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product review
Phantom Trader
KNOWVERA, LLC
Phone: 203 617-4050
Email: Phantom@KnowVera.com
Website: www.phantomtrader.com
Product: Real-time charting, analysis,
and commentary service
Minimum system requirements:
Windows XP SP3, Windows 7 or 8, or
Microsoft .NET 4.0 Framework.
Price: Phantom Trader Premium,
$500/month; Phantom Trader Basic,
$149/month.
In
the fast-paced world of daytrad-
ing, prospective participants are
faced with a myriad of choices
as to what sort of methodology,
trading system, or advisory service to rely
on as they seek to extract intraday profits
in the stock, forex, and commodities mar-
kets. Some of the primary tools used are:
n Live chat rooms
n Mechanical trading systems
n Discretionary trading systems
n Charting package of technical
indicators
n Combinations of all of the above
resources and tools.
Figure 2: TREND MONITOR HEAT MAP. This feature depicts the strength/weakness of a variety of financial instruments on a wide range of time frames; here, the GBP/
CAD exhibits extremely bullish trending tendencies on its 240-minute (four-hour) time frame, listed as a strong buy. Currencies with deep red color cells have powerful bearish
trends in play, such as the NZD/CHF, which is listed as a strong sell as of November 29, 2013.
The right side The Phantom claims an 80% success components of this charting/trade signal/
I spoke with the real-life Phantom Trader rate with his live calls in the market live commentary software:
Steve Kalayjian by phone in November (across various intraday time frames) n Trading ideas, issued in real time, up
2013. He informed me that the algorithms and his accompanying text commentary. to 20 per trading day, including scalp,
used in Phantom Trader (PT) were de- All trades use entry, stop-loss, exit, and day, swing, and position trades alerts
veloped over the span of six and a half price targets — all of which are derived (Figure 1). John Kozey, a chartered
years and that the intended goal of the from the mathematical calculations of the market technician (CMT) and char-
software, which is to identify the right PT algorithms. Kalayjian also watches tered financial analyst (CFA), issues
side of the market for traders most of for correlations between the S&P 500 trade alerts in PT for those interested
the time, has been achieved with Phan- futures contract and the SPY in order in taking multiday trade setups in
tom Trader (PT). Kalayjian attributes a to help provide additional confirmation stocks or ETFs identified by PT as
trader’s success to the following three before issuing market calls. I asked being of interest
factors: him if a trader could conceivably use
the indicators as the basis for a stand- n Real-time audio/text market com-
1. Eighty percent of a trader’s suc- alone mechanical trading model and mentary and trade signals
cess depends on being on the right the answer was an unqualified yes;
side of a given market n Custom charts with specialized, fixed
after viewing numerous forex, stock,
(nonadjustable by the user) versions
ETF, and futures contract charts in PT,
2. Ten percent will depend on a of key technical indicators (moving
it is accurate to state that the KnowVera
trader’s discipline averages, stochastic, MACD, and
Research Trend Channel (at the bottom
DMI/ADX), plus the KnowVera Re-
3. Ten percent will depend on a of the PT charts) does possess a consistent
search Trend Channel indicator. Time
trader having self-confidence ability to identify the start of meaningful
frames on the charts are adjustable by
— the kind that comes from — and tradable — swing/trend moves
the user, ranging from a one-minute
consistently employing a proven on virtually any liquid stock, ETF,
to a yearly chart
methodology. commodity, or forex (FX) market and,
when used in conjunction with multiple n Trend Monitor Heat Map (Figure 2),
Kalayjian stated that market price time frame confirmation, appears to offer which is a unique tool that gauges
patterns repeat and that his ability to serious traders a significant edge in the the strength/weakness of a particular
visually identify such patterns gives him financial markets. market (green for bullish, orange for
a good idea of where prices in a given neutral, and red for bearish) but also
market may have a high probability of Key components provides a numerical, proprietary
heading; such experience, intuition, and Per the description on its homepage, PT “score” based on the underlying trad-
technical power is all put to use every day is an “integrated market commentary and ing algorithms powering the PT soft-
as PT users listen to him make live market proprietary charting tool.” After working ware. A stock in a green heat map box
calls. Markets covered with live audio/ with the program for more than three with a score ratio of 8:1 is a stock that
text trading signals and commentary weeks, I find that PT delivers on both of may be likely to experience a period
include: these features, and in an effective man- of sustained gains on the trading time
ner. Scott Mabry of KnowVera indicates frame being examined. Conversely, an
n ETFs: SPY, QQQ, SDS, DIA, IWM that PT is relied on by both institutional instrument in an orange heat map box
n Futures: The front-month emini and retail traders as a tool to identify with a score of 4:5 is most likely in
S&P 500 and emini NASDAQ 100 potential trading setups, market trends, trend transition, and is worth watching.
contracts. and chart patterns using the following A stock with a score of 1:9 in a red
Copyright © Technical Analysis Inc.
Stocks & Commodities V. 32:2 (48-51): Product review: Phantom Trader by Donald W. Pendergast Jr.
Figure 4: WEEKLY CHART. On this chart of the GBP/USD, all four indicators were already in bullish mode at the time of the long entry setup on its daily time frame. Using
a time frame three to five times the length of the trading time frame to confirm signals appears to be a very sound strategy.
Figure 5: DAILY CHART. A long-entry setup appears on the daily chart for the GBP/USD on November 21, 2013, followed by a low-risk pullback entry a few days later.
Note the agreement between all four Phantom Trader indicators.
Daily chart (Figure 5): 10-bar moving average, and then put regardless of whether they trade on a
Having verified that the weekly chart is on another half lot; assuming an entry one-minute or monthly time frame, or
in a confirmed uptrend, the following price of 1.61526 (the open on Novem- anywhere in between.
trade signal would have been an all-green ber 26, 2013), the total average entry
signal to go long the GBP/USD on the price for both positions was 1.61750. Follow the phantom
daily time frame: With the GBP/USD currently trading Phantom Trader offers traders a logically
at 1.63329 as this is being written on constructed, well-tested, highly focused
n The MACD made a bullish cross-
November 28, 2013, that equates to a set of charts, indicators, and algorithms
over on November 18, 2013
hypothetical open profit of $1,579 on that may help keep them on the right
n The DMI is positive one lot of the GBP/USD. side of the markets they trade, whether
n The Phantom Trend Channel they choose to follow the live Phantom
switched to bullish mode on The ADX (average directional index) Trader audio/text trade alerts and com-
November 21, 2013. component of the DMI indicator used mentary or instead choose to identify
in the daily and weekly charts for the attractive, low-risk trade setups on their
Here are the hypothetical open gains GBP/USD is rising on both time frames, own. Having worked with dozens of
based on two different long entry confirming the strong bullish trend forces trading/charting platforms since 1999, it
points: at work in this widely traded FX market; seems to me that Phantom Trader is the
there are small blue arrows (red in a first one to provide skilled traders with
1. Buy one lot (100,000 units in base downtrending market) underneath the a one-stop, no-nonsense trading solu-
currency) at close (5 pm ET) on No- last two daily price bars and also under tion that could meet the needs of even
vember 21, 2013 after a confirmed the current weekly bar, offering a quick the most demanding, highly capitalized
bullish crossover on the daily chart’s visual confirmation of a strengthening institutional trader as well as for the
KVRTC; current open profit is $1,356 (weakening) ADX. average retail trader.
in USD, using a hypothetical entry Once in this trade, the trader can
price of 1.61973. use the built-in stop-loss values (in the Donald W. Pendergast Jr. has written
KVRTC indicator window). Only time more than 1,200 articles for Traders.com
2. Buy a half lot (50,000 units in base will tell what the final outcome of this Advantage at www.traders.com since
currency) at the close (5 pm ET) on hypothetical long trade entry will be, October 2008 and is currently available
November 21, 2013, using the same but the odds favor those traders who for financial markets consulting and re-
bullish cross of the KVRTC; wait for primarily trade in the direction of an search assignments. He may be reached
a pullback (remember, strongly trend- instrument’s higher time frame trend — at puertoricool@yahoo.com.
ing markets may or may not pull back and who consistently make the effort to
to allow a better entry price after the do so. The PT algorithms and indicators
original breakout) toward the rising appear to be tailor made for such traders,
Copyright © Technical Analysis Inc.