Robot Tracker

A leading indicator!
Robot Tracker plots the sentiment or the participation of program tradings involvement.
Setup for TradeStation symbol: $ESINX or any of the PREM (premium) type indices.

Program traders buy when the market is not at fair value. This provides us a fantastic divergence indication of a trend reversal!!

On average 30% of the trading on the NYSE is program trading. Estimates for 2008 range as high as an 80% proportion of all trades in some markets. Here computers make the decision to initiate orders based on information that is received electronically, before human traders are even aware of the information. Some program trading strategies are subject to regulatory restrictions. For instance, NYSE Rule 80A requires index arbitrage trades to be marked when submitted. index arbitrage accounts for about 9% of all program trading.

Examples:
1) My favorite use of the Robot Tracker is an event I call the Robot Stretch. I use it to identify when a strong reversal is about to occur. This event must be used when my other indicators are at an extreme over bought, over sold or high amplitude. When the distance between plots increase, I've noticed it's a very high probability trade.

2) After a big move down, if you see that the slope is moving up rapidly and price is moving sideways, expect a move up.

3) Side ways movement of price while Robot_Tracks is moving strongly in a direction, produces a lower risk trade.

4) The greater the amplitude the more likely price will change direction or to continue on it's present trajectory. Now this is a relative observation. I've added over sold/bought plots for those times that you notice the price is oscillating and respecting a threshold.

5) Divergence: If price moves down while Robot_Tracks is moving up, don't expect price to stay down for long. Price is likely to move up quickly.

Observations:
Works great on a 1 minute chart.
Because it's an oscillator, like all oscillators they don't work on strong trends. But it works fantastic for the trader who scalps or the swing trader to find the best entry.
Works from a little after the open to the close, but be careful of divergence in the morning and don't use it after 4:00pm eastern time.

List of TradeStation Premium Indices Symbols:
$ESINX : e-mini S&P 500 Premium Index
$NDIQX : NASDAQ 100 Premium Index
$NQIQX : e-mini NASDAQ 100 Premium Index
$DJDJI: Dow Jones Premium
$TFTOY: Mini Russell Premium
$SPINX: S&P Premium Index
$RLIUX : Russell 2000 Premium Index
$ER2IUX: e-mini Russell 2000 Premium Index

To learn more visit:
http://www.nyse.com/press/12_2009.html (News Release NYSE)
http://wapedia.mobi/en/Algorithmic_trading
http://en.wikipedia.org/wiki/Algorithmic_trading
http://www.investopedia.com/articles/trading/07/program_trading.asp
www.indexarb.com
www.programtrading.com

A video about how program trading affects the market (begin watching at 4:00 minutes):