list sources:

Option Wizardģ Scan starts you with ticker lists, but tickers change each day.  Use these sources (which themselves change from time to time) to stay up to date.  Delay data is downloaded ticker by ticker from the CBOE site;  real time data from eSignal can be accessed for an entire list of tickers.

DOW JONES 30
http://finance.yahoo.com/q/cp?s=^DJI

NASDAQ 100
http://www.nasdaq.com/quote.dll?page=nasdaq100
http://finance.yahoo.com/q/cp?s=^ndx

SP500
SP has a history of constantly changing their web pages.
Presently at http://www2.standardandpoors.com/spf/xls/index/sp500.xls

Alternately, start with:
http://www.standardandpoors.com  
Drill down:
Index methodology
Browse By Index
S&P 500 
Constituent List
Download table
Save as .txt or .xls

INDUSTRY GROUPS
http://biz.yahoo.com/research/indgrp

SCREEN STOCKS
http://screen.yahoo.com/stocks.html

Note: Manually change any stock that is listed as XYZ.B to XYZb to conform to Yahoo ticker format.


 

Troubleshooting

If program crashes repeatedly when loading a certain list, remake the list as a new text file as follows: open old list, copy symbols, open new .txt document, paste symbols, save.


Scan Stock

After you scan your list, you have "long" and "short" candidates. Next, zero in on these, and see how well the model has worked on each by scanning the past 200 days of each candidate stock.

Variables are user-definable.

To scan a stock, enter the ticker symbol and press the calculate button. Scan Wizard downloads the last 200 days of historical data. They are then backtested to show the Force Index, attendant buy-sell signals, as well as stochastics, moving averages, historical volatilities.

 

The (slow, 20 day or optimized) Force Index goes long when slow Force Index changes from negative to positive. For faster moving stocks, you can look for change in the fast (5 day default) Force Index average.

 

In the Scan Stock view, you can see how well the stock performed in response to change in Force Index.

 

If you have optimized a particular ticker symbol, the Slow Force value that is employed is the optimized, best value. [All other settings, i.e. moving averages, and volatilities, read from the smoothings page]. If you wish to "write over" the optimized value, e.g. Slow Force 20DMA, simply re-optimize the stock with the Slow Force range set from 20 to 20.

 

In the following example, Scan Wizard™ gave a long signal on the SP500, i.e. SPX Dec. 1, 2010.  It stayed long through Jan. 7, 2011, racking up 65.43 points to the good.   In 20 trades over the previous  220 trading days, the optimized Scan Wizard Force Index trading model, generated a profit of $996.76 on $10,000 capital, or 9.74% annualized. Best Force Index smoothing was 12, and best stop loss was 6%. Not all trades are winners, it should be noted.

 

Column Key:

Ticker: stock ticker symbol.

Time: Last update. Scan Wizard offers Delay and Real Time capabilities.

Last: last price.

Change: from previous day.

High.

Low.

Open.

Volume

Vol/Ave Volume (x days): Volume divided by average volume over x days, user defined in preferences. See Scan Wizard Trading Method for explanation on how to employ  this technical indicator. 140 pages, 30+ case histories.

% change. % price change from previous day.

L/S Force. Of x days, of which 20 is the default. Returns Long when 20 day (default) optimized slow Force Index crosses from negative to positive. Returns Short when 20 day or optimized Force Index crosses from positive to negative.

Trade Profit/Loss. On beginning $10,000 investment, 220 trading days ago. Accumulates all profits, losses.

Total return from $10k.  Running totals.

Current position.  0 = none, 1 = long, -1 = short.

Trailing stop loss. Actual stop per optimization.

Smoothing. Optimal Force Index smoothing.

Fast Force: x day moving average of Force Index. User-defined in Preferences, Smoothings. In this graphic, 20.

Slow Force: optimized best value for x day moving average of Force Index. If ticker has not been optimized individually or in a list, then defaults to user-defined value in Preferences, Smoothings

%K: fast stochastics

% D: slow stochastics

K/D crossover, indicates change in momentum.

Fast MA (moving average). User-defined in Preferences, Smoothings

Slow MA (moving average). User-defined in Preferences, Smoothings

MA crossover, indicates change in trend.

Fast HV: Fast historical volatility., user defined in preferences. Default is 6. User-defined in Preferences, Smoothings

Slow HV: Slow historical volatility, user defined in preferences. Default is 100. User-defined in Preferences, Smoothings
Some analysts look for stocks where 6 day HV < 100 day HV, which often presages breakout, up or down.

Fast HV vs. Slow HV: Returns less or greater. Click on title to sort list on this field.

Trend:
Uptrend is defined when Price > 20 day MV > 35 day MV > 50 day. MV is moving average.
Downtrend is defined when Price < 20 day MV < 35 day MV < 50 day.
When conditions are not met, stock is neither in uptrend or downtrend, by definition.

Day number (0 in scan list)

Ticker symbol (for sort purpose in scan list)

 

Other features include:

Export to Excel

Print chart

Preferences dialog box for smoothing values

New in version 2.0, optimization and risk management:

User-defined variables . . . . .generate the following results table for the Dow 30. You can export to Excel for further analysis:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk management includes optimized stop loss percent, and actual trailing stop loss.


Charting

Next, chart your ticker. Hit chart button for each new chart. We provide candles, force and stochastics. Spaces between groups of bars denote weekends or other non-market days. This allows you to easily see weeks of trading and how the week progresses.

Want to zero in on certain dates: simply drag your cursor left to right over your target area. Want to move back to the six-month default view? Form a rectangle by dragging the cursor right to left.


News

What catalytic news generates the change in Force, trend, sentiment? Access Yahoo Financial News.

 

DATA ERRORS

All data is saved to disk.  As a result, if incorrect data is sent, it stays incorrect.  Scan Wizard™ has no way of knowing that incorrect data was sent.  If it has been at least two market days since the last retrieval Scan Wizard will retrieve a new set of data -- so this happens automatically every Monday. Meanwhile, you can manually clear the data by deleting a file from \Documents and Settings\user\Application Data\ScanWizard\.


INTERPRET

Now you have scanned your list, zeroed in on candidates, looked at the charts, found the news.

Now comes the hard part: interpretation. What does it all mean? What should I do, right now, with ticker XYZ?

There is no one answer.

There are hundreds, thousands of books on investing, trading, technical analysis.

In no way do these few words aim to substitute for reading and studying this body of knowledge on your own any more than reading a brochure stands in for a medical education.

See our bookstore for more.

Meanwhile, we need to outline some key concepts to maximize your understanding of and use of Scan Wizard.

Scan Wizard accurately identifies major change in trend and sentiment.

SW will likely generate more signals than the typical trader­investor can trade.

Once a Force Index change occurs the question becomes:? will it continue?? Will a stock rise/fall an additional 10­20­30% or more?

Or is it a False Breakout?? A trap for bulls that shuts tightly the next day?

In a third case, when a stock has a huge one day move, might it neither increase, nor decrease, but rather stabilize at those much higher levels?

As appealing an indicator as is Force Index, like any other indicator, it is not long before you see it triggers more questions than it answers.

As the Japanese say, each day, each market event is an Ichigo Ichie ­­ an unrepeatable miracle.

There is no one way, one rule, one precept. The Force Index change can reverse, melt into a False Breakout, or it can continue on, even stronger on day two, than day one.

Finding Force Breakouts is the daily work of Scan Wizard, sorting through them to determine which are real and which are not is the work of the trader.

Not all breakouts will continue, up or down, but over time, we notice patterns that put the odds in our favor.

Patterns in the fundamentals, the technicals and finally, the subsequent market action.

How we approach these patterns, and how we manage risk, determines our success.

Here are some tips designed to put he odds in your favor.

 

FUNDAMENTALS

LONG SIDE

Go long only stocks of highest caliber, market leaders, widely known names. Stick with the SP500, NASDAQ100, DJ30.

SHORT SIDE

Fear is more powerful than greed, so even the great companies can decline swiftly when sentiment shifts.

Also go short the also ran companies, those without powerful Wall Street advocates, when sentiment turns against them.

 

TECHNICALS

LONG SIDE

Best opportunities: go long a great stock after long decline, base building, then bad news generates huge price rise on huge volume. Signifies the sellers are gone.

Positive opportunity: stock in strong uptrend, regresses to 20 day moving average (DMA), resumes uptrend.

SHORT SIDE

Look for major change in sentiment following extended price rise.

Similarly, stock in recent disfavor rallies, if rally fails at 20 DMA line. go short.

 

APPROACHES

SUPER AGGRESSIVE (not recommended)

Takes full position on signal.

Enters stop­loss or stop­limit order, and/or stop and reverse. Stop-and-reverse, e.g. Buy stock at 50, sell short 2x at 48.50.

AGGRESSIVE

Scale in, average down or up.

CONSERVATIVE

Wait for 2nd day confirmation.

A high percentage of breakouts regress, and hence are named, false breakouts. As always, money management, risk management is the key. See below information on FALSE BREAKOUTS.


SPECIAL NOTES:

1. It is often best to wait on trading signals after significant daily volume, i.e. towards end of day (EOD).

2. Often a stock that is in a true breakout, but up 1, 2, 3 points on the day, will regress a bit the next day, giving you an even better entry point.

3. Occasional bad data can generate incorrect buy-sell signal; please recheck data.

4. FALSE BREAKOUTS

While we are not able at this time to offer quantitative evidence, our experience is that perhaps as many as four out of five "breakouts" are false breakouts, i.e. they regress significantly. The percentage depends on the overall market. In a sideways market, which happens some

This is an opportunity.

One may, then, with appropriate stop-loss risk management in place, (e.g. long calls, or stop loss above short sale point) use Scan Wizard to go SHORT questionable upside breakouts, or possibly LONG downside breakouts. We recommend the former more than the latter because FEAR is much stronger than GREED. It takes weeks for an uptrend to build; it takes only a few days to return to the starting point and wipe out all the gains.

Summarizing, there are any number of approaches that may be taken with Scan Wizard. Scan Wizard shows activity and change in activity. How to turn that information into profit is an art. Art has no rules. This art requires judgment, timing and above all else, rigorous risk management.

5. FLUTTER

What should you do when you ‘scan stock’ and see a plethora recent long-short-long-short days, back to back? This means that Force Index is "fluttering" along the zero line, minus to plus to minus to plus. Our advice: wait for a clear change in direction, either up or down. Instead of busting out in dramatic fashion, sometimes stocks will quietly move through the zero line, regress a bit, repeat several times, and then break out. These stocks are worth keeping a close eye on.


CORRUPTED DATA FIX

To save data your program uses a combination of the system enumeration "Environment.SpecialFolder.ApplicationData" which in turn uses the current logged on users username, and appends "ScanWizard" to the end of the path. So if the current logged on username was Andrew, the location of the files would be:

C:\Documents and Settings\Andrew\Application Data\ScanWizard

You can either edit that path to your own windows username and paste it straight into Windows Explorer to load the location, or browse to it within Windows Explorer. If you want to browse to it you will need to enable "Show hidden files and folders" if you have not done so previous. From a Windows Explorer window, click the "Tools" menu, then the "Folder Options" item, and then click the "View" tab in the dialog that just appeared. Towards the bottom of the window you will see a "Hidden files and folders" option, select to show and click OK. You'll now be able to browse to the directory.

Within this directory each Stock Symbol is stored in a separate file, so there should be files like:

SLV.csv
MSFT.csv

You could either delete SLV.csv or just edit corrupted data it in Excel (e.g.  remove duplicate rows). Do either of these with the program closed, restart and you should be good to go.

 


SUMMARY

FORCE INDEX signals appear when optimized or 20 Day Force Index changes from + to -, or - to +. Can be at any time.

RULE OF THUMB: wait till end-of-day for meaningful price and volume action to confirm early day signals. [There are exceptions to every rule, however.]

RECONFIRM Scan Wizard signals with corresponding fundamental, technical, Scan Wizard track record (for that ticker), general market and news analysis.

RISK MANAGEMENT (stop loss, stop limit, options, etc.) is essential. Like any system, Scan Wizard will be wrong. We also recommend that new users paper trade the system, log results. How an individual actually trades Scan Wizard is a highly personal manner: how to scale in, use options, stop-loss, etc.

Being objective, unable to hear CNBC, unable to read Barrons, and having no bias to be long or to be short, Scan Wizard will also be right, often remarkably so.



Scan Wizard is "most right" when there is a fundamental, sea change in a stock and the company. It is "least right" when a stock is meandering.

Our aim, over time, is to tip the odds in your favor so that you will:

1. Find candidates. Be alerted to situations in your list you may have missed, or could not have discovered any other way.
2. Time candidates. Confirm or repudiate your trading ideas.
3. Get an objective "second opinion."
4. Gain a better sense of the overall market.
5. Trade with confidence.
6. Trade profitably.
7. Repay your investment in Scan Wizard many, many times over.



MORE INFORMATION

Force Index
Developer’s Stocks and Commodities feature.

Option Wizard QuickGuide (pdf)
Technical indicators and Backtest Wizard

Option Wizard Trading Method
120 pages, 30 case histories, trading rules on aligning fundamentals, technicals, options analysis for success.

Scan Wizard Short Term Trading Method.
140 pages, 30+ case histories. The real world of Scan Wizard trading in April, 2001 to May, 2001. Winners, losers, scratches.


CHICAGO -- Scan Wizard is a trademark of Sarkett & Associates, Inc. -- 111[an error occurred while processing this directive]