Dear Trader,

Thank you for asking! Yes there is. Trade-Ideas™ Backtest is a strategy-based backtesting tool rather than a symbol-based backtesting tool. This means you are testing how specific Trade-Ideas strategies will do in the current market environment.

As we all know, especially in light of recent events, the market can change rapidly, causing strategies which worked only a short time ago to be less than ideal today. For this reason, our backtesting tool goes back 15 days, giving you a current look at how your strategy would have done.

Brett Schulte
ScottradeELITE Product Specialist and Active Trader Services at Scottrade

Dear F.C.,

You are probably setting them up properly, but there a few things that might help you understand them a little better. When set up and used properly, ScottradeELITE price alerts can be a powerful tool for investors.

When setting up an alert in ScottradeELITE, be aware that in most cases you should use only one rule per alert. Many clients make the mistake of setting up multiple rules in an alert, only to find that the conditions for ALL rules must be satisfied before an alert is displayed.

Using the equals sign when setting up a rule can also cause issues. If you set an alert to trigger when the last equals a certain price, if that specific price is skipped, the alert will not trigger. It is much better to use the greater than or less than signs when creating price alerts.

I hope this helps clarify how the alerts work so you can take full advantage of them.

Brett Schulte
Active Trader Services & ScottradeELITE Product Specialist at Scottrade

Market capitalization, or market cap, is a measure of a company's size. It is calculated by multiplying a company's current stock price by the number of its outstanding or floating shares. A company with a current market value of $20 per share that has 100 million outstanding shares would have a market cap of $2 billion.

Companies of different sizes come with varying strengths and risks. What are known as large-cap companies, or those with a market value of at least $5 billion, are generally stable, well-established corporations that expose you to less risk in hard economic times.

Small-cap companies, or those with a market value of less than $1.5 billion, are generally considered to have greater growth potential. At the same time, their stock prices tend to be more volatile, as small-cap companies do not have the financial resources of larger companies.

Sharing characteristics of both large- and small-cap companies, mid-cap companies offer investors a balance between risk and stability. While they have some growth potential like small-cap companies, they are also less vulnerable to economic downturns.

Dear D.T.S.,

Volume is simply the number of shares or contracts that trade over a given period of time, usually a day. The higher the volume, the more active the security. Volume bars illustrate how many shares have traded per period and show trends in the same way that prices do. It is the basic, yet important, analysis of volume that provides investors with an element of technical analysis. Volume can provide valuable clues as to the intensity of a given price move. During consolidation periods low volume levels generally prevail.

Calculations - To determine the movement of the volume (up or down), chartists look at the volume bars that can usually be found at the bottom of any chart.

Volume is an important aspect of technical analysis because it is used to confirm trends and chart patterns. Any price movement up or down with relatively high volume is seen as a stronger, more relevant move than a similar move with weak volume. Therefore, if you are looking at a large price movement, you should also examine the volume to see whether it tells the same story.

The other use of volume is to confirm chart patterns. In most chart patterns, there are several pivotal points that are vital to what the chart is able to convey to chartists. Basically, if the volume is not there to confirm the pivotal moments of a chart pattern, the quality of the signal formed by the pattern is weakened.

Another important idea in technical analysis is that price is preceded by volume. Volume is closely monitored by technicians and chartists to form ideas on upcoming trend reversals. If volume is starting to decrease in an uptrend, it is usually a sign that the upward run is about to end.

I hope this information helps. You can find this, along with additional information, under the Help menu in ScottradeELITE.

Sincerely,
Paul Sieben
Active Trader Services & Product Specialist

Dear U.S.G.,

This is an excellent question because many people assume ScottradeELITE and other programs which rely on streaming data will always work flawlessly upon installation. However, this is not always the case. There are several things you will want to look at after you have installed ScottradeELITE.

First, how many programs do you currently have running concurrently with ScottradeELITE? Many people make the mistake of attempting to run numerous programs at the same time as ScottradeELITE. This is never a very good idea whether we are talking about ScottradeELITE or any other program you rely on to make trades. The more programs you have open, the more memory is taken up on your computer and the slower ScottradeELITE runs. This situation can lead to delays after clicking on buttons, including when you place a trade. The solution is to make sure you keep the number of other programs running on your computer to a minimum when using ScottradeELITE.

Second, are you using other streaming quotes platforms at the same time as ScottradeELITE? While it may seem like a good idea to use the trading platforms of several companies at once, it can definitely lead to several unintended and unwanted consequences. First, you may exceed the total amount of bandwidth your Internet service provider (ISP) offers to you. This could lead to delays in the data coming through to either ScottradeELITE or any other streaming platform you may be using. Second, particularly on heavy trading days, your computer may not have enough memory to handle the requests from two or more streaming quotes platforms. This is basically the first issue I described in the paragraph above.

Third, what type of Internet connection do you have? For the best ScottradeELITE performance, you should have a broadband (Cable, DSL) Internet connection. What many people do not know is that your ISP may offer several "tiers" of broadband Internet, with higher tiers costing more but providing you with faster upload and download speeds. In other words, you will have higher bandwidth. I encourage you to contact your ISP to see what tiers of service they have available.

Fourth, does your computer have a software firewall? Almost all Windows computers for sale today come pre-installed with a firewall, usually Norton® (made by Symantec®) or McAfee®. Typically, these firewalls will eventually block the streaming data sent and received by ScottradeELITE unless some initial work is done by you.

You will see an icon for your firewall in the lower right hand corner of your computer screen just to the left of the time. Hover your mouse over each icon until you see McAfee or Norton (or another firewall manufacturer - you may need to check with whomever you purchased the computer from). Once you have determined which firewall you have, contact the tech support group for that particular firewall and ask how to open Port 443 - the opening o

Dear E.F.,

NASDAQ Velocity and Forces is a unique, real-time tool that indicates changes in market direction based off of order flow, not executions. By combining the information displayed in the Forces and Velocity speedometers, you can detect surges in trading activity to help you fine tune your trading strategy.

Here is how it works. The Forces speedometer shows you the ratio of buy orders to sell orders. Once again, this is based on order flow and not actual executions. The higher the ratio on either the buy or sell side could indicate a shift in the trading direction for a particular stock.

The Velocity speedometer measures the momentum of order flow. The higher the percentage listed on the speedometer represents a faster, more intense rate at which orders are being received at the market site. The benchmark is 100% which represents the previous 21 day average order flow at that moment in time for a given stock.

Combining the information from the Forces and Velocity speedometers gives you the ability to detect potential shifts in a stock's price and make better trading decisions. To find out further information about NASDAQ Velocity and Forces, I encourage you to view the podcast on Scottrade.com. Alternatively, you can also view the video through the Scottrade Webcast link within ScottradeELITE's Help section.

Thanks for your feedback!

Sincerely,
Paul Sieben
Active Trader Services Specialist at Scottrade

Dear C.M.,

Yes! Scottrade hosts FREE ScottradeELITE User Summits across the country to help you learn more about ScottradeELITE and the markets in general.

The User Summits are on Saturday afternoons and include:

• An in-depth walkthrough of ScottradeELITE from our Director of Product Development
• A session about Trade-Ideas from our Manager of Active Trader Services
• A guest speaker usually from an exchange or other relevant organization

Below is the current ScottradeELITE User Summit schedule for 2008.

• Pittsburgh - June 7 - Westin Convention Center, Pittsburgh
• Boston - June 28 - Westin Copley Place, Boston
• San Diego - July 12 - Hyatt La Jolla
• New York - July 19 - Sheraton Hotel & Towers
• San Jose - August 16 - Hyatt Regency Santa Clara
• Chicago - September 13 - The Westin Chicago Northwest
• Atlanta - October 18 - Sheraton Atlanta
• Houston - November 15 - The Westin Oaks Hotel in Post Oak

If you would like to receive an e-mail invitation to any of the User Summits, please e-mail elitenewsletter@scottrade.com. Please include the events you are interested in and your e-mail address.

We look forward to seeing you at a ScottradeELITE User Summit!

Kristin McDougall
Customer Education Manager at Scottrade

Dear N.C.,

This is an excellent question. ScottradeELITE is Scottrade's most robust trading platform, and advanced layouts may tax some older computers. As a result, there are several things you should be looking for in a new computer if you want ScottradeELITE to perform smoothly:

1) Operating System (OS)
ScottradeELITE is a Windows-based platform and as such works best with one of the two latest Windows operating systems, Windows XP or Windows Vista. Each operating system comes in a variety of "flavors" such as Windows XP Pro or Vista Ultimate, but as long as you have some type of variant of one of these two operating systems, you will be fine. Please note ScottradeELITE will now work on the latest Intel-based Macintosh computers using Parallels or Boot Camp. I currently recommend Windows XP as the OS of choice.

2) Processor Speed (in GHz)
The second factor to look at when buying a computer is processor speed, or the "horsepower" of your computer. The larger your processor speed, expressed in gigahertz (GHz), the faster your computer can run a given program. It is also very useful to have a higher processor speed if you plan to run other programs at the same time as ScottradeELITE.

Currently, you can get an average new computer with a 1.8 GHz processor for a very reasonable price. ScottradeELITE users with multiple monitors and many windows open will probably want to look for a computer with a 2.4 GHz Dual Core or Quad-Core Processor. The higher the Front Side Bus (FSB) speed the better your computer will perform as well. FSB is usually reported immediately following the processor speed.

3) RAM (Random Access Memory, in MB or GB)
The third factor is memory, which is usually expressed in megabytes (MB) and gigabytes (GB). One thousand twenty-four megabytes (1024 MB) equals one gigabyte (1 GB). Currently, our minimum system requirements specify 256 MB (.25 GB) of RAM. For the best results, Windows XP users should be using around 1.5-2 GB of RAM, and Windows Vista users should have closer to 3 GB of RAM.

4) Internet Connection
The fourth, and in many ways most important factor, is your Internet connection. To optimize ELITE, you should be using a broadband Internet connection using Cable or DSL. There are often several levels of service an Internet service provider (ISP) will offer. I encourage you to contact your local ISP and see what kind of rates they offer for their fastest service. For instance, the local cable ISP here in St. Louis offers a 10 MBPS (megabyte per second) download speed as its top tier of service, which should be more than sufficient for all but the very largest of ScottradeELITE layouts.

Dear A.R.,

Many investors find order types, and especially Stop and Stop Limit orders, difficult to understand. I'll start with the definitions and then provide some specific examples to help clarify for you.

Stop Order

A Stop order is an order to buy or sell a security when its price surpasses a particular point, limiting your loss or locking your profit. Once the market price surpasses the predefined entry/exit point, the stop order becomes a market order, and is then handled as defined under the definition of a market order. This type of order is also referred to as a "stop-loss order". These types of orders may be placed with special instructions, like GTC (good until cancelled). Stops are not a definite guarantee of getting the desired entry/exit points. For instance, if a stock gaps down then your stop order will be triggered (or filled) at a price significantly lower than expected.

• Buy Stop Orders - The stop price is set above the current ASK price
• Sell Stop Orders - The stop price is set below the current BID price
• Depending on market conditions, once the order is triggered, there is no guarantee of the execution price and the price received may be several points away from the stop price.

As an example, we want to sell our position if the price of the stock drops to 30.25. Wait a minute! Lower than the prevailing market bid of 33.56? Yes! Because we won't actually trigger the stop order until GE trades lower to 30.25. Until that time we still own 10 shares of GE. A Stop Order is a protective order that limits our loss from the purchase price. Let's investigate.

After entering the symbol and the number of shares, select "Stop" from the Order Type drop down box. As soon as you select Stop, the Stop Price field will become accessible. It is important to note that for a sell order, the Stop price must be lower than the prevailing quote, which in this case a bid 33.82, so our Limit order of 30.25 is lower.

View Graphic

Dear C.G.,

The best way to get started with Trade-Ideas is to go to the Settings button on the main tool bar. This will open to the Strategies tab. Here you will see two folders: Preconfigured Strategies and Recent Strategies.

The Preconfigured Strategies are a great way to learn how strategies can be set up. If you highlight any of the strategies here, you will see the Alerts/Filters for that strategy to the right in the icon view. When you mouse over the icon, you will see the details for that particular Alert/Filter. If you left click on the icon, you will be taken to the help page for a detailed definition of the Alert/Filter. Right clicking on the icon will take you to the window where you can alter that Alert/Filter.

Once you feel you are ready to create your own strategy, double-click on Start from Scratch under the preconfigured strategies. Next, you will go through each tab and select the Alerts/Filters you want to use, exchanges or symbol lists you wish to follow, and you will be given the opportunity to name your new strategy. Your new strategy will now be under the Recent Strategies folder for you to come back to and use the next time you log in. All you will need to do is open the settings menu, expand the Recent Strategies folder and double click on the strategy that you have created.

As always, feel free to contact your local branch office for additional information.

Sincerely,
Todd Slawson
Active Trader Specialist - Scottrade