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Review of ‘Alchemy of Trading’ at Trader’s Narrative

Review of ‘Alchemy of Trading’

Stephan Vita’s Alchemy of Trading has an openhouse and I thought I would check it out and write a review.

Alchemy was a free blog at one point but Stephan put up a subscription wall around it last year and began charging about $20 a month. He added some new content but mostly, the paid content is similar to his previously fee blog. You can also read some of the paid content on a delayed basis on his blog.

Alchemy is divided into several categories: Real Time Blog, Brainstorming, Real Time Portfolio Allocation, Sector Rankings, Gurus and Sentiment Models, Chart Laboratory, and more. The most interesting and educational is the Real Time Blog and Brainstorming where Stephen writes his thoughts and actual trades in (more or less) real time.

As I’ve already griped, Stephen insists on using his own lingo to describe market concepts leaving the novice scratching their heads. For example, the category The Professor’s Nags is devoted to potential short candidates (’nag’ is used for its meaning of an old, overworked horse). I supposed simply calling them Potential Shorts is way too simplistic.

alchemy of trading review.pngStephen is predominantly a break-out swing trader looking for relative strength and a positive technical picture to go long and the opposite to go short. For example, yesterday he went long UACL as it broke above resistance. But he usually takes small positons, preferring to leave a large ballast of cash. Right now he is 53% short (energy) and 14% long (transport/logistics) with 33% in cash. Stephen also provides information on the general market tone using internal indicators like advance/decline, COT, sentiment and the McClellan oscillator. And more recently he has come to rely heavily on Tom DeMark’s TD sequential buy/sell signals.

So is all that worth $240 a year? That depends.

With very little work anyone can pull together the same info found on Alchemy. All you need is a filter to find break out candidates, and to keep track of sectors, sentiment, and general market tone. But if you want it done for you because you don’t have the time or if you are starting to learn about trading and have no clue what you’re doing, then it might be worth it for a few months.

If you are new to trading, you should start out with some basic books on technical analysis because otherwise you’re not going to get the most out of sites like this one. But if you want to learn from websites, you should also check out similar sites like Minyanville. Like Alchemy it has a real time trading blog and lots of analysis but in some ways it is superior. For one, it is the product of a team of 30 traders, not one person. Two, eventhough it is a tad more expensive at $25/month, they offer a 2 week free trial.

In any case, take advantage of Stephen’s offer and check out Alchemy for the day.

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One Response to “Review of ‘Alchemy of Trading’”  

  1. 1 RDR

    I am a satisfied subscriber to Alchemy of Trading since Nov.2005. I feel that the information is worth the roughly $1 per trading day. I find that the information from other members on the message boards is useful. Mr. Vita subscribes to several costly market advisors and sends us synopses of more salient passages from their letters. True, he has been bearish for several months, and was a bit early. And my trading, which is in an IRA, does not allow shorting or some of his other techniques. I continue to try to maximize my use of free web sites like yours to assist me in my investing. Thank you for your efforts.
    I also subscribe to the weekend edition of the Investors Business Daily and altho it costs about the same as Alchemy of Trading, I get less useful info from IBD (especially since the market has tanked).

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