1739511221,timestamp,2-5 stcov298leto3,d,"{""minimum-quantity"":""1"",""path"":""ch7j208"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:7 (8): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

PUTTING A STOP TO IT

Editor,

Very interesting article by David Garrard in the May 2011 S&C about the use of stops. Preservation of capital is an important element in any trade.

After reading the article, I had several points that did not seem to be covered:

1. Regarding Figure 2, how were the tight, medium and loose stops calculated? The author makes reference to “dynamic volatility and an evaluation of standard deviations” but there are no hints on how this number is calculated.

2. For the 14-day Atr, how does the author suggest applying this number to the stock price? Do I use a multiple of the Atr like 2 or 2.5? Do I simply calculate the 14-day Atr daily and apply it to each different closing price? Another way to look at it is, how frequently do I calculate and change the Atr?

Loved the article but the actual application is vague. Thank you for a fantastic publication.

Jeff"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-7-8-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-7-8-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-7-8-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" yanimrsibyjo,d,"{""minimum-quantity"":""1"",""path"":""faarfr2014"",""ysw-page-title"":""(Yet Another) Improved RSI by John F. Ehlers"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/thumbnail-21727.gif"",""height"":""360"",""width"":""272""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/yet-another-improved-rsi-by-john-f-ehlers-1.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/yet-another-improved-rsi-by-john-f-ehlers-2.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" 1scsuplmeof,d,"{""minimum-quantity"":""1"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""1-year S&C Subscription plus MetaStock (special offer)"",""caption-linebreaks"":""SUBSCRIBE TO STOCKS & COMMODITIES MAGAZINE AND GET METASTOCK TECHNICAL ANALYSIS SOFTWARE!

Trade smarter with the premier magazine for traders. Get one year of S&C -- 13 issues -- each featuring the latest and most relevant technical trading tips and techniques. You'll especially appreciate the annual Bonus Issue, which includes not only the Readers' Choice Awards, but also the annual Traders' Resource section focusing on technical analysis software. Plus, you'll receive a free 30-day subscription to MetaStock.

Subscribe today using a credit card and we'll include your choice of FREE trading service! One-year subscription + Bonus Issue -- 13 issues -- is only $89.99 (magazines shipped outside the US require additional postage as follows: Canada, US$15 per year, Europe, US$25.50 per year, all other countries US$39 per year) for subscribers over the Internet.

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Technical Analysis of STOCKS & COMMODITIES magazine has been published since 1982. Our content is the heart of an industry that revolves around trading profitably with computer technology. Indicators, trading systems, trading software, brokerages, and trading legends have all grown from the pages of S&C.

Get ready — we are opening the floodgates on our nearly thirty years of content. We are going to give every subscriber to S&C full access to more than 17,000 technical trading articles. Our premium S&C Archive, Traders Advantage, and Working-Money.com website sections will deliver what you need on most every computer and mobile operating system. Our timeless trading examples can give you an edge, but only if you become a subscriber!

A one year subscription includes:

S&C MAGAZINE The premier publication for traders. 13 Magazines printed each year and mailed to you. Interviews, Traders' Tips, Product Reviews, trading examples, trading systems, and new indicators.

DIGITAL EDITION The complete magazine as a PDF. Accessible anytime and anywhere. Mobile friendly across most every platform.

S&C ARCHIVES Nearly 33 years of content! Searchable and organized by year and month. The exact topic you're looking for a click away.

WORKING MONEY The information you need to invest successfully. Easy to understand, straight forward ideas on how to trade and invest your money.

TRADERS ADVANTAGE Ideas, insights, evaluations, tips and techniques that can help you trade smarter. Over 25 new articles added each month that cover stocks, futures, forex, etc. using every type of system and indicator available.

If you are renewing your current subscription, your payment will extend your current subscription."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/1-year-s-c-subscription-plus-metastock-special-offer-39.gif"",""height"":""173"",""width"":""162""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/1-year-s-c-subscription-plus-metastock-special-offer-40.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/1-year-s-c-subscription-plus-metastock-special-offer-41.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" 1scsuplstsof,d,"{""minimum-quantity"":""1"",""path"":""hotdeals"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""1-year S&C Subscription plus StockCharts.com (special offer)"",""caption-linebreaks"":""SUBSCRIBE TO STOCKS & COMMODITIES MAGAZINE AND GET ONE Month Access to StockCharts.com Extra. Real time data and amazing charting abilities worth $24.95.

Trade smarter with the premier magazine for traders. Get one year of S&C -- 13 issues -- each featuring the latest and most relevant technical trading tips and techniques. You'll especially appreciate the annual Bonus Issue, which includes not only the Readers' Choice Awards, but also the annual Traders' Resource section focusing on technical analysis software.

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Subscribe today using a credit card and we'll include your choice of FREE trading service! One-year subscription + Bonus Issue -- 13 issues -- is only $89.99 (magazines shipped outside the US require additional postage as follows: Canada, US$15 per year, Europe, US$25.50 per year, all other countries US$39 per year) for subscribers over the Internet.

Pay Now...Get access NOW!

Technical Analysis of STOCKS & COMMODITIES magazine has been published since 1982. Our content is the heart of an industry that revolves around trading profitably with computer technology. Indicators, trading systems, trading software, brokerages, and trading legends have all grown from the pages of S&C.

Get ready — we are opening the floodgates on our nearly thirty years of content. We are going to give every subscriber to S&C full access to more than 17,000 technical trading articles. Our premium S&C Archive, Traders Advantage, and Working-Money.com website sections will deliver what you need on most every computer and mobile operating system. Our timeless trading examples can give you an edge, but only if you become a subscriber!

A one year subscription includes:

S&C MAGAZINE The premier publication for traders. 13 Magazines printed each year and mailed to you. Interviews, Traders' Tips, Product Reviews, trading examples, trading systems, and new indicators.

DIGITAL EDITION The complete magazine as a PDF. Accessible anytime and anywhere. Mobile friendly across most every platform.

S&C ARCHIVES Nearly 33 years of content! Searchable and organized by year and month. The exact topic you're looking for a click away.

WORKING MONEY The information you need to invest successfully. Easy to understand, straight forward ideas on how to trade and invest your money.

TRADERS ADVANTAGE Ideas, insights, evaluations, tips and techniques that can help you trade smarter. Over 25 new articles added each month that cover stocks, futures, forex, etc. using every type of system and indicator available.

If you are renewing your current subscription, your payment will extend your current subscription."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/1-year-s-c-subscription-plus-stockcharts-com-special-offer-29.gif"",""height"":""72"",""width"":""75""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/1-year-s-c-subscription-plus-stockcharts-com-special-offer-30.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/1-year-s-c-subscription-plus-stockcharts-com-special-offer-31.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" 5yearscsubpl,d,"{""minimum-quantity"":""1"",""path"":""hotdeals"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""10 Classic Traders’ Tools (package)"",""caption-linebreaks"":""TEN CLASSIC TRADERS' TOOLS ARTICLES FROM THE S&C ONLINE STORE!

We call this package our Classic Traders' Tools set, and it covers the essentials from Bollinger Bands to candlestick charting. We have compiled these ten articles (in PDF article form) from the S&C store:



These classic articles will be yours by simply clicking the red \""download now\"" button after you've submitted your credit card payment information."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/10-classic-traders-tools-package-22.gif"",""height"":""287"",""width"":""214""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/10-classic-traders-tools-package-25.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/10-classic-traders-tools-package-26.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" 2007,d,"{""minimum-quantity"":""1"",""path"":""faarinsc"",""ysw-page-title"":""2007"",""imageFields"":{},""relations"":[]}" 2008,d,"{""minimum-quantity"":""1"",""path"":""faarinsc"",""ysw-page-title"":""2008"",""imageFields"":{},""relations"":[]}" 2009,d,"{""minimum-quantity"":""1"",""path"":""faarinsc"",""ysw-page-title"":""2009"",""imageFields"":{},""relations"":[]}" 2010,d,"{""minimum-quantity"":""1"",""path"":""faarinsc"",""ysw-page-title"":""2010"",""imageFields"":{},""relations"":[]}" 2011,d,"{""minimum-quantity"":""1"",""path"":""faarinsc"",""ysw-page-title"":""2011"",""imageFields"":{},""relations"":[]}" 2012,d,"{""minimum-quantity"":""1"",""path"":""faarinsc"",""ysw-page-title"":""2012"",""imageFields"":{},""relations"":[]}" 2013,d,"{""minimum-quantity"":""1"",""path"":""faarinsc"",""ysw-page-title"":""2013"",""imageFields"":{},""relations"":[]}" 2014,d,"{""minimum-quantity"":""1"",""path"":""faarinsc"",""ysw-page-title"":""2014"",""imageFields"":{},""relations"":[]}" 2015,d,"{""minimum-quantity"":""1"",""path"":""faarinsc"",""ysw-page-title"":""2015"",""imageFields"":{},""relations"":[]}" 2016,d,"{""minimum-quantity"":""1"",""path"":""faarinsc"",""ysw-page-title"":""2016"",""imageFields"":{},""relations"":[]}" 2017,d,"{""minimum-quantity"":""1"",""template"":""storetemplate."",""ysw-page-title"":""2017"",""imageFields"":{},""relations"":[]}" 20171,d,"{""minimum-quantity"":""1"",""path"":""faarinsc"",""ysw-page-title"":""2017"",""imageFields"":{},""relations"":[]}" 2018,d,"{""minimum-quantity"":""1"",""path"":""faarinsc"",""ysw-page-title"":""2018"",""imageFields"":{},""relations"":[]}" 2019,d,"{""minimum-quantity"":""1"",""path"":""faarinsc"",""ysw-page-title"":""2019"",""imageFields"":{},""relations"":[]}" 2020,d,"{""minimum-quantity"":""1"",""path"":""faarinsc"",""ysw-page-title"":""2020"",""imageFields"":{},""relations"":[]}" 2021,d,"{""minimum-quantity"":""1"",""path"":""faarinsc"",""ysw-page-title"":""2021"",""imageFields"":{},""relations"":[]}" 5scsuplstcos,d,"{""minimum-quantity"":""1"",""path"":""hotdeals"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""5-year S&C Subscription plus STOCKS & COMMODITIES Sweatshirt"",""caption-linebreaks"":""SUBSCRIBE TO STOCKS & COMMODITIES MAGAZINE AND GET A STOCKS & COMMODITIES SWEATSHIRT FROM THE S&C ONLINE STORE!

Trade smarter with the premier magazine for traders! Get 5 years' worth of S&C -- 60 monthly issues -- each featuring the latest and most relevant technical trading tips and techniques. You'll also receive the annual S&C Bonus Issue, which includes not only the Readers' Choice Awards, but also the annual Traders' Resource section focusing on technical analysis software. Plus, with this offer ONLY, you'll receive the most special sign of your trading prowess -- our STOCKS & COMMODITIES SWEATSHIRT (The Heavyweights(TM) by Hanes 50% Cotton/50% Polyester). No one will ever again doubt your word at a barbecue, company function, or seminar when you're wearing this sweatshirt! Sweatshirts are available in tan and light gray, adult sizes L and XL.

-- a $33.75 value ABSOLUTELY FREE upon payment.

If you are renewing your current subscription, your payment will extend your current subscription."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/5-year-s-c-subscription-plus-stocks-commodities-sweatshirt-21.gif"",""height"":""180"",""width"":""360""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/5-year-s-c-subscription-plus-stocks-commodities-sweatshirt-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/5-year-s-c-subscription-plus-stocks-commodities-sweatshirt-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" alqabykejda,d,"{""minimum-quantity"":""1"",""path"":""faarfr2014"",""ysw-page-title"":""Algo Q&A by Kevin J. Davey"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/thumbnail-21728.gif"",""height"":""360"",""width"":""272""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/algo-q-a-by-kevin-j-davey-1.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/algo-q-a-by-kevin-j-davey-2.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" arpa,d,"{""minimum-quantity"":""1"",""path"":""articles"",""template"":""storetemplate."",""ysw-page-title"":""Article Packages"",""imageFields"":{},""relations"":[{""name"":""contents"",""ids"":[""trarpap"",""tocroprabrpa"",""5yearscsubpl"",""bobaarpap"",""syve3seonst"",""1yearscsubpl4"",""faarinsc""]}]}" articles,d,"{""minimum-quantity"":""1"",""path"":""index"",""template"":""storetemplate."",""ysw-page-title"":""Articles"",""caption-linebreaks"":""GET THE VERY ARTICLE YOU WANT — AND NOTHING ELSE!

Want indicators but not oscillators? Interviews, but not product reviews? Whatever you’re looking for— articles about a specific trading technique or written by a certain author, for instance — now you can purchase them without buying a whole set. Browse our complete list of nearly 5,000 articles, adding the ones you want to your shopping cart. Download the product immediately after ordering.

*Note: These articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout click the \""Download Now\"" button to immediately receive your article(s) purchase.

\nEnter the topic you are looking for here:\nSearch for: "",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/articles-26.gif"",""height"":""105"",""width"":""77""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/articles-27.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/articles-28.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[{""name"":""contents"",""ids"":[""volume432025"",""volume422024"",""volume412023"",""volume402022"",""volume392021"",""volume382020"",""volume37"",""volume362018"",""volume352017"",""volume342016"",""volume332015"",""volume322014"",""volume31"",""volume30"",""volume292011"",""volume28"",""volume272009"",""volume26"",""volume252007"",""volume242006"",""volume2320051"",""volume24"",""volume212003"",""volume202002"",""volume192001"",""volume182000"",""volume17"",""articles-volume-16"",""articles-volume-15"",""articles-volume-14"",""articles-volume-13"",""articles-volume-12"",""articles-volume-11"",""articles-volume-10"",""articles-volume-9"",""articles-volume-8"",""articles-volume-7"",""articles-volume-6"",""articles-volume-5"",""articles-volume-4"",""articles-volume-3"",""articles-volume-2"",""articles-volume-1"",""arpa""]}]}" bobaarpap,d,"{""minimum-quantity"":""1"",""path"":""hotdeals"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Bollinger Bands Article Package (package)"",""caption-linebreaks"":""THREE CLASSIC JOHN BOLLINGER ARTICLES FROM THE S&C ONLINE STORE!

Master traders are the bread-and-butter of STOCKS & COMMODITIES magazine. Gathered here, in one easy-to-download package, are three past articles about or by JOHN BOLLINGER (in PDF article form) from the S&C Online Store. Bollinger himself explains the use of the trading envelopes named after him, and then sits for two interviews with S&C editors nine years apart.

You'll receive:\n
  • USING BOLLINGER BANDS, by John Bollinger
    • \n
  • JOHN BOLLINGER INTERVIEW (1993), by Thom Hartle
    • \n
  • JOHN BOLLINGER INTERVIEW (2002), by Jayanthi Gopalakrishnan


    • Bollinger Bands are one of the most powerful concepts available to the technically based investor, indicating whether prices are high or low on a relative basis. If you want to better understand technical analysis, this set of three articles will serve you well."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/bollinger-bands-article-package-package-22.gif"",""height"":""262"",""width"":""198""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/bollinger-bands-article-package-package-25.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/bollinger-bands-article-package-package-26.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" books,d,"{""minimum-quantity"":""1"",""path"":""index"",""template"":""storetemplate."",""ysw-page-title"":""Books"",""caption-linebreaks"":""Each representing a year’s worth of insight and tested trading techniques, these volumes are handy and durable references.

    New to S&C? You'll want to order one or more of these collections of articles.

    Subscriber for years? You'll appreciate the convenience of having all this information in a handy, well-indexed book. You'll never have to paw through a pile of old S&Cs again.

    Click here for more information on S&C Volume Books."",""imageFields"":{},""relations"":[{""name"":""contents"",""ids"":[""s-cba"",""vol17sc19boo"",""s-cbj"",""s-cbh"",""s-cbg"",""s-cbf"",""s-cbe"",""s-cbd"",""s-cbc"",""s-cb9"",""s-cb8"",""s-cb7"",""s-cb6"",""s-cb5"",""s-cb4"",""s-cb3"",""s-cb2"",""s-cb1""]}]}" buandbebainb,d,"{""minimum-quantity"":""1"",""path"":""ch10o20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Bull And Bear Balance Indicator by Vadim Gimelfarb"",""caption-linebreaks"":""Bull And Bear Balance Indicator by Vadim Gimelfarb

    This new indicator analyzes the balance between bullish and bearish sentiment.

    Every day at the stock exchanges, a battle is waged between the buyers (“bulls”), who are trying to push prices up, and the sellers (“bears”), who want to push prices down. The end of the day sees a higher or lower price compared to the day before, depending on who wins, while the intermediate results and the maximum and minimum prices show the course of the battle during the day. Since the shifting of power between the bulls and the bears is one of the first signs of a probable turn of trend, the task of estimating this balance has often drawn the attention of stock market analysts, who offer varying solutions.

    THE ELDER-RAY INDICATOR

    The most popular method of estimating this power struggle between the bulls and the bears is the Elder-ray indicator, which was developed and described by technician Alexander Elder."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/bull-and-bear-balance-indicator-by-vadim-gimelfarb-21.gif"",""height"":""255"",""width"":""198""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/bull-and-bear-balance-indicator-by-vadim-gimelfarb-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/bull-and-bear-balance-indicator-by-vadim-gimelfarb-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" ch13bis20,d,"{""minimum-quantity"":""1"",""path"":""volume28"",""template"":""storetemplate."",""ysw-page-title"":""Chaper 13 (Bonus Issue 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You can do this (or obtain it) on the Adobe web site at www.adobe.com.

    Go to the email confirming receipt of your recent order. Scan down the email to the line that reads: \""You can always find out the current status of your order by going to\"" and click on the link directly below.

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    With this package, we've compiled five PDF articles by and about J. Welles Wilder, the inventor of the relative strength index and average true mean -- among many others! Wilder was named one of the heroes of technical analysis in our 20th anniversary issue!

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  • THE RELATIVE STRENGTH INDEX, by J. Welles Wilder
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    This is the online place to buy the many products we publish especially for technical traders like you.

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    Subscribe today using a credit card and we'll include your choice of FREE trading software! One-year subscription + Bonus Issue -- 13 issues -- is only $89.99 (magazines shipped outside the US require additional postage as follows: Canada, US$15 per year, Europe, US$25.50 per year, all other countries US$39 per year) for subscribers over the Internet. The one-year subscription includes 12 regular monthly issues PLUS the annual Bonus Issue. Subscribers will also receive free trading software of their choice with a paid subscription. (NOTE: Use the \""comment\"" field during checkout to tell us which piece of software you would like to receive upon payment. View your choices at http://www.traders.com/Documentation/Subsoftware.html.)

    Pay Now...Get access NOW!

    Technical Analysis of STOCKS & COMMODITIES magazine has been published since 1982. Our content is the heart of an industry that revolves around trading profitably with computer technology. Indicators, trading systems, trading software, brokerages, and trading legends have all grown from the pages of S&C.

    Get ready — we are opening the floodgates on our nearly thirty years of content. We are going to give every subscriber to S&C full access to more than 14,000 technical trading articles. Our premium S&C Archive, Traders Advantage, and Working-Money.com website sections will deliver what you need on most every computer and mobile operating system. Our timeless trading examples can give you an edge, but only if you become a subscriber!

    A one year subscription includes:

    S&C MAGAZINE The premier publication for traders. 13 Magazines printed each year and mailed to you. Interviews, Traders' Tips, Product Reviews, trading examples, trading systems, and new indicators.

    DIGITAL EDITION The complete magazine as a PDF. Accessible anytime and anywhere. Mobile friendly across most every platform.

    S&C ARCHIVES Nearly 33 years of content! Searchable and organized by year and month. The exact topic you're looking for a click away.

    WORKING MONEY The information you need to invest successfully. Easy to understand, straight forward ideas on how to trade and invest your money.

    TRADERS ADVANTAGE Ideas, insights, evaluations, tips and techniques that can help you trade smarter. Over 25 new articles added each month that cover stocks, futures, forex, etc. using every type of system and indicator available.

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    Subscribe today using a credit card and we'll include your choice of FREE trading software! One-year subscription + Bonus Issue -- 13 issues -- is only $89.99 for subscribers over the Internet. The one-year subscription includes 12 regular monthly issues PLUS the annual Bonus Issue. Subscribers will also receive free trading software of their choice with a paid subscription. (NOTE: Use the \""comment\"" field during checkout to tell us which piece of software you would like to receive upon payment. View your choices at http://www.traders.com/Documentation/Subsoftware.html.)

    Pay Now...Get access NOW!

    Technical Analysis of STOCKS & COMMODITIES magazine has been published since 1982. Our content is the heart of an industry that revolves around trading profitably with computer technology. Indicators, trading systems, trading software, brokerages, and trading legends have all grown from the pages of S&C.

    Get ready — we are opening the floodgates on over thirty years of content. We are going to give every subscriber to S&C full access to more than 17,000 technical trading articles. Our premium S&C Archive, Traders Advantage, and Working-Money.com website sections will deliver what you need on most every computer and mobile operating system. Our timeless trading examples can give you an edge, but only if you become a subscriber!

    A one-year digital subscription includes:

    DIGITAL EDITION The complete magazine as a PDF. Accessible anytime and anywhere. Mobile friendly across most every platform.

    S&C ARCHIVES Over 30 years of content! Searchable and organized by year and month. The exact topic you're looking for a click away.

    WORKING MONEY The information you need to invest successfully. Easy to understand, straight forward ideas on how to trade and invest your money.

    TRADERS ADVANTAGE Ideas, insights, evaluations, tips and techniques that can help you trade smarter. Over 25 new articles added each month that cover stocks, futures, forex, etc. using every type of system and indicator available.

    If you are renewing your current subscription, your payment will extend your current subscription.

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    Technical Analysis of STOCKS & COMMODITIES magazine has been published since 1982. Our content is the heart of an industry that revolves around trading profitably with computer technology. Indicators, trading systems, trading software, brokerages, and trading legends have all grown from the pages of S&C.

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    A one year subscription includes:

    S&C MAGAZINE The premier publication for traders. 13 Magazines printed each year and mailed to you. Interviews, Traders' Tips, Product Reviews, trading examples, trading systems, and new indicators.

    DIGITAL EDITION The complete magazine as a PDF. Accessible anytime and anywhere. Mobile friendly across most every platform.

    S&C ARCHIVES Nearly 32 years of content! Searchable and organized by year and month. The exact topic you're looking for a click away.

    WORKING MONEY The information you need to invest successfully. Easy to understand, straight forward ideas on how to trade and invest your money.

    TRADERS ADVANTAGE Ideas, insights, evaluations, tips and techniques that can help you trade smarter. Over 25 new articles added each month that cover stocks, futures, forex, etc. using every type of system and indicator available.

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    Subscribe today using a credit card and we'll include your choice of FREE trading software! Two-year subscription + Bonus Issues -- 26 issues -- is only $149.99 for subscribers over the Internet. The two-year subscription includes 24 regular monthly issues PLUS the annual Bonus Issues. Subscribers will also receive free trading software of their choice with a paid subscription. (NOTE: Use the \""comment\"" field during checkout to tell us which piece of software you would like to receive upon payment. View your choices at http://www.traders.com/Documentation/Subsoftware.html.)

    Pay Now...Get access NOW!

    Technical Analysis of STOCKS & COMMODITIES magazine has been published since 1982. Our content is the heart of an industry that revolves around trading profitably with computer technology. Indicators, trading systems, trading software, brokerages, and trading legends have all grown from the pages of S&C.

    Get ready — we are opening the floodgates on over thirty years of content. We are going to give every subscriber to S&C full access to more than 17,000 technical trading articles. Our premium S&C Archive, Traders Advantage, and Working-Money.com website sections will deliver what you need on most every computer and mobile operating system. Our timeless trading examples can give you an edge, but only if you become a subscriber!

    A two-year digital subscription includes:

    DIGITAL EDITION The complete magazine as a PDF. Accessible anytime and anywhere. Mobile friendly across most every platform.

    S&C ARCHIVES Over 30 years of content! Searchable and organized by year and month. The exact topic you're looking for a click away.

    WORKING MONEY The information you need to invest successfully. Easy to understand, straight forward ideas on how to trade and invest your money.

    TRADERS ADVANTAGE Ideas, insights, evaluations, tips and techniques that can help you trade smarter. Over 25 new articles added each month that cover stocks, futures, forex, etc. using every type of system and indicator available.

    If you are renewing your current subscription, your payment will extend your current subscription.

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    Pay Now...Get access NOW!

    Technical Analysis of STOCKS & COMMODITIES magazine has been published since 1982. Our content is the heart of an industry that revolves around trading profitably with computer technology. Indicators, trading systems, trading software, brokerages, and trading legends have all grown from the pages of S&C.

    Get ready — we are opening the floodgates on our nearly thirty years of content. We are going to give every subscriber to S&C full access to more than 17,000 technical trading articles. Our premium S&C Archive, Traders Advantage, and Working-Money.com website sections will deliver what you need on most every computer and mobile operating system. Our timeless trading examples can give you an edge, but only if you become a subscriber!

    A one year subscription includes:

    S&C MAGAZINE The premier publication for traders. 13 Magazines printed each year and mailed to you. Interviews, Traders' Tips, Product Reviews, trading examples, trading systems, and new indicators.

    DIGITAL EDITION The complete magazine as a PDF. Accessible anytime and anywhere. Mobile friendly across most every platform.

    S&C ARCHIVES Nearly 32 years of content! Searchable and organized by year and month. The exact topic you're looking for a click away.

    WORKING MONEY The information you need to invest successfully. Easy to understand, straight forward ideas on how to trade and invest your money.

    TRADERS ADVANTAGE Ideas, insights, evaluations, tips and techniques that can help you trade smarter. Over 25 new articles added each month that cover stocks, futures, forex, etc. using every type of system and indicator available.

    If you are renewing your current subscription your payment will extend your current subscription. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/special-3-year-subscription-to-stocks-commodities-includes-digital-edition-22.gif"",""height"":""396"",""width"":""300""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/special-3-year-subscription-to-stocks-commodities-includes-digital-edition-25.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/special-3-year-subscription-to-stocks-commodities-includes-digital-edition-26.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" sp3sutostcod,d,"{""minimum-quantity"":""1"",""path"":""stcodiedsu"",""template"":""storetemplate."",""ysw-page-title"":""Special 3-year subscription to STOCKS & COMMODITIES Digital Edition *NO PRINTED DELIVERY*"",""caption-linebreaks"":""Technical Analysis of STOCKS & COMMODITIES, The Traders’ Magazine, has been the premier magazine in the field for many years. It’s a how-to guide for traders -- and traders-to-be -- who want to play the markets with a concrete game plan. Every issue of STOCKS & COMMODITIES provides the latest, most detailed information on technical trading strategies, charting patterns, indicators, and computerized trading methods.

    Subscribe today using a credit card and we'll include your choice of FREE trading software! Three-year subscription + Bonus Issues -- 39 issues -- is only $199.99 for subscribers over the Internet. The three-year subscription includes 36 regular monthly issues PLUS the annual Bonus Issues. Subscribers will also receive free trading software of their choice with a paid subscription. (NOTE: Use the \""comment\"" field during checkout to tell us which piece of software you would like to receive upon payment. View your choices at http://www.traders.com/Documentation/Subsoftware.html.)

    Pay Now...Get access NOW!

    Technical Analysis of STOCKS & COMMODITIES magazine has been published since 1982. Our content is the heart of an industry that revolves around trading profitably with computer technology. Indicators, trading systems, trading software, brokerages, and trading legends have all grown from the pages of S&C.

    Get ready — we are opening the floodgates on over thirty years of content. We are going to give every subscriber to S&C full access to more than 17,000 technical trading articles. Our premium S&C Archive, Traders Advantage, and Working-Money.com website sections will deliver what you need on most every computer and mobile operating system. Our timeless trading examples can give you an edge, but only if you become a subscriber!

    A three-year digital subscription includes:

    DIGITAL EDITION The complete magazine as a PDF. Accessible anytime and anywhere. Mobile friendly across most every platform.

    S&C ARCHIVES Over 30 years of content! Searchable and organized by year and month. The exact topic you're looking for a click away.

    WORKING MONEY The information you need to invest successfully. Easy to understand, straight forward ideas on how to trade and invest your money.

    TRADERS ADVANTAGE Ideas, insights, evaluations, tips and techniques that can help you trade smarter. Over 25 new articles added each month that cover stocks, futures, forex, etc. using every type of system and indicator available.

    If you are renewing your current subscription, your payment will extend your current subscription.

    The S&C Digital Edition has the exact same content as the print edition and can be accessed from the Subscribers’ Area at Traders.com."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/special-3-year-subscription-to-stocks-commodities-digital-edition-no-printed-delivery-23.gif"",""height"":""233"",""width"":""172""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/special-3-year-subscription-to-stocks-commodities-digital-edition-no-printed-delivery-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/special-3-year-subscription-to-stocks-commodities-digital-edition-no-printed-delivery-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" spec5yearsub1,d,"{""minimum-quantity"":""1"",""path"":""stoccommag"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Special 5-year subscription to STOCKS & COMMODITIES *Includes Digital Edition"",""caption-linebreaks"":""\n\n\n\n\n

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    5-YEAR SUBSCRIPTION TO STOCKS & COMMODITIES MAGAZINE

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    Technical Analysis of Stocks & Commodities magazine\nis the savvy trader’s guide to profiting in any market.

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    Every month, we provide serious traders with information on how\nto apply charting, numerical, and computer trading methods to trade\nstocks, bonds, mutual funds, options, forex and futures. We examine\nand explain both old and new trading methods, techniques and products,\nand bring the best to you every month. Whether you’re a beginner\nor a seasoned veteran, you’ll always find the information\nyou need to become a better trader.

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    S&C DIGITAL EDITION

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    The complete magazine as a PDF for you to download. Includes\nthe latest twelve issues, plus the most current Bonus Issue,\nas PDFs for you to either download or read directly in your\nbrowser. No more waiting for the mail to deliver your magazine!

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    WORKING MONEY

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    Working Money gives insight on how to minimize your losses\nand maximize your profits while investing for maximum growth.\nFull access to thousands of articles, with more added several\ntimes a month.

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    Don’t delay — order today to get the lowest per-issue\nrate possible for S&C magazine*, plus all of the online benefits\na subscription offers. You’ll also be eligible to receive\na copy of the book Charting The Stock Market: The Wyckoff Method absolutely\nfree (shipping to foreign addresses extra).

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    NOTE: Use the \""comment\"" field during checkout to tell us who should receive your gift subscription or which book you would like to receive.

    Pay Now...Get access NOW!

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    Get ready — we are opening the floodgates on over thirty years of content. We are going to give every subscriber to S&C full access to more than 17,000 technical trading articles. Our premium S&C Archive, Traders Advantage, and Working-Money.com website sections will deliver what you need on most every computer and mobile operating system. Our timeless trading examples can give you an edge, but only if you become a subscriber!

    A five-year digital subscription includes:

    DIGITAL EDITION The complete magazine as a PDF. Accessible anytime and anywhere. Mobile friendly across most every platform.

    S&C ARCHIVES Over 30 years of content! Searchable and organized by year and month. The exact topic you're looking for a click away.

    WORKING MONEY The information you need to invest successfully. Easy to understand, straight forward ideas on how to trade and invest your money.

    TRADERS ADVANTAGE Ideas, insights, evaluations, tips and techniques that can help you trade smarter. Over 25 new articles added each month that cover stocks, futures, forex, etc. using every type of system and indicator available.

    If you are renewing your current subscription, your payment will extend your current subscription.

    The S&C Digital Edition has the exact same content as the print edition and can be accessed from the Subscribers’ Area at Traders.com."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/special-5-year-subscription-to-stocks-commodities-digital-edition-no-printed-delivery-20.gif"",""height"":""233"",""width"":""172""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/special-5-year-subscription-to-stocks-commodities-digital-edition-no-printed-delivery-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/special-5-year-subscription-to-stocks-commodities-digital-edition-no-printed-delivery-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" specialoffers,d,"{""minimum-quantity"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Special Offers"",""imageFields"":{},""relations"":[{""name"":""contents"",""ids"":[""spec5yearsub1"",""stcodiedsu""]}]}" stcodiedsu,d,"{""minimum-quantity"":""1"",""path"":""stoccommag"",""template"":""storetemplate."",""ysw-page-title"":""STOCKS & COMMODITIES DIGITAL EDITION ONLY"",""caption-linebreaks"":""The STOCKS & COMMODITIES Digital Edition is a great option for subscribers who prefer the digital format or foreign readers who do not want to pay extra to have their magazines shipped overseas. The digital editions are in PDF format and are great for viewing the magazine on an iPad or other mobile media device.

    The S&C Digital Edition has the exact same content as the print edition and can be accessed from the Subscribers’ Area at Traders.com.

    Technical Analysis of STOCKS & COMMODITIES, The Traders’ Magazine, has been the premier magazine in the field for many years. It’s a how-to guide for traders -- and traders-to-be -- who want to play the markets with a concrete game plan. Every issue of STOCKS & COMMODITIES provides the latest, most detailed information on technical trading strategies, charting patterns, indicators, and computerized trading methods.

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    A subscription to STOCKS & COMMODITIES Magazine and Traders.com includes access to over 17,000 diverse articles on trading. You are purchasing the equivalent of a 40,000 page book AND 13 future issues for as little as $89.99 per year.

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    Package classifieds are included in our Tech Traders Newsletter emailed to over 290K subscribers around the middle of each month.

    Example newsletter:\nTech Traders' Newsletter example

    \nPackage classifieds also include a 88x31 button web ad shown on Traders.com domains for three months. Ads can be seen on the homepage of Traders.com right sidebar and throughout the domain.

    Package classifieds also gain extra exposure from their companies Traders' Resource listing by being highlighted in the Sponsors section on the sidebar of Traders.com and the lead generation pages of Traders.com.

    Sponsors section of Traders; Resource:\nSponsors section of Traders' Resource

    Sign up for Traders' Resource here:\nSign up for Traders' Resource

    Ad closing dates:\nEditorial calendar with closing dates

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    3 months of web button ad impressions on Traders.com

    3 ads in the Tech Traders Newsletter

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    Include links to your classified ad and button ad in the comments section of your order. Or email the materials to advert@traders.com. Classified material directions."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-magazine-classified-package-26.gif"",""height"":""280"",""width"":""213""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-magazine-classified-package-29.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-magazine-classified-package-30.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" sctshirt,d,"{""minimum-quantity"":""1"",""path"":""tshirts"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities Sweatshirt"",""caption-linebreaks"":""Sweatshirts that is.

    The Heavyweights(TM) by Hanes 50 Cotton/50 Polyester. Available in Large and X-Large and in the following colors: Tan and Light Gray.

    Price Includes shipping."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-sweatshirt-22.gif"",""height"":""449"",""width"":""899""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-sweatshirt-25.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-sweatshirt-26.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stoccommagts,d,"{""minimum-quantity"":""1"",""path"":""tshirts"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities T-Shirts"",""caption-linebreaks"":""T-shirts that is.

    T-shirts are 100% Heavyweight(TM) Cotton Tee. Available in Medium & Large and in the following colors: White, Bright Yellow and Light Blue.

    Price includes shipping."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-t-shirts-22.gif"",""height"":""443"",""width"":""799""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-t-shirts-25.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-t-shirts-26.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stoccomv1253,d,"{""minimum-quantity"":""1"",""path"":""articles-volume-12-chapter-12"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 12:12 (537-541): Letters To S&C"",""caption-linebreaks"":""LETTERS TO S&C

    DOUBLE EXPONENTIAL MOVING AVERAGES

    Editor,

    In \""Smoothing data with faster moving averages\""(January 1994 STOCKS & COMMODITIES), author Patrick\nMulloy refers to the steps used to calculate the 26-week one-parameter double exponential\nmoving averages (DEMA1). Figure 6 is titled \""Weekly NASDAQ, 26-week EMA and 26-week DEMA1\"" and\nits caption states the DEMA1 shows higher response to the changing prices than the single EMA.

    Actually, the principal reason for this greater responsiveness is that the plot for the EMA1 \""equivalent\""\nmoving average of 26 weeks is being compared to that of one about half that long. This is because the\nformula a = 2/(w+1) used for computing equivalent simple moving average periods for exponential\nsmoothing, while valid for EMA1, isn't valid for DEMA1. Over the range of useful values of a, for any\ngiven a, much more weight is given to the most recent price (C) for DEMA1 than for EMA1. Specifically,\nthe weight of the most recent price is a(2-a) for DEMA1. On the other hand, it is obvious that the weight\ngiven the most recent price for EMA1 is a. This means that, for a given a, the \""average age\"" of data in a\nDEMA1 lot is significantly less than one for EMA1. This, in turn, means that DEMA1's equivalent moving\naverage period is much shorter."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-12-12-537-541-letters-to-s-c-20.gif"",""height"":""261"",""width"":""204""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-12-12-537-541-letters-to-s-c-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-12-12-537-541-letters-to-s-c-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" v14246chaikm1,d,"{""minimum-quantity"":""1"",""path"":""chap8aug20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 18:8 (42-46): Catching DJIA Breakouts by Mark Vakkur, M.D."",""caption-linebreaks"":""Stocks & Commodities V. 18:8 (42-46): Catching DJIA Breakouts by Mark Vakkur, M.D.

    Buying breakouts in the Dow Jones Industrial Average works well — but there are caveats.

    If the trend is your friend, the simplest way to use\nthat idea is to buy only those markets that are\nbreaking out to new highs. But is this really a good strategy? As it turns out, at least for the Dow Jones Industrial Average (DJIA), breakouts are very useful in identifying periods of increased profitability. I studied breakouts on the DJIA from February 1988 to November 1998. If breakouts truly are useful, buying a breakout over this 11-year span should have led to a greater than average subsequent four-week and eight-week\nprofitability.

    Obviously, the DJIA has been in an extraordinary secular bull market since 1982; it may behave differently in a downtrend or a trading range. Many\nmarket players are now used to buying high and selling higher. I leave it to you to apply the concepts presented\nhere to your tradable of choice. That said, here’s how the DJIA performed following breakouts.

    SOME DEFINITIONS

    Using EasyLanguage, I created a function that tests to see:

    1. Is the high of this bar greater than the highest high of a given lookback period?

    2. If yes, is this the first time a new high was set during the lookback period?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-18-8-42-46-catching-djia-breakouts-by-mark-vakkur-m-d-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-18-8-42-46-catching-djia-breakouts-by-mark-vakkur-m-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-18-8-42-46-catching-djia-breakouts-by-mark-vakkur-m-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stoccomv2014,d,"{""minimum-quantity"":""1"",""path"":""december2002"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 20:11 (14-19): Letters to S&C"",""caption-linebreaks"":""Letters by Technical Analysis

    WAITING FOR THE FED

    Editor,

    Can you clarify a point\nin the article “Waiting\nFor The Fed” by David\nPenn, which was published\nin August 2002\nissue of STOCKS &\nCOMMODITIES? Does Mark Boucher’s\nsystem keep out of stocks if the T-bill\nrate is lower than the prior year? I got\nconfused in reading the description of\nthe system and the commentary.

    GLENN BERGEVIN via e-mail

    David Penn replies:\nThanks for writing. The monetary timing\nmodel I mentioned is a rate of change\nmodel. In other words, it doesn’t matter\nif the percentage change is up or down.\nIf the year-to-year change is greater\nthan 6%, suggests the model, then an\nexit signal is given. If the year-to-year\nchange is less than 6%, then an entry\nsignal is given.

    I think this is key. Boucher points out\nthe conventional wisdom that higher\nshort rates are bad for stocks. In my\narticle, I wanted to suggest that the\nproblem isn’t just higher or lower short\nrates, but the rate of change from year\nto year. Stocks, apparently, can thrive\nin both relatively higher and relatively\nlower short rates. But what appears to\nreally affect stocks badly is when short\nrates change dramatically from year to\nyear."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-20-11-14-19-letters-to-s-c-20.gif"",""height"":""266"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-20-11-14-19-letters-to-s-c-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-20-11-14-19-letters-to-s-c-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stoccomv2021,d,"{""minimum-quantity"":""1"",""path"":""chap2feb202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 20:2 (12-14): Letters to S&C"",""caption-linebreaks"":""INDICATOR FOR AGRICOMMODITIES

    Editor,\nCan you help me determine the right\nindicator to use on the CBOT corn, beans,\nmeal, and wheat markets? - MOHAMED ELSHAMY, via e-mail

    \nThere really is no “right” indicator to\nuse on the grain markets. However,\ngrains are seasonal, and we have published\narticles discussing strategies for\ntrading seasonals. Try using the search\nengine at our website, Traders.com, to\nsearch for articles on seasonals. You\ncould also try visiting the Chicago Board\nof Trade’s website at CBOT.com for\nideas on this topic.—Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-20-2-12-14-letters-to-s-c-21.gif"",""height"":""262"",""width"":""199""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-20-2-12-14-letters-to-s-c-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-20-2-12-14-letters-to-s-c-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stoccomv2081,d,"{""minimum-quantity"":""1"",""path"":""chap8aug202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 20:8 (12-16): Letters To S&C"",""caption-linebreaks"":""Letters To S&C

    Letters include comments and updates on the Trend Intensity Index, TRIX, the A/D Line, Elliott Waves and the center of gravity oscillator."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-20-8-12-16-letters-to-s-c-20.gif"",""height"":""266"",""width"":""201""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-20-8-12-16-letters-to-s-c-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-20-8-12-16-letters-to-s-c-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov216womo,d,"{""minimum-quantity"":""1"",""path"":""ch13bis"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:13 (65-69): Working Money: Bear Market Bottoms by David Penn"",""caption-linebreaks"":""Working Money: Bear Market Bottoms by David Penn

    Can history help us recognize the end of the bear market before it arrives?

    The rally in equities during October 2002 appeared like a land bird spotted by a sailor lost at sea. In some respects, given the depth of the decline in indexes such as the Standard & Poor’s 500 index since March 2002 (and before that, the decline since March 2000), it is\nalmost surprising that more commotion hasn’t been made out of the S&P 500’s 130-point, 17% rally, which began with the bottom of October 10, 2002. With the\ncurrent bear market beginning to rival historical bear markets in both length and severity, it is hard to blame those who buy stocks for feeling that enough is enough\n… it’s time for stocks to rally.

    Is “PO’d” an official stage — somewhere between anger and dejection — in the course of the typical bear market? There was a growing sense, as the markets\nbegan to move upward again in the second half of October, that investors had taken enough punishment — as if there were some not-so-benevolent god of the\nmarkets hurling down thunderbolts in the form of corporate crooks, war anxieties, terrorism, and depressed corporate earnings. Experienced traders, of course, would recognize this thinking as hope, pure and simple.

    But legions of still relatively green investors seem to believe that as long as they take their “punishment,” then the market will reward them with a return to the sort of historic overperformance that got investors so giddy about investing in the first place. This, unfortunately, sets up a sort of “Are we there yet?” watched-pot syndrome in the minds of average investors — a condition that, ironically, makes the market all the more prone to move lower before it moves higher."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-13-65-69-working-money-bear-market-bottoms-by-david-penn-21.gif"",""height"":""255"",""width"":""198""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-13-65-69-working-money-bear-market-bottoms-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-13-65-69-working-money-bear-market-bottoms-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov217trre,d,"{""minimum-quantity"":""1"",""path"":""ch13bis"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:13 (70-91): Traders’ Resource: Software by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Resource: Software by Technical Analysis, Inc.

    In this day and age, the choice of software with which to analyze and interact with the markets is rich, with different packages offering different capabilities, methodologies, and price ranges to fit every style of trader. Are you interested in a basic software package, but also find that you need to write custom indicator\nformulas? Are you interested in ranking, screening, and producing a list of candidates based on your favorite technical indicators? Or are you a daytrader, a position trader, or a professional trader? Are you looking for software to run from your hard drive, or do you prefer to\nrely on your Internet connection for interactive analysis?\nSoftware packages for each of these needs are all out there, but tracking them down can be a daunting task. To help STOCKS & COMMODITIES readers make the right choices for themselves, we surveyed the industry and collected the responses. The information is summarized here and reprinted in full at our website.\nIn this listing, resellers of software are also included, so software is not always listed by developer."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-13-70-91-traders-resource-software-by-technical-analysis-inc-21.gif"",""height"":""271"",""width"":""210""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-13-70-91-traders-resource-software-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-13-70-91-traders-resource-software-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov211inre,d,"{""minimum-quantity"":""1"",""path"":""ch2f20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:2 (120-121): Intermarket Review by David Penn"",""caption-linebreaks"":""Intermarket Review by David Penn

    THE NEW YORK STOCK EXCHANGE (NYSE)\nFINANCIAL INDEX ($NFA)

    The NYSE financial index consists of more\nthan 900 banks, brokerage houses, savings\nand loan institutions, insurance companies,\nand other financial corporations. Top financial\ninstitutions such as Citigroup Inc., American\nInternational Group, Morgan Stanley\nCorp., Bank of America, and Wells Fargo are\namong the index’s components. The index is\ndesigned to track the performance of the\nmajor and most widely traded financial stocks\nin the New York Stock Exchange."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-120-121-intermarket-review-by-david-penn-20.gif"",""height"":""266"",""width"":""201""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-120-121-intermarket-review-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-120-121-intermarket-review-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov211bofo,d,"{""minimum-quantity"":""1"",""path"":""ch2f20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:2 (122): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    • The Volatility Course by George A.Fontanills and Tom\nGentile

    • Daytrade Your Way To Financial Freedom by Sammy Chua

    • How Technical Analysis Works by Bruce M. Kamich

    • Trendwatching: Don’t Be Fooled By The Next\nInvestment Fad, Mania, Or Bubble by Ron Insana

    • Iceberg Risk: An Adventure In Portfolio Theory by Kent Osband

    • Absolute Returns: The Risk And Opportunities Of Hedge\nFund Investing by Alexander M. Ineichen

    • Personal Finance For Dummies by Eric Tyson"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-122-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""266"",""width"":""201""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-122-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-122-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov211leto,d,"{""minimum-quantity"":""1"",""path"":""ch2f20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:2 (14-22): Letters To S&C"",""caption-linebreaks"":""Letters to S&C

    HOW RELIABLE ARE CANDLESTICKS?

    Editor,\nFirst, I want to compliment\nyou on your excellent\nmagazine.\nNext, I would like to\npoint out some faults in\n“How Reliable Are Candlesticks?”,\nwhich appeared in the November 2002\nissue of STOCKS & COMMODITIES.\nIn the article, author Giovanni Maiani\nuses definitions of candlestick signals\nwithout validating how correct these\nsignals are. Remember, just because\ncandle signals are in a software package,\nthat does not necessarily make them\ncorrect..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-14-22-letters-to-s-c-20.gif"",""height"":""266"",""width"":""201""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-14-22-letters-to-s-c-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-14-22-letters-to-s-c-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov212zita,d,"{""minimum-quantity"":""1"",""path"":""ch2f20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:2 (24-32): Zigzag Targets by William Cringan"",""caption-linebreaks"":""Zigzag Targets by William Cringan

    Isolate large or small price moves to suit your\ntype of trading.

    The zigzag indicator presents major\nprice moves by connecting peaks\nand troughs with straight lines. By\ncontrolling the minimum that\nprices must reverse before a new\ntrend, or “zig,” is established, you can isolate\nprice moves, whether large or small, to suit your\ntrading. Further, the zigzag indicator is adaptable\nfor the type of trading you’re into, whether\ndaytrading or position trading; daytraders are\ninterested in quick, short moves, whereas position\ntraders are interested in larger moves over\nperiods of weeks or months."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-24-32-zigzag-targets-by-william-cringan-20.gif"",""height"":""266"",""width"":""201""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-24-32-zigzag-targets-by-william-cringan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-24-32-zigzag-targets-by-william-cringan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov212sica,d,"{""minimum-quantity"":""1"",""path"":""ch2f20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:2 (26): Sidebar: Calculating Of The Normalized Price Less EMA(40) Deviation by William Cringan"",""caption-linebreaks"":""Sidebar: Calculating Of The Normalized Price Less EMA(40) Deviation by William Cringan

    CALCULATION OF THE NORMALIZED\nPRICE LESS EMA(40) DEVIATION\nExponential (EMA)

    An exponential (or exponentially weighted)\nmoving average based on price is calculated\nby adding a percentage of today’s price and\none less the same percentage of the previous\ncalculated average value. Exponential moving\naverages place more weight on recent\nprices. This calculation is quicker and easier\nto generate on spreadsheets and code for\nprograms. Another benefit of this moving average\nis that it has similar smoothing characteristics\nto the arithmetic average, but it follows\nprice-turning events closer and recovers\nfrom changes in price trend quicker."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-26-sidebar-calculating-of-the-normalized-price-less-ema-40-deviation-by-william-cringan-20.gif"",""height"":""266"",""width"":""201""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-26-sidebar-calculating-of-the-normalized-price-less-ema-40-deviation-by-william-cringan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-26-sidebar-calculating-of-the-normalized-price-less-ema-40-deviation-by-william-cringan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov213adev,d,"{""minimum-quantity"":""1"",""path"":""ch2f20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:2 (34-39): Adam & Eve Double Bottoms by Thomas Bulkowski"",""caption-linebreaks"":""Adam & Eve Double Bottoms by Thomas Bulkowski

    Here’s the final part of a four-part\nseries discussing double bottoms.

    If you read my article\nin the January 2003\nSTOCKS & COMMODITIES\nabout the\nEve & Adam double\nbottom, you can\nguess that an Adam & Eve double\nbottom (AEDB) is its mirror image. If\nyou think I saved the best for last,\nthough, you would be wrong, as an\nAEDB’s performance falls between\nthe best-performing Eve & Eve pattern\nand the worst-performing Adam\n& Adam pattern."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-34-39-adam-eve-double-bottoms-by-thomas-bulkowski-20.gif"",""height"":""266"",""width"":""201""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-34-39-adam-eve-double-bottoms-by-thomas-bulkowski-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-34-39-adam-eve-double-bottoms-by-thomas-bulkowski-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov214fute,d,"{""minimum-quantity"":""1"",""path"":""ch2f20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:2 (40-46): Fundamentally Technical by Phil Doyle"",""caption-linebreaks"":""Fundamentally Technical by Phil Doyle

    Here’s how you can use both techniques to increase your\nreturns.

    The average buyside analyst spends endless\nhours poring over balance sheets and income\nstatements in much the same way that traders\nand technical analysts spend untold hours\nreviewing charts. Many technicians are quick\nto dismiss fundamental data as already taken\ninto account in price, while some fundamental analysts will\nscoff at the work of technicians as voodoo. I would be the last\nto suggest we set aside our beloved charts in favor of spreadsheets,\nbut results could be improved by incorporating a basic\nlevel of fundamental analysis into charting and trading."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-40-46-fundamentally-technical-by-phil-doyle-20.gif"",""height"":""266"",""width"":""201""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-40-46-fundamentally-technical-by-phil-doyle-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-40-46-fundamentally-technical-by-phil-doyle-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov214qaby,d,"{""minimum-quantity"":""1"",""path"":""ch2f20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:2 (48): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    EXIT STRATEGIES AND FAIR VALUE

    Two questions: A while back you had\nsome postings regarding some of your\n“seasoned traders” who were entering\nseveral hundred orders on the opening\neach day. Would I be correct in assuming\nthey use some sort of automated exit\nstrategy? They couldn’t possibly trade\ntheir positions individually, as you seem\nto do. How do they execute this?

    Second, someone posted something\nto the effect of holding onto a position\nwell after the opening because “…the\npremium [is] out of whack of fair value\n[and] …arbitrage will eventually pull\nthings back to fair value.” I thought\nthere was no fair value after the opening.\nOtherwise, it seems, you would be\nconstantly calculating and holding positions\nmuch longer than you seem to\nhold yours. I look foward to your comments.\nThanks — Mitchell Berkowitz"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-48-q-a-by-don-bright-20.gif"",""height"":""266"",""width"":""201""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-48-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-48-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov215exyo,d,"{""minimum-quantity"":""1"",""path"":""ch2f20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:2 (53-54): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    OPTION SPREADS

    I was told that to lower my risk in buying\ncalls or puts, I could spread them. What\ndoes this mean?

    To spread an option means to buy a\ncall or put and sell one simultaneously\nto hedge it, either in the same month (as\nwith vertical spreads) or different\nmonths (diagonal spreads). As an option\npurchaser, a trader has the right to\nbuy or sell the underlying instrument at\na specific price in the future, depending\non whether it’s a call or a put. Should the\nbuyer decide to exercise the option before\nexpiration, the seller is obliged to\ndeliver, or take delivery of, the underlying.\nWhen you both purchase an option\nand sell one, you accomplish several\nthings:..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-53-54-explore-your-options-by-tom-gentile-20.gif"",""height"":""266"",""width"":""201""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-53-54-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-53-54-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov216coof,d,"{""minimum-quantity"":""1"",""path"":""ch2f20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:2 (60-63): The Concept Of Equivalence by Giorgos Siligardos, Ph.D."",""caption-linebreaks"":""The Concept Of Equivalence by Giorgos Siligardos, Ph.D.

    Try this to avoid using two indicators that are equivalent.

    Let me present an objective, mathematical\nway to determine when two indicators are\nequivalent with respect to divergence.\nKnowing when two or more indicators are\nequivalent will allow you to watch only one\nof them for divergences, saving you time.\nFurther, by using appropriate functions, you can convert a\nnormalized (bounded) oscillator into a denormalized one and\npreserve its performance with respect to divergence. This lets\nyou create indicators as compositions of normalized and\nnonnormalized oscillators."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-60-63-the-concept-of-equivalence-by-giorgos-siligardos-ph-d-20.gif"",""height"":""266"",""width"":""201""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-60-63-the-concept-of-equivalence-by-giorgos-siligardos-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-60-63-the-concept-of-equivalence-by-giorgos-siligardos-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov216tran,d,"{""minimum-quantity"":""1"",""path"":""ch2f20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:2 (64-67): Trend And Volatility by Jesse Chen"",""caption-linebreaks"":""Trend And Volatility by Jesse Chen

    This combination can help you determine\nyour optimum spread strategy.

    In options trading, you\noften either become attached\nto a few spread\nstrategies or end up\ngambling on individual\ncalls or puts. Unfortunately,\nno real methodology can be\ndeveloped using either of these techniques.\nA steady and consistent trading\nincome can come about only when\nyou create a complete game plan for\ntrading options. One such game plan\nor methodology involves the combination\nof trend and volatility."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-64-67-trend-and-volatility-by-jesse-chen-20.gif"",""height"":""266"",""width"":""201""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-64-67-trend-and-volatility-by-jesse-chen-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-64-67-trend-and-volatility-by-jesse-chen-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov216ovad,d,"{""minimum-quantity"":""1"",""path"":""ch2f20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:2 (68-70): Overcoming Addictions by Adrienne Laris Toghraie, MNLP"",""caption-linebreaks"":""Overcoming Addictions by Adrienne Laris Toghraie, MNLP

    Addictions will turn your successful trading into a lost cause.\nWhat to do?

    Addictions play a major role in the lives of\nmany traders. With few exceptions, addictions\ninevitably lead to behaviors that can\ndestroy a trader’s professional and personal\nlife, break down hard-earned performance,\nand sabotage success.

    How can addictions create such ruin? As the need to satisfy\nan addiction grows, traders can be driven to the outer limits\nof normal behavior. When an addiction worms its way into\nthe center of an individual’s consciousness, it pushes the\nmost important things in life out to the periphery. Activities\nthat were once considered off limits may become normal if\nthe addict deems them necessary to support the addiction. At\nthe same time, activities that once supported success may\nbecome difficult to sustain as addiction-related activities compete for limited physical and emotional resources and\ntime."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-68-70-overcoming-addictions-by-adrienne-laris-toghraie-mnlp-20.gif"",""height"":""266"",""width"":""201""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-68-70-overcoming-addictions-by-adrienne-laris-toghraie-mnlp-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-68-70-overcoming-addictions-by-adrienne-laris-toghraie-mnlp-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov217wefo,d,"{""minimum-quantity"":""1"",""path"":""ch2f20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:2 (79): Websites For Traders: www.ChartWare.de by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Websites For Traders: www.ChartWare.de by Jayanthi Gopalakrishnan

    WWW.CHARTWARE.DE

    In my quest to identify websites\nfocused on technical analysis, I\nstumbled upon www.chartware.de.\nThis site, hosted in Germany, lets\nviewers read the site either in German\nor English. I assumed the site\nwould have a focus on European\nstocks, but was surprised to find\nstocks traded on the US exchanges\non the homepage’s streaming\nticker tape. You can see what the\nsite has to offer immediately by\ntaking a glance at the homepage.\nUsers can get quotes, analyze\ncharts, get an overall market view,\nget buy/sell ratings, and be a part\nof a trading community."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-79-websites-for-traders-www-chartware-de-by-jayanthi-gopalakrishnan-20.gif"",""height"":""266"",""width"":""201""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-79-websites-for-traders-www-chartware-de-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-79-websites-for-traders-www-chartware-de-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov218inal,d,"{""minimum-quantity"":""1"",""path"":""ch2f20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:2 (80-86): Interview: Alan Farley Of HARD Right Edge by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Interview: Alan Farley Of HARD Right Edge by Jayanthi Gopalakrishnan

    What are the big differences between swing trading and momentum\ntrading? Alan Farley can tell you. Farley is a private trader and the\npublisher of HARD Right Edge (www.HARDRightEdge.com), a comprehensive\nonline resource for trader education, technical analysis,\nand short-term trading techniques. He is the author of the McGraw-\nHill bestseller The Master Swing Trader and is a popular columnist\nfor The Street.com. Farley has been on the market scene for more than\na decade as a private investor, advisor, and author. He speaks and\nlectures on swing trading, including original strategies and tactics\nillustrated throughout HARD Right Edge.\nFarley has also been featured in Barron’s, SmartMoney, Active\nTrader, and Online Investor, among other publications. He consults\nregularly with industry leaders on issues facing today’s traders, and is a\nstrong voice for the Internet revolution changing the face of our modern\nmarkets. STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan\nspoke with Farley on November 21, 2002, via telephone."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-80-86-interview-alan-farley-of-hard-right-edge-by-jayanthi-gopalakrishnan-20.gif"",""height"":""266"",""width"":""201""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-80-86-interview-alan-farley-of-hard-right-edge-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-80-86-interview-alan-farley-of-hard-right-edge-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov218prre,d,"{""minimum-quantity"":""1"",""path"":""ch2f20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:2 (87-90): Product Review: eSignal 7.1 by Dennis D. Peterson"",""caption-linebreaks"":""Product Review: eSignal 7.1 by Dennis D. Peterson

    Product: Trading platform offering\nquotes, advanced charting,\nbacktesting, and formula-building.\nSystem requirements: Windows 98\n(or higher) or NT 4.0 (service pack 3\nrecommended); 233 MHz Pentium or\ncompatible; 128 MB RAM; 20 MB\navailable disk space; Internet\nconnection; Internet Explorer."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-87-90-product-review-esignal-7-1-by-dennis-d-peterson-20.gif"",""height"":""266"",""width"":""201""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-87-90-product-review-esignal-7-1-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-87-90-product-review-esignal-7-1-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov21939we,d,"{""minimum-quantity"":""1"",""path"":""ch2f20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:2 (91, 39): Websites For Traders: StockFetcher.com by David Penn"",""caption-linebreaks"":""Websites For Traders: StockFetcher.com by David Penn

    STOCKFETCHER.COM

    One of the fascinating things about the\ntechnology sector implosion has been\nthe movement by many technology\nproduct manufacturers to load more and\nmore features into and onto a given\nproduct. Thus, not only do we have\npersonal computers that surf the web,\nplay music, and edit digital video, but\nwe also have cell phones that take photographs\nand refrigerators with flatscreen\nLCD monitors."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-91-39-websites-for-traders-stockfetcher-com-by-david-penn-20.gif"",""height"":""266"",""width"":""201""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-91-39-websites-for-traders-stockfetcher-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-91-39-websites-for-traders-stockfetcher-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov219prre,d,"{""minimum-quantity"":""1"",""path"":""ch2f20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:2 (92-93): Product Review: Xspreads And OTO by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Product Review: Xspreads And OTO by Jayanthi Gopalakrishnan

    The equity markets are constantly\nadding new technology\nto make trading\neasier, but for some reason,\nthe options market has not kept up. Options traders often find it\ndifficult to place trades for some of the\nmore complex strategies such as spreads,\nstraddles, strangles, and butterflies.\nOptionsXpress has introduced some\nfeatures that simplify the trading of these\ncomplex strategies."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-92-93-product-review-xspreads-and-oto-by-jayanthi-gopalakrishnan-20.gif"",""height"":""266"",""width"":""201""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-92-93-product-review-xspreads-and-oto-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-92-93-product-review-xspreads-and-oto-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov21952tr,d,"{""minimum-quantity"":""1"",""path"":""ch2f20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:2 (94-109, 52): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    • TRADESTATION: Z-SCORE INDICATOR

    Veronique Valcu’s article “Z-Score Indicator” in this issue\nprovides a description and commentary on a new method of\ndisplaying directional change normalized in terms of standard\ndeviation. This indicator can be drawn on a TradeStation\nscreen by using the following function code, called ZScore:\nFunction: ZScore\ninputs:\nPrice( NumericSeries ),\nAvgLen( NumericSimple ) ;\nZScore = (Price - Average( Price, AvgLen ) )\n/ StandardDev( Price, AvgLen, 1 ) ;\nThis indicator has two inputs, “Price” and “AvgLen.” Price\ncan be the open, high, low, or close. AvgLen describes the\nlength of the sample considered in the standard deviation\ncalculation."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-94-109-52-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""266"",""width"":""201""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-94-109-52-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-2-94-109-52-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov211trti,d,"{""minimum-quantity"":""1"",""path"":""ch3m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:3 (100-109): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    • TRADESTATION:\nFIBONACCI RETRACEMENTS AND THE RSI

    Ingo Bucher’s article in this issue, “Fibonacci Retracements\nAnd The RSI,” describes the advantages of considering\nFibonacci retracement levels for use with the classic RSI\nindicator. Bucher reviews six charts, each displaying Fibonacci\nretracement levels for the RSI associated with each chart. The\nEasyLanguage code given here will allow you to automatically\nrecreate these charts for any security available in TradeStation.

    Bucher calculated his retracement levels by picking the\nRSI high and low for a given time window. In his examples,\nthese were generally six months to a year’s worth of data.\nOnce the high and low were picked, he calculated retracement\nlevels based on the well-known Fibonacci numbers (23.6%,\n38.2%, 50%, 61.8%)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-100-109-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""207""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-100-109-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-100-109-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov211leto1,d,"{""minimum-quantity"":""1"",""path"":""ch3m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:3 (12-15): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    KONDRATIEFF WAVE

    Editor,

    From the first issue of\nSTOCKS & COMMODITIES\nI picked up a year\nago to the most recent\nissue, I have never been\ndisappointed in the quality or content of\nyour publication.\nIn the September 2002 S&C was an\narticle on the Kondratieff wave by Tim\nElrod, which I found interesting. However,\nI noticed that the chart showing the\nwholesale prices in relation to the idealized\nlong wave was dated only till 2000.\nSince we’re now at the start of 2003, I\nwas wondering where I could find an upto-\ndate chart like the one in the article?\nIn addition, I am curious as to whether\nSTOCKS & COMMODITIES has ever or\nwill ever be running an article on the\ntechnical view of commodity price and\ninventory?

    ROBERT HERBST, via e-mail"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-12-15-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""207""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-12-15-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-12-15-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov211bofo1,d,"{""minimum-quantity"":""1"",""path"":""ch3m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:3 (130): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    - Building Winning Trading Systems\nWith TradeStation

    - Index Funds: Strategies For Investment Success

    - Good Advice For A Bad\nEconomy

    - The Grangaard Strategy: Invest\nRight During Retirement

    - How To Become A Successful Trader

    - The Business Valuation Book: Proven Strategies\nFor Measuring A Company’s Value

    - Quantum Investing"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-130-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""207""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-130-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-130-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov211cofi,d,"{""minimum-quantity"":""1"",""path"":""ch3m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:3 (16-21): Combining Fibonacci Retracements And The RSI by Ingo W. Bucher"",""caption-linebreaks"":""Combining Fibonacci Retracements And The RSI by Ingo W. Bucher

    Combining the two can help identify significant support and\nresistance levels.

    Many of you have used the relative strength\nindex (RSI) and Fibonacci retracement levels\nindependently, but have you ever considered\nanalyzing the behavior of Fibonacci\nretracement levels on the RSI? It may seem\nremote, but this technique could have some advantages over the commonly used 70–30 overboughtoversold\nlevel of the RSI. In addition, there is a great deal of\ninformation between the overbought and oversold levels that\ncould be exploited more effectively by combining traditional\ncharting and Fibonacci ratios. I’ll start by defining RSI.

    THE RELATIVE STRENGTH INDEX (RSI)

    The RSI compares the strength of price advances with respect\nto price declines over a specific time period. In 1978, J.\nWelles Wilder Jr. developed this indicator to overcome some\nof the inaccuracies of the simpler momentum oscillators. The\nterm “relative strength” can be slightly misleading, because\nthe indicator does not show the relationship between two\ndifferent securities. Instead, it measures the internal strength\nof one security. The calculation of the RSI is provided in\ndetail in the sidebar, “Relative strength index calculation.”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-16-21-combining-fibonacci-retracements-and-the-rsi-by-ingo-w-bucher-21.gif"",""height"":""267"",""width"":""207""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-16-21-combining-fibonacci-retracements-and-the-rsi-by-ingo-w-bucher-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-16-21-combining-fibonacci-retracements-and-the-rsi-by-ingo-w-bucher-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov211sire,d,"{""minimum-quantity"":""1"",""path"":""ch3m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:3 (18): Sidebar: Relative Strength Index (RSI) Calculation by Ingo W. Bucher"",""caption-linebreaks"":""Sidebar: Relative Strength Index (RSI) Calculation by Ingo W. Bucher

    RELATIVE STRENGTH INDEX (RSI)\nCALCULATION

    SIDEBAR FIGURE 1:\nCALCULATING 14-\nPERIOD RSI USING A\nSPREADSHEET"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-18-sidebar-relative-strength-index-rsi-calculation-by-ingo-w-bucher-21.gif"",""height"":""267"",""width"":""207""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-18-sidebar-relative-strength-index-rsi-calculation-by-ingo-w-bucher-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-18-sidebar-relative-strength-index-rsi-calculation-by-ingo-w-bucher-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov212daqq,d,"{""minimum-quantity"":""1"",""path"":""ch3m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:3 (24-31): Daytrading QQQ by Misha T. Sarkovich, Ph.D."",""caption-linebreaks"":""Daytrading QQQ by Misha T. Sarkovich, Ph.D.

    Looking at price history can help you become a more\nsuccessful trader.

    The QQQ is an exchange-traded fund\n(ETF), sometimes referred to as “cubes”\nor “Qs.” The QQQ is traded primarily\non the exchange floor of the American\nStock Exchange (AMEX) and represents a price index of Nasdaq 100’s largest stocks. In\nessence, the QQQ allows investors and traders to buy\nor sell shares in the collective stock performance of\nan entire stock portfolio as a single security. Other\ncommon exchange-traded funds are SPY and DIA,\nwhich are also referred to as “spiders” and “diamonds.”\nThese represent the price indexes of the\nStandard & Poor’s 500 index and the Dow Jones\nindustrials, respectively.

    THE BASICS

    QQQs, SPYs, and DIAs are ETFs that are unit investment\ntrustsÝ governed by the Investment Company\nAct of 1940, while iShares and Select Sector SPDRs\nare structured as open-end mutual funds or managed\ninvestment companies. ETFs must replicate the holdings\nof the underlying index. Subsequently, the ETFs\nare continuously created and redeemed by large\nfinancial institutions (that is, the authorized participants)\nin large block units of 50,000 shares to reflect\nthe actual buying and selling of ETF shares. In addition,\nETFs are held only in the book entry format,\nwithout any traditional stock certificates."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-24-31-daytrading-qqq-by-misha-t-sarkovich-ph-d-20.gif"",""height"":""267"",""width"":""207""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-24-31-daytrading-qqq-by-misha-t-sarkovich-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-24-31-daytrading-qqq-by-misha-t-sarkovich-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov212siad,d,"{""minimum-quantity"":""1"",""path"":""ch3m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:3 (28): Sidebar: Advantages Of Trading QQQ by Misha T. Sarkovich, Ph.D."",""caption-linebreaks"":""Sidebar: Advantages Of Trading QQQ by Misha T. Sarkovich, Ph.D.

    There are advantages to trading the QQQ:\n1 Large liquidity: There is no doubt the QQQ has\ncontinuously large average daily volume. It is one of\nthe most actively traded products on the market,\nparticularly at the American Stock Exchange (AMEX).\nProfessionals and hedge fund managers trade the\nQQQ through highly liquid electronic communication\nnetworks (ECNS). Sidebar Figure 1, which contains\ndaily volume data since January 2000, gives you an\nidea of the trading volume of the QQQ. The average\ndaily trading volume during the last two and a half\nyears has been approximately 60 million shares, with\nthe highest daily volume reaching a level of 219 million\nshares. It is easy to get your buy or sell limit orders\nfilled at the quoted bid and ask price, so getting in and\nout of QQQ positions is simple and fast."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-28-sidebar-advantages-of-trading-qqq-by-misha-t-sarkovich-ph-d-20.gif"",""height"":""267"",""width"":""207""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-28-sidebar-advantages-of-trading-qqq-by-misha-t-sarkovich-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-28-sidebar-advantages-of-trading-qqq-by-misha-t-sarkovich-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov213qaby,d,"{""minimum-quantity"":""1"",""path"":""ch3m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:3 (32-33): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    BULLETS

    Do you know where I could find more\ninformation about the “bullet” options\nstrategy involving married puts? Thank\nyou — Matt Bridier

    Married puts or “bullets” are simply\ncontracts entered into between a trader,\nhis firm, and another entity. Stock is\npurchased with an equivalent number of\nputs. The puts are exercised at the end of\nthe trading day, leaving the trading account\n“flat.” During the day, the trader\ncan trade with the long stock, and can sell\nit without marking the sale short. This\npractice varies from firm to firm, and is\ngenerally only available to proprietary\ntraders (due to margin rules and so on)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-32-33-q-a-by-don-bright-20.gif"",""height"":""267"",""width"":""207""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-32-33-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-32-33-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov213sctr,d,"{""minimum-quantity"":""1"",""path"":""ch3m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:3 (34-43): The Scoring Trade by Thomas Bulkowski"",""caption-linebreaks"":""The Scoring Trade by Thomas Bulkowski

    Here’s a scoring system for symmetrical\ntriangles that helps predict\nperformance.

    How do you make\nmoney in a bear market\nwithout selling\nshort? By picking\nwinners. How do\nyou gain the experience\nnecessary to pick winners? Good\nquestion. Someone once said you\nshould print a chart of your favorite\nstock each morning, stare at it for\neight hours every day, and then —\ntwo years later — trade the stock.\nThere is much truth in that: acquiring\nexperience has few shortcuts.

    I review 225 stocks daily, but it\ntakes just 15 minutes. As fast as the\ncomputer can load each chart, I’m ready\nto move on to the next one. I only stop\nif I see something interesting.\nOne of those interesting events\nwas a trade I made in WPS Resources\nCorp. (WPS) using my scoring system\nfor chart patterns."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-34-43-the-scoring-trade-by-thomas-bulkowski-21.gif"",""height"":""267"",""width"":""207""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-34-43-the-scoring-trade-by-thomas-bulkowski-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-34-43-the-scoring-trade-by-thomas-bulkowski-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov214exyo,d,"{""minimum-quantity"":""1"",""path"":""ch3m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:3 (44-45): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    OPTIONS SYMBOLS

    What do the various letters signify in an\noptions symbol? — Name Withheld

    The letters in an option symbol designate\nthe underlying instrument, whether it\nis a put or call, the expiration date, and the\nstrike of the contract. MSQAJ is a typical\nsymbol. It would be broken down like\nthis: MSQ (Microsoft Corp.), A (January\ncall), J (50 strike).\nEvery option symbol has a root symbol\none to three letters long for the underlying\nissue. Generally, the root symbol\nis the same as the stock symbol,\nunless the stock symbol is four or more\nletters. In the case of Texas Instruments\n(TXN), for example, the root symbol is\nsimply TXN."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-44-45-explore-your-options-by-tom-gentile-21.gif"",""height"":""267"",""width"":""207""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-44-45-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-44-45-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov215wefo,d,"{""minimum-quantity"":""1"",""path"":""ch3m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:3 (53): Websites For Traders: SelectSectors.com by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Websites For Traders: SelectSectors.com by Jayanthi Gopalakrishnan

    SELECTSECTORS.COM

    Analyzing the performance of various\nsectors has always been a useful tool in\nmarket analysis. There are different\nways to do this; SelectSectors.com looks\nat the various Fidelity Select sectors to\ndetermine performance. Why Fidelity\nsector funds? Because each portfolio\nrepresents a market sector, and a look at\ntheir performance will give you an idea\nof which sectors are showing strength\nand which are showing weakness.

    Links to various sections of Select\nSectors.com are displayed along the top\nof the homepage. There you will see\ndaily commentary on various sectors,\nwith an emphasis on the strongest-performing\none. You will also see the chart\nof a specific sector that is currently\nworth monitoring with respect to current\nmarket conditions. Very short commentaries\nof broader indexes or sectors,\nalong with general economic conditions,\nare also provided."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-53-websites-for-traders-selectsectors-com-by-jayanthi-gopalakrishnan-21.gif"",""height"":""267"",""width"":""207""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-53-websites-for-traders-selectsectors-com-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-53-websites-for-traders-selectsectors-com-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov215apex,d,"{""minimum-quantity"":""1"",""path"":""ch3m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:3 (58-63): Applying Expert Systems To Trading by Wolf von Ronik"",""caption-linebreaks"":""Applying Expert Systems To Trading by Wolf von Ronik

    Artificial intelligence was introduced 50-odd years ago to\nmodel the way humans learn and extrapolate from the\nknowledge they glean. How can the theory of expert systems,\none of the two current thoughts of artificial intelligence, be\napplied to trading?

    In a broad sense, artificial intelligence (AI) is an\nattempt to model human learning and decisionmaking.\nIn recent years AI techniques have\nbeen applied to a diverse number of activities,\nincluding trading. A number of trading software\npackages that traders can purchase today\nare based upon AI techniques.\nSince its introduction in the 1950s, artificial intelligence\nhas split into two camps — expert systems and neural\nnetworks. Although these two terms are often used interchangeably,\nthey are distinct in their approach to modeling\nhuman decision-making processes and, therefore, in their\napplicability to trading.

    WHAT ARE EXPERT SYSTEMS?

    In its simplest form, an expert system is essentially a collection\nof data and accompanying if-then rules configured into\nthe familiar decision tree (Figure 1). The decision tree begins\nwith a node containing a data statement, labeled D1. The\ninformation in D1 is subjected to a pair of rules, denoted R1\nand R2, in the following manner:\nIf the data in D1 fulfills the criteria of rule R1, then follow R1’s\naccompanying branch; if the data in D1 fulfills the criteria of R2,\nthen follow R2’s accompanying branch."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-58-63-applying-expert-systems-to-trading-by-wolf-von-ronik-20.gif"",""height"":""267"",""width"":""207""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-58-63-applying-expert-systems-to-trading-by-wolf-von-ronik-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-58-63-applying-expert-systems-to-trading-by-wolf-von-ronik-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov216chma,d,"{""minimum-quantity"":""1"",""path"":""ch3m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:3 (63): Charting The Market by David Penn"",""caption-linebreaks"":""Charting The Market by David Penn

    Here’s a sample FTSE 100 chart showing some news events\nin 2002 and accompanying market shifts. Coincidence?

    1. Germany establishes new “voluntary code” for corporate\ngovernance. German index of business confidence\nreaches 11-month high."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-63-charting-the-market-by-david-penn-20.gif"",""height"":""267"",""width"":""207""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-63-charting-the-market-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-63-charting-the-market-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov216hiri,d,"{""minimum-quantity"":""1"",""path"":""ch3m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:3 (68-70): Hidden Risks Of Debit Spread by Alex Mendoza"",""caption-linebreaks"":""Hidden Risks Of Debit Spread by Alex Mendoza

    Understand all your risks when you trade.\nStrategies that seem harmless could end up\ncosting you.

    Debit spreads are a favorite strategy\namong experienced options\ntraders who understand\nthe need to hedge risk, however\nstrong their directional\nconvictions. For example, if\nthe price of the underlying instrument\nrises, instead of profiting from a simple\ncall, you can hedge the risk of the total cost of the\noption by selling another call at a higher strike\nprice. This would lower the cost basis of your\ntrade. The tradeoff for the lower risk is that profits\nare limited to the difference between the strikes\nminus the initial debit.

    On the surface, common sense would lead you\nto believe that the risk in all debit spreads is limited\nto the debit of the trade. But the way assignment\ntakes place in American-style, cash-settled options\nis such that any short option position, even\nwithin the confines of a spread, will give the holder\nof the trade unlimited risk — even a position as\nseemingly harmless as a bull call spread."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-68-70-hidden-risks-of-debit-spread-by-alex-mendoza-21.gif"",""height"":""267"",""width"":""207""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-68-70-hidden-risks-of-debit-spread-by-alex-mendoza-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-68-70-hidden-risks-of-debit-spread-by-alex-mendoza-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov21779wo,d,"{""minimum-quantity"":""1"",""path"":""ch3m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:3 (72-75, 79): Working Money: 10 Challenges Facing A Market Rebound by Matt Blackman"",""caption-linebreaks"":""Working Money: 10 Challenges Facing A Market Rebound by Matt Blackman

    Can technical traders safely\nignore these 10 fundamental\nobstacles?

    Most traders agree that fundamental\ninvestors would be well advised to use charts to\nhelp make better decisions, especially\nin times of volatility. But\ncan traders afford to ignore the\nfundamental economic challenges\nfacing the markets?

    THE MARKET CANARY

    Many traders say there is a real and\nvisible disconnect between US financial\nmarkets and the economy.\nInterest rates are at historic lows,\nthe housing sector is flourishing,\nand consumer spending (which\naccounts for two-thirds of the US\neconomy) remains amazingly resilient.\nUntil recently, markets ignored\nthis positive news."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-72-75-79-working-money-10-challenges-facing-a-market-rebound-by-matt-blackman-20.gif"",""height"":""267"",""width"":""207""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-72-75-79-working-money-10-challenges-facing-a-market-rebound-by-matt-blackman-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-72-75-79-working-money-10-challenges-facing-a-market-rebound-by-matt-blackman-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov218inol,d,"{""minimum-quantity"":""1"",""path"":""ch3m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:3 (80-85): Interview: Oliver Velez Of Pristine.com by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Interview: Oliver Velez Of Pristine.com by Jayanthi Gopalakrishnan

    Oliver L. Velez is the chairman and cofounder of Pristine.com, a leading\nonline educational portal for active, self-directed traders. He is also the\nchief editor of the site’s flagship product, “The Pristine Day Trader.”\nA respected financial professional and a sought-after speaker with a\nsuccessful 14-year track record, Velez is recognized as one of the\npioneers in the daytrading industry.

    As a professional trader, Velez built a formidable reputation for his\ntrading skills. He established Pristine in September 1994 as an\neducational site, making stock recommendations, but also explaining\nwhen, how, and why to buy a stock. Today, 63,000 individuals in more\nthan 62 countries use Pristine’s services.

    Velez is widely known for his trading skills and specialized knowledge\nof technical analysis (that is, predicting price movement through chart\npatterns and market indicators). Velez has advised professional traders,\nmoney managers, mutual funds, and hedge funds, and is recognized as\nthe “professional’s professional.” With all that in mind, what does\nVelez think about the coming times for the markets?

    STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan conducted\nthis interview with Oliver Velez via telephone on December 31, 2002."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-80-85-interview-oliver-velez-of-pristine-com-by-jayanthi-gopalakrishnan-20.gif"",""height"":""267"",""width"":""207""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-80-85-interview-oliver-velez-of-pristine-com-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-80-85-interview-oliver-velez-of-pristine-com-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov218wefo,d,"{""minimum-quantity"":""1"",""path"":""ch3m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:3 (86-87): Websites For Traders: The-Privateer.com by David Penn"",""caption-linebreaks"":""Websites For Traders: The-Privateer.com by David Penn

    THE-PRIVATEER.COM

    If investing is a journey, then Bill Buckler\n— editor and publisher of the newsletter\nThe Privateer — is more than\nhappy to be your captain. As Buckler\nannounces in his on-site bio, “From The\nQuarterdeck,” there might be little in\nthe way of his background or résumé\nthat would make him appear a more\ncapable steward of investment themes\nthan those money managers who, in the\nmidst of a raging bear market, have\nsimply been losing clients’ money hand\nover fist. Bill Buckler is no high-paid\nmoney manager, no investment guru,\nno self-appointed market visionary. He\nis a newsletter writer, a man who, when\nit comes to economics, considers himself\n“entirely self-taught.”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-86-87-websites-for-traders-the-privateer-com-by-david-penn-20.gif"",""height"":""267"",""width"":""207""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-86-87-websites-for-traders-the-privateer-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-86-87-websites-for-traders-the-privateer-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov218prre1,d,"{""minimum-quantity"":""1"",""path"":""ch3m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:3 (88-91): Product Review: Profit Trader 7.0 by Barbara Star, Ph.D."",""caption-linebreaks"":""Product Review: Profit Trader 7.0 by Barbara Star, Ph.D.

    Anyone who has used momentum\nindicators or\nmoving averages to gauge\nprice turns knows only\ntoo well the uncertainties\ncaused by false signals, lagging crossovers,\nand whipsaws. But what if you\nknew that the momentum indicator was\nbottoming within the same time frame\nthat a cycle low was due? And what if\nyou knew the subsequent buy signal\nhad a 70% probability of being correct?\nWouldn’t that give you more confidence\nto enter the trade? Walter Bressert\nthinks it would, and he created\nProfitTrader with that in mind."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-88-91-product-review-profit-trader-7-0-by-barbara-star-ph-d-21.gif"",""height"":""267"",""width"":""207""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-88-91-product-review-profit-trader-7-0-by-barbara-star-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-88-91-product-review-profit-trader-7-0-by-barbara-star-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov219inre,d,"{""minimum-quantity"":""1"",""path"":""ch3m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:3 (92-93): Intermarket Review by David Penn"",""caption-linebreaks"":""Intermarket Review by David Penn

    - JAPANESE YEN

    - CANADIAN DOLLAR

    - BRITISH POUND

    - AUSTRALIAN DOLLAR"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-92-93-intermarket-review-by-david-penn-21.gif"",""height"":""267"",""width"":""207""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-92-93-intermarket-review-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-92-93-intermarket-review-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov219prre1,d,"{""minimum-quantity"":""1"",""path"":""ch3m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:3 (94-97): Product Review: Stock Watch Pro by David Penn"",""caption-linebreaks"":""Product Review: Stock Watch Pro by David Penn

    For all the attention given\nto the powerhouses of\nmarket analysis software\n— companies like\neSignal, Townsend Analytics, TradeStation, and Equis International\n— there are any number of\nsmaller outfits who do the same good\nwork in providing investors and traders\nwith the tools they need to confidently\nparticipate in the financial markets. Sure,\nmany of these smaller companies don’t\nsport the massive (and effective) marketing\nmachines of those companies that\nhave become almost household words\nwhen it comes to trading software. But\nthe absence of a high-powered public\nrelations team is hardly a hindrance to\nmaking good software, as Cron Technologies’\nStock Watch Pro makes plain."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-94-97-product-review-stock-watch-pro-by-david-penn-21.gif"",""height"":""267"",""width"":""207""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-94-97-product-review-stock-watch-pro-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-94-97-product-review-stock-watch-pro-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov219prre2,d,"{""minimum-quantity"":""1"",""path"":""ch3m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:3 (98-99): Product Review: XL Chart Pro by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Product Review: XL Chart Pro by Jayanthi Gopalakrishnan

    Although technical analysis\n–related Excel add-on\nproducts are plentiful,\nXLChart Pro has unique\ncharacteristics that many point & figure enthusiasts will find especially\nuseful. It’s a simple program\nwithout the bells and whistles typical of\nmost software packages, but the results\nare impressive. XLChart Pro is designed\nin Visual Basic, and it can produce as\nmany point and figure charts as your\nsystem will handle."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-98-99-product-review-xl-chart-pro-by-jayanthi-gopalakrishnan-20.gif"",""height"":""267"",""width"":""207""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-98-99-product-review-xl-chart-pro-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-3-98-99-product-review-xl-chart-pro-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov211leto3,d,"{""minimum-quantity"":""1"",""path"":""ch6j20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 21:6 (12-17): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    TRADERS’ TIPS ONLINE

    Editor,

    Is there a way I can get the Traders’ Tips\nfrom last month’s magazine online?\nSTEVE STOYKA, via e-mail

    Yes. Past Traders’ Tips can be viewed\nat our website at Traders.com. The current\nissue’s Traders’ Tips can be found\nat: http://www.traders.com/Documentation/\nFEEDbk_docs/TradersTips/\nTradersTips.html. (Alternatively, from\nour homepage at Traders.com, click on\nthe STOCKS & COMMODITIES magazine\nicon on the left, then scroll down to the\n“This month in S&C” section on the\nleft-hand side, and look for “Traders’\nTips.”) For Traders’ Tips published\nearlier, click on the “Back issues\narchive” located under the “This month\nin S&C” section, or use the search\nengine. To locate tips on specific topics,\nuse our site’s search engine.

    Other code presented in the articles\nin this magazine can be found at our\nwebsite in a subscriber-only area at\nhttp://technical.traders.com/sub/\nsublogin.asp. Login requires your last\nname and subscriber number.

    By the way, the Traders’ Tips topics\nthis month are the RSI along with implied\nvolume and volatility. —Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-6-12-17-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""263"",""width"":""204""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-6-12-17-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-21-6-12-17-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov221leto,d,"{""minimum-quantity"":""1"",""path"":""ch10o201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:10 (10-15): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 22:10 (10-15): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist.

    Address your correspondence to: Editor, STOCKS & COMMODITIES, 4757 California Ave. SW, Seattle, WA 98116-4499, or email to Editor@Traders.com. All letters become the property of Technical Analysis, Inc. Letter-writers must include their full name and address\nfor verification. Letters may be edited for length or clarity. The opinions expressed in this column do not necessarily represent those of the magazine.—Editor

    TRADERS’ TIPS

    Editor,

    I want to calculate a 13-day exponential moving average (EMA) of closing prices and apply a 21-day rate of change to it. I searched your website and found a\nreference to the Traders’ Tips column from the October 1994 issue of S&C (Traders’ Tips, Volume 12:10). Does this article give me the formula to do it?

    Traders’ Tips

    v 12:10 (441-442)

    This month’s Traders’ Tips all focus on the rate of change (ROC) indicator discussed in Bruce Faber’s article. The rate of change is a function already available in both SuperCharts and TradeStation. From within the Quickeditors of either program, you can create a new indicator.

    The performance of ROC can often be improved by smoothing. An example is given in CompuTrac SNAP. Also, Behold! and MetaStock’s System Tester can be used to measure the performance of the ROC indicator.\nThanks for your help.

    N. SIEGEL, via email"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-10-15-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-10-15-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-10-15-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov221prre,d,"{""minimum-quantity"":""1"",""path"":""ch10o201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:10 (108-109): Product Review: Wave59 RT by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 22:10 (108-109): Product Review: Wave59 RT by Jayanthi Gopalakrishnan

    Whenever I review new trading software, the first question I ask myself is, “How is it different?” With the\nplethora of indicators and charting tools already in the market, is there really room for more? Apparently there is.

    The conclusion I came to when I looked at Wave59.com is that there are plenty of new variables that can be incorporated into trading software.

    INSTALLATION AND DATA

    The installation was relatively painless. Once you log on with your username and password, you’ll need to specify the datafeed you will be using. Your choices\nfor real-time data include eSignal, IQFeed, and QCharts. MetaStock and ASCII end-of-day data are supported as well."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-108-109-product-review-wave59-rt-by-jayanthi-gopalakrishnan-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-108-109-product-review-wave59-rt-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-108-109-product-review-wave59-rt-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov221prre1,d,"{""minimum-quantity"":""1"",""path"":""ch10o201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:10 (110-112): Product Review: MarketAspects 1.3 by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 22:10 (110-112): Product Review: MarketAspects 1.3 by David Penn

    When I last looked at TradeSignals’ MarketAspects product, I referred to it as a “powerful, if not overwhelming, way to study, understand, and trade the markets.” In the year since that review, TradeSignals has improved upon its original MarketAspects software\n(now in version 1.3). But the software’s fundamental appeal as an easy-to-use real-time charting product\nwith all of the basic tools and a few fancy new ones has remained intact.

    In fact, some of the enhancements that are part of 1.3 are not fancy at all, and perhaps represent what some original MarketAspects users have been clamoring for ever since version 1 got up to speed. These enhancements include new printing functionality, alerts,\nfive new overlays, 12 new indicators, a tabbed workspace layout similar to the one in Figure 1 (through which different charts and quoteboards can be created\nand saved), the ability to save parameters for indicators, overlays, and studies, new keyboard shortcuts or hotkeys, and cosmetic (but worthwhile)\nchanges like displaying current symbol, time frame, and the high, low, close/last price, and change in the upper lefthand corner of each chart."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-110-112-product-review-marketaspects-1-3-by-david-penn-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-110-112-product-review-marketaspects-1-3-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-110-112-product-review-marketaspects-1-3-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov221bofo,d,"{""minimum-quantity"":""1"",""path"":""ch10o201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:10 (117): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 22:10 (117): Books For Traders by Technical Analysis, Inc.

    Analysing & Interpreting The Yield Curve (359 pages, $79.95 hardcover, 2004, ISBN 0470821256) by\nMoorad Choudhry, published by John Wiley\n& Sons. The yield curve is the defining indicator\nof the global debt capital markets, and understanding\nit is vital to the smooth running of the economy. All participants in the market, whether they are issuers of capital, investors, or banking intermediaries, have a need to estimate, interpret, and understand the yield curve. Fund managers who accurately predict the shape and direction of the curve will consistently outperform those who do not. This book offers an intuitive account of a technical subject, market approaches to enable evaluation of the current and expected shape of the curve, and an opportunity\nto understand the latest analytical techniques.\nIt is a clear account of the topic written by an experienced practitioner.

    Other books in this review are: Advanced Swing Trading: Strategies To Predict, Identify, And Trade Future Market Swings by John Crane; Currency Overlay by Neil Record; Minding The Corporate Checkbook: A Manager's Guide To Successful Business Investments by Steven R. Kursh; The Options Trader Handbook: Strategies And Trade Adjustments by George Jabbour and Philip Budwick; Uncertainty And Expectation: Strategies For The Trading Of Risk by Gerald Ashley."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-117-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-117-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-117-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov221trre1,d,"{""minimum-quantity"":""1"",""path"":""ch10o201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:10 (124-129): Traders’ Resource: Mutual Funds by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 22:10 (124-129): Traders’ Resource: Mutual Funds by Technical Analysis, Inc.

    When investing with mutual funds, the issue is cost of all kinds. Sales charges, turnover costs (trading costs), tax costs, management fees, marketing costs, and\ncash-holding costs all eat into your returns; then the compounding effect magnifies your losses. It’s critical to consider all of these costs when approaching\nmutual fund investing and do the appropriate research to make sure you are making the most of your investment. A family of low-cost, no-load funds that allows costless switching between funds can be very beneficial in the long run.

    After you’ve minimized costs, you can look at returns. The benchmarks for returns are usually index funds that mirror one of the market indices, such as the Standard & Poor’s 500. It’s a challenge for actively managed funds to beat the returns of the benchmarks, especially when you take into account the costs of active management, so consider these index funds in\nyour research.

    Finally, consider balancing your portfolio between bonds or money market funds and equity funds. A mix of bond funds and equity funds is best for all but the youngest investor. This portfolio diversification will help limit your risk while still allowing for respectable returns.

    This listing provides a sampling of the types of mutual\nfunds available and some of the costs associated with them. Some funds are listed with multiple versions (for example, AIM Advisor Flex A, AIM Advisor Flex B, AIM Advisor Flex C). These funds invest in the same issues but have different fee structures."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-124-129-traders-resource-mutual-funds-by-technical-analysis-inc-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-124-129-traders-resource-mutual-funds-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-124-129-traders-resource-mutual-funds-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov22111at,d,"{""minimum-quantity"":""1"",""path"":""ch10o201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:10 (130, 118): At The Close by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 22:10 (130, 118): At The Close by Jayanthi Gopalakrishnan

    How did the markets open today? For the last four\nmonths, I’ve been watching market movements in\nthe e-minis. After all, they are a popular trading\ninstrument, and one that provides the opportunity\nto make a few points in a trading day. This, along with my strong belief that you should only trade a market that you understand, piqued my interest in paper-trading them. Let me walk you through a trading day.

    I’ve set a few guidelines I intend to follow. The first thing I look at before trading anything is the daily chart of the Standard & Poor’s 500 index, since it closely resembles the movement in the e-minis. As you can see from Figure 1, the S&P 500 is currently trading below its 50-day moving average. In addition, prices have broken below a critical support level at 1080.\nThis could mean a further decline in prices to levels lower than seen on this chart. With this negative sentiment, I am not even going to open a long position to make a trade. All charts point to a downwardtrading\nmarket, which means great opportunities in shorting."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-130-118-at-the-close-by-jayanthi-gopalakrishnan-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-130-118-at-the-close-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-130-118-at-the-close-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov221mami,d,"{""minimum-quantity"":""1"",""path"":""ch10o201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:10 (16-20): Maximizing The Mini by Mike Paulenoff"",""caption-linebreaks"":""Stocks & Commodities V. 22:10 (16-20): Maximizing The Mini by Mike Paulenoff

    Here’s a look at a successful short-term trade on the e-mini contract.

    One morning in June, with the Standard & Poor’s 500 riding a nearly four week uptrend, a friend of mine decided to bet the market would decline. Rather than short the cash index through funds or exchangetraded\nfunds (ETFs) that track the S&P 500, Tom decided to trade the index futures, where he has far more margin power and where nearly round-the-clock trading enables him to buy before the cash market opens. His early morning price on the S&P futures was 1143 or, as it turned out, 41/2 points higher than the S&P 500’s\nopening price.

    Rather than the regular S&P index futures contract, Tom bought the e-mini S&P contract, which is one-fifth the contract size and requires far less money down on margin. A single regular S&P contract, which is valued at $250 per point (or about $275,000 on a price of 1,100), requires about $20,000 in margin ($5,000 if you’re not holding overnight). An e-mini contract, valued\nat $50 per point, requires about $4,000 if held overnight, and far less if daytrading. You can daytrade up to 49 e-mini contracts for $500 on Global Futures Exchange, though the added leverage, of course, increases risk.

    Now, Tom decided to short 10 June e-mini S&P contracts, and at the same time entered an intraday protective stop on his e-mini position to limit his loss in case his analysis and entry proved ill-timed. By evening, with the June e-mini S&P contract down to 1128.50 (nearly 3 points below the cash index’s close), Tom was able to cover his short at more than 14 points. That’s 14 times $50 per point times 10 contracts\n… or $7,000. Nice bit of change."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-16-20-maximizing-the-mini-by-mike-paulenoff-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-16-20-maximizing-the-mini-by-mike-paulenoff-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-16-20-maximizing-the-mini-by-mike-paulenoff-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov222taof,d,"{""minimum-quantity"":""1"",""path"":""ch10o201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:10 (22-27): A Tale Of Two Indicators by Andrew Tomlinson"",""caption-linebreaks"":""Stocks & Commodities V. 22:10 (22-27): A Tale Of Two Indicators by Andrew Tomlinson

    What do you do when two apparently similar indicators give opposite signals?

    On July 6, 2004, I was feeling pretty pleased with myself. The stock market was falling and my short positions were making money for the first time in a couple of months (hey, stay on one side of the market for long enough and you’re sure to be right sooner or later). One of my short positions, Micromuse (MUSE), gapped down 20% at the open on a revised outlook.\nWhen I checked the market later in the day (I trade from\nhome, so the first day after a long weekend is an orgy of\ngrocery shopping and ferrying the kids here and there — you get the picture — so being glued to the broker’s screen is not really an option), I saw that the stock had traded down another 18% before starting to swing up again. No reason for swift action, I decided (my experience as a non–daytrader is that I lose money if I make snap judgment calls during the trading day). I chose to wait for my day’s-end review before planning\nmy next steps.

    WHAT I FOUND

    That evening, I opened up MetaStock and started to go\nthrough my positions. When I got to MUSE, I saw that the price had ended up pretty much where it started, showing a big initial gap down and then a spike reversal (one of those falling-window-doji-hammery-things for candlestick aficionados) on heavy volume.

    The surprise came when I looked at my volume indicators. I typically use Chaikin money flow† (CMF), using a nine-day period instead of the 21-day default since I like the greater sensitivity. But I’ve also recently been testing out a couple of other volume indicators, having just finished reading the book Bollinger On Bollinger Bands, which spends some time on the indicator’s use in confirming entry signals. So I also\nhad a 10-day money flow index (MFI) up on my screen."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-22-27-a-tale-of-two-indicators-by-andrew-tomlinson-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-22-27-a-tale-of-two-indicators-by-andrew-tomlinson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-22-27-a-tale-of-two-indicators-by-andrew-tomlinson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov222fian,d,"{""minimum-quantity"":""1"",""path"":""ch10o201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:10 (28-34): Fibonacci And Gann Projections by Dennis D. Peterson"",""caption-linebreaks"":""Stocks & Commodities V. 22:10 (28-34): Fibonacci And Gann Projections by Dennis D. Peterson

    It’s time to have a little fun and see what a day-at-a-time\nreplay can reveal in terms of future projections.

    In 2002, I wrote an article in Working Money about using Fibonacci projections. Since then, the charting techniques in eSignal have improved considerably and with the generous help of eSignal’s Jason Keck, I decided to revisit the topic. Along the way, I thought, why not throw in couple of other goodies, like Gann’s square of nine and a retracement readout? The Fibonacci projections used here were first described by technician Robert Miner, who proposed this system in his article “A Spreadsheet For Time Ratio Analysis” in the December 1992 STOCKS & COMMODITIES.

    THE OBJECTIVE

    The system I will describe attempts to predict future turning points — that is, pivot peaks or valleys. It finds these turning points by applying Fibonacci ratios to the most recent swings. When it comes to trading, it’s helpful to rely on a system, since it removes emotion from trading.

    But it wouldn’t be wise of you to rely on a system that has not been backtested. The challenge when backtesting this particular system comes when the most recent swing depends on the point in time (peak or valley) where you start the backtesting. In a typical price chart, each point will have a unique set of projections, and in order to keep track of them,\nyou need to have a unique identifier for each. But visually, this would be confusing. Ideally, you need to choose a point in time in the past, march forward one bar at a time, and watch how the actual swing points either hit or miss a projected swing point. This is made possible by eSignal’s “Replay” function."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-28-34-fibonacci-and-gann-projections-by-dennis-d-peterson-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-28-34-fibonacci-and-gann-projections-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-28-34-fibonacci-and-gann-projections-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov224bran,d,"{""minimum-quantity"":""1"",""path"":""ch10o201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:10 (42-46): Breakeven Analysis For Daytrading by Roberto Chahin"",""caption-linebreaks"":""Stocks & Commodities V. 22:10 (42-46): Breakeven Analysis For Daytrading by Roberto Chahin

    When you’re creating a business plan, you’ve got to make sure you can break even, or better yet, make a profit. That goes for the business of daytrading, too.

    Serious daytrading is a full-time business; it is not something that can be taken lightly. It is especially dangerous to try to daytrade while you are working at another job. Think about it: You’re in between meetings or phone calls, and you’re simultaneously trying to follow a market depth window or a time & sales screen. Your job will cause you to become distracted and prevent you from focusing on your trading, which will result in poor performance in both. Trading on an intraday basis requires your full attention, concentration, and commitment. If you decide to take up\ndaytrading as a full-time business, it’s important to treat it like any other business.

    THE BREAKEVEN POINT

    Your first step should be to draft a plan that will delineate your goals, strategies, and expected results. An important part of any business plan is the analysis of the breakeven point. In a retail business, the breakeven point is the value or number of sales needed to cover the overhead expenses and the cost of\ngoods sold. For such businesses, you must determine the breakeven point by calculating the gross profit margin per unit (GPM), which is the difference between the sale price and the cost of each unit. Then you must take the overhead figure and divide it by the GPM to determine how many units you would have to sell in order to cover your fixed overhead costs for a specific period of time. This is not difficult, since retail businesses know the price and cost of the units they\nsell. But in the business of daytrading, calculating the\nbreakeven point is more difficult because of the probabilistic nature of the markets.

    You can estimate the number of trades that is required in a certain period by first determining the average expected profit per trade:

    E =W(NMPR – CN) – (NPR + CN)(1 – W)"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-42-46-breakeven-analysis-for-daytrading-by-roberto-chahin-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-42-46-breakeven-analysis-for-daytrading-by-roberto-chahin-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-42-46-breakeven-analysis-for-daytrading-by-roberto-chahin-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov224qaby,d,"{""minimum-quantity"":""1"",""path"":""ch10o201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:10 (47): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 22:10 (47): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions\nwill appear in a future issue of S&C.

    ARBITRAGE AND VWAP

    For arbitrage (as with Bank One and JPMorgan Chase), you have said to use the “ratio” and “spread number” as a reference. What is the ratio? Is that the price difference ratio, or the spread ratio? Second, regarding VWAP (volume-weighted average price), suppose the\nprice is $30, and the VWAP is $30.20. Does that mean the price is below the average-volume price?

    The ratio refers to the number of shares in one stock that it takes to equal 100 shares of the other. In this case, the ratio is 1.32 of JPM to 1.00 of ONE. To trade it,\nyou would buy/sell 1,300 shares of JPM, and sell/buy 1,000 shares of ONE.

    Volume-weighted average price is simply that. To calculate VWAP, multiply the price by the number of shares for each trade. Add the results for all the trades and divide that by the number of shares traded. This will give you the VWAP number. The current price is either higher or lower than VWAP. VWAP is used by brokers and customers to give them a standardized price at which to buy/sell stock to each other that day."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-47-q-a-by-don-bright-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-47-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-47-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov225riin,d,"{""minimum-quantity"":""1"",""path"":""ch10o201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:10 (52-55): Risk/Reward In Trading by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 22:10 (52-55): Risk/Reward In Trading by Don Bright

    Every investor and trader has been taught to be fearful of risk in the marketplace. That makes sense, right? You have to be cautious with your money, right? You have to limit losses, right? Well, maybe not.

    As in most other things, risk in the marketplace comes\nwith a counterpart: reward. These rewards can be financial, physical, mental, or even emotional. We all risk so many things every day, from the moment we get out of bed in the morning, head to work in traffic, engage our peers in conversation, and otherwise negotiate our way through day-to-day life. Even matters of the heart involve risk and reward; how many people are too afraid of rejection to pursue a satisfying relationship? For now, though, let’s just take a look at risk and reward in the investment and trading world.

    APPLYING STOP-LOSSES

    So many of my learned peers support the theory of tight stop-loss methods when investing or trading. This seems to make perfect sense on the surface, but look a bit deeper. If you buy 100 shares of stock at $50, and hope to get an annual return on investment (ROI)\nof 12%, the stock would have to rise by $6 annually (assuming there were no dividends paid). To protect\nyourself from ruin, you can enter an initial stop-loss sell order to trigger at a predetermined price. How much should you limit your loss? How does this individual stock movement affect your overall portfolio?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-52-55-risk-reward-in-trading-by-don-bright-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-52-55-risk-reward-in-trading-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-52-55-risk-reward-in-trading-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov225exyo,d,"{""minimum-quantity"":""1"",""path"":""ch10o201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:10 (56): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 22:10 (56): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    INTEREST RATE INDEXES

    The five-year note index (FVX), the 10-year note index (TNX), and the 30-year bond index (TYX) are vehicles to trade options on interest rates. My question is, what are the corresponding bond price indexes, and are they optionable? Thank you, Tom — your monthly “Explore\nYour Options” page is always riveting. — Fiorenzo Primavori

    The five-year note index ($FVX), the 10-year note index ($TNX), and the 30-year bond index ($TYX) are vehicles\nsome traders use to monitor and profit from changes in interest rates. The indexes actually represent the current rates on various government bonds multiplied\nby 10. Thus, the 10-year note index reflects the current rate on the benchmark 10-year Treasury note, multiplied by a factor of 10. If the yield on the 10-year note is 4%, the TNX will equal 40. Similarly, the 30-year bond index tracks the yield on the 30-year Treasury bond, and the five-year note index is the yield on the five-year note, times 10."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-56-explore-your-options-by-tom-gentile-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-56-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-56-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov225chma,d,"{""minimum-quantity"":""1"",""path"":""ch10o201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:10 (58-61): Charting The Market by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 22:10 (58-61): Charting The Market by David Penn

    Writing in Commodities Magazine back in 1980, technical analyst Donald Lambert observed that:

    Many commodities exhibit some type of cyclical or seasonal price pattern. But the commodity trade still faces the problem of detecting when the regular price movements begin and end because climate and other real world conditions may affect their timing.\nTo be useful in cyclical markets, an index must examine current prices in light of past prices but must not allow data from the distant past to confuse present patterns …\nThe comparison of current prices to moving averages solves one problem by providing a moving reference point. But it leaves another problem for the trader: While some commodities typically move only a few cents each day, daily moves in others might be hundreds of cents. Rather than develop separate rules to determine each commodity’s fluctuations, some standardization technique had to be found.

    It was the commodity channel index, or CCI, that turned out to be the object of Donald Lambert’s quest. Now a technical indicator found on virtually all technical analysis charting software packages, the CCI was developed during the height of commodity speculation in 1980. Originally intended for use with cycle analysis, the CCI has survived and prospered as a tool for technicians and chartists, whether or not they are\ndeploying the indicator for the purpose of following cycles."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-58-61-charting-the-market-by-david-penn-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-58-61-charting-the-market-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-58-61-charting-the-market-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov226sifo,d,"{""minimum-quantity"":""1"",""path"":""ch10o201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:10 (61): Sidebar: Four steps to calculate Lambert’s commodity channel index"",""caption-linebreaks"":""Stocks & Commodities V. 22:10 (61): Sidebar: Four steps to calculate Lambert’s commodity channel index

    Formulas are provided for the following four steps that calculate Lambert's commodity channel index.

    1. Compute today’s “typical” price, using high, low,\nand close:

    2. Compute a moving average of the N most recent\ntypical prices:

    3. Compute the mean deviation of the N most\nrecent typical prices:

    4. Compute the commodity channel index:"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-61-sidebar-four-steps-to-calculate-lambert-s-commodity-channel-index-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-61-sidebar-four-steps-to-calculate-lambert-s-commodity-channel-index-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-61-sidebar-four-steps-to-calculate-lambert-s-commodity-channel-index-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov226inle,d,"{""minimum-quantity"":""1"",""path"":""ch10o201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:10 (62-67): Interview: Leo Zamansky Of RINA Systems by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 22:10 (62-67): Interview: Leo Zamansky Of RINA Systems by Jayanthi Gopalakrishnan

    RINA Systems founder Leo Zamansky has more than 20 years of experience in managing large software development projects, creating modeling and optimization technology. He is a professional developer\nwith experience in applying mathematics and computer expertise to a range of applications. Much of his work has been in the field of quantitative analysis and operations research, and further, he has published a book and numerous articles in the fields of operations\nresearch, discrete optimization, and financial analysis. Currently, he is also a principal of Seven Hills Capital Management, LLC.

    STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed him via email on August 2, 2004.

    How did you get started in technical analysis?

    Before I got involved with financial technology, I performed research work in optimization and modeling, and I became interested in financial markets. Then I met trader David Stendahl when he was looking for somebody with a math and software background to help him develop trading models and systems. We started to collaborate on add-on products for TradeStation, and after a while, we realized trading performance analysis should include not only basic statistics about the past, but also characteristics\nthat show how likely it is that trading performance will do better than the underlying market in the future. About\nthat time, I also studied and experimented with nonlinear modeling and optimization for determining asset allocation, also called rebalancing."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-62-67-interview-leo-zamansky-of-rina-systems-by-jayanthi-gopalakrishnan-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-62-67-interview-leo-zamansky-of-rina-systems-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-62-67-interview-leo-zamansky-of-rina-systems-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov227inre,d,"{""minimum-quantity"":""1"",""path"":""ch10o201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:10 (72-73): Intermarket Review by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 22:10 (72-73): Intermarket Review by David Penn

    HOLDRS, or Holding Company Depositary Receipts, are exchange-traded products created by Merrill Lynch & Co. that allow individual investors and institutions to own a basket of common stocks from companies within a specific industry or market sector. Unlike other\nexchange-traded products, HOLDRS investors have ownership rights to the underlying stocks in a given HOLDR should they choose to exercise them (a process called “canceling”). The component stocks of individual HOLDRS are selected based on market capitalization, liquidity, price/earnings ratio, and other factors. Component stocks may be equally weighted in a given HOLDR, or weighted based on market capitalization.

    OIL SERVICE HOLDRS

    The Oil Service HOLDRS (OIH) are designed to provide investors with exposure to companies involved in the drilling, production, and refinement of petroleum products. OIH components include Baker Hughes,\nHalliburton, Global Santa Fe, Transocean Sedco Forex, and Schlumberger Ltd.

    The OIH emerged from a volatile, but overall bullish, market in 2003 to set major new highs in the summer of 2004 as energy prices surged. Breaking out over its 20-week simple moving average in the fourth quarter of 2003, OIH corrected into the second quarter of the year but found support on its 50-week simple moving average. It was the rally from this support that has allowed the OIH to perform so well into 2004, when other markets were failing."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-72-73-intermarket-review-by-david-penn-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-72-73-intermarket-review-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-72-73-intermarket-review-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov227itai,d,"{""minimum-quantity"":""1"",""path"":""ch10o201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:10 (78-80): It Ain’t Over Till. . . Well, You Know by Adrienne Laris Toghraie"",""caption-linebreaks"":""Stocks & Commodities V. 22:10 (78-80): It Ain’t Over Till. . . Well, You Know by Adrienne Laris Toghraie

    Are you looking for a way to revive your passion for trading after a long, hot, summer? A visit to the ballpark before baseball season is over may do the trick.

    Baseball may be the greatest of all summer pastimes, and it may also be the perfect metaphor for trading. If you want to have a long and successful trading career, you can learn valuable lessons by following baseball. Here are some lessons I’ve learned about the game that can help you become a better trader.

    EVERY MOVE COUNTS

    Like trading, every pitch and every swing of the bat can mean the difference between winning and losing. To start with, all eyes are fixed on the pitcher as he focuses on propelling that baseball across the plate at 90 miles an hour. Just as suddenly, all eyes focus on the batter who has to make a split-second decision on whether to hit the ball. No one on either team can afford to get distracted. Games can be won or lost on a single catch or error.

    Major league players are baseball’s equivalent to master traders; there are so few of them compared to the tens of thousands of young men who are trying to break into the “show.” Only a few, whether ballplayers or traders, have the combination of natural talent and dedication to make it to the top. What makes the difference between those who make it and those who don’t?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-78-80-it-ain-t-over-till-well-you-know-by-adrienne-laris-toghraie-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-78-80-it-ain-t-over-till-well-you-know-by-adrienne-laris-toghraie-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-78-80-it-ain-t-over-till-well-you-know-by-adrienne-laris-toghraie-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov228wefo,d,"{""minimum-quantity"":""1"",""path"":""ch10o201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:10 (81): Websites For Traders: FuturesExaminer.com by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 22:10 (81): Websites For Traders: FuturesExaminer.com by Jayanthi Gopalakrishnan

    FUTURESEXAMINER.COM

    “What’s the best trading system out there?” Many of you have called the editorial staff at STOCKS & COMMODITIES to ask this question, but unfortunately,\nthere is no right answer. It’s an individual thing: It all depends on what you trade and what you consider to be good. And given the plethora of trading systems out there, it’s really difficult, if not impossible, for me to come up with a definitive answer. For starters, I haven’t\ntried every single trading system out there, and to make it more difficult, most of the systems are proprietary, which makes it impossible to figure out how well they work. But recently, I came across www.FuturesExaminer.com, a site where several futures trading systems are ranked. I’m sure most of you have heard of Futures Truth, a publication that ranks trading systems."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-81-websites-for-traders-futuresexaminer-com-by-jayanthi-gopalakrishnan-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-81-websites-for-traders-futuresexaminer-com-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-81-websites-for-traders-futuresexaminer-com-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov228trse,d,"{""minimum-quantity"":""1"",""path"":""ch10o201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:10 (82-88): Trading Sector Funds Using Statistics by John P. Twardy"",""caption-linebreaks"":""Stocks & Commodities V. 22:10 (82-88): Trading Sector Funds Using Statistics by John P. Twardy

    Ever thought of trading sector funds? Here’s a method that’ll give you an edge on the market.

    Sector fund analysis and trading always seem to require tools other than the standards used by the average stock trader. Because sector funds deal with a specific family of stocks, which are associated with a specific sector of the economy, at a specific time in the economic cycle, several layers of complexity are added to the analysis problem. Thus, while typical analysis packages provide moving averages, trendlines, and more, these methods aren’t enough when applied to sector fund analysis.

    SECTOR FUNDS DEMYSTIFIED

    What are sector funds? Sector funds are a subset of the mutual fund industry. Many mutual fund companies offer sector funds as part of their portfolios. There may be 30 or 40 sector funds available as investment vehicles from any one brokerage firm. Each of these funds invests in one particular sector of the economy, as diverse as real estate, biotechnology, insurance, wireless communications, gold, and so on. The\nindividual sector funds hold stock in various companies that make up a portion of that sector.

    If you invest in any sector fund, your investment will be\nconcentrated in one narrow industry sector. This select portion of the market may not follow the broader market trends, and at times will actually go against the trending market. Since investments in sectors represent such a narrow focus on the stock market, they tend to inherently represent a larger potential risk (and hence, reward) to the investor."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-82-88-trading-sector-funds-using-statistics-by-john-p-twardy-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-82-88-trading-sector-funds-using-statistics-by-john-p-twardy-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-82-88-trading-sector-funds-using-statistics-by-john-p-twardy-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov228sifi,d,"{""minimum-quantity"":""1"",""path"":""ch10o201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:10 (86): Sidebar: Fitting a trendline by least squares by Arthur A. Merrill"",""caption-linebreaks"":""Stocks & Commodities V. 22:10 (86): Sidebar: Fitting a trendline by least squares by Arthur A. Merrill

    Trendlines usually are drawn through tops or bottoms. They also are drawn through the center of prices by a lagged moving average or by eye. A straight line through the center of a price channel, if the scale is logarithmic, will give you the percentage growth or decline rate.

    If the straight line is drawn by eye, it is subject to debate. This doubt can be resolved by a mathematically calculated line called “least squares.” The deviations of the points from the line are A, B, C, D and E in Figure 1. The line produced by the least squares calculation reduces the sum of the squares of these deviations to a minimum, hence the name “least squares.”

    Now, the formula for a straight line is:

    Y = a + bX"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-86-sidebar-fitting-a-trendline-by-least-squares-by-arthur-a-merrill-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-86-sidebar-fitting-a-trendline-by-least-squares-by-arthur-a-merrill-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-86-sidebar-fitting-a-trendline-by-least-squares-by-arthur-a-merrill-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov228wefo1,d,"{""minimum-quantity"":""1"",""path"":""ch10o201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:10 (89-90): Websites For Traders: Prophet Patterns In Prophet.net by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 22:10 (89-90): Websites For Traders: Prophet Patterns In Prophet.net by David Penn

    There is an irony in trying to introduce Prophet Patterns, which is one of the newer modules in Prophet.net — aka the “complete technical analysis suite in a browser” — developed by Prophet Financial Systems. That irony lies in the fact that it is difficult to talk about one component of this “suite” — such as Prophet Patterns — without talking about its relationship to other components in the suite.

    That’s not to say that these components are dependent upon one another. While each component — JavaCharts, MarketMatrix, or Linked WatchLists — is impressive in and of itself, the greatest efficiency and usefulness with Prophet.net comes to the trader or analyst who is able to move seamlessly from component to component.

    With that, consider yourself introduced to Prophet.net’s Prophet Patterns (Figure 1). Prophet Patterns helps traders spot 12 of the most commonly traded chart patterns in both daily and intraday time frames. Using a variety of proprietary algorithms, Prophet Patterns not\nonly locates ascending and descending triangles, upward and downward channels, falling and rising wedges, head & shoulders tops and bottoms, triangles, rectangles, triple bottoms, and triple tops; the program also lets traders know the direction of the price movement, the anticipated advance or decline in the stock, and — vitally — the time frame during which this movement is expected to occur."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-89-90-websites-for-traders-prophet-patterns-in-prophet-net-by-david-penn-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-89-90-websites-for-traders-prophet-patterns-in-prophet-net-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-89-90-websites-for-traders-prophet-patterns-in-prophet-net-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov229prre,d,"{""minimum-quantity"":""1"",""path"":""ch10o201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:10 (91-92): Product Review: The Volatility Primer by Dennis D. Peterson"",""caption-linebreaks"":""Stocks & Commodities V. 22:10 (91-92): Product Review: The Volatility Primer by Dennis D. Peterson

    This course is about trading options, not simply buying\nor selling options as a way to hedge stocks. Stock traders should be able to transition to buying and selling options, but as options expert Larry McMillan points out, this doesn’t seem to be the case. However, this video might make a difference for them, since it is well-presented and jam-packed with useful information. It’s not often you come across video courses on options trading that you want to rewind to review what was just said, rather than fast-forward to get to the presenter’s points. This tape falls into that rare category.

    The video shows a 2003 course presented by McMillan. You can download all of the slides (115) used in the\npresentation. In some video courses with audience participation, the camera focuses on the presenter as opposed to the screen. In this case, however, the focus\nis more on the screen and less on Larry, which is more helpful to the viewer.

    Do you ever wonder what implied volatility really means? You’ll wonder no more after viewing this video. It explains terms such as the “vig,” which is not a term many people know. The “vig” tells you how much the stock must rise to overcome the bid-ask spread, which is handy information if you want to make a profit."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-91-92-product-review-the-volatility-primer-by-dennis-d-peterson-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-91-92-product-review-the-volatility-primer-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-91-92-product-review-the-volatility-primer-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov229trti1,d,"{""minimum-quantity"":""1"",""path"":""ch10o201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:10 (94-107): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 22:10 (94-107): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    In this issue code has been provided for Dennis Peterson's article \""Fibonacci And Gann Projections,\"" which presents a technique for forecasting time and price turning points. Included are Tradestation, AmiBroker, Wealth-Lab, eSignal, NeuroShell Trader, NeoTicker, and Prophet.Net code. Finally, Stratagem Software provided Smartrader \""Crack Spread\"" code. The term crack spread refers to the “catalytic cracking”\nprocess used at refineries to separate crude oil into marketable products such as unleaded gasoline, heating oil, and various lesser components."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-94-107-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-94-107-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-10-94-107-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov221leto1,d,"{""minimum-quantity"":""1"",""path"":""ch11n201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:11 (10-13): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 22:11 (10-13): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist.

    READERS’ CHOICE AWARDS

    Editor,

    I heard that you published the results of a study comparing different training courses for options trading.\nI heard that this study or comparison was in the March 2004 issue. However, when I visited your website, I could not find this comparative study in the March issue. Do you happen to know what issue this comparison was in?

    RAY MONTELLO, via email

    You may be referring to our annual Readers’ Choice Awards in our Bonus Issue, which is published in early March. However, it wasn’t actually a comparison, but rather the results of our Readers’ Choice Awards survey, in which our subscribers are asked what products and services they find the most useful across 20 categories. We do have categories for options software and training courses, but not specifically for options training courses. Unfortunately, our Readers’ Choice Awards are not available at our website. This feature is found only in our Bonus Issue, which is mailed to paid subscribers.\nThus, the only way to get hold of the information is by purchasing a subscription. You can contact our Subscriptions Department for information at Circ@Traders.com."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-10-13-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-10-13-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-10-13-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov221exyo,d,"{""minimum-quantity"":""1"",""path"":""ch11n201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:11 (101): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 22:11 (101): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    OPTIONS THAT EXPIRE WORTHLESS

    Q: What percentage of calls that are sold on underlying stocks expire worthless?\n— Perry Buckman

    A: It is impossible to say what percentage of calls that are sold expire worthless. However, studies have examined what percent of all options expire worthless.\nWhile I have heard traders speculate that 70%, 80%, or even 90% of all contracts do so, the actual numbers are\nprobably much lower. According to a presentation by Alex Jacobson, vice president of the International Securities Exchange (ISE), at the Optionetics Oasis\n2004 Convention, a comprehensive study that included more than 30 years of data revealed that only 30% of options expire worthless. Roughly 10% of all options contracts are exercised, and the remaining 60% are closed through offsetting transactions. In sum, traders\nare more likely to close options through offsetting transactions before expiration than to let them expire worthless."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-101-explore-your-options-by-tom-gentile-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-101-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-101-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov221trti,d,"{""minimum-quantity"":""1"",""path"":""ch11n201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:11 (102-114): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 22:11 (102-114): Traders’ Tips by Technical Analysis, Inc.

    This month's code is for Vadim Gimelfarb’s article, “Using Volume To Detect Shifts In Power,” which proposes the TRsV (true range specified volume) indicator. The TRsV indicator is used in\nthe article in conjunction with the bull and bear power\nindicator described in the October 2003 issue of STOCKS & COMMODITIES. Finally, the two indicators are combined to form a strategy. Code is provided for the following programs: TradeStation, MetaStock, Wealth-Lab, Trading Solutions, AmiBroker, eSignal, AIQ, NeoTicker, Prophet.Net, Investor/RT, SmarTrader, TechniFilter Plus, Financial Data Calculator, BullCharts, Trade Navigator, StockWiz, and Aspen Graphics."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-102-114-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-102-114-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-102-114-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov22111at1,d,"{""minimum-quantity"":""1"",""path"":""ch11n201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:11 (130, 116): At The Close by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 22:11 (130, 116): At The Close by Jayanthi Gopalakrishnan

    Just when I think I have a system in place and have it all figured out, the market pulls a fast one on me. Just when everything is moving along in one direction,\nsomething will happen to cause everyone to reverse direction, and very quickly. Whenever I see this happening, I can’t help but remember a phrase I once\ncame across that I still consider to be a perfect description of the financial markets: “Market participants are like a school of fish that all change direction at the same time.”

    To give you an idea of how accurate that statement is, I am going to share a trade with you. It’s not necessarily\nan example of a good trade, but of course, at the time I thought it was fabulous. On September 1, 2004, the daily chart of the Standard & Poor’s 500 (Figure 1) showed that the index was hovering over the 50-day moving average. Judging by the reaction of prices to this moving average, I wasn’t sure whether it would go up or down. But given that the moving average was sloping down, I decided that if I were to make a trade, it\nwould be to short the e-mini if the opportunity arose."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-130-116-at-the-close-by-jayanthi-gopalakrishnan-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-130-116-at-the-close-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-130-116-at-the-close-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov221seto,d,"{""minimum-quantity"":""1"",""path"":""ch11n201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:11 (14-20): Selecting Top Performers by Jongseon Kim"",""caption-linebreaks"":""Stocks & Commodities V. 22:11 (14-20): Selecting Top Performers by Jongseon Kim

    Too often we enter a trade only to find that the stock price just isn’t going anywhere. Here’s how you can avoid falling into this trap.

    When should you trade and when should you not? I answered that question in my article, “Trading In Tempo With TRIX.” The next hurdle before entering a trade is to select stocks that will give you the best rate of return. If you choose a stock that is slow moving,\nyou are bound to be disappointed, because even in\na strong market these stocks will give you a low rate of return. You don’t want to choose the wrong one.

    SELECTING THE RIGHT STOCKS

    Naturally, you would like to accumulate a high rate of return, and in order to do so, you must earn as much as possible while you are in your trades. In this article, I will discuss several methods for selecting the most promising, best-performing stocks.

    In Figures 1 and 2, I reintroduce the basic concept of when and when not to trade from my earlier article. Now that you know when, how do you select the what?

    The essential factor to consider is the momentum of the rise in stock price. You need to select stocks that show strong momentum, or the potential for strong momentum. Only then will the buy and sell signals provide a satisfactory rate of return. If the momentum is not strong, you may experience a situation similar to that in Figure 3. But how do you know which stocks have momentum, activity, or potential? To find out, I analyzed four methods. In the first three, I used\nthe TRIX indicator. In the fourth, I focused on avoiding sudden and undesired fluctuations in the price of healthy stocks. To study and verify the momentum and potential effect, I looked at the weekly chart of the Nasdaq Composite from November 1995 to April 2004 (Figure 4). You can apply the studies I discuss in\nthis article to medium-term investments."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-14-20-selecting-top-performers-by-jongseon-kim-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-14-20-selecting-top-performers-by-jongseon-kim-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-14-20-selecting-top-performers-by-jongseon-kim-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov222catr,d,"{""minimum-quantity"":""1"",""path"":""ch11n201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:11 (22-27): Candlestick Trading Principles by Steve Nison, CMT"",""caption-linebreaks"":""Stocks & Commodities V. 22:11 (22-27): Candlestick Trading Principles by Steve Nison, CMT

    Candlestick charts are available almost everywhere. Are you using them to their fullest potential?

    Until I wrote about the technique of Japanese candlestick charting in the 1980s, they were unknown\nin the Western world. Since then, candlesticks have become ubiquitous, available in almost every software and online charting package. Why have candlestick charts become so popular? The answer is simple. When properly used, candlesticks let you seize trading opportunities by pinpointing early market turns and minimizing losses.

    However, the Japanese say that “a wise hawk conceals its claws,” and with the popularity of candles comes\nmisuse. Too many of those applying candlesticks are using them incorrectly. With this in mind, I have designed 12 trading principles to help traders capitalize\non candlestick charts by bolstering trading performance, decreasing market risk, and correcting the most common mistakes. I don’t have enough\nroom to address them all in this article, but I will address four of the 12.

    TRADING PRINCIPLE 1: Candlesticks are easy to use but powerful in diagnosis.

    Since candlestick charts are now so accessible, why not learn how to harness their potential? What good is it to have them around unless you can use the insights they can provide?

    Nonetheless, some technicians believe candlesticks aretoo complicated or there are too many patterns to understand. Untrue. Candlesticks are so easy to use and so powerful that once you learn even the basic concepts you’ll never go back to a bar chart. In addition, while there may be many candlestick signals, there are only a dozen or so key signals and patterns. I will explain how even a single significant candlestick can offer important trading insights."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-22-27-candlestick-trading-principles-by-steve-nison-cmt-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-22-27-candlestick-trading-principles-by-steve-nison-cmt-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-22-27-candlestick-trading-principles-by-steve-nison-cmt-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov222mase,d,"{""minimum-quantity"":""1"",""path"":""ch11n201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:11 (28-34): The Market’s Second Chance by Donald Jones"",""caption-linebreaks"":""Stocks & Commodities V. 22:11 (28-34): The Market’s Second Chance by Donald Jones

    In my STOCKS & COMMODITIES articles on auction market analysis (see suggested reading), I gave examples of making trades with value-based information. Implicitly, these were all “first-chance,” breakout trades. You do the analysis, the market meets the entry criteria and, boom! you initiate the trade.

    In the real world, we all sometimes miss that first\nchance. Most of us know better than to chase a trade.\nBut on occasion, the market offers a second chance.\nRecognizing a valid second-chance opportunity is more difficult and takes more market knowledge than entry on breakout. Second chances can come in a variety of guises, but they have two general characteristics:

    • The initial breakout comes out of a congesting\nmarket condition, and

    • The second chance occurs during a subsequent\ncongestion.

    If you’ve missed a great trade, don’t lose hope, because the market often gives second chances. Here’s how you can recognize them when they appear."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-28-34-the-market-s-second-chance-by-donald-jones-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-28-34-the-market-s-second-chance-by-donald-jones-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-28-34-the-market-s-second-chance-by-donald-jones-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov224roap,d,"{""minimum-quantity"":""1"",""path"":""ch11n201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:11 (44-48): Rotten Apples? Spotting Adam And Eve Double Tops by Thomas N. Bulkowski"",""caption-linebreaks"":""Stocks & Commodities V. 22:11 (44-48): Rotten Apples? Spotting Adam And Eve Double Tops by Thomas N. Bulkowski

    These variations on the classic double top have performance differences. You can profit from them. Here’s how.

    Recognizing a budding double top is the first step to averting disaster. Trading them properly can save you from taking a loss — it may even make you a tidy sum. Ignoring them could hurt your wallet. What is a double top, and what do Adam and Eve have to do with it? In early 2003, the market started trending upward. By January 2004, stocks began to get pricey, and I was expecting double tops to appear like daffodils in the spring.

    A double top looks just like it sounds: a twin price peak with highs near the same price level and peaks separated by several weeks (some recommend they be at least a month apart). It forms at the end of an upward price trend, although the trend need not be very long. The dip between the two peaks is usually 10% to 20%, sometimes much more. I have found that the deeper the valley, the better the pattern’s performance.

    Adam and Eve refer to the shape of the tops. I am sure you can guess what they look like, but I will spell it out anyway. Adam tops are narrow and pointed, perhaps with a one-day spike. Eve tops are more rounded, wider, and sometimes have many peaks near the same price."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-44-48-rotten-apples-spotting-adam-and-eve-double-tops-by-thomas-n-bulkowski-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-44-48-rotten-apples-spotting-adam-and-eve-double-tops-by-thomas-n-bulkowski-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-44-48-rotten-apples-spotting-adam-and-eve-double-tops-by-thomas-n-bulkowski-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov225usvo,d,"{""minimum-quantity"":""1"",""path"":""ch11n201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:11 (56-59): Using Volume To Detect Shifts In Power by Vadim Gimelfarb"",""caption-linebreaks"":""Stocks & Commodities V. 22:11 (56-59): Using Volume To Detect Shifts In Power by Vadim Gimelfarb

    Who has control: The bulls or the bears?

    Volume plays an important part in stock market\ndynamics. However, the kind of information that triggers the volume increase or decrease accompanying price changes is much less evident.

    VOLUME VS. PRICE

    To use as examples, I can point to two articles in the January 2004 STOCKS & COMMODITIES. One, written by D.W. Davies, is based on Joseph Granville’s classic approach and describes the use of on-balance volume in daytrading.

    The thesis of this approach is that volume increase confirms and often precedes price increase, while a decrease in volume signals a high probability of a slowdown in the price increase and the possibility that prices will reverse.

    According to Granville, an increase in volume reflects the accumulation process, which is a prerequisite for an increasing trend to be stable. Anthony Trongone, the author of the other S&C article, notes that contrary\nto the classic theory, his observations for short-term periods show that a volume increase accompanying price growth is likely to be a bearish signal, while a decrease in volume during price growth is bullish. At the same time, volume growth during price decrease\nindicates a likely change in direction, while volume decrease suggests a continuation. This, in general, is in accord with Granville’s theory."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-56-59-using-volume-to-detect-shifts-in-power-by-vadim-gimelfarb-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-56-59-using-volume-to-detect-shifts-in-power-by-vadim-gimelfarb-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-56-59-using-volume-to-detect-shifts-in-power-by-vadim-gimelfarb-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov226trcu,d,"{""minimum-quantity"":""1"",""path"":""ch11n201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:11 (60-65): Trading Currencies Using Multiple Time Frames by Kathy Lien and Patrick Dyess"",""caption-linebreaks"":""Stocks & Commodities V. 22:11 (60-65): Trading Currencies Using Multiple Time Frames by Kathy Lien and Patrick Dyess

    When trading currencies, it’s best to get the big picture first and then use a shorter time frame to select entries and exits.

    With $1.5 trillion in daily turnover, the foreign exchange market is the largest market in the world. Previously, access to this market was restricted to hedge funds, large commodity trading advisors (CTAs), and institutional investors due to regulation, capital requirements, and technology. The big players have always wanted access to the market because unlike the equity markets, where liquidity is dispersed across many different stocks, the $1.5 trillion in liquidity is concentrated in four major currency pairs, so they are very liquid. This means that traders can get in and out easily, executing more than $100 million without causing a significant shift in the markets.

    TRADING THE TRENDS

    Technical analysis is the most common trading strategy used by professional forex traders because currencies rarely spend much time in tight trading ranges and tend to develop strong trends. More than 80% of forex volume is speculative in nature, so as a result, the market frequently overshoots and then corrects itself. A technically trained trader can easily identify new trends and breakouts, providing multiple opportunities to enter and exit positions. In addition, aside from trend trading, certain currencies may undergo extended periods of range trading. Traders can find ample opportunity to play the ends of ranges.

    In order to trade successfully on an intraday basis, it is\nimportant to be selective. You’ve heard of the trading cliché “The trend is your friend,” haven’t you? Clichés become clichés for good reason — more often than not, they’re true. This one is the tenet for trading, and its importance should not be understated. Trading with the trend while employing trailing stops allows the opportunity to capture big moves in any market."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-60-65-trading-currencies-using-multiple-time-frames-by-kathy-lien-and-patrick-dyess-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-60-65-trading-currencies-using-multiple-time-frames-by-kathy-lien-and-patrick-dyess-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-60-65-trading-currencies-using-multiple-time-frames-by-kathy-lien-and-patrick-dyess-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov226inje,d,"{""minimum-quantity"":""1"",""path"":""ch11n201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:11 (66-72): Interview: Jeffrey Hirsch, The Chronicler Of Change by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 22:11 (66-72): Interview: Jeffrey Hirsch, The Chronicler Of Change by Jayanthi Gopalakrishnan

    Like father, like son — eventually. Jeffrey Hirsch is now the president of the Hirsch Organization, and editor-in-chief of The Stock Trader’s Almanac and Almanac Investor newsletter. But he started out not\nwanting to do anything like his dad, Yale Hirsch, who is best known as the founder of The Stock Trader’s Almanac. Now in its 38th edition, the Almanac documents years of historical stock market behavior and analysis (www.stocktradersalmanac.com). But Jeffrey Hirsch eventually changed his mind, starting out as a market analyst and historian after college, and gradually working his way up. STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan spoke with Jeffrey Hirsch via phone on September 7, 2004.

    Q: How did you first become involved in the markets?

    A: I was raised around it, and it was almost a process of osmosis. A lot of young people want to do something different than their parents at some point, so I floated a bit through college. When I left and saw that my father needed my help, and seeing my mind sort of worked like his — genetics and all — I went to work for him. I started with the company in the autumn of 1989.

    Q: What did you do?

    A: I started off doing everything in the corporation from the ground up — from shipping, receiving, customer service, to statistical analysis and stock market analysis — and basically apprenticed at his side, feet, everywhere. Still do, to some extent. It was about 2001 when I took over the helm, and moved out from behind the scenes. The 2002 edition of The Stock Trader’s Almanac is the first one that’s got both of our names on it."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-66-72-interview-jeffrey-hirsch-the-chronicler-of-change-by-jayanthi-gopalakrishnan-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-66-72-interview-jeffrey-hirsch-the-chronicler-of-change-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-66-72-interview-jeffrey-hirsch-the-chronicler-of-change-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov227noan,d,"{""minimum-quantity"":""1"",""path"":""ch11n201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:11 (78-81): Noise And Time Series by Clem Chambers"",""caption-linebreaks"":""Stocks & Commodities V. 22:11 (78-81): Noise And Time Series by Clem Chambers

    Does signal processing help in determining future price movements? After reading this, you may be tempted to explore further.

    I t’s an unhappy fact that thousands of people comb over market time series every single day. Whether they are drawing lines on paper, crunching numbers in Excel, or programming backtesters, they are all looking for the same thing: a way to make money trading using the historical record to predict the future.

    According to the efficient market hypothesis, this of course is impossible. Fortunately, hypothesis means “theory,” not\nan irrefutable truth. So we can all get back to the data and get on with our hypothesis — that the past can indicate the future. We just have to figure out how.

    NOT FOLLOWING THE CROWD

    As anyone who has sifted through a box of old coins at a flea market will tell you, it is hard to find any gold ones, because hundreds of people have been there before you. This is the problem we all face in the way of trading ideas; the most obvious ideas are gone, preempted by others prepared or able to take a smaller return than we can or able to make the trade faster than we can.

    However, I bought a couple of gold coins for mere pennies when I was a child, simply because I wasn’t\nexpecting to find a treasure. Untold people walked by the same opportunity but didn’t see it because they\nwere looking for something else or thinking in terms of rummaging around in the other box they thought\nwas the place to find coins. This might seem pointless to you, but data error in a time series is common. If we use faulty data, running a backtest can convince us that\nwe could have had a fantastic return on our trading system, when in fact no profit potential was there."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-78-81-noise-and-time-series-by-clem-chambers-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-78-81-noise-and-time-series-by-clem-chambers-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-78-81-noise-and-time-series-by-clem-chambers-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov228qaby,d,"{""minimum-quantity"":""1"",""path"":""ch11n201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:11 (87): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 22:11 (87): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://\nMessage-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    ENTERING ORDERS

    Q: If one wishes to enter orders (buying or selling) market-on-open and/or market-on-close, what is the best way to achieve this on the various US stock exchanges?

    How do you manage this for large orders and/or in illiquid markets? Also, what are the mechanics for doing this? I believe the NYSE and AMEX accept\nMOO/MOC (market on open/market on close) orders, but the Nasdaq does not.

    Can you enter these orders fairly anonymously so as to avoid tipping your hand to the specialists/market makers? To be clear, I am trying to find a way of achieving the opening or closing price with minimal slippage. Thanks in advance for your insights on this. — CPTrader

    A: Any person or institution can enter MOO or MOC orders either directly via SuperDot or through his/her/its brokerage. This will be relatively anonymous; generally just the broker’s “give-up” (acronym) shows up on the order.

    As far as getting decent prices goes, it depends a lot on supply and demand on that particular day. Illiquid stocks will obviously move more than the blue chips when hit with large blocks."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-87-q-a-by-don-bright-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-87-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-87-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov229wefo1,d,"{""minimum-quantity"":""1"",""path"":""ch11n201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:11 (92-93): Websites For Traders: FuturesBuzz.com by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 22:11 (92-93): Websites For Traders: FuturesBuzz.com by David Penn

    FUTURESBUZZ.COM

    Perhaps there will never come a day when mainstream information and news about the futures and commodities markets will rival the information and news available about the equity markets.

    Until then, futures and commodities traders — current and aspiring — will have to rely on websites like FuturesBuzz.com to keep abreast of the diverse set of information and datapoints they need to get and stay ahead of the game.

    FuturesBuzz.com was founded back in 2000. According to its founders, the website’s original goal was twofold:\nFirst, they wanted to create a one-stop portal for traders looking for sound, articulate information on the futures\nand commodities markets. But second, the founders of FuturesBuzz.com wanted to alert traders to a major problem in their industry: disreputable brokers. As they wrote in the “About Us” section of the website:

    \""By telling the stories on how they defrauded investors, we believe this will make investors more aware and\nhopefully avoid some of these schemes.\""

    In a few short years, FuturesBuzz.com has grown from a futures truth squad to that one-stop portal for those looking for charts, research, market commentary, and analysis, as well as some of the basic “what you need to know to trade futures” material such as commitment\nof traders reports, trading calendars, and specifications for futures contracts."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-92-93-websites-for-traders-futuresbuzz-com-by-david-penn-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-92-93-websites-for-traders-futuresbuzz-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-92-93-websites-for-traders-futuresbuzz-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov229prre1,d,"{""minimum-quantity"":""1"",""path"":""ch11n201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:11 (94-96): Product Review: NeoTicker 3.0 by Dennis D. Peterson"",""caption-linebreaks"":""Stocks & Commodities V. 22:11 (94-96): Product Review: NeoTicker 3.0 by Dennis D. Peterson

    NeoTicker 3.0 has all the standard features you\nmight expect to find in advanced charting software. But it also has a number of unique features: a pattern\nscanner that can use multiple indicators or an actual price pattern, the ability to chart multiple time frames on a single chart, and a quote window that includes a line chart for each symbol.

    NeoTicker is the integration of several software packages, and it has been carefully developed to serve the needs of NeoTicker’s primary users: daytraders.\nThis is truly an evolving trading package, with many new features that were added after the initial integration and since our last review in 2001.

    MAIN MENUS AND CHARTING

    Unlike most charting packages, which incorporate their menus into the charting window, NeoTicker uses separate windows for its main and drawing menus. Like all NeoTicker windows, the menu windows can be sized and positioned to fit your screen needs. You can still see your desktop and icons underneath (Figure\n1).

    More than 14 drawing tools are included, such as Fibonacci levels and the Andrews pitchfork. A unique feature is the ability to overlay data series of different\ntime frames on the same chart, as shown in Figure 2. The weekly candles are displayed in blue, while daily candles are in red and green. To use this feature, all you have to do is right-click on a chart background, which brings up a popup menu with “Add data” as one of the options."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-94-96-product-review-neoticker-3-0-by-dennis-d-peterson-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-94-96-product-review-neoticker-3-0-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-94-96-product-review-neoticker-3-0-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov229prre2,d,"{""minimum-quantity"":""1"",""path"":""ch11n201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:11 (98-100): Product Review: Updata Technical Analyst by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 22:11 (98-100): Product Review: Updata Technical Analyst by David Penn

    Do you remember that “rushing racks” scene in The Matrix, the one where Trinity presents young Neo with a dazzling panoply of weaponry in what might be called\nthe ultimate in window shopping?

    Well, you might feel something similar when opening up a workspace in\nUpdata Technical Analyst. While there’s no point in taking Updata TA behind the woodshed to find out whether its voluminous set of indicators, overlays, and\noscillators is more extensive than that of its competitors, there is also no denying that when it comes to features that will appeal to both the artist and the scientist inside every technical analyst, Updata TA is second to none.

    What can you do with Updata TA? While first and foremost an extensive technical analysis charting package, Updata TA includes features that allow for more testing and backtesting — including indicator optimization — than do many comparable packages. Often it is the case that the more indicators and oscillators and overlays a charting program has, the less robust its backtesting and optimization capabilities. I’ve thought of this syndrome as the battle\nbetween technical analyst as artist and scientist. Even though most of the best technical analysts will be a bit of both, I suspect most of us who look at charts to make investment and speculative decisions tend toward either the discretionary or systematic end of the technical spectrum. To this end, it is a boon to see both ends so well served in Updata TA."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-98-100-product-review-updata-technical-analyst-by-david-penn-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-98-100-product-review-updata-technical-analyst-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-11-98-100-product-review-updata-technical-analyst-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov221leto2,d,"{""minimum-quantity"":""1"",""path"":""ch12d201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:12 (10-13): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 22:12 (10-13): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine would not exist.

    Address your correspondence to: Editor, STOCKS & COMMODITIES, 4757 California Ave. SW, Seattle, WA 98116-4499, or email to Editor@Traders.com. All letters become the property of Technical Analysis, Inc. Letter-writers must include their full name and address\nfor verification. Letters may be edited for length or clarity. The opinions expressed in this column do not necessarily represent those of the magazine.—Editor

    NOVICE TRADER

    Editor,

    I’m a new subscriber to S&C magazine, as well as a novice investor. I’d like to thank you for the articles aimed at those of us who are relatively new to technical\nanalysis, such as the ones on candlestick charting. The articles are well written, educational, and easy to understand. Please continue to publish this kind of article and keep up the good work.

    STEVE HOWELL\nTaylor, MI"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-10-13-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-10-13-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-10-13-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov221wefo,d,"{""minimum-quantity"":""1"",""path"":""ch12d201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:12 (102-103): Websites For Traders: CandlestickShop.com by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 22:12 (102-103): Websites For Traders: CandlestickShop.com by David Penn

    CANDLESTICKSHOP.COM

    It must be entertaining to technical analysts who have used candlestick charts for years to learn of the almost mystical regard that some technicians have for them. Part of this is probably the packaging. For all the colorful descriptions of technical price action — from deadcat bounces to breakouts — you really have to take off your hat to some of the emotive phraseology embedded in Japanese candlesticks. From the hanging man pattern — which sounds like the title of some early Clint Eastwood spaghetti western — to bullish engulfing and piercing patterns, the vocabulary of candlestick charting alone is enough to make the average technical analyst feel as if his or her powers of perception (on the wings of mere metaphors, no less) have increased tenfold.

    Admittedly, few of those who practice and preach candlesticks are notable for dispelling such dreams of analytic potency. Some less reputable (or, at least, less responsible) candlestick advocates seem to hint that candlestick signals are all you need to construct a\nsound trading strategy, system, or methodology. Still, putting aside the notion that, with good money management, systems built on random entries have done surprisingly well, it is hard to deny that candlesticks do make many aspects of trading or chart reading far easier compared to other methods of displaying price action. I have often repeated the quote by trader, educator, and Pristine.com founder Oliver Velez Jr., who insisted in a seminar that he wouldn’t even consider looking at a chart unless it was in candlestick form."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-102-103-websites-for-traders-candlestickshop-com-by-david-penn-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-102-103-websites-for-traders-candlestickshop-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-102-103-websites-for-traders-candlestickshop-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov221prre3,d,"{""minimum-quantity"":""1"",""path"":""ch12d201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:12 (122-124): Product Review: AllPennyStocks.com by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 22:12 (122-124): Product Review: AllPennyStocks.com by David Penn

    ALLPENNYSTOCKS.COM

    You know you shouldn’t. Deep down, you know better, don’t you? But still, you just can’t help yourself. Twenty cents a share for a company just about to make it into\nthe big time. … A buck fifty a share for this tiny, great little outfit that nobody knows about — yet. And there you are, waiting to enter on the ground floor. You want to do it. You can’t help yourself. But you also can’t help but remember everything that everybody told you about penny stocks — much of which is probably summed up in this note from Investor’s Business Daily founder William O’Neil: The Canadian and Denver markets list\nmany stocks you can buy for only a few cents a share. The reason I suggest you avoid gambling in such cheap merchandise is that everything sells for about\nwhat it’s worth. You get what you pay for.

    Talk about getting no respect! If the late great Rodney Dangerfield had been a trader, he probably could have made a career out of the abuse heaped upon penny\nstocks alone."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-122-124-product-review-allpennystocks-com-by-david-penn-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-122-124-product-review-allpennystocks-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-122-124-product-review-allpennystocks-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov221prre2,d,"{""minimum-quantity"":""1"",""path"":""ch12d201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:12 (122-124): Product Review: QCharts by Dennis D. Peterson"",""caption-linebreaks"":""Stocks & Commodities V. 22:12 (122-124): Product Review: QCharts by Dennis D. Peterson

    QCharts by Quote.com is a real-time datafeed that can\nbe downloaded from the Internet. The product contains\nall the basic charting elements plus a few extras, some of which I have not seen in other products. As I was\nreviewing this product I came across a few glitches, but nothing catastrophic. Among the many pluses were the visually appealing charting capabilities.

    USER CHART INTERFACE

    There are nine different toolbars available, which makes it easy to control the look of your screen (Figure 1) as well as overlay drawing features. These drawing\nfeatures include the Andrews pitchfork, line drawing, and a cycle tool that I’ll touch on later. The zooming feature works by clicking and dragging the x or y axes. In addition, you can increase or decrease bar spacing. Bars are limited to OHLC, candlestick, and line. If you\nwant point & figure or other chart types, Quote.com does offer you the option of getting MetaStock Pro with a live feed for $199.95 per month."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-122-124-product-review-qcharts-by-dennis-d-peterson-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-122-124-product-review-qcharts-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-122-124-product-review-qcharts-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov221bofo1,d,"{""minimum-quantity"":""1"",""path"":""ch12d201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:12 (128): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 22:12 (128): Books For Traders by Technical Analysis, Inc.

    Applying Elliott Wave Theory Profitably (222 pages, $69.95, hardcover, 2003, ISBN 0-471-42007-7) by Steven W. Poser, published by John Wiley &\nSons.

    During the late 1920s, Ralph Nelson Elliott theorized\nthat stock markets do not behave in a random, chaotic manner, but rather move in cycles, reflecting the actions and emotions of human mass psychology. Elliott believed that the ebb and flow of mass psychology reveals itself in repetitive patterns, or waves. This book makes sense of this proven trading strategy and gives you a straightforward lesson on how to make money\nusing Elliott wave theory. This book will take you through the process of understanding how and why Elliott wave theory works."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-128-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-128-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-128-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov22111at2,d,"{""minimum-quantity"":""1"",""path"":""ch12d201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:12 (130, 116): At The Close by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 22:12 (130, 116): At The Close by Jayanthi Gopalakrishnan

    Forex Trading And Technical Indicators

    Jeff Hughes is a self-taught technical trader of stocks who recently entered the foreign exchange (forex)\nmarket for the first time. In this Q&A, learn how and why he uses technical analysis to successfully trade the\nforex market. Hughes used his technical trading abilities as a first-time entrant into the forex market to win Forex.com’s “Win A Mini” trading contest in June 2004. The next contest is scheduled to begin in February 2005.

    Q: What motivated you to try trading forex?

    A: I think the main reasons were, first, that the markets are open 24 hours a day from Sunday evening to Friday evening, and second, the high degree of margin leverage. But it didn’t take me long to realize that the forex markets, more than any other markets I’d traded to date, adhered to technical levels of support and resistance. This was a highly appealing trait.

    Q: What is your trading methodology?

    A: The most important thing I’ve learned about trading is that it can be as simple or as complicated as you want it to be. When I first started, I believed that you could not have too much information, but this overcomplicated things for me. I would read everything I could get my hands on. Now I trade my methods using indicators that work for me, and don’t worry about what the experts are saying. I am mostly a self-taught technical trader."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-130-116-at-the-close-by-jayanthi-gopalakrishnan-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-130-116-at-the-close-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-130-116-at-the-close-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov221endo,d,"{""minimum-quantity"":""1"",""path"":""ch12d201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:12 (14-18): The End Of The Trend by Cornelius Luca"",""caption-linebreaks"":""Stocks & Commodities V. 22:12 (14-18): The End Of The Trend by Cornelius Luca

    You’re riding along with the trend, watching your returns consistently increase. You know it’s not going to go\non forever… but how do you know when it’ll end?

    As much as we like trends and their inherent profitability, all good things must eventually come to an end. Dealing with their demise is easier said than done; it’s not only that traders loathe parting\nwith a good thing, but ending trends is often a messy affair that can take its toll on your budget. However, there are several reversal formations you can watch for that may give you a warning that the trend is almost over.

    The most significant trend reversal patterns are the\nfollowing:

    1. Head & shoulders and inverse head & shoulders

    2. Double top and double bottom

    3. Triple top and triple bottom

    4. V-top

    Arguably, the second tier of reversal formations are:

    1. Rounded top and rounded bottom

    2. Rectangle reversal

    3. Diamond

    4. Upthrust and spring

    This article will analyze the head & shoulders formation, using currency pairs as examples."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-14-18-the-end-of-the-trend-by-cornelius-luca-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-14-18-the-end-of-the-trend-by-cornelius-luca-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-14-18-the-end-of-the-trend-by-cornelius-luca-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov222qaby,d,"{""minimum-quantity"":""1"",""path"":""ch12d201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:12 (20): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 22:12 (20): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://\nMessage-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    PROGRAM TRADES

    I read an online chat that talked about programmed trades occurring on the Nasdaq. I don’t trade that market, but found it interesting. It made me wonder, with more than 50% of NYSE volume in programs, whether it is important to investigate that process and learn more about it. Currently, I am knowledgeable\nwith regard to index arbitration (program trades that work the premium), but know little about other types of program trades. To what extent does your training deal with that subject? I am hoping to find a resource for learning more about the subject generally. I appreciate any comment you might have — Steve

    First, we have to define program trades. There is the legal definition, which has rigid guidelines and is subject to trading curbs and other restrictions. I prefer the broader definition, which includes any type of automated response to the market via programming.\nThis takes on many forms, from simple, if/then–type DDE-link (dynamic data exchange) activated or ActiveX\nresponses, to elaborate massive line item order entries using FIX protocol."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-20-q-a-by-don-bright-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-20-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-20-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov222trin,d,"{""minimum-quantity"":""1"",""path"":""ch12d201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:12 (22-27): Trading In A Sideways Market by Anthony Trongone"",""caption-linebreaks"":""Stocks & Commodities V. 22:12 (22-27): Trading In A Sideways Market by Anthony Trongone

    When the markets are trading in a narrow range, you\nare likely to become susceptible to emotional trading.\nBut if you follow the emerging patterns of a sideways market, you can trade successfully.

    Without a thorough understanding of how a sideways market functions, trading in such a featureless environment can easily diminish the assets in your portfolio. You can achieve some success from trading without adequate knowledge; unfortunately, it will come without the benefit of sound planning. Although you may realize that your trading is emotionally driven, your sporadic successes will reinforce your desire to continue. And since emotional distractions are detrimental to clear reasoning, it is necessary for you to supplant these emotional impulses with a constructive strategy, one that will allow you to form your decisions from emerging price patterns.

    This article follows the performance of the triple Q's (QQQ) when prices begin falling after entering the upper range (resistance), or recover from the lower portion of the trading range (support). After establishing\na holding pattern, it can take days for prices to come within either a supporting or resisting price range; therefore, much of your trading will take place somewhere between these boundaries. Unfortunately,\nthe literature on how the technician should navigate\nwithin this middle terrain is inconclusive."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-22-27-trading-in-a-sideways-market-by-anthony-trongone-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-22-27-trading-in-a-sideways-market-by-anthony-trongone-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-22-27-trading-in-a-sideways-market-by-anthony-trongone-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov222siex,d,"{""minimum-quantity"":""1"",""path"":""ch12d201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:12 (28-36): Sidebar: Excel codes for trend trigger factor by M.H. Pee"",""caption-linebreaks"":""Stocks & Commodities V. 22:12 (28-36): Sidebar: Excel codes for trend trigger factor by M.H. Pee

    EXCEL CODES FOR TREND TRIGGER FACTOR

    The Excel spreadsheet in sidebar Figure 1 shows all the required calculations for the 15-day trend trigger factor (TTF) on the euro between October 1, 2002, and January 15, 2003, inclusively. The data is represented in continuous contract format. The date, open, high, low, and close goes into column A, B, C, D, and E, respectively. The date is represented using eight digits, with the first four representing the year, the next two the month, and the last two the day. For example, 20030108 represents January 8, 2003.

    Column F represents the 15-day buy power, which is\ndefined as the difference between the highest high of the first period and the lowest low of the second period. Enter the following Excel codes in cell F30 and copy it to the bottom of the spreadsheet. . ."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-28-36-sidebar-excel-codes-for-trend-trigger-factor-by-m-h-pee-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-28-36-sidebar-excel-codes-for-trend-trigger-factor-by-m-h-pee-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-28-36-sidebar-excel-codes-for-trend-trigger-factor-by-m-h-pee-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov222trtr,d,"{""minimum-quantity"":""1"",""path"":""ch12d201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:12 (28-36): Trend Trigger Factor by M.H. Pee"",""caption-linebreaks"":""Stocks & Commodities V. 22:12 (28-36): Trend Trigger Factor by M.H. Pee

    Whether you’re trading short term or long term, the only way to make money in the market is to position yourself in the direction of the trend.

    The markets are mostly random, but they do have a small trend component. It is this trend component that you should take advantage of if you want to make money in the markets. I don’t mean you should buy at the bottom of a trend and sell at the top by predicting exactly when it will start and when it will end. What you\nshould do is follow the trend and ride it along until you see weakness. The further the market moves from your entry price in your direction, the more you will make; the stronger the trend, the more opportunity you will have to make a larger profit.

    DEFINITION

    To keep you trading with the trend, I designed an indicator called the trend trigger factor (TTF) that will help you be long in an uptrend and short in a downtrend. This indicator allows you to follow the trend and capitalize on that rare nonrandom trend component of the markets. I will illustrate the calculation of the TTF by using a 15-day parameter."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-28-36-trend-trigger-factor-by-m-h-pee-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-28-36-trend-trigger-factor-by-m-h-pee-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-28-36-trend-trigger-factor-by-m-h-pee-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov224whis,d,"{""minimum-quantity"":""1"",""path"":""ch12d201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:12 (42-45): Where Is The Weakest Link? by Damir Smitlener"",""caption-linebreaks"":""Stocks & Commodities V. 22:12 (42-45): Where Is The Weakest Link? by Damir Smitlener

    With the year coming to a close, it’s a good time to\nrevisit your trading system. Here are a few things to\nconsider that you may never have thought of.

    Varied and various forms of technical analysis have been used to determine which way the market will go. Much of this effort has been devoted to creating\nindicators that are used to find turning points and identify trends. Despite that effort, most traders fail to extract a living from the markets. It is widely assumed that these failures aren’t due to specific techniques, but\nrather to the limitations of the traders who are attempting to follow the techniques.

    But what happens if you stand this idea on its head? What if you assume traders are in fact not the weak link in the chain, and the problem lies instead in the most common clichés embodied by technical analysis? What if you stop trying to ride trends and eliminate stop-losses?

    A PROFITABLE TRADING SYSTEM

    Perhaps the best-known trend-following system is the Turtle approach that trader Richard Dennis made famous in the 1980s. Simply, this approach waits for a 20-day breakout, either up or down, then takes a position in the same direction. One explicit assumption of this technique is that most breakouts will not lead to profits. Consequently, a built-in loss-prevention algorithm keeps you in the game long enough to catch the big moves. But if so many breakouts are in fact false, then it should theoretically be possible to find a system that profits from that.

    What about stop-losses? A traditional stop-loss is a price-based, predetermined exit that is placed in order to mitigate damage from an adverse market move. This definition may seem to imply that losses are a function of being “wrong.” That is not, however, completely accurate: losses are also a function of position size. While seemingly obvious, this detail is often overlooked."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-42-45-where-is-the-weakest-link-by-damir-smitlener-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-42-45-where-is-the-weakest-link-by-damir-smitlener-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-42-45-where-is-the-weakest-link-by-damir-smitlener-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov224dyof,d,"{""minimum-quantity"":""1"",""path"":""ch12d201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:12 (46-49): The Dynamics Of Candlestick Patterns by Shijoong Sung"",""caption-linebreaks"":""Stocks & Commodities V. 22:12 (46-49): The Dynamics Of Candlestick Patterns by Shijoong Sung

    Candlestick patterns have been used for centuries, but given that they have received so much attention among technical analysts, can they still be used in the conventional way?

    If a hammer pattern appears during a bearish trend,\ndoes that mean you should plunge into the market? If a hanging man pattern appears during a bullish trend, does that mean you should exit the market immediately? Little is known about the effects and dynamics of candlestick patterns, so to find out more, I did a thorough and systematic investigation of 351,745 candlestick patterns. My analysis seemed to suggest that the conventional way of interpreting candlestick patterns should be reconsidered.

    MYSTERY

    Typically, a hammer that occurs in a downtrend suggests a trend reversal. Similarly, a hanging man pattern in an uptrend suggests the trend will end and the market will reverse. It is a nice surprise to see a hammer pattern that turns a bearish price movement into a bullish one, or a hanging man pattern that turns a bullish movement into a bearish one. But that doesn’t mean you can make money from these patterns. From\nmy analysis, I found that there are many hammer patterns that give the correct bullish signal. Unfortunately, there can be just as many — or even more — hammer patterns that give the false signal. Is it really favorable to take any action when these patterns appear?

    Another important issue that is rarely addressed is the\namount of time it takes for the expected price movement to continue after a specific candlestick pattern occurs. When should you take action? Candlestick patterns are usually considered to have a very short-term effect. But is that really the case?

    To answer these riddles, it is necessary to perform a systematic investigation into how the market reacts to these patterns. To analyze the pattern effectiveness and the time it takes for price movement of the patterns, I collected about eight years of daily data from the KOSPI 200 stock index, which is listed on the Korea Stock\nExchange. There were approximately 1,758 candlesticks for each symbol studied. In total, I investigated 351,745 candlestick patterns."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-46-49-the-dynamics-of-candlestick-patterns-by-shijoong-sung-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-46-49-the-dynamics-of-candlestick-patterns-by-shijoong-sung-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-46-49-the-dynamics-of-candlestick-patterns-by-shijoong-sung-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov225sest,d,"{""minimum-quantity"":""1"",""path"":""ch12d201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:12 (56-59): Setting Strike Price Probability At Expiration by David White"",""caption-linebreaks"":""Stocks & Commodities V. 22:12 (56-59): Setting Strike Price Probability At Expiration by David White

    Here’s one way you can increase your odds for a short-term play.

    Nassim Taleb’s exceptional book, Fooled By Randomness, helped me finally gain the proper understanding of the probability of hitting a strike price at expiration: “The statistic that 90% of all option positions lost money is meaningless (i.e., the frequency) if we do not take into account how much money is made on average during the remaining 10%.” Let’s take a look at what this means.

    PRICE AT EXPIRATION

    Setting a real-odds number is impossible, as Taleb comments, but there is real information in the bets that people make in the market. For example, I found a website (www.iqauto.com — click on “maximum pain opts”) that gives a strike number where the stock price is most likely to be at expiration. This number is based on finding the centerpoint where the most money would\nbe lost at expiration.

    This theory is based on pretty solid ground if you look at other areas of life, such as horse racing. At a pari-mutuel horse track, the odds that are the basis of the payout are calculated by the wagers placed. Just as in the options market, 90% of the time the odds are correct. The tracks pay out 80% of the money, so the only thing they care about is how much the bettors put down, not the way they pick their bets. Nine times out of 10, they skim the 10% difference as profit.

    Determining probability by wager has also been used for more surprising purposes, such as finding a submarine lost at sea — within 1,000 yards (see The Silent War by John Piña Craven). Given a decent sample size, accurate odds can be made on just about anything with this method: Just get enough people together and then bet on it."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-56-59-setting-strike-price-probability-at-expiration-by-david-white-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-56-59-setting-strike-price-probability-at-expiration-by-david-white-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-56-59-setting-strike-price-probability-at-expiration-by-david-white-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov226inre,d,"{""minimum-quantity"":""1"",""path"":""ch12d201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:12 (66-67): Intermarket Review by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 22:12 (66-67): Intermarket Review by David Penn

    How do you spell “inflation”? O-I-L? How about long-term interest rates, such as those attached to the 10-year US Treasury note? If you are a supply-side economist of the Jude Wanniski school, then maybe you will refuse to shout “inflation” until you see the color of the eyes of the “POG,” more familiarly known as the price of gold. Then again, if you believe that an inflating dollar has to have another currency against which to depreciate in value, how about the Swiss franc, that stalwart European currency of the inflationary 1970s? With the Federal Reserve Board’s stance on the economy somewhat mixed (here’s a hint: “soft patch” means “resurgent fears of deflation”), investors and traders need more help than ever in determining just what an inflationary environment — or rather, the first stages of an inflationary environment — might look like. To that end, Intermarket Review profiles the top four compasses of market-oriented inflationary expectation: the price of gold, the yield on the 10-year T-note, crude oil, and the Swiss franc.

    GOLD

    What can be said about gold? “The only real money …”? “Barbaric relic …”? Federal Reserve Board chairman Alan Greenspan, arguably the greatest financial asset inflationist in American history, once wrote of gold: “This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights …” Cryptologists need not apply, there was no modern-day Fed-speak there. It is worth adding that in addition to gold’s role as a monetary indicator (rising gold prices reflect inflationary fears, falling gold prices reflect deflationary or disinflationary fears), gold has a number of uses in both technology and industry, as well as, of course, in jewelry."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-66-67-intermarket-review-by-david-penn-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-66-67-intermarket-review-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-66-67-intermarket-review-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov226brst,d,"{""minimum-quantity"":""1"",""path"":""ch12d201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:12 (68-72): Breadth Statistics: What Do They Tell You? by Tom McClellan"",""caption-linebreaks"":""Stocks & Commodities V. 22:12 (68-72): Breadth Statistics: What Do They Tell You? by Tom McClellan

    Let’s revisit the advance/decline line.

    Advance/decline (A/D) statistics have been used since 1926, when they were first analyzed by Col. Leonard Ayres and James Hughes of the Cleveland Trust Co. In the early 1960s, the use of the advance/decline line gained more attention with the writings of Richard Russell, Joseph Granville, and others who were able to\ndemonstrate its effectiveness when it showed a diverging condition during the 1961–62 market top.

    A/D LINE BASICS

    There are different ways to construct A/D lines. The most common method is by summing up the daily breadth (advancing issues minus declining issues), which means that the value of the A/D line changes by each new day’s breadth reading. Although this calculation is simple, it poses problems for long-term comparisons. Over the years, there has been an\nincrease in the number of issues traded. A difference of 100 in A/D would have a significant meaning in the 1930s, when there were only 600 or so issues traded. But now, with more than 3,400 stocks traded on the New York Stock Exchange (NYSE), that difference would not mean as much. Because of this, a “normal” A/D line may have mismatched amplitudes of strong or weak breadth days in long-term comparisons.

    One way to get around this is by using a ratio instead of\nthe raw breadth statistics. You can calculate this ratio using the formula:

    A/D ratio = [(A-D)/(A+D)] x 1000

    Although the number 1000 is used here, you can use other values as long as you are consistent throughout the data.

    From Figure 1, you can see that for periods of up to a couple of years there is not much difference in appearance between the normal A/D line and the A/D ratio. Because of this, many technical analysts use the raw data for short- to intermediate-term analysis (days to weeks)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-68-72-breadth-statistics-what-do-they-tell-you-by-tom-mcclellan-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-68-72-breadth-statistics-what-do-they-tell-you-by-tom-mcclellan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-68-72-breadth-statistics-what-do-they-tell-you-by-tom-mcclellan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov227exyo,d,"{""minimum-quantity"":""1"",""path"":""ch12d201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:12 (74): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 22:12 (74): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    EXIT STRATEGY EXAMPLE

    Would you explain the process of exit strategies? Thanks — Elom

    The appropriate exit strategy will depend on your outlook for whatever you are trading. In most cases, it’s best to have a stop-loss that will trigger your exit from the trade if it begins to move in the wrong direction. The stop-loss might be based on a technical level, a dollar\namount, or a percentage. For example, you might set a stop around an important technical support area in the market. Or, you might stop out of the trade if it moves 5% in the wrong direction. We also recommend setting an exit strategy based on a profit objective. For example, if you set up a straddle or a bullish spread using options, you might exit part or all of the trade when you have achieved a 25% or 50% profit. Most important, when you develop an exit strategy, whatever it is, stick to it. This sometimes means cutting a loss\neven if it’s painful in the short term."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-74-explore-your-options-by-tom-gentile-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-74-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-74-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov227inla,d,"{""minimum-quantity"":""1"",""path"":""ch12d201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:12 (74-79): Interview: Larry Connors On How Markets Really Work by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 22:12 (74-79): Interview: Larry Connors On How Markets Really Work by Jayanthi Gopalakrishnan

    Laurence Connors is chairman and chief executive officer of TradingMarkets.com, a financial markets information company he founded in 1998. With more than 22 years’ experience in the financial markets industry, he is also the managing director of Connors Capital, a private investment company. Larry Connors has also authored topselling books on market strategies and volatility trading, including Street Smarts (with Linda Raschke), How Markets Really Work, Connors On Advanced Trading Strategies, and Trading Connors VIX Reversals. His opinions and insights have been featured or quoted in The Wall Street Journal, The New York Times, Barron’s, Bloomberg TV, Bloomberg Radio, Dow Jones Newswire, Yahoo! FinanceVision, Los Angeles Times, E-Trade Financial Daily, Futures magazine, Technical Analysis of STOCKS & COMMODITIES, and others. He has been a featured speaker at a number of major investment conferences over the past decade. STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Larry Connors on October 7, 2004.

    Q: Larry, how did you get interested in technical analysis?

    A: Back in 1987, there were very few books written on trading or technical analysis. My goal was to be able to trade for myself on a full-time basis, and support my family. It took seven years before I was comfortable\nenough to do this for myself. The path to the same goal is probably a lot smoother today, because of the amount of information that’s out there. But back in the late 1980s and early 1990s it didn’t exist. In 1994, I left Donaldson Lufkin Jenrette and started my hedge fund.\nAlso at the time, I co-authored a book, which McGraw-Hill published, and also began publishing my own research.

    Q: And that’s what you’ve been doing for a while now, right?

    A: We’ve been publishing now for approximately\n10 years. In our latest book, How Markets Really Work, there’s been an evolution of my own thinking. We’re at the stage right now where, if it can’t be quantified, we’re\nnot going to trade it. We need to have statistical analysis behind it."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-74-79-interview-larry-connors-on-how-markets-really-work-by-jayanthi-gopalakrishnan-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-74-79-interview-larry-connors-on-how-markets-really-work-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-74-79-interview-larry-connors-on-how-markets-really-work-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov228prre1,d,"{""minimum-quantity"":""1"",""path"":""ch12d201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:12 (83-85): Product Review: Terra Nova Investor by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 22:12 (83-85): Product Review: Terra Nova Investor by Jayanthi Gopalakrishnan

    The idea of direct-access order entry has long been associated with active traders who make several trades per day. But lately, products that mimic direct-access platforms but without the bells and whistles of a fullfledged trading platform are entering the marketplace. One such product is Terra Nova Investor from Terra Nova Online. This platform is targeted to the less active equity, futures, and options trader who is interested in taking the first step into the world of direct-access trading.

    INSTALLATION

    Since Terra Nova Investor is a browserbased platform, it’s relatively easy to download. Once you open an account, you will receive a user name, domain, and password that will enable you to install and run the program.

    FEATURES

    Navigating through all the features this platform has to offer does take some getting used to. Basically, what you get are the most-actives, gainers, losers, to selecting the data to display. In Figure 2 you get a glimpse of the choices."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-83-85-product-review-terra-nova-investor-by-jayanthi-gopalakrishnan-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-83-85-product-review-terra-nova-investor-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-83-85-product-review-terra-nova-investor-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov228trti,d,"{""minimum-quantity"":""1"",""path"":""ch12d201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:12 (86-98): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 22:12 (86-98): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    In the article “Trend Trigger Factor”, M.H. Pee describes a trend trigger factor (TTF) indicator, which is a method of detecting uptrends and downtrends using a 15-day buy power and 15-day sell power calculation. Pee also provides sample criteria that can be used to create an always-in-the-market reversal strategy based on the TTF indicator. Here, TradeStation provides sample EasyLanguage code for a TTF PaintBar study and strategy.

    MetaStock, WealthLab, AmiBroker, eSignal, NeuroShell Trader, TradingSolutions, TickQuest, Prophet.net, AIQ, TechniFilter Plus, Financial Data Calculator, Aspen Graphics, SmarTrader, Investor/RT, StockWhiz also provide code for the TTF."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-86-98-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-86-98-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-86-98-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov229chma,d,"{""minimum-quantity"":""1"",""path"":""ch12d201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:12 (99-100): Charting The Market by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 22:12 (99-100): Charting The Market by David Penn

    GAPS

    Are gaps to technical analysts what stock splits are to fundamental analysts: clear evidence of a market event, the significance of which is often inversely related to the\nlevel of glad surprise the event itself elicits? Thus, during the stock market bubble years of the late 1990s, television advertisements for brokerage firms would routinely feature “regular” guy (and gal) traders and investors babbling about how XYZ Trade Inc. kept them abreast of all the things a “serious trader/investor” needs: upgrades, downgrades, stock splits. … In fact, a number of brokerages continue to present us with these alleged market players, who are apparently unable to execute a trade unless an analyst suggests they do so.

    But technicians were often little better, as the birthright of stock market riches was claimed more and more often by an ever-widening cohort of stock traders and investors. And one of the favorite tools of the bubble-era technical analyst was the gap — particularly the gap up. In a time when many of the most sought-after stocks\nwere also the least-liquid stocks (especially as the Nasdaq market soared into its peak), the gap up appeared to become both more common and, potentially, more rewarding.

    What exactly is meant by a gap? And do the different kinds of gaps — from ex-dividend and common gaps to breakaway and exhaustion gaps — suggest different things in terms of how the astute technical analyst reads them?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-99-100-charting-the-market-by-david-penn-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-99-100-charting-the-market-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-12-99-100-charting-the-market-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov22186le,d,"{""minimum-quantity"":""1"",""path"":""ch4a201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:4 (10-13, 86-87): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 22:4 (10-13, 86-87): Letters To S&C by Technical Analysis, Inc.

    CANDLESTICKS REVISITED

    Editor,

    While I disagree with the importance placed on a\nsingle tall white candlestick line in Stephen Bigalow’s article in the February 2004 issue (“Stop-Loss Procedures Made Easy”), I am glad he touched on the importance of using stops. In all of my training material, I stress that while candlesticks give many timing advantages, the trader must always take into account risk and reward. One of my Nison Trading Principles (my 13 most important trading concepts) is, “Even a perfect candle signal does not equal a good trade! One must always judge the potential trade’s risk-reward.”\nNot understanding this is probably one of the most common mistakes made by those new to candlesticks.\nBy using a protective stop, we harness one of the major strengths of technical analysis. To wit: fostering a sound money management approach to trading. A stop means that there is a price at which the position is wrong. As the Japanese proverb says, “When you are\nriding a dead horse, it is best to dismount.”

    STEVE NISON, CMT\nCandlecharts.com"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-10-13-86-87-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""263"",""width"":""204""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-10-13-86-87-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-10-13-86-87-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov221trre,d,"{""minimum-quantity"":""1"",""path"":""ch4a201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:4 (102-113): Traders’ Resource: Courses And Seminars by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 22:4 (102-113): Traders’ Resource: Courses And Seminars by Technical Analysis, Inc.

    They say that the more you learn, the more you know you need to learn. This is true in trading. If you’re not fully prepared when you go to trade, you could be the\none that the smart money profits from. Education is crucial in trading. If you don’t step up to the line with the right tools and know-how to trade the markets, you might as well be gambling — with the odds on the house’s side. But help is available, in the way of courses, seminars, classes, manuals, books, tutorials, even mentors.

    Readers often ask us how they can further their knowledge and skills in trading (that is, in addition to reading STOCKS & COMMODITIES!). Some readers write us asking about certification or degree programs in technical analysis, some want a schedule of upcoming seminars and conferences, and others seek personalized counsel or tutoring. Well, here it is — your\nresource for current and upcoming courses and seminars. It’s this month’s Traders’ Resource. Readers may also want to check out our Readers’ Choice Awards in the 2004 Bonus Issue of STOCKS & COMMODITIES for the category of Trading Centers/Schools/Training."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-102-113-traders-resource-courses-and-seminars-by-technical-analysis-inc-21.gif"",""height"":""263"",""width"":""204""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-102-113-traders-resource-courses-and-seminars-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-102-113-traders-resource-courses-and-seminars-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov221chma,d,"{""minimum-quantity"":""1"",""path"":""ch4a201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:4 (120-121): Charting The Market: Stochastics by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 22:4 (120-121): Charting The Market: Stochastics by David Penn

    STOCHASTICS

    For many technicians, stochastics are the first real oscillator to be encountered when embarking on the study of technical analysis. Unlike some of the more common-sounding concepts in technical analysis, terms like support and resistance, breakout and breakdown, trading range, relative strength, and pullback, a term like stochastics lets an acolyte\ntechnician know he or she has truly entered a different field of knowledge with its own rules, customs, mores, and in-group jargon.

    What are stochastics? George Lane, in an informative and entertaining article for Technical Analysis of STOCKS & COMMODITIES back in 1984, wrote a brief primer on using what he called “Lane’s Stochastics”:

    \""This method is based on the observation that as price decreases, the daily closes tend to accumulate ever closer to their extreme lows of the daily range. Conversely, as price increases, the daily closes tend to accumulate ever closer to the extreme high of the daily range."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-120-121-charting-the-market-stochastics-by-david-penn-21.gif"",""height"":""263"",""width"":""204""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-120-121-charting-the-market-stochastics-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-120-121-charting-the-market-stochastics-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov221trin,d,"{""minimum-quantity"":""1"",""path"":""ch4a201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:4 (14-20): Trend-Quality Indicator by David Sepiashvili"",""caption-linebreaks"":""Stocks & Commodities V. 22:4 (14-20): Trend-Quality Indicator by David Sepiashvili

    Having trouble detecting trends, or estimating their\nduration when you do spot one? This indicator comes\nto the rescue.

    Trend detection and estimation is one of the most important objectives of technical analysis. One common filtering technique that attempts to eliminate stock market noise and extract important trends is smoothing with the help of moving averages. When using moving averages (MAs) to detect a trend in a security’s price, the main difficulty is determining the appropriate averaging period.

    To determine the appropriate period can be challenging because different periods have advantages\nand disadvantages. A shorter averaging period, for instance, may give higher profits but involve high risk, owing to numerous random fluctuations that affect the trend. A longer moving average helps avoid many false reversals by lagging behind the security’s current prices, but as a rule, less risk means less profit. The trend-quality indicator (or Q-indicator) is a trend detection and estimation tool that is based on a two-step filtering technique. It measures cumulative price changes over term-oriented semicycles and relates them to “noise.” The approach reveals congestion and trending periods of the price movement\nand focuses on the most important trends, evaluating their strength in the process. The indicator is presented in a centered oscillator and banded oscillator format."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-14-20-trend-quality-indicator-by-david-sepiashvili-20.gif"",""height"":""263"",""width"":""204""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-14-20-trend-quality-indicator-by-david-sepiashvili-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-14-20-trend-quality-indicator-by-david-sepiashvili-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov222vodi,d,"{""minimum-quantity"":""1"",""path"":""ch4a201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:4 (22-28): Volume Divergence by Hal Masover"",""caption-linebreaks"":""Stocks & Commodities V. 22:4 (22-28): Volume Divergence by Hal Masover

    Divergence in volume and price give clues to future price movement.

    One of the first things I learned about trading was to search for divergences. Briefly, divergence simply refers to the circumstance of price going one way but not being confirmed by any number of possible other confirming indications.

    The first one I learned to use and still like is stochastic divergence. This was developed by George Lane and\nis available on virtually any charting software. In Figure 1, I have reproduced stochastic divergence on a fiveminute chart of the Standard & Poor’s 500 index from April 10, 2003.

    See how the price makes three consecutive lower lows from the previous afternoon low labeled 1, 2, and 3? Now look at the stochastic indicator right below the chart. The indicator makes higher lows over this same time. This is divergence."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-22-28-volume-divergence-by-hal-masover-20.gif"",""height"":""263"",""width"":""204""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-22-28-volume-divergence-by-hal-masover-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-22-28-volume-divergence-by-hal-masover-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov223dopr,d,"{""minimum-quantity"":""1"",""path"":""ch4a201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:4 (30-37): Do Price Patterns Really Work? by Martin J. Pring"",""caption-linebreaks"":""Stocks & Commodities V. 22:4 (30-37): Do Price Patterns Really Work? by Martin J. Pring

    How far can you expect prices to go when they break\nout of a pattern? Here’s one technique you can use to\nfind out.

    Technical analysis focuses on identifying trends early on and riding them until evidence of a reversal appears.\nEssentially, these trends are periods in which either buyers or sellers are in command, depending on direction.

    Fortunately for technicians, there is usually a transitional phase or trading range separating up- and\ndowntrends. During these trading ranges, neither side\nis in control. Over the years, market participants have\nnoticed that many of these ranges trace out fairly\ndefinable price formations, which, when completed\nwith a breakout, signify that a new trend is under way\n(see Figure 1 for a bear/bull reversal).

    Once prices break out from such a pattern, it is possible to set an objective by measuring the pattern’s\ndepth and projecting this distance in the direction of\nthe breakout. In this article I will be concentrating on\ndaily charts, but the principles apply to any time frame."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-30-37-do-price-patterns-really-work-by-martin-j-pring-20.gif"",""height"":""263"",""width"":""204""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-30-37-do-price-patterns-really-work-by-martin-j-pring-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-30-37-do-price-patterns-really-work-by-martin-j-pring-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov224tich,d,"{""minimum-quantity"":""1"",""path"":""ch4a201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:4 (44-48): Tiny Chart Patterns: Stinkers Or Stalwarts? by Thomas N. Bulkowski"",""caption-linebreaks"":""Stocks & Commodities V. 22:4 (44-48): Tiny Chart Patterns: Stinkers Or Stalwarts? by Thomas N. Bulkowski

    Recognizing tiny chart patterns may be all the edge you need to make a killing in the market, but do they work?

    In two prior articles, I discussed bullish chart patterns of long duration. This article discusses smaller chart patterns: some you may have heard about, and some\nthat may be new to you. None of the patterns is longer than a few days. Daytraders in stocks or commodities\nmay find them useful, but some of the patterns may also help longer term investors. Sometimes these tiny\npatterns can tip you off to a large move ahead. They can signal a trend reversal and save you a ton of money.\nSo what are these mysterious chart patterns?

    INSIDE DAYS

    All figures in this article show high- low- close prices — that is, no opening price. Figure 1 illustrates our first\npattern, inside days, on the daily scale. Look at the inset for a closer view of the pattern. An inside day is\nwithin the boundary of the prior day’s range (hence its name). The second day has a lower high and higher low — a narrowing of the price range. No ties are allowed (the two days cannot share the same high or low price). Where the stock opens or closes is not important, and the second day need not be centered in the first day’s price range. The inset shows the second\nday’s price range to be above the midpoint of the prior day."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-44-48-tiny-chart-patterns-stinkers-or-stalwarts-by-thomas-n-bulkowski-20.gif"",""height"":""263"",""width"":""204""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-44-48-tiny-chart-patterns-stinkers-or-stalwarts-by-thomas-n-bulkowski-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-44-48-tiny-chart-patterns-stinkers-or-stalwarts-by-thomas-n-bulkowski-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov225dopu,d,"{""minimum-quantity"":""1"",""path"":""ch4a201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:4 (52-55): Dollar-Weighted Put/Call Ratios by Fari Hamzei and Barbara Star Ph.D."",""caption-linebreaks"":""Stocks & Commodities V. 22:4 (52-55): Dollar-Weighted Put/Call Ratios by Fari Hamzei and Barbara Star Ph.D.

    Does this new twist on the popular sentiment indicator hold some predictive value? Find out here.

    Many years have passed since Martin\nZweig used end-of-day option trading activity to create the put/call ratio. Since then, it has been widely followed as a measure of market sentiment. It reflects the emotional aspect of trading by identifying the degree to which traders feel optimistic or pessimistic about near-term market direction. Because it reveals what traders are thinking, many believe that the put/call ratio holds some predictive value.

    The original put/call ratio is based on total option contract volume for the day. It aggregates all put and call option volumes into one ratio. But options traders know that prices fluctuate throughout the day, and thus,\nnot all contracts for a given stock or index are created equal. Wouldn’t it make more sense to track changes in option trading on a real-time basis and incorporate both price and volume in the calculation? That was the\npremise Fari Hamzei wanted to test. He managed to create the code and gather the information needed to produce real-time, dollar-weighted put/call ratios, thanks to improved computer technology and Internet speed."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-52-55-dollar-weighted-put-call-ratios-by-fari-hamzei-and-barbara-star-ph-d-20.gif"",""height"":""263"",""width"":""204""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-52-55-dollar-weighted-put-call-ratios-by-fari-hamzei-and-barbara-star-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-52-55-dollar-weighted-put-call-ratios-by-fari-hamzei-and-barbara-star-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov225inre,d,"{""minimum-quantity"":""1"",""path"":""ch4a201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:4 (56-57): Intermarket Review by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 22:4 (56-57): Intermarket Review by David Penn

    TURKISH INVESTMENT FUND (TKF)

    The Turkish Investment Fund (TKF) is a closed-end fund under the advisement of Morgan Stanley Investment Advisors. Traded on the New York Stock Exchange (NYSE), the fund is geared toward providing\ninvestors with exposure to equities of companies based in or out of Turkey. Founded in December 1989, the fund had total net assets in excess of $29 million as of this writing. Holdings in the Turkish Investment Fund include companies such as Turkiye Is Bankasi (banking), Akbank (banking), and Turkcell Iletisim Hizmet (communications). By industry sector, TKF is diversified principally among financials, consumer discretionary, and industrials.

    Also covered: MEXICO FUND (MXF), TEMPLETON RUSSIA AND EAST EUROPEAN FUND (TRF), and INDIA FUND (IFN)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-56-57-intermarket-review-by-david-penn-20.gif"",""height"":""263"",""width"":""204""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-56-57-intermarket-review-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-56-57-intermarket-review-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov225cohe,d,"{""minimum-quantity"":""1"",""path"":""ch4a201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:4 (58-60): Come Here Quick, Durbin Watson by Ron McEwan"",""caption-linebreaks"":""Stocks & Commodities V. 22:4 (58-60): Come Here Quick, Durbin Watson by Ron McEwan

    Here’s how you can use the Durbin Watson statistic to measure the autocorrelation of two securities.

    One of the most powerful statistical tools traders have at their disposal is the ability to measure the correlation between two sets of time series data.

    There are many approaches to this. One is to measure the relationship of stock prices (usually the closing prices). Another method, common among portfolio\nanalysts, is to measure the correlation of the returns (daily, weekly, or monthly) of the underlying data. The idea is that you would not want too many securities in the portfolio that are highly correlated with each other (you do not want the same kind of eggs in your basket). Yet another method is to measure the correlation of the residuals of a regression line that has been applied to the data. This is referred to as autocorrelation.

    MEASURING AUTOCORRELATION

    If your goal is to find autocorrelation in a database of stocks, then a simple measure of correlation will not do. While you can have high correlation between the closing prices of two stocks as well as returns of stocks (Figure 1), the level of autocorrelation, or correlation of residuals, might be very low (Figure 2).

    There are times when you may want to avoid stocks that trade in a similar fashion to each other, but there are also times when autocorrelation can be helpful in developing a trading strategy."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-58-60-come-here-quick-durbin-watson-by-ron-mcewan-20.gif"",""height"":""263"",""width"":""204""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-58-60-come-here-quick-durbin-watson-by-ron-mcewan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-58-60-come-here-quick-durbin-watson-by-ron-mcewan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov226sidu,d,"{""minimum-quantity"":""1"",""path"":""ch4a201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:4 (60): Sidebar: Durbin Watson statistic by Ron McEwan"",""caption-linebreaks"":""Stocks & Commodities V. 22:4 (60): Sidebar: Durbin Watson statistic by Ron McEwan

    The Durbin Watson statistic is a test that looks for first-order autocorrelation in the residuals of a time-series regression. The residual for time period t is compared with the residual for time period t–1, resulting in a statistic that measures the significance\nof this correlation. The value of the statistic ranges from zero to 4, with 2 indicating that there is no serial correlation. Sidebar Figure 1 shows a spreadsheet for calculating the autocorrelation for 10 securities."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-60-sidebar-durbin-watson-statistic-by-ron-mcewan-20.gif"",""height"":""263"",""width"":""204""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-60-sidebar-durbin-watson-statistic-by-ron-mcewan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-60-sidebar-durbin-watson-statistic-by-ron-mcewan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov226wotr,d,"{""minimum-quantity"":""1"",""path"":""ch4a201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:4 (62-64): The Wounded Trader by Adrienne Laris Toghraie"",""caption-linebreaks"":""Stocks & Commodities V. 22:4 (62-64): The Wounded Trader by Adrienne Laris Toghraie

    Don’t let your past affect your present performance in the markets.

    The business of trading forces you to face the psychological baggage that you carry. It also makes you deal with new issues that develop from losses in the markets. Hard-earned money and dreams lost can leave deep psychological wounds. The prevention of such wounds, and the way you handle them when they do happen, will determine whether you will survive as a professional trader.

    READY TO RUMBLE

    If you want to become a profitable entrepreneur, you must prepare yourself by getting some education and a business plan. This is a time-consuming and costly process. Look at doctors, lawyers, and storefront business owners. For each career, money is required to provide for years of education, and then additional\ncapital is needed to maintain the business and a comfortable lifestyle through the start-up phase of the venture.

    The same requirements apply to trading. To become a trader, it is important to realize and prepare for the fact that most traders are not profitable in their first year. Early planning for the equipment and trading capital is important for eventual success. Most traders enter the trading business undercapitalized, undereducated,\nand underprepared for contingencies. This lack of preparation creates an emotional war zone from the very beginning of the venture."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-62-64-the-wounded-trader-by-adrienne-laris-toghraie-20.gif"",""height"":""263"",""width"":""204""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-62-64-the-wounded-trader-by-adrienne-laris-toghraie-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-62-64-the-wounded-trader-by-adrienne-laris-toghraie-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov226exyo,d,"{""minimum-quantity"":""1"",""path"":""ch4a201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:4 (65): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 22:4 (65): Explore Your Options by Tom Gentile

    CALENDAR SPREADS

    Q: I’m having a hard time understanding exactly how a calendar spread creates profit. Can you explain this technique in language that I can easily understand?

    A: A calendar spread, also referred to as a time spread, is a “delta-neutral” (nearly risk-free) strategy. It is composed of both a long and a short position (hence the spread), using two calls or two puts that have the same strike price but expire on different dates. Ideally, in order to maximize the profit, you would like for the stock to finish at exactly that strike price. In Figure 1, you can see that the maximum profit of the calendar spread pictured is at the $25 level, which is the strike of both the long and short position."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-65-explore-your-options-by-tom-gentile-20.gif"",""height"":""263"",""width"":""204""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-65-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-65-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov226insh,d,"{""minimum-quantity"":""1"",""path"":""ch4a201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:4 (66-73): Interview: Short-Term Trader Jeff Cooper by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 22:4 (66-73): Interview: Short-Term Trader Jeff Cooper by Jayanthi Gopalakrishnan

    Few people have succeeded in trading the way Jeff Cooper has. His first book, Hit And Run Trading, is often referred to as the bible of the short-term trader. His other work, including Hit And Run Trading II, has further given insight into his ability to spot unique trading setups that over time profitably repeat themselves. His next book (with partner David Reif), Wheels Of Time And Price, will be published in 2005 by Traders Library. Cooper is a regular contributor to TheStreet.com, where he also offers his Trading Report subscription service. Currently, he manages money at\nwww.MutualMoneyFlow.com. STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Cooper on February 10, 2004.

    Q: How did you get interested in the financial markets?

    A: My father operated one of the first private hedge funds in the 1960s, and as a teenager I was always fascinated that his decisions were basically intuitive and instinctive, in the sense he was a tape reader. He didn’t come from a background of academia, he didn’t have an MBA. In college, my majors were cinema and literature, so I was more right-brain than left-brain oriented too. I think that led to my interest in trading psychology and the way the market seemed to repeat certain patterns, and traced out fractals of patterns on different time frames. I was also intrigued that I saw my dad sitting at his own desk, and he was his own boss, but without any inventory. He was more or less a short-term trader. In my naïveté, it seemed to me he was able to make money with little effort."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-66-73-interview-short-term-trader-jeff-cooper-by-jayanthi-gopalakrishnan-20.gif"",""height"":""263"",""width"":""204""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-66-73-interview-short-term-trader-jeff-cooper-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-66-73-interview-short-term-trader-jeff-cooper-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov227notr,d,"{""minimum-quantity"":""1"",""path"":""ch4a201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:4 (74): Novice Trader’s Notebook: Momentum by Amy Wu"",""caption-linebreaks"":""Stocks & Commodities V. 22:4 (74): Novice Trader’s Notebook: Momentum by Amy Wu

    MOMENTUM

    The momentum indicator was first presented in J. Welles Wilder’s \""New Concepts In Trading Systems\"" and has since become a popular technical tool. Price\nmomentum is defined as the measure of velocity of price change or market speed. The difference method for calculating a momentum indicator is the following:\nhave n be the time period (usually 14 days), then subtract the close n periods ago from the present close period. If both of these closing values are identical, then\nthe difference is zero. If the present close is smaller than the previous close, the momentum will be negative. Likewise, if the present close is greater than the previous close, the momentum will be positive. This indicator is an oscillator because the values are determined by their place above, below, or on the zero\nline. Above the zero line, go long; below the zero line, go short."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-74-novice-trader-s-notebook-momentum-by-amy-wu-20.gif"",""height"":""263"",""width"":""204""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-74-novice-trader-s-notebook-momentum-by-amy-wu-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-74-novice-trader-s-notebook-momentum-by-amy-wu-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov227qaby,d,"{""minimum-quantity"":""1"",""path"":""ch4a201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:4 (76): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 22:4 (76): Q&A by Don Bright

    SPECIALIST PARTICIPATION

    Q: Would you tell me what prints on the time and sales would indicate specialist participation in a stock? I’ve read and observed that double prints on the offer often reveal that the specialist is going long the stock in the same amounts that other market participants are buying the stock. What do double prints on the bid mean? Is this the specialist going short in the same manner? Also, where can I research when and how a specialist is governed in entering and exiting positions? Thanks — grimer11

    A: You can tell exactly when a specialist is participating in certain prints, and when he is likely to have participated in others. Here’s an example: When you see the bid or offer change significantly, without the other side changing at all, and then a block trade (print) goes up at or near the recently changed quote price,\nyou can be pretty sure that the specialist took part in a negotiated trade. This activity indicates that the quote price must be changed so that the trade price falls within the (new) national best bid/offer (NBBO) as required by regulations. These block trades are always\n10,000 shares or more in the stocks that I trade."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-76-q-a-by-don-bright-20.gif"",""height"":""263"",""width"":""204""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-76-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-76-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov227quin,d,"{""minimum-quantity"":""1"",""path"":""ch4a201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:4 (77): Quick-Scan: Intermarket Analysis by Matt Blackman"",""caption-linebreaks"":""Stocks & Commodities V. 22:4 (77): Quick-Scan: Intermarket Analysis by Matt Blackman

    INTERMARKET ANALYSIS: Profiting From Global Market Relationships

    Publisher: John Wiley & Sons, Author: John J. Murphy, Year: 2004, Price: $69.95

    It’s surprising to consider, but according to Intermarket Analysis, John Murphy’s latest book, his distinguished\ncareer in the markets began nearly four decades ago. While many traders active today had yet to enter the material plane, he was already a stock analyst on Wall\nStreet. In the 1970s he began working in the commodities markets, which were in the process of a rapid evolution from a concentration on hard assets such as corn and sugar to include more sophisticated\nfinancial instruments such as contracts on currencies and Treasury bonds. This was followed by the introduction of stock index futures in the early 1980s. Commodities included the four major asset classes of stocks, bonds, commodities, and currencies."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-77-quick-scan-intermarket-analysis-by-matt-blackman-20.gif"",""height"":""263"",""width"":""204""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-77-quick-scan-intermarket-analysis-by-matt-blackman-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-77-quick-scan-intermarket-analysis-by-matt-blackman-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov227prre,d,"{""minimum-quantity"":""1"",""path"":""ch4a201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:4 (78-81): Product Review: TradeScan by S&C Staff"",""caption-linebreaks"":""Stocks & Commodities V. 22:4 (78-81): Product Review: TradeScan by S&C Staff

    TradeScan is a real-time trading alert service. The algorithms used to create the alerts use tick data that identifies individual trades inconjunction with price, volume, and Level II information. The displays are produced by a software application that is downloaded and installed. You pay a monthly fee to receive the alerts, most of which are text. There are two different packages, HL+ and Pro; Pro offers more alerts. Kingsbury Financial Management, Inc. (KFMI), claims that the alerts are delivered within one second of their origination. For example, when TradeScan takes data such as time and sales information, translates it into price and size, and uses it to generate an alert, the alert\nappears on your screen one second later. KFMI delivers the alerts using Insight Software’s Whisper application.

    FEATURES

    This product is geared to active traders, especially daytraders. In the case of institutional customers with trading floors, KFMI offers a volume discount and a remote server to better support larger numbers of traders."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-78-81-product-review-tradescan-by-s-c-staff-20.gif"",""height"":""263"",""width"":""204""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-78-81-product-review-tradescan-by-s-c-staff-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-78-81-product-review-tradescan-by-s-c-staff-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov228prre,d,"{""minimum-quantity"":""1"",""path"":""ch4a201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:4 (82-84): Product Review: TBOTS by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 22:4 (82-84): Product Review: TBOTS by David Penn

    How would you like a trading assistant? Or even better, how would you like a whole staff of assistants to monitor your target levels, prepare baskets of stocks to buy in order to exploit temporary weakness as revealed by your favorite trading setups and strategies, and generally execute your trading commands with the speed, accuracy, and sense of purpose of the 101st Airborne Division of the US Army?

    If that’s the kind of support you want or need to be all the trader you can be, then consider enlisting TradeSignals’ newest product, TBOTS: Trading Robots,\nto your cause. TBOTS allows any trader (or active investor, for that matter) to be his or her own hedge fund, or even mutual fund family (for those who believe that, when it comes to finding tradable stocks, the more the merrier)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-82-84-product-review-tbots-by-david-penn-20.gif"",""height"":""263"",""width"":""204""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-82-84-product-review-tbots-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-82-84-product-review-tbots-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov228quna,d,"{""minimum-quantity"":""1"",""path"":""ch4a201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:4 (85): Quick-Scans: Natural Order Educators by J. Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 22:4 (85): Quick-Scans: Natural Order Educators by J. Gopalakrishnan

    The thought of taking up trading as a profession often inspires images of the road to riches. But, as we all know, that’s not the right attitude for a beginning\ntrader. Instead of dreaming of luxuries to come, you should be envisioning plenty of hard work as you begin your trading education. Go into trading with a learning\nattitude: ready to learn what you need to, then go out and use that knowledge in a way that will benefit you the most. You can either teach yourself, or you can\nhave someone else teach you. If it’s the latter that you want, there are innumerable resources. In fact, our Traders’ Resource section in this issue lists pages of\ncourses and seminars related to trading.

    And, of course, there are a great many courses and seminars to consider. It is a cumbersome task to find one that matches what you are looking for. If you are a\nfutures trader, you may wish to consider the course offered by Natural Order Educators. Although the company’s methodology works for most other tradables, all their examples use futures contracts. The Natural Order Educators students I spoke with for this review took the course in order to trade futures."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-85-quick-scans-natural-order-educators-by-j-gopalakrishnan-20.gif"",""height"":""263"",""width"":""204""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-85-quick-scans-natural-order-educators-by-j-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-85-quick-scans-natural-order-educators-by-j-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov229trti,d,"{""minimum-quantity"":""1"",""path"":""ch4a201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:4 (90-99): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 22:4 (90-99): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue. Internet users will also find these and most previous Traders’\nTips at our website at www.Traders.com. To locate the various tips, use our site’s search engine or click on the STOCKS & COMMODITIES magazine icon on the left-hand side of our homepage, then scroll down to the “This month in S&C” section on the left-hand side and look for “Traders’ Tips.” For Traders’ Tips published earlier, click on the “Back issues archive” located under the “This month in S&C” section, or use the search engine. Other code presented in the articles in this magazine can be found at our website in a subscribers-only area at http:// technical.traders.com/sub/sublogin.asp. Login requires your last name and subscriber number.

    This month's code is provided by TradeStation, MetaStock, CQG, AmiBroker, eSignal, Wealth-Lab, NeuroShell Trader, AIQ Trading Expert, NeoTicker, Prophet.net, TechniFilter Plus, and TradeSense for David Sepiashvili's article \""Trend-Quality Indicator.\""

    Also included are CQG code for the Cumulative Price Change Indicator, and NeoTicker code for the B-indicator."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-90-99-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""263"",""width"":""204""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-90-99-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-90-99-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov229wefo,d,"{""minimum-quantity"":""1"",""path"":""ch4a201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 22:4 (99-100): Websites For Traders: CANSLIM.net by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 22:4 (99-100): Websites For Traders: CANSLIM.net by David Penn

    CANSLIM.NET

    When veteran traders and stockpickers are asked, “How do I get started in the stock market?” many point to one book: William O’Neil’s classic, \""How To Make\nMoney In Stocks.\"" This book, which was first published in 1988, is infused with both an optimism that is exceptional for its directness and simplicity (“Success\nin a free country is simple. Get a job, get an education, and learn to save and invest wisely. Anyone can do it. You can do it”), as well as a hard-as-nails attitude toward investing in stocks (O’Neil is credited for the slogan: “There are no good stocks. They are all bad —\nunless they go up.”)

    One of O’Neil’s biggest contributions, however, was his combination of fundamental and technical analysis into a methodology generally referred to by its acronym, CANSLIM. CANSLIM stands for the seven characteristics O’Neil believes stock investors need to consider when selecting stocks. These specific\ncharacteristics are:

    C: Current quarterly earnings per share

    A: Annual earnings increases

    N: New products, new management, new highs

    S: Supply and demand

    L: Leader or laggard?

    I: Institutional sponsorship

    M: Market direction"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-99-100-websites-for-traders-canslim-net-by-david-penn-21.gif"",""height"":""263"",""width"":""204""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-99-100-websites-for-traders-canslim-net-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-22-4-99-100-websites-for-traders-canslim-net-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231leto,d,"{""minimum-quantity"":""1"",""path"":""volume1jan2005"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:1 (10-13): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:1 (10-13): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist.

    Address your correspondence to: Editor, STOCKS & COMMODITIES, 4757 California Ave. SW, Seattle, WA 98116-4499, or email to Editor@Traders.com. All letters become the property of Technical Analysis, Inc. Letter-writers must include their full name and address\nfor verification. Letters may be edited for length or clarity. The opinions expressed in this column do not necessarily represent those of the magazine.—Editor

    TRADING SECTOR FUNDS USING STATISTICS

    Editor,

    The October 2004 article by John Twardy, “Trading\nSector Funds Using Statistics,” piqued my interest,\nand the sidebar on determining a trendline by least squares was very helpful. I do have a request for\na couple of clarifications. The gain/risk index is to be computed for each sector fund for the last 30 days. The next step is to “rank the funds according to this index.” Please explain how the ranking relates to 30 days of\ngain/risk index computations. Is a 30-day average to be used? Also, there is reference to the value of the “sum of the gain/risk index values for all funds for any given day makes up the sector trend index. This gives you the overall trend of the market, which is helpful for this\nshort-term analysis.” How is this value specifically used when selecting the highest-ranking fund?

    PETE BOCK

    via email"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-10-13-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-10-13-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-10-13-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231trre,d,"{""minimum-quantity"":""1"",""path"":""volume1jan2005"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:1 (102-113): Traders’ Resource: Trading Systems by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:1 (102-113): Traders’ Resource: Trading Systems by Technical Analysis, Inc.

    Trading systems can help take the subjective interpretation out of trading decisions by providing automated buy and sell signals based on preprogrammed rules. Trading systems are usually computer programs but can also be a real-time\nservice issuing signals or a set of published rules to follow. They can rely on one or more trading\ndisciplines, such as artificial intelligence, Gann analysis, astrology, indicator sets, or custom rules. This month in Traders’ Resource, we present a list of\npublicly available trading systems, most of which are sold as software packages for personal computers.

    We contacted trading system developers and vendors and asked them to fill out an online survey form to describe their product or products. Here, you’ll find a summary of the data we collected. While we’re only able to present an abbreviated amount of the information here in the magazine due to the space constraints of the printed page, you’ll find the complete\nlisting of product specifics at our website, Traders.com. Just click on the Traders’ Resource link and then on the Trading Systems category link. The product information you’ll find at our website for trading systems will help answer questions such as: What indicators does the system utilize? What markets are followed by the trading system? Are additional applications required to use the trading system? What types of customer support are offered? What are the primary features of the trading system? We hope this resource will help you narrow down your search and find the right trading system."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-102-113-traders-resource-trading-systems-by-technical-analysis-inc-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-102-113-traders-resource-trading-systems-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-102-113-traders-resource-trading-systems-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231wefo,d,"{""minimum-quantity"":""1"",""path"":""volume1jan2005"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:1 (122-123): Websites For Traders: PowerSwings.com by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:1 (122-123): Websites For Traders: PowerSwings.com by David Penn

    POWERSWINGS.COM

    Will a massive post-election bull market in stocks do for financial weblogs what the US Presidential election season did for political blogs? I have no idea whether the consensus view of ever-higher stock prices is any more correct than the consensus contrarian view of a gut-wrenching market collapse, but as long as the markets remain a place of fascination, opportunity, and\ncontroversy, there will always be those looking for insights and, fortunately, those talented and articulate enough to provide them.

    One such articulate talent is Teresa Lo, founder of PowerSwings.com and a frequent Technical Analysis of STOCKS & COMMODITIES contributor. While the dotcom bubble encouraged legions of financial analysts, money managers, and others to try to become more interactive through message boards, chats and chat transcripts, and other methods, a great many of those efforts either imploded with the dotcom bubble burst or metastasized into semifinancial, semipolitical\nweb journals — and eventually blogs — leaving the space for ongoing, running market and economic commentary from real market participants largely to the\ncontrarian camp of gold bugs and perennial market bears."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-122-123-websites-for-traders-powerswings-com-by-david-penn-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-122-123-websites-for-traders-powerswings-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-122-123-websites-for-traders-powerswings-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231chma,d,"{""minimum-quantity"":""1"",""path"":""volume1jan2005"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:1 (124-125): Charting The Market: Triangles by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:1 (124-125): Charting The Market: Triangles by David Penn

    TRIANGLES

    Writing about triangles as significant patterns in technical analysis, trader, author, and educator John Murphy observes that:

    \""… The triangle is usually a continuation pattern. Its formation signals that a trend has gotten ahead of itself and needs to consolidate for a while. Once that consolidation has been completed, the prior trend usually resumes in the same direction. In an uptrend, therefore, a triangle is usually a bullish pattern. In a downtrend, a triangle is usually bearish.\""

    There is no fault to be found in Murphy’s introduction to\ntriangles. He goes on to note that there are two main varieties of generally “directional” triangles, outside of the basic symmetrical form. But one of the most interesting — and potentially the most rewarding — aspects of triangles is not included in his discussion.

    Here is Elli Gifford, writing in her book, The Investor’s\nGuide To Technical Analysis:

    \""The triangle is reasonably uncommon as a reversal pattern. It is more often part of a trend, and its resolution signals continuation, but when it is a reversal pattern it is a powerful one. The rising lows and falling highs are evidence of a market argument\ntightening and, once it is resolved, the prediction —\nmade by measuring its base — is usually fulfilled quickly.\"""",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-124-125-charting-the-market-triangles-by-david-penn-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-124-125-charting-the-market-triangles-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-124-125-charting-the-market-triangles-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231bofo,d,"{""minimum-quantity"":""1"",""path"":""volume1jan2005"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:1 (128): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:1 (128): Books For Traders by Technical Analysis, Inc.

    The Trading Method That Can Make You Rich (199 pages, $195 hardcover, 2004, ISBN 0-97607150-0-\n9) by Roy Kelly, published by ARC Systems.

    Roy Kelly explains a mechanical trading approach that has proven to be an effective strategy for trading all markets. He has compiled 30 years of research\ninto this book, with 129 illustrative charts and graphs that explain a method that can enable the reader to become a successful trader."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-128-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-128-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-128-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov23111at,d,"{""minimum-quantity"":""1"",""path"":""volume1jan2005"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:1 (130, 116): At The Close by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:1 (130, 116): At The Close by Jayanthi Gopalakrishnan

    With the Presidential elections behind us, the “uncertainty factor” that was so often talked about for\nseveral months is no longer an excuse for the market’s unpredictable behavior. Not that this means there is no uncertainty in the markets; there always is and will be. Since the election results came out, the Standard & Poor’s 500 index (the index I watch most closely) has crossed above its 50-day moving average as well as broken above the downward-sloping price channel that acted as a strong resistance level (Figure 1). Now it appears that the next resistance level is the February/March 2004 highs.

    In the two days following the elections, the markets saw a significant rally. As of this writing (November 10, 2004), there seems to be some hesitation as the markets decide which way to go next. Perhaps it’s another uncertainty factor. Regardless, this indecisiveness makes it difficult for me to place a trade, to the point where I am tempted to give my eyes a rest and not watch the markets for a while. But as things go, I did have a chart up on my screen when I was fortunate enough to spot an opportunity. I placed a trade on November 9 that met my basic criteria (see my previous\ncolumns for what they are)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-130-116-at-the-close-by-jayanthi-gopalakrishnan-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-130-116-at-the-close-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-130-116-at-the-close-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231sp50,d,"{""minimum-quantity"":""1"",""path"":""volume1jan2005"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:1 (14-16): S&P 500 Float Changes by James Kellndorfer"",""caption-linebreaks"":""Stocks & Commodities V. 23:1 (14-16): S&P 500 Float Changes by James Kellndorfer

    Before applying indicators to securities, it may be worth your while to identify stocks that behave logically. Here’s how you can apply the rules of Economics 101 to find the right stocks.

    Generally, mathematical formulas are created in an\neffort to devise some new indicator that demonstrates\na pattern, but sometimes patterns appear unexpectedly when you examine the underlying mechanism. For this article, I conducted a simple survey of the Standard & Poor’s 500 to evaluate the basic law of supply and demand found in any introductory economics course. I initiated this survey to test the theories of basic economics and to discover if any patterns emerged.

    This survey was prompted by Standard & Poor’s announcement that the company will be changing its methodology in calculating its indexes. Starting this spring, the computation of the S&P 500 will shift to using a company’s float rather than the number of shares outstanding.

    CHANGES IN FLOAT

    Simply, I collated those stocks with the largest changes in their float to tabulate the results. No effort was made to subject this survey to the rigors of a scientific study and therefore no statistical relevance could be determined. After I tabulated the results, three groups emerged: companies whose float increased without a stock split (nonsplit group); companies whose float increased as a result of a stock split; and those companies in which the float decreased. A company’s float represents the number of shares available\nto the investing public. In case you weren’t aware of this, a company with a million shares doesn’t necessarily mean that all of its shares are available for trading. The company may own some of the shares through previous stock repurchases (known as stock buybacks). Or the company may have given away shares in the form of stock options as incentives to entice employees. Plus, a company may have even reissued stock through a secondary offering. This gets\ncomplicated in today’s world of finance, but the fact is the float represents the net result of all of these transactions. This quantity was chosen because it easily summarizes all of the changes that a company makes to its stock."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-14-16-s-p-500-float-changes-by-james-kellndorfer-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-14-16-s-p-500-float-changes-by-james-kellndorfer-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-14-16-s-p-500-float-changes-by-james-kellndorfer-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231lasv,d,"{""minimum-quantity"":""1"",""path"":""volume1jan2005"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:1 (18-29): Las Vegas Or Los Nasdaq? by Markos Katsanos"",""caption-linebreaks"":""Stocks & Commodities V. 23:1 (18-29): Las Vegas Or Los Nasdaq? by Markos Katsanos

    Have you ever seen a low-priced stock in your watchlist\ngo up by more than 50% in a day and wished that it had\nbeen in your portfolio list instead? Here’s a method\nfor picking stocks before they break out.

    Most traders and market technicians avoid penny stocks. In fact, their stock screening usually includes a\nfilter to eliminate stocks priced at $5 or less. The most common reason cited is that technical analysis does not apply to penny stocks. But is technical analysis really irrelevant where penny stocks are concerned? I decided to investigate.

    STOCK SELECTION

    For my research, I compiled a list of 50 stocks priced below $3, all trading on major US exchanges: the NYSE, Nasdaq, or AMEX. I made a note in an Excel spreadsheet of the values, direction, and (where appropriate) divergence of 30 different indicators or statistical metrics, one day before a major breakout. I used indicators with their default values plus two additional time periods.

    The average breakout of the sample was 150% in the next few days; the minimum considered for this study was 40%. More than half of the indicators were found to have no significant predictive power and, to eliminate unnecessary work, were dropped out halfway through the research. The remaining indicators were evaluated empirically and statistically, and the best were included in a MetaStock system test. Indicator parameters were optimized in further out-of-sample testing. Any recognizable formations and their duration were also noted. The system was then tested on 100 penny stocks."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-18-29-las-vegas-or-los-nasdaq-by-markos-katsanos-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-18-29-las-vegas-or-los-nasdaq-by-markos-katsanos-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-18-29-las-vegas-or-los-nasdaq-by-markos-katsanos-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231sime,d,"{""minimum-quantity"":""1"",""path"":""volume1jan2005"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:1 (18-29): Sidebar: MetaStock Code and Penny Stock Breakout System by Markos Katsanos"",""caption-linebreaks"":""Stocks & Commodities V. 23:1 (18-29): Sidebar: MetaStock Code and Penny Stock Breakout System by Markos Katsanos

    This sidebar contains the MetaStock Code and Penney Stock code for Markos Katsanos' penny stock breakout system. The majority of the stocks broke out of a base formation. Breakouts from pennats or flags were excluded from ths study, as the breakout setup tended to bary substantially from typical stocks in the sample. No other distinguishable formations was observed except for a couple of uncompleted cup-with-handle formations."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-18-29-sidebar-metastock-code-and-penny-stock-breakout-system-by-markos-katsanos-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-18-29-sidebar-metastock-code-and-penny-stock-breakout-system-by-markos-katsanos-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-18-29-sidebar-metastock-code-and-penny-stock-breakout-system-by-markos-katsanos-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233lipo,d,"{""minimum-quantity"":""1"",""path"":""volume1jan2005"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:1 (30-35): Linking Point & Figure And Bar Charts by Robert Busby, Ph.D."",""caption-linebreaks"":""Stocks & Commodities V. 23:1 (30-35): Linking Point & Figure And Bar Charts by Robert Busby, Ph.D.

    Ever thought of combining these two chart pattern techniques? Find out how.

    Point & figure is one of the oldest western techniques of charting, tracing its lineage back to Charles Henry Dow. Large numbers of financial professionals rely on point & figure (P&F) charts for buy and sell signals. An even larger group of professionals look at financial data in the form of time series, and prefer bar, line or candlestick charts. Devotees of these two “parallel universes” are frequently at odds with one another, each asserting that only their version of technical analysis is correct. Of course, many people use both techniques; but there is at least anecdotal evidence of a sizable body of technicians who do not cross boundaries.

    P&F VS. TIME SERIES

    P&F advocates say that their charts contain all essential market information, filtering out market noise and simplifying decision-making. They assert that only market movement counts, not the time required to make the moves. But those who prefer time series methods say that time affects the value of money, closing price affects margin calls (and therefore volatility), and open-to-close trends confirm close-to-close trends. No such information is available from P&F charts.

    Even those who use both methods tend to use them separately, and do not combine them. Analysts might like to combine P&F charts mathematically and graphically with other indicators, but they don’t generally have a method for doing so. They might want to test trading systems that combine traditional signals with P&F signals, but their software often will not allow it. For most market watchers, P&F charts are a technical end-game. Although many interesting patterns can be seen, further mathematical manipulation is not generally performed on them.

    In addition, there are many methods for choosing box\nheight and reversal numbers in P&F charting. Some systems use closing prices, while others use highs and lows. However, questions such as which choices give the most reliable signals or avoid the most false signals are normally decided by trial and error — not explicit analysis."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-30-35-linking-point-figure-and-bar-charts-by-robert-busby-ph-d-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-30-35-linking-point-figure-and-bar-charts-by-robert-busby-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-30-35-linking-point-figure-and-bar-charts-by-robert-busby-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233siab,d,"{""minimum-quantity"":""1"",""path"":""volume1jan2005"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:1 (30-35): Sidebar: About Renko charts and box sizes by Robert Busby, Ph.D."",""caption-linebreaks"":""Stocks & Commodities V. 23:1 (30-35): Sidebar: About Renko charts and box sizes by Robert Busby, Ph.D.

    Here’s an amusing technical phenomenon. The P&F data is computed using a box reversal of one and is then manipulated into four columns in the following way: On up days, a row is formed using the data from the previous day, then the current data, then repeat both. On down days, the data is subtracted from box size (assumed fixed) and a row is formed using data from the previous day twice, then the current\ndata twice."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-30-35-sidebar-about-renko-charts-and-box-sizes-by-robert-busby-ph-d-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-30-35-sidebar-about-renko-charts-and-box-sizes-by-robert-busby-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-30-35-sidebar-about-renko-charts-and-box-sizes-by-robert-busby-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov23345in,d,"{""minimum-quantity"":""1"",""path"":""volume1jan2005"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:1 (36-38, 45): Index Rotation With Exchange-Traded Funds by David Vomund"",""caption-linebreaks"":""Stocks & Commodities V. 23:1 (36-38, 45): Index Rotation With Exchange-Traded Funds by David Vomund

    Which will perform best, large-cap stocks or small-cap stocks? Will value stocks outperform growth stocks or will growth outperform value?

    If you watch CNBC, you’ll notice that growth managers always say growth will outperform, value managers always say value will outperform, and small-cap managers always say small-cap stocks will outperform. Every analyst has his unique approach, and he believes his style is best. Unfortunately, market environments change. That means there are times when growth outperforms value and vice versa, and times when largecaps outperform small-caps and vice versa.

    THE STYLE INDEX ROTATION STRATEGY

    Instead of being locked into one trading style, it is best to employ a strategy that allows the user to rotate to the best-performing market segment. That’s what our\nstyle index strategy is all about. The style index strategy trades securities that track various market indexes. These “style” indexes include large-cap growth, large-cap value, small-cap growth, smallcap value, and so forth. While mutual fund families like the ProFunds have funds that track these indexes, the best vehicle for\ntrading style indexes is exchange-traded funds (ETFs), the fastest-growing financial product in the US.

    First launched in the early 1990s, ETFs are securities that combine elements of index funds, but do so with a twist. Like index funds, ETFs are pools of securities that track specific market indexes at a very low cost. Like stocks, ETFs are traded on major US exchanges and can be bought and sold anytime during normal trading hours."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-36-38-45-index-rotation-with-exchange-traded-funds-by-david-vomund-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-36-38-45-index-rotation-with-exchange-traded-funds-by-david-vomund-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-36-38-45-index-rotation-with-exchange-traded-funds-by-david-vomund-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233siru,d,"{""minimum-quantity"":""1"",""path"":""volume1jan2005"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:1 (39-45): Sidebar: Runs tests, Z score by Norman J. Brown"",""caption-linebreaks"":""Stocks & Commodities V. 23:1 (39-45): Sidebar: Runs tests, Z score by Norman J. Brown

    Here are calculations for the approximate derivation of the Z score. Suppose you have a run sequence xx/yyyy/x/yy/xxx/y/x/y\nwhere:

    x is an up day or positive return

    y is a down day or negative return

    This series has N=15, with eight streak runs (OR trades), and four switches (OR round trips)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-39-45-sidebar-runs-tests-z-score-by-norman-j-brown-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-39-45-sidebar-runs-tests-z-score-by-norman-j-brown-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-39-45-sidebar-runs-tests-z-score-by-norman-j-brown-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov235siab,d,"{""minimum-quantity"":""1"",""path"":""volume1jan2005"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:1 (52-55): The Simple ABC Correction by Thomas N. Bulkowski"",""caption-linebreaks"":""Stocks & Commodities V. 23:1 (52-55): The Simple ABC Correction by Thomas N. Bulkowski

    This chart pattern reliably signals an extended move up. Take a look.

    An old joke says that if an investor buys land in an earthquake zone, it will be his own fault. When I see a simple ABC correction in a stock, it reminds me of pavement pushed up by an earthquake. The upward price trend shifts downward in a stair-step correction\nand then the price trend resumes its upward march,\nmany times for an extended rally.

    Figure 1 shows what I’m talking about. An upward price\ntrend begins at point 1 and soars to point 2 before rounding over. Prices retrace a portion of the advance, forming the simple ABC correction. After meeting support at point C, prices resume their upward trend. This example shows a rounded volume appearance, the most common shape.

    IDENTIFICATION: SEARCHING THE PAVEMENT

    What should you look for when searching for ABCs? Since this is a new pattern for me and I had little to go on, I made up my own set of rules to select patterns for statistical analysis. The essence of the ABC pattern is a measured move down (MMD) chart pattern. In a MMD, the drop from 2 to A is nearly the same as the drop from B to C. The ABC pattern does not have that restriction, but it does have others. Take a look at Figure 2."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-52-55-the-simple-abc-correction-by-thomas-n-bulkowski-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-52-55-the-simple-abc-correction-by-thomas-n-bulkowski-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-52-55-the-simple-abc-correction-by-thomas-n-bulkowski-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov235qaby,d,"{""minimum-quantity"":""1"",""path"":""volume1jan2005"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:1 (56): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 23:1 (56): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    TIME & SALES SHEETS

    A friend referred me to you; he says you know everything there is to know about the stock market. At the end of the day, is there a universal time and sales sheet, or does every brokerage house have its own? May I trouble you for the time and sales sheet for AA for Wednesday, July 14, 2004 (by email or a copy)? Or could you give me a site where I can get it? Is it true that a market order to cover a short position guarantees you execution but may take several minutes to fill (and therefore, the price may be much higher than the price at the time of the order, if 3,000 shares of AA are involved)?

    — George"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-56-q-a-by-don-bright-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-56-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-56-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov235indo,d,"{""minimum-quantity"":""1"",""path"":""volume1jan2005"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:1 (58-63): Interview: Don Miller & The Ultimate Entrepreneurial Experience by J. Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:1 (58-63): Interview: Don Miller & The Ultimate Entrepreneurial Experience by J. Gopalakrishnan

    Don Miller toiled in the corporate world, wondering if there were more to life — and then he discovered there was. He gave up the comfort and safety of his career in the telecommunications industry and plunged into the world of trading, the “ultimate entrepreneurial experience.” He is an independent futures trader who focuses primarily on the US and foreign indexes,\nincluding the US S&P e-minis and German DAX. In addition to trading a private capital fund, Miller writes a midday column for TradingMarkets.com and has created several instructional DVDs (available at DonMillerTrading.com). He is a member of the Chicago\nMercantile Exchange. STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Don Miller via telephone on November 3, 2004.

    How did you get into trading?

    Back in the mid-1990s I was in the corporate world. I had worked my way up to an executive position with a fairly large telecommunications company in the Midwest. My educational background is in finance and accounting, and I did a lot of that. But I got to a point where I had lost my motivation. I was running a division, I was testifying, I was doing all sorts of things, but it just got to a point where I looked around and said, “Is this\nall there is?”

    Actually, it sounds like a lot!

    I guess a better way to put it is that I’d lost the challenge. At that time, access to the markets was more readily available, and one thing led to another. I\ndecided to forgo my nice, safe corporate career for what I refer to as the “ultimate entrepreneurial experience.” It’s been a whirlwind effort ever since."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-58-63-interview-don-miller-the-ultimate-entrepreneurial-experience-by-j-gopalakrishnan-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-58-63-interview-don-miller-the-ultimate-entrepreneurial-experience-by-j-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-58-63-interview-don-miller-the-ultimate-entrepreneurial-experience-by-j-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov236howy,d,"{""minimum-quantity"":""1"",""path"":""volume1jan2005"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:1 (68-72): How Your Stories Shape You by Adrienne Laris Toghraie"",""caption-linebreaks"":""Stocks & Commodities V. 23:1 (68-72): How Your Stories Shape You by Adrienne Laris Toghraie

    The stories you tell reflect your worldview — and they can help you succeed.

    We all have stories that chronicle our lives. At first glance, these stories seem harmless enough, but the cost of holding onto them can be very high. Instead of illustrating why things have turned out the way they have, these “harmless” stories hold the potential to determine how successful we will become in the future.

    Some of these stories are more influential than others. The more we reflect on a particular story, the more powerful that story and its message becomes. The level of detail given to our thoughts determines the depth of the feelings associated with them. When our feelings have more depth, they have more power to influence our behavior.

    If our thoughts about our trading please us, our minds will support us in following the rules of our trading methodology. If our thoughts disturb us and are attached to actions that go against our ingrained rules, our minds will establish a negative pattern of behavior. When these negative thoughts are repeated, breaking those patterns of behavior becomes more difficult.

    THE BIG FISH THAT GOT AWAY

    Recently, I worked with a trader named Jack, who loved to relate detailed stories about his ability to forecast market tops and bottoms. Of course, his forecasts made money for everyone but him, or so he claimed. “If only I could act on my own advice, I would be a multimillionaire!” he’d say. Jack clearly felt it was important for me to be aware of this, because he repeated it many times between his stories."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-68-72-how-your-stories-shape-you-by-adrienne-laris-toghraie-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-68-72-how-your-stories-shape-you-by-adrienne-laris-toghraie-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-68-72-how-your-stories-shape-you-by-adrienne-laris-toghraie-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov237exyo,d,"{""minimum-quantity"":""1"",""path"":""volume1jan2005"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:1 (73): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 23:1 (73): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    WHAT WENT WRONG?

    I am wondering if someone can please explain what happened during this paper trade: Sell two YHOO January 2006 35 calls at 3.8 and buy two YHOO January 2006 27.5 calls at 6.8. The maximum risk equals $300, maximum reward is $450, and the breakeven equals 30.5. I closed out both sides of the trade when the stock was above 35. My gain was only around $200 total. Since my maximum reward was $450 and I had a quantity of two, shouldn’t it have been\naround $900, considering the stock price was above the short call?

    The trade you outlined is a bull call spread. In this trade, you are buying a call with a lower strike price and selling a call with a higher strike price. So in your example, the cost of the trade is $300 per spread, or 6.8 – 3.8 = 3 * 100. . ."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-73-explore-your-options-by-tom-gentile-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-73-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-73-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov237prre,d,"{""minimum-quantity"":""1"",""path"":""volume1jan2005"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:1 (74-77): Product Review: TradingSolutions by Dennis D. Peterson"",""caption-linebreaks"":""Stocks & Commodities V. 23:1 (74-77): Product Review: TradingSolutions by Dennis D. Peterson

    Neural network predictions can be a useful tool in your arsenal of analysis techniques, and TradingSolutions makes that possible. Its latest release, version 3.0, is a highly versatile set of software. The product has a unique user interface that with some practice I think you’ll find fast and easy to use.

    There are two concepts used by TradingSolutions (TS) that are helpful to understand before giving this software a try. The first is its organization of your data into what are referred to as fields, and the second is what is referred to as an optimal signal. If you think about the steps you need to go through to use a neural network, the fields make sense, and consequently, so do the menu items and pulldown lists.

    DATA IMPORT

    First on your list of steps to go through is the import of raw data. You can interface with four datafeeds (eSignal, IQFeed, Prophet, and QuotesPlus) in addition to the free TS Solution Service. You can also go to the TradingSolutions website and navigate to a list of static data, along with explanations on how to import it (http://www.tradingsolutions.com/resources/data.html).

    You might want to take a look, as the list of sources itself is interesting. I tried one symbol of Yahoo! Finance end-ofday data. It was quick and easy to retrieve the data and put it into TS format. I then discovered a neat feature of TradingSolutions: The trading symbol for static data is available if you should switch to a datafeed such as eSignal. All I had to do\nwas change my data source, and I could do this for one item in a group, an entire group, or the entire portfolio."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-74-77-product-review-tradingsolutions-by-dennis-d-peterson-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-74-77-product-review-tradingsolutions-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-74-77-product-review-tradingsolutions-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov238prre,d,"{""minimum-quantity"":""1"",""path"":""volume1jan2005"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:1 (82-86): Product Review: IQ Charts by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:1 (82-86): Product Review: IQ Charts by David Penn

    The world of technical analysis charting software is increasingly split between two camps. Call them the Jets and the Sharks, call them the Reds and the Blues, Athenians versus Spartans, American Leaguers versus National Leaguers … call them what you like, but after five years of looking at a different mousetrap each month, I feel this might be one point that can be made\nwith certainty.

    On the one hand are the Engineer Packs. These packages seem geared toward the most indicator-loving, oscillator-appreciating, backtesting, code-writing, optimizing technicians out there. If you find yourself occasionally so engrossed in systems development, for example, that you sometimes forget that, at the end of the day, all that labor was geared toward helping you place a real trade in a real market, then I don’t need to tell you that the Engineer Pack is for you. You’ve probably already got three, four, or more of these systems on your PC.

    On the other hand are the Artisan Packs. While mostly web-based (the system either resides on a server or is\ndownloaded directly from the web to your PC), these platforms put a nearartistic emphasis on platform presentation, and have an equal preoccupation retrace with ease of use. So what if you don’t have 50 different indicators? So what if the Gann projection capability is less than what you’d find in an Engineer Pack? So what if historical data only goes back as far as the first Bush administration? These charts are as easy on the eyes as a sunset, and the time otherwise spent trying to figure out what all those buttons, pulldown menus, and\nhotkeys stand for could be spent on a stroll through a Simple Garden of Charting Delights."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-82-86-product-review-iq-charts-by-david-penn-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-82-86-product-review-iq-charts-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-82-86-product-review-iq-charts-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov238wefo,d,"{""minimum-quantity"":""1"",""path"":""volume1jan2005"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:1 (87): Websites For Traders: Technical AnalysisSite.com by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:1 (87): Websites For Traders: Technical AnalysisSite.com by Jayanthi Gopalakrishnan

    TECHNICALANALYSISSITE.COM

    There couldn’t be a more appropriate domain name for a site dedicated to technical analysis, and when a dedicated technical analyst comes across such a site, he or she will expect nothing less than an overdose of technical analysis.

    So will this site satisfy the technical analyst’s craving?\nWhat I found from navigating TechnicalAnalysisSite.com was that it was nothing more than an educational and informative site that discusses various technical analysis indicators,\nalthough not all of them — in fact, not even a large percentage of them. But the site is free, which is a rarity in this day and age. On the homepage you’ll see a chart of the smart money flow index. Now I’ve heard of the money flow index, but this had the word “smart” added to it. My initial thought, when I saw the reference\nto this indicator, was that it was probably a proprietary indicator that was a modification of the money flow index. To find out, I clicked on the link for more information and did see a short description explaining how the indicator is calculated and how it can be applied, so that was enlightening."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-87-websites-for-traders-technical-analysissite-com-by-jayanthi-gopalakrishnan-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-87-websites-for-traders-technical-analysissite-com-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-87-websites-for-traders-technical-analysissite-com-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov238trti,d,"{""minimum-quantity"":""1"",""path"":""volume1jan2005"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:1 (88-101): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:1 (88-101): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    Markos Katsanos’ article “Detecting Breakouts In Low-\nPriced Stocks: Las Vegas Or Los Nasdaq?” describes a system of tests for early determination of conditions suitable for a penny stock’s price to “break out” of its established trading range. The tests include Katsanos’ finite-volumeelement; three linear regression slopes; MACD; a standard deviation-of-price calculation passed through a stochastic filter; the product of standard deviation of price and the ADX; and the slow K stochastic. For each criterion, a threshold is\noffered. If all threshold criteria are met, a signal is generated.

    The following codes for MetaStock, AmiBroker, Wealth-Lab, eSignal, NeuroShell, NeoTicker, AIQ, TradingSolutions, TechniFilter Plus, Trade Navigator, Aspen Graphics, and Investor/RT duplicate Katsanos’\ncalculations."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-88-101-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-88-101-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-1-88-101-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231leto9,d,"{""minimum-quantity"":""1"",""path"":""ch10o202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:10 (10-11): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:10 (10-11): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit letters on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine would not exist. —Editor

    FINDING GUJRAL

    Editor,

    I read your magazine every month, cover to cover, and\nalways find articles of interest. I have been devouring\neverything I can find on becoming a better trader for the last couple of years.

    Ashwani Gujral’s book, \""How ToMake Money Trading Derivatives: An Insider’s Guide,\"" interested me when I\nread your interview with him in the March 2005 STOCKS & COMMODITIES (“Trading Divergences With Ashwani\nGujral” by Jayanthi Gopalakrishnan). I went to Gujral’s website but couldn’t find any mention of the book at all, not even in the site’s bookstore. I also tried to fill out the “Contact us” info but struck out again. Do you know where I can get more information on the book and purchase it?

    GARY GALVIN\nvia email"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-10-11-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-10-11-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-10-11-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231fofo,d,"{""minimum-quantity"":""1"",""path"":""ch10o202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:10 (12-18): Forex Focus by Todd Gordon, CMT"",""caption-linebreaks"":""Stocks & Commodities V. 23:10 (12-18): Forex Focus by Todd Gordon, CMT

    Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. With that in mind, STOCKS & COMMODITIES has introduced Forex Focus to better prepare the retail trader to participate in the currency market.

    Are Fibonacci Levels Leading Indicators For Forex?

    Gain insight into the trading tactics of institutional\nforeign exchange traders.

    The recent explosion in popularity of the cash foreign exchange markets has been fueled by investors from nearly every trading discipline, from hedge fund managers to commodity trading advisors (CTAs) to investment banks to individual traders. This influx of players contributes to the $1.9 trillion turned over daily in the foreign exchange markets, and it is the very size and source of this volume that allows skilled technical traders to place trades in the spot forex markets with relative safety.

    So how do we safely navigate among the forces in the currency trading universe and live to tell the tale? The key lies in understanding the use of analytic indicators. Let’s take a look.

    EVERYBODY LOOKS AT TECHNICALS

    Technical analysis existed in the 1970s and 1980s, but not to the degree that it does today. Thirty years ago, there was certainly no equivalent of eSignal or TradeStation running on every currency trader’s desk in the interbank market. Those traders could not call up a 38.2% Fibonacci retracement for a recent move by clicking a mouse, nor could they easily pull up a real-time streaming chart to learn that the dollar/Swiss\nfranc (USD/CHF) had held 1.1800 for the past month.\nFar from it. Back then, when a large order hit a trader’s\ndesk, he either knew his technical levels beforehand, having organized and written them down days before, or simply guessed where to position himself ahead of this order. Today, in contrast, charting packages with advanced technical analytics litter the desks of just about every investing institution. Traders can call up technical indicators instantly for any investment instrument and position themselves accordingly. The markets are far different."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-12-18-forex-focus-by-todd-gordon-cmt-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-12-18-forex-focus-by-todd-gordon-cmt-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-12-18-forex-focus-by-todd-gordon-cmt-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov232fufo,d,"{""minimum-quantity"":""1"",""path"":""ch10o202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:10 (202-23): Futures For You by Dan O’Neil"",""caption-linebreaks"":""Stocks & Commodities V. 23:10 (202-23): Futures For You by Dan O’Neil

    INSIDE THE FUTURES WORLD

    Want to learn how the futures markets really work? Dan O’Neil, a principal at online futures and forex broker XPRESSTRADE (www.xpresstrade.com), responds to\nyour questions about today’s futures markets. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be\nposted there, and selected questions will appear in a future issue of S&C.

    WELCOME TO FUTURES FOR YOU

    When I was invited to author a new column for STOCKS & COMMODITIES devoted to the futures markets, I\ncouldn’t have been more enthusiastic. Futures trading is a highly specialized niche within the larger financial services industry, and our markets are often overlooked and misunderstood. In this column, I’ll share insight about the mechanics of the futures markets, clear\nup misconceptions, explain advantages and drawbacks to futures, point out potential opportunities, and respond to your questions. I look forward to hearing from you!

    TRADING VOLATILE ENERGY FUTURES

    With both crude oil and unleaded gasoline futures recording all-time highs, the current spotlight’s on the energy sector. Today’s volatile energy markets make for excellent trading opportunities, but sharp turns in the market also make these contracts treacherous and unsuitable for the faint of heart. How can a new futures trader, or a trader with limited trading capital, participate\nin the world’s most active commodity market while minimizing risk?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-202-23-futures-for-you-by-dan-o-neil-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-202-23-futures-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-202-23-futures-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov232sisp,d,"{""minimum-quantity"":""1"",""path"":""ch10o202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:10 (24-27): Singular Spectrum Analysis Of Price Movement In Forex by Sergiy Drogobetskii"",""caption-linebreaks"":""Stocks & Commodities V. 23:10 (24-27): Singular Spectrum Analysis Of Price Movement In Forex by Sergiy Drogobetskii

    Looking for new information about price movements?\nSingular spectrum analysis may shed some light.

    Finding an analytical method to reduce noise and predict price movement dynamics has been a popular topic of discussion among traders. In fact, several methods from the fields of physics and mathematics\nhave already been applied for this very reason. But how do you extract the necessary information, and what can you use as the basis for your forecasting model?

    SINGULAR SPECTRUM ANALYSIS

    Although there are several methods for analyzing time\nseries, they tend to have limitations. The method I will\ndiscuss in this article has some advantages over other\ntime series analysis techniques: It can tell you how to\nextract relevant information from noisy time series\nand what to use as a basis for your forecasting model.\nSingular spectrum analysis (SSA) is a new analytical\nmethod that has been applied to branches of scientific\nstudy such as bioinformatics, meteorology, astronomy,\nand pattern recognition. SSA is useful for compressing\ninformation, smoothing of initial data and, in certain\ncases, predicting time series data prices. In this article,\nI will apply SSA to forex market prices.

    Like other financial markets, the forex market is a\ncomplex, dynamic system. Based on my analysis of\neconomic systems, I thought it best to apply a passive\nexperiment that involves observing the behavior of a\nsystem over time. This resulted in representing the\nvalues of observable magnitudes as a time series. The SSA was designed to provide insight into the dynamics\nof the process that generates time series. It is based on the singular value decomposition (SVD) of a trajectory matrix that is constructed from the time\nseries of prices."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-24-27-singular-spectrum-analysis-of-price-movement-in-forex-by-sergiy-drogobetskii-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-24-27-singular-spectrum-analysis-of-price-movement-in-forex-by-sergiy-drogobetskii-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-24-27-singular-spectrum-analysis-of-price-movement-in-forex-by-sergiy-drogobetskii-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233libe,d,"{""minimum-quantity"":""1"",""path"":""ch10o202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:10 (32-38): The Link Between Bollinger Bands & The Commodity Channel Index by N. Harrington"",""caption-linebreaks"":""Stocks & Commodities V. 23:10 (32-38): The Link Between Bollinger Bands & The Commodity Channel Index by N. Harrington

    Bollinger Bands and the commodity channel index (CCI) have been employed independently, in conjunction with other indicators, and with each other. Could standard deviation bands around price action be a generalization of an oscillator plotted below the prices?

    In my work in technical market analysis (TMA), I never really considered the commodity channel index (CCI) until December 2003, when I attended a conference of Woodie’s CCI Club, highlighted by a talk by CCI creator Donald R. Lambert. Seeing so many people willing to\ncome to a conference just to discuss one indicator got me curious. That curiosity led to my own study of the CCI in December 2003 and early January 2004. During that time, I happened upon an interesting relationship between the CCI and John Bollinger’s work with standard deviation bands, which he coined “Bollinger Bands.”

    INITIAL RESEARCH

    When I got home from the conference, I started experimenting with the CCI in the e-mini Standard & Poor’s 500 market. I noticed it looked a lot like Bollinger’s %B indicator, which I sometimes use. I changed a default setting of the %B and it became so close to the CCI that they had to be mathematically equivalent, or very close to it. That intrigued me even more.

    But before going any further into my research, let’s\nreview the technical foundation of the commodity channel index and Bollinger Bands.

    LAMBERT’S COMMODITY CHANNEL INDEX

    Donald Lambert’s article on the CCI was originally published in Commodities magazine (now Futures) in October 1980, and republished with corrections in Technical Analysis of STOCKS & COMMODITIES in its inaugural year of 1982."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-32-38-the-link-between-bollinger-bands-the-commodity-channel-index-by-n-harrington-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-32-38-the-link-between-bollinger-bands-the-commodity-channel-index-by-n-harrington-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-32-38-the-link-between-bollinger-bands-the-commodity-channel-index-by-n-harrington-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234betr,d,"{""minimum-quantity"":""1"",""path"":""ch10o202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:10 (40-44): The Beginning Trader by Thomas Bulkowski"",""caption-linebreaks"":""Stocks & Commodities V. 23:10 (40-44): The Beginning Trader by Thomas Bulkowski

    Here are some tips to help a beginning trader\nbecome profitable.

    You may be approaching retirement and want to supplement your income or earn enough money to afford the rising cost of health care. You may be\na decade out of college, employed at a boring job, and yearn to have a 30-foot commute. Your dreams may be of trading for a living and making a six-figure income while taking days or even weeks off without a boss asking where you’ve been. This article will help steer you in the proper direction to achieve those goals.

    Lesson 1: Keep trading costs as low as possible I used to think trading stocks was a zero-sum game where one trader wins a dollar and another one loses a buck. It’s not. It’s a negative sum game. The difference is the cut the broker takes along with a slice paid to the government — costs you have to overcome to be profitable. No one says you have to use only one broker. You can use a full-service broker and a discount shop. My preference is to use one broker to keep things\nsimple. Simple is best.

    I’ve always used a discount broker for my trading. They keep costs low and don’t give investment advice, two ingredients I find valuable. Why spend $50 trading a stock when you can spend $10?

    For example, in my portfolio, I hold a stock I bought for a split-adjusted price of 88 cents in 1990. It peaked recently near $44. I’ve traded it over the years but never sold all of my shares. In the 46 times I’ve traded it, my broker has made $1,720 off me, or an average of $37 per trade. I consider that commission huge compared to the $10 or less I can get Internet trading now. Why pay full price when you can get trading done at a discount?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-40-44-the-beginning-trader-by-thomas-bulkowski-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-40-44-the-beginning-trader-by-thomas-bulkowski-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-40-44-the-beginning-trader-by-thomas-bulkowski-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234exyo3,d,"{""minimum-quantity"":""1"",""path"":""ch10o202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:10 (45): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 23:10 (45): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will\nappear in a future issue of S&C.

    EXITING A SPREAD

    I once read about three ways to exit a spread, but I don’t remember them all. I know I can close the position\nthrough an offsetting transaction. What are the others?

    Spreads include combinations of options that are bought (or long) and options that are sold (or short). If a trader holds a spread with a combination of long and short options, three things can happen. The first is to close the position by initiating an offsetting or closing\ntransaction. In that scenario, the strategist would buy back the short options and sell the long ones.

    Alternatively, the position can be held through expiration and the options can expire worthless. This often happens with successful credit spreads. For example, if a strategist is in a bear call spread, which is created by selling a call and purchasing a call with a higher\nstrike price, the trade creates a credit. This credit is earned because the short call with the lower strike price will have a greater premium than the long call. If the stock falls and remains below the strike price of both call options at expiration, the options can expire\nworthless and the strategist keeps the credit. Thus, with some spreads, letting the options expire is a viable and desirable way of exiting the position."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-45-explore-your-options-by-tom-gentile-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-45-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-45-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov235qaby1,d,"{""minimum-quantity"":""1"",""path"":""ch10o202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:10 (53): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 23:10 (53): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://\nMessage-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    DAYTRADING: MARK-TO-MARKET OR RETAIL PRICING?

    Why do daytrading firms mark-tomarket? Why not account for positions the retail way? I heard that retail firms like Ameritrade and Scotttrade take the other side of a retail trader’s trades and sell order flow.

    If the firm is taking the other side of customer’s trades, aren’t they losing as well? If so many different orders are coming in each second, how do they manage to sell order flow? How can a retail firm do unlimited shares for $9.99? What about ECN costs? — Still learning

    Glad to see that you are taking your trading seriously enough to keep on learning. Professional trading firms use the mark-to-market method of pricing and earnings calculations for a couple of reasons. First, since we trade so many times each day/week/month/year, it\nwould be onerous to match up each trade and keep track accordingly. Second, since stock prices change constantly, mark-tomarket gives a better view of the actual profits or losses. If you buy 1,000 of XYZ at $40, and it is trading at $20, the trader has a better view of what we call our net liquidating balance (the true value of the trading account)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-53-q-a-by-don-bright-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-53-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-53-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov235incr,d,"{""minimum-quantity"":""1"",""path"":""ch10o202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:10 (54-63): Interview: Crosscurrent’s Keith Raphael by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:10 (54-63): Interview: Crosscurrent’s Keith Raphael by Jayanthi Gopalakrishnan

    Keith Raphael, president of Crosscurrents Investment Advisory, served as principal of the Taylor-Raphael Group commodities trading firm of the New York Commodities Exchange from 1978 to 1986. He traded ECU arbitrage for Bank Brussels Lambert in New York from 1987 to 1990 and served as chief technical market analyst for Chase Manhattan Bank from 1990 to 1993. In 1993, the Euromoney survey of the 400 top corporations, investment banks, and funds in the US and Europe named Raphael as the top technical market analyst and charting service. In 1992 and 1993, the Greenwich Associates survey of 350 North American corporations, investment banks, and funds awarded him the same ranking. STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan\ninterviewed Raphael via telephone on August 10, 2005.

    Q: How did you get started in trading?

    A: I came out of the University of Vermont in 1978 with\nan international economics and business background. Despite that fundamental background, I spent time doing statistical analysis for my courses. I got interested in gold charts because I was doing analysis on gold and how some of its movements affected statistics. After I graduated, a friend invited me to work\nfor him on the floor of the commodity exchange. At that point, I was still interested in statistics, so I applied my knowledge of statistics to charting. That triggered\nmy interest in trading.

    Through 1980 in the massive gold move, I started doing some trading, which was, of course, really volatile and dangerous at that point. But I really enjoyed it, and I started to use pure technical analysis for all my trading. That’s how I started—from statistical to basic technical analysis, then applying one to the other and developing my own concepts."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-54-63-interview-crosscurrent-s-keith-raphael-by-jayanthi-gopalakrishnan-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-54-63-interview-crosscurrent-s-keith-raphael-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-54-63-interview-crosscurrent-s-keith-raphael-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov236prre6,d,"{""minimum-quantity"":""1"",""path"":""ch10o202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:10 (64-70): Product Review: eASCTrend 6.0 AOE by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:10 (64-70): Product Review: eASCTrend 6.0 AOE by David Penn

    First, the good news. Anybody who has spent any time\nlooking at price charts knows that some of the most\nlucid, beautiful trending markets can be found in the daily charts of currency pairs. If you don’t believe me, then take a look. Were you long for the great run in the euro back in the second half of 2004? How about getting short sterling during the summer of 2005? And I know I’m not the only one who noticed the USD/JPY in mid-summer 2005 and wondered whether any ride back down would be as bumpy (yet stalwart) as the ride up over the past several months.

    It is little wonder that some of the traders—and trading systems—most commonly linked with trend trading\nhave performed most admirably in the currency markets, be they George Soros or Paul Tudor Jones, John Henry or followers of the original Turtle Trading\nsystem. If the trend is your friend, then the foreign exchange market is the next best thing to that famous watering hole where “everybody knows your name.”

    Now the bad news. The opportunities that a 24-hour market brings are the same ones such a market takes away. Unlike most other financial markets— at least as far as the average retail trader is concerned—the forex market never rests. Sure, volume will trail off from\ntime to time at different hours of the day (again, that’s a 24-hour day), but at any given moment, in Sydney, Tokyo, Zurich, London, Chicago, or San Francisco, traders are looking for angles to exploit —and round-the-clock market access plays a big role in uncovering those angles and soft patches where savvy\ntraders can establish lower-risk positions and let the traders just waking up in the next time zone do all the heavy lifting of moving those positions forward."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-64-70-product-review-easctrend-6-0-aoe-by-david-penn-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-64-70-product-review-easctrend-6-0-aoe-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-64-70-product-review-easctrend-6-0-aoe-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov237wefo,d,"{""minimum-quantity"":""1"",""path"":""ch10o202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:10 (72-74): Websites For Traders: Trade2Win.com by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:10 (72-74): Websites For Traders: Trade2Win.com by David Penn

    TRADE2WIN.COM

    In Jack Schwager’s interview with Linda Bradford Raschke in The New Market Wizards, Market Wizard Raschke says this in response to a question about the\ndifficulty of adjusting to the “isolation of trading from home”:

    For the first four years, being off the floor was great—no distractions, no outside opinions. Last year, however,\nthe isolation started to really bother me. I got lonely. I tried talking to other traders on the phone during the day, but I found that it was distracting and lowered my productivity. I also tried establishing a trading office with\nanother trader … I recognize that isolation has become a problem, and I keep on trying to find different\nsolutions.

    While you have to hunt a little to ferret out traders willing to admit it, trading is a lonely business and that isolation doesn’t always work in the trader’s favor. What the absence of distraction brings, the echo chamber of\none’s own thoughts can often take away as the trader, to steal a line, begins debating with him- or herself.

    Though the world of trading is anything but sense-deprived, the lifestyle of the individual retail trader is not unlike living in a sensory deprivation tank: what starts out as an exploration of one’s psychological\nand emotional limits can devolve into a “room full of mirrors” filled with the kind of doubt, second-guessing,\nand paranoia that is often our undoing as traders."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-72-74-websites-for-traders-trade2win-com-by-david-penn-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-72-74-websites-for-traders-trade2win-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-72-74-websites-for-traders-trade2win-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov237quww,d,"{""minimum-quantity"":""1"",""path"":""ch10o202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:10 (75): Quick-Scans: www.MarketVolume.com by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:10 (75): Quick-Scans: www.MarketVolume.com by Jayanthi Gopalakrishnan

    MarketVolume A/D Charts

    www.MarketVolume.com

    In June 2004, STOCKS & COMMODITIES reviewed\nwww.MarketVolume.com, which covered the services\nprovided on this website. But besides the commentaries and the recommendations, MarketVolume offers charting packages that are worth mentioning. One of these is the advance/decline\ncharting package.

    My first impression was that the charts were somewhat\nSpartan, with options that were limited to those\non the dropdown menus. However, when I explored\nthe site further, I found features that traders would find\ninteresting. You can choose from more than 15 indexes to plot, select various periodicities ranging from two hours to 10 years, and select moving average parameters. But there are features that are specifically\nrelated to advancing/declining issues."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-75-quick-scans-www-marketvolume-com-by-jayanthi-gopalakrishnan-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-75-quick-scans-www-marketvolume-com-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-75-quick-scans-www-marketvolume-com-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov237scas,d,"{""minimum-quantity"":""1"",""path"":""ch10o202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:10 (76-78): Scalping As A Trading Style by Vadym Graifer"",""caption-linebreaks"":""Stocks & Commodities V. 23:10 (76-78): Scalping As A Trading Style by Vadym Graifer

    Scalping got a bad name during the 1998–2000 market boom, mostly thanks to the media. Does scalping really deserve the bashing?

    Scalpers inhabit an area of fairly small trade movements and feed off the table of bigger fish. The casualty rate is high (although this statement cannot be limited to scalpers only), but those who survive are\nwell prepared to profit, in spite of the constantly changing trading environment. This ability to adjust immediately is worth it, as such a skill is necessary to\nprosper in difficult and quickly changing markets.

    BUT WHAT IS SCALPING?

    The basic definition of scalping is a trading style in which a trader takes a profit on the first leg of a movement, not allowing the stock any meaningful retreat. It is based on an assumption that it is easier\nto get a higher amount of winning trades when profits are taken faster, minimizing the cases when relatively small profits evaporate and turn into a loss. This is contrary to the more conventional and commonly accepted approach where a trader lets profits run,\nrisking losing them on a reversal or a severe pullback, and trying to make up for a diminished win/loss ratio by a bigger ratio of winner vs. loser."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-76-78-scalping-as-a-trading-style-by-vadym-graifer-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-76-78-scalping-as-a-trading-style-by-vadym-graifer-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-76-78-scalping-as-a-trading-style-by-vadym-graifer-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov237prre4,d,"{""minimum-quantity"":""1"",""path"":""ch10o202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:10 (79-80): Product Review: TradeStation 8.1 by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:10 (79-80): Product Review: TradeStation 8.1 by Jayanthi Gopalakrishnan

    If I had to choose just one word to describe the features\nthat have been added to TradeStation 8.1, it would\nbe “orders.” Orders have, without a doubt, been enhanced to the point that traders can select from a wide array of order types when placing trades. TradeStation is a rule-based trading platform for equities, options, futures, and forex. It allows clients to design, backtest, and automatically execute custom trading strategies. The latest version, TradeStation 8.1, has just been released.

    INSTALLATION AND SETUP

    Not surprisingly, installing TradeStation 8.1 was a snap. It did take longer than the indicated five minutes for the initial install and running of the program, but\nnot by much. And upgrading to new builds, when they were available, took about the same amount of time. Once the program was installed and running, I didn’t experience any difficulties. Many years have passed since I last used a TradeStation program, and I must\nsay I was impressed with the performance of this version."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-79-80-product-review-tradestation-8-1-by-jayanthi-gopalakrishnan-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-79-80-product-review-tradestation-8-1-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-79-80-product-review-tradestation-8-1-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov238frad,d,"{""minimum-quantity"":""1"",""path"":""ch10o202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:10 (81-82): Fractal Adaptive Moving Averages by John F. Ehlers"",""caption-linebreaks"":""Stocks & Commodities V. 23:10 (81-82): Fractal Adaptive Moving Averages by John F. Ehlers

    We all want to eliminate bad whipsaw trades. Here’s a\nweapon you can add to your arsenal of technical indicators for just that purpose.

    The objective of using filters is to separate the desirable signals from the undesirable ones. The\npractical application of moving averages often\ninvolves a tradeoff between the amount of smoothness\nrequired and the amount of lag that can be tolerated. Moving averages have this problem because the price data is not stationary and may have different bandwidths over different time intervals.

    Various momentum-adaptive filtering techniques have\nbeen developed to take advantage of the nonstationary structure of prices. Adaptive filters have also been developed based on price statistics and the cyclic content of the price data. In this article, I will describe a different class of filters that monitors a measure of temporal nonstationarity and alters their bandwidth in response to this measure.

    ARE MARKETS FRACTAL?

    There is no argument that market prices are fractal. Fractal shapes are self-similar — that is, a particular fractal has the same roughness and sparseness no matter how closely you view them. For example, if you remove the labels from a fiveminute chart, a daily chart, and a weekly chart, you would have difficulty telling them apart. This is the characteristic that makes them fractal. The fractal dimension that describes the sparseness at all magnification levels defines the self-similarity."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-81-82-fractal-adaptive-moving-averages-by-john-f-ehlers-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-81-82-fractal-adaptive-moving-averages-by-john-f-ehlers-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-81-82-fractal-adaptive-moving-averages-by-john-f-ehlers-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov238sifr,d,"{""minimum-quantity"":""1"",""path"":""ch10o202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:10 (81-82): Sidebar: FRAMA EasyLanguage code by John F. Ehlers"",""caption-linebreaks"":""Stocks & Commodities V. 23:10 (81-82): Sidebar: FRAMA EasyLanguage code by John F. Ehlers

    FRAMA EASYLANGUAGE CODE

    Inputs:\nPrice((H+L)/2);\nN(16);\n{N must be an even number}\nVars:\ncount(0);\nN1(0),\nN2(0),\nN3(0),\nHH(0),\nLL(0),\nDimen(0),\nalpha(0),\nFilt(0); ..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-81-82-sidebar-frama-easylanguage-code-by-john-f-ehlers-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-81-82-sidebar-frama-easylanguage-code-by-john-f-ehlers-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-81-82-sidebar-frama-easylanguage-code-by-john-f-ehlers-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov238trti3,d,"{""minimum-quantity"":""1"",""path"":""ch10o202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:10 (83-89): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:10 (83-89): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement one of the strategies presented in this issue.

    This month code is given for John Ehler's article “Fractal Adaptive Moving Averages.\"" Included are: TradeStation, MetaStock, AIQ, WealthLab, eSignal, NeuroShell Trader, AmiBroker, NeoTicker, TradingSolutions, and Financial Data Calculator."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-83-89-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-83-89-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-83-89-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov239bofo5,d,"{""minimum-quantity"":""1"",""path"":""ch10o202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:10 (94): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:10 (94): Books For Traders by Technical Analysis, Inc.

    The Bible Of Options Strategies (356 pages, $49.95\nhardcover, 2005, ISBN 0-13-171066-4) by Guy Cohen,\npublished by FT/ Prentice Hall.

    Pick the right options strategies ... implement them step-bystep ... maximize your profits! This is a comprehensive reference to contemporary options trading. OptionsEasy creator Guy Cohen identifies today’s strategies and tells you how and when to use each one. It includes the strategies of buying and shorting shares, calls and puts, income strategies like covered calls, naked puts, iron butterflies, calendar\ncalls, and more."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-94-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-94-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-10-94-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231leto10,d,"{""minimum-quantity"":""1"",""path"":""ch11n202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:11 (10-14): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist.

    TRUE STRENGTH INDEX

    Editor,

    As a veteran reader of S&C, I have found the recent\ndialogue on William Blau’s TSI (true strength index) very interesting. I consider Blau’s work on double smoothing as remarkably insightful. William Blau and I were friends and I remember how proud he was of the development of the TSI and related techniques, which\nwere simple but elegant. I would like to point out, however, that the implementation is not a secret. At the risk of seeming promotional, I published it in my 1995 book Trading Systems & Methods and have expanded that coverage in the recent fourth edition, along with\nBlau’s other techniques. The implementation\nof TSI can be done in one line in TradeStation, but it’s easier to read in three lines:

    Num = smoothedaverage(smoothedaverage\n(close-close[1],smooth1),smooth2);\nDenom = smoothedaverage(smoothedaverage\n(absvalue(close-close[1]),smooth1),smooth2);\nTSI = 100*num/denom;

    PERRY KAUFMAN, via email

    Editor: Thank you for sharing this. Readers may be interested to find the following articles by William Blau as well as one by Perry Kaufman at the\nS&C Online Store: Blau, William [1991]. “Double\nSmoothed-Stochastics,” Technical Analysis of STOCKS & COMMODITIES, Volume 9: January."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-10-14-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-10-14-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-10-14-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231appi,d,"{""minimum-quantity"":""1"",""path"":""ch11n202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:11 (16-19): Applying Pit-Trading Techniques To Electronic Trading by Clem Chambers"",""caption-linebreaks"":""Stocks & Commodities V. 23:11 (16-19): Applying Pit-Trading Techniques To Electronic Trading by Clem Chambers

    Just like every other established futures market, the London International Financial Futures Exchange (LIFFE) used to have a pit where colorfully jacketed traders stood and bellowed their orders back and forth.\nBut in recent years, pit trading has made way for\nelectronic trading and the old floor traders have either retired, gone to the US to work the pits there, or made the transition to screen trading.

    Those who hoped to make it trading electronically have\nfound it hard to get by; screen trading is a different game altogether. Now, most — perhaps all — have disappeared from the LIFFE market completely.

    THE MARKET MAKERS

    If you were to ask pit traders how they make money, it is\nunlikely you would get a satisfactory answer. I put this down to the fact that most are self-taught; they understand the job intuitively rather than technically — years of practice in an incredibly frenetic environment, not a textbook, have taught them their trade.

    After talking to them, you can often be left with the feeling they don’t know how they make money. Alternately, you will\nbe regaled by stories of hunches or pulling off massive trades, and a never-ending flow of war stories that sound good but don’t leave you with much of an idea of how their gut turns into profit. Trading futures on screen should be like trading on the floor, but it isn’t. The good news, however, is that comparing and contrasting\nthe two opens up new ways to trade."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-16-19-applying-pit-trading-techniques-to-electronic-trading-by-clem-chambers-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-16-19-applying-pit-trading-techniques-to-electronic-trading-by-clem-chambers-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-16-19-applying-pit-trading-techniques-to-electronic-trading-by-clem-chambers-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov232chyo,d,"{""minimum-quantity"":""1"",""path"":""ch11n202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:11 (20-27): Chart Your Stocks With Float Charts by Steve Woods"",""caption-linebreaks"":""Stocks & Commodities V. 23:11 (20-27): Chart Your Stocks With Float Charts by Steve Woods

    Price is king. Volume is queen. Both live in the context of time. But is there a prince or prime minister who has been overlooked? Float charts may have the answer.

    In my 1996 STOCKS & COMMODITIES article, I introduced the cumulative volume float indicator and In\ndemonstrated a dynamic relationship between a stock’s price and volume and its floating supply of shares. The idea was simple: by adding up volume cumulatively on a chart, we can identify rectangles that correspond with areas of accumulation at the bottom and distribution at the top. Since then, I have come to realize that what I discovered was not just a new indicator but an entirely new type of stock chart.

    To understand, consider this question: What data goes into creating a stock chart? Price and volume. Is there a piece of data that stock charts have not been using? If the historical pantheon of charting begins with candlesticks, then goes to point and figure, then moves on to price & volume, I would ask: Is there a fourth way of charting stocks? Is there an overlooked piece of data which, when used properly, actually creates a new type of stock chart? Is there a new way to look at what is happening in a stock’s trading history? Yes! The missing data is the float number. The new type of chart is a float chart, and its origins go back to W.D. Gann’s book, Truth Of The Stock Tape, originally published in 1923."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-20-27-chart-your-stocks-with-float-charts-by-steve-woods-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-20-27-chart-your-stocks-with-float-charts-by-steve-woods-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-20-27-chart-your-stocks-with-float-charts-by-steve-woods-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov232imyo,d,"{""minimum-quantity"":""1"",""path"":""ch11n202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:11 (28): Improve Your Trading System With Speed by Gomu Vetrivel"",""caption-linebreaks"":""Stocks & Commodities V. 23:11 (28): Improve Your Trading System With Speed by Gomu Vetrivel

    Constantly improving your trading system is the best way to improve the performance of your trading system. But what’s speed got to do with it?

    Speed has a lot to do with improving the performance\nof your trading system. As you’ll see, it makes all the difference. What is speed? Speed refers to how fast the price is moving. The average speed during the course of a motion is often computed using the following equation:

    Speed = Distance traveled by price / Time taken

    Try not to confuse speed with momentum. Momentum is nothing but speed with direction. For example, if on day zero, price is 100, and on day 1, price is 150 and on day 2 price is 100, then momentum on day 1 is 50 and on day 2 is -50, whereas speed on day 1 is 50 and day 2 is also 50.

    SO MANY POSSIBILITIES

    When price is going up, speed can increase or decrease. Similarly, when price is going down, speed can increase or decrease. Let’s look at the following two hypotheses:

    Hypothesis 1\nA system can take a long signal when price is going up and speed increases. It can take a short signal when price is going down and speed increases.

    Hypothesis 2

    A system can take a long signal when price is going up and speed decreases. It can take a short signal when price is going down and speed decreases."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-28-improve-your-trading-system-with-speed-by-gomu-vetrivel-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-28-improve-your-trading-system-with-speed-by-gomu-vetrivel-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-28-improve-your-trading-system-with-speed-by-gomu-vetrivel-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov232siea,d,"{""minimum-quantity"":""1"",""path"":""ch11n202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:11 (28): Sidebar: EasyLanguage for Vetrivel systems by Gomu Vetrivel"",""caption-linebreaks"":""Stocks & Commodities V. 23:11 (28): Sidebar: EasyLanguage for Vetrivel systems by Gomu Vetrivel

    Base System

    var:x(0);\nx=absvalue(c-c[1]);\nif c>average(c,10) and c[1]average(c,10)[1] then sell at c;"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-28-sidebar-easylanguage-for-vetrivel-systems-by-gomu-vetrivel-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-28-sidebar-easylanguage-for-vetrivel-systems-by-gomu-vetrivel-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-28-sidebar-easylanguage-for-vetrivel-systems-by-gomu-vetrivel-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233fofo1,d,"{""minimum-quantity"":""1"",""path"":""ch11n202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:11 (32): Forex Focus by Kathy Lien"",""caption-linebreaks"":""Stocks & Commodities V. 23:11 (32): Forex Focus by Kathy Lien

    Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. With that in mind, STOCKS & COMMODITIES has introduced Forex Focus to better prepare the retail trader to participate in the currency market.

    Ever thought of currencies as an alternative or supplement for oil? Maybe now you will. Oil prices have been skyrocketing over the past year, with prices of light crude increasing 60% since January. Some traders think oil prices will continue to rally to $80 or even\n$100 a barrel, while others think that it is meeting resistance and, as a result, could turn lower from here on. Typically, traditional oil traders prefer to trade oil futures directly to express their views of where oil may be headed next, but many traders have been turning to the foreign exchange market as a supplemental or even alternative way to express those views. If you think oil prices are headed higher, the primary advantage of trading currencies instead of oil futures is the ability to earn interest. Not only could you capitalize on oil appreciation but you could also earn interest income."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-32-forex-focus-by-kathy-lien-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-32-forex-focus-by-kathy-lien-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-32-forex-focus-by-kathy-lien-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233deof,d,"{""minimum-quantity"":""1"",""path"":""ch11n202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:11 (34-38): The Development Of A Futures Trader by Thomas Drinka, Nathan Losey, and Ryan Lauer"",""caption-linebreaks"":""Stocks & Commodities V. 23:11 (34-38): The Development Of A Futures Trader by Thomas Drinka, Nathan Losey, and Ryan Lauer

    Here’s a look at the trading methodology implemented\nby two futures traders. By using Market Profile, they\nsuccessfully traded the e-mini.

    In my opinion, the teaching of off-floor futures trading is a relevant part of academic curricula. In fact, at Western Illinois University there are six agricultural economics (AE) courses related to the use of futures and options for hedging and speculation.

    In one of the advanced AE courses, students learn\nabout the traditional Market Profile theory devised by J.\nPeter Steidlmayer and the Chicago Board of Trade\n(CBOT) in the early 1980s. This course is concerned with simulated, real-time trading utilizing Market Profile.\nStudents have access to six CQG terminals that disseminate real-time data from the CBOT, Chicago Mercantile Exchange (CME), Euronext.liffe, and the Singapore Exchange. There, they conduct simulated\nreal-time trades.

    While in these courses, two of my former students configured laptop computers in order to trade electronic\nmarkets. This article reviews their trading methodology and the first-year trading performance for one of them."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-34-38-the-development-of-a-futures-trader-by-thomas-drinka-nathan-losey-and-ryan-lauer-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-34-38-the-development-of-a-futures-trader-by-thomas-drinka-nathan-losey-and-ryan-lauer-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-34-38-the-development-of-a-futures-trader-by-thomas-drinka-nathan-losey-and-ryan-lauer-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234qaby2,d,"{""minimum-quantity"":""1"",""path"":""ch11n202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:11 (40): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 23:11 (40): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http:// Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    SPECIALIST STRATEGY

    I am interested in your strategy for calculating fair value, mentioned in the August 2005 issue of S&C. How can I\nget more info on this strategy?—Joseph Staron

    Two answers: You can always check out one of our training programs (www.stocktrading.com), or you can\ngo to www.elitetrader.com (register for free), and check the forum called “Don’s openings and more.” You will have to weed through several nonsense posts, but a search back to the original thread from a few years ago will show you more in-depth discussions of this particular strategy."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-40-q-a-by-don-bright-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-40-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-40-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234qudi,d,"{""minimum-quantity"":""1"",""path"":""ch11n202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:11 (42): Quick-Scans: Divergence Software, Inc. by Sean Moore"",""caption-linebreaks"":""Stocks & Commodities V. 23:11 (42): Quick-Scans: Divergence Software, Inc. by Sean Moore

    Divergence Software specializes in custom programming and script development for the eSignal platform by utilizing eSignal’s EFS programming language (similar to JavaScript). Divergence has developed studies and trading systems for use with eSignal and is also an active contributor to eSignal\nbulletin boards.

    • S/R Analyst Pro

    S/R Analyst Pro, previously a standalone software product, is now designed to work directly within eSignal. All you have to do is load the S/R Analyst EFS\nscript into your eSignal Advanced Chart and you’re ready to go. The script will automatically draw pivot points, trendlines, support and resistance lines, and\ngap zones (Figure 1). The script instantly provides visual aids that can help improve your chart reading. With the built-in menu, you have the ability to customize\nmost of the script settings, but you cannot access the actual EFS code."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-42-quick-scans-divergence-software-inc-by-sean-moore-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-42-quick-scans-divergence-software-inc-by-sean-moore-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-42-quick-scans-divergence-software-inc-by-sean-moore-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234sisp,d,"{""minimum-quantity"":""1"",""path"":""ch11n202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:11 (44-48): Singular Spectrum Analysis: Part II by Sergiy Drogobetskii"",""caption-linebreaks"":""Stocks & Commodities V. 23:11 (44-48): Singular Spectrum Analysis: Part II by Sergiy Drogobetskii

    Here’s another look at applying singular spectrum analysis to the foreign exchange markets.

    In my last article, I discussed some of the variables that make up single spectrum analysis (SSA), an analytical\nmethod that has been applied to various branches of\nscientific study. It has proved useful for compressing information, smoothing initial data and, in certain cases, predicting time series data prices. Last time, I showed how SSA could be applied to forex market\nprices. This time, I will continue in that direction and show how you can apply SSA to forecast prices.\nIn reconstructing the initial time series, one important consequence of the singular value decomposition\n(SVD) of a trajectory matrix (built from the time series of prices) is that it is possible to completely reconstruct\nthe decomposed initial trajectory matrix by using empirical orthogonal functions (EOFs) contained\nin the right matrix V..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-44-48-singular-spectrum-analysis-part-ii-by-sergiy-drogobetskii-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-44-48-singular-spectrum-analysis-part-ii-by-sergiy-drogobetskii-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-44-48-singular-spectrum-analysis-part-ii-by-sergiy-drogobetskii-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov235fufo,d,"{""minimum-quantity"":""1"",""path"":""ch11n202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:11 (54-55): Futures For You by Dan O’Neil"",""caption-linebreaks"":""Stocks & Commodities V. 23:11 (54-55): Futures For You by Dan O’Neil

    INSIDE THE FUTURES WORLD

    Want to learn how the futures markets really work? Dan O’Neil, a principal at online futures and forex broker XPRESSTRADE (www.xpresstrade.com), responds to\nyour questions about today’s futures markets. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be\nposted there, and selected questions will appear in a future issue of S&C.

    MARKED-TO-MARKET

    The Chicago Mercantile Exchange’s popular e-mini stock index futures have triggered an influx of newcomers to the futures markets. Perhaps the most common source of confusion for stock traders migrating to the futures markets is the difference in settlement procedures.

    Suppose a trader buys 100 shares of stock for $40 per share. The value of the stock would be $4,000, and the buyer would be responsible for paying this sum to the seller. If the price of the stock subsequently rises to $50, the owner of the stock will have an unrealized profit, meaning that he won’t be able to actually spend his $1,000 profit until he formally liquidates his position by selling 100 shares at $50 per share. In the stock world, profits and losses aren’t realized until the position is closed.

    Now imagine a trader who establishes a long position in e-mini S&P futures, and suppose his entry price is\n1230.00. Since the value of the contract is the index multiplied by $50, we’re talking about something north of $60,000. But the futures trader doesn’t actually buy the contract—rather, he’s required only to deposit some amount of good-faith margin, which is designed to ensure that resources are on hand to cover any losses."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-54-55-futures-for-you-by-dan-o-neil-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-54-55-futures-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-54-55-futures-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov236infl,d,"{""minimum-quantity"":""1"",""path"":""ch11n202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:11 (62-68): Interview: Floyd Upperman by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:11 (62-68): Interview: Floyd Upperman by Jayanthi Gopalakrishnan

    Floyd Upperman became interested in the futures market in the early 1990s after investing in stocks and stock options. While working in the high-tech world of semiconductors, Upperman spent his spare time and money researching the investment world. Using his knowledge of statistics and engineering background\ncombined with his programming skills, he designed his own trading system based on repetitive patterns and conditions characteristic to individual commodities. Using fundamental information supplied by the US government with the commitment of traders data, he has been able to separate the open interest for each commodity into three distinct groups. STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Floyd Upperman via telephone on September 13, 2005.

    Q: Tell us how you got started in trading.

    A: My background is in electrical engineering, so after I\ngot my degree, I went to work for Intel in New Mexico. Intel gave me some stock, and I made a lot of money off it. I saw how you could keep making money in stocks, and that got me interested in trading. I started off trading technology stocks in the late 1980s, but I didn’t have a lot of money then, and I found out quickly you needed a decent amount of money to trade.

    Eventually, I migrated over into options, because 100 shares per option gave me more leverage. But I still found I didn’t have any consistency in my trading. I made money sometimes, lost money other times, and didn’t really have a system. I couldn’t figure out any\norder in the market either; even though I knew a lot about technology and what we were doing at Intel, I didn’t know why the markets did what they did.

    Around that time, I moved to Irvine, CA, to make disk drives at Western Digital. There was this TV station, WKHY, that was similar to CNBC before CNBC got going. They\ncovered a lot of information on commodities and featured people like Ira Epstein. I remember someone\nfrom a company called Anco talking about wheat, and that’s how I got interested. I made $1,700 trading wheat options."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-62-68-interview-floyd-upperman-by-jayanthi-gopalakrishnan-20.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-62-68-interview-floyd-upperman-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-62-68-interview-floyd-upperman-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov236wefo2,d,"{""minimum-quantity"":""1"",""path"":""ch11n202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:11 (69): Websites For Traders: SiliconInvestor.com by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:11 (69): Websites For Traders: SiliconInvestor.com by David Penn

    SILICONINVESTOR.COM

    At the risk of sounding like I’m taking a shot, there was a day when Silicon Investor (siliconinvestor.com) was a\nsmoking-hot website. Not coincidentally, those days were also ones during which “silicon” had the same buzz to it that gold did in the late 1970s—or steam power in the early 19th century. As the name suggests, Silicon Investor was once synonymous with the high-tech investment craze of the 1990s. Five years ago, Beth Kwon of TheStreet.com reported that SI, as Silicon Investor was affectionately known at the time, had “long been considered a sane destination in the arguably insane world of Internet stock message boards.”

    Kwon might have considered SI past its prime (her article was titled, “Silicon Investor Relegated To Message-Board Back Seat”), but far more discomfort\nwas headed SI’s way, as being merely passé gave way to charges that it was becoming a home for investment ill repute as one of its allegedly more widely read posters was sentenced in May 2000 to a $20,000 fine and four months in federal prison for felony mail fraud (“This Silicon Investor Is Now Anthony@FederalDetention.gov”). And shortly after that, there was this little thing called the NASDAQ meltdown …"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-69-websites-for-traders-siliconinvestor-com-by-david-penn-20.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-69-websites-for-traders-siliconinvestor-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-69-websites-for-traders-siliconinvestor-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov237prre5,d,"{""minimum-quantity"":""1"",""path"":""ch11n202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:11 (70-74): Product Review: tymoraPro by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:11 (70-74): Product Review: tymoraPro by David Penn

    It seems to me there’s a big risk in creating software like tymoraPRO. On one hand, the amount of market information this software provides to traders— especially daytraders and swing traders— is staggering. If there are various trends in technical\nanalysis software development, trends toward flashier and fancier graphics, trends toward greater analysis/brokerage integration, and so on, tymoraPRO\ndefinitely represents the notion you can never really know too much about what is going on in the marketplace. As my examples show, the mere fact that\ntymoraPRO is able to accomplish this “datastorm” without careening out of control or into incoherence is testament enough to the software’s design.\nOn the other hand, because tymoraPRO makes distinctions and discriminations about what sort of technical information is and is not helpful for traders, the software designers run the danger of upsetting those potential customers ready to turn up their noses at a software package that doesn’t feature their precious moving average convergence/ divergence (MACD) histogram, or Fibonacci time series, or stochRSI.

    Laugh if you like, but there’s a reason why most standard charting analysis packages come loaded for bear with more indicator options than any trader\ncould possibly (or better, should possibly) attempt to deploy in real-life trading. And it is a reason tymoraPRO implicitly rejects."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-70-74-product-review-tymorapro-by-david-penn-20.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-70-74-product-review-tymorapro-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-70-74-product-review-tymorapro-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov23795tr,d,"{""minimum-quantity"":""1"",""path"":""ch11n202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:11 (75-83, 95): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:11 (75-83, 95): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    In his article, “Improve Your Trading System With Speed,” Gomu Vetrivel presents an indicator called speed. He defines speed as the absolute value of the difference between two closing prices. Vetrivel presents the results of tests he conducted to attempt to determine whether speed can be used to improve the performance of a system, the entries of which are\nbased on moving average crossovers.

    In the first test presented by Vetrivel, every crossover\nsignal is traded. In the second, only crossovers with increasing speed are taken. In the third test, only crossovers with decreasing speed are taken. Vetrivel’s article already contains code written for TradeStation 2000i. In addition, Traders' Tips provides code for TradeStation, Wealth-Lab, AmiBroker, eSignal, NeueoShell Trader, Investor/RT, NeoTicker, TradingSolutions, MetaStock, TechniFilter Plus, BioComp, and Financial Data Calculator."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-75-83-95-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-75-83-95-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-75-83-95-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov238inre1,d,"{""minimum-quantity"":""1"",""path"":""ch11n202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:11 (84-85): Intermarket Review by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:11 (84-85): Intermarket Review by David Penn

    This month's reviews are for: Internet Holdrs Trust (HHH), GSTI Software Index ($GSO), Philadelphia Stock Exchange Semiconductor Index ($SOX), and the Telecommunications Holders Trust (TTH)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-84-85-intermarket-review-by-david-penn-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-84-85-intermarket-review-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-84-85-intermarket-review-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov238exyo1,d,"{""minimum-quantity"":""1"",""path"":""ch11n202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:11 (86): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 23:11 (86): Explore Your Options by Tom Gentile

    AVOIDING ASSIGNMENT

    Suppose I use a spread by selling a 50 call and buying a 55 call. If the stock starts approaching 50, at what price should I buy back the 50 call to avoid assignment? How else can I hedge this situation for limited losses?

    Assignment happens when you have very little or no time value remaining in the options contract. Time value will drop toward zero when an option is inthe-\nmoney and running out of time. Very deep in-the-money options also have very little time value.

    In rare instances, an out-of-themoney option will get assigned, but it doesn’t happen often. Assignment\nmight occur, for example, if weekend news is expected to affect the stock to the downside after expiration day.\nHowever, you are at risk of assignment if the option is in-the-money at or near expiration, with little or no time\nvalue. If you want to avoid it, close out the position. On the other hand, if there is time value remaining, the option will probably not be assigned. A good rule of thumb is if the time value drops to 1/4 points or more, assignment is unlikely."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-86-explore-your-options-by-tom-gentile-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-86-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-86-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov239bofo6,d,"{""minimum-quantity"":""1"",""path"":""ch11n202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:11 (94): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:11 (94): Books For Traders by Technical Analysis, Inc.

    The Bull Hunter: Tracking Today’s Hottest Investment (225 pages, $24.95 hardcover, 2005, ISBN 0-471-71983-8) by Dan Denning, published by John Wiley & Sons.

    The world of investing has changed drastically in the past few years. This book details where you should be looking now, what you should be looking for, and\nwhy. The author outlines techniques to mine raging bull markets and profits in emerging countries, sectors, industries, and companies just beginning to flourish. He also shows how to protect yourself from disastrous risk."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-94-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-94-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-94-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov239atcl3,d,"{""minimum-quantity"":""1"",""path"":""ch11n202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:11 (98): At The Close by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:11 (98): At The Close by Jayanthi Gopalakrishnan

    For reasons that are obvious (think prices at the gas\npump if you’re confused), I have been watching the action in the crude oil market recently. Given that haven’t seen prices come down that much at the gas pumps, I thought I’d pull up a chart of the continuous crude oil contracts to see where things were heading. I’m not trading crude oil contracts but thought I’d share my observations. Usually, I overlay a 50-period moving average but in this case, I thought a shorter period would fit better. I applied the 40-day moving average to the daily chart of the crude oil continuous contracts, since it seemed to closely correlate with the trendline displayed in Figure 1. If you look at the current action (as of September 16, 2005), you will see some\ninteresting behavior, in terms of the trendline and moving average displayed."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-98-at-the-close-by-jayanthi-gopalakrishnan-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-98-at-the-close-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-11-98-at-the-close-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231leto11,d,"{""minimum-quantity"":""1"",""path"":""ch12d202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:12 (10-13): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:12 (10-13): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist.

    TREND-FOLLOWING TECHNIQUES FOR LONG-TERM INVESTING

    Editor,

    Most articles I have read in your magazine deal with\nshort-term trading. Do you have any articles about\ntrend following for longer-term stock trades? For example, I think Richard Donchian created the 20-day\nchannel technique.

    ED PAGE\nvia email

    You are correct in that most of our articles focus on short-term trading. However, we do from time to time include articles on long-term trading. In fact, we have published articles specifically on the Donchian channel. I would recommend that you search our archives at our website, www.Traders.com. In addition,\nour online publication Working Money at Working-Money.com includes more articles on longer-term trading and investing. It might be worth your while to browse those articles.—Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-10-13-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-10-13-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-10-13-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231fofo1,d,"{""minimum-quantity"":""1"",""path"":""ch12d202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:12 (14-17): Forex Focus by John Forman"",""caption-linebreaks"":""Stocks & Commodities V. 23:12 (14-17): Forex Focus by John Forman

    Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. With that in mind, STOCKS & COMMODITIES has introduced Forex Focus to better prepare the retail trader to participate in the currency market.

    Basic Statistical Analysis: A Tool For All Traders

    What implications could these statistical studies have on the spot foreign exchange market?

    Many of you look at charts. Many of you evaluate the fundamentals. But how many of you look at statistics? Granted, there is not a whole lot of glamour in what is often referred to as the quantitative analysis of the\nmarkets, but there certainly is the potential for value. In this article, you will find examples of studies that anyone can perform without much strain.

    PRICE CHANGES AND DAILY RANGES

    Pictures speak volumes, so it is worth looking at a couple of charts. Figure 1 is a distribution of the daily ranges in the exchange rate between the euro and the US dollar (EUR/USD). The ranges are calculated as a percentage of the day’s average price (high plus low divided by two). There is a lot of purple to the right-hand side of the graph where the lowest values are located. A few sizable ranges were included (including one in\nexcess of 5%), but in most observations the market held within a range of 1.5% or less.

    To anyone familiar with the markets, this is hardly earth-shattering information. It tells you that the market tends to move in small increments and to experience fairly small ranges, but also on occasion it experiences\nsignificant volatility. You are not going to develop a trading system based on this analysis alone, but it can come in handy where risk management and trade expectations are concerned."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-14-17-forex-focus-by-john-forman-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-14-17-forex-focus-by-john-forman-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-14-17-forex-focus-by-john-forman-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231coad,d,"{""minimum-quantity"":""1"",""path"":""ch12d202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:12 (18-27): Combining A/D Indicators And Volume Patterns by V. Kalitowski and A. von Stuermer"",""caption-linebreaks"":""Stocks & Commodities V. 23:12 (18-27): Combining A/D Indicators And Volume Patterns by V. Kalitowski and A. von Stuermer

    Here’s a novel approach to market timing that can forecast mid-term runs on the S&P 500.

    There are certain critical advance and decline levels\nthat serve as excellent high-reward/low-risk entry points to go long the Standard & Poor’s 500 for a mid-term run. We have found critical levels associated with two A/D ratios applied to the S&P 500. You can, however, use the indicators to trade any of the S&P 500 constituent stocks. We chose the S&P 500 mainly\nbecause many analysts and money managers consider it to be the best proxy for market sentiment. Our findings are based on an analysis of historical data dating back to June 1997.

    ABOUT THE A/D INDICATORS

    Advances and declines (AD) are well-known indicators used to gauge market strength or weakness, so armed with AD data, you can assess how strong a current trend really is. We use two specific ratios based on the advance/decline (A/D) concept:

    • A/D issues

    • A/D volume

    The A/D issues ratio simply indicates whether a majority of stocks were traded at higher or lower prices relative to the close of the previous trading session. An A/D issues ratio with a large positive value indicates a strong market performance (positive market momentum), while a negative ratio represents a weak performance (negative market momentum)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-18-27-combining-a-d-indicators-and-volume-patterns-by-v-kalitowski-and-a-von-stuermer-20.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-18-27-combining-a-d-indicators-and-volume-patterns-by-v-kalitowski-and-a-von-stuermer-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-18-27-combining-a-d-indicators-and-volume-patterns-by-v-kalitowski-and-a-von-stuermer-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233qaby,d,"{""minimum-quantity"":""1"",""path"":""ch12d202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:12 (34): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 23:12 (34): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    TAPE READING

    Q: Here’s a scenario for you: ABC stock is presented at 100.00 (56k) X 100.05 (100)

    All other factors being equal, for the sake of discussion, do you:

    (A) go long at the bid?

    (B) go long at the offer?

    (C) short at offer? or

    (D) place short at bid?

    Thanks for your input.—shortseller

    A: Since this is just one part of many overall tape-reading data, there is not nearly enough information to make a decision. For example, what is the depth of the NYOB? What is the PREM or DISC\nto FV? Tape reading is all-encompassing —it’s more than just looking at a simple level 1 quote as it comes up on the ticker.

    That said, we never teach our traders to get in front of a large order, because price moves to size (and through, quite often). Instead, we teach that more often than not, the “not so well trained” guys place orders a penny or two in front of big orders, thinking that they have a great stop-loss just a penny away. And as we all know, that’s rubbish… when the offer goes, it goes all the way, and these guys scramble to cover shorts and so on, running the stock up through that big order price."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-34-q-a-by-don-bright-20.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-34-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-34-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233brof,d,"{""minimum-quantity"":""1"",""path"":""ch12d202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:12 (36-41): Breadth Of Fresh Air by Gregory L. Morris"",""caption-linebreaks"":""Stocks & Commodities V. 23:12 (36-41): Breadth Of Fresh Air by Gregory L. Morris

    The significance of the levels of the McClellan summation index can help improve your trading results.

    I was writing my second book, The Complete Guide To Market Breadth Indicators, when I became aware of some significant facts. Here’s one: If you had to I select one market breadth indicator that would tell you when to invest and when to be on the sidelines, which would it be? During my research, I discovered it would be the McClellan summation index.

    Why, you ask? I’ll tell you — but before I do, here’s a quick rundown on the topics I’ll have to cover in order to fully explain why:

    • An exponential moving average (EMA), which gives more weight to the most recent data and is quicker at responding to price action than the more common simple moving average.

    • Advancing issues (A = advances), which are the number of stocks that increased in price during the day.

    • Declining issues (D = declines), which are the number of stocks that declined in price during the day.

    • The advance decline line, which is the daily difference between advances and declines, and then a running sum is maintained each day."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-36-41-breadth-of-fresh-air-by-gregory-l-morris-20.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-36-41-breadth-of-fresh-air-by-gregory-l-morris-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-36-41-breadth-of-fresh-air-by-gregory-l-morris-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234exyo4,d,"{""minimum-quantity"":""1"",""path"":""ch12d202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:12 (42): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 23:12 (42): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    OPTIONS AFTER BANKRUPTCY

    How does the bankruptcy of a company affect its options contract? Do all the options expire worthless?\nWhen a company files for bankruptcy protection, some options may expire worthless, but not always. After the\ncompany files, the first step is delisting; stock is often delisted from the exchanges within days, if not the same day of the announcement. In rare instances, it takes longer. For example, Delta Airlines (DAL) filed for bankruptcy in mid-September, but shares continued trading on the New York Stock Exchange (NYSE) for several weeks. The NYSE recently announced it would delist the stock on October 13, 2005.

    Once the shares are removed from the exchanges, the stock begin trading on the OTC Bulletin Board, or “pink\nsheets.” The stock symbol changes, but shares continue trading and can be bought and sold. At that time, however, the options are affected. To be specific,\nonce the stock is delisted, options can be closed out, but no new positions can be opened. However, it is possible to institute closing transactions. If, for example, an investor owns puts, that position can be closed out even after the stock is delisted."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-42-explore-your-options-by-tom-gentile-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-42-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-42-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234prre1,d,"{""minimum-quantity"":""1"",""path"":""ch12d202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:12 (44-48): Product Review: Dynamic Trend Profile 2.0 by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:12 (44-48): Product Review: Dynamic Trend Profile 2.0 by David Penn

    What’s your favorite sin? Gluttony? Lust? Avarice? Okay,\nlet me try that again. What’s your favorite trading sin? That no-no, shibboleth, or trading atrocity that, despite your best intentions and “knowing better,” you are too often powerless to resist. My own trading bête noire has to be the old “turning trades into investments” offense. For me, as a short-term trader, this often\nmeans allowing swing trades to turn into position trades. But the problem is essentially the same.

    Part of what happens with some traders isn’t just that a position goes against them and they have to cage for more time by convincing themselves that the trade works “just as well” as a position play as it did when it was conceived as a swing trade. Translation: If I wait,\nhopefully the trade will do what I wanted it to do. Nor are the offenders necessarily those with winning positions who just can’t force themselves to leave the party while the joint is still jumping (insert your favorite “Bulls make money, bears make money, but pigs get slaughtered”\nriff here)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-44-48-product-review-dynamic-trend-profile-2-0-by-david-penn-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-44-48-product-review-dynamic-trend-profile-2-0-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-44-48-product-review-dynamic-trend-profile-2-0-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov235sira,d,"{""minimum-quantity"":""1"",""path"":""ch12d202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:12 (50-52): A Simple Range-Trading System by Xavier Maria Raj"",""caption-linebreaks"":""Stocks & Commodities V. 23:12 (50-52): A Simple Range-Trading System by Xavier Maria Raj

    Creating a trading system is always a good idea, and\nkeeping it simple is even better. Here’s a look at one\nstrategy that could make all the difference.

    It is always tempting to react to price movements, but doing so to each one may not be a good idea. If you\nreact to each and every price move, your transaction costs could be comparatively more than your profits!

    To avoid this situation, you could use filters or identify specific patterns and build a trading strategy. With this in mind, I have presented a simple strategy based on a specific chart pattern.

    THE LOGIC BEHIND THE PATTERN

    The chart pattern involves identifying the bar with an expanded range relative to the previous bar’s range. This pattern is confirmed when the current bar’s range (High – low) is greater than the previous bar’s range.

    Today’s Range (High – Low)> Previous Day’s Range

    Based on this pattern, let’s formulate a trading strategy.

    • Signals to be generated for the next day are based on the direction of the expanded day. So on the day of the upward direction in prices — when the close is greater than the open — take only long signals for the next trading day.

    • If prices move in a downward direction, take only short signals for the next trading day.

    The last bar on Figure 1 shows an expanded range day with an upward direction. Figure 2 shows an expanded range day with a downward direction. Based on this trading rule, let’s generate signals using the following condition:

    • Generate a buy signal on the trading day following the upward direction expanded range day with a stop-loss buy order above the previous high plus one tick. . ."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-50-52-a-simple-range-trading-system-by-xavier-maria-raj-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-50-52-a-simple-range-trading-system-by-xavier-maria-raj-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-50-52-a-simple-range-trading-system-by-xavier-maria-raj-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov235sira1,d,"{""minimum-quantity"":""1"",""path"":""ch12d202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:12 (50-52): Sidebar: RAJ rules with TradeStation by Xavier Maria Raj"",""caption-linebreaks"":""Stocks & Commodities V. 23:12 (50-52): Sidebar: RAJ rules with TradeStation by Xavier Maria Raj

    D1 = Current Day

    D2 = Next Day

    H1 = High of Current Day. . ."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-50-52-sidebar-raj-rules-with-tradestation-by-xavier-maria-raj-20.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-50-52-sidebar-raj-rules-with-tradestation-by-xavier-maria-raj-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-50-52-sidebar-raj-rules-with-tradestation-by-xavier-maria-raj-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov235inba,d,"{""minimum-quantity"":""1"",""path"":""ch12d202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:12 (56-61): Interview: Barbara Rockefeller by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:12 (56-61): Interview: Barbara Rockefeller by Jayanthi Gopalakrishnan

    Barbara Rockefeller of Rockefeller Treasury Services is an international economist, author, newsletter publisher, and trader specializing in foreign exchange, with more than 20 years of institutional experience.\nHer “Daily Currency Briefing” newsletter is a synopsis of events and forecasts in spot foreign exchange, published for central banks, fund managers, and multinational corporations, while the “Daily\nFutures Report” is a technical analysis–based report on currency futures. Prior to starting the newsletter business in 1990, she was the senior risk manager in the international division at Citibank. STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Rockefeller via telephone on October 6, 2005.

    Q: How did you get started in technical analysis?

    A: I was an economics major in college and had to write a senior thesis. I had just spent a year at the\nUniversity of Keele in Staffordshire, England, so I decided to write about why the pound must be devalued. This was back in the days of fixed exchange rates, and in those days, we thought foreign exchange rates were set by economics. As it happens, before I finished the thesis, they did devalue the pound. My\nthesis advisor thought I was perspicacious… and of course, I didn’t have a clue! Who has a clue when they are 21?

    Q: Most people don’t. So did that get the wheels rolling?

    A: Not really. Even after exchange rates were floated in the 1970s, analysts still thought that economics ruled FX rates. When I was at Brown Brothers Harriman, they had a process of forecasting exchange rates consisting of everybody in the room writing down their forecasts for one, three, six, and 12 months. Then the boss would take all the numbers, knock off the high and low estimates, average the rest, and there was your forecast. It was an incredibly ineffective way to forecast! Moreover, a lot of value judgments went into the forecasts, like my colleague who always said, “America is the greatest country in the world. The dollar should be strong!” There was a bias toward forecasting the dollar higher, even though it was falling, month after month. I spoke up against it and it made me a “troublemaker.”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-56-61-interview-barbara-rockefeller-by-jayanthi-gopalakrishnan-20.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-56-61-interview-barbara-rockefeller-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-56-61-interview-barbara-rockefeller-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov236ovma,d,"{""minimum-quantity"":""1"",""path"":""ch12d202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:12 (62-65): Overhauling Market Breadth by Jacobus R. van den Brink"",""caption-linebreaks"":""Stocks & Commodities V. 23:12 (62-65): Overhauling Market Breadth by Jacobus R. van den Brink

    A transformation of the Arms index and its components saves screen space and provides additional insight into market breadth.

    Most index traders are familiar with the Arms index (TRIN), which measures the average volume per declining issue relative to the average volume per advancing issue, where comparison is made to yesterday’s close:

    TRIN = (DNVOL / DECL) / (UPVOL /ADVN)

    where:

    DNVOL = Total volume of declining issues (“down volume”)

    DECL = Total number of declining issues (“decliners”)

    UPVOL = Total volume of advancing issues (“up volume”)

    ADVN = Total number of advancing issues (“advancers”)

    The neutral value, or identity, of TRIN is not zero, but one. This is a tricky aspect of the TRIN formula, since values below one are considered bullish while values above are bearish. Consequently, the opposite of any\nTRIN value x is not its inverse (-x) but its reciprocal (1/x), limiting bullish values to zero and leaving bearish values unlimited. A further consequence is that the usual smoothing technique using an arithmetic average does not work with TRIN. Consider the values\n0.5 and 2; in bullish/bearish terms, they are exact opposites and should therefore average to the neutral value of 1, but obviously do not. (Those traders casually programming an n-bar TRIN moving average should take notice.) To correct this, I will not adjust the averaging method, but suggest instead some fundamental TRIN enhancements and additions."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-62-65-overhauling-market-breadth-by-jacobus-r-van-den-brink-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-62-65-overhauling-market-breadth-by-jacobus-r-van-den-brink-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-62-65-overhauling-market-breadth-by-jacobus-r-van-den-brink-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov23669pr,d,"{""minimum-quantity"":""1"",""path"":""ch12d202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:12 (66-67, 69): Product Review: Trade-Ideas by Dennis D. Peterson"",""caption-linebreaks"":""Stocks & Commodities V. 23:12 (66-67, 69): Product Review: Trade-Ideas by Dennis D. Peterson

    Trade-Ideas provides realtime streaming alerts for\nstocks, indexes, exchange traded funds (ETFs), and\ne-minis. These alerts employ criteria commonly used by many traders. The alert calculations are done\non a tick-by-tick basis for the instruments being traded on the NYSE, AMEX, CME, and NASDAQ. Historical data is available, but as you might guess, storing tick data for three of the biggest exchanges limits history to about 20 days. In addition, many of the alerts (especially patterns based on tick calculations) means that they can be triggered with a single tick. All of the calculations are accomplished on their servers, so\nthere is little impact on your system resources. You can use Trade-Ideas through a browser-based version or download the application Trade-Ideas Pro, which is the\nfocus of this review. The goal of Trade-Ideas software is to help you spot trading opportunities as they happen in real-time."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-66-67-69-product-review-trade-ideas-by-dennis-d-peterson-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-66-67-69-product-review-trade-ideas-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-66-67-69-product-review-trade-ideas-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov236wefo3,d,"{""minimum-quantity"":""1"",""path"":""ch12d202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:12 (68-69): Websites For Traders: www.advfn.com by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:12 (68-69): Websites For Traders: www.advfn.com by Jayanthi Gopalakrishnan

    WWW.ADVFN.COM

    When I brought up the home page of Advanced Financial Network (www.advfn.com), it was evident that\nseveral features had been added to it since my last review in June 2003. I’ll have to confess that it was very easy to get distracted by the large number of\nadvertisements on the site, but once you get past that, you’ll find the site does contain a vast amount of information.

    The navigation bar along the top of the page is one indication of the various features available. I also noticed the five dropdown menus, and this was\nenough to get my attention. Once I logged in and installed the Java application, the fun started.

    LET THE GAMES BEGIN

    The first thing that popped up on my screen was a quote screen similar to the one in Figure 1. You have the flexibility to add stock symbols, create your own\nlist of stocks (monitor), and edit the existing lists. From this screen you can move to one that displays small charts of all the symbols listed on the quote screen."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-68-69-websites-for-traders-www-advfn-com-by-jayanthi-gopalakrishnan-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-68-69-websites-for-traders-www-advfn-com-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-68-69-websites-for-traders-www-advfn-com-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov237chma,d,"{""minimum-quantity"":""1"",""path"":""ch12d202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:12 (70-71): Charting The Market by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:12 (70-71): Charting The Market by David Penn

    CHANNELLING

    If one trendline is good, are two trendlines better? That’s one way of summing up the attraction many people have with channeling and trend channels. A technician could even see trend channels as the difference between those who prefer to draw their uptrend lines from the lowest low to the highest low and those who prefer their uptrend lines to ride on top, projecting forward from the lowest high.

    Writing about trend channels, their relationship to trendlines, and how these channels can be profitably traded, in his excellent book Trading For A Living, Alexander Elder notes that:

    \""Channel lines, like trendlines, should be drawn across the edges of congestion areas, leaving out the extreme highs and lows. The presence of a channel line reinforces the validity of the trendline itself. The validity of channel lines depends on how many times they were touched by prices. A channel line marks the area of bulls’ maximum power in an uptrend and bears’ maximum power in a downtrend. The wider the channel the stronger the trend. It pays to trade in the direction of the channel’s slope, going long in the lower quarter or half of a rising channel and selling short in the upper quarter or half of a falling channel. Profits should be\ntaken at the opposite channel wall."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-70-71-charting-the-market-by-david-penn-20.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-70-71-charting-the-market-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-70-71-charting-the-market-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov237fufo,d,"{""minimum-quantity"":""1"",""path"":""ch12d202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:12 (72-73): Futures For You by Dan O’Neil"",""caption-linebreaks"":""Stocks & Commodities V. 23:12 (72-73): Futures For You by Dan O’Neil

    INSIDE THE FUTURES WORLD

    Want to learn how the futures markets really work? Dan O’Neil, a principal at online futures and forex broker XPRESSTRADE (www.xpresstrade.com), responds to\nyour questions about today’s futures markets. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be\nposted there, and selected questions will appear in a future issue of S&C.

    YOU’RE ON MARGIN CALL

    The market’s moving in the wrong direction, losses are accumulating, and the value of your account is declining. By the time your broker issues a margin call, you’re already feeling substantial frustration and anxiety. Under these circumstances, it’s easy to see your broker as your adversary. But veteran traders know this couldn’t be further from the truth.

    For starters, nothing’s more disappointing to us than to see a good client roughed up in the marketplace. We’re\nnot merely being altruistic—we want you to be successful and to earn profits because we’d like to see your account, your trading activity, and the commissions\nyou generate grow over time. Ideally, if you’ve enjoyed a terrific trading experience, you’ll introduce your friends and acquaintances to futures and options trading, and they’ll open accounts with us, too. In other words, our interests are aligned, and our fortunes are closely tied to yours."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-72-73-futures-for-you-by-dan-o-neil-20.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-72-73-futures-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-72-73-futures-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov237wefo1,d,"{""minimum-quantity"":""1"",""path"":""ch12d202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:12 (75-77): Websites For Traders: TradingMarkets.com by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:12 (75-77): Websites For Traders: TradingMarkets.com by David Penn

    TRADINGMARKETS.COM

    Very early in his book How Markets Really Work, author, trader, and TradingMarkets.com founder Larry Connors pays tribute to the writing of Michael Lewis. Lewis, author of \""Liar’s Poker\"" and \""Moneyball,\"" is famous for\nhaving shown how the insiders of the investment banking world of Wall Street plied their trade in the booming 1980s, and how a crafty baseball owner reinvented the way talent was evaluated in Major League Baseball in the late 1990s.

    What ties the worlds of \""Liar’s Poker\"" and \""Moneyball\"" together are two themes. First, the books offered a rare glimpse into worlds that most of us only know through stock tables and box scores. Second, in both instances the institutions involved — Salomon Brothers and the Oakland Athletics, respectively — decided they needed to rewrite the rules of the game in order to compete with older, richer, or simply better established competitors.

    In visiting TradingMarkets.com, it is readily apparent how both themes — the value of seeing the world from the view of those on the inside and the willingness to abandon conventional wisdom — have contributed to make this website one of the best resources on the Internet for stock, option, futures, and foreign exchange traders. Unlike many financial websites that use a mixture of journalists and money managers to discuss the financial news of the day, TradingMarkets.com has from the beginning focused on bringing everyday active traders into the world of real world traders and money managers for whom trading the financial markets is\ntheir life’s work."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-75-77-websites-for-traders-tradingmarkets-com-by-david-penn-22.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-75-77-websites-for-traders-tradingmarkets-com-by-david-penn-26.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-75-77-websites-for-traders-tradingmarkets-com-by-david-penn-27.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov237trti5,d,"{""minimum-quantity"":""1"",""path"":""ch12d202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:12 (78-84): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:12 (78-84): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    Jacobus van den Brink’s article in this issue, “Overhauling Market Breadth,” presents a modified version of the Arms index. Code for this system is provided for TradeStation, MetaStock, Wealth-Lab, AmiBroker, eSignal, NeuroShell Trader, NeoTicker, Trading Solutions, AIQ, and Financial Data Calculator."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-78-84-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-78-84-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-78-84-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov239bofo7,d,"{""minimum-quantity"":""1"",""path"":""ch12d202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:12 (94): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:12 (94): Books For Traders by Technical Analysis, Inc.

    The Definitive Guide To Point And Figure (515 pages, $90 hardcover, 2005, ISBN 1-897-59763-0) by Jeremy\ndu Plessis, published by Harriman House Publishing.

    This work seeks to demystify point & figure charts, one of the great secrets of the technical analysis world. After an explanation of the history and development of the technique, from invention to present day, the author explains how to use P&F charts to project targets and\ncalculate risk-reward ratios, and covers many other aspects of point & figure charting in considerable detail. P&F charts are the voice of the market, and this book helps you listen to—and understand—that voice."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-94-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-94-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-94-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov239atcl4,d,"{""minimum-quantity"":""1"",""path"":""ch12d202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:12 (98): At The Close by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:12 (98): At The Close by Jayanthi Gopalakrishnan

    Continuing from last month’s look at crude oil contracts, we did experience some easing in crude oil prices. The 40-day moving average turned down, the upward sloping trendline broke, and up until now, prices have been below the 40-day moving average. But they have yet to reach the levels I mentioned\nin my column last month. If you look at the chart of crude oil contracts in Figure 1, you see there was a sharp decline in prices followed by a pullback. Will prices move back up to the moving average, or will they continue falling?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-98-at-the-close-by-jayanthi-gopalakrishnan-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-98-at-the-close-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-12-98-at-the-close-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov232rech,d,"{""minimum-quantity"":""1"",""path"":""ch13b20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:13 (20-33): Readers’ Choice Awards 2005 by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:13 (20-33): Readers’ Choice Awards 2005 by Technical Analysis, Inc.

    We are pleased to present the Technical Analysis of STOCKS & COMMODITIES magazine 2005 Readers’ Choice Awards (RCA). Each year, we put before our readers a ballot of products and services related to technical analysis and trading.

    The following pages present the products and services you and your peers chose this year as your favorites. The Readers’ Choice Awards begins each year with a list of products gathered by the editors of STOCKS & COMMODITIES, with space for write-in votes (given that our list doesn’t claim to be complete). Then, to find out what our readers find to be the most useful for their trading, we ask them to choose their favorite products or the ones they find most useful from various categories by going to our website, Traders.com, and filling out the survey there. After that, we compile the results, just in time for the Bonus Issue you hold in your hands.

    Products are categorized by their primary purpose. Just because a service or product is not listed does not necessarily mean that the product does not have features germane to the category; otherwise, a number of products could be listed in numerous categories. In addition, some categories are divided by cost so that the comparisons can be made on a more level playing field.

    The winners in the Readers’ Choice Awards are almost always the dominant players in their niche, and rightfully so. You may have special needs for your trading, however, so you should keep in mind those\nproducts that are not the big names in the category of your interest before you make your final decision. The RCA is designed to be an aid for you when you are deciding on which of the numerous products and services currently available to use for your trading and investing. With that in mind, we think you’ll find the Readers’ Choices a terrific guide to products and services that you’ll be interested in."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-13-20-33-readers-choice-awards-2005-by-technical-analysis-inc-20.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-13-20-33-readers-choice-awards-2005-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-13-20-33-readers-choice-awards-2005-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov236esof,d,"{""minimum-quantity"":""1"",""path"":""ch13b20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:13 (62-64): Essentials Of Technical Analysis by Larry Swing"",""caption-linebreaks"":""Stocks & Commodities V. 23:13 (62-64): Essentials Of Technical Analysis by Larry Swing

    Technical analysis doesn’t have to be complex. Here’s a reminder to keep it simple.

    We have a hard time making fast decisions with complicated information. That is why we try to simplify trading as much as possible, in order to scan fast and accurate trading opportunities in a few seconds. As Albert Einstein used to say, “Keep things as simple as possible but not any simpler.”

    THE BASICS

    A stock price is determined by an exchange between buyers and sellers. If there happens to be more buyers than sellers then the market goes up. On the contrary, if there happens to be more sellers than buyers, then the market goes down. The price at which a stock is offered affects the trader’s decision. If a trader is long and the stock starts to decline, the trader could be forced to close his position. If short, he might do likewise on a rising stock.

    When a trader takes a long position, he becomes a potential seller, while short positions are held by potential buyers. As prices change due to buying and selling pressure, information about the condition of the stock is revealed by the combination of price and volume action. How do you get this information? I use the following technical analysis tools as part of my daily charting arsenal:

    1. Candlestick

    2. Volume

    3. Equivolume

    4. Moving average (MA)

    5. Force index

    6. Directional movement index (DMI)"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-13-62-64-essentials-of-technical-analysis-by-larry-swing-20.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-13-62-64-essentials-of-technical-analysis-by-larry-swing-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-13-62-64-essentials-of-technical-analysis-by-larry-swing-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231leto1,d,"{""minimum-quantity"":""1"",""path"":""chapter21"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:2 (10-13): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:2 (10-13): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist.

    Address your correspondence to: Editor, STOCKS & COMMODITIES, 4757 California Ave., SW, Seattle, WA 98116-4499, or email to Editor@Traders.com. All letters become the property of Technical Analysis, Inc. Letter-writers must include their full name and address\nfor verification. Letters may be edited for length or clarity. The opinions expressed in this column do not necessarily represent those of the magazine.—Editor

    GOOGLE-TYPE IPOS

    Editor,

    I wanted to let you know that your article about Google (Opening Position, Technical Analysis of STOCKS & COMMODITIES, December 2004) was great. I’m a beginning investor, so understanding is key to investing. Thanks.

    RAVEN GOFORTH\nvia email"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-10-13-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-10-13-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-10-13-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231wefo1,d,"{""minimum-quantity"":""1"",""path"":""chapter21"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:2 (103): Websites For Traders: TraderMentors.com by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:2 (103): Websites For Traders: TraderMentors.com by David Penn

    TRADERMENTORS.COM

    When Marty Schwartz decided he wanted to move from being a trader who was “always going tapioca” to\nsomeone who traded for a living, he and his wife wrote out a list of things he needed to do in order to make that\ndream happen. One item was to develop a sound methodology. Another item was to come up with an appropriately sized “nut” of $100,000 (in the early 1980s, no less). Second on the list was to buy a seat on an exchange. The third item on the list?

    GET A MENTOR

    I’ve riffed on this theme before. The commandment to “get a mentor” might be the one aspect of becoming a professional-caliber trader that many aspirants find the most vexing. This task is often all the more difficult for those who don’t have ready access to a live exchange, the way Schwartz did with the American Stock Exchange or Linda Bradford Raschke did with the Pacific\nCoast Stock Exchange."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-103-websites-for-traders-tradermentors-com-by-david-penn-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-103-websites-for-traders-tradermentors-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-103-websites-for-traders-tradermentors-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231prre,d,"{""minimum-quantity"":""1"",""path"":""chapter21"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:2 (104-105): Product Review: Financial Data Calculator 3.0 by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:2 (104-105): Product Review: Financial Data Calculator 3.0 by Jayanthi Gopalakrishnan

    It's amazing that a product that looks like nothing more\nthan a notepad is capable of doing all that this program does. In all honesty, when I opened up Financial Data Calculator (FDC) and saw a blank page, I was rather skeptical. But after going through the tutorials provided in the CD, I was impressed with its rich array of features. FDC is capable of performing what any other trading platform can do, and because it doesn’t have any rigid structure, you’re free to do just about anything with it.

    INSTALLATION

    After you insert the CD, the setup program starts automatically. You’ll be prompted to enter a serial number that you get from Mathematical Investment\nDecisions, and then the program starts."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-104-105-product-review-financial-data-calculator-3-0-by-jayanthi-gopalakrishnan-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-104-105-product-review-financial-data-calculator-3-0-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-104-105-product-review-financial-data-calculator-3-0-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231wefo2,d,"{""minimum-quantity"":""1"",""path"":""chapter21"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:2 (106): Websites For Traders: MarketEdge.com by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:2 (106): Websites For Traders: MarketEdge.com by Jayanthi Gopalakrishnan

    MARKETEDGE.COM

    Wouldn’t we all like to have an edge on the market? When I first glanced at this website, I initially thought it was a site dedicated to fundamental analysis. But when I saw the features available for paid subscribers, such as market timing signals, interactive charting with trading signals, using technical analysis for screening, and point & figure (P&F) chart breakouts and alerts, I decided to explore further, and was I glad I did.

    Subscription rates range from $9.95 to $29.95 per month, depending upon what level you want. There is also the option of an annual subscription for $79.95. The homepage for MarketEdge.com consists mostly of articles from various other sites such as TheStreet.com and Standard & Poor’s. . ."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-106-websites-for-traders-marketedge-com-by-jayanthi-gopalakrishnan-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-106-websites-for-traders-marketedge-com-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-106-websites-for-traders-marketedge-com-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231trre1,d,"{""minimum-quantity"":""1"",""path"":""chapter21"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:2 (114-117): Traders’ Resource: Exchanges by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:2 (114-117): Traders’ Resource: Exchanges by Technical Analysis, Inc.

    With the explosion of exchanges around the world and the increasing poaching of products between exchanges, traders should be aware of all the places where trading opportunities occur. No longer bound by national borders or even physical locations, exchanges can be no more than a box in the corner of an office. Differentiation comes in the form of product, volume,\nspeed, pricing, and investor protections.

    Look for an exchange with extensive trade documentation so that disputes can be resolved quickly and with quick reference to events. Since more and more alternatives are rapidly becoming available, don’t be afraid to direct your business to the exchange of your choice. The plethora of investor choice is forcing a rapid decline in transaction costs already, and exchange monopolies are a thing of the past.

    Use the listing presented here to find the websites of the exchanges handling your tradable, then go to the site to get the specifics of the trading vehicle. Better yet, get several equivalent products at several exchanges and be sure your broker can direct your business to the venue of your choice."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-114-117-traders-resource-exchanges-by-technical-analysis-inc-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-114-117-traders-resource-exchanges-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-114-117-traders-resource-exchanges-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231bofo1,d,"{""minimum-quantity"":""1"",""path"":""chapter21"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:2 (120): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:2 (120): Books For Traders by Technical Analysis, Inc.

    Trading Pairs: Capturing Profits And Hedging Risk With\nStatistical Arbitrage Strategies (279 pages, $89.95 hardcover, 2004, ISBN 0-471-58428-2) by Mark\nWhistler, published by John Wiley & Sons.

    When you buy or sell a stock, you hope it\nmoves in a direction that results in a profit. Sometimes that leaves you with a naked position at the mercy of the\nmarkets. Pairs trading allows the individual investor a way to hedge positions. The goal is to protect your portfolio from drastic market upswings or downturns while finding the inequities that will make you money. This guide lays a foundation, then teaches you to use this technique profitably. Pairs trading is not the holy grail of trading, but the insights and advice in this book will help traders to track pairs and increase the bottom line in their portfolios."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-120-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-120-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-120-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov23110at,d,"{""minimum-quantity"":""1"",""path"":""chapter21"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:2 (122, 108): At The Close by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:2 (122, 108): At The Close by Jayanthi Gopalakrishnan

    It’s been a rather slow month when it comes to trading (I am writing this in December 2004). Perhaps it’s because my attention hasn’t been so focused on the\nmarkets, or perhaps it’s just that I wasn’t able to find any attractive opportunities, which may be an indication that I should fine-tune my strategies. Perhaps waiting for the 11:00 am (PT) action isn’t working anymore. I did make one trade that I would like to share with you. It happened on December 7, and I’ll have to admit that I\nbroke the rules on this trade. The Standard & Poor’s 500 index was well above its 50-day moving average (Figure 1), so, strictly speaking, I should have only gone long, based on my basic trading rules. But I saw an opportunity arising, and perhaps my confidence led me to open a short position, even though it was contrary to what I should have done."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-122-108-at-the-close-by-jayanthi-gopalakrishnan-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-122-108-at-the-close-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-122-108-at-the-close-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231sivo,d,"{""minimum-quantity"":""1"",""path"":""chapter21"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:2 (14-20): Sidebar: Volatility entry advisor for MetaStock by Jim Berg"",""caption-linebreaks"":""Stocks & Commodities V. 23:2 (14-20): Sidebar: Volatility entry advisor for MetaStock by Jim Berg

    MetaStock code for Jim Berg's Volatility entry advisor."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-14-20-sidebar-volatility-entry-advisor-for-metastock-by-jim-berg-22.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-14-20-sidebar-volatility-entry-advisor-for-metastock-by-jim-berg-26.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-14-20-sidebar-volatility-entry-advisor-for-metastock-by-jim-berg-27.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231trab,d,"{""minimum-quantity"":""1"",""path"":""chapter21"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:2 (14-20): The Truth About Volatility by Jim Berg"",""caption-linebreaks"":""Stocks & Commodities V. 23:2 (14-20): The Truth About Volatility by Jim Berg

    Many indicators can help identify volatility. But can you use them to target specific price areas for entry signals, trailing stops, and profit-taking opportunities?

    Typically, volatility indicators are used to determine\nthe direction, strength, and momentum of a security. The average true range (ATR), one of the more popular volatility indicators, measures volatility by looking at the average price ranges over the past x number of periods, taking gaps into account.

    The true range indicator is the greatest of the\nfollowing for each period:

    • The distance from today’s high to today’s low

    • The distance from yesterday’s close to today’s high

    • The distance from yesterday’s close to today’s low.

    Most trading software packages include ATR in\ntheir list of indicators, which you can usually overlay\non top of a bar chart, as can be seen in Figure 1.

    ANALYZE IT

    Typically, when analyzing ATR volatility, you would focus on volatility at tops and bottoms and during price consolidation and retracements. However, if you incorporate the ATR into a few simple formulas, you may be able to identify where to enter and exit trades, and make a reasonable profit. Before going any further, I think it’s fair to say that I apply my ATR volatility analysis only to securities that are in a rising trend. After all, it is the path of least resistance. Who wouldn’t want to buy securities when they are rising and sell them when they are no longer in a rising trend?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-14-20-the-truth-about-volatility-by-jim-berg-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-14-20-the-truth-about-volatility-by-jim-berg-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-14-20-the-truth-about-volatility-by-jim-berg-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov232simo,d,"{""minimum-quantity"":""1"",""path"":""chapter21"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:2 (22-27): Sidebar: MOMA and Excel by Stephan Bisse"",""caption-linebreaks"":""Stocks & Commodities V. 23:2 (22-27): Sidebar: MOMA and Excel by Stephan Bisse

    Simple moving averages are great tools for filtering out noise from time series, but all they can do is show\nwhere a time series has been. The only way that a moving average can point the way to market direction is if additional information — a leading indicator for that time series — is included in the calculation. One way\nof doing this is adjusting each datapoint in the lookback period by the absolute move that preceded each datapoint as a percentage of the sum of all the absolute moves in the lookback period. If the premise\nthat large moves in a given direction are harbingers of a new trend in the same direction is correct, then the\nmove-adjusted moving average (MOMA) will be a superior indicator of future market direction when compared to a simple moving average."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-22-27-sidebar-moma-and-excel-by-stephan-bisse-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-22-27-sidebar-moma-and-excel-by-stephan-bisse-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-22-27-sidebar-moma-and-excel-by-stephan-bisse-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov232vimo,d,"{""minimum-quantity"":""1"",""path"":""chapter21"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:2 (22-27): Visiting MOMA by Stephan Bisse"",""caption-linebreaks"":""Stocks & Commodities V. 23:2 (22-27): Visiting MOMA by Stephan Bisse

    Give your moving averages a head start with move-adjusted moving averages.

    The most popular of all technical indicators may be the moving average. The backbone of many trading systems, moving averages are great for filtering out the noise from time series and showing the underlying trend of where the time series has been.

    By definition, however, moving averages on their own can never say anything about the future direction of a time series, regardless of the lookback period used or any standard adjustments or weightings applied to the datapoints. The only way that moving averages can give any indication of the coming direction of a time series is if additional information with some predictive power — in other words, a leading indicator for the time series in question — is incorporated into the calculation.

    TYPES OF MOVING AVERAGES

    A simple moving average (SMA) is calculated by taking the sum of a series of datapoints and dividing it by the number of points in the series. Each subsequent value of the SMA is calculated by including the new datapoint in the calculation and dropping the oldest to keep the number of datapoints in the calculation constant. In an SMA, all the datapoints are given equal weight."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-22-27-visiting-moma-by-stephan-bisse-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-22-27-visiting-moma-by-stephan-bisse-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-22-27-visiting-moma-by-stephan-bisse-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233buwo,d,"{""minimum-quantity"":""1"",""path"":""chapter21"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:2 (32-35): Building A Workable Trading Model by Seth Weinstein"",""caption-linebreaks"":""Stocks & Commodities V. 23:2 (32-35): Building A Workable Trading Model by Seth Weinstein

    Having trouble designing a successful trading system? Here’s how you can develop a robust, non–curve fitted system for trading.

    Statistical models allow you to reduce, if not remove, emotion from the trading process. Knowing the model’s past performance gives you some comfort when you enter a trade, something a discretionary trader does not have. However, there are drawbacks to\nusing quantitative models if they are not designed correctly. If a model is not properly designed and tested, it can be a dangerous tool. The key to using a quantitative model is to develop a robust, non–curve\nfitted system for trading.

    DEVELOPING A ROBUST STRATEGY

    When you create a quantitative strategy, you need to find a statistical pattern from historical data that will continue to work going forward. A robust model should perform in actual use in a similar manner as it did in historical tests. So what can you do to increase\nthe odds that a model will be a longlasting one?

    OUT-OF-SAMPLE TESTING

    One precaution you can take to ensure that a model is robust is to use out-of-sample testing during the optimization process. Optimization is the process of testing for the most effective values for the inputs of the system being designed. Do not use the full range of historical price data to perform out-of-sample testing when optimizing. By leaving out a section or sections of historical data from the optimizing, you can see how the system would perform on data outside of the optimization. This process helps you avoid curve-fitting the system."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-32-35-building-a-workable-trading-model-by-seth-weinstein-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-32-35-building-a-workable-trading-model-by-seth-weinstein-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-32-35-building-a-workable-trading-model-by-seth-weinstein-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234dibr,d,"{""minimum-quantity"":""1"",""path"":""chapter21"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:2 (44-51): Directional Breakout Indicator by Barbara Star, PhD"",""caption-linebreaks"":""Stocks & Commodities V. 23:2 (44-51): Directional Breakout Indicator by Barbara Star, PhD

    Price breakouts of moving averages present many profitable trading opportunities. Here’s an indicator you can use to detect breakouts and identify price direction.

    Despite the availability of more complex tools, moving\naverages remain one of the most popular methods\nthat traders use to help identify price direction. Because they smooth data and reduce day-to-day price fluctuations, moving averages offer a rapid way to recognize bullish or bearish trends. Moving averages may also serve as points of support or resistance. As a result, price breakouts of a moving average alert traders to potential shifts in trend. The most familiar\nbreakout occurs when the closing stock price crosses its moving average either to the upside or the downside, warning that a trend may be changing. That type of breakout often is accomplished with a single price bar.

    Sometimes, however, a tug-of-war between bulls and\nbears causes the moving average to cut through two or more consecutive price bars. This results in brief sideways price action, a neutral zone, which sets up another type of breakout as price eventually emerges from the neutral zone either to the upside or downside.\nRegardless of the type, price breakouts of moving averages present many profitable trading opportunities. Here is an indicator that detects both types of potential breakouts and identifies the direction that price might take following the breakout.

    THE DIRECTIONAL BREAKOUT INDICATOR

    According to conventional wisdom, the direction of the\nclosing price in relation to its moving average at the time of the breakout forecasts subsequent price direction. When the closing price rises above the moving average, it portends a move to the upside. When the closing price falls from above to below the moving average, it warns that the price may continue to\nmove to the downside. Even though reality often runs counter to conventional wisdom, there does seem to be enough truth in the predictive value of moving average breakouts to merit marking their occurrence."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-44-51-directional-breakout-indicator-by-barbara-star-phd-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-44-51-directional-breakout-indicator-by-barbara-star-phd-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-44-51-directional-breakout-indicator-by-barbara-star-phd-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234sies1,d,"{""minimum-quantity"":""1"",""path"":""chapter21"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:2 (44-51): Sidebar: eSignal code for Breakout Colored Price Bars by Barbara Star, PhD"",""caption-linebreaks"":""Stocks & Commodities V. 23:2 (44-51): Sidebar: eSignal code for Breakout Colored Price Bars by Barbara Star, PhD"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-44-51-sidebar-esignal-code-for-breakout-colored-price-bars-by-barbara-star-phd-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-44-51-sidebar-esignal-code-for-breakout-colored-price-bars-by-barbara-star-phd-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-44-51-sidebar-esignal-code-for-breakout-colored-price-bars-by-barbara-star-phd-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234sies,d,"{""minimum-quantity"":""1"",""path"":""chapter21"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:2 (44-51): Sidebar: eSignal code for Directional Breakout Indicator by Barbara Star, PhD"",""caption-linebreaks"":""Stocks & Commodities V. 23:2 (44-51): Sidebar: eSignal code for Directional Breakout Indicator by Barbara Star, PhD"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-44-51-sidebar-esignal-code-for-directional-breakout-indicator-by-barbara-star-phd-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-44-51-sidebar-esignal-code-for-directional-breakout-indicator-by-barbara-star-phd-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-44-51-sidebar-esignal-code-for-directional-breakout-indicator-by-barbara-star-phd-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov23563fo,d,"{""minimum-quantity"":""1"",""path"":""chapter21"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:2 (56-59, 63): Fourier Transforms As An Aid To Decision-Making by Alok Srivastava"",""caption-linebreaks"":""Stocks & Commodities V. 23:2 (56-59, 63): Fourier Transforms As An Aid To Decision-Making by Alok Srivastava

    Interested in improving the performance of\nyour indicators? It may be worth your while to\ngain an understanding of Fourier transforms,\nfrequency analysis, and inverse transformations.

    Traditionally, technical analysis has been used to detect and interpret patterns in past security prices to\nprovide insight into future price movement. This, in turn, has lured researchers to try to beat the markets consistently, using a range of techniques varying from mathematics, physics, and economics to psychology. In this article, I will focus on the use of Fourier transforms together with technical analysis in making\ntrading decisions.

    FOURIER TRANSFORMS

    The application of Fourier transforms has been well established in fields like digital signal processing (DSP), medical diagnostics, image processing, the media, and so on. The Fourier transform breaks up a signal from the time domain to a frequency domain,\ncharacterizing signals and letting you see order where there appeared to be none. For this article I used the transform to convert raw data into useful information to aid in making trading decisions.

    Many technical analysis indicators seem to work well for specific kinds of patterns. Unfortunately, there are no indicators that can take into account all of the possible\ncharacteristics that a price series can exhibit. I will show you how to incorporate stock price volatility so your indicators can adapt accordingly."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-56-59-63-fourier-transforms-as-an-aid-to-decision-making-by-alok-srivastava-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-56-59-63-fourier-transforms-as-an-aid-to-decision-making-by-alok-srivastava-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-56-59-63-fourier-transforms-as-an-aid-to-decision-making-by-alok-srivastava-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov236papr,d,"{""minimum-quantity"":""1"",""path"":""chapter21"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:2 (60-63): Partial Profits = Fiscal Folly? by Austin Passamonte"",""caption-linebreaks"":""Stocks & Commodities V. 23:2 (60-63): Partial Profits = Fiscal Folly? by Austin Passamonte

    Is exiting a portion of your trade before your profit target\nis hit a viable strategy?

    Had I known that my career path would wind its way into professional trader status, I might have studied advanced mathematics with much more enthusiasm. After all, math is an exact science that does not lie. The way we assemble and interpret numbers to compile trading data may be subjective, but two plus two always equals four …or does it?

    Somewhere along the way, many traders have been led to believe that taking partial profits — that is, exiting some part of a trade before the necessary profit target is hit while letting the other part “run” — is a viable tactic. The reasons for this seem to boil down to human emotions. Some followers of this practice suggest that partial gains taken early in a trade reduce stress and allow the trader to ride out the remaining contracts, while others suggest that taking partial profits protects against drawdown (maximum loss), should a trade reverse early to halfway through its execution.

    NOT AS THEY APPEAR

    On the face of it, taking partial profits may look like a\nprofessional tactic. It certainly has great appeal to new traders entering our game. But is it really as beneficial as it appears? If we can agree that math is an exact science, why don’t we take a few words here to compare partial-profit exit tactics with the straight exit of trades? Assuming each trade’s win/loss results happen in random fashion, we’ll look at three hypothetical trading methodologies whose results over the course of time have win/loss ratios of 80%, 50%, and 40%. Finally, we will assume our profit target to initial stop-loss ratio is always 2/1. The math used in this article is meant to serve as an example only."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-60-63-partial-profits-fiscal-folly-by-austin-passamonte-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-60-63-partial-profits-fiscal-folly-by-austin-passamonte-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-60-63-partial-profits-fiscal-folly-by-austin-passamonte-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov236inri,d,"{""minimum-quantity"":""1"",""path"":""chapter21"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:2 (68-75): Interview: Rick Ackerman Of Rick’s Picks by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:2 (68-75): Interview: Rick Ackerman Of Rick’s Picks by Jayanthi Gopalakrishnan

    Rick Ackerman started out as a newspaperman before he found his calling as a trader. How often does that happen? Not very! He went from journalism to a seat on the Pacific Stock Exchange (PSE), where he learned to trade the hard way. He has been trading stocks, futures, and options for nearly 30 years, 12 of them as a market maker on the PSE. Currently, he manages a\nhedge fund and is the editor and publisher of Rick’s Picks, a daily advisory geared to traders and investors. The technical tools described in this interview took 14 years to develop and hone. STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Rick Ackerman via telephone on December 2, 2004.

    Q: How did you get into trading?

    A: Growing up, I would get stock shares as birthday presents. I wouldn’t say I got hooked on the stock market then, but I enjoyed watching the stocks go up. Later, I worked as a reporter and editor for the Atlantic City Press. I came out to California in the mid-1970s looking for a job on a newspaper, but I couldn’t find\none. I had visited the Philadelphia Options Exchange a few times, and it seemed like an interesting place to work; and I realized that if I simply leased a seat on the Pacific Stock Exchange (PSE), I wouldn’t have to look around for a job in California — I’d already have one. So, sometime in the late 1970s, I became a member of the PSE and leased a seat for a few hundred dollars a month. I had borrowed about $35,000 — money that I used to trade, and also to live on. It took me about six months to run that $35,000 down to $2,000. So it really\ncame down to survival.

    Q: What did you do then?

    A: I would sit outside the exchange, eating a brown-bag lunch with my friend Frank, and we would try to figure out what had to happen, and whether some revelation\nwould come that would save both of us. Frank didn’t make it; he left. But I was trading in Levi Strauss options at the time, and I remember putting on\na calendar spread 40 times in Levi. I was just about out of the game at that point."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-68-75-interview-rick-ackerman-of-rick-s-picks-by-jayanthi-gopalakrishnan-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-68-75-interview-rick-ackerman-of-rick-s-picks-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-68-75-interview-rick-ackerman-of-rick-s-picks-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov237prre1,d,"{""minimum-quantity"":""1"",""path"":""chapter21"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:2 (76-79): Product Review: TradeBolt by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:2 (76-79): Product Review: TradeBolt by David Penn

    Do the same factors that make a good order entry platform also apply to automated trading software? If\nanything, the best automated trading software platforms will be everything that good order entry platforms are, and then some. After all, even the most\nardently automatic trader will from time to time want (or think he or she wants) the ability to grab the steering wheel and finish the race on his or her own. And if this is the case, that trader will want an automated trading system that will perform with the same speed, accuracy, checks, and system integrity as the\nbest manual order entry systems.

    At the same time, the buyer of an automated trading software platform likely will put significant additional\ndemands on his or her chosen system. The platform, for example, must be highly integrated with the trader’s preferred charting software. Yet the best automated trading software platforms will be configurable enough to allow the trader to “program out” any unwanted\npeculiarities in the charting/data platform. Again, on the issue of integration, the automated trading software\nmust not only “play well with others,” but the software — or at least the best software — should also be extensible enough for developers and even individual, code-writing, retail traders to be able to add functionality that suits their particular trading needs. For some automated trading software packages, this combination alone — tight integration on the one hand and, for lack of a better phrase, easy extensibility on\nthe other — is too much accomplishment to ask for."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-76-79-product-review-tradebolt-by-david-penn-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-76-79-product-review-tradebolt-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-76-79-product-review-tradebolt-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov238qaby,d,"{""minimum-quantity"":""1"",""path"":""chapter21"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:2 (80): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 23:2 (80): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    TICKER

    While watching the ticker on CNBC preopening, I note most trades are in the hundreds of shares. After the opening, I note the trades are predominantly in the tens of thousands per trade. Then, when I access a Level II\ntime and sales ticker, even after opening, I note, once again, predominantly trades in the hundreds of shares with no sign of the big trades. If I am looking at Level II and see a market maker showing 100s at $20.05 (for example), what is the impact of all of those big shares that are not showing up on my trading screen? Does it have no effect at all on the bid/ask? Would that volume not move the stock price, even if no low-volume trades are currently showing up on my screen?

    James Kellndorfer addressed this same question in the October issue of Technical Analysis of STOCKS & COMMODITIES, and he seems to have no answer either. In view of the facts shown in Kellndorfer’s article pertaining to the increase in program trading with a simultaneous decrease in small trading activity, has this caused your traders to seek faster trades while accepting smaller gains in order to remain in the trading business?

    Thanks — Ponsinir

    There are simple answers to your questions. Before the opening bell, you may see some trading in the\npremarket hours. Big players don’t bother much with pre- or post-market\nhours trading. . ."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-80-q-a-by-don-bright-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-80-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-80-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov238prre1,d,"{""minimum-quantity"":""1"",""path"":""chapter21"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:2 (82-85): Product Review: Trade Oracle by Dennis D. Peterson"",""caption-linebreaks"":""Stocks & Commodities V. 23:2 (82-85): Product Review: Trade Oracle by Dennis D. Peterson

    Trade Oracle (TO) is a set of indicators, experts, explorations, and system tests for use with MetaStock 8.0 or higher. The package is composed of 90 systems selected by the Trading Systems Analysis Group (TSA Group) after testing 10,000 different systems across\n4,000 different stocks. They only chose systems that performed better than buy-and-hold on more than 50% of the stocks.

    It has a couple of unique features that you will likely find profitable, such as telling you where your stops should go and how long to stay in a trade. Use of the package is straightforward, and since all the code is written in\nC and then incorporated as dynamic link libraries (DLL), it is also fast. However, this also means you can’t see the code directly on your screen. All references are to “ExtFml” — that is, external formula. However, a manual is provided that shows the MetaStock code.

    Let me say again at the outset that this tool can make you money. It follows trader Gary B. Smith’s “platinum rule” of trading."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-82-85-product-review-trade-oracle-by-dennis-d-peterson-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-82-85-product-review-trade-oracle-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-82-85-product-review-trade-oracle-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov238exyo,d,"{""minimum-quantity"":""1"",""path"":""chapter21"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:2 (86): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 23:2 (86): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    DAYTRADING OPTIONS

    Q: What is the best strategy for short-term daytrading?

    A: In my opinion, options are not for daytraders. For short-term traders, simple call and put buying is probably the most widely used strategy. Bullish traders buy calls. Bearish traders buy puts. I trade short term at times, and I find that in-the-money (ITM) options work best because they have a better level of disaster protection, yet work like a stock due to their high delta†. I like options with higher deltas because they see greater price changes for each point of movement in the underlying stock or index. For example, an option\nwith a delta of 0.75 will increase 75 cents for each point move in the stock. However, an option with a delta of 0.33 will increase by only 33 cents for every point move in the stock. As a final note, calls have positive deltas and puts have negative deltas. So, when trading puts,\nI look for higher negative deltas — for example, -0.8 is better than -0.4."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-86-explore-your-options-by-tom-gentile-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-86-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-86-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov23810ch,d,"{""minimum-quantity"":""1"",""path"":""chapter21"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:2 (88-89, 107): Charting The Market by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:2 (88-89, 107): Charting The Market by David Penn

    WHEN SELLERS SELL OUT

    Writing about “The Selling Climax” in Technical Analysis Of Stock Trends, authors Robert Edwards and John Magee observe that:

    Most true Selling Climaxes, if not all, have been produced by distress selling … They have come at the end of rapid and comprehensive declines which exhausted the margin reserves of many speculators and necessitated the dumping of their shares at whatever the market would bring. This process is progressive — feeding upon itself, so to speak — with each wave of forced sales jeopardizing another lot of\nmargined accounts, until at last millions of shares are tossed overboard, willy-nilly, in a final clean up.

    Bad? Good? Indifferent? For Edwards and Magee, it depends on where you stand as a trader.

    Such is a Selling Climax in which the total turnover may\nexceed any single day’s volume during the previous upswing. It is a harvest time for traders who, having avoided the bullish infection at the top of the market, have funds in reserve to pick up stocks available at panic prices.

    It is hard to overstate the value of Edwards and Magee’s book when reading through chapters like “The Selling Climax.” An instructional guide, a market history, and a template for sound trading, Technical Analysis Of Stock Trends was, interestingly, one of the few sources I could find that spent a good deal of time dealing with the market phenomenon known as the selling climax."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-88-89-107-charting-the-market-by-david-penn-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-88-89-107-charting-the-market-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-88-89-107-charting-the-market-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov239trti,d,"{""minimum-quantity"":""1"",""path"":""chapter21"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:2 (90-102): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:2 (90-102): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    Jim Berg’s article, “The Truth About Volatility,” describes a system for screening weekly data to identify candidates and using daily data to enter and manage positions. This month, TradeStaion, Wealth-Lab, AmiBroker, eSignal, NeuroShell Trader, TradingSolutions, NeoTicker, AIQ, Investor/RT, Trade Navigator, Aspen Graphics, BulCharts, TechniFilter Plus, and Stratagem Software code are provided for Jim Berg's system."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-90-102-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-90-102-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-2-90-102-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231leto2,d,"{""minimum-quantity"":""1"",""path"":""chapter31"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:3 (10-15): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:3 (10-15): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist. Address your correspondence to: Editor, STOCKS & COMMODITIES, 4757 California Ave.\nSW, Seattle, WA 98116-4499, or email to Editor@Traders.com. All letters become the property of Technical Analysis, Inc. Letter-writers must include their full name and address for verification. Letters may be edited for length or clarity. The opinions expressed in this column do not necessarily represent those of the magazine.—Editor

    NOVICE TRADERS

    Editor,

    I just started reading your articles, and although I don’t understand even the simplest jargon (all industries have their buzzwords) let alone the mathematical\nmodels your writers are referencing during their testing process, I’m encouraged by your tutorial listed under\n“Novice traders” on your site. A very smart move — anticipate a new subscriber.

    DAVID FRANK, via email

    Thank you for your feedback. You might also want to think about looking into our online publication Working Money, which is targeted toward traders who are just starting out. — Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-10-15-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""269"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-10-15-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-10-15-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231bofo2,d,"{""minimum-quantity"":""1"",""path"":""chapter31"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:3 (108): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:3 (108): Books For Traders by Technical Analysis, Inc.

    Here's a sample entry: The Astute Investor (404 pages, $29.95 hardcover, 2005, ISBN 0-9759660-0-6) by Eric Prentis, published by Prentis-Business. Is the stock market undervalued or overvalued? Is the market in a long-term upward trend or a long-term downward trend? What is the most promising stock to buy? This book allows investors to answer these vital questions, and more, for themselves. Uncomplicated and easily\nimplemented through the use of correct investment\nmodels and current data on the Internet, it brings all investors into the 21st century."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-108-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-108-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-108-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov23110at1,d,"{""minimum-quantity"":""1"",""path"":""chapter31"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:3 (110, 100): At The Close by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:3 (110, 100): At The Close by Jayanthi Gopalakrishnan

    In my February 2005 column, I hinted about coming up with In a new trading system. That was because the number of trades I was making per month had dwindled to one or two — if I was lucky. So I decided to spend some time observing the market to identify any changes in market behavior and integrate them into my system in the hopes that it would generate more trades.

    As it turns out, I am still observing the market, so I will not be walking you through a trade this month. Instead, I will show you how breakouts above moving averages can be used to your advantage."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-110-100-at-the-close-by-jayanthi-gopalakrishnan-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-110-100-at-the-close-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-110-100-at-the-close-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231whpo,d,"{""minimum-quantity"":""1"",""path"":""chapter31"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:3 (16-21): What Powers Chart Patterns? by Thomas N. Bulkowski"",""caption-linebreaks"":""Stocks & Commodities V. 23:3 (16-21): What Powers Chart Patterns? by Thomas N. Bulkowski

    Have you ever wondered if small-cap stocks perform better than large caps? Does heavy breakout day volume really power prices higher? Here’s a closer\nlook at variables that affect chart pattern performance.

    “What powers stocks?” If you asked me that 25 years ago when I first started investing, I would have rattled off\na bunch of fundamental factors such as good earnings, strong sales, little or no debt, insider buying and no selling, not to mention the ratios: price to earnings, price to sales, debt to equity, and so on. Since I defected from the fundamental side to technical analysis, the question becomes, “What powers chart patterns?” My answer today is shorter: supply and demand. If no one wants to sell Google and everyone is clamoring for the shares, the stock will rise. If research becomes public saying that a drug kills people, investors will dump the shares of the company that makes it, and the stock will tumble. Quickly.

    This article discusses results of research I conducted on nearly 7,500 chart pattern samples in 13 bullish and 13 bearish chart pattern types during the writing of my book, Trading Classic Chart Patterns. The research includes the years from 1991 to 2001, but not all 500-plus stocks covering the period. I’ve found the answers to certain questions about what affects chart patterns.

    PRICE TREND

    What length of price trend leading to a chart pattern results in the best post–breakout performance? Answer: The short term. For chart patterns with upward breakouts, a price trend of less than three months’ duration leading to the start of a chart pattern yielded the best performance eight times. The intermediate term (three to six months long) worked best twice and the remaining four times did well for trends longer than six months, including one tie. For downward breakouts\n(bearish patterns), the short term worked best nine times, and the intermediate did best four times. None of the long-term trends performed well."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-16-21-what-powers-chart-patterns-by-thomas-n-bulkowski-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-16-21-what-powers-chart-patterns-by-thomas-n-bulkowski-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-16-21-what-powers-chart-patterns-by-thomas-n-bulkowski-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov232baan,d,"{""minimum-quantity"":""1"",""path"":""chapter31"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:3 (22-26): Backtesting And Edgetesting by Damir Wallener"",""caption-linebreaks"":""Stocks & Commodities V. 23:3 (22-26): Backtesting And Edgetesting by Damir Wallener

    Anybody with a computer and an Internet connection\ncan evaluate trading strategies. But how do you judge\nthe validity and significance of the results? Here’s a\nlook at some of the pitfalls awaiting the unwary.

    The age of program trading for the masses has arrived. Backtesting — the evaluation of strategies against reams of historical data — is easy to do, but useful, trustworthy advice on the validity and significance of\nbacktesting results remains in relatively short supply.\nIn this article I will walk you through the design process of a simple strategy, and leave it up to you to determine validity and significance.

    THE FIRST STEP

    Most backtesters begin with whole-sample testing. Applying a strategy against a large, contiguous mass\nof data can give you a quick estimation of what has\nworked in the past. For example, a simple moving average crossover signal tested against 80 years of\nhistorical Dow Jones Industrial Average (DJIA) data\nshows a 5/8 crossover on daily bars produced a loss\nof 11,000 points. There is no reason to stop there:\nBecause of the availability of data, it is possible to\ntest several parameters. In Figure 1, you see the results of expanding the test to cover all possible moving average crossover combinations between\nthree and 12."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-22-26-backtesting-and-edgetesting-by-damir-wallener-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-22-26-backtesting-and-edgetesting-by-damir-wallener-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-22-26-backtesting-and-edgetesting-by-damir-wallener-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov232whdi,d,"{""minimum-quantity"":""1"",""path"":""chapter31"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:3 (28-29): What’s The Difference by John F. Ehlers"",""caption-linebreaks"":""Stocks & Commodities V. 23:3 (28-29): What’s The Difference by John F. Ehlers

    What’s the difference between the median and the average? It’s what drives this new adaptive smoothing filter.

    Remember back in school when your teacher asked\nyou what the difference was between the median and the average? I remember thinking, “Yeah, what is the difference?” as in, “Who cares?” As it turns out, you should care. It is exactly that difference that drives a unique new adaptive smoothing filter that I’m going to tell you about.

    Average and median filters eliminate extraneous data in fundamentally different ways. An average folds “noise” in with the signal so that if enough points are selected, the noise is reduced by summing to its own (nearly) zero average value. On the other hand, a median filter eliminates noise by ignoring it. A big spike in the data has no impact at all on the median signal value. Median filters are used in video to eliminate impulsive, or “salt and pepper” noise on the picture. We will exploit these characteristics to create an adaptive\nsmoothing filter.

    THE DIFFERENCE IS…

    Consider a dataset that consists of 10 ones. Both the average and the median of this dataset is 1. Next, let’s move that dataset forward as we would with a moving average, dropping the last old data sample and adding a new one. Assuming the value of the new data sample is 10, then the new average will be 1.9 (nine ones and one 10, divided by 10). On the other hand, the median of the new dataset still remains unchanged at 1. A median filter ranks all the samples within the filter and selects the middle one as the filter output. So there is\na difference between median and averaging filters. That percentage difference becomes less as the respective filter lengths are made shorter."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-28-29-what-s-the-difference-by-john-f-ehlers-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-28-29-what-s-the-difference-by-john-f-ehlers-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-28-29-what-s-the-difference-by-john-f-ehlers-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233siem,d,"{""minimum-quantity"":""1"",""path"":""chapter31"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:3 (30-35): Sidebar: Emerging market study by Robert Pelletier"",""caption-linebreaks"":""Stocks & Commodities V. 23:3 (30-35): Sidebar: Emerging market study by Robert Pelletier

    The emerging market study is based on the premise that “sleeper” stocks, which build value without a corresponding increase in price, will be discovered suddenly and emerge with rapid gains in share value. The study attempts to find these stocks as they begin to emerge, specifically by identifying stocks that meet the condition of: 1) flat market behavior, followed by 2) accelerating upward or downward market movement.\nThe PERL language programming code for the emerging market study is shown here."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-30-35-sidebar-emerging-market-study-by-robert-pelletier-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-30-35-sidebar-emerging-market-study-by-robert-pelletier-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-30-35-sidebar-emerging-market-study-by-robert-pelletier-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233sosy,d,"{""minimum-quantity"":""1"",""path"":""chapter31"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:3 (30-35): Sound Systems by Robert Pelletier and Sabrina Carle"",""caption-linebreaks"":""Stocks & Commodities V. 23:3 (30-35): Sound Systems by Robert Pelletier and Sabrina Carle

    Too often, trading systems are based on coincidence rather than on sound scientific or mathematical principles. Here’s how you can create a trading\nsystem based on logic.

    Just before the 2004 US Presidential election, people\nacross the United States were talking about the predictor that had called the Presidential winner for an\namazing 16 campaigns. From 1936 through 2000, the success or failure of the Washington Redskins football team on the Sunday before Tuesday’s Presidential\nelection had successfully predicted the election’s outcome. If the Redskins won, the incumbent’s party\nretained the White House. If the Redskins lost, the incumbent’s party lost. Every single time. When the Redskins lost to the Green Bay Packers on October 31,\n2004, George W. Bush’s reelection bid seemed doomed — if you believed the hype, that is.

    Although we seriously doubt that anybody bet the farm on this predictor, it was an interesting diversion that had pundits from both parties wondering if the streak would extend to 68 years. By now, everyone knows that the predictor was wrong this time. Even as you read\nthis, President Bush is settling in for four more years in the White House, and for the first time in the history of the Washington Redskins, the team failed to predict\nthe Presidential winner. Astonishing!"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-30-35-sound-systems-by-robert-pelletier-and-sabrina-carle-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-30-35-sound-systems-by-robert-pelletier-and-sabrina-carle-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-30-35-sound-systems-by-robert-pelletier-and-sabrina-carle-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233wefo,d,"{""minimum-quantity"":""1"",""path"":""chapter31"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:3 (36): Websites For Traders: TradeTheNews.com by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:3 (36): Websites For Traders: TradeTheNews.com by Jayanthi Gopalakrishnan

    WWW.TRADETHENEWS.COM

    News moves the markets, and it’s in the best interest of every trader to keep abreast of the financial news. Because of this, most traders tune into some news channel, whether it be radio or television, to hear the financial news throughout the trading day. But now, with\nTradeTheNews.com (TTN), you have the option of receiving real-time audio news via the Internet, the benefit being that you can keep your eyes and ears focused on the screen or screens in front of you.

    TTN is a closed-circuit network, so you’ll need to download the Withit IP Dealerboard before you can receive any news. Note there are four spaces for channels, and you can assign each by selecting from the authorized channel list. As of this writing, your options are Trade The News, S&P Futures pits, and the Nasdaq futures pits."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-36-websites-for-traders-tradethenews-com-by-jayanthi-gopalakrishnan-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-36-websites-for-traders-tradethenews-com-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-36-websites-for-traders-tradethenews-com-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov23371qa,d,"{""minimum-quantity"":""1"",""path"":""chapter31"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:3 (37, 71): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 23:3 (37, 71): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://\nMessage-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    CONVERSIONS

    Q: I understand that you were a trader on the options trading floor. Would you please explain what a conversion is? I have heard that they are risk free. How\ncan that be?—zdreg

    A: First off, the basics are pretty simple. If you buy stock, say at $53, and sell $50 strike price calls and buy $50 strike price puts, then you have a conversion. If the stock goes up or down $10 (or any major move), you will not make or lose any money. The price of the calls and puts together will work out to be around $3.00 ($50 strike price, plus the difference between $50 and $53). The call and put together are your synthetic short\nposition, and the stock is your long position. . ."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-37-71-q-a-by-don-bright-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-37-71-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-37-71-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233advo,d,"{""minimum-quantity"":""1"",""path"":""chapter31"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:3 (38-41): Adding Volume To The Move-Adjusted Moving Average by Stephen Bisse"",""caption-linebreaks"":""Stocks & Commodities V. 23:3 (38-41): Adding Volume To The Move-Adjusted Moving Average by Stephen Bisse

    In this second article of the series, we look at how adding volume can help identify large moves in one\ndirection.

    In “Visiting MOMA,” my previous Technical Analysis of STOCKS & COMMODITIES article, a simple moving average (SMA) was adjusted by the relative magnitude of the change between closes to create a move-adjusted moving average (MOMA). The reasoning behind this adjustment was that moving averages on their own can, by definition, never say anything about\nthe future direction of a time series, only give a view of where a time series has been. This holds true regardless of the lookback period used or any weightings applied to the datapoints, be it a linear weighting such as in a weighted moving average (WMA) or an exponential moving average (EMA), which uses an exponent to determine the rate at which the significance of older datapoint decays. It is no coincidence that moving averages often form the basis of trend-following trading systems.

    FUTURE DIRECTION

    Logically, the only way that a moving average can\nact as a predictor of the prices is if additional\ninformation is incorporated into the calculation.\nThis additional information has to be some sort of\nleading indicator for the time series in question.

    Two well-known variations on moving averages\nalready introduce additional information into\nthe calculation: the volatility index dynamic average\n(VIDYA) developed by Tushar Chande and the volumeadjusted moving average (VAMA) developed by Richard Arms. The VIDYA uses a volatility index for weighting the datapoints, while the VAMA weights the datapoints in the lookback period based on their corresponding relative volume."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-38-41-adding-volume-to-the-move-adjusted-moving-average-by-stephen-bisse-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-38-41-adding-volume-to-the-move-adjusted-moving-average-by-stephen-bisse-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-38-41-adding-volume-to-the-move-adjusted-moving-average-by-stephen-bisse-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233sivo,d,"{""minimum-quantity"":""1"",""path"":""chapter31"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:3 (38-41): Sidebar: VOMOMA by Stephen Bisse"",""caption-linebreaks"":""Stocks & Commodities V. 23:3 (38-41): Sidebar: VOMOMA by Stephen Bisse

    Simple moving averages (SMA) are great tools for filtering out noise from time series, but all they can do is show where a time series has been. The only way in which a moving average can point the way to future market direction is if additional, leading information is included in the calculation.

    The idea behind VOMOMA is that both the magnitude of\nmoves between datapoints and the volume are leading\nindicators of the market direction. To calculate VOMOMA, the first step is to calculate a MOMA. Adjust each datapoint in the lookback period by the absolute move that preceded it as a percentage of the sum of all the absolute moves in the lookback period. . ."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-38-41-sidebar-vomoma-by-stephen-bisse-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-38-41-sidebar-vomoma-by-stephen-bisse-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-38-41-sidebar-vomoma-by-stephen-bisse-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234exyo,d,"{""minimum-quantity"":""1"",""path"":""chapter31"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:3 (45): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 23:3 (45): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    TIME TO GO?

    Q: Tom, I’ve heard you saying, “When volatility is high, it’s time to buy, but when it’s low, it’s time to go.” I think it was in the context that volatility is increasing when\nstocks are falling and that’s a good time to buy. Conversely, when volatility is low, it may be time to take profits and avoid a correction. Do I have this right?\nThanks — Rock

    A: The sayings “VIX is high, it’s time to buy” or “VIX is low, it’s time to go” are often used with reference to the CBOE Volatility Index ($VIX). The index tracks the expected volatility of the Standard & Poor’s 500 Index ($SPX), which is updated in real time using the prices of SPX options. In addition, VIX is often used as a contrary sentiment indicator."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-45-explore-your-options-by-tom-gentile-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-45-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-45-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov235mase,d,"{""minimum-quantity"":""1"",""path"":""chapter31"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:3 (50-54): Market Sentiment Extremes by John Jagerson & S. Wade Hansen"",""caption-linebreaks"":""Stocks & Commodities V. 23:3 (50-54): Market Sentiment Extremes by John Jagerson & S. Wade Hansen

    The ability to pick up on and properly\ninterpret minute signals in the market dictates\nthe distinction between success and failure.\nHere’s how implied volatility can help.

    Small vibrations — a large investor begins buying calls.\nVirtually imperceptible movements — a hedge fund manager raises his stop-loss levels. These are telltale signs a change is coming. The ability to pick up on and properly interpret these minute signals means the difference between success and failure in the marketplace. Bulls and bears alike push market sentiment to extremes. Whether the imbalance is positive or negative, the market must eventually turn and correct itself. But before it does, it will often announce its intentions through implied volatility.

    IMPLIED VOLATILITY

    Implied volatility is an estimate of future price changes. While historical volatility is an easily quantifiable measurement of past price movement, implied volatility is an emotionally based guess determined by investors\nas they buy and sell options. Implied volatility, or investor fear, increases as investors become bearish toward the market and decreases as investors become more bullish. As subjective as implied volatility may be, however, it is an extremely accurate measurement of the posture of those who drive the market."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-50-54-market-sentiment-extremes-by-john-jagerson-s-wade-hansen-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-50-54-market-sentiment-extremes-by-john-jagerson-s-wade-hansen-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-50-54-market-sentiment-extremes-by-john-jagerson-s-wade-hansen-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov236intr,d,"{""minimum-quantity"":""1"",""path"":""chapter31"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:3 (64-71): Interview: Trading Diverences With Ashwani Gujral by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:3 (64-71): Interview: Trading Diverences With Ashwani Gujral by Jayanthi Gopalakrishnan

    Ashwani Gujral first got acquainted with technical analysis when he was studying for his master’s degree in business administration in the US during the mid-1990s — and since then, there’s been no turning back. These days, Gujral is an India-based technical analyst, commentator, author, and trainer who follows both Indian and US markets; he’s also an active short-term trader and a money manager. He is a frequent contributor to various US trading magazines and makes regular weekly appearances on Indian business television channels. Not only that, he\nhas an Internet presence, as he runs an index futures trading chatroom, as well as a print presence, since he has just published a book called How To Make Money Trading Derivatives: An Insider’s Guide. He can\nbe found at www.ashwanigujral.com.STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan conducted the interview with Gujral via instant messaging on the Internet, starting on January 4, 2005.

    Q: How did you get started in technical analysis?

    A: I did my master’s in business administration (MBA) in the US in 1995, which was when I became fascinated by the money management business. The first real gurus I wanted to emulate were Warren Buffett,\nGeorge Soros, and Peter Lynch.

    Q: Not a bad place to start!

    A: Being an engineer and having an MBA in finance certainly helped. As an engineer, I was trained to build frameworks and models to solve problems, and this\nhelped in developing a quantitative and a logical approach to forecasting stock price movements. As an MBA, I was trained to understand business models, so that helped me understand the business of companies whose charts I picked for analysis. This is important because I advise investing in only fundamentally sound and pedigreed companies, even if it is done on the basis of charts. In addition, when I returned to India, I\nfound that technical data was much more easily available than fundamental data. This was one of the many reasons I chose technical analysis as my methodology for analysis. Back in 1995, I had a hard time just finding annual reports, but of course\nthat has changed. And that’s how my fascination with\ncharting began, because that put me on a par with large investment banks with thousands of analysts making the same forecasts."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-64-71-interview-trading-diverences-with-ashwani-gujral-by-jayanthi-gopalakrishnan-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-64-71-interview-trading-diverences-with-ashwani-gujral-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-64-71-interview-trading-diverences-with-ashwani-gujral-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov236sise,d,"{""minimum-quantity"":""1"",""path"":""chapter31"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:3 (64-71): Sidebar: Setups by Ashwani Gujral"",""caption-linebreaks"":""Stocks & Commodities V. 23:3 (64-71): Sidebar: Setups by Ashwani Gujral

    Key points about momentum setup

    • Buy setup

    • Slow stochastics makes a low for the day,\nbut the market does not make a new low for the day

    • Sell setup

    • Slow stochastics makes a high for the day, but the market does not make a new high for the day If, because of a strong trend, the slow stochastics is not\nreaching extremes, the fast stochastics can also be used."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-64-71-sidebar-setups-by-ashwani-gujral-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-64-71-sidebar-setups-by-ashwani-gujral-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-64-71-sidebar-setups-by-ashwani-gujral-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov23793we,d,"{""minimum-quantity"":""1"",""path"":""chapter31"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:3 (72, 93): Websites For Traders: The KirkReport.com by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:3 (72, 93): Websites For Traders: The KirkReport.com by David Penn

    THEKIRKREPORT.COM

    I have no idea who in the world Charles E. Kirk is. But after only a few months of peeking in on his website/blog, TheKirkReport.com, I’m sold. I don’t\nknow if there is a more worthwhile location on the Internet to go for reasoned, agenda-free thought and commentary on the stock market. That Kirk’s website is updated regularly, is chock-full of interesting hyperlinks to other resources on the web, and has the sort of\ncasual chatting-over-lunch-the-other day tone that helps make the best weblogs so readable is all the more\nreason to read The Kirk Report.

    SO WHO IS HE?

    Kirk’s anonymity is hardly his fault. Not only has he and his website/blog been discussed (albeit too briefly in my opinion) in prestigious financial publications,\nbut TheKirkReport.com features an informative “About Me” page that tells visitors just who Kirk is, what his background in the financial markets is, and what his intentions are for his website. At the risk of spoiling the surprise, Kirk is an individual investor who has been trading stocks for more than a decade. He’s got a juris doctor (law) degree, a little history as a newsletter founder and contributor (the newsletter is called MoneyXperts), and even spent some time as a private investigator."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-72-93-websites-for-traders-the-kirkreport-com-by-david-penn-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-72-93-websites-for-traders-the-kirkreport-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-72-93-websites-for-traders-the-kirkreport-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov237prre2,d,"{""minimum-quantity"":""1"",""path"":""chapter31"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:3 (74-78): Product Review: MetaStock 9.0 Professional by Dennis D. Peterson"",""caption-linebreaks"":""Stocks & Commodities V. 23:3 (74-78): Product Review: MetaStock 9.0 Professional by Dennis D. Peterson

    MetaStock 9.0 Professional is a nonsubscription-based\nstock market analysis application. It needs to be used\nwith a datafeed, which can be either real-time or end of day (EOD). Since MetaStock is a popular product among traders, a number of other packages do accept data in MetaStock format and a number of datafeeds provide data in MetaStock format. The compact disc comes with some excellent user manuals, and the technical support is outstanding and free. MetaStock is one of the software packages I use every day and have done so for several years.

    DATA INTERFACES

    Besides providing an interface for realtime datafeeds, specifically QCharts or eSignal, MetaStock 9.0 also accepts EOD data that you can get from fee-based sources, such as Reuters, or from free sources. The free route usually entails using a program that Equis offers (for no charge) called Downloader, which will\nconvert the data. For example, the other day I was interested in obtaining put/call ratios. I went to the CBOE site and downloaded a spreadsheet into Excel. I deleted all columns except the date and ratio columns and revised the top rows into a single row of headers, placing above the date column and above the put/call ratios column. I saved this modified spreadsheet as a CSV file and converted it into MetaStock format via Downloader. Under the options source tab, I checked the daily option; under the options destination tab, I\nchecked “Replace matching dates” with the “Append data to end of file” selected, and finally checked “Create new files,” making sure the “Include open & open interest” box was not checked since I had no other data."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-74-78-product-review-metastock-9-0-professional-by-dennis-d-peterson-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-74-78-product-review-metastock-9-0-professional-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-74-78-product-review-metastock-9-0-professional-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov238inre,d,"{""minimum-quantity"":""1"",""path"":""chapter31"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:3 (80-81): Intermarket Review by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:3 (80-81): Intermarket Review by David Penn

    iShares are an investment product from Barclay’s\nGlobal Investors, and represent among the broadest\nvariety of exchange-traded funds (ETFs) available\nto institutional and retail investors alike. iShares can be bought and sold like stocks and are used by many investors instead of mutual funds in order to take advantage of the low expenses involved in trading ETFs.

    THE MSCI SWEDEN INDEX FUND (EWD)

    The MSCI Sweden Index Fund (EWD) is built to provide investors and traders with exposure to the equities of companies operating in and out of Sweden. The fund is geared to mirror the performance of the publicly traded stocks of the Swedish stock market as represented by the MSCI Sweden Index. Major components of EWD include Telefonaktiebolaget LM Ericsson Class B, Nordea AB, Hennes & Mauritz AB Class B, and Volvo AB Class B. Top industry sector representation consists of technology hardware and equipment, capital goods, and banks."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-80-81-intermarket-review-by-david-penn-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-80-81-intermarket-review-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-80-81-intermarket-review-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov238prre2,d,"{""minimum-quantity"":""1"",""path"":""chapter31"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:3 (82-85): Product Review: eASCTrend 6.0 EODS by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:3 (82-85): Product Review: eASCTrend 6.0 EODS by David Penn

    I don’t care how many pictures of traders with their well-shod feet propped up on mahogany Herman Miller desks we must be subjected to. The fact of the matter is that trading is hard work and there are only two ways that the average trader who dreams of success can\nmake money while looking anything like the Masters of Trading Serenity and Bliss that populate advertisements in financial magazines. The first is to\nget somebody else to do your trading for you. The second is to get something else to do your trading for you.

    In the world of the latter, there are as many rogues as there are righteous ones, and scanning through trader message boards for the conventional wisdom on\nautomated trading systems tends to produce more disgruntlement than gratitude. Unfortunately, it is often difficult to determine where the fault lies—in\nnefarious software that fails to perform as advertised, or in clumsy, faint-hearted traders unable to stomach the drawdowns and underperformance streaks that are inevitable with even the most effective mechanical trading systems."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-82-85-product-review-easctrend-6-0-eods-by-david-penn-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-82-85-product-review-easctrend-6-0-eods-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-82-85-product-review-easctrend-6-0-eods-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov238trti1,d,"{""minimum-quantity"":""1"",""path"":""chapter31"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:3 (86-92): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:3 (86-92): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    Editor’s note: Since the TradeStation code for this month’s primary Traders’ Tips topic (John Ehlers’ article “The Secret Behind The Filter: What’s The Difference?” elsewhere in this issue) was already provided in the article by Ehlers, the following TradeStation Traders’ Tips submission treats a\ndifferent topic from a past issue of S&C.

    This month's tips are for David White’s article, “Setting Strike Price Probability At Expiration” (S&C, December 2004), which describes the calculation of the max-loss point. Code is provided for TradeStation, eSignal, AmiBroker, NeuroShell Trader, NeoTicker, and MetaStock."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-86-92-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-86-92-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-86-92-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov239trre,d,"{""minimum-quantity"":""1"",""path"":""chapter31"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:3 (94-99): Traders’ Resource by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:3 (94-99): Traders’ Resource by Technical Analysis, Inc.

    You can find a wealth of information on the Internet for nearly any subject imaginable, including investing, trading, and the financial markets. You can even find\na good amount on technical analysis. Each month in STOCKS & COMMODITIES’ Traders’ Resource, we present a listing for different categories of products\nand services related to trading, all to aid our readers in\ntheir pursuit of trading. This month, we focus on the topic of online trading services. We contacted companies that offer services to traders over\nthe Internet as well as financial website developers and asked them to fill out an online survey form to describe their Internet site. Here, you’ll find an excerpt of the data we collected. Some of these websites offer charting, price quotes, and financial news and information; others offer a more specialized service that may be useful to investors and traders. Features may include stock screening, articles, discussion forums, online support, and more."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-94-99-traders-resource-by-technical-analysis-inc-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-94-99-traders-resource-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-3-94-99-traders-resource-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231leto3,d,"{""minimum-quantity"":""1"",""path"":""chapter41"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:4 (10-14): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:4 (10-14): Letters To S&C by Technical Analysis, Inc.

    FUTURES LIQUIDITY

    Editor,

    I just received and enjoyed reading your magazine, STOCKS & COMMODITIES. In the February 2005 issue, on page 87, you list futures liquidity from most to least liquid. I find it amazing that you list the British pound (GBP) as being more liquid than the Canadian dollar (CD). I have traded on the floor at the Chicago Mercantile Exchange for 25 years and have traded actively in both the GBP and the CD pits. The CD pit is far more liquid than the GBP pit. While trading in the GBP pit, I was told that if you compare the daily range with the volume, the GBP pit was the least liquid pit on the floor.

    LGO via email

    Editor,

    The Futures Liquidity page of the December 2004 Technical Analysis of STOCKS & COMMODITIES states that [the] “Greatest number of dots indicates the greatest activity.” Taking a look in the average volumes traded in the Chicago Mercantile Exchange (CME) reveals that e-mini Standard & Poor’s 500 has more volumes than S&P 500. If that is the case, why does S&P 500 [have] more dots than e-mini S&P 500?

    In the article “The End Of The Trend,” author Cornelius Luca states that intraday formations are much less reliable than daily ones. If the concept or strategy is robust, shouldn’t it work in all time frames and all markets? Luca also mentions that shoulders\npatterns should be of fairly similar heights. How much leeway can we give to determine if it is a perfect head\nand shoulders pattern?

    VETRIVEL, India"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-10-14-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-10-14-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-10-14-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231qaby,d,"{""minimum-quantity"":""1"",""path"":""chapter41"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:4 (15): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 23:4 (15): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://\nMessage-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    ADJUSTING ENTRY PRICES

    How do you go about entering a trade after considering it for purchase the morning after your nightly analysis,\nwhen premarket indicators look to gap sharply higher, gap sharply lower, moderately higher, moderately lower, and neutral? Do you adjust your entry price accordingly, or do you use pivot numbers?

    —Joseph Anthony

    I assume you want to attempt the best possible entry (buy) the next day. If you see an expected gap up prior to the stock opening, based on opening indications from the specialist, then I would not buy on the opening. Remember, the specialist cannot participate on the buy side when there is a gap up opening; rather, he must accommodate the excess buy orders by selling. It is never a good idea to go against the specialist. Now, if you see a gap down based on opening indications, I suggest you double-check your homework, and then participate with an opening-only order to buy. This way,\nyou’ll be on the same buy side as the specialist (for the reasons I mentioned)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-15-q-a-by-don-bright-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-15-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-15-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231siai,d,"{""minimum-quantity"":""1"",""path"":""chapter41"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:4 (16-20): Sidebar: AIQ systems EDS code moving average pullback system by Steve Palmquist"",""caption-linebreaks"":""Stocks & Commodities V. 23:4 (16-20): Sidebar: AIQ systems EDS code moving average pullback system by Steve Palmquist

    ! EDS code for MAPS system

    ! Steve Palmquist

    ! www.daisydogger.com

    ! look for Stocks in an up trend

    RisingCloses if LoVal([close],5) > HiVal([close],20,20)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-16-20-sidebar-aiq-systems-eds-code-moving-average-pullback-system-by-steve-palmquist-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-16-20-sidebar-aiq-systems-eds-code-moving-average-pullback-system-by-steve-palmquist-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-16-20-sidebar-aiq-systems-eds-code-moving-average-pullback-system-by-steve-palmquist-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231trmo,d,"{""minimum-quantity"":""1"",""path"":""chapter41"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:4 (16-20): Trading Moving Average Pullbacks by Steve Palmquist"",""caption-linebreaks"":""Stocks & Commodities V. 23:4 (16-20): Trading Moving Average Pullbacks by Steve Palmquist

    Many traders have found success in trading pullbacks. But even a popular system needs to incorporate risk management.

    Every evening, I look over a dozen different scans and\nselect trading techniques that are best suited to the\ncurrent market environment. Because the market constantly changes, it is important to have multiple techniques in your toolbox. But how do you know if a scan is suited for the current market?

    To answer this question, you must understand how each system is affected by a variety of market parameters. This analysis also makes you more aware of how you can manage your risks.

    FIRST STEPS

    Pullback techniques are based on the idea that trends continue, and the best way to trade them is to look for a pullback in the trend because it usually represents a lower-risk entry point.

    Prior to trading a system, I want to have a clear understanding of issues, such as:

    • How does the system behave when the market is in\nan uptrend?

    • How does the system behave when the market is in\na downtrend?

    • How does the system behave when the market is\nmoving sideways?

    • How do price and volume affect the system?

    • How does trigger-day volume affect the system?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-16-20-trading-moving-average-pullbacks-by-steve-palmquist-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-16-20-trading-moving-average-pullbacks-by-steve-palmquist-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-16-20-trading-moving-average-pullbacks-by-steve-palmquist-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov232exyo,d,"{""minimum-quantity"":""1"",""path"":""chapter41"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:4 (21): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 23:4 (21): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    BUYING, SELLING, AND OPEN INTEREST

    I came across something the other day while reading The Wall Street Journal. In the “Leaps-Long Term Options” section, I noticed that the put volume of a stock was quite high compared to the call volume, and the strike price was out-of-the-money. Does this suggest\nthat the “experts” are buying puts because they think the stock will go down, or that they are selling the puts and\nexpecting the stock to go up? Is there any way to get this buy/write volume for a particular strike price?\nUnusual increases in volume or open interest can sometimes signal that experts or well-informed investors expect the stock to make a significant move in the future. At other times, large volume can represent a protective purchase of puts, the sale of an open position, or maybe even part of a more complex trade involving other stocks or options. So how do you know\nwhat is happening?

    Remember, all options trades involve a buyer and a seller. In order to determine which one initiated the trade, you can try to see if the trade occurred at the\nbid price or the ask price. If the trade happened at the bid price, it was probably a sale. If the trade takes place at the ask price, it was probably a buy. As you can see, unless you can watch the market or have access to time and sales data for the options market, it is often difficult to tell if a certain trade was at the bid or the ask, and therefore it is hard to know if the position was a purchase or a sale. Nevertheless, the price of the trade and whether it was at the bid or ask can give you clues regarding whether it was a purchase or a sale."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-21-explore-your-options-by-tom-gentile-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-21-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-21-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov232mefl,d,"{""minimum-quantity"":""1"",""path"":""chapter41"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:4 (22-31): Measuring Flags And Pennants by Markos Katsanos"",""caption-linebreaks"":""Stocks & Commodities V. 23:4 (22-31): Measuring Flags And Pennants by Markos Katsanos

    This new statistically derived formula can help you\nestimate price targets more accurately.

    Flags and pennants are my favorite formations, and I have used them in my trading for some time. In using them, I found that my exit strategy and profit objective was far from optimal. The classical method used for measuring these common and useful formations is simple and straightforward, but how accurate and reliable is it? It’s difficult to find technical literature that provides any statistical studies on the subject. In fact, it is Robert Edwards & John Magee’s classic Technical Analysis Of Stock Trends, that standard of the industry, that provides the measuring formula and most other information on the subject. Given the limited amount of statistical studies on the subject, I decided to investigate.

    I found 100 flag, pennant, or similar short-term\nconsolidation patterns for the past two years (2003–\n04) using daily charts. My criteria for including a\npattern in the list was, first of all, a steep and quick\nprice rise leading to the formation of no less than 20%\nfrom the lowest point of the flagpole. I excluded bearish flags that formed after a declining price trend from the current study. I then made a note of the price level and the date of the lowest and highest point of the pole, the point where prices break out above the upper trendline of the formation, and the breakout up to the first short-term top. I also noted the volume trend during the formation pattern."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-22-31-measuring-flags-and-pennants-by-markos-katsanos-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-22-31-measuring-flags-and-pennants-by-markos-katsanos-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-22-31-measuring-flags-and-pennants-by-markos-katsanos-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov232sipe,d,"{""minimum-quantity"":""1"",""path"":""chapter41"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:4 (22-31): Sidebar: Pearson’s correlation coefficient by Markos Katsanos"",""caption-linebreaks"":""Stocks & Commodities V. 23:4 (22-31): Sidebar: Pearson’s correlation coefficient by Markos Katsanos

    PEARSON’S CORRELATION COEFFICIENT

    Pearson’s correlation coefficient r is a measure of the relationship between two variables. It can take values between -1.0 and +1.0. .."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-22-31-sidebar-pearson-s-correlation-coefficient-by-markos-katsanos-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-22-31-sidebar-pearson-s-correlation-coefficient-by-markos-katsanos-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-22-31-sidebar-pearson-s-correlation-coefficient-by-markos-katsanos-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov232sime,d,"{""minimum-quantity"":""1"",""path"":""chapter41"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:4 (22-31): Sidebar: The Measuring Formula by Markos Katsanos"",""caption-linebreaks"":""Stocks & Commodities V. 23:4 (22-31): Sidebar: The Measuring Formula by Markos Katsanos

    Equation 1:

    Ln(Breakout) = 1.3+0.5* ln(pole)+0.28* ln(historical volatility)+0.16*ln(volatility in formation) -0.14*ln(formation duration)-0.006*formation slope..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-22-31-sidebar-the-measuring-formula-by-markos-katsanos-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-22-31-sidebar-the-measuring-formula-by-markos-katsanos-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-22-31-sidebar-the-measuring-formula-by-markos-katsanos-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233siwe,d,"{""minimum-quantity"":""1"",""path"":""chapter41"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:4 (32-35): Sidebar: WEVOMO by Stephan Bisse"",""caption-linebreaks"":""Stocks & Commodities V. 23:4 (32-35): Sidebar: WEVOMO by Stephan Bisse

    Simple moving averages (SMA) are great for showing the past price action of a market by filtering out noise and showing the underlying trend. However, the only way a moving average can indicate the future market direction is if additional, leading information is included in its calculation.

    The idea behind WEVOMO is that the magnitude of\nmoves between datapoints, and the volume of each datapoint are both leading indicators in the future direction of a market, and that the more recent datapoints are more important than the older ones."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-32-35-sidebar-wevomo-by-stephan-bisse-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-32-35-sidebar-wevomo-by-stephan-bisse-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-32-35-sidebar-wevomo-by-stephan-bisse-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233wevo,d,"{""minimum-quantity"":""1"",""path"":""chapter41"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:4 (32-35): Weight + Volume + Move-Adjusted Moving Average: It’s WEVOMO! by S. Bisse"",""caption-linebreaks"":""Stocks & Commodities V. 23:4 (32-35): Weight + Volume + Move-Adjusted Moving Average: It’s WEVOMO! by Stephan Bisse

    Moving averages: I use ’em, you use ’em, we all use ’em, but can they really tell you anything about the future direction of a time series? In this article, the third of a series, we look at minimizing the lag even more using the weighted move- and volume-adjusted moving average.

    Moving averages merely give you a view of where a time\nseries has been in the past. So how can it be used as a predictor? The only way is by adding more information Copyright into the calculation. But if you do this you have to make sure it is a leading indicator\nfor the time series in question. In other words, changes in the additional information must be correlated to future changes in the time series.

    In my February 2005 article, “Visiting MOMA,” I adjusted a simple moving average (SMA) by taking each datapoint in the lookback period and weighting it according to the absolute magnitude of the move that\npreceded it relative to the sum of all of the absolutes in the lookback period. I christened this new moving average MOMA. In my March 2005 article, “Adding Volume To The Move-Adjusted Moving Average,” I further adjusted MOMA by the relative magnitude of the volume of each datapoint in the lookback period to create a double-adjusted moving average, which I\nchristened VOMOMA. The idea behind MOMA is that a strong move in a given direction is a harbinger of the future direction of the market, and therefore weighting\nan average by the magnitude of the moves between datapoints can produce timelier signals than a standard SMA. The additional step to VOMOMA is based on the logic that large moves accompanied by heavy volume are more significant than those panied by light volume. Therefore, a moving average adjusted by both volume and size of move can capture these additional nuances."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-32-35-weight-volume-move-adjusted-moving-average-it-s-wevomo-by-s-bisse-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-32-35-weight-volume-move-adjusted-moving-average-it-s-wevomo-by-s-bisse-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-32-35-weight-volume-move-adjusted-moving-average-it-s-wevomo-by-s-bisse-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233main,d,"{""minimum-quantity"":""1"",""path"":""chapter41"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:4 (38-41): A Marriage In Artificial Intelligence by D.M. Wong, Ph.D."",""caption-linebreaks"":""Stocks & Commodities V. 23:4 (38-41): A Marriage In Artificial Intelligence by D.M. Wong, Ph.D.

    Can you really make better decisions with more information? Perhaps artificial intelligence has the answer. Find out how you can develop skills to\ngain control.

    There are content-drenched websites such as TheStreet.com, CNBC.com, cbsmarketwatch.com, and so many more. Add to these all the subscription-based\ninvesting magazines and newsletters that are available. Can there be any doubt about our thirst for information?\nWe tend to assume that people can make better decisions with more information. The logical extension is that people will make even better decisions with even more information. But is that true?

    WHAT’S THE CUTOFF POINT?

    Do people really make better choices with more information, or can too much information actually undermine the decision-making process? Among economists, it is an axiom that choice is good and more choice is better. Giving buyers more choice means more — and more intense — competition, which lowers prices, raises quality and fosters innovation. In the end, workers are more productive,\nconsumers are better off and the economy is bigger and more efficient. It’s a lovely theory. … Unfortunately, it turns out not to be true.

    Yes, up to a point, choice does enhance efficiency and\nconsumer welfare. But at some point, there get to be so\nmany options about what to buy or what career to go into or which mutual fund to invest in that many people make worse decisions than they would if they had fewer choices...

    —Washington Post, September 10, 2004"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-38-41-a-marriage-in-artificial-intelligence-by-d-m-wong-ph-d-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-38-41-a-marriage-in-artificial-intelligence-by-d-m-wong-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-38-41-a-marriage-in-artificial-intelligence-by-d-m-wong-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234inri,d,"{""minimum-quantity"":""1"",""path"":""chapter41"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:4 (46-53): Interview: Richard Dennis by Art Collins"",""caption-linebreaks"":""Stocks & Commodities V. 23:4 (46-53): Interview: Richard Dennis by Art Collins

    Perhaps no one in the world of commodity trading has more lore attached to him\nthan the legendary Richard Dennis, the founder, along with William Eckhardt, of\nthe original Turtles and the system they established. Dennis’s stunningly successful\ninvolvement with mechanical systems came about when he realized that whatever\nworked for him in his trading could be reduced to and defined as a trading rule.\nToday, he pretty much eschews the public investment arena, confining himself to\nan exploration of mechanical trading ideas for personal use. A self-described\n“computer-illiterate,” he nonetheless has worked steadily with a handful of\nprogrammers for the last quarter century.\nTo separate the myth from the man, STOCKS & COMMODITIES contributor Art Collins\nspoke with Richard Dennis in October 2004 at Yoshi’s, a restaurant in Chicago.

    Q: How’s the current trading environment compared with your high-profile days?

    A: It’s 10 times harder than it used to be. It should be. The market’s job is to derail the systems traders. Some\nof them are going to make money, but that can’t go on forever.

    Q: Why not?

    A: Because the market is changing more dramatically than it would have 15 or 20 years ago. I think that’s because there are a lot more trend-followers involved\nin the market than before. It’s a game where you’re forever chasing your tail.

    Q: Anticipation doesn’t have a lot of place in the mechanical trading world, does it? The adage is that systems react rather than predict, and traders should\nhave no input at all once they’re beyond a certain stage.

    A: There’s something to be said for the dumb bunny approach of “I’m just looking at numbers.” I’ve done my share of talking myself out of systems that would have worked for years. You pays your money and you takes your chances. But ideas help if you’re thinking about what the market is likely to be like two years from now."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-46-53-interview-richard-dennis-by-art-collins-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-46-53-interview-richard-dennis-by-art-collins-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-46-53-interview-richard-dennis-by-art-collins-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov235mico,d,"{""minimum-quantity"":""1"",""path"":""chapter41"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:4 (54-57): Mind Control by Michael Bois, CFA, CTA"",""caption-linebreaks"":""Stocks & Commodities V. 23:4 (54-57): Mind Control by Michael Bois, CFA, CTA

    The psychology of trading has always been a struggle.\nPerhaps the techniques here could provide a solution.

    Not long ago, I interviewed a Standard & Poor’s floor trader from the Chicago Mercantile Exchange (CME) who recounted his first experience trading inside the pit. Prior to becoming a trader, he had been a clerk, relaying orders from his employer’s desk to the trader inside the pit. As a clerk, his physical position was directly outside the pit, literally leaning on the rail separating the spaces, giving and receiving hand signals to and from the desk. From his vantage point outside of the pit, he developed an excellent feel for the\nmarket’s order flow and subsequently its direction. As his back was usually facing the pit, his ear became acutely attuned to the variations in volume and tone of the voices of the traders inside the pit. Several years later, on his first day as a full-fledged trader, he donned his badge and marched proudly to the center of the pit as the veterans assumed their positions.

    At 8:30 am CT, the opening bell rang and, for him, it was as if someone had flipped on a strobe light and dangled a spinning, mirrored ball before his eyes. The voices were no longer the familiar, resonant meter guiding him to the correct side of the market. They sounded like a broken calliope, a cacophonous, confusing racket. Eyes frantically darting from one side of the pit to the other, he eventually caught the eye\nof a seasoned pro who knew him. The old pro grinned, then signaled and cried out, “You bought one.”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-54-57-mind-control-by-michael-bois-cfa-cta-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-54-57-mind-control-by-michael-bois-cfa-cta-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-54-57-mind-control-by-michael-bois-cfa-cta-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov235sike,d,"{""minimum-quantity"":""1"",""path"":""chapter41"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:4 (54-57): Sidebar: Key elements of a guided enactive mastery program by Michael Bois"",""caption-linebreaks"":""Stocks & Commodities V. 23:4 (54-57): Sidebar: Key elements of a guided enactive mastery program by Michael Bois

    1. Understand your trading system or methodology, ideally through extensive backtesting

    2. Identify a qualified guide or mentor who also understands your system or methodology

    3. Break your system or methodology down into its smallest components"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-54-57-sidebar-key-elements-of-a-guided-enactive-mastery-program-by-michael-bois-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-54-57-sidebar-key-elements-of-a-guided-enactive-mastery-program-by-michael-bois-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-54-57-sidebar-key-elements-of-a-guided-enactive-mastery-program-by-michael-bois-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov235prre,d,"{""minimum-quantity"":""1"",""path"":""chapter41"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:4 (58-60): Product Review: ProphetX by Dennis D. Peterson"",""caption-linebreaks"":""Stocks & Commodities V. 23:4 (58-60): Product Review: ProphetX by Dennis D. Peterson

    ProphetX, a software package providing access to\nreal-time quotes as well as news and weather, was\noriginally built by FIMI (Financial Information Management, Inc.), and designed for fundamentalists.\nFIMI was bought by DTN, and recently, ProphetX has been undergoing changes to make it a product for\ntechnical analysts as well.

    While real-time quotes are available for stocks, futures, and futures options, I reviewed this product using the demo version with delayed quotes. ProphetX is customized at installation to be “focused” on basic commodities, metals, or energy. I chose basic commodities as the focus, and because of that, energy or metals–specific newsfeeds were not enabled (the energy and metals feed can be added for an additional $50 a month each). Historical data is available for\nstocks, futures, and future options. The features that set ProphetX apart from others are the extensive news and\nweather reporting, and to a lesser degree, future options history. Very few vendors offer a history of option prices."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-58-60-product-review-prophetx-by-dennis-d-peterson-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-58-60-product-review-prophetx-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-58-60-product-review-prophetx-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov236prre,d,"{""minimum-quantity"":""1"",""path"":""chapter41"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:4 (66-67): Product Review: MTPredictor End-of-Day 4.0 by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:4 (66-67): Product Review: MTPredictor End-of-Day 4.0 by Jayanthi Gopalakrishnan

    One of the challenges that traders face is finding the\nright equities, futures, indexes, options, or currencies\nto trade. But the difficulties difficulties don’t stop there. The next challenge is to make sure that when you enter\nthe trade, it has the potential to bring you the highest returns possible with the lowest risk. This is the most difficult aspect of trading, especially since forecasting price movement is (pretty close to, if not) impossible.\nAnd it is for this reason that the importance of money management is stressed. Still, is it possible to determine the risk/reward ratio of any trade? That’s\nsomething that the folks at MTPredictor have worked on with great enthusiasm. A real-time and end-of-day version is available, but here in this review we are limiting ourselves to the end-of-day version.

    INSTALLATION

    The installation was pretty straightforward, although it did take a few minutes. You receive a username and password via email once you purchase the product. All you have to do is follow the instructions and you’re ready to go. It’s relatively simple to use, whether you’re using the basic features or the advanced ones. As you can see from Figure 1, there is a button for each feature."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-66-67-product-review-mtpredictor-end-of-day-4-0-by-jayanthi-gopalakrishnan-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-66-67-product-review-mtpredictor-end-of-day-4-0-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-66-67-product-review-mtpredictor-end-of-day-4-0-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov237prre3,d,"{""minimum-quantity"":""1"",""path"":""chapter41"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:4 (70-75): Product Review: RealTick 8.0 by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:4 (70-75): Product Review: RealTick 8.0 by David Penn

    Of all the major technical analysis and trading software\npackages on the market that allow traders to analyze and trade stocks, options, and futures, Townsend\nAnalytics’ RealTick occupies an interesting niche.

    On the one hand, RealTick belongs on that same stage with some of the other well-known, heavily advertised\n“elite” technical analysis and trading software packages, packages that are used by thousands of dedicated traders and investors in the US and around\nthe world. In fact, compared feature for feature, RealTick can go toe-to-toe with virtually any of those systems—retail or institutional. As often as not, RealTick—on issues of scalability, order making, or\njust overall feature integration—will also be able to go where some of its peer software packages cannot.\nOn the other hand, RealTick has a surprisingly low “whine factor” compared to the other technical analysis\nheavy-hitters (I had a term other than “whine” in mind, but Technical Analysis of STOCKS & COMMODITIES is nothing if not a publication for the whole family). One of the reasons why you know there are widely used technical analysis and trading software packages\nout there other than RealTick is because so many of the people using those other packages seem to spend so much time complaining about them."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-70-75-product-review-realtick-8-0-by-david-penn-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-70-75-product-review-realtick-8-0-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-70-75-product-review-realtick-8-0-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov237trti,d,"{""minimum-quantity"":""1"",""path"":""chapter41"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:4 (76-80): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:4 (76-80): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, with code contributed by TradeStation, Wealth-Lab, AmiBroker, eSignal, MetaStock, Trading Solutions, NeuroShell Trader, Investor/RT, Prophet.net, NeoTicker, Trade Navigator, Aspen Graphics, BullCharts, Technifilter Plus,SmarTrader, and Stockwhiz for Steve Palmquist's article \""Trading Moving Average Pullbacks.\"""",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-76-80-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-76-80-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-76-80-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov238trre,d,"{""minimum-quantity"":""1"",""path"":""chapter41"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:4 (81-85): Traders’ Resource: Courses And Seminars by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:4 (81-85): Traders’ Resource: Courses And Seminars by Technical Analysis, Inc.

    They say that the more you learn, the more you know you need to learn. This is true in trading. If you’re not fully prepared when you go to trade, you could be the one that the smart money profits from. Education is crucial in trading. If you don’t step up to the line with the right tools and know-how to trade the markets, you might as well be gambling — with the odds on the house’s side. But help is available, in courses, seminars, classes, manuals, books, tutorials, and personal trading mentors.

    Readers often ask us how they can further their knowledge and skills in trading (that is, in addition to reading STOCKS & COMMODITIES!). This listing — which includes only a selected sample of the products offered by various firms — is a place to start for educational resources.

    Readers may also want to check out our Readers’ Choice Awards in the 2005 Bonus Issue of STOCKS & COMMODITIES for the category of Trading Centers/Schools/Training.

    TRADERS’ RESOURCE AT TRADERS.COM

    In addition to the information given here, Traders’ Resource is also available at our website, http://www.Traders.com, and in much greater detail. At our website, you’ll not only find out much more about all the courses and seminars listed here, but you’ll also find information on products and services in numerous other categories as well, such as data services, advisory services, software, and others. Just click on the Traders’ Resource link. Then follow the Courses and Seminars category link, or use the search feature to find products or services with specific attributes in this or other categories. For more specific information on any of the listings here, such as seminar dates and locations, instructor background, hardware and software requirements, target audience, and additional products offered by these companies, visit Traders’ Resource at Traders.com."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-81-85-traders-resource-courses-and-seminars-by-technical-analysis-inc-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-81-85-traders-resource-courses-and-seminars-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-81-85-traders-resource-courses-and-seminars-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov239bofo,d,"{""minimum-quantity"":""1"",""path"":""chapter41"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:4 (96): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:4 (96): Books For Traders by Technical Analysis, Inc.

    InvestorWiz!: An Educational Investment Course For\nNovice Investors (124 pages, $65 softcover, 2003, ISBN\n1932560777) by Soraya Nasrallah, published by Lumina Press. InvestorWiz! is a 10-chapter investor course for novice investors and features samples, practice exercises, answer pages, and other resources on stock basics, brokerage accounts and forms, the economy, chart analysis, and more. This book will assist novice investors and those seeking more financial independence or searching for a career in the brokerage industry."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-96-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-96-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-96-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov239atcl,d,"{""minimum-quantity"":""1"",""path"":""chapter41"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:4 (98): At The Close by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:4 (98): At The Close by Jayanthi Gopalakrishnan

    So far, the 50-day moving average on the Standard & Poor’s 500 chart has been acting as a good support level during February (Figure 1). Not only is it acting\nas a support, it has also showed signs of a slight upward bend. This tells me that I should only go long when trading the e-mini contract. Now it’s a matter of\nwaiting till the right opportunity comes.

    On February 16, 2005, at around 11:07 am (PT), I noticed an increase in buying enthusiasm, but that quickly faded. That was unfortunate, because for a moment I thought my original plan to trade at around 11:00 am (PT) might still be something to capitalize on. Twenty minutes later, I noticed a similar scenario—that is, a buying frenzy followed by a quick selloff. . ."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-98-at-the-close-by-jayanthi-gopalakrishnan-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-98-at-the-close-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-4-98-at-the-close-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231leto4,d,"{""minimum-quantity"":""1"",""path"":""chapter5may"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:5 (10-12): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:5 (10-12): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist. Address your correspondence to: Editor, STOCKS & COMMODITIES, 4757 California Ave.\nSW, Seattle, WA 98116-4499, or email to Editor@Traders.com. All letters become the property of Technical Analysis, Inc. Letter-writers must include their full name and address for verification. Letters may be edited for length or clarity. The opinions expressed in this column do not necessarily represent those of the magazine.—Editor

    GUJRAL BOOK

    Editor,

    How may I obtain a copy of the book How To Make\nMoney Trading Derivatives, by Ashwani Gujral? I see that it is listed as suggested reading after his interview (Technical Analysis of STOCKS & COMMODITIES,\nMarch 2005). An excellent article, by the way.

    ROBERT PHILLIPS\nvia email

    Thank you for your feedback. We are glad you enjoyed the article. I would suggest you contact Gujral via his\nwebsite, www.ashwanigujral.com, regarding his book.—Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-10-12-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-10-12-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-10-12-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231wefo3,d,"{""minimum-quantity"":""1"",""path"":""chapter5may"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:5 (13-15): Websites For Traders: fmcenter.org by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:5 (13-15): Websites For Traders: fmcenter.org by David Penn

    FMCENTER.ORG

    For some, the Federal Reserve Board, its operations, and intentions are shrouded in mystery, if not paranoia\nand conspiracy theory. One regular advertisement\non Internet and AM radio teases listeners darkly with the invitation to purchase a book that promises to:\n…“[E]xpose the almost inconceivable stories of deceit, conspiracy, and media cover up involving the creation of the Federal Reserve System, an entity that emerges as a secret government more powerful than the duly constituted government of the President, the Congress\nand the Courts.”

    Even less excitable observers can’t help but regard the institution known colloquially as “the Fed” with some\nmeasure of awe and despair. William Greider titled his classic book on the Federal Reserve System Secrets Of The Temple. G. Edward Griffin collected his observations on the Fed in a book called The Creature From Jeckyll Island. Libertarian economist Murray\nRothbard never tired of pillorying the Fed in his books, with titles such as The Case Against The Fed and What Has The Government Done To Our Money?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-13-15-websites-for-traders-fmcenter-org-by-david-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-13-15-websites-for-traders-fmcenter-org-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-13-15-websites-for-traders-fmcenter-org-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231dawi,d,"{""minimum-quantity"":""1"",""path"":""chapter5may"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:5 (16-23): Daytrading With Market Value by Donald L. Jones"",""caption-linebreaks"":""Stocks & Commodities V. 23:5 (16-23): Daytrading With Market Value by Donald L. Jones

    Markets are complex, self-regulating, and driven by feedback. The message is clear: Decipher the feedback to understand your market.

    How can you understand the market? With feedback.\nWhat is feedback? Feedback is market response. For instance, heavy demand leads to increased market activity; feedback is apparent as more ticks, more volume, increased volatility, and higher prices. You already know this, but how can you interpret this data?\nMost technical indicators are not adequately coupled to the market because markets are dynamic and changing. Decoding feedback requires a market-attuned approach, something flexible enough to keep up with changes in the feedback itself. An important characteristic of feedback is that it takes time to develop a signal. A market acts, for example, and price jumps. All traders receive the information\nat about the same time. You consider the new information and then react to it in your own way at your own pace, and other traders do the same. The sum of all traders’ actions creates the total feedback reaction to the initial market movement.

    This takes time, since each trader’s response time frame is different. Ultimately, there is a new feedback message to which you and other traders may respond. This feedback-reaction-feedback cycle continues as\nlong as the market trades. Average feedback response time has been measured to be some dozens of minutes."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-16-23-daytrading-with-market-value-by-donald-l-jones-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-16-23-daytrading-with-market-value-by-donald-l-jones-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-16-23-daytrading-with-market-value-by-donald-l-jones-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov232cyin,d,"{""minimum-quantity"":""1"",""path"":""chapter5may"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:5 (28-35): Cycles In Time And Money by Stuart Belknap, Ph.D."",""caption-linebreaks"":""Stocks & Commodities V. 23:5 (28-35): Cycles In Time And Money by Stuart Belknap, Ph.D.

    Wouldn’t you like to be able to identify top and bottom extremes and get signals to open new positions or close current ones? This may help.

    When was the last time you thought about using cycles to design a trading system? Many trading systems depend on cycle indicators, and in this article I will focus on systems derived from oscillators. These days, there are literally hundreds of oscillator-based cycle indicators, each scalable by one or more parameters. In addition, most toolbox programs provide a simple formula language, which you can use to derive any\nnumber of personal variations.

    Markets, groups, and individual securities have\ncharacteristic behavior that requires just the right\nindicator for a given time frame and trading bar interval. It is also evident that markets demonstrate both extended trending and flat or trading type price action, each of which may or may not favor one indicator over the other. But is this level of complexity necessary?

    The universal cycle index (UCI) is a standard of\nreference applicable to any security, time frame, and\ntrading bar interval during either oscillating or trending\nprice action. The MetaStock user formulas are shown in the sidebar on the last page, but here, I will. . ."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-28-35-cycles-in-time-and-money-by-stuart-belknap-ph-d-21.gif"",""height"":""270"",""width"":""205""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-28-35-cycles-in-time-and-money-by-stuart-belknap-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-28-35-cycles-in-time-and-money-by-stuart-belknap-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov232sime1,d,"{""minimum-quantity"":""1"",""path"":""chapter5may"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:5 (28-35): Sidebar: MetaStock user formulas for UCI by Stuart Belknap, Ph.D."",""caption-linebreaks"":""Stocks & Commodities V. 23:5 (28-35): Sidebar: MetaStock user formulas for UCI by Stuart Belknap, Ph.D.

    METASTOCK USER FORMULAS FOR UCI

    Volatility (Sigom%)\nyom:=100*(C-Ref(Mov(C,25,S),12))/\nRef(Mov(C,25,S),12);\navyom:=Sum(yom,50)/50;\nvaryom:=Sum(yom*yom,50)/50-avyom*avyom;\nsom:=Ref(Sqrt(varyom),-12);\nsigom:=Mov(som,25,S); sigom; . . ."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-28-35-sidebar-metastock-user-formulas-for-uci-by-stuart-belknap-ph-d-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-28-35-sidebar-metastock-user-formulas-for-uci-by-stuart-belknap-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-28-35-sidebar-metastock-user-formulas-for-uci-by-stuart-belknap-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233datr,d,"{""minimum-quantity"":""1"",""path"":""chapter5may"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:5 (36-42): Darvas-Style Trading by Daryl Guppy"",""caption-linebreaks"":""Stocks & Commodities V. 23:5 (36-42): Darvas-Style Trading by Daryl Guppy

    The markets have changed since the 1960s, with the weekly trading volumes of those days often exceeded by a single day of trading now. With that in mind, can classic techniques such as Darvas-style trading still work?

    Nicholas Darvas was a Hungarian-born dancer who successfully traded the market in the early 1960s. His book, How I Made Two Million Dollars In The Stock Market, is a classic. It describes a unique approach to understanding the nature of trend behavior. The Darvas trading style uses trend analysis based entirely on dynamic support and resistance concepts. It is a complete and standalone trading approach. It is not combined with straight-edge trendlines, or with moving averages, or with the Guppy multiple moving average, or any other indicator.

    WHY DARVAS?

    Darvas trading defines an uptrend by constructing a series of imaginary boxes based on a price chart. Each box contains a set of price moves. Each new box sits on top of the previous box like a set of rising stairs. When price moves above the upper edge of the box, it means the continuation of a trend is confirmed. The trend ends when prices close below the bottom of the current box. These upper and lower limits create a Darvas box and define the acceptable bullish and\nbearish range of prices.

    For several years, this approach was tested in current\nmarkets with real trades and modifications consistent with the logic of the Darvas method, but taking into account changes in volatility that characterize modern markets. These included applications to breakout trading using a different set of initiating triggers while applying the basic method."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-36-42-darvas-style-trading-by-daryl-guppy-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-36-42-darvas-style-trading-by-daryl-guppy-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-36-42-darvas-style-trading-by-daryl-guppy-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234qaby,d,"{""minimum-quantity"":""1"",""path"":""chapter5may"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:5 (43): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 23:5 (43): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://\nMessage-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    BID/ASK EQUATIONS

    Q: Is there a mathematical equation to figure out the bid/ask price? How do computers handle that information?

    A: There is not really any mathematical equation, although there are automated systems. On listed stocks, there is a single place (where the specialist is) that handles all the orders. If they have\nbuyers at 30.10 and sellers at 30.20, then you will see either those prices or slightly better placed by the specialist. Over-the-counter (OTC) pricing is usually\na bit more fragmented, but can be wider or narrower, depending upon how many people are participating. With either market, the supply and demand usually determines pricing."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-43-q-a-by-don-bright-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-43-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-43-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov23451pr,d,"{""minimum-quantity"":""1"",""path"":""chapter5may"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:5 (44-46, 51): Product Review: PFscanRT by Dennis D. Peterson"",""caption-linebreaks"":""Stocks & Commodities V. 23:5 (44-46, 51): Product Review: PFscanRT by Dennis D. Peterson

    PFscanRT, the latest in a series of software products offered by David Baker, is a sophisticated point & figure software that uses eSignal for a real-time interface. If you sign up for a year, you pay only $200. No matter which subscription plan you try, you get PFscan2\nthrown in for free, normally a $120/year fee. The two together form a powerful package.

    POINT & FIGURE VS. BAR CHARTS

    Let me digress. My guess is that when you start to read about point & figure charts, you think, “This is just a bunch of antiquated and backward charting techniques.” My response to that would be, “It sounds like you don’t know much about point & figure.” Before the days of bar charts, point and figure was the technique used to represent price activity. Some say the origins of point and figure go back to the late 19th century.

    Point & figure charts have three advantages when compared to typical bar charts. First, support and resistance is more easily defined. Second, point and\nfigure charts are more amenable to finding certain chart patterns than bar charts, and third, they have horizontal counts that can be used for price projections.

    One disadvantage to using point & figure charts is that there is no time scale, which means that momentum indicators are not available. But in PFscan, the developer provides ready access to standard bar charts so you can get the advantages of both."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-44-46-51-product-review-pfscanrt-by-dennis-d-peterson-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-44-46-51-product-review-pfscanrt-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-44-46-51-product-review-pfscanrt-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234exyo1,d,"{""minimum-quantity"":""1"",""path"":""chapter5may"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:5 (47): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 23:5 (47): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    WHAT TO DO WHEN ASSIGNED

    Q: If I hold a stock in my portfolio and I sell calls on the stock, what do I do if faced with assignment? That is, if the call owner wants to exercise the call option, how will I know and how can I deliver the stock?

    A: If you own the stock and sell the call on that stock, you will set up a trade known as a covered call or a buy-write. It is a popular strategy that can be used to generate income in a portfolio and also lower the cost of owning the stock. However, as you note, the gains from the strategy are limited because, if the stock moves higher, the call will be exercised by the owner and assigned to you, the option seller. At that point, the\ncall seller must deliver the shares to the call owner."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-47-explore-your-options-by-tom-gentile-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-47-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-47-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234debr,d,"{""minimum-quantity"":""1"",""path"":""chapter5may"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:5 (48-57): Detecting Breakouts From Flags & Pennants by Markos Katsanos"",""caption-linebreaks"":""Stocks & Commodities V. 23:5 (48-57): Detecting Breakouts From Flags & Pennants by Markos Katsanos

    Here’s a system to identify and trade flag and pennant formations.

    In my previous article, I wrote about the measuring implications, duration, and identifying characteristics of\nflags and their variations, and promised to present a system to identify and trade these short-term and highly profitable formations. I constructed a viable system by distilling the most useful statistics together with technical observations of 100 flag and pennant samples. I optimized the test parameters in further out-of-sample testing of a list of 250 stocks.

    In this article, I have presented the formula and methods used in this system, along with the test results on four stocks. I found the most profitable test returned an adequate 187% profit being only 8% of the\ntime in the market, versus a tragic 91% loss for the buy and hold investor.

    A frequent trader, however, will need to wait for the next entry signal, since the system test produced only one trade per year on average. Nevertheless, this need\nnot be a major disadvantage, as a daily scan of a large database of stocks is bound to produce a few trades. I ran a MetaStock exploration on a database of 1,250 stocks and produced 13 hits. Results were highly\nprofitable, producing an annualized 735% profit."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-48-57-detecting-breakouts-from-flags-pennants-by-markos-katsanos-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-48-57-detecting-breakouts-from-flags-pennants-by-markos-katsanos-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-48-57-detecting-breakouts-from-flags-pennants-by-markos-katsanos-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234sime,d,"{""minimum-quantity"":""1"",""path"":""chapter5may"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:5 (48-57): Sidebar: MetaStock Codes: System Test, Flags & Pennants by Markos Katsanos"",""caption-linebreaks"":""Stocks & Commodities V. 23:5 (48-57): Sidebar: MetaStock Codes: System Test, Flags & Pennants by Markos Katsanos

    This sidebar contains:

    METASTOCK CODE: SYSTEM TEST, FLAGS & PENNANTS

    METASTOCK CODE FOR VFI FORMULA, and

    METASTOCK EXPLORATION FOR FLAG AND PENNANT PATTERN-RECOGNITION SYSTEM"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-48-57-sidebar-metastock-codes-system-test-flags-pennants-by-markos-katsanos-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-48-57-sidebar-metastock-codes-system-test-flags-pennants-by-markos-katsanos-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-48-57-sidebar-metastock-codes-system-test-flags-pennants-by-markos-katsanos-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov236ovbi,d,"{""minimum-quantity"":""1"",""path"":""chapter5may"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:5 (62-63): Overcoming Bias by Gary Norden"",""caption-linebreaks"":""Stocks & Commodities V. 23:5 (62-63): Overcoming Bias by Gary Norden

    Trading biases may be affecting your decision-making abilities. Being aware of them can help you overcome them.

    It has always amazed me how, in a business in\nwhich we essentially have a 50% probability of making\nmoney, about 80% of private traders lose. In the futures market where technical analysis is more prominent, the failure rate is even higher— more than 90%. Could it be that a majority of traders are doing something drastically wrong?

    WHAT ARE TRADERS DOING?

    From my experience as a local trader on LIFFE, running investment bank trading desks, and from conversations with traders and brokers around the world, I have reached the conclusion that the biases and rules of thumb — like anchoring, conservativeness, and loss\naversion — described by behavioral finance supporters are good examples of where traders go wrong. More likely than not, traders are prone to one or more of these biases, which can result in irrational and poor decision-making. In order to improve your trading, you must first of all recognize these biases before you can overcome them."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-62-63-overcoming-bias-by-gary-norden-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-62-63-overcoming-bias-by-gary-norden-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-62-63-overcoming-bias-by-gary-norden-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov23694pr,d,"{""minimum-quantity"":""1"",""path"":""chapter5may"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:5 (64-67, 94): Product Review: OptionVue 5 by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:5 (64-67, 94): Product Review: OptionVue 5 by David Penn

    With apologies to Chaucer and the Wife of Bath, oh\nto speak of the woe that is options trading!

    If it isn’t the historically low volatility in recent years—as\nshown by a volatility index that looks like it fell off the dinner table—then it’s some smart-aleck telling us that 225% of all options traders lose money, or that 750%\nof all options expire worthless. On the more sensible side of things, one exceptionally savvy trader who’s spent more than a few years successfully trading\noptions recently wrote in a newsletter to subscribers that “it’s arguable that there is no game any longer … no(t) for options traders, who doubtless understand\nthat, when volatility continues to shrink, the short sale of puts and calls becomes a game of Russian roulette.”

    And if the game is tough on guys like him, what does that suggest for the rest of us?

    If your options game is not where you want it to be—or if you don’t even have an options game and are starting to think it might be high time to get one—then consider spending a few minutes now (and a whole month’s worth of free trial later) getting to know OptionVue 5."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-64-67-94-product-review-optionvue-5-by-david-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-64-67-94-product-review-optionvue-5-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-64-67-94-product-review-optionvue-5-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov236inti,d,"{""minimum-quantity"":""1"",""path"":""chapter5may"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:5 (68-74): Interview: Tim Wood Of Cycles News & Views by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:5 (68-74): Interview: Tim Wood Of Cycles News & Views by Jayanthi Gopalakrishnan

    Tim W. Wood is editor and publisher of Cycles News & Views, which provides technically based research and analysis on the stock market, gold, bonds, the dollar, and more. This research is primarily based around two proven disciplines. One, classic Dow theory, was a method of market analysis developed by Charles H. Dow more than 100 years ago, and Wood’s application of Dow theory is based on the original writings of Charles Dow and his predecessors. The other discipline he uses is a quantitative approach based on cyclical analysis. These methods were used for more than a year and a half in advance to forecast the decline into the 2002 stock market low. Other calls include the 2001 top in the dollar and the 2001 bottom in commodity prices and gold. STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Tim Wood via telephone on March 8, 2005.

    Q: Tell us how you got started in technical analysis.

    A: I originally started studying cycles through the works of Walter Bressert, about 15 years ago. Everything I really know about cycles came from Walter. He was a wonderful cycles pioneer. That was the only cycles course I ever took. Why would you need more?

    Q: Have you only worked on cycles, or did you start out with technical analysis?

    A: I started out with technical analysis, and then I looked at Elliott waves and other things. What struck me about cycles is that they are a way to quantify a move. Basically, you’re profiling. You can develop expectations of trend, and you can also find there are trends within trends by looking at the different cycles. There are cycles you look at on a monthly chart, versus cycles you look at on a weekly chart, versus cycles you look at on a daily chart. It’s a way to quantify at multiple levels."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-68-74-interview-tim-wood-of-cycles-news-views-by-jayanthi-gopalakrishnan-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-68-74-interview-tim-wood-of-cycles-news-views-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-68-74-interview-tim-wood-of-cycles-news-views-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov237trti1,d,"{""minimum-quantity"":""1"",""path"":""chapter5may"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:5 (75-81): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:5 (75-81): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    Stuart Belknap's article \""Cycles In Time And Money\"" describes an algorithm for ploting a centered cycle oscillator. Trader's Tips supplies code for his indicator, the universal cycle index (UCI), which is intended to be \""in phase\"" with the market and to operate in real time.

    Code is given for the following programs: TradeStation, Wealth-Lab, AmiBroker, eSignal, NeuroShell Trader, NeoTicker, AIQ, and Aspen Graphics. MetaStock code for the UCI was provided in his article."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-75-81-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-75-81-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-75-81-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov238trre1,d,"{""minimum-quantity"":""1"",""path"":""chapter5may"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:5 (82-88): Traders’ Resource: Advisory Services by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:5 (82-88): Traders’ Resource: Advisory Services by Technical Analysis, Inc.

    Advisory services are all over the place, as this listing shows. You have plenty of choices and price points to consider. One key factor is whether the outfit you’re checking out is a Registered Investment Advisor (RIA) or a registered Commodity Trading Advisor (CTA). Though it doesn’t weed out the undependable advice, the act of registration puts the person or persons under the government’s scrutiny. In this listing, filled in by the companies themselves, you’ll find those who have RIA and/or CTA certifications as well as those who are nonregistered advisories.

    If it’s trading advice you seek, then track records are\nessential, preferably records monitored by third parties. References should also be checked, and if publications are involved, back issues should be scanned. Even then, a lengthy observation period following the advisor’s rationale and recommendations is prudent. Commit money to trades only when you are ready to follow the advice thoroughly: you’ll only have yourself to blame if you cherry-pick trades and come up with results differing from the advisor’s.

    This listing may also include other types of products that are not strictly advisories but that may provide advice or recommendations, such as newsletters, commentary, hotlines, and educational services. This listing is only a sample of products offered; you may find additional products from these and other companies in the Traders’ Resource database\nat our website, Traders.com."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-82-88-traders-resource-advisory-services-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-82-88-traders-resource-advisory-services-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-5-82-88-traders-resource-advisory-services-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231leto5,d,"{""minimum-quantity"":""1"",""path"":""ch6j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:6 (10-15): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:6 (10-15): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist. Address your correspondence to: Editor, STOCKS & COMMODITIES, 4757 California Ave.\nSW, Seattle, WA 98116-4499, or email to Editor@Traders.com. All letters become the property of Technical Analysis, Inc. Letter-writers must include their full name and address for verification. Letters may be edited for length or clarity. The opinions expressed in this column do not necessarily represent those of the magazine.—Editor

    FLAGS IN A BEAR MARKET?

    Editor,

    I just finished Markos Katsanos’ recent S&C\narticle, “Measuring Flags And Pennants” (April 2005), and was thoroughly impressed. The accuracy of his revised price predictions are truly amazing for the small\nsample size presented. I am wondering how this formula will perform for larger sample sizes and in bear versus bull markets. I am relatively new to the whole concept of backtesting, having just signed up for a TradeStation trial, and my higher math skills are very rusty. But I am eager to explore these tests at some\npoint in the future. I also eagerly await Katsanos’ next article on applying this newfound result. Thanks for the insightful analysis.

    BRENT BREWER, CFA\nvia email

    Markos Katsanos replies:

    Thank you for your interest in my article. The coefficient r2 suggests the simplified formula would explain only\nabout half of the cases. This was verified by my statistical research on 100 flags and pennants during the period of 11/13/2002–11/15/2004, which included\na bullish and a sideways market but not a bear market. This process revealed that 57% of the cases were\nwithin +/-10% of the predicted price objective. Nevertheless, using the formula removes emotions from trading and prevents you from blaming yourself\nfor selling too soon or too late."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-10-15-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-10-15-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-10-15-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231sime1,d,"{""minimum-quantity"":""1"",""path"":""ch6j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:6 (16-22): Sidebar: MetaStock formulas for Darvas technique by Daryl Guppy"",""caption-linebreaks"":""Stocks & Commodities V. 23:6 (16-22): Sidebar: MetaStock formulas for Darvas technique by Daryl Guppy

    METASTOCK FORMULAS FOR DARVAS TECHNIQUE\nA MetaStock expert advisor developed by technician Matthew\nFord implementing the modified Darvas technique was\noriginally published in my weekly newsletter, Tutorials In\nApplied Technical Analysis. These free formulas can be\ndownloaded from www.guppytraders.com under the Trend\nTrading Formula button."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-16-22-sidebar-metastock-formulas-for-darvas-technique-by-daryl-guppy-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-16-22-sidebar-metastock-formulas-for-darvas-technique-by-daryl-guppy-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-16-22-sidebar-metastock-formulas-for-darvas-technique-by-daryl-guppy-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231soda,d,"{""minimum-quantity"":""1"",""path"":""ch6j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:6 (16-22): Something Darvas, Something New by Daryl Guppy"",""caption-linebreaks"":""Stocks & Commodities V. 23:6 (16-22): Something Darvas, Something New by Daryl Guppy

    In the May 2005 STOCKS & COMMODITIES, Daryl Guppy discussed classic Darvas-style trading. Here, he modifies the technique to fit modern-day markets, given that markets are more volatile these days than they were in the 1960s.

    The increased volatility of modern-day trading has reduced the risk control elements of the Darvas approach, which was originally developed and applied\nto less volatile markets. The Darvas box and trailing-stop approach is designed to keep you in a long-term steady trend, since the stop-loss level remains unaltered for extended periods in the face of substantial price moves. But in the volatile markets\nof today, this kind of strategy could expose you to an unexpectedly high level of risk. To bring this classic trading style into modern markets, I made four modifications. Each modification is consistent with the underlying logic of the Darvas method.

    MODERN DARVAS RULES

    The new rules are shown in bold:

    • Trade is initiated by a new high for the rolling 12- or six-month period.

    • All entry decisions are based on the high of the\nprice series.

    • All exit decisions are based on the close of the series.

    • Entry action is triggered by the first trade at the trigger price.

    • Exit action is managed on the day after the trigger close.

    • Action is triggered by the close.

    • Stop-loss calculation uses ghost boxes where necessary to handle modern volatility."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-16-22-something-darvas-something-new-by-daryl-guppy-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-16-22-something-darvas-something-new-by-daryl-guppy-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-16-22-something-darvas-something-new-by-daryl-guppy-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233spup,d,"{""minimum-quantity"":""1"",""path"":""ch6j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:6 (30-37): Spike Up The Volume by Giorgos Siligardos, Ph.D."",""caption-linebreaks"":""Stocks & Commodities V. 23:6 (30-37): Spike Up The Volume by Giorgos Siligardos, Ph.D.

    A long spike appearing in the volume histogram usually catches your attention. But how do these spikes in volume really affect indicators and prices?

    Volume can be considered to be the fuel of the markets. When the daily trading volume of a security is extremely high compared to its average daily values, that means it’s attracting a large number of buyers or\nsellers. Oftentimes, this huge rush leads traders awry.\nIn his article “A Tale Of Two Indicators,” Andrew\nTomlinson gave an interesting example of two volume\nindicators that diverge, giving opposite signals.\nThe daily volume spike along with a gapping down\nhammer created these signals, and Tomlinson noted\nthat this divergence was due to the nature of the\nformulas of these volume indicators. Here I will\ndiscuss the concept of volume and show that volume\nspikes actually do not provide signals that indicate\nwhich way prices will go, but rather provide instantaneous alert signals."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-30-37-spike-up-the-volume-by-giorgos-siligardos-ph-d-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-30-37-spike-up-the-volume-by-giorgos-siligardos-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-30-37-spike-up-the-volume-by-giorgos-siligardos-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233rean,d,"{""minimum-quantity"":""1"",""path"":""ch6j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:6 (38-43): Retracement Analysis Beyond The Horizonal by Cornelius Luca"",""caption-linebreaks"":""Stocks & Commodities V. 23:6 (38-43): Retracement Analysis Beyond The Horizonal by Cornelius Luca

    If you are a currency trader, then\nyou need to know your trends. Here’s\nhow you can monitor the health of a\ntrend in the currency markets.

    Currencies may be one of the best-trending financial\ninstruments, so monitoring the health of the trend is an extremely important responsibility for those who trade currencies. While at times you will enjoy surging trends, such as the downtrend experienced by the dollar/Norwegian krone in the last quarter of 2004 (Figure 1), this is the exception to the rule.

    Trending currencies will typically be subject to several pullbacks or retracements due to short-term countermoves, profit-taking before and after the release of significant economic indicators, and bargain-hunting.\nWhen it comes to analyzing retracements, traders generally use Fibonacci levels. And yet, this statement\nis only partly accurate; the levels are only ratios, and there’s more to it than applying the standard group\nof three horizontal lines at 38.2%, 50%, and 61.8%. (In fact, 50% is not even a Fibonacci retracement level\nbut it’s bundled in, due to its high technical significance.)

    In addition to these three ubiquitous horizontal lines, there are two other ways to apply the Fibonacci ratios\nfor retracement analysis: fanlines and arcs. This article will focus on fanlines and will also compare them to\nthe standard Fibonacci horizontal lines."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-38-43-retracement-analysis-beyond-the-horizonal-by-cornelius-luca-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-38-43-retracement-analysis-beyond-the-horizonal-by-cornelius-luca-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-38-43-retracement-analysis-beyond-the-horizonal-by-cornelius-luca-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234sico,d,"{""minimum-quantity"":""1"",""path"":""ch6j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:6 (46-50): Sidebar: Constructing a PAC chart by François Bertrand"",""caption-linebreaks"":""Stocks & Commodities V. 23:6 (46-50): Sidebar: Constructing a PAC chart by François Bertrand

    CONSTRUCTING A PAC CHART

    Here are the steps:

    1. Create a “price grid” where each row in the grid represents a range of prices. Then identify the range of boxes in the grid that encompasses each day’s trading range (from low to high). This step is somewhat similar to how point & figure charts are constructed. . ."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-46-50-sidebar-constructing-a-pac-chart-by-fran-ois-bertrand-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-46-50-sidebar-constructing-a-pac-chart-by-fran-ois-bertrand-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-46-50-sidebar-constructing-a-pac-chart-by-fran-ois-bertrand-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234vipr,d,"{""minimum-quantity"":""1"",""path"":""ch6j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:6 (46-50): Visualize Price Movement by François Bertrand"",""caption-linebreaks"":""Stocks & Commodities V. 23:6 (46-50): Visualize Price Movement by François Bertrand

    Detecting the strength and direction of investor sentiment at an early stage is critical for successful trading. Here’s an inventive, profit-generating type of charting that provides unparalleled insight into volume.

    Detecting the strength and direction of investor sentiment toward a stock at an early stage is critical for successful trading. Volume, the number of shares traded for a stock on a given day, has long been recognized as a premier indicator of investor emotion and is used daily by traders under one form or another.\nPrice activity (PAC) charts are a potent yet highly intuitive\nmethod of charting. Their innovative layout of data offers\nanalysts unparalleled visual insight on volume with respect to both price and time. These charts are simple in concept and potent at detecting breakouts, the strength and location of actual resistance/support levels, and by their very nature, leverage well-known formations such as pennants, triangles, flags, and consolidation areas (Figure 1).

    CONCEPT AND BENEFITS

    Like many well-established indicators, PAC charts aim at measuring investor emotion levels (through volume measurement) for a given stock. However, PAC charts track volume independently at each price point, not just total volume for the entire stock. In addition, this information is compounded and weighed over time. While this approach is similar in some ways to “price by volume” histograms, the tracking and compounding of data per price point, per day, effectively increases the amount of information provided by PAC charts by an order of magnitude. In effect, the per pricepoint information reveals exactly at which prices, which point in time, and what quantities that investors have been\ntrading. This data offers real benefits to investors."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-46-50-visualize-price-movement-by-fran-ois-bertrand-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-46-50-visualize-price-movement-by-fran-ois-bertrand-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-46-50-visualize-price-movement-by-fran-ois-bertrand-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov235exyo,d,"{""minimum-quantity"":""1"",""path"":""ch6j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:6 (51): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 23:6 (51): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    CLOSING OUT A LOSING BEAR PUT SPREAD

    I set up a losing bear put spread, and the price is staying above the price of the long put side of the spread. I want to exit the trade — but if I sell the long put, will I be in danger of assignment if the price drops?

    As you know, the bear put spread is created with the simultaneous purchase of a (long) put with a higher strike price and the sale of a (short) put with a lower\nstrike price. The position will generate profits if the stock price falls below the strike price of the short put. If the stock is not moving lower and the trader wants\nto exit the position, the best solution is to exit the entire trade. Simply selling the long put will expose the trader to greater risk. It means that the bear put spread has been converted into a naked or uncovered short put."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-51-explore-your-options-by-tom-gentile-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-51-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-51-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov235inmi,d,"{""minimum-quantity"":""1"",""path"":""ch6j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:6 (52-57): Interview: Michael W. Covel by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:6 (52-57): Interview: Michael W. Covel by Jayanthi Gopalakrishnan

    The author of Trend Following: How Great Traders Make Millions In Up Or Down Markets and a researcher of the most successful trend-following investment managers, Michael Covel has been consulting on trend-following to individual traders, hedge funds,\nand banks for 10 years. Teaching and sharing unique insights about trend-following, trading, and alternative investments has earned him respect as a rational voice in uncertain times. He can be reached at www.michaelcovel.com and www.trendfollowing.com.\nSTOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Michael Covel via telephone on March 31, 2005.

    Q: How did you get started in technical analysis?

    A: What led me to trend-following was curiosity. I was looking at performance data and what all those who\nplayed the trends made. Occasionally, I would read an article in STOCKS & COMMODITIES or Futures, but I didn’t find much about these traders and I couldn’t\nfigure out why Main Street and Wall Street weren’t preoccupied with them. How could they not be? If you just look at their performance numbers, you can see how much money they’ve pulled out of the market. So I had this insatiable curiosity to figure out the puzzle.

    Q: And were you trading the markets at some point?

    A: We all start out trading, whether it is with a good strategy or a bad one. These days, I keep money with trend-following traders. I also try to maintain a\ntrend-following mindset in other areas of my life, from real estate to starting businesses."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-52-57-interview-michael-w-covel-by-jayanthi-gopalakrishnan-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-52-57-interview-michael-w-covel-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-52-57-interview-michael-w-covel-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov235wefo,d,"{""minimum-quantity"":""1"",""path"":""ch6j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:6 (58-59): Websites For Traders: TheLongWaveAnalyst.ca by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:6 (58-59): Websites For Traders: TheLongWaveAnalyst.ca by David Penn

    THELONGWAVEANALYST.CA

    Writing in his best-selling book, Conquer The Crash, Elliott wave theoretician Robert Prechter said this about\nanalyst Ian Gordon:

    I am convinced that the explanation for such opinions is that these analysts feel optimistic and have to rationalize why. I am aware of only two other writers who see the [Kondratieff] cycle performing in its typical way and with its normal timing. Ian Gordon, who in 1998 began publishing The Long Wave Analyst, is an astute historian and student of the subject.

    Who is Ian Gordon, and what is the Kondratieff wave? For answers to those questions, there is no better place to go than Ian Gordon’s own website, TheLongWaveAnalyst.ca. I don’t know if there is another source on the Internet that provides as much detail, explanation, and contemporary commentary on the theories of early 20th-century Russian economist Nikolai Kondratieff as this website. That so much of the material here is provided for free only underscores how valuable this resource is for investors and traders,\nstudents of economic history, and analysts of contemporary finance."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-58-59-websites-for-traders-thelongwaveanalyst-ca-by-david-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-58-59-websites-for-traders-thelongwaveanalyst-ca-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-58-59-websites-for-traders-thelongwaveanalyst-ca-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov236prre1,d,"{""minimum-quantity"":""1"",""path"":""ch6j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:6 (60-63): Product Review: ChartFilter by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:6 (60-63): Product Review: ChartFilter by David Penn

    If there is one question I am asked more than any other by readers, then without a doubt that question is: Where can I find a good stock screener/scanner?

    For the stock investor or trader, this is not without good reason. Unlike futures traders, who have a fairly finite universe of as many as 20 different commodities to track and follow—much less foreign exchange traders, who tend to focus on a range of anywhere from two to\n10 different currency pairs—the stock trader faces a relatively unique problem. For one, there are thousands of stocks, any one of which is as likely to make a major move as another. And while there may be safety and comfort in the familiar, the trader or investor who limits him- or herself to Dow stocks, or Nasdaq 100 stocks, or Standard & Poor’s 500 stocks will constantly feel like kicking him- or herself for missing the stocks that show\nup on “Big Mover” lists days later— after they’ve made their big move.

    Stock traders and investors looking for quality stock screeners are generally one of two types. The first type demands an exceptional degree of flexibility in determining the criteria of the various stock screens. Often, this trader is comfortable (to say nothing of happiest) when busily concocting ever more intricate codes and algorithms that, when properly optimized, will illuminate potentially winning stocks like blips on a\nradar screen."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-60-63-product-review-chartfilter-by-david-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-60-63-product-review-chartfilter-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-60-63-product-review-chartfilter-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov236wefo,d,"{""minimum-quantity"":""1"",""path"":""ch6j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:6 (68): Websites For Traders: www.BreakoutWatch.com byJayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:6 (68): Websites For Traders: www.BreakoutWatch.com byJayanthi Gopalakrishnan

    WWW.BREAKOUTWATCH.COM

    When it comes to trading, breakouts have always attracted attention. This is because they are always associated with making quick profits. But how do you know when a breakout is a breakout? Making that identification is a task that may require hours of pondering over charts. To reduce the time you spend looking for them, you may want to try using the services that www.BreakoutWatch.com offers. As you can probably guess by the domain name, those services tell you which stocks are about to break out from specific patterns."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-68-websites-for-traders-www-breakoutwatch-com-byjayanthi-gopalakrishnan-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-68-websites-for-traders-www-breakoutwatch-com-byjayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-68-websites-for-traders-www-breakoutwatch-com-byjayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov236prre2,d,"{""minimum-quantity"":""1"",""path"":""ch6j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:6 (69-75): Product Review: Tradecision Version 1.7 by Dennis D. Peterson"",""caption-linebreaks"":""Stocks & Commodities V. 23:6 (69-75): Product Review: Tradecision Version 1.7 by Dennis D. Peterson

    It is easy to explore all the things you can do with\nTradecision. It’s a complete analysis package\nwith a number of interesting features and a user interface that is extremely easy to use. It is a package\nthat’s offered at a highly competitive price with two key features: neural network capability and free end-of-day\n(EOD) data. It’s definitely an interesting product, though it still has a few bugs.

    There are three different packages available. For this review, I used the version with the most bells and whistles: Professional Real-Time. I tested Tradecision on two different machines, both using eSignal as the real-time feed. I focused on the features not usually\nseen in other packages to check out how they performed.

    The three users I contacted each said he was happy with the product. They all liked getting a neural network capability at a reasonable price. They all chose the Professional version to get the neural neural\nnetwork capability (this version comes with genetic algorithms, which helps enormously if you are trying to\noptimize parameters in conjunction with finding a neural network solution). They too had experienced a few bugs, but given that this product is so powerful, it\nmakes you want to be patient and work through the glitches. Between phone calls and email, the issues I had were resolved (but I recommend email; my questions were answered in both a timely and a most thorough way, some of the best I have seen)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-69-75-product-review-tradecision-version-1-7-by-dennis-d-peterson-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-69-75-product-review-tradecision-version-1-7-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-69-75-product-review-tradecision-version-1-7-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov237trti2,d,"{""minimum-quantity"":""1"",""path"":""ch6j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:6 (76-81): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:6 (76-81): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    Daryl Guppy’s two articles, “Something Darvas, Something New” in this issue and “Darvas-Style Trading” in the May 2005 S&C, introduce a new trading system. Code for this system shows how Darvas boxes are drawn and also the three methods for using the boxes: classic, modern, and breakout methods.

    MetaStock code was included in the article, so Traders' Tips show how to set up a system test in MetaStock. For the other platforms, code is provided for TradeStation, Wealth-Lab, AmiBroker, eSignal, NeuroShell Trader, NeoTicker, Trading Solutions, and Technifilter Plus."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-76-81-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-76-81-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-76-81-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov238qaby1,d,"{""minimum-quantity"":""1"",""path"":""ch6j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:6 (82): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 23:6 (82): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://\nMessage-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    PRACTICAL ADVICE FOR NEW OPTIONS TRADERS

    Q: I recently started to look at options trading and am considering LEAPS in particular. As with everything else, I’m learning that “the devil is in the details”; we might have a general understanding of things, but actually getting into the market is a different matter\naltogether.

    Can you give me practical advice on what to do to trade options? I would greatly appreciate it if you could give\nme some pointers on what dangers I should expect, such as not getting my position filled by a broker.—Jamie

    A: First, you need to learn the valuation principles of conversions and reverse conversions; they tend to trade at or near a fair value based on interest rates,\ndividends, and days until expiration. Don’t get swayed by over- or undervalued calls or puts when compared to\nsimple historical volatility.o Floor traders, along with the major firms, are among the most savvy traders on the planet — and they have the best overall tools. They have the ability to “cross-instrument” hedge at all times (that is, lay off interest risk via currency variables, and so on), as well as “cross-market” hedge with the equity futures (such as a basket of stocks/options and futures)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-82-q-a-by-don-bright-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-82-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-82-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov238trre2,d,"{""minimum-quantity"":""1"",""path"":""ch6j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:6 (84-86): Traders’ Resource: Consultants"",""caption-linebreaks"":""Stocks & Commodities V. 23:6 (84-86): Traders’ Resource: Consultants

    Consultants consult on just about every conceivable worry traders have. A quick perusal of our listing in this issue shows that they have been called in to consult on\neverything from tax advice to weather reporting. Can all this help you? Maybe. The rules for checking out consultants are simple: check references, check\nreferences, and (did you guess?) check references. Nothing can be more vague than a consultant’s initial proposal, but nothing is clearer than a client’s opinion on the success of a consultant’s engagement. Consultants without satisfied clients are likely to be doubly expensive: wasted money and wasted time. When checking references, make sure you use some references not supplied by the company you are evaluating.

    That said and with that in mind, you must do your\nhomework before calling a consultant in to help you. Be\nsure you can say in one sentence what you want the\nconsultant to achieve. In addition, be sure you know of and can contact people who truly specialize in your area of concern, not simply someone who will take on any problem that someone dreams up. Again, references from others (and satisfied customers) are great leads.

    TRADERS’ RESOURCE AT TRADERS.COM

    In addition to the information given here, Traders’ Resource is also available at our website, Traders.com, and in much greater detail. At our website, you’ll not only find out more about the consulting services listed here, but you’ll also find information on products and services in numerous other categories as well, such as brokerages, publications, data services, software, and more. Just click on the Traders’ Resource link. Then follow the category link, or use the search feature to find products or services with specific attributes in this and other categories.

    As for the following table of information, here’s a list of\nconsulting services that may offer the guidance you seek for your trading. Services offered by the following consultants may include custom software and hardware programming; systems integration; coaching; and trading systems."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-84-86-traders-resource-consultants-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-84-86-traders-resource-consultants-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-84-86-traders-resource-consultants-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov239bofo1,d,"{""minimum-quantity"":""1"",""path"":""ch6j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:6 (96): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:6 (96): Books For Traders by Technical Analysis, Inc.

    Hot Commodities: How Anyone Can Invest Profitably\nIn The World’s Best Market (250 pages, $29.95\nhardcover, 2004, ISBN 1-4000-6337-X) by Jim Rogers, published by Random House. The next bull market is here, not in stocks or bonds, but in commodities.

    The commodities bull market began in 1998 and Rogers thinks it will last for at least 15 years. The fund he started in 1998 is up more than 165% and is one of the best-performing index funds in the world. Rogers’ strategies are simple and straightforward. He offers the lowdown on the most lucrative markets for today and tomorrow. Once you recognize the cyclical and historical trading patterns he outlines here, you’ll be on\nyour way."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-96-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-96-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-96-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov23988at,d,"{""minimum-quantity"":""1"",""path"":""ch6j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:6 (98, 88): At The Close by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:6 (98, 88): At The Close by Jayanthi Gopalakrishnan

    The Standard & Poor’s 500 index has not really been doing much of late to get excited about. If you look at the\ndaily chart of the index in Figure 1, you will see that it has been bouncing around between its upward sloping trendline (support) and its 50-day moving average (resistance). It has tested that support level three\ntimes, but I am waiting for it to break out above that resistance level before even thinking of going long.

    Or perhaps the index will break below the trendline that has been acting as a support level. And as it turned out, a few days later, it was the latter scenario that traders were confronted with, which actually surprised me (Figure 2). I was under the impression that with oil prices coming down slightly, the equity markets\nwould become more bullish. In fact, I was looking for crude oil prices to hit at least $52 a barrel before equity markets turned up. But it seems that the drop in oil prices didn’t have a positive effect after all."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-98-88-at-the-close-by-jayanthi-gopalakrishnan-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-98-88-at-the-close-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-6-98-88-at-the-close-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231leto6,d,"{""minimum-quantity"":""1"",""path"":""ch7j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:7 (10-15): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:7 (10-15): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist.

    S&C MARKET PROFILE ARTICLES

    Editor,

    I am conducting research on every article you have published on Market Profile. Can you please help me find all the links?

    ALEX BENJAMIN\nvia email

    By performing a search at our website, www.Traders.com, you should be able to find all the references to Market Profile we’ve published. You could also search for Donald Jones, since he has written articles on that subject. Good luck.—Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-10-15-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-10-15-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-10-15-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231taed,d,"{""minimum-quantity"":""1"",""path"":""ch7j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:7 (16-24): The Tape-Reading Edge by Thomas Carr, Ph.D."",""caption-linebreaks"":""Stocks & Commodities V. 23:7 (16-24): The Tape-Reading Edge by Thomas Carr, Ph.D.

    Tape-reading skills are a product of your intuition. Here’s how you can sharpen your intuitive power into a tremendous profit-making talent.

    First, it must be said that tape-reading is\na kind of luxury, at least these days. It\nis not necessary to tape-read to be a\nsuccessful trader; tape-reading gives you an extra edge — an edge that takes your trading to the next stage of excellence. Sound tapereading skills are essential for getting the best possible entry, holding onto winning trades beyond your profit target, and are sometimes responsible for keeping you out of bad trades altogether.

    WHAT IS TAPE-READING?

    Tape-reading gets its name from the old “ticker tape”\nmachine that used to feed stock quotes to brokers\nbefore the advent of computers and LED displays. A\nsmall, glass-enclosed printing press would spit out a\ncontinuous paper ribbon, on which would be typed\norder size and price quotes as trades were executed.\nFortunately, we no longer have to crowd around\nthe ticker waiting anxiously for the tape to give us a\nquote on the stock we are interested in. We simply\ntype the symbol into our computerized, electronic\ncharting system and we are given a trade-by-trade,\nstreaming “tape” of the action in real time."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-16-24-the-tape-reading-edge-by-thomas-carr-ph-d-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-16-24-the-tape-reading-edge-by-thomas-carr-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-16-24-the-tape-reading-edge-by-thomas-carr-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov232rian,d,"{""minimum-quantity"":""1"",""path"":""ch7j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:7 (26-32): Rising And Falling Overnight Sessions by Anthony Trongone, Ph.D."",""caption-linebreaks"":""Stocks & Commodities V. 23:7 (26-32): Rising And Falling Overnight Sessions by Anthony Trongone, Ph.D.

    Don’t overlook how the performance of an individual stock affects the direction of an index-tracking stock or commodity. Here’s an example using the NASDAQ 100.

    If history is any guide, knowing how and when individual companies perform within an index-tracking stock or commodity will help you identify profitable trading opportunities. Keeping track of the results could allow you to see a positive impact on your returns as the trading day comes to a close.

    To find out how this works, I focused on the 14 companies with the highest market capitalization in the Nasdaq 100 covering 770 trading days from January 2, 2002, to January 21, 2005. These companies (Figure 1) represent a cumulative weighting of 47.44% of the overall index. This extensive analysis will provide you with reliable trading strategies as well as the knowledge necessary to give you a statistical advantage when taking a position at either the open or close.

    The astute trader observes the effect of a difference in the rising or falling overnight trading session. Consider, for instance, what the cumulative results are when taking a long position at the start of the regular session after it experiences a rising or falling overnight session. After rising in the overnight session, there was a loss of -$190.74, but the company came away with $302.84 worth of earnings in the regular trading session.

    Since 11 stocks as well as the index-tracking stock were\nunable to produce similar performance results within each trading session (that is, stocks with a pattern of success overnight were unprofitable in the day session, but stocks with a pattern of failure in the overnight session are profitable during the day), several reliable trading strategies are possible.\nYou can easily profit from these opportunities by\nsimply trading one stock against another, one stock against an index-tracking stock or commodity, or by simply trading the index-tracking stock or the futures contract."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-26-32-rising-and-falling-overnight-sessions-by-anthony-trongone-ph-d-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-26-32-rising-and-falling-overnight-sessions-by-anthony-trongone-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-26-32-rising-and-falling-overnight-sessions-by-anthony-trongone-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233qusc,d,"{""minimum-quantity"":""1"",""path"":""ch7j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:7 (34): Quick Scans: TotalView by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:7 (34): Quick Scans: TotalView by Jayanthi Gopalakrishnan

    NASDAQ Level II quotes: Those words were ubiquitous during the dotcom era, giving the impression to active traders that it was a necessity on your quote screen in order to trade. And given the volatility in some of those stocks, I would have had to agree. But as liquidity in some of the technology stocks dwindled once the bubble burst, so did the glamour of the Level II quote. Still, even now, many active traders feel strongly about having a quote screen that provides more depth. It gives them that intuitive edge, and if you have ever watched a Level II screen, I’m sure you feel the same way. The product is also in line with the interest of financial regulators who want a market that is efficient\nand transparent — that is, one in which orders are not concealed."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-34-quick-scans-totalview-by-jayanthi-gopalakrishnan-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-34-quick-scans-totalview-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-34-quick-scans-totalview-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233wefo1,d,"{""minimum-quantity"":""1"",""path"":""ch7j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:7 (36): Websites For Traders: SeekingAlpha.com by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:7 (36): Websites For Traders: SeekingAlpha.com by David Penn

    SEEKINGALPHA.COM

    One reason you don’t tend to read too many restaurant reviews written while the reviewer is still sampling the cuisine is obvious: How can the reviewer provide a complete evaluation of the meal if he or she hasn’t eaten the whole thing—appetizer to dessert? Something similar strikes me as I set out to introduce a fascinating new website called Seeking Alpha—or, more accurately, seekingalpha.com. While I haven’t even come close to perusing all that this website has to offer in the way of news, information, and opinion on the financial markets, the few “bites” I’ve had so far have proven rewarding enough that I’m already eager to give\n“two spoons up” to seekingalpha.com and its creator and author, David Jackson."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-36-websites-for-traders-seekingalpha-com-by-david-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-36-websites-for-traders-seekingalpha-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-36-websites-for-traders-seekingalpha-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234loba,d,"{""minimum-quantity"":""1"",""path"":""ch7j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:7 (40-44): Look Back Before You Leap by Richard Bergner"",""caption-linebreaks"":""Look to the past to predict the future: It’s a new way to predict commodity price action as you study a chart.

    How can you find good trading opportunities? Imagine, if you will, all the ways you’ve read or heard about how to do so. But if you’re aware of those opportunities, you can be sure that others are as well, thus lessening your chances of profiting from them. If you want a different way to identify good trading opportunities, why not examine a market’s behavior in reverse? That’s right — look to the past to mark trends that have a good chance of materializing, as you step toward the future.

    REVERSE TRENDLINES

    One method I like uses reverse trendlines to home in on potential trading zones. But what are reverse trendlines? Everyone knows that by simply extending trendlines from the past, you can estimate the future and be better prepared to trade. But instead of using normal trendlines that connect support points in an ascending move and supply points during a descent, reverse trendlines are drawn along the highs when\nprices are rising and drawn along the lows when prices are falling. These lines represent momentum, which is reflected by the points of contention where supply and demand come together, and where either supply or demand overcomes the other, thus turning prices in the opposite direction."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-40-44-look-back-before-you-leap-by-richard-bergner-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-40-44-look-back-before-you-leap-by-richard-bergner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-40-44-look-back-before-you-leap-by-richard-bergner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234qaby1,d,"{""minimum-quantity"":""1"",""path"":""ch7j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:7 (46): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 23:7 (46): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    PROGRAM TRADING

    Q: I just started daytrading NYSE stocks. I would like to know more about program trading and how it can have an effect on my trading the Dow 30 or Standard & Poor’s 500. Is there any way I can know or track which stocks are being hit by program trading at a given moment? If you know any websites or books where\nI can learn more about taking advantage of program trading, please let me know.—Jim

    A: I go to www.programtrading.com every day to see their fair value calculations and buy and sell programs. I have mentioned them before in STOCKS & COMMODITIES, and still think they are a good resource."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-46-q-a-by-don-bright-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-46-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-46-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234prre,d,"{""minimum-quantity"":""1"",""path"":""ch7j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:7 (47-51): Product Review: Track ’n Trade Pro 4.0 by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:7 (47-51): Product Review: Track ’n Trade Pro 4.0 by David Penn

    One of my biggest pet peeves about the world of technical analysis software is the tendency some have to compare every new product to one of the top-selling two or three programs on the market (I won’t mention\nnames). Clearly, there is a reason why these two or three programs are top sellers —and regular winners of Technical Analysis of the STOCKS & COMMODITIES\nReaders’ Choice Awards. But to judge and evaluate every other software program out there on the basis of\nhow much it resembles one of the top sellers does a disservice both to the software program being evaluated and the traders who may consider using that particular, lesser-known program.

    I think of this as I return to Track ’n Trade Pro—a software program I first reviewed in September 2002 that can boast of a few S&C Readers’ Choice Awards of its own. At the time, I was relatively new to technical analysis, and even greener when it came to the analysis of the futures markets. So I was especially receptive to a product like Track ’n Trade Pro (TNT Pro) that seemed geared toward teaching about the world of futures trading—a world that is still alien to a great many fundamental and technical traders."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-47-51-product-review-track-n-trade-pro-4-0-by-david-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-47-51-product-review-track-n-trade-pro-4-0-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-47-51-product-review-track-n-trade-pro-4-0-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov235foan,d,"{""minimum-quantity"":""1"",""path"":""ch7j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:7 (52-56): Forex, Anyone? by Rudy Teseo"",""caption-linebreaks"":""Stocks & Commodities V. 23:7 (52-56): Forex, Anyone? by Rudy Teseo

    It may be easier than you think.

    When I first read about foreign currency trading and foreign exchange (FX or forex for short), my first reaction was, “That’s not for me.” Perhaps that’s been your attitude. However, when I decided to install a program and do some paper-trading before committing any hard-earned dollars, I was amazed at how easily I slipped into the routine. That’s because there’s very little difference between what I’m doing now and what I’ve been doing for years.

    NUTS AND BOLTS

    FX is the largest financial market, trading $2.5–3 trillion per day. It is open 24 hours per day, except for a break from 4 pm ET Friday to 2 pm ET Sunday. With more than two dozen currency pairs to choose from, there is always action to suit your style. Executions are instantaneous, the pairs are very liquid, and the leverage in the two types of accounts is the highest found anywhere. For option traders, there are some\nunique contracts available in FX with large gains possible. FX also provides one of the best trending markets, and trends lead to profitable trades. A final difference: you can short a currency pair without an uptick.

    Foreign exchange is an exchange where one country’s\ncurrency is exchanged for another’s through a “floating”\nexchange rate system. There is no central exchange, like the New York Stock Exchange (NYSE). What you have is a network of banks running the exchange electronically."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-52-56-forex-anyone-by-rudy-teseo-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-52-56-forex-anyone-by-rudy-teseo-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-52-56-forex-anyone-by-rudy-teseo-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov235siea,d,"{""minimum-quantity"":""1"",""path"":""ch7j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:7 (58-63): Sidebar: EasyLanguage Code for ProSuite 2001 by Massimiliano Scorpio"",""caption-linebreaks"":""Stocks & Commodities V. 23:7 (58-63): Sidebar: EasyLanguage Code for ProSuite 2001 by Massimiliano Scorpio

    FUNCTION msPattPos (Numeric Output)

    Input:Element(NumericSimple);

    value1=High[1];

    value2=Low[1];

    value3=(value1+value2)/2;

    value4=value1+AvgTrueRange(10)[1];

    value5=value2-AvgTrueRange(10)[1];

    If Element
    Two-bar patterns: How to select, reorganize, and trade them.

    Previously, my articles were focused on finding your favorite configurations using EasyLanguage (EL). I started using a very simple methodology (the reversal pattern) and then continued observing the relationship\nbetween the open and the close, respective to the previous bar (hot zones).

    In this article I use a more sophisticated approach to\nshow a “complete” way to select, recognize, and come\nup with statistics on specific two-bar patterns. You will\nsee how every bar, on any time frame, can be “scanned” using the EL code and provide some useful information to make your decisions more objective. The basic code is completely disclosed, so you have the flexibility to personalize and implement it, especially with regard to the statistical inputs.

    CODE SETUP

    In my quest to easily understand market behavior, I found that I needed an extremely objective approach to make sure that everyone could come up with the same conclusions I did.

    Starting from the same point that I did in the hot zones article, I created a specific algorithm to compare each\nof the single elements of a market bar (open/high/\nlow/close) with the previous bar range and place it\nin a well-defined zone."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-58-63-targeting-your-pattern-by-massimiliano-scorpio-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-58-63-targeting-your-pattern-by-massimiliano-scorpio-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-58-63-targeting-your-pattern-by-massimiliano-scorpio-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov236prre3,d,"{""minimum-quantity"":""1"",""path"":""ch7j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:7 (66-67): Product Review: STOPS by Dennis D. Peterson"",""caption-linebreaks"":""Stocks & Commodities V. 23:7 (66-67): Product Review: STOPS by Dennis D. Peterson

    Performing money management, seeing your performance before you actually place a trade, and papertrading are features you will find in STOPS, a product by Numasoft, Inc. Money management is about keeping track of your trades against a background of risk and reward, and as a plus, STOPS provides an evaluation of your trading performance.

    To get STOPS going, you will have to prime the pump a bit. If you haven’t thought much about money management, this product will likely get you going. However, it is not a tutorial per se about money management. The developer of the product, Dennis Blaisdell, is ready to provide any assistance you need, and with any luck, with a few questions answered you will be off and running. For its current price of $95\n(through 2005) and a lifetime of free updates, this is a good deal.

    OVERVIEW

    STOPS will give you alerts when certain risk or exit conditions have been met. For the software to do this, you must provide some setup data: (1) your open positions, and (2) your initial account cash position. Once you have completed the setup, the software will generate the alerts when you give it the most recent daily data. You do this by extracting the data (four formats are supported). To extract, simply enter the symbol to the securities window using “Add” from the main menu. before you actually place a trade, and papertrading are features you will"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-66-67-product-review-stops-by-dennis-d-peterson-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-66-67-product-review-stops-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-66-67-product-review-stops-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov236inbr,d,"{""minimum-quantity"":""1"",""path"":""ch7j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:7 (68-75): Interview: Brett Steenbarger by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:7 (68-75): Interview: Brett Steenbarger by Jayanthi Gopalakrishnan

    No matter how you look at it, Brett N. Steenbarger keeps busy; he is director of trader development of Kingstree Trading and clinical associate professor of psychiatry and behavioral sciences at SUNY Upstate Medical University in Syracuse, NY. Not only that, he is the author of The Psychology Of Trading and numerous articles in trading publications, many of which are archived on his website at www.brettsteenbarger.com. Steenbarger’s writings on brief therapy have been featured in standard reference works in psychology,\nincluding \""The Encyclopedia Of Psychotherapy\"" and \""The Psychologists’ Desk Reference\""; his most recent book, \""The Art And Science Of Brief Psychotherapies,\"" has been adopted as a core training text in psychiatric residency programs. In addition to applying short-term\nchange techniques to trading, Steenbarger coordinates a training program for new traders modeled after the medical education system.

    STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Brett Steenbarger via telephone on May 5, 2005.

    Q: How did you first become interested in trading?

    A: My background is as a clinical psychologist, and for 19 years I taught at Upstate Medical University in Syracuse and directed a student counseling program. In that program, I was working with medical students and their counseling needs. During that time I became acquainted with — and proficient at — short-term [brief] therapy, working with people in quick ways to help them make changes in their lives. I taught that to people who were learning to be therapists, and to our own students in the student counseling, and it became a major focus of my academic work.

    At the same time, I was interested in trading and had followed the markets since the late 1970s. My very first experience with the markets was as a graduate\nstudent at the University of Kansas in Lawrence, when I attended a seminar offered by someone named Joseph Granville. I was intrigued by the markets, and followed them, and traded them on and off — obviously in a part-time mode, since I was a graduate student and worked full time as a psychologist."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-68-75-interview-brett-steenbarger-by-jayanthi-gopalakrishnan-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-68-75-interview-brett-steenbarger-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-68-75-interview-brett-steenbarger-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov237exyo1,d,"{""minimum-quantity"":""1"",""path"":""ch7j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:7 (79): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 23:7 (79): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    LEAPS QUESTION

    Q: I know that there is a point in time when LEAPS turn into short-term options and change their names. Can there be any problems with renaming for me if I still\nhold such an option?

    A: Long-term Equity Anticipation Securities (LEAPS) have different symbols than do short-term options. However, as time passes and the options become short-term options, the symbol will change. The symbol change, however, will not affect the value of the options contract. It is merely a cosmetic change and your brokerage firm will make the necessary adjustments. There is nothing to worry about."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-79-explore-your-options-by-tom-gentile-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-79-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-79-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov238trti2,d,"{""minimum-quantity"":""1"",""path"":""ch7j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:7 (80-85): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:7 (80-85): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue. Massimiliano Scorpio’s article, “Targeting Your Pattern,” describes price bar patterns. Every price bar can be identified by its pattern. It can then be determined both how frequently a pattern occurs on a chart and how frequently the subsequent day closes higher than it did on the day on which the pattern occurred. Code is supplied for this strategy in following platforms:

    TradeStation, MetaStock, Wealth-Lab, AmiBroker, eSignal, Investor/RT, NeuroShell Trader, Trading Solutions, AIQ, Neoticker, SmarTrader, and TechniFilter Plus."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-80-85-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-80-85-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-80-85-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov239atcl1,d,"{""minimum-quantity"":""1"",""path"":""ch7j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:7 (97): At The Close by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:7 (97): At The Close by Jayanthi Gopalakrishnan

    It doesn’t hurt to remember that the simplest of indicators can provide a great deal of information. I’m looking at the daily chart of the Standard & Poor’s 500 index when I say this because I can’t think of a better example of the behavior of the 50-day simple moving\naverage (SMA). Note from the chart in Figure 1 how it acts as a resistance level. The average is sloping down, and on May 9, 2005 and the following day,\nprices hit that level and moved down. I have actually used this indicator for my long-term investments. When the value of the S&P 500 fell below the 50-day SMA,\nI moved all my long-term investments into stable value funds. Although my returns weren’t stellar, at least I can boast by saying that they didn’t lose any money."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-97-at-the-close-by-jayanthi-gopalakrishnan-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-97-at-the-close-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-97-at-the-close-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov239bofo2,d,"{""minimum-quantity"":""1"",""path"":""ch7j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:7 (97): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:7 (97): Books For Traders by Technical Analysis, Inc.

    The Automatic Millionaire Workbook (200 pages, $14.95 softcover, 2005, ISBN 0-7679-1948-3) by David Bach, published by Broadway Books. This workbook features the five questions that determine, with 90% certainty, if you will be an Automatic Millionaire, and charts and checklists for paying down debt while you save. There is one crucial step that guarantees your\nfinancial plan will succeed, as well as details on where to invest, what phone calls to make, and exactly what to say when automating your financial future."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-97-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-97-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-7-97-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231leto7,d,"{""minimum-quantity"":""1"",""path"":""ch8a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:8 (10-13): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:8 (10-13): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist.

    SWING TRADING

    Editor,

    After trying VectorVest, TC2000, MetaStock, and other programs, I can’t seem to win in swing trading options. I hear AIQ is good, but what is the best software for swing trading? Or am I kidding myself with software? Should I be using a top-of-the-line advisory?

    KEN DAVIS\nvia email

    The first thing you need to do is spend some time coming up with a strategy that works for you. We have published several articles in the past on swing trading. You may even find code for a swing-trading strategy in our Traders’ Tips section at our website, www.Traders.com. After you find a strategy, then you\ncan think about finding software to implement it, since you’ll know better at that point what features you need. If you have already done that without success, then you may want to think about finding a trading mentor who has succeeded in swing trading.—Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-10-13-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-10-13-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-10-13-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231peop,d,"{""minimum-quantity"":""1"",""path"":""ch8a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:8 (14-20): Persistent Option Volatility by Roger Ison, Ph.D."",""caption-linebreaks"":""Stocks & Commodities V. 23:8 (14-20): Persistent Option Volatility by Roger Ison, Ph.D.

    Do you really understand what your options model is\ndoing? Let’s find out.

    If you trade options, you know that mathematical\noption models are essential tools and, generally, very good. Market makers rely on option models explicitly;\nfor example, at least one well-known broker provides tight, mechanically derived, online bid and ask prices for any option, and usually executes trades at their model prices instantly, without human intervention. Brokers’ models can be quite sophisticated, taking into account factors other than the theoretical price, such as the market maker’s current “book,” quotes on other markets, anticipated dividends, recent volatility, and the cost of hedging the market maker’s position with other\noptions or futures.

    ANALYZING YOUR MODEL

    It’s a bad idea to trade against that sort of computational firepower without a decent evaluation of the current option prices. It’s also a bad idea to trade\nwithout having a clear sense of how your strategy might unfold over time. Excellent modeling software is available to traders, and some usable tools are\naccessible by web browser, but there are some mistakes traders may make when interpreting these\nmodels. In this article, we’ll explore the issue of\npersistent volatility."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-14-20-persistent-option-volatility-by-roger-ison-ph-d-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-14-20-persistent-option-volatility-by-roger-ison-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-14-20-persistent-option-volatility-by-roger-ison-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov232qaby,d,"{""minimum-quantity"":""1"",""path"":""ch8a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:8 (21): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 23:8 (21): Q&A by Don Bright

    SINCE YOU ASKED\nConfused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://\nMessage-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    MINIMIZING RISK IN PAIRS TRADING

    When selecting a portfolio of pairs to minimize market risk, what tools do you use to minimize or diversify away the specific risk? Do you use any aspects from the capital asset pricing model (CAPM) or arbitrage pricing theory (APT)? —Alex

    Excellent question. Since correlated pairs trading has been much more lucrative to those who do their homework, we have done our best to cover most of\nthe bases when determining which specific pairs (of stocks) to trade. The CAPM comes into play, almost inadvertently, since we use systematic risk (beta) and\nspecific risk (valuations such as price-to-book) in our analysis. The alternative pricing method of arbitrage pricing theory comes into play more along the lines of our historical data and spread ranges. As in most working strategies, we cannot limit ourselves to a few criteria."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-21-q-a-by-don-bright-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-21-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-21-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov23228co,d,"{""minimum-quantity"":""1"",""path"":""ch8a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:8 (22-23, 28-31): Commitment Of Traders Report: Demystified by Jason Braswell"",""caption-linebreaks"":""Stocks & Commodities V. 23:8 (22-23, 28-31): Commitment Of Traders Report: Demystified by Jason Braswell

    Debunking the myths about the COT, its traders, and their markets can help you build indicators for your own\ntrades.

    Most traders know that the Commitment of Traders (COT) essentially is a report of the open interest held by the major categories of traders. Despite this basic knowledge, there seem to be some pervasive misconceptions about the report when it comes to understanding the relationship between the market and these categories of traders. I’m going to first give a\nquick background on the report for those who aren’t yet familiar with it, and then, using the natural gas market\nas an example, I’m going to show how some common assumptions about the report don’t hold, at least not for all markets. Finally, I’m going to show some ways you can understand the role of each of the major players in a specific market, using this knowledge to build some useful indicators.

    THE BASICS

    The COT is published by the Commodity Futures Trading Commission (CFTC), and it reports the open interest, the number of existing longs or shorts, held by all the traders for a given contract. The COT then breaks those traders down into four categories:

    1. Commercials, sometimes called “hedgers”

    2. Noncommercials, known also as “speculators” or “funds”

    3. Nonreportables, also known as “smalls” or “small\nspeculators” and

    4. Spreaders."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-22-23-28-31-commitment-of-traders-report-demystified-by-jason-braswell-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-22-23-28-31-commitment-of-traders-report-demystified-by-jason-braswell-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-22-23-28-31-commitment-of-traders-report-demystified-by-jason-braswell-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov232caco,d,"{""minimum-quantity"":""1"",""path"":""ch8a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:8 (24-27): The Cash Cow by Carley Garner with Paul Brittain"",""caption-linebreaks"":""Stocks & Commodities V. 23:8 (24-27): The Cash Cow by Carley Garner with Paul Brittain

    Here’s a look at a side of short option trading that you\ncannot ignore.

    On the surface, selling options for the sole purpose\nof premium collection appears irrational. After all, the strategy involves unlimited risk and limited reward. However, a closer look into the reality of the options market reveals a side of short option trading that even cynics cannot ignore.

    EVER THOUGHT OF TRADING NAKED?

    Industry veteran Paul Brittain of the Commodity Trading\nSchool and Alaron Trading is convinced that short option trading is an effective futures trading strategy despite the negative hype surrounding it. Consequently, he is committed to educating traders about the realities of “trading naked,” and is eager to share some of his secrets.

    Option writing is the act of selling an option in order to\ncollect a premium in exchange for assuming the risk of the market dropping below the strike price in case of a put, or climbing above the strike in case of a call. This is also referred to as “naked” option trading because the strategy involves theoretic unlimited losses.\nThe logic behind option selling is similar to that used by insurance companies. Insurers collect premiums on policies with the expectation of future payouts. By knowing the probability of a claim, they can calculate their expected return for assuming the risk of the policyholder. They are confident that they will profit over time, despite their obligation to pay claims. Casinos successfully operate on a similar premise. They bring in gaming revenue knowing that there are jackpots to be paid, but they also know that the odds are ultimately in favor of the house."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-24-27-the-cash-cow-by-carley-garner-with-paul-brittain-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-24-27-the-cash-cow-by-carley-garner-with-paul-brittain-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-24-27-the-cash-cow-by-carley-garner-with-paul-brittain-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233vosh,d,"{""minimum-quantity"":""1"",""path"":""ch8a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:8 (36-39): Volume Shapes And Chart Patterns by Thomas N. Bulkowski"",""caption-linebreaks"":""Stocks & Commodities V. 23:8 (36-39): Volume Shapes And Chart Patterns by Thomas N. Bulkowski

    Do volume shapes predict postbreakout performance from chart patterns?

    In the second edition of my Encyclopedia Of\nChart Patterns, I introduced a concept that I call volume shapes. I reviewed 38,500 chart patterns and catalogued each according to one of five volume shapes: flat, receding, rising, U, and dome, and then\nmeasured performance after the breakout. Here, I will examine the various volume shapes and some of the chart patterns, and discuss performance.

    VOLUME SHAPES

    Flatliners: Figure 1 shows an example of a symmetrical triangle with a flat volume trend. A symmetrical triangle\nis a chart pattern that sports price action bounded by two converging trendlines. One trendline slopes downward and the other upward. Look for price to\ntouch each trendline at least twice (two individual peaks and two valleys), with prices crossing the pattern plenty of times. You should not see an abundance of white space between the trendlines — that’s key. A breakout occurs when price closes outside of the trendline boundary.

    Flat volume is just what it sounds like. Look for a horizontal volume trend but allow the mountain range to\nappear irregular. You’ll see some peaks and valleys, but the overall trend will appear flat."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-36-39-volume-shapes-and-chart-patterns-by-thomas-n-bulkowski-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-36-39-volume-shapes-and-chart-patterns-by-thomas-n-bulkowski-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-36-39-volume-shapes-and-chart-patterns-by-thomas-n-bulkowski-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234exyo2,d,"{""minimum-quantity"":""1"",""path"":""ch8a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:8 (43): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 23:8 (43): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    S&P 500 INDEX OPTIONS SETTLEMENT

    Are Standard & Poor’s 500 ($SPX) options settled American-style or European- style? Can they be assigned or exercised before expiration?

    S&P 500 options settle Europeanstyle, which means that they can only be exercised at expiration. In fact, most index options settle European-style.

    There are a few exceptions, however. For example, options on the S&P 100 ($OEX) settle American-style, and exercise or assignment can take place at any time prior to expiration.

    Exchange-traded funds (ETFs) also settle American-style, as do stock options, which can be exercised at any time before expiration. So traders who want to trade the S&P 500, but with options with American-style settlement, will trade options on the S&P 500 SPDRS (SPY) or “spiders,” because the SPY is an exchange-traded fund. However, to avoid the risk of early assignment with strategies like credit spreads, it’s sometimes better to use an index that settles European-style."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-43-explore-your-options-by-tom-gentile-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-43-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-43-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234fofo,d,"{""minimum-quantity"":""1"",""path"":""ch8a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:8 (46-47): Forex Focus by Kathy Lien"",""caption-linebreaks"":""Stocks & Commodities V. 23:8 (46-47): Forex Focus by Kathy Lien

    Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. With that in mind, STOCKS & COMMODITIES is introducing Forex Focus to better prepare the retail trader to participate in the currency market.

    WHAT MOVES THE US DOLLAR?

    Many factors are responsible, but some are more\nimportant than others. Most speculative currency traders are technicians — that is, traders who rely solely on charting methods. However, this does not mean that fundamentals are insignificant and have\nno bearing on trading decisions. In fact, more and more\ntechnicians are inquiring about the expectations of the market leading up to major economic releases.

    NUMBERS TO KEEP AN EYE ON

    It is estimated that approximately 25% of all traders base their strategies off fundamentals, using releases such as Gross Domestic Product (GDP), employment, and Consumer Price Index (CPI) as the basis for their trading decisions. Because of this substantial influence in the market, knowing how, why, and which releases provoke the biggest response beforehand can be a profitable way to formulate trades."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-46-47-forex-focus-by-kathy-lien-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-46-47-forex-focus-by-kathy-lien-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-46-47-forex-focus-by-kathy-lien-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234tuit,d,"{""minimum-quantity"":""1"",""path"":""ch8a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:8 (48-51): Turbocharge It! by Marge Sherald"",""caption-linebreaks"":""Stocks & Commodities V. 23:8 (48-51): Turbocharge It! by Marge Sherald

    Tired of spending too much time in front of your computer? Here’s how you can cut that time and fine-tune your indicators and trading rules.

    As a trader, you know the process of developing and\ntesting trading systems never ends if you want to keep up with changing markets. You spend countless hours in front of your computer fine-tuning indicators and trading rules to fit your trading style and increase your profits. In this article, you’ll learn how to let a genetic algorithm do a lot of your work, save time, and turbocharge your returns.

    THE RELATIVE VIGOR INDEX

    Recently, I read Cybernetic Analysis For Stocks And Futures by John Ehlers. Ehlers has built a reputation as the foremost expert in the industry at applying signal processing techniques to trading. One of the indicators in his book, the relative vigor index, caught my attention, and I decided to use that as a starting point for my trading strategy.

    The relative vigor index (RVI) is an oscillator that measures the strength of up or down markets by computing the difference between the close and opening prices relative to the total movement for the day. To normalize the index to the daily trading range, the change in price is divided by the maximum range of prices for the day. The basic formula for the RVI is as follows:

    RVI = (Close – Open) / (High – Low)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-48-51-turbocharge-it-by-marge-sherald-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-48-51-turbocharge-it-by-marge-sherald-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-48-51-turbocharge-it-by-marge-sherald-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov235inwh,d,"{""minimum-quantity"":""1"",""path"":""ch8a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:8 (52-56): Int: Which Option Strategy Should You Use? Guy Cohen Tells You by J. Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:8 (52-56): Int: Which Option Strategy Should You Use? Guy Cohen Tells You by J. Gopalakrishnan

    Guy Cohen, creator of the OptionEasy software and author of the books \""Options Made Easy\"" and \""The Bible Of Options Strategies,\"" has had extensive experience in trading and analyzing both the US and UK\nderivatives and stock markets. Specializing in trading and analytics applications ranging from real estate to derivatives, Cohen has developed some of the most comprehensive business, trading, and training models, all specifically designed for maximum user-friendliness.

    Cohen has a master’s in business administration with a concentration on finance from City University Business School and also teaches individuals, specializing in trading psychology, technical analysis, and options strategies.

    STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Guy Cohen in early June 2005, using a combination of online audio chat, instant messaging, and email.

    Q: How did you get into trading options?

    A: I got into options while I was studying for my MBA,\nwhere I took options specialist classes. Prior to that, I’d been in commercial real estate. My rationale for doing my MBA was to increase my financial capabilities. I’d already completed various finance exams in order to become an analyst, but I felt that an MBA, particularly\none that was finance-oriented, would be a great feather in my cap.

    After I completed my options exams successfully and got a grasp of the academics, I launched into trading options for real. That’s when I discovered the difference between understanding how an option works, and the more practical test of how to actually trade options.

    Q: Big difference there!

    A: So true! At the time, the options software around wasn’t too helpful, so the only way for me to make progress was to build my own application. So that’s\nwhat I did. I needed an application that was highly visual, where I could see my risk profile and any other important factors to do with my strategy or trade. Initially, I began in Microsoft Excel, and from this original spreadsheet I started to add new strategies and modules."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-52-56-int-which-option-strategy-should-you-use-guy-cohen-tells-you-by-j-gopalakrishnan-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-52-56-int-which-option-strategy-should-you-use-guy-cohen-tells-you-by-j-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-52-56-int-which-option-strategy-should-you-use-guy-cohen-tells-you-by-j-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov235prre1,d,"{""minimum-quantity"":""1"",""path"":""ch8a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:8 (58-61): Product Review: Strategy Center by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:8 (58-61): Product Review: Strategy Center by Jayanthi Gopalakrishnan

    Active traders will value having the ability to backtest their strategies and identify stocks, indexes, or futures that meet the specific criteria of their strategies. CyberTrader has added Strategy Center, a new suite of technical analysis tools, to their existing trading platform that integrates trading strategies into their trading.

    FEATURES

    The starting point of Strategy Center is a window populated by a list of preloaded strategies (Figure 1). All you really have to do to select one of these strategies is highlight it and click on the Add button, and your strategy gets listed on the right-hand side as a selected strategy. Whenever you select a strategy, a brief description of the specific strategy is displayed at the bottom of the window. If a strategy you wish to use is not listed in the preloaded list, you do have the option of creating one. This involves adding one of the available indicators and specifying a trade action. Similarly, you can add a money management action, such as, for example, placing a stop-loss at 3%."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-58-61-product-review-strategy-center-by-jayanthi-gopalakrishnan-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-58-61-product-review-strategy-center-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-58-61-product-review-strategy-center-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov23683ch,d,"{""minimum-quantity"":""1"",""path"":""ch8a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:8 (62, 83): Charting The Market: Piercing Patterns by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:8 (62, 83): Charting The Market: Piercing Patterns by David Penn

    Writing about dual candle lines in his book \""Beyond\nCandlesticks,\"" Steve Nison recalls a particularly\nvivid (and metaphoric) description of a “piercing\npattern” in Japanese candlestick analysis:

    \""… [T]he last of the bulls that were backed into\na corner and came out fighting in a heroic\nfight. Kamikaze fights are always frightening,\nso the bears seeing this take to the sidelines\nfor the moment. In this quiet period, the\nbulls may get reinforcements, or after all the\nselling that has occurred, the supply road for\nthe bears may be already broken.\""

    Great action. But something in this eludes me when I think about piercing patterns. In looking at what happens in a piercing pattern, what I see is almost wholly a reaction to overreaching. I don’t see a “quiet period,” in which reinforcements gather like the colonists crossing the Delaware River on the night before Christmas to surprise the British troops during the American Revolution. No, piercing patterns remind me more of World War II’s Battle of Stalingrad."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-62-83-charting-the-market-piercing-patterns-by-david-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-62-83-charting-the-market-piercing-patterns-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-62-83-charting-the-market-piercing-patterns-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov236wefo1,d,"{""minimum-quantity"":""1"",""path"":""ch8a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:8 (63-64): Websites For Traders: www.TimerTrac.com by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:8 (63-64): Websites For Traders: www.TimerTrac.com by David Penn

    WWW.TIMERTRAC.COM

    Investment newsletter writers have Mark Hulbert and his digest; the followers of market folklore, arcana, and shibboleths have Yale Hirsch and his almanac, and now, the world of market timers has TimerTrac.com.

    What is Timer Trac? Quite simply, Timer Trac provides an amazing cross-section of data on some of the country’s most savvy and often under-the-radar market timers, traders, and money managers whose job it is to be in the market when it’s moving up and out of the\nmarket—or short—when the market is moving down.

    And whether you’re looking for the skinny on some big-talkin’ market timer or just want to show off your own talents in that regard, Timer Trac may be for you.

    Timer Trac verifies claims about performance by market timers, and displays this information in text, tabular, and graphic form. This is perhaps what\nmakes Timer Trac so special: not only does the service provide invaluable performance information on a number of talented though often obscure market\ntimers, but it also provides the information in such a way that would-be subscribers can make comparisons between trading styles or strategies between market timers as well as within a market timing organization."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-63-64-websites-for-traders-www-timertrac-com-by-david-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-63-64-websites-for-traders-www-timertrac-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-63-64-websites-for-traders-www-timertrac-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov236prre4,d,"{""minimum-quantity"":""1"",""path"":""ch8a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:8 (65-68): Product Review: Market System Analyzer by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:8 (65-68): Product Review: Market System Analyzer by David Penn

    Writing about money management in his book \""Come Into My Trading Room,\"" trader, author, and trading educator Alexander Elder suggests that:

    Successful trading is based on 3 M’s: Mind, Method, and Money. Mind is trading psychology. Method is market analysis, and Money refers to risk management.\nThis last M is your ultimate key to success. The slope of your equity curve, which you must draw as part of your money management process, reflects the state of your mind as well as the quality of your method.

    Even for those who know that money management means more than just utilizing stop-losses, it is no secret that money management is the least attractive\npart of the trader’s game. Analysis may get tedious and trading itself might be frustrating, but the upside from successfully conducting both is obvious and readily apparent: your analysis tells you a stock will go up and it does, your method tells you to take a position and you exit with a profit. Nothing to complain about there."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-65-68-product-review-market-system-analyzer-by-david-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-65-68-product-review-market-system-analyzer-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-65-68-product-review-market-system-analyzer-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov237hoho,d,"{""minimum-quantity"":""1"",""path"":""ch8a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:8 (70-73): Home, Home On The Range by Andrew Tomlinson"",""caption-linebreaks"":""Stocks & Commodities V. 23:8 (70-73): Home, Home On The Range by Andrew Tomlinson

    Price ranges are used in signaling both reversals and breakouts. Looking at how stochastics perform in breakouts sheds light on several key characteristics of the indicator.

    One of the trading systems I use is based on changes in momentum. There’s nothing particularly high-tech or unique about it, but it means that I’ve been looking at a\nlot of breakouts. And one of the interesting things about breakouts is that they often affect indicators in unexpected ways. They act as a kind of stress test, pushing market metrics to extremes, and as a result,\nthey make me look a little closer. In my last STOCKS & COMMODITIES article, I looked at how volume indicators behaved under stress. On this occasion, it’s the behavior of the stochastics indicator that caught\nmy eye, particularly when compared to a Donchian price channel.

    WHAT I FOUND

    Figure 1 shows the price action of McKesson Corp. (MCK) in the autumn of 2004. The upper window shows the price bars along with 14-day price bands of the highest high and lowest low. The chart shows a series of downward price breakouts, most notably on July 1 and September 8. The lower window shows a 14-bar stochastic.

    The first thing I noticed is that there are no breakouts in the stochastic — that is, nothing that showed a breakout had taken place. Yes, there was a move to the lower part of the indicator range, but nothing that distinguished a steady move down to the bottom of a narrow channel (for example, June 17–28, a 7%,\nseven-day decline), from an abrupt breakout (September 8, a 16%, one-day drop). The size of the stochastic move was particularly small if the drop was from the bottom of the prior range rather than the top."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-70-73-home-home-on-the-range-by-andrew-tomlinson-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-70-73-home-home-on-the-range-by-andrew-tomlinson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-70-73-home-home-on-the-range-by-andrew-tomlinson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov237inre,d,"{""minimum-quantity"":""1"",""path"":""ch8a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:8 (74-75): Intermarket Review by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:8 (74-75): Intermarket Review by David Penn

    THE BRAZIL FUND (BZF)

    The Brazil Fund, a closed-end fund traded on the New York Stock Exchange (NYSE), has been in existence since April 1988. The fund includes holdings in such Brazilian companies as WEG Industries, (industrial goods and services), Banco Itau Holding Financeira (banks), and Petroleo Brasileiro (oil, gas, petrochemicals).

    After a strong 2003, during which BZF traded above its 10-week moving average for the later three quarters of the year, the fund slipped into a correction that took about 30% off its late 2003 price. That correction lasted six months into the late spring of 2004, when BZF reversed and began moving aggressively higher. Moving above its 20-and 50-week moving averages in the summer of 2004, BZF nearly doubled in value from those late spring/early summer lows as 2004 drew to an end.

    What they say: “One problem is that the obvious source of new investment is old investors—and they have\ntheir doubts. Duke Energy, an American company, has\ninvested 1.5 billion reals ($545m) in Brazil since buying\nCESP Paranapanema, a generator on the edge of Sao Paulo state, in 1999. It has been hurt by currency devaluation, by a plunge in demand when rationing was imposed and by quirky regulatory decisions. ‘We have no plans to invest new capital in Brazil,’ said the company’s ‘southern cone’ chief, Mickey Peters, in August. Duke is keeping quiet before the auction.” —From “No Switch-off, Please: Will A Giant Energy Auction In Brazil Lift Investors’ Spirits?” Economist, December 2, 2004."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-74-75-intermarket-review-by-david-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-74-75-intermarket-review-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-74-75-intermarket-review-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov237trti3,d,"{""minimum-quantity"":""1"",""path"":""ch8a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:8 (76-82): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:8 (76-82): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    Andrew Tomlinson’s article in this issue, “Stochastics And Price Range Dynamics: Home, Home On The Range,” reviews two techniques for evaluating price ranges: price bands and stochastics. In addition, he compares the use of current-day and previous-day price ranges for both price bands and stochastics.\nThe code for performing these studies is provided for TradeStation, MetaStock, Wealth-Lab, NeuroShell Trader, AmiBroker, eSignal, Investor/RT, TechniFilter Plus, NeoTicker, Trade Navigator, and BullCharts."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-76-82-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-76-82-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-76-82-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov238trre3,d,"{""minimum-quantity"":""1"",""path"":""ch8a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:8 (84-89): Traders’ Resource: Brokerages by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:8 (84-89): Traders’ Resource: Brokerages by Technical Analysis, Inc.

    Self-directed traders, as STOCKS & COMMODITIES\nreaders usually are, have more choices than ever in\ntheir ongoing search for speed, pricing efficiency, and\ngood accounting when it comes to brokerages. First,\nyou have to find a brokerage that handles your tradable;\nfull-service brokerages dealing with equities, options, futures, bonds, mutual funds, foreign exchange, and cash goods are usually full-priced as well. A little scouting, however, will get you a brokerage targeted on your market of interest.

    After that, your first question these days might be, “How fast can I execute an order?” Look for whether the brokerage offers direct access to automated exchange trading systems, market makers, and electronic\ncommunications networks (ECNs). If not, check to see if there is at least the capability of placing orders online through the Internet. Absent that, you’re relegated to old-fashioned phone calls.

    With the presence of freely available company information over the Internet, retail brokerage research is less valuable than it ever has been. Nevertheless, if you’re in less intensively studied but highly commercial\nmarkets such as futures, a brokerage’s ability to provide market statistics, hedging activity reports, and other commercial information may be critical to your trading and investing decisions.

    Finally, don’t forget the security of your money. Inquire about a brokerage’s clearing operations, and if you’re in equities, about Securities Investor Protection Corp. (SIPC) coverage.

    Only highlights of product information are given here. For more complete information, see the Traders’ Resource area at our website, www.Traders.com."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-84-89-traders-resource-brokerages-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-84-89-traders-resource-brokerages-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-84-89-traders-resource-brokerages-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov239bofo3,d,"{""minimum-quantity"":""1"",""path"":""ch8a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:8 (94): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:8 (94): Books For Traders by Technical Analysis, Inc.

    Economic And Financial Decisions Under Risk (244 pages, $35 softcover, 2005, ISBN 0-691-12215-6) by\nLouis Eeckhoudt, Christian Gollier, and Harris Schlesinger, published by Princeton University Press.

    Understanding and dealing with risk is an essential part of modern economics. This book represents a summary of basic multiperiod decision-making under risks. The authors start with the fundamentals of risk measurement and risk aversion, then apply these concepts to insurance decisions and portfolio choice in\na one-period model. The rest of the book is mostly devoted to looking at these decisions in a multiperiod context, which adds the long-term perspective most risk management analyses requires. Each chapter concludes with a discussion of the relevant literature and a set of problems."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-94-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-94-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-94-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov23982at,d,"{""minimum-quantity"":""1"",""path"":""ch8a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:8 (98, 82): At The Close by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:8 (98, 82): At The Close by Jayanthi Gopalakrishnan

    Here’s an informal question and answer with Sohail Asghar,\npresident of PennyStockAction.com and a pioneer of two\nindependent home-based activities, penny stock trading and\nsports investing.\nHow did you get interested in the markets?\nIn 1986 I visited Canada and saw my cousin daytrading on\na regular basis. He introduced me to some others who were\ndaytrading as a home-based activity. At that time, daytrading\nwasn’t a popular activity in France.\nWhat did you find exciting about active trading?\nWhen I saw how popular daytrading was in the US and\nCanada and how people worked from home and handled their\nown capital in such a smart way, I really wanted to look into\nthe possibilities of doing it for myself when I returned to\nFrance. I really liked that an active trader has to be in a\nchallenging spirit vs. the stock market.\nViews From An Active Trader"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-98-82-at-the-close-by-jayanthi-gopalakrishnan-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-98-82-at-the-close-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-8-98-82-at-the-close-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231leto8,d,"{""minimum-quantity"":""1"",""path"":""ch9s202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:9 (10-14): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:9 (10-14): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist.

    OFFLINE CHARTING SOFTWARE

    Editor,

    Is there any stock market graphing software I can use\nwithout going on the ’Net and working with just the closing prices? I track only around 10 stocks, and I use simple indicators with simple moving averages:

    1MA, 2MA, 3MA, 10MA

    Price oscillator (12MA-26MA)/26MA

    Stochastic 19-1-1

    ANTOINE HEBERT

    Borrington, NH

    In these days of computers and Internet connectivity, most technical analysis software makes use of the Internet and most traders download their data via\nthe Internet. Perhaps someone reading this can suggest an alternative program. However, you can always simply a spreadsheet application such as Excel or a graphing application and input closing prices manually from the newspaper, then plot your charts, as\nwas done in pre-Internet days.—Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-10-14-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-10-14-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-10-14-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov231twom,d,"{""minimum-quantity"":""1"",""path"":""ch9s202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:9 (16-22): Two Moving Function Hybrids by William Rafter"",""caption-linebreaks"":""Stocks & Commodities V. 23:9 (16-22): Two Moving Function Hybrids by William Rafter

    Find out how to use these smooth and timely indicators.

    In analyzing the markets, we frequently findourselves looking at data that is not quite adequate for our needs. More often than not, the data is erratic. We want a reliable market indicator, not an erratic one; so we usually smooth the data with a variety of tools. This smooth the data with a variety of tools. This smoothness comes at a price — speed. Thus, when you find something that is both smooth and timely, it’s time to take notice. The moving slope is one such indicator.

    THE RATE OF CHANGE

    Two of the common momentum indicators used by traders are the change and rate of change (commonly referred to as ROC). The latter is really only the former divided by price, but it has the advantage of being price-independent — that is, by comparing the 25-day changes of two datasets, you must be mindful that the datasets may be priced differently. By taking their rates of change, you eliminate the price bias. For example, compare the two panes of Figure 1. The top pane illustrates the 25-day change of the closes of the Dow\nJones Industrial Average (DJIA) and the Standard & Poor’s 500 (S&P). The price differences of the respective indexes make comparison almost impossible. The lower pane shows the indexes compared on the basis of their 25-day ROCs, which is considerably more useful than the top pane."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-16-22-two-moving-function-hybrids-by-william-rafter-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-16-22-two-moving-function-hybrids-by-william-rafter-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-16-22-two-moving-function-hybrids-by-william-rafter-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov232canr,d,"{""minimum-quantity"":""1"",""path"":""ch9s202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:9 (24-29): Can Relative Strength Be Used In Portfolio Management? by J. Lewis, M. Moody, H. Parker, & A. Hyer"",""caption-linebreaks"":""Stocks & Commodities V. 23:9 (24-29): Can Relative Strength Be Used In Portfolio Management? by J. Lewis, M. Moody, H. Parker, & A. Hyer

    The concept of relative strength is part of the foundation\nof technical analysis, but can it be used successfully\nwhen it comes to portfolio management?

    In its simplest form, relative strength is the measurement of the performance of one item versus another over a period of time. Dozens of formulations\nof relative strength have been proposed by technicians, as well as others, over the years. One of the early mentions of relative strength is from one of the masters of technical analysis, Richard Wyckoff:

    As your trend charts are made on transparent paper they may be laid over other charts of groups or individual stocks to show which groups and which stocks are stronger or weaker than the general market, as represented by the averages. One of the best indications of the future course of a group or a stock is its comparative strength when the rest of the market is weak, or its comparative weakness in a strong market.

    THE EARLY YEARS

    Numerous other technicians including George Chestnutt and Sedge Coppock made their own inquiries into relative strength. These technical analysts\nwere aware of how useful it could be, but their published works on the topic generally lacked statistical detail. (Chestnutt may have preferred the pudding to the proof; he was the manager of one of the\nbest-performing mutual funds of the 1960s.)"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-24-29-can-relative-strength-be-used-in-portfolio-management-by-j-lewis-m-moody-h-parker-a-hyer-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-24-29-can-relative-strength-be-used-in-portfolio-management-by-j-lewis-m-moody-h-parker-a-hyer-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-24-29-can-relative-strength-be-used-in-portfolio-management-by-j-lewis-m-moody-h-parker-a-hyer-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233fofo,d,"{""minimum-quantity"":""1"",""path"":""ch9s202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:9 (30-32): Forex Focus by Vikram Murarka"",""caption-linebreaks"":""Stocks & Commodities V. 23:9 (30-32): Forex Focus by Vikram Murarka

    Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. With that in mind, STOCKS & COMMODITIES has introduced Forex Focus to better prepare the retail trader to participate in the currency market.

    Here are some strong, classical technical signals favoring a euro/ dollar trend reversal.

    Date: 5/23/05

    Closing price of EUR/USD: 1.2595

    At the beginning of January 2005, I studied the relationship between the euro and the US dollar and the 10-year Bund-Treasury bond differential and analyzed how it tied in with the technical picture of the\neuro/US dollar. Given the Elliot wave counts and the yield differentials moving in favor of the US dollar, the indications were that the euro would fall. This is a follow-up article, aimed at finding out whether there are any further technical analysis points to be noted, and what the future might hold.

    If you look at Figure 1, this is perhaps one of the most\nclassic technical bear turnaround setups in the currency markets in a long time. First note the Elliot waves count on the euro uptrend that started in late 2000. Wave 5 was completed toward the end of December 2004, as marked in the chart, and the euro started falling thereafter."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-30-32-forex-focus-by-vikram-murarka-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-30-32-forex-focus-by-vikram-murarka-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-30-32-forex-focus-by-vikram-murarka-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov233exyo,d,"{""minimum-quantity"":""1"",""path"":""ch9s202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:9 (34): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 23:9 (34): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    COLLAR QUESTION

    Q: I need help understanding collars. I know you sell the call to finance the put, and the put options act as insurance on your stock. But what happens if your stock\ntakes off and you are assigned the call? Would you forfeit profits on the stock if it takes a run up? Is there a way around this?

    A: As you stated, the collar is a position created with long stock, a short call, and a protective put. By “long stock,” I mean holding shares. It could be a new purchase of stock or an existing position. The collar also includes a put, which will protect the stock from a move to the downside. A long stock, long put position\nis sometimes called a “protective put.” One put option is purchased for every 100 shares of stock. However, the collar is different from the protective put because it includes a short call. Selling a call will bring in premium, which helps pay for the put. One call is sold for every 100 shares of stock. So the collar is a low cost\nway of protecting a stock position."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-34-explore-your-options-by-tom-gentile-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-34-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-34-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234shmo,d,"{""minimum-quantity"":""1"",""path"":""ch9s202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:9 (42-47): Shorting Moving Average Pullbacks by Steve Palmquist"",""caption-linebreaks"":""Stocks & Commodities V. 23:9 (42-47): Shorting Moving Average Pullbacks by Steve Palmquist

    Do you have a trading system that works well during declining markets? You can add the moving average short system to your toolbox.

    A successful trader must have a variety of tools in his or her trading toolbox to match the various conditions\nhe or she will encounter. The market has periods when it is trending up, trending down, and times when it is just basing. It is very difficult to find a system that works well in all three types of market conditions. A more fruitful approach is to use a different tool for each type of market. Using a system specifically designed for each type of market environment generally produces better\nresults than trying to use one generic tool for all market conditions.

    A DECLINING MARKET

    The overall market direction is a powerful force that pushes most stocks in one direction. Just as it is difficult to swim against the tide, it is hard to make money in a declining market if your only tool was designed to find good long setups. When the market is declining, it is usually best to focus on shorts. One of the systems I use during market declines involves shorting pullbacks to a declining moving average. This technique is based on the observation that trends\ncontinue, and a pullback or retracement in the trend represents a low-risk (and well-defined) entry point."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-42-47-shorting-moving-average-pullbacks-by-steve-palmquist-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-42-47-shorting-moving-average-pullbacks-by-steve-palmquist-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-42-47-shorting-moving-average-pullbacks-by-steve-palmquist-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov234sied,d,"{""minimum-quantity"":""1"",""path"":""ch9s202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:9 (42-47): Sidebar: EDS code for MAS system by Steve Palmquist"",""caption-linebreaks"":""Stocks & Commodities V. 23:9 (42-47): Sidebar: EDS code for MAS system by Steve Palmquist

    EDS CODE FOR MAS SYSTEM (for use in AIQ Systems’ TradingExpert Pro program)

    ! Look for stocks in a downtrend\nLowerCloses if HiVal([close],5) < LoVal([close],20,20).\n! Defining the 35-day simple moving average\nPullbackMAS is simpleavg([close],35)..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-42-47-sidebar-eds-code-for-mas-system-by-steve-palmquist-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-42-47-sidebar-eds-code-for-mas-system-by-steve-palmquist-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-42-47-sidebar-eds-code-for-mas-system-by-steve-palmquist-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov235inre,d,"{""minimum-quantity"":""1"",""path"":""ch9s202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:9 (52-53): Intermarket Review: Goldman Sachs by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:9 (52-53): Intermarket Review: Goldman Sachs by David Penn

    GOLDMAN SACHS COMMODITIES INDEX (GSCI)\nSUBGROUP—PRECIOUS METALS ($GPX)

    The Goldman Sachs Commodities Index (GSCI) is a\nworld-production weighted index of commodity prices\nbased on the average quantity of production for the\nlast five years of available data. In addition to being a\nbenchmark against which commodity price performance can be judged, the subgroups of the GSCI\nare equally reliable measures of the price performance\nof the various commodities that make up the GSCI. The\nprovided weekly charts of these subgroups include\nboth the 20- and 50-period moving averages.\nThe GSCI Precious Metals subgroup includes both\ngold and silver.

    The bull market in precious metals intensified in 2004 after a correction that saw the group slip from their early spring highs. By the summer of 2004, however, precious metals had gotten their groove back, and\nwent on to notch higher highs by fall. The correction that\nfollowed these late 2004 highs has been stickier than the one that befell $GPX in 2003, insofar as the index has slipped into a sideways consolidation, rather than the sort of post-correction rally of a year ago."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-52-53-intermarket-review-goldman-sachs-by-david-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-52-53-intermarket-review-goldman-sachs-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-52-53-intermarket-review-goldman-sachs-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov235lisp,d,"{""minimum-quantity"":""1"",""path"":""ch9s202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:9 (54-55): The Lightning Spread And Other Strategies by Jesse Chen"",""caption-linebreaks"":""Stocks & Commodities V. 23:9 (54-55): The Lightning Spread And Other Strategies by Jesse Chen

    Here are some strategies you can apply by combining two or more options.

    Options spreads are essentially the combination of two or more options. There are six components that you can build from.

    These are:

    1. Buy call (BC)

    2. Buy put (BP)

    3. Sell call (SC)

    4. Sell put (SP)

    5. Buy underlying (BU)

    6. Sell underlying (SU)

    You can have three variations on the first four options\nstrategies on this list. They are:

    • In-the-money (i)

    • At-the-money (a)

    • Out-of-the-money (o)

    The phrase “the money” denotes the current price of the\nunderlying stock or future. For example, if Microsoft is at 30:

    • A 30 call and 30 put are at-the-money

    • A 40 call and 20 put are out-of-the-money

    • A 20 call and 40 put are in-the-money

    The abbreviations listed here can help you organize your options strategies:

    1. Buy call (BC): Buy in call (BiC), buy at call (BaC), or buy out call (BoC)

    2. Buy put (BP): Buy in put (BiP), buy at put (BaP), or buy out put (BoP)

    3. Sell call (SC): Sell in call (SiC), sell at call (SaC),\nor sell out call (SoC)

    4. Sell put (SP): Sell in put (SiP), sell at put (SaP), or sell out put (SoP)"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-54-55-the-lightning-spread-and-other-strategies-by-jesse-chen-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-54-55-the-lightning-spread-and-other-strategies-by-jesse-chen-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-54-55-the-lightning-spread-and-other-strategies-by-jesse-chen-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov235wefo1,d,"{""minimum-quantity"":""1"",""path"":""ch9s202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:9 (56-57): Websites For Traders: PrudentBear.com by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:9 (56-57): Websites For Traders: PrudentBear.com by David Penn

    You know the routine from, ahem, Red State comedian Jeff Foxworthy? The one-liner intro that he has managed to parlay into a successful career as a stand-up comic: “You know you’re a redneck\nif …”

    Well, I don’t know rednecks fromredcoats, but if you’ve got several PrudentBear.com entries in your Internet\nbrowser’s history cache, then I know how to tell if you’re a permabear … Prudentbear.com, a website founded\nby David Tice of Tice & Associates, is either the best thing in the world or one of the worst. By that I mean if the Dow rallies any time soon, anywhere near the once-prophesied 36,000 level, then Prudentbear.com might be the last thing that thousands of bearish traders and investors read before taking that long walk off a short pier."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-56-57-websites-for-traders-prudentbear-com-by-david-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-56-57-websites-for-traders-prudentbear-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-56-57-websites-for-traders-prudentbear-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov23577pr,d,"{""minimum-quantity"":""1"",""path"":""ch9s202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:9 (58-59, 77-78): Product Review: TradeAccountant by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 23:9 (58-59, 77-78): Product Review: TradeAccountant by David Penn

    Ever see a message board thread titled “taxes and trading”?

    Actually, the more important question is: Have you\never clicked on or participated in a trader’s message board discussion on taxes and trading?

    Didn’t think so.

    If there is one subject that traders are even less enthusiastic about addressing than money management, it would truly have to be “taxes and trading.” Fortunately, in much the same way that popular tax preparation software products have revolutionized the process of filing taxes for hundreds of thousands of ordinary working Janes and Joes, TradeAccountant may provide a longed-for breakthrough for traders who enter tax season every year with a mixture of fear and loathing.

    What makes TradeAccountant a boon for traders?

    TradeAccountant is a valuable tool for real-life traders, who need not only position-tracking and trade-management tools, but also — sooner or later —\ntools to help them move their trading results into tax-paying reality."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-58-59-77-78-product-review-tradeaccountant-by-david-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-58-59-77-78-product-review-tradeaccountant-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-58-59-77-78-product-review-tradeaccountant-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov236prre5,d,"{""minimum-quantity"":""1"",""path"":""ch9s202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:9 (62-66): Product Review: Advanced GET by Dennis D. Peterson"",""caption-linebreaks"":""Stocks & Commodities V. 23:9 (62-66): Product Review: Advanced GET by Dennis D. Peterson

    Advanced GET has been a STOCKS & COMMODITIES\nReaders’ Choice Awards winner for years. At $2,995\nfor an end-of-day standalone version or $160 a month for real-time access, it’s not cheap. But is it worth it?\nTo find out, for this review I downloaded the real-time standalone version and also used the one added to the\neSignal service. I was also sent one of the courses —“Creating A Profitable Trading Plan”— and one of the instructors went over the material with me.

    BACKGROUND

    The first thing that struck me as we went through the course material was how much of it was material I had already found to be true, except for the refinements,\nwhich were new to me. It would be unfair to reveal the details of what is taught in the course, but I want to mention that I found the material valid, because it is the course material that strongly suggests to me that Advanced GET can be an extraordinary tool for making money. We went over a number of real-time trades in detail as they unfolded, observing the e-mini Standard\n& Poor’s 500 contracts activity. The instructor traded his own account and I watched him make a tidy $1,200 profit in about 30 minutes. He was also more than willing to point to trades that didn’t work as well, giving me a sense that this was an above-board and honest demonstration."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-62-66-product-review-advanced-get-by-dennis-d-peterson-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-62-66-product-review-advanced-get-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-62-66-product-review-advanced-get-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov236lego,d,"{""minimum-quantity"":""1"",""path"":""ch9s202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:9 (68-70): Letting Go Of Resentment by Adrienne Laris Toghraie"",""caption-linebreaks"":""Stocks & Commodities V. 23:9 (68-70): Letting Go Of Resentment by Adrienne Laris Toghraie

    Each trading day brings with it an array of emotions, both positive and negative. Here’s how you can get a\ngrip on your negative emotions.

    If there is one thing that all traders share, it is the need to handle negative emotions so they do not sabotage\nour lives. In an average workday, a trader often has to\ndeal with the roller-coaster ride of emotions as a trade goes wild. Greed, fear, shame, regret, anger, and anticipation … all these emotions come on without warning.

    Great traders experience those emotions right along with struggling traders. The difference is in how they are managed.

    HANDLING TOXIC EMOTIONS

    Resentment is one of the most toxic of emotions, and often occurs as a result of a loss. If a trader feels responsible for the loss, he will not feel resentment. But if he feels he is not responsible, resentment will often follow. For traders, losses can occur for reasons beyond their control; they may be the result of others’\nactions, actions that are unethical, irresponsible, predatory, careless, thoughtless, or purely accidental. For example, a trader may have:

    • Lost a great deal of money in the market because his\ntrading was interrupted at a crucial time by someone\nwho demanded his attention for a trivial reason..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-68-70-letting-go-of-resentment-by-adrienne-laris-toghraie-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-68-70-letting-go-of-resentment-by-adrienne-laris-toghraie-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-68-70-letting-go-of-resentment-by-adrienne-laris-toghraie-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov237inha,d,"{""minimum-quantity"":""1"",""path"":""ch9s202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:9 (72-76): Interview: Harry Boxer by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:9 (72-76): Interview: Harry Boxer by Jayanthi Gopalakrishnan

    With over 30 years of Wall Street investment and\ntechnical analysis experience, Harry Boxer is a widely syndicated and featured guest on many financial programs and websites, including CNBC, CBS MarketWatch, Winning on Wall Street, Stockhouse, DecisionPoint, and more. A former chief technical analyst and columnist for AmericaInvest.com, Harry’s impressive credentials include eight years as chief technical analyst with three Wall Street brokerage firms, and the honor of winning both the 1995 and the 1996\nworldwide Internet stock-market trading contest, “The Technical Analysis Challenge.” You’ll find Harry’s daily wisdom at The Technical Trader (www.thetechtrader.com), an ongoing, real-time diary of his trading ideas and market analysis.

    STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Harry Boxer via telephone on July 13, 2005.

    Q: How did you get started in technical analysis?

    A: Actually, that’s a good story—I was a teenager growing up in the New Jersey and New York area and I would spend the summers in a bungalow colony in the\nCatskills. The guy in the bungalow next door to me was this old, crotchety stockbroker named Hank Greenstein, who taught me about charts. At that time, computer programs didn’t exist and you had to draw a chart yourself, so Hank taught me how to create my own hand-drawn charts, how to keep them and use them. When computerized programs came out, like Worden Brothers Telechart 2000 (now TC net, which I use religiously), my chart-making ability obviously became a great help.

    Q: They say that people who can draw charts by hand actually have a better understanding of chart movement.

    A: I agree. I like to say that I’ve been charting for over forty years. My history is that I spent some time on Wall\nStreet as a broker/technical analyst. I wrote a newsletter for a couple of brokerage firms called The Trader’s Corner, which was completely technical..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-72-76-interview-harry-boxer-by-jayanthi-gopalakrishnan-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-72-76-interview-harry-boxer-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-72-76-interview-harry-boxer-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov237trti4,d,"{""minimum-quantity"":""1"",""path"":""ch9s202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:9 (79-84): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:9 (79-84): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement one of the strategies presented in this issue.

    Steve Palmquist’s article in this issue, “Shorting Moving\nAverage Pullbacks,” reviews a shorting technique that can be applied to a list of stocks. The technique uses a combination of signals: bars under a moving average, the existing trend, the existence of a “pullback” to the moving average, a trigger condition (lower low), a volume threshold, and a criterion based on stochastics.

    Code for this system is supplied for TradeStation, MetaStock, Wealth-Lab, eSignal, NeuroShell Trader, amiBroker, Investor/RT, NeoTicker, and TechniFilter Plus."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-79-84-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-79-84-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-79-84-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov239bofo4,d,"{""minimum-quantity"":""1"",""path"":""ch9s202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:9 (94): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 23:9 (94): Books For Traders by Technical Analysis, Inc.

    Trading With Median Lines (180 pages, $199.99 + $10 S&H softcover, 2003, ISBN: 0-9729829-0-6), by Timothy Morge, published by Blackthorne Capital, Inc.

    Beginning with a detailed history of median lines, this book describes the various types, with detailed charts and step-bystep instructions for drawing and using each median line type. Each chart is drawn as if hand-drawn rather than with a “canned” drawing tool. Once the line types are explained, trade examples are given throughout, as each set of tools is introduced. This visually intense book features more than 125 full-page, color charts."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-94-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-94-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-94-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov239atcl2,d,"{""minimum-quantity"":""1"",""path"":""ch9s202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 23:9 (98): At The Close by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 23:9 (98): At The Close by Jayanthi Gopalakrishnan

    The S&P 500 has done a good job staying above its 50-\nday moving average since May 18, 2005 (Figure 1).\nThere was only one day (7/07/05) when it hit a point\nbelow the MA, but that drop proved insignificant at the\nend of the day—the closing value was once again well above the MA. For the moment, things are looking good for S&P traders. In light of this scenario, I applied the tighter, 40-day moving average on the daily chart. As you can see in Figure 2, I found it to act as a more accurate support level from 6/24/05 to 7/8/05. With that\nin mind, the chart shows the S&P 500 as healthy, with possibilities of holding onto positions for a little longer than one day.

    Take July 8, 2005 for example. On the 5-minute chart of the S&P 500 e-mini contract in Figure 3, you can see there was a surge in volume at 12:25pm. If you had opened a position at say, 1215.50, when a new high for the day was made, and if you had held that position until the next trading day, you would have gained a hefty return. Of course, this is easy to say in hindsight. If you are accustomed to exiting your positions before the close, it’s very difficult to hold onto a position overnight, or in this case, through the weekend."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-98-at-the-close-by-jayanthi-gopalakrishnan-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-98-at-the-close-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-23-9-98-at-the-close-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241leto,d,"{""minimum-quantity"":""1"",""path"":""ch1j20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:1 (10-11): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:1 (10-11): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine would not exist.

    Editor,

    Had Neil Jon Harrington contacted me prior to writing his article (“The Link Between Bollinger Bands And The\nCommodity Channel index,” October 2005 S&C), I could have saved him some trouble, for the relationship between the commodity channel index and Bollinger Bands is well known and has been widely explored. If the same input data is used and the constants equalized, it is true that the main difference in logic between the two approaches comes down to the difference between standard deviation and mean absolute deviation. However, that is not a trivial difference; it is a significant and crucial difference. When prices are close to the average, there is little\ndifference between the calculations, but when prices move away from the average, the differences become dramatic.

    This is due to the squaring of the deviations from the mean in standard deviation, a calculation that accentuates large deviations. Mean absolute deviation has no such magnifying mechanism. This difference is most critical when it is the greatest — that is, at the extremes — because it allows our definition of relatively high and low — the Bollinger Bands — to remain germane to the rapidly evolving price structure. Please note that these two series cannot be made to correspond by adjusting the constants involved, since the difference is nonlinear. This nonlinearity arises from the squaring of the differences in the calculation of standard deviation.

    For a normally distributed series, series, MAD is approximately equal to 0.7979 standard deviation; however, security prices are not normally distributed,\nso we can expect the difference to be somewhat greater. Though Mr. Harrington did “uncover” the facts, he missed the worth. Traders should not consider %b — that is, the oscillator derived from Bollinger Bands\n— and the commodity channel index to be interchangeable. Donald Lambert and I created different tools for different purposes; each has its unique characteristics and utility.

    Thanks again for your fine publication, which I read religiously.

    JOHN BOLLINGER, CFA, CMT\nwww.BollingerBands.com

    Readers: See also the explanatory article on Bollinger Bands called “Bollinger Bands Vs. Trading Bands”\nin the December 2005 S&C.—Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-10-11-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-10-11-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-10-11-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241fofo,d,"{""minimum-quantity"":""1"",""path"":""ch1j20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:1 (12-16): Forex Focus by Darrell Jobman"",""caption-linebreaks"":""Stocks & Commodities V. 24:1 (12-16): Forex Focus by Darrell Jobman

    Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. With that in mind, STOCKS & COMMODITIES has introduced Forex Focus to better prepare the retail trader to participate in the currency market.

    Down under may be over the top. If you doubt it, then what’s it mean when commodities trend down when the Australian dollar weakens against the US dollar? To a large extent, fundamental analysis involves extrapolating the future from the events of the past as analysts review historical numbers in search of identifiable trends. Traditional technical analysis suffers from the same backward-looking drawback when it relies on traditional moving averages, arcane chart patterns, and a variety of measurements to indicate when or if a market or security has become\noverbought or oversold.

    The purpose of investing, however, is not to identify what has happened but rather to anticipate what is likely to happen. One of the best ways to look and think forward comes from studying how the trend of one market affects another. Most often, this is called intermarket analysis. As capital flows from one long-term theme to the next, it typically shifts its geographical emphasis. In recent years, money has poured into Asia in search of superior investment returns and out again with almost single-minded ferocity. In 1998, capital outflows from countries such as Singapore, Thailand, Indonesia, the Philippines, and Malaysia helped create a financial markets crisis that spilled over to Russia and then Brazil. Capital continued to flow into the US dollar to help finance the tech bubble that eventually began to collapse in 2000 before turning toward Europe to take advantage of\nhigher real interest rates.

    CURRENCIES ARE KEY

    In many respects, currencies act as both gateways and signposts for ongoing macro trends. When a currency is appreciating relative to other major currencies, it shows which direction capital is moving toward and, perhaps just as important, which direction it is moving away from."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-12-16-forex-focus-by-darrell-jobman-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-12-16-forex-focus-by-darrell-jobman-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-12-16-forex-focus-by-darrell-jobman-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241deyo,d,"{""minimum-quantity"":""1"",""path"":""ch1j20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:1 (18-26): Developing Your Own Indicators by Lee Leibfarth"",""caption-linebreaks"":""Stocks & Commodities V. 24:1 (18-26): Developing Your Own Indicators by Lee Leibfarth

    Does the thought of developing custom indicators\nintimidate you? It doesn’t have to. Here’s a stepby-\nstep look at the process.

    Custom indicators can give you a perspective on market conditions that you can’t get yet by simply reading a price chart. Custom indicators allow you to quickly check the validity of trading ideas specifically in the way you want to, and they can be an important visual tool to assist in everyday trading. Developing custom indicators doesn’t have to be rocket\nscience, even for traders unfamiliar with programming.\nI will discuss the development of three different technical indicators along with some of their potential\nuses. Although the examples will be illustrated using TradeStation EasyLanguage, the concepts can be easily applied to almost any charting platform that allows the programming of custom indicators such as eSignal, MetaStock, Wealth-Lab, and others.

    INDICATOR 101

    Before we jump into the indicator developer arena,\nwe must understand the concepts behind some of the\nmore popular indicators. For the sake of this article,\nonly stand-alone indicators will be discussed: those\nthat are displayed in their own charts, usually just\nbelow a price chart."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-18-26-developing-your-own-indicators-by-lee-leibfarth-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-18-26-developing-your-own-indicators-by-lee-leibfarth-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-18-26-developing-your-own-indicators-by-lee-leibfarth-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241sikn,d,"{""minimum-quantity"":""1"",""path"":""ch1j20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:1 (18-26): Sidebar: Know The Code by Lee Leibfarth"",""caption-linebreaks"":""Stocks & Commodities V. 24:1 (18-26): Sidebar: Know The Code by Lee Leibfarth

    Each trading platform uses its own specific programming language that can take time to learn. A program or “code” is composed of a list of instructions that must be in an exact format. Each horizontal line of code gives the computer a different command and is referred to as a statement. Statements form the building blocks of a computer program and commonly end with a semicolon. Here is a list of the components\nthat can be found in the program statements, along with some basic examples. Keep in mind that these examples are written in EasyLanguage and will be slightly different for other trading platforms."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-18-26-sidebar-know-the-code-by-lee-leibfarth-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-18-26-sidebar-know-the-code-by-lee-leibfarth-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-18-26-sidebar-know-the-code-by-lee-leibfarth-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241sima,d,"{""minimum-quantity"":""1"",""path"":""ch1j20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:1 (18-26): Sidebars: MacDaddy Indicator, UpDown Indicator, Trigger Indicator by Lee Leibfarth"",""caption-linebreaks"":""Stocks & Commodities V. 24:1 (18-26): Sidebars: MacDaddy Indicator, UpDown Indicator, Trigger Indicator by Lee Leibfarth

    Program Header

    Variables: macDaddy( 0 ), smoothedMac( 0 );\nInputs: reference_input( AVERAGE(C,18) ), dependent_input( C ),\nsmoothing_length( 5 ); . . ."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-18-26-sidebars-macdaddy-indicator-updown-indicator-trigger-indicator-by-lee-leibfarth-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-18-26-sidebars-macdaddy-indicator-updown-indicator-trigger-indicator-by-lee-leibfarth-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-18-26-sidebars-macdaddy-indicator-updown-indicator-trigger-indicator-by-lee-leibfarth-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov24250si,d,"{""minimum-quantity"":""1"",""path"":""ch1j20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:1 (28-31, 50-53): Sidebar: Swiss Army Knife EasyLangague Code by John F. Ehlers"",""caption-linebreaks"":""Stocks & Commodities V. 24:1 (28-31, 50-53): Sidebar: Swiss Army Knife EasyLangague Code by John F. Ehlers

    {\nSWISS ARMY KNIFE INDICATOR\nby John Ehlers\n}

    Inputs:\nPrice((H+L)/2),\nType(“BP”),\nN(0),\nPeriod(20),\ndelta1(.1); . . ."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-28-31-50-53-sidebar-swiss-army-knife-easylangague-code-by-john-f-ehlers-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-28-31-50-53-sidebar-swiss-army-knife-easylangague-code-by-john-f-ehlers-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-28-31-50-53-sidebar-swiss-army-knife-easylangague-code-by-john-f-ehlers-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov24250sw,d,"{""minimum-quantity"":""1"",""path"":""ch1j20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:1 (28-31, 50-53): Swiss Army Knife Indicator by John F. Ehlers"",""caption-linebreaks"":""Stocks & Commodities V. 24:1 (28-31, 50-53): Swiss Army Knife Indicator by John F. Ehlers

    You’ve probably never heard of this indicator, but it has all the common functions such as smoothing and\nmomentum generation. Find out why it’s going to be your new best friend.

    This indicator does some unusual things, such as\nband-stop and band reject filtering. Once you program\nthis indicator into your trading platform, you can perform virtually any technical analysis technique with it. This unique general indicator results from general digital\nsignal processing (DSP) concepts for discrete signal networks that appear in various forms in technical analysis.

    Z-TRANSFORMS

    The description of this indicator involves Z-transforms. Z-transforms are a convenient way of solving difficult\ndifference equations in much the same way that LaPlace transforms are used to solve differential equations in calculus. Difference equations arise from\nthe use of sampled data, the way we have in technical analysis: Daily bars sample price data once a day. Intraday bars sample price data every minute, hour, or whatever. The concept is the same regardless of the sampling rate. In Z-transforms, Z-1 stands for one\nsample period of delay. For simplicity, I will always refer to daily bars as the sample rate."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-28-31-50-53-swiss-army-knife-indicator-by-john-f-ehlers-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-28-31-50-53-swiss-army-knife-indicator-by-john-f-ehlers-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-28-31-50-53-swiss-army-knife-indicator-by-john-f-ehlers-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov243wefo,d,"{""minimum-quantity"":""1"",""path"":""ch1j20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:1 (32-33): Websites For Traders: SafeHaven.com by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 24:1 (32-33): Websites For Traders: SafeHaven.com by David Penn

    SAFEHAVEN.COM

    In a world only recently removed from cast-in-stone expectations of double-digit returns on invested income, the idea of a website dedicated to the “preservation of capital” must sound as exciting as watching grass grow. After all, with three decades’\nworth of inflation—of both the physical kind and the asset kind—you are more likely to hear “preservation” in the context of wildlife wetlands than in the context of sound (to say nothing of shrewd) financial planning.\nBut as an increasing number of smart financial types has been telling investors, the days of double-digit investment returns are likely long gone. And this is without even entertaining the darkest visions of the global financial future, those apparitions of either hyperinflation or, worse, deflationary depression that a number of no-less savvy financial figures have been warning us will be the real cause for the end of the double-digit investment returns era."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-32-33-websites-for-traders-safehaven-com-by-david-penn-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-32-33-websites-for-traders-safehaven-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-32-33-websites-for-traders-safehaven-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244qaby,d,"{""minimum-quantity"":""1"",""path"":""ch1j20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:1 (44): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 24:1 (44): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    INTEREST RATES & STOCK SALES

    With interest rates on the rise again, I am concerned about how brokerage fees affect traders. My firm already charges a hefty fee for debit balances, and I am\nconfused about the cash that comes in from short stock sales—is that something my firm should consider?

    —dallasequity

    Excellent questions. Let me try to help find some answers. When you buy securities, your broker allows you to buy on margin (in most cases), charging you that “hefty fee” you mention. The best way around that is to keep more money in your account to cover purchases,\nbut you have to consider what you’re giving up as well. You’re forgoing the interest that you could be earning\nin an interest-bearing account, and this number is part of your “cost of carry” calculation that you must consider\nin all stock purchases. For example, if you could get a 6% return from a government-backed security (basically\nrisk-free), you first have to anticipate that you will overcome that with either stock appreciation or dividend yield, or a combination of both."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-44-q-a-by-don-bright-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-44-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-44-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244trfl,d,"{""minimum-quantity"":""1"",""path"":""ch1j20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:1 (46-49): Trading Flat Base Breakouts by Bill Pritchard"",""caption-linebreaks"":""Stocks & Commodities V. 24:1 (46-49): Trading Flat Base Breakouts by Bill Pritchard

    Here’s a look at a simple stock-trading strategy that combines fundamentals and technicals.

    The flat base breakout pattern (FBB) is a stock market\nclassic, a time-tested, proven winner. Of all the\nvarious patterns, nothing more clearly communicates\nsudden buying activity than the FBB. A trader who enters a position based on an FBB pattern will likely see profits within a very short time frame. Unfortunately,\nthere are no guarantees in the stock market, and this\npattern is no exception. However, by profiling past winners and using fundamental and technical analyses, you can improve your odds of success.

    By applying a dual exponential moving average† (EMA) as an exit signal, the FBB trader will exit with significant profits in most cases. For the purposes of this article, I will define an FBB as a stock the closing price of which is higher than its highest high over the previous 60 days. In addition, a visual inspection of the chart should show a flat or slightly angled price trend until the day that the FBB occurs. Price action prior to the FBB should be listless, with little volume or activity."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-46-49-trading-flat-base-breakouts-by-bill-pritchard-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-46-49-trading-flat-base-breakouts-by-bill-pritchard-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-46-49-trading-flat-base-breakouts-by-bill-pritchard-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov245fufo,d,"{""minimum-quantity"":""1"",""path"":""ch1j20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:1 (54): Futures For You by Dan O’Neil"",""caption-linebreaks"":""Stocks & Commodities V. 24:1 (54): Futures For You by Dan O’Neil

    INSIDE THE FUTURES WORLD

    Want to learn how the futures markets really work? Dan O’Neil, a principal at online futures and forex broker XPRESSTRADE (www.xpresstrade.com), responds to\nyour questions about today’s futures markets. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be\nposted there, and selected questions will appear in a future issue of S&C.

    Jeffrey Owen Katz is a professional trader and consultant specializing in predictive modeling and forecasting. He is president and founder of Scientific Consultant Services, a company focused on the development of sophisticated artificial intelligence\n(neural networks and genetic algorithms) software, primarily for application in the financial markets. He was first to develop a commercial neural network\nforecasting package for the Standard & Poor’s 500 (NexTurn, released in 1989). He introduced the first 32-bit neural network development tool (N-Train). He was the first to make artificial intelligence technology accessible to TradeStation users through such products as TradeNet and TS-Evolve. He was also the first to publish a paper on genetically evolving rule-based trading systems. He has published a\nnumber of articles in a diverse selection of professional journals, trade publications, anthologies, and also coauthored (with Donna L. McCormick) several books.\nSTOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Katz via telephone on November 10, 2005.

    Q: How did you get interested in the financial markets?

    A: Back in the 1970s, I used to dabble in stocks, and at that time, William O’Neil was publishing Daily Charts. I would go over those charts and visually backtest different kinds of systems. I found one pattern where there would be a very low-volume, low-liquidity stock — usually an oil stock — and you’d see a spike in volume and prices would start going up slightly instead of just staying flat. That would be a good breakout-type signal\nfor buying. In those days, breakout systems worked well. I was hooked! I was only sporadically involved in\nthe markets until about 1986, when the personal computer came along and I got more involved. CompuServe got started about then, and using it you could download actual data, so I started putting together databases and trying to implement in Fortran the same kind of system I used with Daily Charts. By then, though, the breakout system had stopped working as well in stocks. Stock prices moved too suddenly; by the time there was a breakout, it was already too late to\nget into a profitable trade.

    Q: What was the difference?

    A: In the early days, before the advent of low-cost, high-speed computers, breakouts would occur and people would see them and jump in, but slowly. Or the\nrumor mill and tip sheets would pick up on a stock, triggering a slow inflow in the following weeks. Markets were slower and less efficient in those days, which gave you time to jump on a trend. By the time I started playing with the markets using computers in 1986, things had sped up, with information being disseminated faster than ever. When a stock moved, it moved fast, with no tradable follow-through."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-54-futures-for-you-by-dan-o-neil-21.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-54-futures-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-54-futures-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov24595in,d,"{""minimum-quantity"":""1"",""path"":""ch1j20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:1 (56-61, 95): Interview: Jeffrey Owen Katz by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 24:1 (56-61, 95): Interview: Jeffrey Owen Katz by Jayanthi Gopalakrishnan

    Jeffrey Owen Katz is a professional trader and consultant specializing in predictive modeling and forecasting. He is president and founder of Scientific Consultant Services, a company focused on the development of sophisticated artificial intelligence\n(neural networks and genetic algorithms) software, primarily for application in the financial markets. He was first to develop a commercial neural network forecasting package for the Standard & Poor’s 500 (NexTurn, released in 1989). He introduced the first 32-bit neural network development tool (N-Train). He was the first to make artificial intelligence technology accessible to TradeStation users through such products as TradeNet and TS-Evolve. He was also the first to publish a paper on genetically evolving rule-based trading systems. He has published a number of articles in a diverse selection of professional journals, trade publications, anthologies, and also coauthored (with Donna L. McCormick) several books.\nSTOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Katz via telephone on November 10, 2005.

    Q: How did you get interested in the financial markets?

    A: Back in the 1970s, I used to dabble in stocks, and at\nthat time, William O’Neil was publishing Daily Charts. I would go over those charts and visually backtest different kinds of systems. I found one pattern where there would be a very low-volume, low-liquidity stock — usually an oil stock — and you’d see a spike in volume and prices would start going up slightly instead of just staying flat. That would be a good breakout-type signal\nfor buying. In those days, breakout systems worked well. I was hooked!

    I was only sporadically involved in the markets until about 1986, when the personal computer came along and I got more involved. CompuServe got started\nabout then, and using it you could download actual data, so I started putting together databases and trying to implement in Fortran the same kind of system I used with Daily Charts. By then, though, the breakout system had stopped working as well in stocks. Stock prices\nmoved too suddenly; by the time there was a breakout, it was already too late to get into a profitable trade."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-56-61-95-interview-jeffrey-owen-katz-by-jayanthi-gopalakrishnan-20.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-56-61-95-interview-jeffrey-owen-katz-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-56-61-95-interview-jeffrey-owen-katz-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246exyo,d,"{""minimum-quantity"":""1"",""path"":""ch1j20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:1 (63): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 24:1 (63): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    ASSIGNMENT ON CALENDAR SPREADS

    I was wondering if there is any possibility that an in-the-money short side of a put calendar would not get assigned on expiry. Or is the short side always assigned automatically?

    The calendar spread is a strategy we use a lot, and understanding when assignment can occur is an important part of this trade. First, let’s review the strategy. To create a calendar spread, the strategist buys a longer-term option and sells a shorter-term option. Both options have the same strike price. The\ntrade can be created with either puts or calls. Puts can be used when the strategist has a downward or bearish view on the underlying asset. Calls make sense when the strategist is bullish on the\nunderlying security."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-63-explore-your-options-by-tom-gentile-20.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-63-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-63-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246prre,d,"{""minimum-quantity"":""1"",""path"":""ch1j20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:1 (64-67): Product Review: Market Master Xec by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 24:1 (64-67): Product Review: Market Master Xec by David Penn

    Some software impresses by being so obviously more\nthan the sum of its parts. If I were to segregate the software used by technical analysts into two groups, then I would probably put the integration über alles, execution ‘n’ analysis platforms in this category. Software like this tends to be both worthwhile and memorable because of the way its various and wide-ranging components, plug-ins, add-ons, and modules almost miraculously manage to come together into the singularity of a simple trading decision to buy, sell, or cover. The ultimate example of such a\nsystem is probably a black-box trading system — though I have had the pleasure of reviewing a number of software products, from order-entry platforms to\nautomated trading programs, that also fit quite well into this category.

    On the other hand, what can be said of those software offerings that are so varied in their capacities, so wide-ranging in their ability to be, to a degree, all things to all traders that we never really feel as if we’ve discovered the “whole” to which the many beautiful and effective parts contribute. Or, rather, that otherwise elusive “whole” — in the context of this latter type of software — tends to change with each use of the application. Because the software can do so many things, so can the trader who masters it.

    I tend to think of this latter group of software applications and platforms as the province of analysts, technical analysts who don’t need (or want) a processed end-result. Instead, these technicians are comfortable with the often laborious practice of applying and reapplying a sometimes staggering number of indicators, oscillators, and other chart-marking tools to price charts — confident that each turn of the analytic\npage will yield, if not a cumulative buy-sell-cover outcome, then clearly a greater and broader understanding of the asset under question."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-64-67-product-review-market-master-xec-by-david-penn-20.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-64-67-product-review-market-master-xec-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-64-67-product-review-market-master-xec-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov24784bl,d,"{""minimum-quantity"":""1"",""path"":""ch1j20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:1 (72-75, 84): A Blueprint For Your Trading by Vadym Graifer"",""caption-linebreaks"":""Stocks & Commodities V. 24:1 (72-75, 84): A Blueprint For Your Trading by Vadym Graifer

    The active management of a trading account should be treated as a business and requires a complete trading plan. Here’s how to build one.

    A trading plan is often described as a document with setups that a trader intends to trade and details of entry and exit. In best-case scenarios, rules of money management are added, instructing a trader on how to act during a trade. While such a plan is better than a haphazard approach, it is not nearly enough for a beginning trader who needs to build an entire trading method from scratch.

    THE COMPLETE PLAN

    The most common shortcomings of an incomplete\ntrading plan are:

    • Lack of foundation in terms of understanding the market inefficiencies that a trader intends to exploit

    • Lack of logical connections between different aspects of trading, mismatch between method, time frame, and tools, and

    • Lack of a well thought-out idea on how to progress through the learning curve with minimal risk.

    Not many would venture into a new business without a thoroughly documented business plan. The active management of your investment or trading account is a business and requires a complete trading plan, with each of its elements aligned and interconnected."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-72-75-84-a-blueprint-for-your-trading-by-vadym-graifer-20.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-72-75-84-a-blueprint-for-your-trading-by-vadym-graifer-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-72-75-84-a-blueprint-for-your-trading-by-vadym-graifer-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247trti,d,"{""minimum-quantity"":""1"",""path"":""ch1j20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:1 (76-84): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:1 (76-84): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    John Ehlers’ article in this issue, “Swiss Army Knife Indicator,\"" presents a generalized filtering algorithm capable of creating simple averages, exponential averages, and momentum measurements. Late in the article, Ehlers suggests creating a MACD-style indicator from two-band pass filters.

    The code for this indicator is given for TradeStation, Wealth-Lab, AmiBroker, eSignal, NeuroShell, NeoTicker, Financial Data Calculator, VTtrader, and Tradecision."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-76-84-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-76-84-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-76-84-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov249bofo,d,"{""minimum-quantity"":""1"",""path"":""ch1j20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:1 (94): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:1 (94): Books For Traders by Technical Analysis, Inc.

    Advanced Derivatives Pricing And Risk\nManagement (420 pages, $84.95 hardcover,\n2006, ISBN 0-12-047682-7) by Claudio\nAlbanese and Giuseppe Campolieti, published\nby Elsevier Academic Press.

    This book provides a combination of theoretical and\npractical tools from which any advanced undergraduate and graduate student, professional quant and researcher will benefit. It differs from existing books in quantitative finance from the ready-to-use software\nand accessible theoretical tools provided as a complete package. As a bonus, the book also gives a detailed exposition on cutting-edge theoretical techniques published here for the first time."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-94-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-94-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-1-94-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241leto9,d,"{""minimum-quantity"":""1"",""path"":""ch10o203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:10 (10-13): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:10 (10-13): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist.

    PAPER TRADING

    Editor,

    I just subscribed to your magazine and I was wondering if you have any articles or back issues on paper-trading options and futures.

    JOHN

    I suggest you start by reading “Getting Started With Options” by Joe Demkovich and Eugene Therot (S&C,\nOctober 1999) and its follow-up article “Getting Started With Options Using Protected Positions” (S&C, November 1999). I also recommend “Five Steps\nTo A Winning Trading System” by Matt Blackman (S&C, July 2003). All of these articles are available from the Online Store at our website, www.Traders.com.\nPaper-trading is a topic that is mentioned in many articles in our magazine because it is the best way to familiarize yourself with a trading strategy or to gain confidence.—Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-10-13-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-10-13-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-10-13-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241qaby2,d,"{""minimum-quantity"":""1"",""path"":""ch10o203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:10 (14-15): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 24:10 (14-15): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    MARKET ON CLOSE ORDERS

    I do not quite understand the imbalance of NYSE and NASDAQ that you mention. Can you articulate?—Kwancy

    Sure. First off, the specialists at the NYSE receive market on close orders (MOC) all day until 3:40 pm Eastern; this is not done the same way on the NASDAQ. These can be very large orders where the brokers/banks/funds/ institutions are willing to either buy or sell shares at the final price of the day (the closing price). For example, there may be one million shares to sell (at any price), and 500,000 shares to buy (at any price), all marked MOC. That would leave an imbalance of 500,000 shares extra to sell."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-14-15-q-a-by-don-bright-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-14-15-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-14-15-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241fofo8,d,"{""minimum-quantity"":""1"",""path"":""ch10o203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:10 (16-23): Forex Focus by Ian Copsey"",""caption-linebreaks"":""Stocks & Commodities V. 24:10 (16-23): Forex Focus by Ian Copsey

    Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. With that in mind, STOCKS & COMMODITIES has introduced Forex Focus to better prepare the retail trader to participate in the currency market.

    Relative Spread Strength As A Long-Term Cyclic Tool

    Having a hard time identifying cycle peaks? This indicator can help confirm cycle highs and lows.

    I use time cycles within my analysis a great deal, but\none of the common problems in doing so is identifying\ncycle peaks. So I set out to create an indicator that could be used as a proxy for cycle highs and also help confirm cycle lows. The indicator I ended up with is quite simple, simply measuring the relative strength index (RSI) of the spread between two simple moving averages. This is why I refer to it as the relative\nspread strength (RSS). The objective was to record the strength of the expansion of the spread that occurs in a move in one direction and then record the contraction\nas the market corrects, causing the moving averages to\nmove back toward each other."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-16-23-forex-focus-by-ian-copsey-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-16-23-forex-focus-by-ian-copsey-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-16-23-forex-focus-by-ian-copsey-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241sira,d,"{""minimum-quantity"":""1"",""path"":""ch10o203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:10 (16-23): Sidebar: Rapid RSI and CTL Code for RSS by Ian Copsey"",""caption-linebreaks"":""Stocks & Commodities V. 24:10 (16-23): Sidebar: Rapid RSI and CTL Code for RSS by Ian Copsey

    RAPID RSI

    Here is the formula for the rapid RSI:

    Rapid RSI = 100 – [(100)/1 – RS]

    where RS = sum of x day’s up closes divided by sum\nof x day’s down closes.

    CTL CODE FOR RAPID RSI

    Here is the Common Technical Analysis Language\ncode for the rapid RSI for use in Global Forex Trading’s\nsoftware.

    indicator RapidRSI;\ninput price = close, period = 14, Hi_Base = 70, Lo_Base = 30;\ndraw RS(“RSI”), line_hi(“OverBought”), line_lo(“OverSold”);\nvars b(number), f(number), i(number), j(number), k(number),\nline(series), u(series), d(series), dif(number),\nSumUp(number), SumDn(number);\nbegin..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-16-23-sidebar-rapid-rsi-and-ctl-code-for-rss-by-ian-copsey-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-16-23-sidebar-rapid-rsi-and-ctl-code-for-rss-by-ian-copsey-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-16-23-sidebar-rapid-rsi-and-ctl-code-for-rss-by-ian-copsey-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov242sige,d,"{""minimum-quantity"":""1"",""path"":""ch10o203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:10 (24-32): Sidebar: General Rules by Sam Bhugaloo"",""caption-linebreaks"":""Stocks & Commodities V. 24:10 (24-32): Sidebar: General Rules by Sam Bhugaloo

    To achieve success, I include these rules as part of the timing trigger within my trading plan:

    • Use a weekly chart of the COT commercials with a Williams’ accumulation/distribution and its 28-period MA (AD/MA)..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-24-32-sidebar-general-rules-by-sam-bhugaloo-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-24-32-sidebar-general-rules-by-sam-bhugaloo-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-24-32-sidebar-general-rules-by-sam-bhugaloo-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov242waco,d,"{""minimum-quantity"":""1"",""path"":""ch10o203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:10 (24-32): Watch The Commercials by Sam Bhugaloo"",""caption-linebreaks"":""Stocks & Commodities V. 24:10 (24-32): Watch The Commercials by Sam Bhugaloo

    The Commitments Of Traders report has long been\nused among futures traders. Here’s why you should\nfollow the commercials and how you can incorporate\nthe information into your trading plan.

    An important feature of the futures markets is the relationship between hedgers and speculators. Commercial traders are hedgers in the futures markets, while speculators are noncommercial traders. The Commodity Futures Trading Commission (CFTC), the government regulatory authority for the industry,\nregisters all futures contracts. The cost for registering\nis higher for speculators than for hedgers. Thus, those traders who are producing or processing large amounts of commodities register as commercial traders. All other traders are either large noncommercials\nwith many contracts traded at a time or traders with\nonly a few contracts. If used correctly, the Commitments Of Traders (COT) report is a powerful tool that will allow traders to predict potential bullish trends or market tops by examining extreme levels of bullishness or bearishness.

    Many traders follow the large speculators, but this may not produce the expected results. Here’s why you should follow the COT commercials and incorporate this into your trading plan."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-24-32-watch-the-commercials-by-sam-bhugaloo-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-24-32-watch-the-commercials-by-sam-bhugaloo-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-24-32-watch-the-commercials-by-sam-bhugaloo-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov243trin,d,"{""minimum-quantity"":""1"",""path"":""ch10o203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:10 (34-36): Trading In Restrictive Intraday Price Ranges by A. Trongone, Ph.D., CFP, CTA"",""caption-linebreaks"":""Stocks & Commodities V. 24:10 (34-36): Trading In Restrictive Intraday Price Ranges by Anthony Trongone, Ph.D., CFP, CTA

    When the commodity markets are moving in a narrow price range, are there any trading opportunities?\nDiscover how you can find them and take immediate action in the e-mini NASDAQ 100.

    The commodities markets are notorious for their price\nfluctuations. Still, there are occasions when they appear directionless. But after experiencing two hours of relatively narrow price movements, does it offer us a (profitable) trading opportunity? Let’s take a look, confining our analysis to trading the e-mini NASDAQ 100 (NQs) between 8:30 am to 4:15 pm. During the 156 trading days I examined, there were 96 trading opportunities, of which 61 were profitable and 29 not, leaving us with six ties.

    After breaking the 8:30 am–4:15 pm trading day into 15-minute segments, I started by looking at the price difference between the opening and the closing prices within each 15-minute bar. A relatively narrow price movement occurs when the bars stay within a twopoint\nrange (opening – closing price is within 2.00 index points). On the NQs, this restriction amounts to a monetary change less than $40, whereas the October 18, 2005–May 26, 2006, average difference was $36.60 (1.81 points)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-34-36-trading-in-restrictive-intraday-price-ranges-by-a-trongone-ph-d-cfp-cta-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-34-36-trading-in-restrictive-intraday-price-ranges-by-a-trongone-ph-d-cfp-cta-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-34-36-trading-in-restrictive-intraday-price-ranges-by-a-trongone-ph-d-cfp-cta-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244sysw,d,"{""minimum-quantity"":""1"",""path"":""ch10o203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:10 (44-50): Synthetic Swing Trading by Carley Garner"",""caption-linebreaks"":""Stocks & Commodities V. 24:10 (44-50): Synthetic Swing Trading by Carley Garner

    Trading successfully means being aware of support & resistance levels. Here are some examples to help you understand the world of option trading.

    Because markets tend to trade in a defined range, outright long option positions are priced to lose. In fact, typically, most options that are more than two strike prices out-of-themoney, in the direction opposite of the overall trend, and with fewer than 45 days until expiration, expire worthless. As a result, constant awareness of support and resistance levels is crucial.

    With that, let’s look at the trade we took advantage of in January 2006. This is one example of a trading strategy we have implemented countless times, usually with similar results. The time, strike prices, and underlying\nfutures contract month may differ, but the approach and strategy never do.

    First of all, the March 2006 Dow contract saw a major run up in November and December 2005. We formed the basis for our trade by keeping in mind that the stock market tends to make a run higher from November through March every year, but also that markets often digest big moves."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-44-50-synthetic-swing-trading-by-carley-garner-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-44-50-synthetic-swing-trading-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-44-50-synthetic-swing-trading-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov245cohi,d,"{""minimum-quantity"":""1"",""path"":""ch10o203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:10 (52-56): Confirming High-Probability Turning Points by Todd Krueger"",""caption-linebreaks"":""Stocks & Commodities V. 24:10 (52-56): Confirming High-Probability Turning Points by Todd Krueger

    Here’s how to use volume spread analysis to track market activity of the professionals.

    As traders, we have different methods with which to analyze the market and on which to base our trading decisions; the two most commonly used are fundamental analysis and technical analysis. Each approach offers varying insights into market activity. Fundamental analysis is often used to help determine the balance of supply and demand, in which reports\nof crop yields or crude oil inventories, for example, are studied to gain a better knowledge of an underlying\ncause for the price of a given futures contract to move in a particular direction.

    Fundamental analysis attempts to answer why a price\nwill move, but not when. Technical analysis, on the other hand, is often used to answer when the price is ready to move on any given contract with no regard as to why.

    A third approach can be used to analyze a market that will answer why and when simultaneously; this methodology is called volume spread analysis (VSA). I will show you how the VSA approach can track professional activity (also known as the smart money), compare this to both fundamental and technical analysis approaches, and show examples of VSA being used to confirm technical analysis indicators to make better trading decisions."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-52-56-confirming-high-probability-turning-points-by-todd-krueger-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-52-56-confirming-high-probability-turning-points-by-todd-krueger-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-52-56-confirming-high-probability-turning-points-by-todd-krueger-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov245exyo,d,"{""minimum-quantity"":""1"",""path"":""ch10o203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:10 (57): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 24:10 (57): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    ABOUT THOSE OPTIONS SCANDALS

    There has been talk lately about the options scandals that have involved many big companies. I am new to options trading and was wondering how these events might affect my trading. The options backdating scandals involve a different kind of options contract\nthan the ones you and I trade. The controversy involves the timing of options grants from employers to employees.

    Specifically, some companies are under investigation for retroactively setting the date of options to a time when the stock price was lower, which makes the option contract immediately more valuable. The scandal involves a type of option that is awarded to key\nemployees by the company. You and I trade a different kind of contract known as listed options. These contracts are not awarded to employees, but trade on the organized options exchanges such as the Chicago Board Options Exchange (CBOE), the International Securities Exchange (ISE), or the American Stock Exchange (AMEX). Since employee options and listed options are very different, the scandal will have no real effect on day-to-day trading for options strategists."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-57-explore-your-options-by-tom-gentile-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-57-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-57-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov245inje,d,"{""minimum-quantity"":""1"",""path"":""ch10o203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:10 (58-65): Interview: Jerry Toepke Of The Moore Research Center by J. Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 24:10 (58-65): Interview: Jerry Toepke Of The Moore Research Center by Jayanthi Gopalakrishnan

    Watching the rhythm of the markets, and being able to anticipate market movement, can give the\ninvolved trader a boost. Jerry Toepke, who is editor at Moore Research Center, Inc. (MRCI), has\ngained an appreciation for the power of the seasonal study as well as how it integrates with\ntechnical and fundamental analysis since he joined MRCI in 1988. His interest in the futures\nmarket started in 1977, and since then, he has been a private trader and retail broker. STOCKS\n& COMMODITIES Editor Jayanthi Gopalakrishnan interviewed MRCI’S Jerry Toepke on August\n9, 2006, via telephone.

    Q: Can you tell us about the Moore Research Center?

    A: The Moore Research Center is an independent, privately owned company engaged in seasonal research. The company has, and still does, conduct research under contract to certain futures exchanges, but generally, it is in the business to provide research to individual traders, from beginners to professionals to commercials, so they can better make their own trading\ndecisions. The company is not an advisory service, and does not presume to make trading recommendations.\nRather, our intent is to perform an objective analysis of historical futures prices, looking for price movements\nthat are so reliably repetitive that traders can anticipate their recurrence on their own.

    Q: Is that kind of predictable repetition\nonly in the futures markets?

    A: I suspect it’s true in most markets, but\nour forte is futures and that is pretty\nmuch where we stay. We have done\nsome special reports, special publications,\nthat we put out once in a while on\nthe Dow Jones industrials, and on the\nStandard & Poor’s 100. We determine\nwhen a specific stock, over the last x\nnumber of years, tends to make a seasonal\nhigh, a seasonal low, and seasonal\ntrends in one direction or other. But\nprimarily, our clientele, our business,\nand our focus are on futures."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-58-65-interview-jerry-toepke-of-the-moore-research-center-by-j-gopalakrishnan-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-58-65-interview-jerry-toepke-of-the-moore-research-center-by-j-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-58-65-interview-jerry-toepke-of-the-moore-research-center-by-j-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246wefo1,d,"{""minimum-quantity"":""1"",""path"":""ch10o203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:10 (66-67): Websites For Traders: Thomson I-Watch by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 24:10 (66-67): Websites For Traders: Thomson I-Watch by David Penn

    Could someone explain to me why a website as helpful as Thomson IWatch can’t have a more straightforward\nURL? Such is the world of mergers and acquisitions, e-commerce style, I suppose. Thomson Financial + Lycos + (apparently) Quote.com = one tricky uniform resource locator. I threw in Quote.com because of the 12 links at the top of the page that features I-Watch,\nwhich is an interactive, graphic display of institutional buying and selling, nine take you to resources at the Quote.com website. Of the other three, one—the\nmessage-board—currently is not functioning, another of the 12 takes you directly to the Securities and Exchange Commission’s EDGAR database, and the\nthird takes you to I-Watch.

    I recently wrote an article for Working-Money.com looking at some of the ways that average stock investors, speculators, and traders could gauge accumulation and distribution in the market.\nThat article focused on price and volume clues, stage analysis, and the role of the Big Money."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-66-67-websites-for-traders-thomson-i-watch-by-david-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-66-67-websites-for-traders-thomson-i-watch-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-66-67-websites-for-traders-thomson-i-watch-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246toof,d,"{""minimum-quantity"":""1"",""path"":""ch10o203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:10 (68-70): The Tools Of The Trade by Martha Stokes"",""caption-linebreaks"":""Stocks & Commodities V. 24:10 (68-70): The Tools Of The Trade by Martha Stokes

    Here’s an overview of the array of tools you need in\norder to trade successfully.

    Every professional knows that the right tools are essential to success. A carpenter wouldn’t use a sledgehammer to nail an interior window frame, nor would he (or she) use a framing waffle-head hammer.\nHe knows that the ideal hammer for fine finish work is a finishing hammer that has a smooth head and is lightweight. By using the right hammer for the job, the carpenter gets the results he wants.

    YOUR TOOLKIT FOR TRADING

    The same applies to trading. Whenever a trader comes to me struggling with less-than-satisfactory results, I first check his or her toolkit of indicators. Many factors can cause this trader to have disappointing results; often, the primary culprit is not understanding how to use indicators. The most common problem is that\ntraders will use several indicators that are basically all\ntracking the same market data and are missing indicators critical for tracking the full range of data for the stock. The toolkit of indicators is out of balance. That trader is using a sledgehammer instead of a finish hammer."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-68-70-the-tools-of-the-trade-by-martha-stokes-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-68-70-the-tools-of-the-trade-by-martha-stokes-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-68-70-the-tools-of-the-trade-by-martha-stokes-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247prre1,d,"{""minimum-quantity"":""1"",""path"":""ch10o203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:10 (72-76): Product Review: StrataSearch 3.0 by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 24:10 (72-76): Product Review: StrataSearch 3.0 by David Penn

    When you write enough product reviews, it becomes hard not to notice certain trends. Because of the work, effort, and time involved in producing the sort of trading and technical analysis software that we review in Technical Analysis of STOCKS & COMMODITIES, I can’t\ncall these trends mere fads or fashions. When we see a certain type of software appear month after month, it is as if we are reading the writing on the wall.

    Of late, this writing has been pretty clear: the most innovative work in trading and technical analysis software is increasingly geared toward taking what\nis traditionally thought of as the “analytic work” out of the hands of the trader. More and more traders are being\nchallenged not so much on the basis of their own ability to analyze price action in the various stock, futures, and forex markets, but more on the basis of their willingness to put their egos on the shelf and, instead, let the power of computer algorithms figure out how various markets should be traded.

    I’m no pilot. But I imagine this development in technical analysis/trading software is similar to the difference\nbetween piloting a biplane in the first third of the 20th century and flying a jet in the first third of the 21st. Both efforts require technical skill, discipline, and courage. But clearly, the aviator of old was required to do a lot of what the contemporary pilot can either take for granted or have a computer perform for him or her."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-72-76-product-review-stratasearch-3-0-by-david-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-72-76-product-review-stratasearch-3-0-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-72-76-product-review-stratasearch-3-0-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247trti6,d,"{""minimum-quantity"":""1"",""path"":""ch10o203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:10 (77-86): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:10 (77-86): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    Editor’s note: This month’s Traders’ Tips\nare based on Ian Copsey’s article in this\nissue, “Relative Strength Spread As A Long-Term Cyclic Tool.” Code written in EasyLanguage for TradeStation is provided by the author in the article’s sidebars. Additional code is presented here for TradeStation, MetaStock, eSignal, AIQ, Wealth-Lab, AmiBroker, NeuroShell Trader, NeoTicker, BioComp Dakota, TechniFilter Plus, Aspen Graphics, Financial Data Calculator, Tradecision, MCFX, Ensign Software, and VT Trader."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-77-86-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-77-86-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-77-86-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov249bofo7,d,"{""minimum-quantity"":""1"",""path"":""ch10o203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:10 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:10 (92): Books For Traders by Technical Analysis, Inc.

    Beat The Odds In Forex Trading: How To Identify\nAnd Profit From High-Percentage Market Patterns (216\npages, $60 hardcover, 2006, ISBN 0-471-93331-7) by Igor Toshchakov (L.A. Igorok), published by John Wiley & Sons.

    Longtime forex traders know the best they can hope for is a proven system and a reliable combination of recurring patterns. This book details a straightforward system that allows you to enter and exit the market according to clear-cut mechanical rules instead of guesswork. This insight-filled book details odds-enhancing trading strategies and gives you\nproven methods and techniques to strengthen\nyour trading approach."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov249atcl3,d,"{""minimum-quantity"":""1"",""path"":""ch10o203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:10 (97-98): At The Close by Dennis D. Peterson"",""caption-linebreaks"":""Stocks & Commodities V. 24:10 (97-98): At The Close by Dennis D. Peterson

    Chart Analysis

    Trying to anticipate market support and resistance requires practice and knowing a few rules. Let’s take a look at the QQQQs. First, it’s obvious from Figure 1\nthat at this point, the QQQQs are in a downtrend or at the very least a downswing, especially if you apply zigzag. Zigzag (red line going through price chart) helps you see only the “significant” movement while eliminating the noise. In this case, noise was defined to be any price movement less than 2%, while 2% was deemed significant.

    I used the open prices because visually it looks correct to me and that’s what I want from zigzag—a visual cue.\nWith the strong downward move between points 1 and 2, you might think that the relative strength index (RSI) would surely bottom out. RSI, which uses the ratio of up\ndays to down days, in this case over the last 14 trading days, gets close when it reaches 23.8. What’s the deal? The deal is that when you look at statistics of up and down days, the market tries to strike a balance. It also has a lot fewer sequences of three down days in a row than two down days in a row. Similarly, for up days there are still fewer four days in a row than three, and so forth. This explains why stochastic RSI is a better\nindicator in many aspects."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-97-98-at-the-close-by-dennis-d-peterson-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-97-98-at-the-close-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-10-97-98-at-the-close-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241leto10,d,"{""minimum-quantity"":""1"",""path"":""ch11n203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:11 (10-13): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:11 (10-13): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist.

    BULKOWSKI INTERVIEW

    Editor,

    I enjoyed your recent interview with Thomas Bulkowski. Could you tell me what chart-pattern recognition computer software he uses? I’m a chart reader but I’m looking for a service/platform that helps me identify these patterns — that brings them to my attention. I currently use TC2005 and eSignal, but you have to really “search” out the charts of stocks that offer potential profit. In addition, any other information/services that he offers would be appreciated, such as his email/website, and so forth.

    MIKE MARTIN

    Tom Bulkowski uses software he developed. A version of it that performs chart pattern recognition is available on his website for free at http://mysite.verizon.net/\nresppzq7/patternz.html. It finds 64 chart patterns, 102 candlesticks, and other related concepts, but you have to provide the data.—Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-10-13-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-10-13-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-10-13-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241fofo9,d,"{""minimum-quantity"":""1"",""path"":""ch11n203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:11 (14-18): Forex Focus: Profiting From The Gartley by Todd Gordon"",""caption-linebreaks"":""Stocks & Commodities V. 24:11 (14-18): Forex Focus: Profiting From The Gartley by Todd Gordon

    Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. With that in mind, STOCKS & COMMODITIES has introduced Forex Focus to better prepare the retail trader to participate in the currency market.

    By identifying advanced patterns in markets about to reverse, you can get a better idea when and where the next five-wave trend could emerge.

    A distinctive and recognizable pattern occurs in the early stages of an emerg-ing trend. Being aware of such a pat-tern can help you position yourself for the pending move. This article will detail the characteristics of that pattern, the symmetrical price legs contained within it, what the price implications may be, and how a trader can iden-tify and profit from this powerful pattern, re-ferred to as the Gartley pattern. We will also delve into Elliott wave theory to further substan-tiate the symmetrical price swings that accom-pany Gartley patterns and their relative location to the market trend.

    THE GARTLEY PATTERN

    H.M. Gartley first introduced the pattern in 1937, but it wasn’t until the late 1980s, when trader Larry Pesavento assigned expected ratios to the four legs of the pattern, that its use became more widespread.\nEssentially, the Gartley pattern uncovers the market’s tendencies to take advantage of the trend-following crowd. Unknown to the trend-followers, Gartleys frequently appear at critical reversal levels. They begin to take shape in the consolidation zones following an extended trend and will often bait latecoming trend-followers into the market, to their dismay."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-14-18-forex-focus-profiting-from-the-gartley-by-todd-gordon-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-14-18-forex-focus-profiting-from-the-gartley-by-todd-gordon-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-14-18-forex-focus-profiting-from-the-gartley-by-todd-gordon-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov242meri,d,"{""minimum-quantity"":""1"",""path"":""ch11n203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:11 (20-26): Measuring Risk by Lee Leibfarth"",""caption-linebreaks"":""Stocks & Commodities V. 24:11 (20-26): Measuring Risk by Lee Leibfarth

    The most important concept in building a profitable trading system is to protect your capital. Here’s a look at some of the techniques you can apply to measure your risks.

    Would you consider riding a roller-coaster at an amusement park? How about tak-ing a whitewater rafting trip or climbing Mt. Everest? For everyone the answer will be different, as we each assess risk and reward differently. Herein lies the reason why one style of trading doesn’t work for everyone: as traders, we all have different risk tolerances. This article will discuss some methods of measuring risk and explain some of the basic principles of successful risk management.

    DEFINING RISK

    In the context of trading, risk refers to the probability of losing money or trading capital. The primary goal of trading is to protect capital. This is, by far, the most important concept in building a profitable trading system. While it may seem that the first goal should be to make a profit, simply focusing on profits (or returns) may cause traders to take unnecessary risks, causing them to burn through a trading account. The fact is, without enough money, traders are bankrupt. Game over. Once a trading account has been lost or severely depleted, it can take a long time and a lot of stress to start over. Proper planning and money management allow traders to establish systems that will protect their most valuable asset: trading capital."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-20-26-measuring-risk-by-lee-leibfarth-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-20-26-measuring-risk-by-lee-leibfarth-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-20-26-measuring-risk-by-lee-leibfarth-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov243buau,d,"{""minimum-quantity"":""1"",""path"":""ch11n203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:11 (36-44): Building Automatic Trendlines by Giorgos E. Siligardos, Ph.D."",""caption-linebreaks"":""Stocks & Commodities V. 24:11 (36-44): Building Automatic Trendlines by Giorgos E. Siligardos, Ph.D.

    Here’s a simple mechanical method for automatic trendline construction using monoparametric trendlines.

    Despite the continuing evolution in technical analysis tools, almost all of the earlier forms of charting techniques are still being used, in exactly the way\nthey have been used for decades. Though the implementation of trendlines by chartists has been around a long time, an algorithmic approach to trendline construction is not yet available. For the mechanical construction of trendlines I will introduce a simple algorithm, one I call monoparametric trendline. It is based upon one parameter (hence the term “monoparametric”), which specifies the magnitude of price swings taken into account.

    DOES THE TREND DEFINE THE TRENDLINE?

    If the concept of a trend is defined as the directional movement of price, then the existence of a trend does not necessarily imply that a trendline can be constructed — for example, the case where price advances for several consecutive days clearly show a directional movement, although no trendline can be constructed unless downward corrections take place.

    Then there’s the definition that John J. Murphy gives in his book Technical Analysis Of The Financial Markets, that the trend as the direction of price peaks and troughs. According to Murphy, an uptrend is defined as a series of successively higher peaks and troughs, and a downtrend is defined as a series of lower peaks and troughs. This definition, of course, involves the existence of both peaks and troughs, and in such case, the bond between trendlines and a trend is unbreakable."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-36-44-building-automatic-trendlines-by-giorgos-e-siligardos-ph-d-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-36-44-building-automatic-trendlines-by-giorgos-e-siligardos-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-36-44-building-automatic-trendlines-by-giorgos-e-siligardos-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov243coac,d,"{""minimum-quantity"":""1"",""path"":""ch11n203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:11 (36-44): Constructing an active proper trendling using two points... by Giorgos E. Siligardos, Ph.D."",""caption-linebreaks"":""Stocks & Commodities V. 24:11 (36-44): Constructing an active proper trendling using two points as milestones by Giorgos E. Siligardos, Ph.D.

    The Pascal-like pseudolanguage here consists of two parts and gives the basic steps for constructing an active proper trendline using two points as milestones. We consider the closing price of a trading vehicle as an array of N values: CLOSE[1], CLOSE[2], ……CLOSE[N]. The first milestone is CLOSE[x1] and the second milestone is CLOSE[x2]. The result of the code is an array: AutoTL[k], AutoTL[k+1], …. AutoTL[N], which contains the values of the trendline.

    The first part of the code constructs an upward trendline and the second part of the code constructs a downward trendline. Expressions in bold italic in the code refer to obvious procedures."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-36-44-constructing-an-active-proper-trendling-using-two-points-by-giorgos-e-siligardos-ph-d-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-36-44-constructing-an-active-proper-trendling-using-two-points-by-giorgos-e-siligardos-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-36-44-constructing-an-active-proper-trendling-using-two-points-by-giorgos-e-siligardos-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov243fipo,d,"{""minimum-quantity"":""1"",""path"":""ch11n203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:11 (36-44): Finding point milestones from which to construct trendlines by Giorgos E. Siligardos, Ph.D."",""caption-linebreaks"":""Stocks & Commodities V. 24:11 (36-44): Finding point milestones from which to construct trendlines by Giorgos E. Siligardos, Ph.D.

    The Pascal-like pseudolanguage here finds the points to be used as milestones from which to construct trendlines.

    We consider the closing price of a trading vehicle as an array of N values: CLOSE[1], CLOSE[2], ……CLOSE[N]. Also, pivot[1].position, pivot[2].position, pivot[3].position and pivot[4].position is an array that\nis used to store the time positions of the last four pivots of the SI. Finally, pivot[1].pivottype, pivot[2].pivottype, pivot[3].pivottype and pivot[4].pivottype is an array that is used to store the (+1) or (-1) assignment of the last four pivots of the SI. Expressions in bold italic in the code refer to obvious or previously stated procedures."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-36-44-finding-point-milestones-from-which-to-construct-trendlines-by-giorgos-e-siligardos-ph-d-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-36-44-finding-point-milestones-from-which-to-construct-trendlines-by-giorgos-e-siligardos-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-36-44-finding-point-milestones-from-which-to-construct-trendlines-by-giorgos-e-siligardos-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov243sial,d,"{""minimum-quantity"":""1"",""path"":""ch11n203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:11 (36-44): Sidebar: Algorithm for the Swing Indicator by Giorgos E. Siligardos, Ph.D."",""caption-linebreaks"":""Stocks & Commodities V. 24:11 (36-44): Sidebar: Algorithm for the Swing Indicator by Giorgos E. Siligardos, Ph.D.

    The Pascal-like pseudolanguage here consists of two parts and gives the basic steps to construct the swing indicator (SI) using parameter threshold %. We consider the closing price of a trading vehicle an array of N values: CLOSE[1], CLOSE[2], ……CLOSE[N].\nThe first part of the code constructs the PIVOT array (PIVOT[1],PIVOT[2], ….PIVOT[N]), which carries information about the peaks and troughs of the SI by assigning “1” to cases where a swing high or low has occurred and zero otherwise.

    The second part of the code constructs the SI array ( SI[1], SI[2], …SI[N] ) by getting the information from the PIVOT array and connecting the pivots using line segments."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-36-44-sidebar-algorithm-for-the-swing-indicator-by-giorgos-e-siligardos-ph-d-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-36-44-sidebar-algorithm-for-the-swing-indicator-by-giorgos-e-siligardos-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-36-44-sidebar-algorithm-for-the-swing-indicator-by-giorgos-e-siligardos-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244bese,d,"{""minimum-quantity"":""1"",""path"":""ch11n203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:11 (48-51): Beyond Setups by Steve Palmquist"",""caption-linebreaks"":""Stocks & Commodities V. 24:11 (48-51): Beyond Setups by Steve Palmquist

    There are several aspects to trading beyond your trading setups. Here’s a look at five factors that will help you become a better trader.

    Like most professions, trading requires a number\nof different skills to be successful. It takes time to develop these skills — two to five years — and there are few shortcuts if you try to do it alone. Many traders will read about a system and use it until they have a number of consecutive losses. Then they switch to another system in a constant search for something that\nworks all the time. They will continue to lose money until they realize there is more to trading than just setups. Some traders will use very tight stops trying to\nminimize risk. When they lose most of their money, they become convinced trading is just luck. Some traders use only a single system they learned from an expert, and eventually, when they start losing with that system,\nthey wonder why it doesn’t work anymore and stop trading.

    The school of hard knocks has taught me that there are aspects to trading, beyond setups, that successful traders must master."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-48-51-beyond-setups-by-steve-palmquist-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-48-51-beyond-setups-by-steve-palmquist-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-48-51-beyond-setups-by-steve-palmquist-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov245prre2,d,"{""minimum-quantity"":""1"",""path"":""ch11n203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:11 (52-54): Product Review: Trade Guide by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 24:11 (52-54): Product Review: Trade Guide by Jayanthi Gopalakrishnan

    We constantly hear the terms supply and demand, but\nhow do you measure these variables in the financial\nmarkets? One way is through volume spread analysis (VSA), developed by Tom Williams, a former syndicate\ntrader, in the 1980s. This technology, which has been built into TradeGuider, helps identify where the professional money is going.

    INSTALLATION AND SETUP

    TradeGuider is integrated with Windows XP, so I didn’t experience any difficulties installing the software. Since\nI have a subscription to eSignal, the datafeed was taken care of. Within a few minutes, I was ready to run the software.

    VOLUME

    The first step is to bring up a chart, which is easily done. Select File from your toolbar and then open a chart. A window comes up where you have to enter symbols in the TradeGuider format. You have the option of displaying multiple charts, always a nice feature.\nOnce you have the charts up on your screen, the fun begins. A five-minute chart of the September e-minis is displayed in Figure 1 as an example. To make it easier to see, I have only displayed one chart."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-52-54-product-review-trade-guide-by-jayanthi-gopalakrishnan-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-52-54-product-review-trade-guide-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-52-54-product-review-trade-guide-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov245qaby,d,"{""minimum-quantity"":""1"",""path"":""ch11n203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:11 (55): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 24:11 (55): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://\nMessage-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    “OVERHEARD” CONVERSATION ONLINE

    NASDAQ and the DJIA keeps going up. As of today, the DJIA’s another 16 points up and it’s only 9:30 am Pacific time—it’s like it’s 1999 all over again! We have to have faith in the Federal Reserve and in the US. If you short-sell, you lose most of the time. —stock_trad3r

    I don’t really think short-sellers are “anti-American”! Just for the record, how much are those indicators up this year? As traders, we really can’t afford to be “buy-only” types—and certainly not “buy & hold” types. Since the market guarantees it will go up and down, why take away half the opportunities? And if it weren’t for short-sellers, where would all the “buy & holders” get the stock?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-55-q-a-by-don-bright-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-55-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-55-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov245enan,d,"{""minimum-quantity"":""1"",""path"":""ch11n203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:11 (56-61): Entropic Analysis Of Equity Prices by Ron McEwan"",""caption-linebreaks"":""Stocks & Commodities V. 24:11 (56-61): Entropic Analysis Of Equity Prices by Ron McEwan

    Here’s a simple method that measures the disorder in equity price data.

    Among the most significant (but perhaps least known to traders) technological breakthroughs of our lifetime were the ideas published in 1948 by Claude E. Shannon and Warren Weaver. Their ideas established the basic principles by which computers are capable of communicating with each other. For traders, the publication of the ideas established the mathematical framework applicable to the analysis and optimization of speculative endeavors. Further, it helped present the groundwork for another significant publication by J.L. Kelly Jr., whose concept was presented in the Bell System Technical Journal in 1956, “A New Interpretation Of Information Rate.”

    Many of you may be familiar with one of their ideas specifically applying to trading, the Kelly criterion (also\nreferred to as the Kelly betting system). The Kelly criterion states that we should bet that fixed fraction of our stake, which maximizes growth. Another member of the Bell Labs team, Edward O. Thorp, went on to publish the well-known “beat the dealer” and “mathematics of gambling” concepts. Thorp could be referred to as the father of program trading.

    All this is based on the original ideas and concepts of\napplying entropy analysis to information as presented by Claude Shannon."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-56-61-entropic-analysis-of-equity-prices-by-ron-mcewan-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-56-61-entropic-analysis-of-equity-prices-by-ron-mcewan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-56-61-entropic-analysis-of-equity-prices-by-ron-mcewan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov245sbca,d,"{""minimum-quantity"":""1"",""path"":""ch11n203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:11 (56-61): SB: Calculating the probability of an up/down move in a time series by Ron McEwan"",""caption-linebreaks"":""Stocks & Commodities V. 24:11 (56-61): SB: Calculating the probability of an up/down move in a time series by Ron McEwan

    The simple form of the probability equation for the\nspreadsheet model is:

    P = ((AVG / RMS) +1)/2

    P = Probability

    AVG = Average of the log changes in the data series (LN (T/T1) function in Excel)

    RMS = Root mean square equation (SUMSQ (Period)/\nCOUNT (Period)) ^0.5..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-56-61-sb-calculating-the-probability-of-an-up-down-move-in-a-time-series-by-ron-mcewan-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-56-61-sb-calculating-the-probability-of-an-up-down-move-in-a-time-series-by-ron-mcewan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-56-61-sb-calculating-the-probability-of-an-up-down-move-in-a-time-series-by-ron-mcewan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246exyo1,d,"{""minimum-quantity"":""1"",""path"":""ch11n203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:11 (62): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 24:11 (62): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    ONE CALL, THAT’S ALL

    I bought my first call option on a stock and the trade is working out nicely. The stock is up almost 10% since I bought the option. I know I can close the trade and make a profit, but is there any way to protect some of the profits if I think the stock might rally even more?

    Sounds like a good situation to be in. If the stock has moved higher as you hoped and the call option has increased in value, there are adjustments you can\nmake to lock in some or all of the profits. The best adjustment will depend on the situation, but one possible approach is to convert the straight call\npurchase into a bull call spread by selling a call option with a higher strike price. Here’s how that would work.

    Say XYZ is trading for $50 a share and I buy the XYZ December 55 call for $2.50 a contract. Now, suppose XYZ shares rally 10% to $55. In that case, the strategist has a profit of at least $2.50 a contract, which is equal to the current stock price ($55) minus the strike price\n(50) minus the cost of the trade $2.50. At that point, the strategist might choose to close out the trade for a 100% profit (or more if time value is remaining.)"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-62-explore-your-options-by-tom-gentile-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-62-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-62-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246qush,d,"{""minimum-quantity"":""1"",""path"":""ch11n203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:11 (64): Quick-Scans: SharpCharts2 by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 24:11 (64): Quick-Scans: SharpCharts2 by Jayanthi Gopalakrishnan

    Creativity and technical analysis: Who would have thought the two could be combined? Evidently the folks at StockCharts.com feel they can be, and they have successfully done so with the introduction of SharpCharts2. At first glance, you may not think much has changed but there are some additions that could really enhance your trading.

    Starting with the attributes, in addition to the options available such as periodicities, chart type, size, and color scheme, you can place grids, change the color, and change the opacity or transparency of specific aspects on a chart. These options are available for the price chart, the overlays, and the indicators."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-64-quick-scans-sharpcharts2-by-jayanthi-gopalakrishnan-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-64-quick-scans-sharpcharts2-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-64-quick-scans-sharpcharts2-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246fufo1,d,"{""minimum-quantity"":""1"",""path"":""ch11n203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:11 (66): Futures For You by Dan O’Neil"",""caption-linebreaks"":""Stocks & Commodities V. 24:11 (66): Futures For You by Dan O’Neil

    INSIDE THE FUTURES WORLD

    Want to learn how the futures markets really work? Dan O’Neil, a principal at online futures and forex broker XPRESSTRADE (www.xpresstrade.com), responds to\nyour questions about today’s futures markets. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be\nposted there, and selected questions will appear in a future issue of S&C.

    OUT OF THE PITS

    I’ve heard about a couple of exchanges introducing “side-by-side” trading in some of their products. What is that? “Side-by-side” trading is the simultaneous trading of a commodity or financial futures product electronically and in the trading pit during business hours. As more exchanges introduce electronic trading, many investors are wondering whether to shift their trading from the pits to the computerized systems. While the contract specifications for products traded in the electronic and open-outcry arenas are usually identical, there are key differences.

    Open-outcry trading involves orders communicated to brokers in a pit via customer requests made to their brokerages via phone or computer. Customer bids and offers are matched between pit brokers, and trades are executed when prices are mutually acceptable. In electronic or screen-based trading, customers send buy/sell orders from their computers to an electronic\nmarketplace offered by the exchange."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-66-futures-for-you-by-dan-o-neil-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-66-futures-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-66-futures-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246intr,d,"{""minimum-quantity"":""1"",""path"":""ch11n203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:11 (68-74): Interview: Trading Your Beliefs With Van K. Tharp"",""caption-linebreaks"":""Stocks & Commodities V. 24:11 (68-74): Interview: Trading Your Beliefs With Van K. Tharp

    Often imitated, never bested, Van Tharp is an original and a pioneer in the field of trading psychology. Van Tharp has been a coach and consultant to traders since 1982. He is the author of numerous books and home-study program and is widely recognized for his best-selling books \""Trade Your Way To Financial Freedom\"" and \""Safe Strategies For Financial Freedom\"". His Peak Performance program is a well-regarded\nclassic that is suitable for all levels of traders and investors. STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan spoke to Van Tharp on September 6, 2006, and put together this interview with a combination of the spoken conversation and written answers.

    Q: Why is it so important to take an inventory of your skills, temperament, time, resources, strengths, and\nweaknesses before you trade?

    A: People will not trade a system competently unless it fits them. It has to fit who they are and their current lifestyle. For example, if you have a full-time job, you probably would have trouble daytrading or even swing trading. You have to design a system that really fits\nyour personality. But it’s more elaborate than that. First,\nyou don’t trade the markets, you trade your beliefs, so it’s important to take an inventory of your beliefs. I believe there are three categories of beliefs."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-68-74-interview-trading-your-beliefs-with-van-k-tharp-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-68-74-interview-trading-your-beliefs-with-van-k-tharp-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-68-74-interview-trading-your-beliefs-with-van-k-tharp-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247prre2,d,"{""minimum-quantity"":""1"",""path"":""ch11n203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:11 (76-78): Product Review: SoftInvestor by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 24:11 (76-78): Product Review: SoftInvestor by David Penn

    Let it never be said there is not a measure of diversity in the optimized trading system software market. This marks the third month in a row I have spent time with\nsoftware based on the idea of, if not reinventing the wheel, then at least putting it through the Speed Channel’s Unique Whips program of spinning rims\nand 20-inch low-profile tires.

    In other words, we are again talking about optimizing indicators as the primary goal of a system like SoftInvestor, which comes to us from Denmark, courtesy of the Implementia company. As they suggest in their response to a question about their target customer, SoftInvestor is geared toward the personal\nand semiprofessional trader who sees the advantage of optimized indicators, but is not necessarily ready to relegate all of his or her trading to the optimized verdicts of his technical analysis software. In this, Implementia’s SoftInvestor is a very accessible, very\nstraightforward technical tool for traders, speculators, and investors looking to see what edge optimized indicators might bring to their work in the markets."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-76-78-product-review-softinvestor-by-david-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-76-78-product-review-softinvestor-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-76-78-product-review-softinvestor-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov24796tr,d,"{""minimum-quantity"":""1"",""path"":""ch11n203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:11 (79-85, 96-97): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:11 (79-85, 96-97): Traders’ Tips by Technical Analysis, Inc.

    This month’s Traders’ Tips\nare based on Giorgos Siligardos’ article in\nthis issue, “Building Automatic Trendlines.”\nSome template code is provided by the\nauthor in the article’s sidebars as a starting\npoint. Additional code for various commercial\nprograms is presented here for TradeStation, eSignal, Wealth-Lab, AmiBroker, NeuroShell Trader, NeoTicker, AIQ, Tradecision. OmniTrader PRO, StrataSearch, Technifilter Plus, Ensign Software, and VT Trader."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-79-85-96-97-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-79-85-96-97-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-79-85-96-97-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov249bofo8,d,"{""minimum-quantity"":""1"",""path"":""ch11n203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:11 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:11 (92): Books For Traders by Technical Analysis, Inc.

    Business Fairy Tales: Grim Realities Of Fictitious Financial Planning (281 pages, $39.95 hardcover, 2006, ISBN 0-324-30539-7) by Cecil W. Jackson, published by Texere.

    There are many lessons to be learned from the barrage of fraud hammering corporate America, including how to spot signs of future impropriety. This book uses real-world scandals to illustrate the top 20 most common methods used by companies to deliberately overstate their earnings and hide their debt."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-11-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241leto11,d,"{""minimum-quantity"":""1"",""path"":""ch12d203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:12 (10-13): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:12 (10-13): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist.

    TECHNICAL ANALYSIS ORGANIZATIONS

    Editor,

    In the Letters To S&C section of your September 2006 issue, you listed two organizations that are associated with technical analysis. However, you left one out: the American Association of Professional Technical Analysts (AAPTA). Information about AAPTA may be found at www.aapta.us.

    DAVID STECKLER

    President, American Association of Professional\nTechnical Analysts

    Thank you for sharing this information.\n—Editor

    MODELING THE MARKET FOLLOW-UP

    Editor,

    Regarding the following formula given in the letter by Ken Kesler in your October 2006 issue, in the second line of MetaStock code:

    EMM:=TL+SHP;

    where does the “TL” come from?

    BILL

    Ken Kesler replies:

    Here is the complete MetaStock code. Sorry for any confusion..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-10-13-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-10-13-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-10-13-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241fofo10,d,"{""minimum-quantity"":""1"",""path"":""ch12d203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:12 (14-18): Forex Focus: Which Currency Pairs Should I Trade? by Grace Cheng"",""caption-linebreaks"":""Stocks & Commodities V. 24:12 (14-18): Forex Focus: Which Currency Pairs Should I Trade? by Grace Cheng

    Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. With that in mind, STOCKS & COMMODITIES has introduced Forex Focus to better prepare the retail trader to participate in the currency market.

    In the currency smorgasbord, which pairs offer the best trading opportunities? Try some of these to decide.

    The currency market can be likened to a buffet table, where you can select from a variety of currency pairs to trade. With more than 30 currency pairs available, the currency trader has overwhelming number of choices, but having so many options is not unlike a young adult suffering from “quarter-life” crisis, a recent social phenomenon whereby an individual feels so lost when faced with a multitude of career options that his life seems to be at a standstill. When choosing which currency pairs to trade, besides the usual factors such as liquidity, amount of spreads, technical signals, and so on, other interesting ways of deciding are available. In this article, I will highlight some approaches I use to decide which currency pairs offer the best trading\nopportunities.

    STRONGEST/WEAKEST PAIRING

    Currencies are always traded in pairs, with one currency exchanging for another. When you “long” a currency pair — that is, buying the first currency (known as base currency) and simultaneously selling the second currency in a pair (known as counter currency) — you are betting on the price appreciation of the base currency and on the depreciation of the counter currency. You want one currency to become stronger and the other to be weaker in the same pair."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-14-18-forex-focus-which-currency-pairs-should-i-trade-by-grace-cheng-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-14-18-forex-focus-which-currency-pairs-should-i-trade-by-grace-cheng-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-14-18-forex-focus-which-currency-pairs-should-i-trade-by-grace-cheng-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov242sefo,d,"{""minimum-quantity"":""1"",""path"":""ch12d203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:12 (20-24): Searching For (Trading) Certainty by Aaron Lynch"",""caption-linebreaks"":""Stocks & Commodities V. 24:12 (20-24): Searching For (Trading) Certainty by Aaron Lynch

    Like dragons, markets are always uncertain, whether\nthey are in a trading range or a trend. Here’s a way to make your profits (for certain) by following the short-term or long-term trend.

    One of the most basic human emotions dictating at least one decision each day is our confidence in a known outcome. This can be as simple as knowing the\nsun will come up tomorrow or the train you take to work will arrive on time (in many cities, of course, this is a forlorn hope!). Without this basic premise, however, our lives would descend into chaos, as we could not make a reliable or informed decision because we would be continually secondguessing all the choices confronting us.

    So how does this affect trading? A colleague of mine disturbs traders by making the statement that “if the markets were certain then there would be no markets.” This can shake the confidence of some. If every market reacted in the same way every time, that market would either be very easy to trade or break down, as it could not exist this way.

    CERTAINTY IN UNCERTAINTY

    Balancing the basic need for certainty coupled with an uncertain trading landscape, we must find an anchor or reference point from which to begin. For me and for all successful traders, that anchor is our chosen trading plan.

    My trading plan is structured around a tool known as a swing chart, based on the principles established by W.D. Gann."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-20-24-searching-for-trading-certainty-by-aaron-lynch-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-20-24-searching-for-trading-certainty-by-aaron-lynch-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-20-24-searching-for-trading-certainty-by-aaron-lynch-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov242qaby2,d,"{""minimum-quantity"":""1"",""path"":""ch12d203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:12 (25): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 24:12 (25): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://\nMessage-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    AND NOW, SOME DEFINITIONS

    Q: What are flippers? What do they do? Are they legal? And why are there so many people complaining about them? Thanks.

    —Richard Wong

    A: First off, a definition: For our purposes, a “flipper” is a short-term investor or daytrader who buys pre–IPO (initial public offering) shares, swiftly spinning them out into public markets for a quick profit. According to an online reference guide, flippers may hold a stock for only 24 to 48 hours. The other “flipper” term you may run across applies to those who buy and fix up houses\nto “flip” at a profit.

    As far as people complaining about either kind of flipper is concerned, the other side of the equation is that these flippers provide much-needed liquidity in these new issues, and in the housing market as well."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-25-q-a-by-don-bright-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-25-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-25-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov243trin1,d,"{""minimum-quantity"":""1"",""path"":""ch12d203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:12 (32-36): Trading In The Middle Zone by Anthony Trongone"",""caption-linebreaks"":""Stocks & Commodities V. 24:12 (32-36): Trading In The Middle Zone by Anthony Trongone

    Having trouble trading at the start of the day? This strategy will help you find your trading spot.

    There are many articles about entering the market at the open; there are many articles about entering the market toward the close. Few articles, however, focus on trading during the middle portion of trading, which I’ll\ncall the “middle zone.” This is unfortunate because this\nless glamorous time frame (10:35–14:55 Eastern time)\nrepresents two-thirds of the overall trading day. Although the opening of the trading session (65 minutes) is an environment replete with excessive price swings, it does provide us with the information necessary to profit in the middle zone (MZ).

    Analyzing the previous 444 trading days supplies us with a formula for midday success. By incorporating\nthe information from the opening one-sixth of the trading day, this system gives us the flexibility of taking either a long or short position in which 110 of the 158 tradable plays are successful."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-32-36-trading-in-the-middle-zone-by-anthony-trongone-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-32-36-trading-in-the-middle-zone-by-anthony-trongone-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-32-36-trading-in-the-middle-zone-by-anthony-trongone-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244span,d,"{""minimum-quantity"":""1"",""path"":""ch12d203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:12 (42-46): Spread Analysis And A Look At Unknown Fundamentals by Darin Newsom"",""caption-linebreaks"":""Stocks & Commodities V. 24:12 (42-46): Spread Analysis And A Look At Unknown Fundamentals by Darin Newsom

    How do you know what the underlying fundamental situation is when the supply and demand factors remain unknown?

    Basically, commodity market analysis can be broken into two categories: fundamental and technical. Fundamental analysis focuses on the supply and demand situation of the market, or all the various factors that affect the price of a particular commodity\nleading to the discovery of that market’s intrinsic value. Technical analysis studies price action over time or the price trend of the market. Where fundamental analysis assumes the study of supply and demand numbers will lead to the true value of the market, technical analysis is based on the idea that market action, discounts everything.

    This point is central to the discussion of the relationship between the two and should be restated. Anything that can possibly affect price direction of a\nparticular commodity and be considered a fundamental factor — supply and demand, political unrest, natural disasters, and so forth — is reflected in the price of that commodity (that is, the market action)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-42-46-spread-analysis-and-a-look-at-unknown-fundamentals-by-darin-newsom-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-42-46-spread-analysis-and-a-look-at-unknown-fundamentals-by-darin-newsom-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-42-46-spread-analysis-and-a-look-at-unknown-fundamentals-by-darin-newsom-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244inro,d,"{""minimum-quantity"":""1"",""path"":""ch12d203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:12 (48-56): Interview: Robert W. Colby, CMT by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Robert W. Colby is senior investment strategist at TradingEducation.com and RobertWColby.com. He is also a consultant to institutional and private investors\nand traders, providing custom research services and trading systems tailored to clients’ objectives, whether it’s short-term trading, long-term investing, stocks, or\ncommodities. Why is the name so familiar? Well, if you’ve been around technical analysis for any length of time, you’ve probably flipped past the name. Colby is the author of The Encyclopedia Of Technical Market Indicators (second edition, 2003), the standard reference for indicator and trading systems design. Colby previously worked at several large Wall Street firms as a proprietary trader, technical analyst, fundamental analyst, and adjunct instructor at New York\nUniversity and New York Institute of Finance, where he developed new courses on investment analysis and market timing.

    STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan conducted a telephone\ninterview with Colby on October 5, 2006.

    Q: I know you’ve been in the industry for a long time. Since…

    A: Forever! 1969.

    Q: I understand you did fundamental analysis when you started out.

    A: Yes, I did.

    Q: What made you focus more on technical\nanalysis?

    A: What cemented it for me was the bear market of 1973–74. I could see the fundamentals meant nothing because stocks were in a downtrend and that was all\nthat mattered. It didn’t matter how much net cash assets the companies had, or what their earnings were. Things went down anyway. Down, down, down, day after day. That was an eye-opener for me. I was working as a fundamentalist at A.G. Edwards & Sons and getting paid for it, but it just became obvious the market sometimes just ignores all fundamentals. Fundamentals just didn’t matter. I saw it again later on occasions where stocks would be undervalued with\nearnings growing at above-average rates for years on end, but the market would just ignore it.

    Q: So fundamentals were being completely\noverlooked?

    A: Yes. It was particularly evident during\nthe late 1970s. The market just didn’t\ncare. Investors weren’t willing to pay\nup for stocks. The uptrends didn’t last,\nand stocks were really cheap and stayed\nthat way for years. Now, it’s a little\ndifferent. The dividend yield, for example,\nwas fairly high during the late\n1970s, compared to recent years. The\nbull market came in the 1980s and valuations\nstarted to increase all the way up\nto 2000. At that point, stocks got very\nexpensive. Since 2000, stocks have become\nless expensive — but not cheap."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-48-56-interview-robert-w-colby-cmt-by-jayanthi-gopalakrishnan-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-48-56-interview-robert-w-colby-cmt-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-48-56-interview-robert-w-colby-cmt-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244sist2,d,"{""minimum-quantity"":""1"",""path"":""ch12d203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:12 (48-56): Sidebar: Stochastics with long-term EMA Filter With MetaStock by R. Colby, CMT"",""caption-linebreaks"":""Stocks & Commodities V. 24:12 (48-56): Sidebar: Stochastics with long-term EMA Filter With MetaStock by R. Colby, CMT

    Based on a merged file of adjusted daily data for the entire history of the S&P 500 Stock Index Futures CSI Perpetual Contract (www.csidata.com) from inception on 4/21/82 to 5/10/01, and cash S&P 500 Stock Price Index from 11/28/80 to 4/21/82, we found the following parameters would have produced a significantly positive result on a filtered mechanical overbought/oversold signal basis with no subjectivity, no sophisticated technical analysis, and no judgment:"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-48-56-sidebar-stochastics-with-long-term-ema-filter-with-metastock-by-r-colby-cmt-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-48-56-sidebar-stochastics-with-long-term-ema-filter-with-metastock-by-r-colby-cmt-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-48-56-sidebar-stochastics-with-long-term-ema-filter-with-metastock-by-r-colby-cmt-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov245exyo1,d,"{""minimum-quantity"":""1"",""path"":""ch12d203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:12 (57): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 24:12 (57): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    RISK OF BUYING CALLS

    I’ve recently watched the behavior of call options of some growth stocks during their rallies, and the profit potential looks phenomenal. How dangerous is it to buy naked calls at the beginning of the rally and sell them at the top when the calls are deep-in-the-money? How often do in-the-money (ITM) options get exercised?

    An option is a standardized contract or agreement between two parties, a buyer and a seller. A put option buyer has the right to sell or put a stock at a specific price, known as the strike price, until that option expires. The buyer of a call option has the same right to buy or call a stock. Each stock option contract gives the right to buy or sell 100 shares of stock. Option buyers pay a premium for the right to buy or sell the underlying\nstock. Options sellers have an obligation to fulfill the terms of the contract. They receive option premiums in exchange for this obligation. A put seller has the obligation to buy or have the stock “put” to their trading account. A call seller, or writer, is taking on the obligation to sell the shares at a specific price."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-57-explore-your-options-by-tom-gentile-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-57-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-57-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov245prre3,d,"{""minimum-quantity"":""1"",""path"":""ch12d203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:12 (58-59): Product Review: Correlation Reports: CSI Data by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 24:12 (58-59): Product Review: Correlation Reports: CSI Data by Jayanthi Gopalakrishnan

    If you own shares of Starbucks, Inc. (SBUX), there’s a strong chance you follow that stock on a regular basis. But do you ever think of following the coffee futures? Are the two positively or negatively correlated? Chances are you may not know, but it may be worth your effort to analyze such correlations. But that would require analyzing so many related markets it might not be worth your time. Fortunately, to reduce the time spent in analyzing the interrelationships among various markets, Commodity Systems, Inc. (CSI) has developed an intermarket correlation report, which can go through as many as 250 million market pairs with the click of a button and spit out a list of those that are significantly correlated with each other.

    This tool is especially useful for spread traders since it identifies low-risk trading opportunities. Since it is a visual tool, you can easily see the relationship between\ntwo markets and also see where you can enter and exit your trades.

    FEATURES

    Once you have a username and password, you’re ready to test out all the features. The interface is simple and what you’ll see first on your browser is a small window with tabs across the top of the page (Figure 1). You can opt to analyze a single pair of markets, one market with everything else, multiple pairs of markets, or everything vs. everything."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-58-59-product-review-correlation-reports-csi-data-by-jayanthi-gopalakrishnan-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-58-59-product-review-correlation-reports-csi-data-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-58-59-product-review-correlation-reports-csi-data-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246whca,d,"{""minimum-quantity"":""1"",""path"":""ch12d203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:12 (60-61): What Can Neural Networks Do For You? by Dima Vonko"",""caption-linebreaks"":""Stocks & Commodities V. 24:12 (60-61): What Can Neural Networks Do For You? by Dima Vonko

    Neural networks can multiply your profits — if you know how to use them.

    Neural networks can be created to generate profits. You may think you need vast computer facilities and a team of doctoral candidates toiling away, but what you really need is an optimal vision of neural networks and an idea of what you can achieve with them. Artificial intelligence technologies, and neural networks that stem from them, can multiply your profits. The major challenge lies in how to develop a network or group of\nnetworks to assist you in your trading decisions without spending more time and money than you can commit.

    To make money with neural networks, you should know what to expect from them, how to use them, and to what ends. But don’t think neural networks will magically let you forecast a price by just entering a few technical indicators as inputs. It doesn’t work that way.

    WHY NEURAL NETWORKS?

    Why use neural networks, given that classic technical indicators are already quite popular? It’s a question of whether you want to acquire a new vision of the market and combine it with new toolsets to obtain results that will put you ahead of other traders. Nonlinear methods and artificial intelligence are the next step in technical analysis. And similar to how traders who first used technical indicators got an edge over other traders, those who combine nonlinear methods with classic approaches and money management techniques will be able to make better trading decisions."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-60-61-what-can-neural-networks-do-for-you-by-dima-vonko-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-60-61-what-can-neural-networks-do-for-you-by-dima-vonko-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-60-61-what-can-neural-networks-do-for-you-by-dima-vonko-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov24686we,d,"{""minimum-quantity"":""1"",""path"":""ch12d203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:12 (62-64, 86): Websites For Traders: www.IPOHome.com by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 24:12 (62-64, 86): Websites For Traders: www.IPOHome.com by David Penn

    IPO Home by Renaissance Capital

    For a few years back in the late 1990s, saying “IPO” around a group of anxious investors was like shouting “Pull!” at a skeet shooting range. I can still remember\nthe gray-haired, Birkenstock-wearing left-wing computer geek I worked for during the bubble years strutting around the office as he mentally counted the amount of money he had made just that afternoon because he had been one of the fortunate few who had received shares of VA Linux just as the company\nwent public. VA Linux, for those who don’t recall, registered what was at the time the best single-day performance in history for an initial public offering\n(IPO) as it rallied nearly 700% from its opening price of $30 a share to an intraday high of more than $300.

    As the saying goes, that was then. About two years later, VA Linux was a shadow of its former self — laying off 35% of its employees and announcing it was getting out of the computer hardware business that had been the company’s raison d’être since its founding in the early 1990s.

    For many investors, I’m sure that experiences like VA Linux during the bubble years turned them off to IPOs in\nthe same way that the NASDAQ crash caused investors to flee the stock market. But IPOs are as old as the stock market itself (here’s a bit of trivia: the first American IPO was the Bank of the United States in 1791). And it should not be surprising if many of the IPOs of the bubble years in the late 1990s suffered the same fate as many of the stocks during the bubble years."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-62-64-86-websites-for-traders-www-ipohome-com-by-david-penn-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-62-64-86-websites-for-traders-www-ipohome-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-62-64-86-websites-for-traders-www-ipohome-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246prre8,d,"{""minimum-quantity"":""1"",""path"":""ch12d203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:12 (66-68): Product Review: CQGNet Professional 7.38 by Barbara Star, Ph.D."",""caption-linebreaks"":""Stocks & Commodities V. 24:12 (66-68): Product Review: CQGNet Professional 7.38 by Barbara Star, Ph.D.

    It's known as the Integrated Client. No, not the person\nwho subscribes to the service; the program itself, because CQGNet combines the power of real-time quotes, analytical charts, user custom studies, backtesting tools, and trading alerts, with order execution at no extra charge. And it comes complete with free 24-hour technical support (from a live person) every trading day plus a personal introductory tutorial\nsession designed to have the new user up and running as quickly as possible.

    Definitely not a newcomer to the financial markets, CQG entered the trading arena in 1980 providing commodity data and charting services via computer\nwhile most traders still required handheld devices to receive quote data. CQG has been a long-time favorite\namong institutional traders for its cutting-edge technology and accurate data. Less well known is that CQG offers the same benefits to individual traders.

    Data quality, accuracy, and reliability have been, and remain, the cornerstone of CQG products. In 1982 the\ncompany transmitted market data via a satellite network. In 2000 CQG started migrating data transmission via the Internet and in 2004 ended satellite transmission. Currently, CQG maintains three\nseparate networks to ensure uninterrupted data transmission. Round-the-clock quality control groups provide another layer of precision by monitoring a worldwide data network and inserting all exchange corrections in real time to provide traders with accurate, integrated information. At present, it offers stock, commodity, futures options, currency, and fixed-income data."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-66-68-product-review-cqgnet-professional-7-38-by-barbara-star-ph-d-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-66-68-product-review-cqgnet-professional-7-38-by-barbara-star-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-66-68-product-review-cqgnet-professional-7-38-by-barbara-star-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246fufo2,d,"{""minimum-quantity"":""1"",""path"":""ch12d203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:12 (69): Futures For You by Dan O’Neil"",""caption-linebreaks"":""Stocks & Commodities V. 24:12 (69): Futures For You by Dan O’Neil

    INSIDE THE FUTURES WORLD

    Want to learn how the futures markets really work? Dan O’Neil, a principal at online futures and forex broker XPRESSTRADE (www.xpresstrade.com), responds to\nyour questions about today’s futures markets. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be\nposted there, and selected questions will appear in a future issue of S&C.

    ETFs vs. FUTURES

    I’ve been reading about commoditiesbased exchange traded funds and am wondering about the differences between investing in exchange traded funds (ETFs) and investing directly in the futures markets. Does one have any major advantages over the other?

    It’s no secret ETFs have emerged as an increasingly popular investment option for individual investors. What\nstarted as a lightly regarded curiosity in 1993 with the debut of a single ETF tied to the Standard & Poor’s 500 has exploded into a booming mainstream marketplace, with more than 300 specialty ETFs now being offered by a host of investment firms. Most ETFs are essentially baskets of securities that track an index, much like plain-vanilla index mutual funds, but trade like stocks on a regular stock exchange.

    ETFs tend to appeal to investors who like to dabble in particular market sectors but perhaps lack the dedication to dig into them. Someone who’s interested\nin adding an energy component to his or her stock portfolio may choose the basket approach of an energy-focused ETF over the idea of researching, investing in, and monitoring a number of individual utility companies."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-69-futures-for-you-by-dan-o-neil-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-69-futures-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-69-futures-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov24773mo,d,"{""minimum-quantity"":""1"",""path"":""ch12d203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:12 (70-71, 73): Money Management Matrix by Peter Nilsson"",""caption-linebreaks"":""Stocks & Commodities V. 24:12 (70-71, 73): Money Management Matrix by Peter Nilsson

    Whether you’re a systems trader or a discretionary trader, here’s a systematic money management technique you can apply.

    Being a discretionary trader in stocks as opposed to a systems trader often is viewed as not being systematic. Although discretionary trading allows the trader greater freedom to use his or her intuition and experience, the core approach or plan can and should be systematic. Much like a business statement, the trading plan should deal with all aspects of trading from practical issues to trade management. The concept of “plan the trade—trade the plan” has many depths and focuses on the business aspect of trading. This has the added bonus of detaching emotions during trading. As a result, the decision to trade becomes a business decision rather than a personal “Am I right or wrong?” decision.

    HOW DO YOU MAKE IT SYSTEMATIC?

    One way to incorporate a systematic approach toward money management and position sizing, while still leaving room for experience and staying discretionary, is to use a money management matrix like the one I propose here. The matrix should be used as a tool to point you toward a specific direction; it does not dictate the final strategy that you should choose. You need to consider many different aspects, such as how current volatility affects money management parameters, diversification, overall exposure/risk, and so forth."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-70-71-73-money-management-matrix-by-peter-nilsson-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-70-71-73-money-management-matrix-by-peter-nilsson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-70-71-73-money-management-matrix-by-peter-nilsson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247wefo4,d,"{""minimum-quantity"":""1"",""path"":""ch12d203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:12 (72-73): Websites For Traders: TraderTim.blogspot.com by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 24:12 (72-73): Websites For Traders: TraderTim.blogspot.com by David Penn

    Technical analysis and stock charts with Tim Knight

    The charts, the whole charts, and nothing but the charts. That is the unequivocal effect of reading the weblog of Tim Knight, founder of Prophet Financial Systems and currently senior vice president of technology at INVESTools, the company that purchased\nProphet.net in 2005. Knight, whose Prophet charts have long been a favorite of this writer, is a chartists’ chartist. And while his blog allows much of his personality to show through — as the best blogs do — TraderTim.blogspot.com is remarkably “about business” when it comes to the charting of the markets.

    You won’t find a lot of references to the ephemera of the Internet at TraderTim. Perhaps because of Knight’s long experience in the world of Internet technology, his blog comes across as far less gawkeyed at some of the “neat things” and cool links you can stumble across while traversing the ever-expanding e-universe.

    There’s nothing wrong with a financial blog talking a little sports, or an investment blog digressing into a conversation about American Idol, or a trading blog posting a series of observations about best-selling books on the Iraqi occupation. But while such blogs arguably represent the “Starbucks” approach to so-called expert blogging, in which the main event (coffee) is accompanied by an increasing number of warm-up acts and side attractions (gourmet drinks\nthat are more milkshake than coffee, fancy sandwiches, hip CDs, and specialty teas), blogs like TraderTim remind me more of the “beer ‘n’ peanuts” vendor at the ballpark hiking the vertical miles from the box seats to the bleachers all game long. He knows what you are there for, and while an orange mocha Frappuccino is no crime, it is not what you’re looking for when you come to watch the game."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-72-73-websites-for-traders-tradertim-blogspot-com-by-david-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-72-73-websites-for-traders-tradertim-blogspot-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-72-73-websites-for-traders-tradertim-blogspot-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247wefo5,d,"{""minimum-quantity"":""1"",""path"":""ch12d203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:12 (74-75): Websites For Traders: News Traders Can Use by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 24:12 (74-75): Websites For Traders: News Traders Can Use by David Penn

    www.tradersaudio.com

    www.needtoknownews.com

    A subscriber recently emailed me about trading groups. He had been trading for only a short time, with the goal of one day being a full-time trader. He explained that what he felt he needed at this point in his education was, for lack of a better term, the personal touch. He was looking for trading groups, get-togethers where dedicated, committed traders talked shop: winning trades, losing trades, setups that were working, setups that weren’t, sector rotation, market sentiment…

    I’ve gotten other email like this from other traders looking for, if not others to trade with, then at least somebody they could talk to. After all, traders can only bore their spouses or partners for so long, and while pets are always ready to listen, they are even less responsive to the rantings of the average trader than the aforementioned spouses.

    Unfortunately, the collapse of the stock market in 2000–01 brought down more than a fortune in ill-conceived equities. It also brought down a number of investment clubs and traders groups that sprouted like mushrooms from the fertile market soil of the late 1990s. As such, there aren’t nearly as many places for aspiring traders to find each other."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-74-75-websites-for-traders-news-traders-can-use-by-david-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-74-75-websites-for-traders-news-traders-can-use-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-74-75-websites-for-traders-news-traders-can-use-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247trti7,d,"{""minimum-quantity"":""1"",""path"":""ch12d203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:12 (76-86): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:12 (76-86): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    Editor’s note: This month’s Traders’ Tips are based on the sidebar to our interview with Robert Colby in this issue, which describes the stochastics with long-term EMA filter technique.

    Code written in MetaStock format is already provided in the sidebar by Robert Colby. Additional code for TradeStation, eSignal, AmiBroker, Wealth-Lab, NeuroShell Trader, NeoTicker, AIQ, StrataSearch, Aspen Graphics Trade Navigator/TradeSense, TradingSolutions, TS Support, VT Trader, and TechniFilter is presented here.

    Readers will find our Traders’ Tips section\nin its entirety at the STOCKS & COMMODITIES website at www.Traders.com in the Traders’ Tips area, from where the code can be copied and pasted into the appropriate program. In addition, the code for each program is usually available at the respective software company’s website. Thus, no retyping of code is required for Internet users. For subscribers, code given in the Colby interview sidebar can be copied and pasted into MetaStock from the Subscriber Area at www.Traders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-76-86-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-76-86-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-76-86-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov249bofo9,d,"{""minimum-quantity"":""1"",""path"":""ch12d203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:12 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:12 (92): Books For Traders by Technical Analysis, Inc.

    Annual Reports 101: What The Numbers And The Fine Print Can Reveal About The True Health Of A Company\n(242 pages, $19.95 softcover, 2007, ISBN 0-8144-7367-9) by Michael C. Thomsett, published by\nAMACOM. An annual report is a powerful and revealing document about a company’s financial standing. If you\nknow what to look for, it can give you insight into the company’s future. This guide will help you see the big picture and assist in spotting any red flags. While recent accounting scandals have made companies more careful about complying with the law, that doesn’t mean they’ve made it any easier to understand. With this book you have a key to company information and a path through the hype."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-12-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241betr,d,"{""minimum-quantity"":""1"",""path"":""ch13b201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:13 (10-14): Better Trade Management With Candlesticks by Tracy Knudsen, CMT"",""caption-linebreaks"":""Stocks & Commodities V. 24:13 (10-14): Better Trade Management With Candlesticks by Tracy Knudsen, CMT

    Using candlestick charts on an intraday basis can help uncover entry and exit points that have optimal risk/reward scenarios.

    Candlestick charts (sometimes referred to as candle charts) are more than 100 years old as a technique and, as such, are older than the bar charts and point\n& figure techniques that are the basis of technical analysis. Yet candle charts, originally from Japan, were unknown to the Western world until Steve Nison introduced them in the 1980s.

    Candlestick trading techniques have now become one of the most-discussed forms of technical analysis\naround the world. These days, almost every technical analysis software package and real-time charting system includes candlestick charts, attesting to their\npopularity and usefulness. The interest in candle charts continues to expand for many reasons, not the least of which are:

    • Candlestick charts are easy to understand.\nAnyone, from the first-time chartist to the seasoned professional, can easily harness the power of candle charts. As I will show later, this is because the data that is required to draw the candlestick chart is the same as needed for the bar chart (high, low, open, and close)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-13-10-14-better-trade-management-with-candlesticks-by-tracy-knudsen-cmt-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-13-10-14-better-trade-management-with-candlesticks-by-tracy-knudsen-cmt-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-13-10-14-better-trade-management-with-candlesticks-by-tracy-knudsen-cmt-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241grof,d,"{""minimum-quantity"":""1"",""path"":""ch13b201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:13 (18-21): The Gravity Of Trading by Adrienne Toghraie"",""caption-linebreaks"":""Stocks & Commodities V. 24:13 (18-21): The Gravity Of Trading by Adrienne Toghraie

    Make money in the markets… and keep it.

    Do you want to make money in the markets and learn how to keep it? Then learn to appreciate gravity. There is an oftencited correlation between the laws of gravity\nand the laws of trading. Gravity is not negotiable and its laws are immutable. It does not care if you ignore them and fall, just as it does not care if you follow them and fly. For many years, market gurus have invoked this principle to explain the facts of life as they apply to trading. Here are the reasons why, incontrovertible\nand immutable:

    • The Markets Are Immutable: Trading is not open to negotiation. When the market is plunging and you are holding a long position, there is no way to negotiate your way to a win. There is no way to exert leverage on the markets because the market does not entertain any arguments, excuses, or reasons that will change its direction to meet you halfway. The only way to win when dealing with an unchangeable force is to move in the direction that it is moving. This is how gravity operates and that is how the markets operate, too.

    • The Markets Don’t Care: A trader is in the wrong profession if he expects to find a caring world where others are concerned if they hurt him. The markets are as unfeeling as gravity. When one trader makes a killing in the market because it went his way, one or more traders are experiencing loss. As you have heard many times, futures trading is a zero-sum business —\nfor someone to win, someone must lose."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-13-18-21-the-gravity-of-trading-by-adrienne-toghraie-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-13-18-21-the-gravity-of-trading-by-adrienne-toghraie-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-13-18-21-the-gravity-of-trading-by-adrienne-toghraie-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov242womo,d,"{""minimum-quantity"":""1"",""path"":""ch13b201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:13 (22): Working Money: Traders’ Notebook: Is Daytrading For You? by Alex Buzby"",""caption-linebreaks"":""Stocks & Commodities V. 24:13 (22): Working Money: Traders’ Notebook: Is Daytrading For You? by Alex Buzby

    Is Daytrading For You? Here’s some practical commentary on those “glamorous” daytrading myths.

    Are you happy with your day job? Are you in a rut? Let’s face it: Most of us are looking to get out of the rat race, and the stories we hear from traders sound good. There seems to be a lot of glamour attached to daytrading — and trading as a whole — that it’s easy to get drawn in.

    So you decide to learn about trading. Up to now, you probably have been investing (usually in stocks), but now you want to trade. Until a few years ago, indexes like Standard & Poor’s 500 and the Dow Jones average futures were the main markets for daytrading, but the\nforeign exchange market has recently become fashionable too.

    Suppose you decide to take it one step further and trade what you have learned. Let’s look at the practicalities of daytrading (in any market) for the individual investor."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-13-22-working-money-traders-notebook-is-daytrading-for-you-by-alex-buzby-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-13-22-working-money-traders-notebook-is-daytrading-for-you-by-alex-buzby-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-13-22-working-money-traders-notebook-is-daytrading-for-you-by-alex-buzby-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov242rech,d,"{""minimum-quantity"":""1"",""path"":""ch13b201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:13 (24-39): Readers’ Choice Awards 2006 by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:13 (24-39): Readers’ Choice Awards 2006 by Technical Analysis, Inc.

    We are pleased to present the Technical Analysis of STOCKS & COMMODITIES magazine 2006 Readers’ Choice Awards (RCA). Each year, we put before our\nreaders a ballot of products and services related to technical analysis and trading. The following pages present the products and services you and your peers chose this year as your favorites.

    The Readers’ Choice Awards begins each year with a list of products gathered by the editors of STOCKS & COMMODITIES, with space for write-in votes (given that our list doesn’t claim to be complete). Then, to find out what our readers find to be the most useful for their trading, we ask them to choose their favorite products or the ones they find most useful from various categories by going to our website, Traders.com, and filling out the survey there. After that, we compile the results, just in time for the Bonus Issue you hold in your hands. Products are categorized by their primary purpose. Just because a service or product is not listed does not necessarily mean that the product does not have features germane to the category; otherwise, a number of products could be listed in numerous categories. In addition, some categories are divided by cost so that the comparisons can be made on a more level playing field. The winners in the Readers’ Choice Awards are almost always the dominant players in their niche, and rightfully so. You may have special needs for your trading, however, so you should keep in mind those products that are not the big names in the category of your interest before you make your final decision. The RCA is designed to be an aid for you when you are deciding on which of the numerous products and services currently available to use for your trading and investing. With that in mind, we think you’ll find the Readers’ Choices a terrific guide to products and services that you’ll be interested in."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-13-24-39-readers-choice-awards-2006-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-13-24-39-readers-choice-awards-2006-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-13-24-39-readers-choice-awards-2006-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244inbo,d,"{""minimum-quantity"":""1"",""path"":""ch13b201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:13 (40-45): Interview: Bob Pelletier Of CSI Data by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 24:13 (40-45): Interview: Bob Pelletier Of CSI Data by Jayanthi Gopalakrishnan

    Not many current traders can remember a time when commodities weren’t a driving force in the markets, but Robert Pelletier, president of CSI, can. Pelletier has a background in statistics, probability theory, and analytical modeling, worked in the Advanced Analytical Methods Laboratories at the General Electric Co. in New York, consulted for the US Navy in Hawaii under Planning Research Corp., and originally formed CSI as a historical market data supplier in 1970.

    STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan sent Pelletier a series of questions during January 2006.

    How did you get interested in commodity trading?

    I formed Commodity Systems, Inc. (CSI), in 1970. That event was triggered by my first experience with the futures market back in the early 1960s. At that time, commodities were something only commercial hedgers and a few traders found sufficiently\ninteresting as a medium of trading. My initial exposure to commodities began with President Kennedy’s 1961 foreign policy debacle: the Bay of Pigs invasion. Cuba, which was a leading world supplier of raw sugar cane crops, was invaded by Cuban exiles under US sponsorship.

    I was working on a mountaintop in Benton, PA, at the time with a seasoned trader friend who took the opportunity to introduce me to the world of commodity futures trading. At the time of the invasion, world sugar was priced at only 1.5 cents per pound. Because of the invasion, the price of sugar rose to 13.5 cents per pound in just a few weeks. This incredible jump in price translated into sugar contract holdings of literally hundreds of thousands of dollars as a friend of mine pyramided his tiny one- or two-contract position into perhaps 100 or more contracts, where each contract represented 112,000 pounds of sugar. Each cent appreciation in the price of sugar rewarded the long-holder with $1,120 per contract."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-13-40-45-interview-bob-pelletier-of-csi-data-by-jayanthi-gopalakrishnan-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-13-40-45-interview-bob-pelletier-of-csi-data-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-13-40-45-interview-bob-pelletier-of-csi-data-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244usfi,d,"{""minimum-quantity"":""1"",""path"":""ch13b201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:13 (46-48): Using Financial Message-Boards by Clem Chambers"",""caption-linebreaks"":""Stocks & Commodities V. 24:13 (46-48): Using Financial Message-Boards by Clem Chambers

    Extract information and trends from the pools of information available on message boards.

    Market pricing is all about information flow. One of the tenets of efficient market hypothesis is that all information available is already factored into the price of an instrument, be it a stock, a commodity, or a bond.\nHowever, one of the glitches that makes the efficient market hypothesis just that —a hypothesis and not a law — is that all available information is simply not factored into the price. Many facts and much information are not widely known or understood.

    This is good news for the active investor, because it means he/she can know or understand information ahead of time and can therefore get ahead of a price move and profit from better information.

    HOW?

    Most people think of information flow solely in terms of news releases. Breaking news is a big driver of price both for shortterm moves and long-term trends. However, it is just a small part of the information\nspectrum.

    There are many other categories ranging from insider information, market knowledge, analysis, rumor, and misinformation. All of these have significant price moving potential, and information flow doesn’t spread out to everyone evenly. Most information is indeed in the price by the time most people receive it, and acting on it late is, at best, pointless.

    While in the past only the central-most participants would receive any of this information flow, these days a great deal of it is carried on Internet message-boards. What’s more, it often appears there first."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-13-46-48-using-financial-message-boards-by-clem-chambers-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-13-46-48-using-financial-message-boards-by-clem-chambers-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-13-46-48-using-financial-message-boards-by-clem-chambers-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov245baex,d,"{""minimum-quantity"":""1"",""path"":""ch13b201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:13 (50-57): BandwidthVolatility Extremes by Barbara Star, Ph.D."",""caption-linebreaks"":""Stocks & Commodities V. 24:13 (50-57): Bandwidth Volatility Extremes by Barbara Star, Ph.D.

    Knowing when volatility has reached extremes could work in your favor.

    Volatility refers to the range or spread between high and low prices over a given time, be it intraday, daily, or\nweekly. When price consolidates or moves sideways, the price range is small and volatility is low. However, when the price range expands or prices rise and fall sharply over short periods of time, volatility is high.\nVolatility shifts from low to high and high to low as price grows, slows, or changes direction. Knowing when volatility has reached extremes could be a profitable piece of trading information.

    VOLATILITY BANDS

    The popular Bollinger Bands offer a visual way to track the ebb and flow of volatility. The width between the upper and lower bands reflects the expansion and contraction of price movements in relation to a moving average. John Bollinger developed the BandWidth indicator as an adjunct to the Bollinger Bands specifically to track changes in bandwidth movement. He found that changes in bandwidth often result in price corrections or reversals.

    By virtue of its relationship to a moving average, bandwidths are comparable between securities in that they rise when volatility expands and contract when volatility declines. However, a moving average is based on the underlying security’s price, so the numeric values of bandwidths are not necessarily comparable. For instance, a bandwidth value of (2) may represent acute contraction in one security but not another."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-13-50-57-bandwidthvolatility-extremes-by-barbara-star-ph-d-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-13-50-57-bandwidthvolatility-extremes-by-barbara-star-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-13-50-57-bandwidthvolatility-extremes-by-barbara-star-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov245avhe,d,"{""minimum-quantity"":""1"",""path"":""ch13b201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:13 (58-60): Avoiding The Herd Mentality In Forex by Todd Gordon, CMT"",""caption-linebreaks"":""Stocks & Commodities V. 24:13 (58-60): Avoiding The Herd Mentality In Forex by Todd Gordon, CMT

    Careful analysis of the technicals along with a good dose of logic and common sense will help you become a more successful foreign exchange trader.

    There was some interesting price action in the last quarter of 2005 in USD/JPY, with foreign exchange traders anticipating a break of the important 115 level. They got it, but in a rather lackluster fashion. As it turned out, the real level to contend with was 116. Look at the candlestick lows, closes, and Fibonacci support levels from 2002 and 2003 that dictated price action in 2005. Armed with this knowledge, you might have prevented a costly short trade at 115.00 and been properly positioned for future price action.

    2005 IN A NUTSHELL

    October was a busy month in the forex markets. EUR/USD battled with 1.2000, while USD/JPY struggled with 115.00. Tradable volatility that allowed for outsized profits was not all that spectacular, but as it turned out, October’s price action set the course for the rest of 2005. And what a finish to 2005 it turned out to be.

    But first, let’s go back to the end of August, when USD/JPY first broke through 110. This new high jump-started the largest USD/JPY run-up in more than six years. Those momentous levels 110 through 114 came and went without much of a to-do, but as USD/JPY cleared the 114.50 level and approached 115, the hype began. Bank traders and market analysts could not talk about anything but 115.00. Their analysis showed that 115 was the breakeven point on hedges\nof Japanese exporters, who would certainly defend this level. Soon, the newspapers, magazines, and trader chatrooms got on board and before long, every trader in the crowd was ready to sell into 115.00."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-13-58-60-avoiding-the-herd-mentality-in-forex-by-todd-gordon-cmt-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-13-58-60-avoiding-the-herd-mentality-in-forex-by-todd-gordon-cmt-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-13-58-60-avoiding-the-herd-mentality-in-forex-by-todd-gordon-cmt-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241leto1,d,"{""minimum-quantity"":""1"",""path"":""ch2f202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:2 (10--12): Letters To S&C by Technical Anaysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:2 (10--12): Letters To S&C by Technical Anaysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist.

    TSI, MACD, AND TRIX

    Editor,

    Regarding the letter titled “TSI Or MACD” from Brent Lindaman, which appeared in the July 2005 Letters to S&C column, I would like to inform you of another indicator that also behaves like MACD and TSI.

    In Martin Pring’s book, \""Martin Pring On Market Momentum,\"" he describes the TRIX indicator on page 244. This indicator gives buy and sell signals that are\nvery similar to those given by the MACD or TSI. A major advantage with TRIX is that its signals produce fewer whipsaws.

    I use the default setting for MACD in MetaStock, TSI(25,13), (as indicated by Mark Phillips in the June 2005 issue of S&C) and TRIX(12,9) (as indicated by\nMartin Pring in his book on page 245).

    SIVA KUMAR AR

    Ayyampalayam, India"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-10-12-letters-to-s-c-by-technical-anaysis-inc-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-10-12-letters-to-s-c-by-technical-anaysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-10-12-letters-to-s-c-by-technical-anaysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241fofo1,d,"{""minimum-quantity"":""1"",""path"":""ch2f202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:2 (10-12): Forex Focus by Matt Blackman"",""caption-linebreaks"":""Stocks & Commodities V. 24:2 (10-12): Forex Focus by Matt Blackman

    Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. With that in mind, STOCKS & COMMODITIES has introduced Forex Focus to better prepare the retail trader to participate in the currency market.

    Is inflation a threat? Find the answer by looking at the historical performance of commodity prices, the US dollar, gold, and economic conditions.

    On New Year’s Eve 2004, the US Dollar Index hit a nine-year low of 80.53, a level of dollar weakness that had been seen only twice before in the past 30 years. Two months later, the Commodity Research Bureau Index (CRB) hit new multiyear highs and continued to move up from there. The basket of commodities and the dollar had been at simultaneous, opposite extremes only once before in recent memory, and\nthat was in November 1980.

    While the US Dollar Index recovered going into 2005, commodity prices continued to rise. The CRB (recently renamed the Continuous Commodity Index) hit 336.56\non September 1, just short of the all-time high of 337.60 hit on November 20, 1980. In September 2005, gold was hovering around a 17-year high.

    During both periods, gold and oil prices were also at or near either all-time or multiyear highs. But there was one pivotal difference: the federal funds rate was 3.75% this time around, while the last time the dollar and commodity prices were at opposite ends of the scale (in 1980), it was approaching 20%.

    Given the number of similarities between the late 1970s and recent times, can understanding what happened to the markets after 1980 help us anticipate what to expect today? And if so, what impact will dramatically lower interest rates today have on commodities and gold prices going forward? In the current volatile markets, what is the best way to play the\ninflation game?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-10-12-forex-focus-by-matt-blackman-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-10-12-forex-focus-by-matt-blackman-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-10-12-forex-focus-by-matt-blackman-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241qaby,d,"{""minimum-quantity"":""1"",""path"":""ch2f202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:2 (19): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 24:2 (19): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http:// Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    FILLED ORDER SPLITS

    How do specialists determine the split on orders being filled? How many shares does each get, and does it depend on how the specialist feels that day? Talk\nabout handing over a blank check.—\nhowardy2k

    It’s very important, in my opinion, that traders understand all this before they start trading. Things change and there are exceptions, but in general, you\ncan count on five things:

    1. Time priority.

    2. Once you have received any part of your order (say 100 of 500), you may be on parity with other orders with the same price limit. Getting the 100 shares can be\nlike the kiss of death, and I usually just cancel the rest, adjust the price limit, and go on trading.

    3. Size priority. If your order cannot fill the matching (opposite side) order and another order can, it’s\npossible to be sized out. This is rare, but it does happen at times.

    4. Long market, long limit. Short market, short limit. If you are selling short 1,000 shares at 39.01, and there are 10,000 other people with orders at the same price, you may not be filled since you’re last in line. But if they trade through your price, you will be filled.

    5. Matching orders. Your order may be matched by the specialist, and/or he may share your order with another broker for fairness."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-19-q-a-by-don-bright-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-19-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-19-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov242sers,d,"{""minimum-quantity"":""1"",""path"":""ch2f202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:2 (20-27): The Self-Adjusting RSI by David Sepiashvili"",""caption-linebreaks"":""Stocks & Commodities V. 24:2 (20-27): The Self-Adjusting RSI by David Sepiashvili

    Here’s how you can design self-adjusting\noverbought–oversold benchmarks for the relative strength index so it can be applied to multiple market conditions.

    Momentum indicators such as the relative strength index (RSI) measure the speed at which a security’s price is changing. One of the main advantages of such indicators is the early signaling for entry and exit points. However, along with their strengths, they do exhibit some limitations.

    With that in mind, I designed a new mode of RSI with self-adjusted overbought–oversold benchmarks. The advantage of this is that it could be applied to multiple market conditions without regard to the calculation period. The basic advantage of the indicator is that it expands the functionality to intermediate and long terms, squeezing its way into the traditional domain of trend-following indicators and making it possible to use it in multiframe analysis.

    LIMITATIONS IN THE RSI

    The application of the popular RSI is conventionally\nlimited to short-term analysis. But detecting a tradable’s strength in the intermediate and long terms is an issue that is just as important, if not more. As you are probably aware, the RSI fluctuates around a centerline and highlights overbought and oversold extremes relative to the 30 and 70 benchmarks. But it is usually more accurate when calculated using a 14-day period. Anything beyond tends to yield errors."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-20-27-the-self-adjusting-rsi-by-david-sepiashvili-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-20-27-the-self-adjusting-rsi-by-david-sepiashvili-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-20-27-the-self-adjusting-rsi-by-david-sepiashvili-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov242seus,d,"{""minimum-quantity"":""1"",""path"":""ch2f202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:2 (28-32): Sell Using Stops by Thomas Bulkowski"",""caption-linebreaks"":""Stocks & Commodities V. 24:2 (28-32): Sell Using Stops by Thomas Bulkowski

    The use of stops separates the professional trader from the amateur investor.

    It doesn’t matter what price you paid for a stock. What matters most is what you sell it for. Do you spend more time researching a buy candidate than you do a sell candidate? That’s not necessarily a bad thing. I know I’ve turned on my computer only to discover, “Hey! I sold a stock!”

    The easiest way to sell a stock is to use a stop. It’s\npainless. Once the stop is in place, it’s almost worryfree. It’ll do its job regardless of whether your\ncomputer crashes, your neighbor cuts your phone line, or even if you forget to check in while on vacation. If you’re not making money in today’s markets, one reason may be that you’re not using stops. Why risk an immediate loss when you can hold out for a larger one? That’s how amateurs approach trading. It’s also why so many seem to lose so much. Stop-loss orders can help change that.

    THE STOP

    Place a stop-loss order below the current market price. When the stock reaches or trades below the stop, the stop order becomes a market order. In a fast-moving\nmarket or a thinly traded stock, you may be stopped out for more than you imagined. The stock may gap open lower, say by 30%, taking you out of the game for a hefty\nloss. To avoid that, buy stocks that only go up. Of course, that’s like saying the best cure for insomnia is to get a little sleep."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-28-32-sell-using-stops-by-thomas-bulkowski-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-28-32-sell-using-stops-by-thomas-bulkowski-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-28-32-sell-using-stops-by-thomas-bulkowski-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov243idcu,d,"{""minimum-quantity"":""1"",""path"":""ch2f202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:2 (36-42): Identifying The Cup (With Or Without The Handle) by Giorgos Siligardos, Ph.D."",""caption-linebreaks"":""Stocks & Commodities V. 24:2 (36-42): Identifying The Cup (With Or Without The Handle) by Giorgos Siligardos, Ph.D.

    Here’s a mechanical identification formula for the rounding bottom, one of the most rewarding formations for traders.

    The rounding bottom† (also known as the cup) is one of the basic and most-familiar bullish charting formations. In this article I will present a simple yet powerful and flexible algorithm to identify cups that can be implemented in almost all technical analysis software and in all time frames.

    The typical cup formation can be seen in Figure 1. The price declines and stops at point B. A sideways price movement follows, accompanied by low volume (the period from points B to C). The price then advances and stops at point D. With that, a cup-like price formation forms. Many times (though not necessarily), after point D the price declines again for a while on very low volume (point E) and forms the “handle” of the cup.\nThen the price breaks upward with the short-term horizontal resistance defined by point D on very high volume, and a medium-long term bullish period begins.

    A variation of the cup is what technician Steve Nison refers to in his Japanese Candlestick Charting Techniques as “tower bottoms.” The typical cup formation takes many weeks (or even months or years) to complete, whereas a tower bottom formation takes a shorter time to form. The segments A-B and C-D are steeper and the bottom period (from B to C) is more volatile. Nevertheless, the similarity between tower bottoms and the typical cups is very strong, so when the bottom part of a tower bottom is not very volatile, I categorized it in the general family of cup formations."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-36-42-identifying-the-cup-with-or-without-the-handle-by-giorgos-siligardos-ph-d-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-36-42-identifying-the-cup-with-or-without-the-handle-by-giorgos-siligardos-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-36-42-identifying-the-cup-with-or-without-the-handle-by-giorgos-siligardos-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov243sime,d,"{""minimum-quantity"":""1"",""path"":""ch2f202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:2 (36-42): Sidebar: MetaStock Formulas and Guidelines by Giorgos Siligardos, Ph.D."",""caption-linebreaks"":""Stocks & Commodities V. 24:2 (36-42): Sidebar: MetaStock Formulas and Guidelines by Giorgos Siligardos, Ph.D.

    Open the Indicator Builder and create the following indicator, which is the basic identification algorithm:

    ———————————

    Name:

    IsCup

    Formula:

    {0}P1:=LastValue(HHV(Log(H),20));"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-36-42-sidebar-metastock-formulas-and-guidelines-by-giorgos-siligardos-ph-d-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-36-42-sidebar-metastock-formulas-and-guidelines-by-giorgos-siligardos-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-36-42-sidebar-metastock-formulas-and-guidelines-by-giorgos-siligardos-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov245qume,d,"{""minimum-quantity"":""1"",""path"":""ch2f202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:2 (54): Quick-Scans: MetaStock Profx by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 24:2 (54): Quick-Scans: MetaStock Profx by Jayanthi Gopalakrishnan

    If you want to see how the “Huf–Puf” (the Hungarian forint and the Polish zloty), “Nokkie–Stokkie” (the Norwegian krone and the Swedish krona), and\n“Kiwi–Aussie” (the New Zealand dollar and the Australian dollar) are trading, you’ll find it all in MetaStock Profx.

    Although it is similar to other MetaStock charting packages, MetaStock Profx provides charting tools, technical indicators, and trading systems specifically\nfor analyzing the foreign exchange market. In fact, the symbol list only includes currency pairs/crosses, and scrolling down the list of currencies, it appears they have covered just about every currency traded.

    INSTALLATION AND DATA

    The installation was relatively straightforward and simple. The data for the product is powered by QuoteCenter, a Reuters service. I didn’t experience problems with the times I tried the product, and from communicating with other users, it seemed that the datafeed was reliable."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-54-quick-scans-metastock-profx-by-jayanthi-gopalakrishnan-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-54-quick-scans-metastock-profx-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-54-quick-scans-metastock-profx-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov245prre,d,"{""minimum-quantity"":""1"",""path"":""ch2f202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:2 (56-59): Product Review: IQ Trader by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 24:2 (56-59): Product Review: IQ Trader by David Penn

    A little over a decade ago, a bunch of derivatives traders\nand information technology (IT) wizards got together in an effort to create a handheld product that floor traders\ncould use to trade in open-outcry exchanges. This was pre–Long-Term Capital Management (LTCM) as far as\nderivatives went, pre-Internet boom as far as IT wizardry went, and pre–BlackBerry/PDA as far as handhelds\nwent. So what might seem commonsensical today was far less so back in 1994.

    In the decade-plus since then, the work of this band of traders and technologists has grown into a suite of products that both professional and average retail traders have come to know and love. Under the rubric of Patsystems, these tools and products have become so much a part of the trading world that many brokerage houses offer or encourage their clients to use Patsystems platforms with their stock and futures accounts. Many are the traders — especially\nnonprofessional ones — who have made their first e-mini Standard & Poor’s 500 trade, for example, using\nPatsystems’ J-Trader.

    For those traders who are ready to raise their game a few notches, Patsystems has a product that combines\nthe simplicity and ease of use of J-Trader with the scalability, power, and sophistication of some of their more upscale, professionally oriented trading products, such as Pro-Mark. And if you have already raised your trading game and are looking for a platform that can\nkeep your pace, then you have all the more reason to find out what Patsystems’ IQ Trader has to offer."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-56-59-product-review-iq-trader-by-david-penn-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-56-59-product-review-iq-trader-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-56-59-product-review-iq-trader-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov24680in,d,"{""minimum-quantity"":""1"",""path"":""ch2f202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:2 (60-67, 80): Interview: David S. Nasser by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 24:2 (60-67, 80): Interview: David S. Nasser by Jayanthi Gopalakrishnan

    David S. Nassar is many things: He is the founder and CEO of MarketWise Securities and MarketWise.com, a 20-year veteran trader, a New York Times best-selling author, and a columnist for MarketWatch.com, among other achievements. Nassar is a highly sought-after speaker for trading forums worldwide and has spoken\nbefore audiences ranging from Massachusetts Institute of Technology students and faculty to the US government.

    STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Nassar via telephone on December 9, 2005.

    Q: How did you get into trading?

    A: I grew up with the markets. I remember my dad, who\nretired from Prudential after 45 years, talking about IRAs and the marketplace and various financial tools\nand instruments as they became available. I remember when options were first introduced and even when Charles Schwab came out with his first book. Those were all things that were of interest in our home. I knew from when I was young that I wanted to be in the market.

    I made my first real trade while I was in college. So when I graduated, I started at Prudential myself, and started trading with my own money. After many, many\nmistakes and hard lessons, I basically taught myself the market.

    Q: And what were some of those many, many mistakes?

    A: The most difficult lessons I learned were how to let go of my opinions before I let go of my money. It’s a\ncliché, but it’s better to lose your opinion than it is your money. When you’re in a trade, obviously you have an opinion about it, and most novices have a hard time letting go of that. It’s a lesson you have to learn the hard way.

    Q: That is the hardest one, I think.

    A: It really is. It’s what most veteran traders say, but it really is the truth, and it is the essence of trading."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-60-67-80-interview-david-s-nasser-by-jayanthi-gopalakrishnan-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-60-67-80-interview-david-s-nasser-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-60-67-80-interview-david-s-nasser-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246sybe,d,"{""minimum-quantity"":""1"",""path"":""ch2f202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:2 (68-70): The System Behind The System by Merlin Jeffries"",""caption-linebreaks"":""Stocks & Commodities V. 24:2 (68-70): The System Behind The System by Merlin Jeffries

    Tired of finding systems that worked well in the past but are deficient in predicting the future?

    Back when I was a novice system developer, I would get excited by every marble-smooth equity curve I stumbled upon. Incredible backtest results in hand, I would start trading those systems with real money, only to find they were big losers in real-time. What happened?

    What happened is that the systems I was finding, while\nexcellent at predicting the past, were deficient when it came predicting the future. This variety of trading system was almost impossible for me to distinguish from the futurepredicting kind; until, that is, I started following a process for developing my systems.

    THE MEANS JUSTIFY THE END

    In the world of system development, the means justify the end. We cannot judge a trading system based upon a backtest result (the end); we must instead consider how the backtest result was achieved (the means). The means, or the system behind the system, is a strategically designed process for developing trading systems, and it’s a trader’s main defense against being tricked into putting real money behind a hindsight-based system."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-68-70-the-system-behind-the-system-by-merlin-jeffries-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-68-70-the-system-behind-the-system-by-merlin-jeffries-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-68-70-the-system-behind-the-system-by-merlin-jeffries-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247exyo,d,"{""minimum-quantity"":""1"",""path"":""ch2f202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:2 (71): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 24:2 (71): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    DELTA & VOLATILITY IN COLLAR TRADES

    I am a subscriber to S&C, and have traded stocks for several years. However, my knowledge of options is quite limited—I recently found that a “collar trade” can work better than stops. Is delta an important consideration when using options in collar trades where I own the stock? Also, what about the volatility rating? Where do you find the rating for delta and volatility when evaluating which options are better than\nothers? — Ronald Rogers"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-71-explore-your-options-by-tom-gentile-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-71-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-71-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247sepa,d,"{""minimum-quantity"":""1"",""path"":""ch2f202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:2 (72-77): Seasonal Patterns In The Markets by Robert Steelman"",""caption-linebreaks"":""Stocks & Commodities V. 24:2 (72-77): Seasonal Patterns In The Markets by Robert Steelman

    We are creatures of habit, and that affects how we approach the markets.

    There are many popular beliefs about how to make money in the financial markets, some popular and some not. Here’s a trading method that, though it ranks low in popularity, produces results that you can’t ignore.\nBy the end of this article, you will have a glimpse into the method and even have a concrete trading plan of how to follow it. All you need is one tool, something\nanyone could pick up anywhere, and it costs only a few\ndollars: a calendar. My focus is on seasonal patterns, mainly because people are creatures of habit and tend to do certain things at certain times, and this behavior affects the markets. There are quite a few of these seasonal patterns, some lasting many months and some only a day.

    IT’S ALL ABOUT PATTERNS

    Seasonal patterns are actually quite well-known to commodities traders, but are much less frequently applied to stock market indexes. For example, heating oil tends to be more expensive at the approach of winter and less when spring is around the corner. But a seasonal phenomenon does occur in the stock market as well. For whatever reason, on some days of every month everyone and his brother goes out to buy some\nstock and, in the process, drives up the market. On other days the opposite occurs; everyone’s out there selling their holdings and driving the prices down.

    With that in mind, I will only be looking at short-term\nphenomena and devising a trading strategy based on them using data going back 20 years. For comparison purposes, I will use the advance made by the Standard & Poor’s 500 index during this time, which would be the same as the buy & hold strategy. Over the course of 20 years (January 1, 1985, through December 31, 2004), the advance comes to 1,035 points. This period included 5,048 trading days (this, of course, excludes weekends and holidays). This means the S&P 500 made about 0.2 points per trading day. Remember\nthat figure as you examine each of the seasonal patterns."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-72-77-seasonal-patterns-in-the-markets-by-robert-steelman-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-72-77-seasonal-patterns-in-the-markets-by-robert-steelman-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-72-77-seasonal-patterns-in-the-markets-by-robert-steelman-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov248fufo,d,"{""minimum-quantity"":""1"",""path"":""ch2f202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:2 (81): Futures For You by Dan O’Neil"",""caption-linebreaks"":""Stocks & Commodities V. 24:2 (81): Futures For You by Dan O’Neil

    INSIDE THE FUTURES WORLD

    Want to learn how the futures markets really work? Dan O’Neil, a principal at online futures and forex broker XPRESSTRADE (www.xpresstrade.com), responds to\nyour questions about today’s futures markets. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be\nposted there, and selected questions will appear in a future issue of S&C.

    NYMEX STUCK ON OPEN OUTCRY

    Gold is trading around 25-year highs. Crude oil continues to hover over $60 per barrel. Natural gas recently jumped to an all-time record, settling above $15 for the first time ever. Copper is in the midst of a powerful bull market. Gasoline prices have been making headlines for months. These are the best of times for the New York Mercantile Exchange (NYMEX), the world’s primary venue for trading in energy and metal futures. NYMEX trading volumes have been surging, and the exchange’s memberships are at historically lofty levels — as I am writing this, a full NYMEX membership last changed hands for $3.6\nmillion."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-81-futures-for-you-by-dan-o-neil-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-81-futures-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-81-futures-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov24897tr,d,"{""minimum-quantity"":""1"",""path"":""ch2f202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:2 (82-87, 97): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:2 (82-87, 97): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    David Sepiashvili’s article, “The Self-Adjusting RSI,” presents a technique to adjust the traditional RSI overbought and oversold thresholds so as to ensure that 70–80% of RSI values lie between the two thresholds. Code for this technique is provided for TradeSation, MetaStock, Wealth-Lab, AmiBroker, eSignal, NeuroShell, Investor/RT, AIQ, TradingSolutions, Trade Navigator, TechniFilter Plus, BioComp Dakota, NeoTicker, and Tradecision."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-82-87-97-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-82-87-97-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-82-87-97-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov248trre,d,"{""minimum-quantity"":""1"",""path"":""ch2f202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:2 (88-89): Traders’ Resource: Exchanges by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:2 (88-89): Traders’ Resource: Exchanges by Technical Analysis, Inc.

    With the explosion of exchanges around the world and the increasing poaching of products between exchanges, traders should be aware of all the places where trading opportunities occur. No longer bound by national borders or even physical locations, exchanges can be no more than a box in the corner of an office. Differentiation comes in the form of product, volume, speed, pricing, and investor protections.

    Look for an exchange with extensive trade documentation so that disputes can be resolved quickly and with quick reference to events. Since more and more alternatives are rapidly becoming available, don’t be afraid to direct your business to the exchange\nof your choice. The plethora of investor choice is forcing a rapid decline in transaction costs already, and exchange monopolies are a thing of the past.

    Use the listing presented here to find the websites of the exchanges handling your tradable, then go to the site to get the specifics of the trading vehicle. Better yet, get several equivalent products at several exchanges and be sure your broker can direct your business to the venue of your choice."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-88-89-traders-resource-exchanges-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-88-89-traders-resource-exchanges-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-88-89-traders-resource-exchanges-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov249bofo1,d,"{""minimum-quantity"":""1"",""path"":""ch2f202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:2 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:2 (92): Books For Traders by Technical Analysis, Inc.

    The Almanac Investor: Profit From Market History And Seasonal Trends (525 pages, $39.95 softcover, 2005, ISBN 0-471-65405-1) by Jeffrey A. Hirsch and J. Taylor Brown, published by John Wiley & Sons. The key to investment success is accurate financial research, which depends on your ability to quickly access and\nanalyze data. Combining this book and its online research platform can help you do just that. This book\nreveals valuable data and practical indicators needed\nto understand and profit from recognizing market\nfluctuations and patterns. Here you will find four decades’ worth of stock market research packed into\none reference."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-92-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov249wefo,d,"{""minimum-quantity"":""1"",""path"":""ch2f202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:2 (96-97): Websites For Traders: Tom Brown’s Bankstocks.com by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 24:2 (96-97): Websites For Traders: Tom Brown’s Bankstocks.com by David Penn

    I first began paying attention to bank stocks as a group after doing an interview with Cassandra Tororian, the\nformer sell-side bank stock analyst who founded Financialmuse.com, an online bank, brokerage, and financial resource designed especially for women. As\nTororian said in that interview back in March 2001 about bank stocks:

    The funny part was, when you go through\nbusiness school they teach you how to read the balance sheets and income statements of companies. But banks? Banks are totally different. Their balance sheets are the complete opposite of any other\ncompany out there.

    So if analyzing banks — and more than that, analyzing bank stocks — threw a talented young business school student for a loop (Tororian was among the few shrewd enough to invest in America Online back in 1995), then you can imagine how much trouble the rest of us might have in trying to sort the banking wheat from the banking chaff."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-96-97-websites-for-traders-tom-brown-s-bankstocks-com-by-david-penn-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-96-97-websites-for-traders-tom-brown-s-bankstocks-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-2-96-97-websites-for-traders-tom-brown-s-bankstocks-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241leto2,d,"{""minimum-quantity"":""1"",""path"":""ch3m201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:3 (10-15): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:3 (10-15): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist.

    MIND MAPS

    Editor,

    I really enjoyed your January 2006 issue, especially\nthe article “A Blueprint For Your Trading.” In it, author Vadym Graifer used a couple of mind maps to\nillustrate the article. Are these available at your website, Traders.com? If not, would the author share them?

    A.J. VASARIS

    Akron, OH

    Vadym Graifer replies:

    The mind maps used in the article were created with ConceptDraw MINDMAP software and are two out of many used in my book, The Master Profit Plan. The book is available through my website at http://www.realitytrader.com/masterplan/. Thank you for the kind words."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-10-15-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-10-15-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-10-15-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241fofo2,d,"{""minimum-quantity"":""1"",""path"":""ch3m201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:3 (16-20): Forex Focus by Matt Blackman"",""caption-linebreaks"":""Stocks & Commodities V. 24:3 (16-20): Forex Focus by Matt Blackman

    Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. With that in mind, STOCKS & COMMODITIES has introduced Forex Focus to better prepare the retail trader to participate in the currency market.

    THE CURRENCY COMBO

    Integrating strategies can increase forex trade confidence. Before entering a trade, traders must do\nwhatever they can to put the odds in their favor. Candlesticks have been helping traders in this for hundreds of years. From analyzing an individual candlestick right up to complex patterns involving a group of them, traders may gain a substantial advantage by learning to use them. Because they do an excellent job in giving visual cues to what is happening in the market, a candlestick chart can quickly show whether there is a trade coming, one setting up, or if nothing much is happening. Since there are excellent books already written on the topic, this article will\ninstead focus on how to combine candlesticks with a crossover strategy on the US Dollar Index to provide more reliable buy and sell signals.

    No matter what time frame you are using — from one minute to monthly — there are advantages to performing a candle-by-candle analysis. Why? The shape of the candle — where it opens or closes, its relation to the previous candle or candles, its position in the overall trend, and if it’s at or near levels of support or resistance — can provide insight about where price is going. By knowing what the highest-probability outcome is for the next candle, a trader can make a more rapid decision as to whether he or she should stay in, stay out, take a profit, or take a loss."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-16-20-forex-focus-by-matt-blackman-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-16-20-forex-focus-by-matt-blackman-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-16-20-forex-focus-by-matt-blackman-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov242auda,d,"{""minimum-quantity"":""1"",""path"":""ch3m201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:3 (22-28): The Automated Daytrader by Lee Leibfarth"",""caption-linebreaks"":""Stocks & Commodities V. 24:3 (22-28): The Automated Daytrader by Lee Leibfarth

    Here’s how daytraders can use different levels of trade automation.

    Technology has played a vital role in allowing retail traders to compete in markets where, traditionally, only institutional and professional traders have been able to profit. Daytrading simply couldn’t exist without high-speed Internet connection, reliable trading software, or direct-access trading. Many of the high-end trading platforms and features only available to institutions as of a few years ago have become both affordable and practical for daytraders. In addition, high-volume retail traders, or daytraders, have become the target market for much of the advanced trading technology available now. One of the most popular examples of this new wave of trading technology is trade automation.

    Initially, many traders viewed trade automation as a mystical “black box” that arbitrarily generated trades. This early perception of automation may have led some traders to disregard the technology for fear of losing control over their trading. While you can buy preprogrammed automated strategies that do not disclose trading logic, there are varying levels of\ntrade automation that savvy traders can customize to\nfit their needs."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-22-28-the-automated-daytrader-by-lee-leibfarth-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-22-28-the-automated-daytrader-by-lee-leibfarth-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-22-28-the-automated-daytrader-by-lee-leibfarth-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov243unma,d,"{""minimum-quantity"":""1"",""path"":""ch3m201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:3 (30-37): Understanding Market Structure by Paolo Pezzutti"",""caption-linebreaks"":""Stocks & Commodities V. 24:3 (30-37): Understanding Market Structure by Paolo Pezzutti

    Understanding the market before placing your trade can make a huge difference to your trading performance.

    Different financial markets have different behaviors.\nThis is because of the intrinsic characteristics of these markets (growth/value stock, for example), market liquidity, participants (long-/short-term investors, institutions, daytraders, and position traders), and\nfactors that affect the markets when market players elaborate information. You can make your system/method work under the technical conditions\nthat best fit the logic of the market if you understand the market structure. Ideally, you want to let your system/family of systems work only in environments\nthat maximize their performance. For example, running a short-term system on a market with a low daily range\nwould probably not be profitable after commissions and slippage.

    THE STATES OF THE MARKET

    The first step is to identify the state of the market so that you trade only when specific conditions are met. You can do that by applying a filter, but before you do so, let’s try to conceptualize the subject. The main components of price movement are directionality and volatility. Volatility can be defined as a measure of an asset’s tendency to move up and down in price over the latest n periods. Directionality can be defined as a measure of an asset’s tendency to move along a defined trend. By combining these elements, you can come up with four market states..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-30-37-understanding-market-structure-by-paolo-pezzutti-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-30-37-understanding-market-structure-by-paolo-pezzutti-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-30-37-understanding-market-structure-by-paolo-pezzutti-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244exyo,d,"{""minimum-quantity"":""1"",""path"":""ch3m201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:3 (41): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 24:3 (41): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicatedmto teaching investors how to minimize their risk while maximizing profits usingmoptions. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    IMPACT OF DIVIDENDS ON BEAR CALL SPREAD

    If I place a bear call spread and the company announces a dividend payment to be paid within the time frame of my trade, how will this affect my trade?

    A dividend can affect the bear call spread or any other position that has a short call option. The bear call spread consists of a long call and a short call where the long call will have a higher strike price than the short. If the short call is in-the-money (the stock price is\ngreater than the strike price of the option) on the day before the ex-dividend date, it might be assigned. If so, it leaves the strategist with a short stock position on the ex-dividend date, which the strategist is responsible for. So the dividend can result in early assignment of the short call, which will obviously change the position. It is a very good idea to know if the short call is at risk of\nassignment due to the dividend. In many cases, it is better to close out the position rather than face assignment."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-41-explore-your-options-by-tom-gentile-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-41-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-41-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244tran,d,"{""minimum-quantity"":""1"",""path"":""ch3m201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:3 (44-45): Trading And Poker Parallels by Don Bright with Darren Clifford"",""caption-linebreaks"":""Stocks & Commodities V. 24:3 (44-45): Trading And Poker Parallels by Don Bright with Darren Clifford

    Risk? Yes. Reward? Of course. But the similarities go deeper.

    A couple of months ago, I was asked about the similarities between stock trading and what seems to be the new national pastime, poker. Las Vegas is home to some of the world’s best poker players, and Bright Trading is headquartered in Las Vegas. It just so happens that some of the world’s best poker players are also Bright traders. My brother, Bob, made his first fortune playing blackjack back in the 1970s. He took that money and bought a seat on an exchange to start trading options in 1978. Over the last couple of decades, we have always played poker at our family Christmas gatherings (everyone should have a family tradition, right?).

    Now, for several years we have had a trader named Chris “Jesus” Ferguson in our organization, and I always thought it was neat to have a younger guy with an interesting appearance as part of our team. To prove that you can’t judge a book by its cover, Ferguson has a doctorate in computer sciences. Ray Bitar, our Los Angeles office manager for many years, teamed up with Ferguson and several top poker players to form a new business venture, Full Tilt Poker. Bitar is now the CEO of Tiltware LLC, in what has become one of the most\npopular online poker sites among serious players."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-44-45-trading-and-poker-parallels-by-don-bright-with-darren-clifford-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-44-45-trading-and-poker-parallels-by-don-bright-with-darren-clifford-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-44-45-trading-and-poker-parallels-by-don-bright-with-darren-clifford-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244sist,d,"{""minimum-quantity"":""1"",""path"":""ch3m201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:3 (46-52): Sidebar: Steps to create trading system BBZ in MetaStock by Jacinta Chan"",""caption-linebreaks"":""Stocks & Commodities V. 24:3 (46-52): Sidebar: Steps to create trading system BBZ in MetaStock by Jacinta Chan

    1. OBTAIN DATA

    (CREATE FILE IN METASTOCK UNDER DOWNLOADER)

    2. CREATE BBZ

    (CREATE A NEW SYSTEM UNDER SYSTEM TESTER)"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-46-52-sidebar-steps-to-create-trading-system-bbz-in-metastock-by-jacinta-chan-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-46-52-sidebar-steps-to-create-trading-system-bbz-in-metastock-by-jacinta-chan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-46-52-sidebar-steps-to-create-trading-system-bbz-in-metastock-by-jacinta-chan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244trtr,d,"{""minimum-quantity"":""1"",""path"":""ch3m201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:3 (46-52): Trading Trends With The Bollinger Bands Z-Test by Jacinta Chan"",""caption-linebreaks"":""Stocks & Commodities V. 24:3 (46-52): Trading Trends With The Bollinger Bands Z-Test by Jacinta Chan

    Standard deviation bands are helpful in determining trends. Here, the author develops a trading system based on this idea that yields high returns with low, controlled risk.

    The set of trading techniques that I will present here uses standard deviation bands to determine trends and help develop a trading system that yields high returns at low, controlled risk. The name for this trading system, BBZ, is an acronym derived from “Bollinger Bands” and the \""z-score,” based on a Working Money article published in October 2002 by Veronique Valcu. In “Z-Score Indicator,” Valcu related z-scores to Bollinger Bands. Intrigued by the article and to continue that discussion, I wanted to take a closer look at that\nrelationship and introduce the Bollinger Bands z-test (BBZ).

    RECAP

    The z-score (Z) measures the difference (direction) between the closing price (C) from the mean (n-period moving average) given the n-period standard deviation(s). Positive or negative values show that the closing price (C) is above (C>µ) or below (C<µ) the mean, respectively.

    The properties that interest traders are return and risk. In finance, average depicts expected return and standard deviation depicts expected risk. In statistics, we can define range trading as prices that are observed within the expected one (1) standard deviation band. We define trend trading as prices that are observed above +1 standard deviation band (for uptrends) and below -1 standard deviation band (for downtrends).

    This article will show how to design and develop this trading system. It outlines the research, why the z-score indicator is used, the tests, and the results."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-46-52-trading-trends-with-the-bollinger-bands-z-test-by-jacinta-chan-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-46-52-trading-trends-with-the-bollinger-bands-z-test-by-jacinta-chan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-46-52-trading-trends-with-the-bollinger-bands-z-test-by-jacinta-chan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov245inke,d,"{""minimum-quantity"":""1"",""path"":""ch3m201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:3 (54-61): Interview: Ken Tower And The Future Of Electronic Trading by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 24:3 (54-61): Interview: Ken Tower And The Future Of Electronic Trading by Jayanthi Gopalakrishnan

    A member and former president of the Market Technicians Association (MTA), Ken Tower is chief market strategist at CyberTrader, and one of the best-known point & figure chartists in financial services today. He is a frequent guest speaker on CNBC, CNN, Fox, Bloomberg TV, Bloomberg Radio, MarketWatch Radio, and AP Radio financial programs. Tower also produces daily and weekly technical market commentary and contributes regularly to online trading seminars and workshops for clients of both CyberTrader and Charles Schwab & Co. He is also a frequent speaker at regional chapters of the MTA and the CFA Institute.

    STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Tower via telephone on January 6, 2005.

    Q: Ken, how did you get interested in the markets?

    A: I was exposed to the stock market when I got out of sixth grade. I was given five shares of stock, and I watched them for a while, not intensely, but on and off. It was a little oil and gas company, and I followed its swings up and down.

    Q: So you started really early!

    A: I did! Later, I went to Lehigh University and ended up a finance major. I really disliked almost everything they\nwere teaching me. There was one chapter in our portfolio management and security analysis class textbook that was about technical analysis. The professor said, “We’re not going to pay any attention\nto this,” and I was immediately intrigued since I didn’t like anything else he was telling us! I also got involved\nwith the investment club at Lehigh, and I just took off from there.

    I was an early subscriber to William O’Neil’s Daily Graphs, and I used to get the options daily graphs presentations. Out of college, I got a job with\nDelafield, Harvey, Tabell, a boutique institutional research firm — at least the Tabell portion was; the rest was more money management. So I was an institutional salesman at this firm for a long time, and\nsince it was such a small firm, you really had to do a lot of your own analysis. Tony Tabell was our leader, but we did a lot of our own work."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-54-61-interview-ken-tower-and-the-future-of-electronic-trading-by-jayanthi-gopalakrishnan-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-54-61-interview-ken-tower-and-the-future-of-electronic-trading-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-54-61-interview-ken-tower-and-the-future-of-electronic-trading-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246usca,d,"{""minimum-quantity"":""1"",""path"":""ch3m201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:3 (62-66): Using Calls To Create Synthetic Leverage by Matthew J. Stander"",""caption-linebreaks"":""Stocks & Commodities V. 24:3 (62-66): Using Calls To Create Synthetic Leverage by Matthew J. Stander

    Before you take the plunge and buy a call option, you should consider whether you know everything you can about doing so.

    Traders frequently buy call options to increase returns on long positions without first taking the time to understand the complexities of option pricing. For a sophisticated options trader with the ability to change positions in milliseconds, pricing models like Black-Scholes provide valuable guidance for establishing derivative positions. However, most traders could benefit from other analytical techniques that avoid the intricacies of complex calculus and cumulative log-normal statistical distributions.

    Analyzing calls based on the synthetic leverage they create is a powerful way to understand how in-the-money call options can benefit you. A better understanding of how call options create leverage will help you determine when to use calls and which call to buy. Modifying long trading strategies to use in-the-money call options for leverage may make your\ntrading strategies much more appealing."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-62-66-using-calls-to-create-synthetic-leverage-by-matthew-j-stander-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-62-66-using-calls-to-create-synthetic-leverage-by-matthew-j-stander-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-62-66-using-calls-to-create-synthetic-leverage-by-matthew-j-stander-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov24671qu,d,"{""minimum-quantity"":""1"",""path"":""ch3m201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:3 (67, 71): Quick-Scans: TradersInternational.com by J. Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 24:3 (67, 71): Quick-Scans: TradersInternational.com by J. Gopalakrishnan

    Trading has long been known as a lonely profession. The image of a solitary trader sitting at home in front of a computer screen(s) watching the markets is not\ntoo far from the truth. Although many traders have accepted that, some nonetheless yearn to communicate with their fellow traders.

    Traders International has addressed this need by giving traders access to its “alert room,” where you can actually watch a trader make live trades on the S&P e-mini contract. Franz Shoar, who has had 19 years’ experience in trading, trades the S&P e-mini contracts on an intraday basis, and if you drop in at Traders International’s alert room, you will get a good look at how he trades. Bear in mind that he uses a lot of indicators and unique trading signals that you have never heard of; nor will you know how to create these indicators or signals. All you can really do is play follow\nthe leader. I have always been skeptical about this type of trading, but I thought I’d give it a chance."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-67-71-quick-scans-tradersinternational-com-by-j-gopalakrishnan-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-67-71-quick-scans-tradersinternational-com-by-j-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-67-71-quick-scans-tradersinternational-com-by-j-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246prre1,d,"{""minimum-quantity"":""1"",""path"":""ch3m201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:3 (68-71): Product Review: E-Gate by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 24:3 (68-71): Product Review: E-Gate by David Penn

    One thing is clear to me after five years of writing product reviews for technical traders: The last thing a\nreader should use to decide whether to adopt a given software package is whether or not I would use it. I’ve\ncome to believe that if every trader could have exactly what he or she wanted in a charting/trading software package, then none of us would end up with the same thing. There may be as many different software products for traders as there are traders who would use them; it certainly seems that way sometimes. To\nthat end, the most sensible way to “review” a product review is to read through the descriptions and explanations of the product and see whether those descriptions and explanations are compatible with the “ideal” charting/trading platform every trader has in his or her head. Who cares if I would use the software? The question is whether the software might work for you.

    All that said, E-Gate — a real-time financial analytical software product from Vancouver, BC–based AlphaTrade.com — is software I would use. And depending on your needs as a trader, I suspect more than a few traders will agree even after spending a short time with the product.

    The fact that E-Gate combines power, ease of use, and coherence into a package that is almost elegant is certainly a winning characteristic as far as I am concerned. So many worthy software packages are hard to embrace because of a stylistic or design-oriented complexity that only takes away from what the software has to offer. While it is true that, given enough time, most traders can find coherence in even the most chaotically arranged software, the truth of the matter is that many traders will abandon a software package long before they’ve arrived at that point. Unfair? Maybe. But it just underscores the idea that analytic/trading software cannot just be capable or functional — at least not any more."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-68-71-product-review-e-gate-by-david-penn-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-68-71-product-review-e-gate-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-68-71-product-review-e-gate-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247qaby,d,"{""minimum-quantity"":""1"",""path"":""ch3m201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:3 (74): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 24:3 (74): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    VOLATILITY & TREND

    Does volatility of a particular market have any correlation with its trendiness? Does increased volatility result in more trends or choppy markets? Any insight, tips, thoughts, or comments on the relationship\nbetween volatility and trend will be welcome.—rizwanuk

    One of my concerns is that most people don’t truly understand implied volatility (as reflected in the VIX, for\nexample) vs. historical volatility. When compared to one another, the two actually show the trending direction, if not the magnitude (gammas) of the move. Due to basic math, as markets trend up or down, volatility goes up. The opposite is true when markets stabilize or become choppy, and implied volatility goes down."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-74-q-a-by-don-bright-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-74-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-74-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247wefo,d,"{""minimum-quantity"":""1"",""path"":""ch3m201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:3 (75): Websites For Traders: SectorUpdates.com by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 24:3 (75): Websites For Traders: SectorUpdates.com by David Penn

    As a trader, do your eyes light up or glaze over when the subject shifts to market sectors? For most fundamentally oriented traders, my guess would be the former rather than the latter. After all, the idea that it\nis beneficial to study the various sectors into which industries, companies, and stocks are divided is predicated on the concept that the economic cycle plays a disproportionate influence on certain stocks at certain times. Other fundamentally oriented types look to the\nmonetary cycle — the pattern of rising and falling short-term, or cash, interest rates — to spot the various effects of the movement of the cycle from tightening or restrictive to neutral to accommodative on different types of stocks.

    The truth of the matter is that technical traders have as much to gain from understanding how powerful the influence of market sectors can be on the stock market as a whole as well as on individual stocks as do fundamental traders. After all, if the economy favors a\ncertain type of stock, and a certain type of stock is well (or even over-) represented in a given index or average, then it might be possible for a trader to achieve outperformance simply by applying his or her technical tools to trading that index or average to the exclusion of\nothers."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-75-websites-for-traders-sectorupdates-com-by-david-penn-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-75-websites-for-traders-sectorupdates-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-75-websites-for-traders-sectorupdates-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247trti1,d,"{""minimum-quantity"":""1"",""path"":""ch3m201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:3 (76-83): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:3 (76-83): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement one of the strategies presented in this issue.

    BOLLINGER BANDS Z-TEST (BBZ)

    Code for Jacinta Chan’s technique described in her article, “Trading Trends With The Bollinger Bands Z-Test,” is provided for TradeStation, eSignal, Wealth-Lab, AmiBroker, AIQ Systems, TradingSolutions, NeuroShell Trader, NeoTicker, Trade Navigator, Technifilter Plus, BioComp Dakota, VT Trader, financial Data Calculator, Tradecision, and SmarTrader. Code for MetaStock has already been provided in the article."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-76-83-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-76-83-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-76-83-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov248trre1,d,"{""minimum-quantity"":""1"",""path"":""ch3m201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:3 (84-88): Traders’ Resource: Online Trading Services by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:3 (84-88): Traders’ Resource: Online Trading Services by Technical Analysis, Inc.

    You can find a wealth of information on the Internet for nearly any subject imaginable, including investing, trading, and the financial markets. You can even find\na good amount on technical analysis.

    Each month in STOCKS & COMMODITIES’ Traders’ Resource, we present a listing for different categories of products and services related to trading, all to aid our readers in their pursuit of trading. This month, we focus on the topic of online trading services.

    We contacted companies that offer services to traders over the Internet as well as financial website developers and asked them to fill out an online survey form to describe their Internet site. Here, you’ll find an excerpt of the data we collected. Some of these websites offer charting, price quotes, and financial news and information; others offer a more specialized\nservice that may be useful to investors and traders.\nFeatures may include stock screening, articles, discussion forums, online support, and more.

    TRADERS’ RESOURCE AT TRADERS.COM

    In addition to the information given here, Traders’ Resource is also available at our website, http://www.Traders.com, and in much greater detail. At our website, you’ll not only find out much more about all the online trading services listed here, but you’ll also find information on products and services in numerous other categories as well, such as data services, brokerages, courses & seminars, and others."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-84-88-traders-resource-online-trading-services-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-84-88-traders-resource-online-trading-services-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-84-88-traders-resource-online-trading-services-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov249wefo1,d,"{""minimum-quantity"":""1"",""path"":""ch3m201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:3 (92): Websites For Traders: TraderMike.net by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 24:3 (92): Websites For Traders: TraderMike.net by Jayanthi Gopalakrishnan

    WWW.TRADERMIKE.NET

    At a time when reading weblogs is fast becoming a ritual, it’s no surprise that the number of technical analysis blogs is on the rise. One that I read regularly\nis www.TraderMike.net. Once you visit the site you’ll understand why. It’s interactive, as are most blogs, with\nclearly explained charts, which make it very easy to understand the reasoning behind the blogger’s opinions.

    Generally, on the home page you will see a watchlist with a chart of the NASDAQ with various indicators, support/resistance levels, patterns, what have you. For example, on the blog entry for November 14, 2005, the daily chart of the NASDAQ (Figure 1) had Bollinger Bands, various moving averages, labeled support and resistance levels, volume, stochastics, and on-balance\nvolume (OBV) either overlaid or displayed on subcharts."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-92-websites-for-traders-tradermike-net-by-jayanthi-gopalakrishnan-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-92-websites-for-traders-tradermike-net-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-92-websites-for-traders-tradermike-net-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov249fufo,d,"{""minimum-quantity"":""1"",""path"":""ch3m201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:3 (98): Futures For You by Dan O’Neil"",""caption-linebreaks"":""Stocks & Commodities V. 24:3 (98): Futures For You by Dan O’Neil

    INSIDE THE FUTURES WORLD

    Want to learn how the futures markets really work? Dan O’Neil, a principal at online futures and forex broker XPRESSTRADE (www.xpresstrade.com), responds to\nyour questions about today’s futures markets. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be\nposted there, and selected questions will appear in a future issue of S&C.

    BECOMING A FUTURES BROKER

    Is this a good time to become a futures/ forex broker? This is for a person who making a career change. Do brokers at a firm like yours spend most of their\ntime trading or selling?

    Great question, and you’ll likely be surprised by my answer. If a family member or close personal acquaintance were to ask my opinion about starting a\nnew career as a traditional futures broker, I’d probably counsel them against it. Is now a great time to consider a career in the futures and forex industry? Absolutely! But as a commission-based broker or salesman? I’m not so sure."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-98-futures-for-you-by-dan-o-neil-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-98-futures-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-3-98-futures-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241leto3,d,"{""minimum-quantity"":""1"",""path"":""ch4a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:4 (10-13): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:4 (10-13): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist.

    ARTICLE TOPIC SUGGESTION

    Editor,

    How about information on keeping a trading journal?\nEverything I have read on the topic talks about the importance of a journal but provided no information about what to put into one.

    KEN SANFORD

    Thanks for your article suggestion. This is always a good topic, since traders should always have a trading plan. Ideally, the trader’s daily discipline should include his or her daily evaluation of the market; a trading idea\nbased on the current market; the risk / reward considerations of the idea; and adherence to a money management strategy. The best plans are documented, so some traders keep daily notes and trading journals. According to trader Tushar Chande, a trading plan is like a game plan and should clearly specify actions to take under different conditions.

    Some websites and blogs give you an idea of the daily notes and observations that other traders keep. In addition, some technical analysis programs, such as Prophet.Net; the Applied Reality Trading home study course; Trendsetter Software’s Personal Hotline and Pro Analyst; and many others offer a trading journal feature."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-10-13-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-10-13-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-10-13-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241chma,d,"{""minimum-quantity"":""1"",""path"":""ch4a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:4 (10-15): Charting The Market: Swing Rule by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 24:4 (10-15): Charting The Market: Swing Rule by David Penn

    What do the measuring rule for double bottoms, head & shoulders tops and bottoms, cups with handles, double tops, rectangle bottoms and tops, ascending and descending triangles, and a host of other chart patterns have in common?

    All of these patterns rely on the size of the pattern to help determine the minimum extent of a breakout or breakdown. In doing so, these measurement rules actually invoke a principle written about years ago\nby Stan Weinstein in his classic investment primer, \""Secrets For Profiting In Bull And Bear Markets\"":

    \""Over the years, technicians have come up with all sorts of fancy theories and games that are supposed to predict where a stock is headed. Believe me, I’ve dabbled with them all, from the simplest to the most complex. I’m not going to burden you with them because it’s not worth the effort. But there is one simple concept that you should be aware of that does have a high degree of accuracy. When you add it to your arsenal of trading tools, you’ll really be ready for the firing line.\""

    What is it? The envelope, please:

    \""This trading measurement is called the swing rule. It doesn’t appear often, but when it does, it can give you real insight into where an advance is likely to end. It’s often so accurate that it’s almost like reading next week’s newspaper today!\"""",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-10-15-charting-the-market-swing-rule-by-david-penn-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-10-15-charting-the-market-swing-rule-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-10-15-charting-the-market-swing-rule-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241fofo3,d,"{""minimum-quantity"":""1"",""path"":""ch4a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:4 (14-18): Forex Focus by Darrell Jobman"",""caption-linebreaks"":""Stocks & Commodities V. 24:4 (14-18): Forex Focus by Darrell Jobman

    Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. With that in mind, STOCKS & COMMODITIES has introduced Forex Focus to better prepare the retail trader to participate in the currency market.

    Where Will The US Dollar Find Support?

    Monetary trends in the first quarter of 2006 may have the answer.

    Monetary policy will remain very important for currency trends during the next few months, even if the markets give greater attention to the growing US trade deficit.

    The exact timing of a peak in US interest rates is difficult to forecast, but there is a strong possibility that rates will peak in the first quarter of 2006. Thereafter, short-term US rates should not change very much for the remainder of 2006.

    The European Central Bank (ECB) is likely to increase interest rates steadily during the year with a rate around 3.0% realistic by the end of 2006. The Bank of Japan is set to abandon its ultra-expansionary monetary policy during the first half of 2006, potentially in April, although\ninterest rates will stay low.

    Nominal yields will continue to favor the US dollar, but the gap relative to the euro and yen is unlikely to widen significantly further. In fact, spreads are likely to narrow from late in the second quarter, and with markets looking forward, the US dollar will find it more difficult to attract capital inflows. A benign series of events is possible, with the dollar settling into a trading range as interest rate differentials stabilize or narrow slowly. Of course, there is also still the risk of sharper dollar falls if the markets start to price in a quick US interest rate cut."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-14-18-forex-focus-by-darrell-jobman-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-14-18-forex-focus-by-darrell-jobman-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-14-18-forex-focus-by-darrell-jobman-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241qaby1,d,"{""minimum-quantity"":""1"",""path"":""ch4a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:4 (19): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 24:4 (19): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://\nMessage-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    LOW-RISK PAIRS TRADING

    You’ve spoken of pairs trading with praise, and I think you have a group of traders engaging in this strategy. Can you suggest a way to start trading this market-neutral strategy without risking too much money (I have a small retail account at this point)?— jackeeo

    Absolutely! For those who haven’t heard much about “correlated pairs trading” —feel free to check my website (www.stocktrading.com) and then click\non the PairCo link. When traders are just starting out, we suggest something called “crutch” pairs trading. First, do a bit of research to find two stocks in the same sector, with similar capitalization and (especially) similar current prices. Check an overlay chart with both stocks to see how well they have tracked for the last few months, and even the last few years (look back 10 years if possible). Generally, we initially choose the most fundamentally strong stock as the “lead” stock (the likely long position), with the weaker stock as the likely short position."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-19-q-a-by-don-bright-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-19-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-19-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov242inyi,d,"{""minimum-quantity"":""1"",""path"":""ch4a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:4 (20-24): The Inverted Yield Curve by Kathy Lien"",""caption-linebreaks"":""Stocks & Commodities V. 24:4 (20-24): The Inverted Yield Curve by Kathy Lien

    An inverted yield curve has implications in regards to the US dollar and the economy. Will they both suffer?

    The potential of a yield curve inversion has been a major topic in the markets over the past few months. With two-year US Treasury bonds yielding 4.60% at the time of this writing and the 10-year bonds yielding 4.31%, the fear is a valid one. The spread has been shrinking for months now, with the first inversion between the two- and 10-year notes occurring in the last week of December 2005. This is the first time that the spread has gone negative since 2000, which was right before the burst of the tech bubble. Interestingly, the inversion, which is believed to come hand in hand with a recession, has not caused a wave of panic because many experts believe that this time around, things will be different.

    Whether or not it is different will remain a debate only time can settle, but in the meantime, what we do find interesting is that contrary to popular thought, yield curve inversions are not necessarily bad for the\nUS dollar.

    DEFINING THE YIELD CURVE INVERSION

    Before we discuss what an inverted yield curve is, it is important to understand what a normal yield curve and an inverted yield curve look like. In a healthy yield curve, short-term interest rates are lower than longer-term interest rates because investors need to be compensated for taking a higher risk by purchasing a bond with a longer maturity. An inverted yield curve occurs when the short-term interest rate is actually higher than the long-term one."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-20-24-the-inverted-yield-curve-by-kathy-lien-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-20-24-the-inverted-yield-curve-by-kathy-lien-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-20-24-the-inverted-yield-curve-by-kathy-lien-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov242whit,d,"{""minimum-quantity"":""1"",""path"":""ch4a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:4 (26-31): What It Takes To Survive by Adrienne Toghraie"",""caption-linebreaks"":""Stocks & Commodities V. 24:4 (26-31): What It Takes To Survive by Adrienne Toghraie

    As a trader, you need to be a winner and you also need to be a survivor. Here’s why.

    No matter how good a trader is, he will experience a shattering loss some time in his career. There is almost no way to avoid such an event because no system is completely infallible and the markets are like\nheat-seeking missiles that sense vulnerability and do not give up until they hit their target. The professional\ntrader must, therefore, learn not only how to be a winner\nbut how to be a survivor as well.

    Traders can learn a lot about the art of survival from the human response to a great natural disaster. Hurricane Katrina, the deadly category 5 hurricane that bore down\non the southeastern region of the US in late August 2005, was responsible for the deaths of more than 1,000 people. One of the cities hit, New Orleans, LA, sits in a bowl-shaped region below sea level, protected by a system of levees that were designed to withstand\na less powerful hurricane than Katrina. An emergency plan for the evacuation of the city was in place, but in the end, for one reason or another, was neither consulted nor followed. When the call to evacuate finally came, a significant portion of the population did not leave, leading to a level of unprecedented calamity. Why?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-26-31-what-it-takes-to-survive-by-adrienne-toghraie-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-26-31-what-it-takes-to-survive-by-adrienne-toghraie-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-26-31-what-it-takes-to-survive-by-adrienne-toghraie-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov243exyo,d,"{""minimum-quantity"":""1"",""path"":""ch4a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:4 (37): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 24:4 (37): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    OPTIONS ON SINGLE STOCK FUTURES

    Do you know of a broker that allows trading in single-stock futures and options?

    Single-stock futures started trading in November 2002, but there are no listed options on those contracts yet.\nOptions might become available in the future, but this has been a slow go due to the cross-regulation of single-stock futures."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-37-explore-your-options-by-tom-gentile-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-37-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-37-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov243vobo,d,"{""minimum-quantity"":""1"",""path"":""ch4a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:4 (38-41): Volatility, Bollinger Bands, And The Yen by Matt Blackman"",""caption-linebreaks"":""Stocks & Commodities V. 24:4 (38-41): Volatility, Bollinger Bands, And The Yen by Matt Blackman

    Combine volatility with your favorite trading signal, and your trade will become a whole lot easier. Here’s an example using the yen.

    Traders are taught from the beginning that acting on a single signal to generate a trade is risky, regardless\nof the asset class or time frame: Which signal will you use to do so?

    Not only that, relying on different indicators that use the same datapoints may seem sufficient to the uninitiated,\nbut that provides a false sense of security. Relying on two indicators that use the same permutations of high, low, open, and close for confirmation is like expecting a threedimensional image by looking at two television screens at once. All you get is the same image in duplicate.

    “Using indicators that are not correlated or, at best, have a very low correlation with one another is a far more effective approach for giving traders more confidence in signals that agree,” points out Darrell Jobman, editor in chief at www.TradingEducation.com.\n“These kinds of signals are truly two dimensional because they rely on different data.”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-38-41-volatility-bollinger-bands-and-the-yen-by-matt-blackman-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-38-41-volatility-bollinger-bands-and-the-yen-by-matt-blackman-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-38-41-volatility-bollinger-bands-and-the-yen-by-matt-blackman-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244avpe,d,"{""minimum-quantity"":""1"",""path"":""ch4a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:4 (42-46): The Average Peak Excursion by Chris Young"",""caption-linebreaks"":""Stocks & Commodities V. 24:4 (42-46): The Average Peak Excursion by Chris Young

    With a multitude of stocks to choose from, how do you know which ones are the best to trade, and how do you determine the best time frame to trade them?

    As traders, your objective is to maximize your rate of return while minimizing risk. Just to make sure it’s clear what I’m writing about, let me define my terms. “Maximize” means that there are choices, approaches, and systems that give more positive results than others. “Rate” means that you are interested in the change per unit time — although rather obvious, we tend to focus too often on change rather than change per unit time. “Return” means that you want more back than what you put in. “Risk” points to the understanding that no system is perfect and choices must be made to preserve trading capital.

    That clarified, average peak excursion (APE) is a tool for\ncharacterizing a stock’s tendency relative to the terms defined. Using APE, you can:

    • Select stocks that tend to yield higher-trading rates\nof returns than other stocks

    • Select stocks for a higher relative reward compared\nwith risk

    • Determine the best trading time frame to maximize\nthe rate of return for a given stock."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-42-46-the-average-peak-excursion-by-chris-young-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-42-46-the-average-peak-excursion-by-chris-young-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-42-46-the-average-peak-excursion-by-chris-young-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov245inra,d,"{""minimum-quantity"":""1"",""path"":""ch4a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:4 (56-63): Interview: Raghee Horner by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 24:4 (56-63): Interview: Raghee Horner by Jayanthi Gopalakrishnan

    Raghee Horner is a trader, teacher, and author, with more than 15 years’ experience in the markets. She is a highly sought-after educator and has taught her brand of technical analysis and charting strategies all over the world, conducting seminars throughout the US, Canada, the Caribbean, and Asia. The author of the works Forex Trading For Maximum Profit and the upcoming Thirty Days Of Trading, she has taught foreign exchange, futures, and equities trading for more than a decade. Emphasizing charting and price action, Horner teaches the tools and strategies that encourage self-directed traders to pursue the study of chart analysis and market psychology. Not only that, she has\noffered education and analysis on her own radio program and currently produces a daily multimedia commentary for TradeDirectFX.com. She also offers analysis about the forex market for eSignal and is a frequent speaker at the Forex Trader Expo.

    STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Horner via telephone on February 7, 2006.

    Q: Raghee, how did you get into forex trading?

    A: Like a lot of traders, I first got interested because I was already trading other markets, and — also like a lot of other traders — I was on the lookout for new trading opportunities. I just don’t think of myself as “just” a foreign exchange trader; I trade futures, and on occasion, I’ll trade stocks. I actually got my start trading commodity futures, so I was exposed to currency trading via currency futures. So it really felt like a natural move to include the forex market to my trading approach and portfolio. More traders should think of themselves as traders. The market you trade should be secondary to the fact that you have a methodology.

    Q: Were you working with a firm?

    A: No, I’ve never worked with a firm or managed other people’s money. I’ve always been a private trader."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-56-63-interview-raghee-horner-by-jayanthi-gopalakrishnan-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-56-63-interview-raghee-horner-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-56-63-interview-raghee-horner-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246prre2,d,"{""minimum-quantity"":""1"",""path"":""ch4a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:4 (67-70): Product Review: FX Solutions GTS by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 24:4 (67-70): Product Review: FX Solutions GTS by David Penn

    What differentiates foreign exchange trading order entry platforms from one another? Much of what makes some forex trading platforms better than others are the same things that make some stock or futures trading platforms better than others: How well does the trading platform track trades once they are placed? How are the quotes arranged and how easily can they be\nreconfigured? How many steps are there between deciding on a trade and actually placing the trade?

    But truly among the foremost considerations of an order entry platform is the authenticity or transparency of the pricing. And when it comes to foreign exchange\ntrading, this consideration is paramount — at least as far as FX Solutions is concerned."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-67-70-product-review-fx-solutions-gts-by-david-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-67-70-product-review-fx-solutions-gts-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-67-70-product-review-fx-solutions-gts-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247fufo,d,"{""minimum-quantity"":""1"",""path"":""ch4a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:4 (71): Futures For You by Dan O’Neil"",""caption-linebreaks"":""Stocks & Commodities V. 24:4 (71): Futures For You by Dan O’Neil

    INSIDE THE FUTURES WORLD

    Want to learn how the futures markets really work? Dan O’Neil, a principal at online futures and forex broker XPRESSTRADE (www.xpresstrade.com), responds to\nyour questions about today’s futures markets. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be\nposted there, and selected questions will appear in a future issue of S&C.

    EXECUTION VS. CONFIRMATION

    Though the futures industry continues to move toward more electronic trading, many important commodity futures continue to trade in the traditional, open-outcry pits. A few examples of hot commodities trading primarily — or even exclusively — in the oldfashioned\npits include gold, crude oil, silver, copper, coffee, and sugar.

    Happily, technology has helped improve the routing of orders to and from the trading pits; in fact, a good number of orders can be sent directly to electronic\ndevices operated by floor brokers standing in the middle of the action. But the inescapable fact is that\nhuman beings ultimately are executing the orders. And during periods of heavy volume or extreme volatility, these folks can quickly become overwhelmed. Whereas you might have a confirmed fill in a second or less when trading a fully electronic product like the e-mini S&P, the process may take considerably\nlonger in an open-outcry market. As a trader, you have to be aware of this and set your expectations accordingly."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-71-futures-for-you-by-dan-o-neil-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-71-futures-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-71-futures-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247pofi,d,"{""minimum-quantity"":""1"",""path"":""ch4a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:4 (72-74): Point & Figure & Forex by Cornelius Luca"",""caption-linebreaks"":""Stocks & Commodities V. 24:4 (72-74): Point & Figure & Forex by Cornelius Luca

    Why are point & figure charts well suited for the 24-hour trading arena in foreign exchange?

    Typically, the majority of currency traders keep their eyes glued on bar and candlestick activity, but point & figure (P&F) charts can help them secure a profit. Line, bar, and candlestick charts need both prices and time\nperiods for plotting. That’s not the case for the P&F charts, because you need only prices. For the purposes\nof this chart, time is irrelevant. P&F charts’ forte comes from the fact that they hide minor price fluctuations in order to filter out statistical noise and produce cleaner breakout points. The P&F charts are based on tick charts, so they are particularly well suited for the 24-hour trading in forex because there are no pauses between trading sessions.

    ORIGINS

    The P&F chart was originally referred to as the “book\nmethod” when it was developed at the end of the 19th\ncentury. Traders entered prices in their original numerical format rather than plotting a line or a bar. A hundred years ago, an analyst would have entered the full prices, but by the start of the 20th century, the numbers had been replaced with symbols: Xs for upward moves and Os for downward moves.

    PRICE STRUCTURE

    Two currency prices are divided in equal portions, which you will include in the boxes, rising or declining. Start with 10 pips in euro/dollar or sterling/dollar and probably five pips for euro/sterling, but optimize the size of these boxes based on currency and volatility. If you expect high volatility, then increase the size of the box, but if you are a daytrader who needs more sensitivity, then you can decrease the size of the box."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-72-74-point-figure-forex-by-cornelius-luca-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-72-74-point-figure-forex-by-cornelius-luca-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-72-74-point-figure-forex-by-cornelius-luca-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247wefo1,d,"{""minimum-quantity"":""1"",""path"":""ch4a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:4 (75-76): Websites For Traders: MadMoneyRecap.com by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 24:4 (75-76): Websites For Traders: MadMoneyRecap.com by David Penn

    Do you think “Jenna,” “Rachel,” and “Gia” are impressed with the work of Jim Cramer, successful former hedge fund manager, founder of TheStreet.com,\nauthor of \""Confessions Of A Street Addict\"" and \""Real Money: Sane Investing In an Insane World\"", host of the daily radio show Real Money, and energetic, Ken\nKesey–esque ringleader of the nightly televised stock circus that is CNBC’s Mad Money? Here’s the first thing you see when you arrive at their website, MadMoneyRecap.com:

    THIS IS A DEDICATED FAN SITE CELEBRATING THE REFRESHING LOGIC THAT NOW FLOWS FREELY ACROSS CRAMERICA! INVESTORS EVERYWHERE ARE THANKING MR. CRAMER … BOO-YAH TO THE MASTER!

    Let’s take that for a “Yes.”

    Full disclosure: I’ve long been a fan of Jim Cramer’s ever since reading his anxious “I don’t know how long this bull#$*& can go on” missives from late 2000 at the then–completely free website, TheStreet.com. What Cramer provides more than anything else is that coveted glimpse of the world as seen by insiders. It doesn’t matter if it’s sports, entertainment, or the stock market — we all have a sense that it is one thing to\nfigure things out for ourselves, but something else entirely to have somebody who has the real inside skinny on what is really going on."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-75-76-websites-for-traders-madmoneyrecap-com-by-david-penn-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-75-76-websites-for-traders-madmoneyrecap-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-75-76-websites-for-traders-madmoneyrecap-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov248trti,d,"{""minimum-quantity"":""1"",""path"":""ch4a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:4 (80-87): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:4 (80-87): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    Chris Young’s article in this issue, “The Average Peak\nExcursion,” describes techniques for calculating average peak excursion and the tendency-to-trend parameter, alpha. TradeStation, MetaStock, Wealth-Lab, AmiBroker, eSignal, NeuroShell Trader, NeoTicker, Trading Solutions, AIQ Systems, TechniFilter Plus, Tradecision, BioComp Dakota, Trade Navigator/TradeSense, and VT Trader all supply code for this technique."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-80-87-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-80-87-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-80-87-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov248trre2,d,"{""minimum-quantity"":""1"",""path"":""ch4a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:4 (88-89): Traders’ Resource: Forex Brokerages by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:4 (88-89): Traders’ Resource: Forex Brokerages by Technical Analysis, Inc.

    Foreign exchange traders have more choices than\never in their ongoing search for speed, pricing efficiency, and good accounting when it comes to forex brokerages. First, you must find a forex brokerage\nthat handles your particular currency cross or pair. You should also look at margin requirements/leverage, and whether the broker offers a mini account. With a little research, you will be able to find a forex brokerage targeted on your interest. After that, your first question might be, “How fast can I execute an order?” For this, it’s best to test out a demo account offered by the\nbrokerage. This gives you the opportunity to see if the prices on the screen are actually honored and the speed at which your order gets executed. A forex brokerage’s ability to provide market statistics, hedging\nactivity reports, and other such information may be critical to your trading and investing decisions. Only highlights of product information are given here. For more complete information, see the Traders’ Resource area at our website, www.Traders.com."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-88-89-traders-resource-forex-brokerages-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-88-89-traders-resource-forex-brokerages-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-88-89-traders-resource-forex-brokerages-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov249bofo2,d,"{""minimum-quantity"":""1"",""path"":""ch4a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:4 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:4 (92): Books For Traders by Technical Analysis, Inc.

    Parlay Your IRA Into A Family Fortune (300 pages,\n$15 softcover, 2005, ISBN 0-14-303641-6) by Ed Slott,\npublished by Penguin Books. This book is based on one simple yet powerful premise: The longer your\nIRA is sheltered from taxes, the more it will grow. Slott\nshows you how. Four key elements must be addressed: What you can do; what you must do; what your beneficiary must do; and how to find an IRA-savvy financial advisor. This guide outlines a way to parlay IRAs and IRA inheritance into successful investments."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov249atcl,d,"{""minimum-quantity"":""1"",""path"":""ch4a202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:4 (98): At The Close by Tony Juste"",""caption-linebreaks"":""Stocks & Commodities V. 24:4 (98): At The Close by Tony Juste

    Expectations Of A Rangebound Market

    Expectations have tremendous importance in the decisions of speculators, and that may lead them to ignore other variables of the market. Here’s a recent story of the euro/US dollar.

    After the release of the US unemployment report on February 3, 2006, the euro took a hit against the dollar as the pair dipped down below the 1.20 level for the first time in four weeks.

    Remember that since a temporary bottom was hit in November 2005, the single currency started a semi-rally on a daily basis that might well be over for now. I call those an “expectations rally.”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-98-at-the-close-by-tony-juste-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-98-at-the-close-by-tony-juste-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-4-98-at-the-close-by-tony-juste-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241leto4,d,"{""minimum-quantity"":""1"",""path"":""ch5m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:5 (10-14): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:5 (10-14): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist.

    Z-TEST

    Editor,

    I would like to comment on Jacinta Chan’s March 2006\narticle on the z-test (“Trading Trends With The Bollinger\nBands Z-Test”). I use the zigzag function for the basis of my intermediate trend-following model. As others have also commented in the pages of STOCKS & COMMODITIES, no matter how you structure your trend and trigger points, there is always a remaining question of the validity of the new trend. In other words, is the active tail real?

    Many people have proposed various ways to validate this tail. However, the z-test is the most straightforward, and it seems to work just as well as the others, or maybe better. The MetaStock code I use for this follows..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-10-14-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-10-14-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-10-14-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241sysp,d,"{""minimum-quantity"":""1"",""path"":""ch5m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:5 (16-20): Synthetically Speaking by Paul J. Kluskowski"",""caption-linebreaks"":""Stocks & Commodities V. 24:5 (16-20): Synthetically Speaking by Paul J. Kluskowski

    How do you transform your premium from debit to credit? Think synthetic positions.

    Ask anyone in the know and they will tell you that the risk/reward profile of a long option is limited risk with unlimited reward potential. The built-in assumption is that the premium is at risk. What if there was a way to change this? What if the premium could be transformed from debit to credit, leaving you with\na risk/reward spectrum that was small gain to unlimited\ngain, versus small loss to unlimited gain? Impossible,\nyou say? If you can think synthetically, this transformation is quite possible.

    WHAT ARE SYNTHETIC POSITIONS?

    Synthetic positions are combinations of stock or futures and options that give the risk/reward profile of a different tradable. Using synthetic positions gives us nearly limitless possible combinations, but our focus right now is to create a synthetic long call option for a credit. A long call option can be synthetically replicated with the use of a long stock position with a long put. (I should note here that there is limited downside risk with hypothetically unlimited upside reward.)"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-16-20-synthetically-speaking-by-paul-j-kluskowski-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-16-20-synthetically-speaking-by-paul-j-kluskowski-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-16-20-synthetically-speaking-by-paul-j-kluskowski-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov242doco,d,"{""minimum-quantity"":""1"",""path"":""ch5m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:5 (22-26): Does Consecutive Covered Call Writing Beat... by Gunter Meissner and Sandra Wu"",""caption-linebreaks"":""Stocks & Commodities V. 24:5 (22-26): Does Consecutive Covered Call Writing Beat Buy & Hold? by Gunter Meissner and Sandra Wu

    One of the most popular option strategies meets one of the most popular investing methods — which will win?

    One of the most popular option strategies is covered\ncall writing. In this strategy, the investor owns the underlying asset, say a stock, and sells a call option on the asset. The investor believes the stock will move sideways during the option period. In this case, the call premium is earned as additional income. In this article we test whether a consecutive covered call writing strategy outperforms the buy & hold strategy.

    THE COVERED CALL WRITING STRATEGY

    The covered call writing strategy (CCW) consists of two positions: Holding the underlying asset and selling a call on the underlying. Graphically, this can be expressed as in Figure 1, where the underlying asset\nis a stock.

    The covered call writing strategy outperforms holding the stock if the stock price stays below the strike price plus the call premium, which in this case is 100 + 10 = 110. (For ease of explanation, in Figure 1 we ignored\nthe interest rate effect of receiving the call premium at option start and paying a potential payoff later at option maturity.) However, a drawback of the CCW strategy is that it misses out on strong price gains."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-22-26-does-consecutive-covered-call-writing-beat-by-gunter-meissner-and-sandra-wu-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-22-26-does-consecutive-covered-call-writing-beat-by-gunter-meissner-and-sandra-wu-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-22-26-does-consecutive-covered-call-writing-beat-by-gunter-meissner-and-sandra-wu-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov243fofo,d,"{""minimum-quantity"":""1"",""path"":""ch5m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:5 (34-38): Forex Focus: Bearish P&F Formations by Cornelius Luca"",""caption-linebreaks"":""Stocks & Commodities V. 24:5 (34-38): Forex Focus: Bearish P&F Formations by Cornelius Luca

    Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. With that in mind, STOCKS & COMMODITIES has introduced Forex Focus to better prepare the retail trader to participate in the currency market.

    BEARISH P&F FORMATIONS

    Previously, we looked at how point & figure charts could be applied in a bullish currency market. This time, we will look at how the technique can be applied in a bearish one. Breakouts of lows, descending formations, and downward breakouts of support levels are all examples of what you can find in a bearish\nmarket. Now, let’s take a look at how we can identify these formations using point & figure charts.

    BREAKOUT OF A TRIPLE LOW

    The breakout of a triple low is formed by two consecutive declines, which stop at the same support level, followed by a third one, which manages to break below this line. Figure 1 shows the price structure of a breakout of a triple low. In this diagram, the sterling/dollar consolidated in the range of 1.4690 to 1.4740, or six boxes. The first two selloffs failed at 1.4690. This support gave way during the third attack and the currency extended the selloff."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-34-38-forex-focus-bearish-p-f-formations-by-cornelius-luca-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-34-38-forex-focus-bearish-p-f-formations-by-cornelius-luca-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-34-38-forex-focus-bearish-p-f-formations-by-cornelius-luca-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov243exyo1,d,"{""minimum-quantity"":""1"",""path"":""ch5m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:5 (39): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 24:5 (39): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    TRADING OIL

    Is there a way to trade oil without trading the commodity itself? I have heard of using stocks like ExxonMobil,\nbut are there any indexes that track oil?

    Shares of energy-related companies will move higher and lower along with the price of crude oil most of the time. Stocks and oil move together because rising crude oil prices will boost the profits of energy-related companies. As a result, investors are willing to pay\nhigher prices for the shares of these companies when crude oil prices are high. The relationship is not perfect,\nof course, but trading stocks like ExxonMobil or Halliburton is one way to play oil."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-39-explore-your-options-by-tom-gentile-22.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-39-explore-your-options-by-tom-gentile-26.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-39-explore-your-options-by-tom-gentile-27.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244befl,d,"{""minimum-quantity"":""1"",""path"":""ch5m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:5 (48-55): Bear Flags by Markos Katsanos"",""caption-linebreaks"":""Stocks & Commodities V. 24:5 (48-55): Bear Flags by Markos Katsanos

    Here’s how you can estimate price targets more accurately in a declining price trend and more.

    My 2005 articles on flags included statistics for bullish flags only. Although my research started long before, the publication of the first article coincided with the worst market correction since 2003, and I have since received a number of emails from readers questioning the validity of the profit target formula as far as bearish formations are concerned.

    This motivated me to research flags and pennants in\na declining price trend. Results of the statistical analysis, together with a new formula for estimating a price target for the optimum exit strategy, will be derived later in this article. My research includes observations\non 100 bear flag, pennant, or similar short-term consolidation patterns for the preceding year and a\nhalf from January 2004 up to June 2005. The criterion I\nused for including a pattern on the list was a steep and\nquick price decline leading to the formation."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-48-55-bear-flags-by-markos-katsanos-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-48-55-bear-flags-by-markos-katsanos-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-48-55-bear-flags-by-markos-katsanos-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov245inca,d,"{""minimum-quantity"":""1"",""path"":""ch5m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:5 (56-59): Interview: Cari Lynn: Life On The Trading Floor by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 24:5 (56-59): Interview: Cari Lynn: Life On The Trading Floor by Jayanthi Gopalakrishnan

    Cari Lynn is a Chicago-based journalist and the author of \""Leg The Spread: A Woman’s Adventures Inside The Trillion-Dollar Boys’ Club Of Commodities Trading.\"" In researching \""Leg The Spread\"", Lynn spent two years at\nthe Chicago Mercantile Exchange (CME), following around the handful of women who brave the male-dominated trading pits. Lynn holds a master’s\ndegree in writing from Johns Hopkins University and a bachelor’s in journalism from the University of Maryland. She has ghost-written two other books of nonfiction, and has also written for numerous newspapers and magazines, including O, The Oprah Magazine, Health, Good Housekeeping, The Chicago Tribune, Washingtonian, San Francisco magazine,\nand Chicago magazine. She has worked on Capitol Hill for the Press Secretary of the House Commerce Committee, and has also taught English at Loyola University and creative writing at Columbia College.

    STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Cari Lynn via telephone on March 9, 2006.

    Q: Cari, what inspired you to get yourself on the floor of the financial markets?

    A: A friend of mine daytraded from home. She also happened to own a seat at the Chicago Board of Trade\n(CBOT). In 2000, when the Internet bubble burst, she watched her account plummet, and was bemoaning the fact that the people on the floor were actually profiting from this. I didn’t understand what that meant. I didn’t know the first thing about futures trading, but I knew she owned the seat. I said, “Why don’t you use it? You know how to trade. You’ve been successfully trading for several years now.” And she said she didn’t trade on the floor because she was afraid. I had no\nconcept why a woman, in this day and age who was adept at her career, would be so afraid. So that got me curious.

    We went down to the floor and I had never seen anything like it. I immediately understood her fear. I couldn’t spot any women. I was also blown away by the fact that here was this whole other world and it was just down the street from me. People don’t have any idea what really goes on there. I knew there were stories waiting to be told. I became fascinated with how the handful of women working on the floor were making it in this really vicious, physical, man’s world. Really, it is one of the last male bastions in society."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-56-59-interview-cari-lynn-life-on-the-trading-floor-by-jayanthi-gopalakrishnan-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-56-59-interview-cari-lynn-life-on-the-trading-floor-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-56-59-interview-cari-lynn-life-on-the-trading-floor-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246crev,d,"{""minimum-quantity"":""1"",""path"":""ch5m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:5 (60-63): Cross-Market Evaluations With Normalized Average True Range by John Forman"",""caption-linebreaks"":""Stocks & Commodities V. 24:5 (60-63): Cross-Market Evaluations With Normalized Average True Range by John Forman

    This technique can be useful to longer-term traders for\ncomparing tradables.

    Like Bollinger Bands, the average true range (ATR) indicator falls into the category of volatility-based technical analysis tools. It is grouped in such a way because rather than measuring the directional bias of a price move, it evaluates the amplitude of the price move ment over a given time frame. Such information can be useful in evaluating markets.

    J. Welles Wilder, the originator of ATR, reported that he\nfound high ATR values often occurring at market bottoms following a “panic” selloff. You can see this in the daily chart of the Standard & Poor’s 500 futures (continuous contract) in Figure 1. As you can see, ATR rose during the market’s selloff over the September–October time period and throughout the\nchoppy bottom phase that followed. Low ATR values, according to Wilder, are often found during extended sideways periods, such as those found at tops and after consolidation periods. That can also be seen\nduring the December consolidation after the November\nrally. In addition, ATR can also be low (or at least falling) while a market trends if it does so in a steady but unspectacular fashion."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-60-63-cross-market-evaluations-with-normalized-average-true-range-by-john-forman-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-60-63-cross-market-evaluations-with-normalized-average-true-range-by-john-forman-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-60-63-cross-market-evaluations-with-normalized-average-true-range-by-john-forman-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov24676si,d,"{""minimum-quantity"":""1"",""path"":""ch5m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:5 (64-67, 76): Sidebar: Miner’s and Fisher’s Fibonacci calcuations... by Mircea Dologa, M.D."",""caption-linebreaks"":""Stocks & Commodities V. 24:5 (64-67, 76): Sidebar: Miner’s and Fisher’s Fibonacci calcuations of End of Wave 3 by Mircea Dologa, M.D."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-64-67-76-sidebar-miner-s-and-fisher-s-fibonacci-calcuations-by-mircea-dologa-m-d-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-64-67-76-sidebar-miner-s-and-fisher-s-fibonacci-calcuations-by-mircea-dologa-m-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-64-67-76-sidebar-miner-s-and-fisher-s-fibonacci-calcuations-by-mircea-dologa-m-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov24676th,d,"{""minimum-quantity"":""1"",""path"":""ch5m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:5 (64-67, 76): The Third Wave by Mircea Dologa, M.D."",""caption-linebreaks"":""Stocks & Commodities V. 24:5 (64-67, 76): The Third Wave by Mircea Dologa, M.D.

    Does the crowd always behave the same way? According to Elliott wave theory, they do, and this is what forms the basis of the impulse pattern of five waves. Here’s part 1 of a quick study.

    When it comes to trading different types of trend\nwaves, trading wave 3 in Elliott wave theory is the most profitable, even if the position may sometimes reach its maximum accepted limit. It’s a question of observing all this unwinding (referred to as chaos by academics) in a tri-dimensional approach. In the first dimension, you must grasp the meaning of each trend’s module. In the second, you must follow up on the functionality of the continuous developing mechanism. And in the third, you must trade — that is, make decisions — and preserve capital.

    THE FRACTAL NATURE OF WAVES

    In his wave theory, R.N. Elliott’s major innovation pointed out that the crowd always behaves the same way, thus constituting the impulse pattern of five waves (noted as W1 through W5), immediately followed by correction pattern of three waves (noted as A, B, C). When all these waves (impulsive or corrective) contain themselves within multiple levels of subwaves, typically referred to as lesser-degree waves (Figures 1 and 2), you understand the fractal nature of the waves."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-64-67-76-the-third-wave-by-mircea-dologa-m-d-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-64-67-76-the-third-wave-by-mircea-dologa-m-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-64-67-76-the-third-wave-by-mircea-dologa-m-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246prre3,d,"{""minimum-quantity"":""1"",""path"":""ch5m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:5 (68-70): Product Review: Technifilter by Dennis D. Peterson"",""caption-linebreaks"":""Stocks & Commodities V. 24:5 (68-70): Product Review: Technifilter by Dennis D. Peterson

    Technifilter is designed to apply criteria to a list of stocks. The criteria can come in the form of a canned plug-in like Darvas boxes or the swing volume tool, or it can be in the form of a formula. The end of day (EOD)\ndata can be in one of several formats: MetaStock, TeleChart 2000, AIQ TradingExpert, Dow Jones Market Analyzer PLUS, or ASCII. Reports are produced using Notepad.

    CHARTING

    Technifilter charting covers the basics. Since Technifilter is located in Australia, getting help on charting questions may not, for most of us, be an easy\nphone call away (although the response is prompt via email). Technifilter comes with a program guide and two other manuals: “Reports, Strategies & Formulas”\nand “Technical Analysis & Formula Writing,” both of which are excellent references and are printed on heavy\nbond letter-sized pages: definitely a classy look and feel. Charting appears in chapter 7, which gives you an idea of where it stands in the priority scale.

    You can get several charts (Figure 1) on a single screen and with the right combination of clicks, you can draw horizontal as well vertical lines and insert Fibonacci retracement percentages. You can do this by right-clicking a trendline drawn from the pivots of\ninterest and selecting retracement. While Technifilter doesn’t advertise its charting capabilities, most users will find the capabilities more than adequate."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-68-70-product-review-technifilter-by-dennis-d-peterson-20.gif"",""height"":""774"",""width"":""585""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-68-70-product-review-technifilter-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-68-70-product-review-technifilter-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247prre,d,"{""minimum-quantity"":""1"",""path"":""ch5m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:5 (72-76): Product Review: OptionsXpress by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 24:5 (72-76): Product Review: OptionsXpress by David Penn

    Rather than a comprehensive look at OptionsXpress, the stock, options, and electronic futures brokerage that\nhas been much lauded in the financial media of late (including commendations from readers of the magazine you have in your hands right now), this peek will focus on those tools that an increasing number of options traders have come to rely on in order to find, evaluate, and execute winning trades in the options marketplace. Whether you are a plain-vanilla options trader who limits your work to straightforward buying\nand selling of calls and puts, or a sophisticated spread trader looking to ferret every last nickel of profit out of a\npair of options, the tools that OptionsXpress provides will go a long way toward helping options traders become as successful as they want to be.

    So forgive me if the following discussion is a little light on account minimums and investor experience levels.\nOr if I don’t spend much time talking about setting up initial accounts or transferring funds from other accounts. And while I’m not necessarily assuming that\nall readers will have a complete knowledge of what options are, what puts and calls are, to say nothing of the complex options combinations — I’m not going to talk a great deal about them, either. The purpose of this review is mostly to alert those who trade options and those who have been thinking about trading options about the tools available at OptionsXpress that will make it easier for them to do so."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-72-76-product-review-optionsxpress-by-david-penn-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-72-76-product-review-optionsxpress-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-72-76-product-review-optionsxpress-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247trti2,d,"{""minimum-quantity"":""1"",""path"":""ch5m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:5 (77-83): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:5 (77-83): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    In his article, “Cross-Market Evaluations With Normalized Average True Range,” John Forman uses a normalized average true range indicator to analyze tradables across markets. Code for this system is provided for TradeStation, WealthLab, AmiBroker, eSignal, NeuroShell Trader, AIQ, NeoTicker, Trading Solutions, BioComp Dakota, Aspen Graphics, TraDecision, VT Trader, Trade Navigator, and SmarTrader."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-77-83-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-77-83-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-77-83-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov249qaby,d,"{""minimum-quantity"":""1"",""path"":""ch5m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:5 (92): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 24:5 (92): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    UNDERSTANDING SPOOS PREMIUM

    I have been researching the PREM (“premium”) or spread between the SPOOS and the S&P cash index. I am trying to understand it better to help in speculating\nday-to-day market direction. Can you shed some insight into this?—Argula

    Good question about a very valuable tool that is necessary for every trader’s toolbox. First off, the Standard & Poor’s 500 spot price, generally reflected with a symbol of SPX, is the actual index price for all 500 stocks (just like the Dow Jones Industrial Average is for the Dow 30 stocks). The SPOOS, as we call\nthem, are the S&P 500 futures contract, interchangeable with the e-mini contract (smaller contract based on same 500 stocks)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-92-q-a-by-don-bright-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-92-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-5-92-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241leto5,d,"{""minimum-quantity"":""1"",""path"":""ch6j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:6 (10-15): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:6 (10-15): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist.

    NEED SOFTWARE FOR BACKTESTING

    Editor,

    I know you review software and trading systems. Can you refer me to an issue (past or in the near future)\nthat evaluates them?

    Essentially, I am interested in backtesting my own strategies using RSI, chart patterns, and trendlines. Since these are somewhat interpretive values, I want to quantify/backtest them as best as possible.

    I am looking at TradeStation and MetaStock; am I on the right track?

    MICHAEL SALZBANK

    Yes, you are on the right track. There are also other products available. Most of our Traders’ Tips section contributors will have what you are looking for. You can also search our archives for product reviews.—Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-10-15-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-10-15-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-10-15-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241fofo4,d,"{""minimum-quantity"":""1"",""path"":""ch6j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:6 (16-18): Forex Focus by Darrel Jobman"",""caption-linebreaks"":""Stocks & Commodities V. 24:6 (16-18): Forex Focus by Darrel Jobman

    Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. With that in mind, STOCKS & COMMODITIES has introduced Forex Focus to better prepare the retail trader to participate in the currency market.

    Q: Is the yen really turning around?

    A: Over the last five years, the Bank of Japan has been engaged in a prolonged battle to combat deflation in the Japanese economy to bring conditions back to “normal.” The central bank already cut interest rates to zero in 2001 but took the additional step of flooding the market with excess liquidity. The bank adopted a quantitative policy with a target of 30-35 trillion yen for current account deposits held by the commercial banks.

    A second element of the policy was to intervene aggressively to prevent yen strength, as a stronger currency would have put further downward pressure on domestic consumer prices. The Japanese central bank, under the direction of the Finance Ministry, intervened heavily to prevent yen gains through the 100 level against the US dollar in the first quarter of 2005, although there has been no need to step in over the\nlast 12 months, given the general dollar gains."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-16-18-forex-focus-by-darrel-jobman-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-16-18-forex-focus-by-darrel-jobman-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-16-18-forex-focus-by-darrel-jobman-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov242hamo,d,"{""minimum-quantity"":""1"",""path"":""ch6j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:6 (21-30): Harnessing The (Mis)Behavior Of Markets by Rick Martinelli"",""caption-linebreaks"":""Stocks & Commodities V. 24:6 (21-30): Harnessing The (Mis)Behavior Of Markets by Rick Martinelli

    Do market prices vary due to large numbers of random\neffects such as the whims of individual traders?

    In 1900, Louis Bachelier was awarded a doctorate from the University of Paris following his defense of a dissertation titled “Théorie de la Spéculation,” an event that marked the first time a serious academic paper addressed the behavior of the financial markets. In his dissertation, Bachelier proposed that market prices vary due to large numbers ofrandom effects, such as the whims of individual traders, and hence can be modeled as Brownian motion. Slowly, the financial community adopted his ideas, which are now the foundation of modern financial engineering.

    THE BROWNIAN MODEL

    Three critical assumptions underlie the Brownian\nmodel, namely:

    1. Price changes are statistically independent

    2. Price changes are normally distributed, and

    3. Price-change statistics do not vary over time.

    The first assumption means that price changes behave like coin tosses, where the current change was not influenced by past changes and has no influence on future changes.

    The second assumption says that the changes follow\na bell-shaped curve. This assumption is relevant\nwhenever random behavior is due to many small\ninfluences. It provides a distribution function characterized by only two parameters, the mean and standard deviation, and implies a certain “contained”\nbehavior of the changes."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-21-30-harnessing-the-mis-behavior-of-markets-by-rick-martinelli-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-21-30-harnessing-the-mis-behavior-of-markets-by-rick-martinelli-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-21-30-harnessing-the-mis-behavior-of-markets-by-rick-martinelli-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov243plyi,d,"{""minimum-quantity"":""1"",""path"":""ch6j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:6 (32-36): Playing The Yield Curve by Jay Kaeppel"",""caption-linebreaks"":""Stocks & Commodities V. 24:6 (32-36): Playing The Yield Curve by Jay Kaeppel

    So what is the yield curve, and how can you use it in your trading? Find out here.

    Most investors are at least vaguely aware of something known in financial circles as the “yield curve.” In its most basic definition, the yield curve represents the difference between interest rates offered by US Treasury securities of various lengths of time until maturity. A more complex version of the yield curve\ncompares intermediate-term interest rates to short-term rates and long-term rates to both intermediate- and short-term rates. Still, the most useful piece of information to find from the yield curve is how short-term rates compare to long-term ones, as these two values represent the two polar extremes on\nthe yield curve. So for the purposes of this article, we will define the yield curve as the difference between long-term and short-term interest rates.

    The simplest way to analyze the yield curve is to subtract the yield on 13-week T-bills from the yield on long-term Treasuries. This can be done using the ticker symbols $TYX and $IRX. $TYX represents the latest yield on long-term (30-year) Treasury bonds, while $IRX represents the latest yield on 13-week Treasury bills. These two yields are plotted against one another in Figure 1.

    Figure 2 displays the yield curve itself since 1993, which is calculated by simply subtracting the daily IRX values from the daily TYX values."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-32-36-playing-the-yield-curve-by-jay-kaeppel-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-32-36-playing-the-yield-curve-by-jay-kaeppel-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-32-36-playing-the-yield-curve-by-jay-kaeppel-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244trch,d,"{""minimum-quantity"":""1"",""path"":""ch6j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:6 (44-47): Trade The Chart, Not The System by Anthony Trongone, Ph.D., CFP, CTA"",""caption-linebreaks"":""Stocks & Commodities V. 24:6 (44-47): Trade The Chart, Not The System by Anthony Trongone, Ph.D., CFP, CTA

    This is why you need to constantly monitor the performance of your trading system.

    Changing economic conditions can affect the performance of any trading system. Therefore, developing the discipline to periodically monitor the performance of your systems becomes a constructive exercise, one that can increase profits or prevent loss.

    The proactive trading system (referred to as “GIA,” which stands for “generating interactive assets”) is a successful strategy for taking a position 60 minutes after the opening of trading. As well as discuss its effectiveness, I will also describe how to proactively react to the running performance of any trading strategy. By tracking your system’s performance, you can fine-tune your trading strategy to existing price movements. This will give you the opportunity to either go short when your system is working or go long when its success fades.

    TRADING THE NASDAQ 100

    This article investigates the price movements of the NASDAQ 100 index (QQQQ) over 514 trading days from January 30, 2004, to February 10, 2006 (Figure 1). With a daily average of 94.5 million shares, NASDAQ 100 findings are generally an accurate barometer of trading technology stocks with active volume. The purpose of this popular exchange traded fund (ETF) is to replicate the movements of the NASDAQ 100, and since the QQQQ has a near-perfect correlation with the NASDAQ 100 futures, you can actively trade it as its replacement."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-44-47-trade-the-chart-not-the-system-by-anthony-trongone-ph-d-cfp-cta-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-44-47-trade-the-chart-not-the-system-by-anthony-trongone-ph-d-cfp-cta-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-44-47-trade-the-chart-not-the-system-by-anthony-trongone-ph-d-cfp-cta-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov245trtr,d,"{""minimum-quantity"":""1"",""path"":""ch6j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:6 (56-61): Trading The Trend In Wave 3 by Mircea Dologa, MD"",""caption-linebreaks"":""Stocks & Commodities V. 24:6 (56-61): Trading The Trend In Wave 3 by Mircea Dologa, MD

    Here’s a refresher course on techniques you can use to trade wave 3, in part 2 of three.

    When trading wave 3, any number of methods could be used, so many that it’s easy to overlook one or two. So which one would be best? Here are a few that may pique your interest, including some that you may have\nlong forgotten.

    PITCHFORKS AND CHANNELS

    The pitchfork technique should be a standard tool to use when trying to measure the slope of the trend of wave 3. The slope is important because its characteristics play a part in defining the exit. In the pitchfork method, a technician will pick an extreme low or high to use as an anchor pivot point and draw a median line. Action and reaction lines are drawn\nthrough high and low points, defining the support and resistance levels for the price channel. In Figure 1, the exit at 4135 takes place where the market price crosses with the first upper parallel line above the center line.

    The channeling technique is another helpful tool for wave analysis. In this method, a price channel contains prices through the course of a trend; historically, this term has been used to denote the area between the base trendline and the reaction trendline defined by price moves against the prevailing trend. Channeling’s main function is to delineate the exhaustion zones, where the local market will certainly perform, either as a reversal, an acceleration, or a consolidation move. Thus, it serves as an optimal timing guide, giving the trader a prolific competitive edge. The channeling technique is used on primary and lesser-degree waves..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-56-61-trading-the-trend-in-wave-3-by-mircea-dologa-md-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-56-61-trading-the-trend-in-wave-3-by-mircea-dologa-md-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-56-61-trading-the-trend-in-wave-3-by-mircea-dologa-md-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246inch,d,"{""minimum-quantity"":""1"",""path"":""ch6j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:6 (62-66): Interview: Chuck Dukas Of TRENDadvisor.com by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 24:6 (62-66): Interview: Chuck Dukas Of TRENDadvisor.com by Jayanthi Gopalakrishnan

    Chuck Dukas is principal in a hedge fund and president of TRENDadvisor.com, a website that provides trading recommendations and educational and training services to better equip the trader to understand the markets and prepare traders to trade independently. He is the author of The TRENDadvisor\nGuide To Breakthrough Profits: A Proven System For Building Wealth In The Financial Markets, which is a comprehensive guide to trend analysis and how it relates to trading and investing plans, published by John Wiley & Sons. This interview combined phone and email questions and answers, starting on April 10, 2006, conducted by STOCKS & COMMODITIES Editor\nJayanthi Gopalakrishnan.

    Q: Chuck, how did you get interested in trading?

    A: From the time I pursued graduate work in finance in the early 1980s, I spent every moment could working on technical analysis. I spent endless hours and years developing and testing algorithms. I was looking\nfor the holy grail of trading. I know now it exists, but not as a trading system. It lies within us. The holy grail\nreally is the discipline to follow a plan or methodology.

    From that I developed the diamond analysis, which was a result of my desire to develop a system with repeatable success for any skill level. Soon I realized I had to record the methodology, which is why I wrote the book.

    Q: What, in your opinion, are the most important decisions any trader has make before placing a trade?

    A: There are some questions you have answer before you place any trade. The questions are:

    1. Do you have a plan for that trade?

    2. Will the trade be a long-term trade or swing trade?

    3. Will your stop be a hard stop or a mental one?

    4. What would the trade look like if it fails?

    5. If you’re going long, do you have a first objective where you will harvest a portion of the profit?

    6. Think of a trader as being a builder of a home. Would\nthat builder construct that home without a set of plans?

    Success comes with a blueprint, and the more times you duplicate that design, the more dependable the outcome."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-62-66-interview-chuck-dukas-of-trendadvisor-com-by-jayanthi-gopalakrishnan-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-62-66-interview-chuck-dukas-of-trendadvisor-com-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-62-66-interview-chuck-dukas-of-trendadvisor-com-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246prre4,d,"{""minimum-quantity"":""1"",""path"":""ch6j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:6 (68-70): Product Review: TechniTrader Home Study Training Course by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 24:6 (68-70): Product Review: TechniTrader Home Study Training Course by David Penn

    Most of the products reviewed by Technical\nAnalysis of STOCKS & COMMODITIES are intended for those who read the reviews. Makes sense, no? While it is true enough that not every product will appeal to every reader, the general theory is that it is our readers who will benefit most directly from the products we review.

    Because our readership tends to be more sophisticated than the average stock trader, this means that some kinds of products might not often be reviewed. Although worthwhile, many of these products are geared toward those traders who are far less experienced or knowledgeable than the average STOCKS & COMMODITIES reader or subscriber.\nStill, just about every S&C reader or subscriber has a relative — a cousin, a niece, an uncle — who has shown more than a little curiosity about what all those charts and squiggly lines actually mean. And I suspect that more than a few readers and subscribers have initiated a conversation with said cousins, nieces, and uncles in an effort to explain just what all those charts and lines in fact represent, only to find themselves sounding more complicated (and more confusing to the listener) the longer the conversation continues. At a certain point, we just give up — tossing a book (or the URL to Working-Money.com, our beginner-friendly website) in their general direction, wishing them the best in figuring out on their own what you failed miserably to explain."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-68-70-product-review-technitrader-home-study-training-course-by-david-penn-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-68-70-product-review-technitrader-home-study-training-course-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-68-70-product-review-technitrader-home-study-training-course-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247qaby1,d,"{""minimum-quantity"":""1"",""path"":""ch6j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:6 (71): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 24:6 (71): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    PROFESSIONAL VS. RETAIL

    Q: I have read some of your articles where you refer to “professional” trading, and wonder what that actually means. In addition, what is the reason for allowing\nyour traders to use a million dollars of your firm’s capital to trade with? Isn’t that awfully risky, like too much margin?—dtcryer82

    A: Good questions! I haven’t written here about “professional” trading in a while, so here goes. When referring to professional trading I mean professional\nversus “retail” trading, not versus “amateur” trading. Since around 1998 or so it’s been a requirement that all traders have licenses (at least a Series 7), or else\nthey are stuck trading with a retail brokerage. The inherent restrictions on retail traders make it virtually impossible for most traders to make money. The main restrictions affect a trader’s use of capital and market access, which leads into your other question."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-71-q-a-by-don-bright-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-71-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-71-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247exyo1,d,"{""minimum-quantity"":""1"",""path"":""ch6j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:6 (73): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 24:6 (73): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    MAX PROFIT ON A BEAR PUT SPREAD

    Q: On March 30, I entered a bear put spread on XYZ using January 2007 leap options. With XYZ near $451.00 a share, the spread consisted of buying a 450\nput for $45.90 and selling a 440 put for $40.40. According to my calculations, the maximum profit is $4.50 per spread if XYZ falls below 440. However, on\nApril 4, I checked the trade and found that XYZ was below the 440 strike price. My understanding was that I could close the trade below the 440 strike for the\nmaximum reward of 450 (minus commissions). Yet when I did the math, it did not all add up. What happened?

    A: The trade’s analysis is correct in many respects. A bear put spread is created by buying a (long) put and selling a (short) put with a lower strike price. This trade\nwill generate profits if the price of the underlying asset falls. The spread is similar to buying a put, but the sale of the short put helps reduce the cost of the trade. This is a popular strategy for playing a market to the downside."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-73-explore-your-options-by-tom-gentile-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-73-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-73-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247fufo1,d,"{""minimum-quantity"":""1"",""path"":""ch6j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:6 (77) : Futures For You by Dan O’Neil"",""caption-linebreaks"":""Stocks & Commodities V. 24:6 (77) : Futures For You by Dan O’Neil

    INSIDE THE FUTURES WORLD

    Want to learn how the futures markets really work? Dan O’Neil, a principal at online futures and forex broker XPRESSTRADE (www.xpresstrade.com), responds to\nyour questions about today’s futures markets. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be\nposted there, and selected questions will appear in a future issue of S&C.

    FUTURES ON BASE METALS

    I’ve been trading gold and silver for years, but lately my attention’s been drawn to the nonferrous metals. I’ve\nread that metals like aluminum, zinc, and nickel have been moving higher. How can I trade these products?

    A: While gold, silver, and other precious metals grab all the headlines, industrial metals like copper, aluminum,\nlead, tin, nickel, and zinc have been racking up big gains, too. Strong growth and unexpected demand shocks from China and other emerging economies,\ncombined with supply disruptions and delays in bringing new production online, are driving metal prices higher. Anytime a market or sector is trending higher, you can be sure that opportunistic traders will sit up and take notice.

    The New York Mercantile Exchange’s COMEX division remains the leader in trading futures on precious metals. But if you’re interested in the nonferrous metals, the preeminent marketplace is the London Metal Exchange (LME). The LME’S origins can be traced as far back as the opening of the Royal Exchange in 1571. This is where metal traders first began to meet. However, it was in 1877 that the London Metal Market and Exchange was formed as a result of Britain’s industrial revolution."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-77-futures-for-you-by-dan-o-neil-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-77-futures-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-77-futures-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247wefo2,d,"{""minimum-quantity"":""1"",""path"":""ch6j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:6 (78): Websites For Traders: www.collective2.com by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 24:6 (78): Websites For Traders: www.collective2.com by Jayanthi Gopalakrishnan

    “I think I’ve found the Holy Grail!”\nThis statement is enough to catch any\ntrader’s attention, but really, as a trader,\nhow many times have you heard that?\nAnd how many times have you fallen\nfor it? Next time someone says that to\nyou, ask him or her to enter the system\ninto collective2.com, a site where\ntrading minds (traders and system\ndevelopers) gather and share their\nthoughts about trading systems.\nThe many features on this site range\nfrom rating trading systems to placing\ntrades. You do have to register to take\nadvantage of the services this site offers,\nbut it is free. You just have to get used\nto the regular emails.\nAnother factor that adds glam to this\nsite is that it caters to all trader types.\nWhether you are a beginning trader, an\nadvanced trader, a system developer, or\nsomeone who has a great trading system\nto sell, you will find something of use\non this site."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-78-websites-for-traders-www-collective2-com-by-jayanthi-gopalakrishnan-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-78-websites-for-traders-www-collective2-com-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-78-websites-for-traders-www-collective2-com-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247wefo3,d,"{""minimum-quantity"":""1"",""path"":""ch6j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:6 (79): Websites For Traders: BusinessTalkRadio.net by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 24:6 (79): Websites For Traders: BusinessTalkRadio.net by David Penn

    BUSINESSTALKRADIO.NET

    Some websites of most interest to investors, speculators, and traders are veritable Meccas of valuable information in and of themselves. Although\ncertainly a dying breed since the dotcom implosion half a decade ago, a few Internet sites remain where someone interested in the mood and movement of the stock, commodity, options, or foreign exchange markets could get some pretty good analysis, interpretation, or tools, all the while spending little more than the time it takes to type in a URL or left-click on a mouse- or touchpad. We have been fortunate enough over the past few years to be able to direct readers to some of these undiscovered gems.

    Other websites for investors, speculators, and traders are less destinations and more waystations. These websites — not necessarily any more numerous than the kind already mentioned — serve to route the curious toward other resources: other websites or books, newsletter services or software, even cable television programs. In a way, websites such as these are a tribute to the Internet, insofar as those who create and maintain such e-directories and e-compendia\nare tacitly acknowledging the wealth of information available online and repudiating the idea that any one website, or any one “family” of websites, could provide an investor, speculator, or trader with all that he or she needs in order to profit from the markets.

    This brief review fits into the latter category for, in a sense, there is precious little “there” to the Business TalkRadio (BTR) Network (businesstalkradio.net)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-79-websites-for-traders-businesstalkradio-net-by-david-penn-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-79-websites-for-traders-businesstalkradio-net-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-79-websites-for-traders-businesstalkradio-net-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov248trti1,d,"{""minimum-quantity"":""1"",""path"":""ch6j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:6 (81-88): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:6 (81-88): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    In his article, “Harnessing The (Mis)Behavior Of Markets,” Rick Martinelli describes a technique for trading when forecasted price change for the next day exceeds a standard deviation–based threshold. Martinelli uses an Excel spreadsheet\nto make calculations.

    The code for these calculations are provided for TradeStation, Wealth-Lab, AmiBroker, eSignal, AIQ, NeuroShell Trader, NeoTicker, Trading Solutions, BioComp Dakota, Trade Navigator, Financial Data Calculator, TS Support, VT Trader, and Tradecision."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-81-88-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-81-88-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-81-88-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov249bofo3,d,"{""minimum-quantity"":""1"",""path"":""ch6j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:6 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:6 (92): Books For Traders by Technical Analysis, Inc.

    Bulletproof Your Trading Profits From IRS Attacks\n(76 minutes, $99 DVD, 2006, ISBN 1-59280-294-X) by Ted Tesser, published by Marketplace Books. This DVD intends to inform every viewer on the significant laws, rules, plans, and guidelines that will aid those who wish to pay all the tax that the law demands … but not a penny more. Find outhow to reduce your odds of being audited, and how to survive an audit. Most important, each viewer is presented with the top 50 questions they may forget to ask."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-92-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov24996at,d,"{""minimum-quantity"":""1"",""path"":""ch6j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:6 (97, 96): At The Close by Vikrant Goyal"",""caption-linebreaks"":""Stocks & Commodities V. 24:6 (97, 96): At The Close by Vikrant Goyal

    A Sweet Report

    Sugar prices are moving up after a lull of a quarter century. Will history repeat itself? Since 1966, global sugar prices have seen two major boom– bust cycles. Remarkably, both cycles seemed to echo each other\nin terms of the time taken for each rise and fall; where the two cycles are superimposed on each other.

    Even more remarkable is that the current upmove in\nsugar seems to be following the pattern of the earlier two cycles. In Figure 3, the percentage moves and time taken for each phase of the boom periods of all three cycles (1972–76, 1978–82, and 2004–present) are displayed. Clearly, both earlier cycles had similar first acts, and the same thing seems to be happening this time around. The eventual fall, still in the distant future, will be the second act, of course."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-97-96-at-the-close-by-vikrant-goyal-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-97-96-at-the-close-by-vikrant-goyal-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-6-97-96-at-the-close-by-vikrant-goyal-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241leto6,d,"{""minimum-quantity"":""1"",""path"":""ch7j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:7 (10-14): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:7 (10-14): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist.

    BOWL PATTERN BREAKOUT

    Editor,

    I loved the article “The Bowl Pattern Breakout”\nin the May 2006 S&C by your staff writer Sharon\nYamanaka. The end of the article reads “Next time, I’ll look at...” Are you planning a follow-up article\nin a future issue of S&C? I was originally planning on letting my subscription to S&C lapse, as there is too much heavy technical subject matter in the magazine for me, but I’d stay with it to follow her work. Could she come up with a screening system for this? I subscribe to Prophet.net for stock charts and simple indicators.

    DAVE GEUPEL

    See page 42 of this issue for a follow-up article by Sharon Yamanaka, “Going Forward Using Stock Screeners.” Continuing\nfrom “Bowl Pattern Breakouts,” this article uses the stock screeners available on financial websites to take\nanother look at bowl patterns.—Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-10-14-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-10-14-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-10-14-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241fofo5,d,"{""minimum-quantity"":""1"",""path"":""ch7j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:7 (16-20): Forex Focus: Major FX: Dollar, Euro, Pound by Shyam G. Devani"",""caption-linebreaks"":""Stocks & Commodities V. 24:7 (16-20): Forex Focus: Major FX: Dollar, Euro, Pound by Shyam G. Devani

    Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. With that in mind, STOCKS & COMMODITIES has introduced Forex Focus to better prepare the retail trader to participate in the currency market.

    What do Fibonacci levels and currencies have in common? More than you would think. Take a look.

    Since reporting on the euro/US dollar (EUR/USD) and the British pound/US dollar (GBP/USD) in December 2005 I have maintained they are in long-term downtrends, and the recent market movements of the past six months have been, and may continue to be in the short term, in a corrective phase. Further, the dollar reached the depths of its depreciation against the euro and sterling throughout the 2000–04 period. I also\ncontended that the new peak in these markets would occur when least expected — when the press and media would headline the drop of the dollar again and refer back to the US current account deficit arguments — as occurred in December 2004. Key price targets were given as potential turning points, and it is unsurprising that the media has once again picked up on the current account argument when the British/\npound/US dollar (GBP/USD) has hit 61.8% and the euro/US dollar (EUR/USD) has hit the 50% retracement levels over the last 10 days."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-16-20-forex-focus-major-fx-dollar-euro-pound-by-shyam-g-devani-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-16-20-forex-focus-major-fx-dollar-euro-pound-by-shyam-g-devani-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-16-20-forex-focus-major-fx-dollar-euro-pound-by-shyam-g-devani-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov242isov,d,"{""minimum-quantity"":""1"",""path"":""ch7j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:7 (22-30): Is Overnight Trading A New Way To Daytrade? by Thomas K. Carr, Ph.D."",""caption-linebreaks"":""Stocks & Commodities V. 24:7 (22-30): Is Overnight Trading A New Way To Daytrade? by Thomas K. Carr, Ph.D.

    Is the pattern daytrading regulation an obstacle to your daytrading? There may be a way around it.

    On September 28, 2001, the Securities and Exchange Commission (SEC) imposed pattern daytrading regulations on all trading accounts less than $25,000. These new rules prohibited undercapitalized traders from daytrading more than twice in any given five-day period. But “necessity is the mother of invention,” so I set to work on finding a way to skirt the SEC rules. It was then I came up with the idea of “OverNightTrading” (ONT).

    WHAT IS ONT?

    It is essential to think of ONT as a form of daytrading.\nDaytrading is a type of short-term trading where positions are taken in liquid, volatile stocks making\nsizable moves on an intraday basis, and are held from\nseveral minutes to several hours, but in no case is a\ndaytrade position held overnight. ONT is daytrading,\nbut with that last qualification removed.

    In ONT, you establish a position in a stock shortly before the close, and then after holding the position\novernight (hence the name), close it the next trading\nday. An ONT is a trade that takes a position in a stock\nwith a high probability of making a sizable move during any or all of three distinct periods..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-22-30-is-overnight-trading-a-new-way-to-daytrade-by-thomas-k-carr-ph-d-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-22-30-is-overnight-trading-a-new-way-to-daytrade-by-thomas-k-carr-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-22-30-is-overnight-trading-a-new-way-to-daytrade-by-thomas-k-carr-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov243exyo2,d,"{""minimum-quantity"":""1"",""path"":""ch7j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:7 (32): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 24:7 (32): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    TRAILING STOP

    Q: Can you explain what a trailing stop is?

    A: To do that, first, I have to explain what a stop order is. A stop order is an order placed with a broker to buy or sell a security when a certain price level is hit. The stop can be used to limit losses from an adverse move in the position, or to lock in a profit. When used to limit\nlosses, it is sometimes referred to as a stop-loss order.

    A trailing-stop order moves along with a favorable movement in the price of the security. Trailing sell-stop orders follow the upward movement of a security by a defined distance and remains in place as long as the security moves upward. Trailing buy-stops, on the other\nhand, will move lower by a defined distance as the security price falls. The “distance” is often expressed as a percentage or a dollar amount."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-32-explore-your-options-by-tom-gentile-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-32-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-32-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov243poof,d,"{""minimum-quantity"":""1"",""path"":""ch7j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:7 (34-40): The Power Of Implied Volatility by Sam Bhugaloo"",""caption-linebreaks"":""Stocks & Commodities V. 24:7 (34-40): The Power Of Implied Volatility by Sam Bhugaloo

    Do you trade beans, grains, softs, oil, or precious metals? Here’s a technique to predict market movements and price direction when trading futures and options on commodities.

    Implied volatility can be used to predict whether a market is likely to move higher or lower and it can warn you against buying options that are too expensive. Implied volatility is a powerful tool and if used correctly, it will add another dimension to your trading and remove the element of guesswork. Unfortunately, many non-professional futures and options traders do not factor in implied volatility as part of their trading plan. Let me show you why they should.

    HOW MUCH FROTH IS IN THIS GLASS OF BEER?

    The mere mention of the term implied volatility (IV) tends to make an individual’s attention wander. The textbooks will state that implied volatility is a measure of the strike price and premium of an option in relation to the underlying futures price. It is, in effect, a measure of supply and demand for an option. This definition itself confuses the nonprofessional traders. I’ll show you how to simplify the technique and apply it through an analogy and series of charts.

    Implied volatility is used to measure a market’s risk — or to simplify things, its “froth” content. What do I mean?\nHere’s an example. Jack went to his local bar and ordered a pint of beer and was served more froth than beer. Like many of us would be in the same situation, Jack was displeased. Unfortunately, this is exactly what most traders go through every day. Traders will buy options with more froth than beer, and when the froth evaporates, they are left with little or nothing. The return on their investment is zero. Understanding this concept alone will first stop you from buying options that are too expensive (that is, they have too much froth), and second, if you are a futures trader, will allow you to predict the direction of the market."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-34-40-the-power-of-implied-volatility-by-sam-bhugaloo-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-34-40-the-power-of-implied-volatility-by-sam-bhugaloo-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-34-40-the-power-of-implied-volatility-by-sam-bhugaloo-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244buan,d,"{""minimum-quantity"":""1"",""path"":""ch7j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:7 (48-52): Sidebar: BullCharts and MetaStock program code for Wilson Relative Price Channel by Leon Wilson"",""caption-linebreaks"":""Stocks & Commodities V. 24:7 (48-52): BullCharts and MetaStock program code for Wilson Relative Price Channel by Leon Wilson

    Copy and paste the code for Leon Wilson's trading technique."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-48-52-sidebar-bullcharts-and-metastock-program-code-for-wilson-relative-price-channel-by-leon-wilson-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-48-52-sidebar-bullcharts-and-metastock-program-code-for-wilson-relative-price-channel-by-leon-wilson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-48-52-sidebar-bullcharts-and-metastock-program-code-for-wilson-relative-price-channel-by-leon-wilson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244wire,d,"{""minimum-quantity"":""1"",""path"":""ch7j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:7 (48-52): The Wilson Relative Price Channel by Leon Wilson"",""caption-linebreaks"":""Stocks & Commodities V. 24:7 (48-52): The Wilson Relative Price Channel by Leon Wilson

    Several indicators quantify the relationship between price action and strength. Here’s one adapted from the relative strength index.

    For technical analysis to adapt and change, you as the trader must understand the environment in which you operate and be able to think about the strategies and tools to apply. Such analysis will allow your trading style to evolve and you will develop a deeper appreciation for market behavior.

    In order to do so, however, you need to question the source of information and the accepted practice of how to use the technique; you must learn to scrutinize information instead of accepting it at face value, regardless of where it may originate.

    A VISIT WITH RSI

    The most popular index, mainly because it’s considered to be one of the most effective, would be the relative strength index (RSI). It is a range-bound index that defines the disparity that exists between higher and lower closing prices.

    The conventional application of the RSI is to place it in a\nseparate pane at the bottom of the screen. You then analyze the behavior and disparity associated with trending activity and the market’s ability to shift the closing price in any direction. Assume that this alternative reflection of the closing price is not only consistent but also generally more beneficial over and above the raw data (the closing price). Although I use the RSI here, the same principles apply to similar range-bound indexes such as money flow, directional\nindex, and relative volatility."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-48-52-the-wilson-relative-price-channel-by-leon-wilson-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-48-52-the-wilson-relative-price-channel-by-leon-wilson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-48-52-the-wilson-relative-price-channel-by-leon-wilson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov245gett,d,"{""minimum-quantity"":""1"",""path"":""ch7j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:7 (58-61): Get That Edge In Your Trading by Clem Chambers"",""caption-linebreaks"":""Stocks & Commodities V. 24:7 (58-61): Get That Edge In Your Trading by Clem Chambers

    When knowing the bid and ask is not enough, electronic order books like NASDAQ TotalView can give retail traders the tools to succeed.

    There is no such thing as too much information when it comes to investing and trading. On a level playing field, if used in trading, our money will simply earn a little more than if it were parked in a certificate of deposit. Not many of us would go to the expense and trouble of speculation if that were the case, and for every trader happy to live without alpha†, there are a thousand who would choke on the prospect.

    WINNER TAKES ALL

    However, of those thousand hungry traders, more than half are likely to end up with less than alpha, and many will end up worse off than if they had put their cash in a sock. There are several reasons why trading can be worse for your wealth than buying a CD. First, trading tends to be a game of winner takes all. In trading, there is no such thing as “enough,” and that means the gains go to the winners — often in big lumps — while others are left, at best, with the crumbs.

    This is because in reality, no trading environment is a level playing field. So many variables are involved in trading that it is in effect an arms race, and the losers in this preparation for battle end up ceding to the parties with an edge. An edge is all it takes to make the difference between success and failure, and when traders use big positions to capture tiny but regular gains, that critical edge can be minute."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-58-61-get-that-edge-in-your-trading-by-clem-chambers-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-58-61-get-that-edge-in-your-trading-by-clem-chambers-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-58-61-get-that-edge-in-your-trading-by-clem-chambers-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246inmi,d,"{""minimum-quantity"":""1"",""path"":""ch7j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:7 (62-67): Interview: Michael “Trader Mike” Seneadza: From Swing Trading to Daytrading by J. Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 24:7 (62-67): Interview: Michael “Trader Mike” Seneadza: From Swing Trading to Daytrading by J. Gopalakrishnan

    Atlanta, GA–based independent stock trader Michael Seneadza received a bachelor of science degree in electrical engineering from Stanford University, but he started swing trading for a living in 1999 after working in the information systems industry for nine years. He\nlaunched his well-received blog at his website, TraderMike.net, in 2003, providing daily market commentary and education material. Last year, he pulled another switch, shifting from swing trading to daytrading.

    STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Seneadza via email and phone in early May 2006.

    Q: Michael, how did you get started trading?

    A: My initial exposure to the market was via an investment investment club that some college friends\nstarted back around 1992. A couple of years later, I opened my own account. Over time, I got more and more into the markets. Around 1997 a few things came\ntogether that really increased my interest in trading.

    Q: What were they?

    A: At that time, I was consulting as a software developer for an energy trading company. Being in that environment really got me curious about trading. Also during 1997, I happened to read \""Trader Vic: Methods Of A Wall Street Master\"" by Victor Sperandeo, and\nWilliam O’Neil’s \""How To Make Money In Stocks\"". Motivated by those two books, I wanted to learn all I could about trading. I bought about 10 more books and\nI began to read Gary B. Smith’s column at TheStreet.com. The more I learned, the more I was convinced that I wanted to trade full time. In mid-1999 my project ended, and I decided that it was now or\nnever to give trading full time a shot."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-62-67-interview-michael-trader-mike-seneadza-from-swing-trading-to-daytrading-by-j-gopalakrishnan-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-62-67-interview-michael-trader-mike-seneadza-from-swing-trading-to-daytrading-by-j-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-62-67-interview-michael-trader-mike-seneadza-from-swing-trading-to-daytrading-by-j-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246prre5,d,"{""minimum-quantity"":""1"",""path"":""ch7j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:7 (68-71): Product Review: MESA8 by Dennis D. Peterson"",""caption-linebreaks"":""Stocks & Commodities V. 24:7 (68-71): Product Review: MESA8 by Dennis D. Peterson

    John Ehlers began applying the approach of maximum entropy spectral analysis (MESA) to trading in 1978, continuously improving it through the years. Now, MESA may be the best method of measuring market cycles.

    MESA8 is the flagship of the company, a set of new indicators available as a TradeStation or NeuroShell Trader plug-in. What makes MESA8 exciting is that\nthe cycles approach uses long-established techniques, techniques that were used to characterize and predict sunspot activity as far back as 1927, so the science behind this product has had many years of development. On top of that, developer Ehlers, the author of MESA8, was the one who first derived MESA (short for maximumentropy spectral analysis), well\nknown in technical analysis.

    FILTER COEFFICIENTS AND DOMINANT CYCLE

    The process behind MESA8 is fairly straightforward: create an adaptive filter that uses an autoregression technique to find autocorrelation coefficients characterizing two signal inputs into the filter: Gaussian noise and the difference between the output of the filter and a time price series. This creates a set of autocorrelation coefficients that “matches” the price series in a white noise environment. After finding the matching coefficients, input a spectrum of frequencies to this adaptive filter. The frequencies that pass through the filter are the ones that reflect the cycle(s) in the price series — the one with the greatest amplitude is the dominant cycle."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-68-71-product-review-mesa8-by-dennis-d-peterson-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-68-71-product-review-mesa8-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-68-71-product-review-mesa8-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247qaby2,d,"{""minimum-quantity"":""1"",""path"":""ch7j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:7 (72): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 24:7 (72): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://\nMessage-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    ZERO-SUM GAME OR NOT?

    Q: Could one of you academics who believe the stock market is a zero-sum game explain this idea? I think if you believe the market is a zero-sum game, you don’t belong in it and should probably get a job teaching theory and not reality. The way I see it, the only way it\ncan be a zero-sum game is if every company in the market went bankrupt and became worthless, and I’m pretty sure this won’t happen.—Madmummy

    A: Since I get the same question during my training sessions, let me offer the following. Imagine I took a company public a few years ago. Say we sold $10\nmillion worth of stock at $1.00. We “made” $10 million. Imagine that investors bought stock at $1.00 and sold it\nat $3.00, so they made money..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-72-q-a-by-don-bright-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-72-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-72-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov24796pr,d,"{""minimum-quantity"":""1"",""path"":""ch7j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:7 (73, 96): Product Review: Applied Reality Trading by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 24:7 (73, 96): Product Review: Applied Reality Trading by Jayanthi Gopalakrishnan

    Study manuals, DVDs, videos, workbook, charting software, trading journal: Yes, this is a comprehensive\nhome-study trading course.

    Needless to say, I was quite overwhelmed when I opened up the box that this course came in, forgetting that I probably had a similar reaction when I opened up a similar box a few years ago to do a review on a previous version.

    When you’re staring at a wealth of educational material like this, you need to figure out where to start. The ART\nWelcome Kit outlines how to study the course and it tells you to begin with the study manual. It was obvious this was a four-week course with five study sessions\nper week. Each session is followed by a list of homework assignments. Besides reading the session in the study manual, this typically involves viewing the video series, completing the corresponding session in the workbook, writing in your trading journal, and other assignments here and there.

    COURSE CONTENTS

    The course focuses on applying the ART system, which displays trading signals for entries and exits. These signals are based on “ART Reversal Bars” as well\nas the “Pyramid Trading Point,” which is a proprietary indicator similar to pivot points. Essentially, it is a trend indicator that can be used with eSignal or TradeStation platforms. Since my last review of this trading course, the ART Software is the most significant new\nfeature."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-73-96-product-review-applied-reality-trading-by-jayanthi-gopalakrishnan-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-73-96-product-review-applied-reality-trading-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-73-96-product-review-applied-reality-trading-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247trti3,d,"{""minimum-quantity"":""1"",""path"":""ch7j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:7 (74-82): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:7 (74-82): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    This month code has been provided for Leon Wilson’s article “The Wilson Relative Price Channel”, which\ntransforms J. Welles Wilder’s relative strength index (RSI) into a set of price channels. Wilson’s formulas are presented for TradeStation, MetaStock, eSignal, AIQ, Wealth-Lab, AmiBroker, NeuroShell Trader, NeoTicker, TradingSolutions, Trade Navigator, Aspen Graphics, Tradecision, VT Trader, and TS Support."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-74-82-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-74-82-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-74-82-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov249bofo4,d,"{""minimum-quantity"":""1"",""path"":""ch7j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:7 (92-93): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:7 (92-93): Books For Traders by Technical Analysis, Inc.

    The Essentials Of Trading: From The Basics To Building A Winning Strategy (300 pages, $60 hardcover, 2006, ISBN 0-471-79063-X) by John Forman, published by John Wiley & Sons.

    “Buy low. Sell high.” It sounds easy, but the reality is very different. Changing market trends can make for turbulent trading. Lack of concentration can lead to costly mistakes. This book is written for those just\nbeginning their journey into trading and provides a base of knowledge from which you can develop trading methods, systems, and techniques that suit you best. From the basics of analyzing a stock and placing a\ntrade, through trading plans and risk management\nto the building of trading systems, this is your source of practical advice."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-92-93-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-92-93-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-92-93-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov249wefo2,d,"{""minimum-quantity"":""1"",""path"":""ch7j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:7 (96-98): Websites For Traders: The Big Picture by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 24:7 (96-98): Websites For Traders: The Big Picture by David Penn

    THE BIG PICTURE

    http://bigpicture.typepad.com

    Think Jim Cramer is the only former hedge-fund gunner turned media star who’s got a flair for language?

    \""Last week, I jokingly referred to the notion that the Tax Cuts Crashed Market. It was a tongue-in-cheek reference to the foolish notion of ascribing a single causative factor to the elaborately intricate dance that defines daily market action … I guess I shouldn’t have been surprised when the talking point went out and Fox News blamed the market drop on the NSA leak!\""

    Or who’s got an appreciation of culture:

    \""A couple of indie albums this week to explore: Several Arrows Later by Matt Pond PA straddles indie rock and jangly pop: It’s not for everybody, but if you like Death Cab for Cutie and the Shins, you may like this …\""

    Not to mention a mind for the markets?

    \""The breach of a key uptrend in the ratio of the S&P 500 to the 10-year US government bond yield suggests either stock prices are headed much lower or bond yields are headed much higher — or both — in the longer term.\""

    These were the product of Barry Ritholtz, chief market strategist and fund manager for New York–based hedge fund Ritholtz Capital Partners (RCP)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-96-98-websites-for-traders-the-big-picture-by-david-penn-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-96-98-websites-for-traders-the-big-picture-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-7-96-98-websites-for-traders-the-big-picture-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241leto7,d,"{""minimum-quantity"":""1"",""path"":""ch8a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:8 (10-13): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:8 (10-13): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist.

    BROKERAGE RATINGS AND AWARDS

    Editor,

    It is my understanding you publish an article each year\nrating online brokerage products and services. In\nwhich 2006 issue can I find that article?

    JIM SCHUMACHER

    You are probably referring to our annual “Readers’ Choice Awards” section published in our annual Bonus Issue, which is mailed to subscribers in February and throughout the year to new subscribers. In that section, we present the results of an online reader survey on investment-related products and services in 20 categories, including analysis software and data services. In the survey, we ask readers to vote for their favorite products and services, and then we tally the results and present the listing. So while we do not publish editorial ratings on brokerage services, this section in the Bonus Issue may be of interest. Please contact our subscription department at circ@traders.com or 800- Technical about how to get a copy.— Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-10-13-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-10-13-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-10-13-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241fofo6,d,"{""minimum-quantity"":""1"",""path"":""ch8a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:8 (14-19): Forex Focus: Going Beyond 70 And 30 In Forex by Jamie Sattele"",""caption-linebreaks"":""Stocks & Commodities V. 24:8 (14-19): Forex Focus: Going Beyond 70 And 30 In Forex by Jamie Sattele

    Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. With that in mind, STOCKS & COMMODITIES has introduced Forex Focus to better prepare the retail trader to participate in the currency market.

    Here’s a look at the performance of a foreign exchange\nstrategy that was applied to the EUR/USD. The relative strength index (RSI), developed by J. Welles Wilder, is one of the most widely used indicators in technical\nanalysis. But by the same token, it is also one of the most misunderstood and incorrectly applied indicators in technical analysis. Too often, a trader attempts to pick a top or a bottom and then watches in frustration as the market fails to top out or bottom out and continues to move in the same direction. Most traders realize that RSI is an oscillator and that its value can range anywhere from zero to 100. Extreme readings are said to be over the 70 level and below the 30 mark, with the former considered overbought† and the latter\noversold.

    CATCHING A MOVE

    This is where most mistakes are made. Novice and experienced traders alike jump at the opportunity to sell a cross below 70 or buy a cross above 30, trying to pick a top or a bottom. Some of the trades will surely work out, but it is the one or two losses that occur when the trader finds him- or herself on the wrong side of a strong trending market that will wreak havoc. It is not necessary to sell tops and buy bottoms. Instead, it’s more effective to try to catch portions of large moves with higher-probability entry points."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-14-19-forex-focus-going-beyond-70-and-30-in-forex-by-jamie-sattele-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-14-19-forex-focus-going-beyond-70-and-30-in-forex-by-jamie-sattele-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-14-19-forex-focus-going-beyond-70-and-30-in-forex-by-jamie-sattele-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov242moma,d,"{""minimum-quantity"":""1"",""path"":""ch8a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:8 (20-26): Modeling The Market = Building Trading Strategies by John F. Ehlers"",""caption-linebreaks"":""Stocks & Commodities V. 24:8 (20-26): Modeling The Market = Building Trading Strategies by John F. Ehlers

    The correct model can form the foundation for comprehensive trading strategies.

    Modeling the market is important because you can build comprehensive trading strategies if your model is correct. One example of a successful model is the famous Black-Scholes model for options; a variety\nof options strategies have been spawned from it.\nAnother historical model is the Hodrick-Prescott\nfilter, which attempts to isolate the trend and cyclic\ncomponents of macroeconomic data. It finds the\ntrend by penalizing variance of the cyclic component.\nOnce the trend is found, the implied cycle component is established as the difference between the original price and the trend. The Hodrick-Prescott is not applicable for trading, usually being applied to monthly, quarterly, and annual data samples. Philosophically, the Hodrick-Prescott has the construc-tion of the model exactly backward. Rather than first finding the trend, I know we can measure the cyclic component of the market, and by using that, we can derive an “instantaneous” trendline.

    TRENDS AND CYCLES

    First, we start by assuming that our market model is made up of a trend component and a cyclic component and that we can add those two components together to synthesize a reasonable representation of the market. There are no overt constraints on these two components; the trend component does not have to be a straight line and can curve across the duration of the\nprice chart. This is the instantaneous trendline."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-20-26-modeling-the-market-building-trading-strategies-by-john-f-ehlers-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-20-26-modeling-the-market-building-trading-strategies-by-john-f-ehlers-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-20-26-modeling-the-market-building-trading-strategies-by-john-f-ehlers-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov242siea,d,"{""minimum-quantity"":""1"",""path"":""ch8a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:8 (20-26): Sidebar: EasyLanguague code by John F. Ehlers"",""caption-linebreaks"":""Stocks & Commodities V. 24:8 (20-26): Sidebar: EasyLanguague code by John F. Ehlers

    EASYLANGUAGE CODE TO PLOT THE INSTANTANEOUS TRENDLINE, MODELING THE MARKET, and THE CYCLIC COMPONENT."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-20-26-sidebar-easylanguague-code-by-john-f-ehlers-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-20-26-sidebar-easylanguague-code-by-john-f-ehlers-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-20-26-sidebar-easylanguague-code-by-john-f-ehlers-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov242qaby,d,"{""minimum-quantity"":""1"",""path"":""ch8a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:8 (27): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 24:8 (27): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://\nMessage-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    COMMENT TO JUNE COLUMN

    I was reading my June issue of S&C. I always enjoy reading your column very much. I wanted to respond to your reply to a question about whether technical analysis works: No one would ever enter into a good technical setup with bad momentum, bad earnings, wide spreads, poor trending. My best trades are when\nall the bad news, bad earnings, bad momentum, and so forth give me an entry at a price I am willing to pay for\nwhatever I trade. Same with good news driving stocks, futures, bonds, and so on into areas I want to be selling or shorting.

    —Steve Misic

    Your comments are certainly valid. Let me explain my thoughts about entries and exits. My point is that even in\nthe most quant-type of entry (correlated pairs trading, for example), we take into consideration all the standard market conditions before entering our short sale or purchase. For example, if the market were tanking, we would not enter our buy order until it settled down a bit for fear we would not be able to get a short sale off (during the decline)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-27-q-a-by-don-bright-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-27-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-27-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov242itin,d,"{""minimum-quantity"":""1"",""path"":""ch8a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:8 (28-31): It’s In The Sentiment by Ajay Jani"",""caption-linebreaks"":""Stocks & Commodities V. 24:8 (28-31): It’s In The Sentiment by Ajay Jani

    Here’s a quantitative sentiment index based on trading\nbehavior of the Rydex Sector Funds.

    With all the debate surrounding the effectiveness\nof market timing, often the underlying goals of the strategy are forgotten. The principle of market timing is to avoid capital commitments during periods when returns are expected to be subpar and to invest during those times when returns are expected to be above average. Those who complain that they would forgo all of the market’s return by missing the 10 best days of the year fail to mention that they would get slaughtered if they were fully invested on the 10 worst days of the year. During an epic bull market such as the\n1998–2000 run, detractors will complain that market timing doesn’t work and that you should be long and strong. These arguments miss the point. The reason to use market timing is not to outperform during raging bull markets or to be invested during the best 10 days of the year. There are two reasons to use market timing:

    1. To maximize return on investment by repeatedly\nturning over your capital in short-term trades. A\nsmall edge compounded can add up to a solid rate\nof return.

    2. To protect your hard-earned assets during a crunching bear market that can knock 25–50% off the\nmarket. By avoiding these debilitating drawdowns,\nyou have the ability to make fresh commitments of\ncapital when fear is rampant, prices are low, and\nopportunity beckons."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-28-31-it-s-in-the-sentiment-by-ajay-jani-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-28-31-it-s-in-the-sentiment-by-ajay-jani-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-28-31-it-s-in-the-sentiment-by-ajay-jani-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov243inma,d,"{""minimum-quantity"":""1"",""path"":""ch8a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:8 (34-37): Intraday Market Forecasting by Lee Leibfarth"",""caption-linebreaks"":""Stocks & Commodities V. 24:8 (34-37): Intraday Market Forecasting by Lee Leibfarth

    How do you find high-probability daytrading setups fast?

    Successful daytraders must have the ability to react as soon as favorable conditions in the market develop. Being able to identify high-probability conditions requires a high level of situational awareness that involves many different charts, indicators, and data sources. I will discuss a method of quickly and accurately sifting through this information in order to spot high probability daytrading setups as soon as they occur.

    Much like a weather forecast, trading decisions are based on probabilities, not certainties. Even with the ideal combination of conditions, there is still a level of\nunpredictability in both the markets and the weather. One way to think of intraday market analysis is to compare it with short-term weather forecasting.

    While it is possible to find a weather outlook for a region, it may be difficult (or impossible) to find a report providing a detailed minute-by-minute outlook for an\nexact location. In this way, the technical analysis needed for daytrading requires an individual approach that forces traders to become their own meteorologists.\nThe first and most important skill to develop for this style of forecasting is a high level of awareness for what is happening in the immediate area at the moment: right here, right now. This may include knowing the current speed and direction of the wind, the barometric pressure, the temperature, and so on."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-34-37-intraday-market-forecasting-by-lee-leibfarth-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-34-37-intraday-market-forecasting-by-lee-leibfarth-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-34-37-intraday-market-forecasting-by-lee-leibfarth-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244exyo1,d,"{""minimum-quantity"":""1"",""path"":""ch8a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:8 (43): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 24:8 (43): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    BEST WAY TO PLAY GOLD

    I’m looking for ways to play gold with options, but have not found any. Are there any ways to play the recent rally?

    Gold has been hot lately and its volatility can create interesting trading opportunities. Some traders use gold futures to participate in the movement in the metal. Long-term investors sometimes buy and hold gold. The new StreetTracks Gold Trust (GLD) is an exchange traded fund that holds the precious metal. Shares of the fund trade on the New York Stock Exchange (NYSE) and the bullion is held in a bank vault. Shares of GLD can be bought and sold like shares of stock. However, no options are listed on the gold fund yet. That might change soon.

    If you are looking for a way to play gold in your brokerage account with options right now, there are a few choices. The first is to trade options on the gold mining companies. Newmont Mining (NEM) is the largest gold mining company by market value and its\noptions contract is actively traded and liquid."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-43-explore-your-options-by-tom-gentile-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-43-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-43-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244whti,d,"{""minimum-quantity"":""1"",""path"":""ch8a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:8 (44-47): What Time Frame Is Right For You? by Thomas Bulkowski"",""caption-linebreaks"":""Stocks & Commodities V. 24:8 (44-47): What Time Frame Is Right For You? by Thomas Bulkowski

    Finding the right time frame for your trading may make life easier for you — and your trading successes more sustainable.

    A trader I’ll call Jennifer made big bucks at her sales job, and her lifestyle matched her income. She drove a fancy car and lived in a big house. Between sales calls and in her off-hours, she developed a foolproof trading system. So she quit her job and started trading bonds and currencies full time.

    I read a recent study that looked at income from traders. Just 4% of those surveyed made more than $50,000 annually. In her first year of trading, Jennifer made twice that, but she wasn’t satisfied. She disliked sitting in front of a computer screen all day. She wanted the freedom to play on Cape Cod, go whale sighting off California, and splash her toes in the waters of the\nCaribbean. “I want to do what you do,” she said to me.\nBy that, she meant making fewer trades each year while having the time to till the garden, tend the tomatoes, and still make big bucks. I call it position trading. To get a feel for the different time frames and styles of trading, I asked nearly 70 traders for information on their trading style. Here’s what 20 of them had to say.

    THE SCALPER

    Pete is a scalper. He doesn’t stand outside concerts hawking hot tickets, but rather he profits from market inefficiencies, holding positions for just minutes. He’s an in-and-out trader who makes money on small price changes. His computer systems and software are custom-designed for his trading style. With the push of a button, he can be in and out of a trade in seconds. That’s vital in today’s fast-paced markets. He will make several trades each hour, but his time trading (not time\nholding) is relatively short — about two hours each day. The remainder of his day he uses for research and following market developments."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-44-47-what-time-frame-is-right-for-you-by-thomas-bulkowski-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-44-47-what-time-frame-is-right-for-you-by-thomas-bulkowski-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-44-47-what-time-frame-is-right-for-you-by-thomas-bulkowski-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244ingl,d,"{""minimum-quantity"":""1"",""path"":""ch8a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:8 (48-54): Interview: Glen Ring And His View On Futures by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 24:8 (48-54): Interview: Glen Ring And His View On Futures by Jayanthi Gopalakrishnan

    One of the nation’s most respected market analysts with 34 years of experience in the commodity industry, Glen Ring brings a broad-based perspective to his work. He has been a producer/hedger, broker, trader,\ntechnical analyst, researcher and seminar speaker, and from 1987 through 1997 he was editor of the successful Trends In Futures (previously titled\nCommodity Close-Up) newsletter before leaving to concentrate on his own newsletter, View On Futures.\nCurrently, he is president of Glen Ring Enterprises, which focuses on providing information, education, research, and support for traders, analysts, and other participants in the futures industry. STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan spoke with Glen Ring in a phone interview on June 9, 2006.

    Q: Glen, how did you get started?

    A: I got interested in the markets when I was in high\nschool in the early 1970s. Dad was a farmer, and I was in partnership with him raising livestock. He was aware of markets but not much, but he suggested that I keep an eye on them, so I did. About 1972, or shortly after, Successful Farming magazine had an article about the hog cycle. I think they called it a “three-and-a-half-year” cycle at the time. It made a lot of sense to me that every time prices were high, we didn’t have many hogs, and every time prices were low, we had a lot of hogs.

    Dad died when I was in college. I ended up farming and going to college at the same time, running back and forth 300 miles on the weekends. He had been sick for years and we were in debt. I could see I wasn’t going to be able to outproduce other farmers who were in better financial shape than I was. That, together with my being intrigued with the commodity markets, was what really got me started. I felt I had my best chance to\noutmarket people."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-48-54-interview-glen-ring-and-his-view-on-futures-by-jayanthi-gopalakrishnan-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-48-54-interview-glen-ring-and-his-view-on-futures-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-48-54-interview-glen-ring-and-his-view-on-futures-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov245fufo1,d,"{""minimum-quantity"":""1"",""path"":""ch8a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:8 (55): Futures For You by Dan O’Neil"",""caption-linebreaks"":""Stocks & Commodities V. 24:8 (55): Futures For You by Dan O’Neil

    INSIDE THE FUTURES WORLD

    Want to learn how the futures markets really work? Dan O’Neil, a principal at online futures and forex broker XPRESSTRADE (www.xpresstrade.com), responds to\nyour questions about today’s futures markets. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be\nposted there, and selected questions will appear in a future issue of S&C.

    HURRICANE SEASON

    Q: We’ve been hearing more about the upcoming hurricane season because of last year’s record damage. Obviously, severe weather can wreak havoc in\nsome commodity markets. What are a few futures markets to look at in terms of potential storm-related shocks?

    A: While nobody likes to think about profiting from a natural disaster that upends so many lives, the fact is that many commodity markets have long been subject to the ebbs and flows of weather. In fact, weather is one of the challenges that many commodity producers\nface, and futures and options contracts were designed largely to help producers manage and mitigate such\nrisks. In many of these markets, weather-related action just naturally opens up opportunities for speculators as well.

    As another hurricane season bears down on the southern coastal US, activity in orange juice, one of the true weather markets, figures to give traders a daily dose of volatility. Frozen concentrated orange juice (FCOJ) futures have always been subject to a variety of\nsupply-side pressures, but a recent price climb to levels not seen in 15 years, combined with the severity of the past few hurricane seasons, make the outlook\nfor the remainder of 2006 particularly intriguing for speculators."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-55-futures-for-you-by-dan-o-neil-22.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-55-futures-for-you-by-dan-o-neil-26.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-55-futures-for-you-by-dan-o-neil-27.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246wefo,d,"{""minimum-quantity"":""1"",""path"":""ch8a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:8 (60-61): Websites For Traders: www.FreeMoneyFinance.com by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 24:8 (60-61): Websites For Traders: www.FreeMoneyFinance.com by David Penn

    WWW.FREEMONEYFINANCE.COM

    Who was it who said that common wisdom was not so common? I was reading some reviews of a book published some 90-years ago titled The Richest Man In\nBabylon. Written by George S. Clason and first published back in 1926(!), the book — subtitled “The success secrets of the ancients” — contains what has\nbeen described as “commonsensical” wisdom on thrift and savings dressed up in a pseudo-Biblical language (hence the richest man “in Babylon”). Here’s a taste from a chapter called “Seven cures for a lean purse”:

    “Confuse not the necessary expenses with thy desires. Each of you, together with your good families, have more desires than your earnings can gratify. Therefore are thy earnings spent to gratify these desires insofar as they will go. Still thou retainest many\nungratified desires.\""

    “All men are burdened with more desires than they can gratify. Because of my wealth thinkest thou I may gratify\nevery desire? ’Tis a false idea. There are limits to my time. There are limits to my strength. There are limits to the distances I may travel. There are limits to what I may eat. There are limits to the zest with which I may enjoy.”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-60-61-websites-for-traders-www-freemoneyfinance-com-by-david-penn-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-60-61-websites-for-traders-www-freemoneyfinance-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-60-61-websites-for-traders-www-freemoneyfinance-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246prre6,d,"{""minimum-quantity"":""1"",""path"":""ch8a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:8 (62-64): Product Review: NASDAQ TotalView by Matt Blackman"",""caption-linebreaks"":""Stocks & Commodities V. 24:8 (62-64): Product Review: NASDAQ TotalView by Matt Blackman

    In the mid-1990s, the NASDAQ gained real popularity with traders. Electronic quotes together with the exponential growth in computers meant that many\nmore professional and retail traders could instantly view the action and play the game. By 1999, the NASDAQ became the world’s largest stock market by dollar volume. The dotcom bubble was in full swing, propelling the NASDAQ Composite from just 750 in early 1995 to a high of 5,132.52 on March 10, 2000, up nearly 600% just five years later.

    With this incredible rise (and eventual fall), volatility also went ballistic. As volatility increased, traders adapted by reducing their time in trades, and this resulted in the rapid proliferation of daytraders in the late 1990s. As timelines shortened, so did strategies. In a trade lasting minutes instead of weeks or months, traditional technical indicators and fundamental information are of little value.

    The new battlefield required traders to assess supply and demand rapidly. Like barracudas waiting for an unwitting morsel to swim within range, traders first to\nspot an arbitrage opportunity and act with lightning speed won games lasting less than a New York minute. Technological tools of the trade and speed became more important than ever before."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-62-64-product-review-nasdaq-totalview-by-matt-blackman-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-62-64-product-review-nasdaq-totalview-by-matt-blackman-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-62-64-product-review-nasdaq-totalview-by-matt-blackman-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246quco,d,"{""minimum-quantity"":""1"",""path"":""ch8a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:8 (65): Quick-Scans: Commitments Of Traders by Bruce R. Faber"",""caption-linebreaks"":""Stocks & Commodities V. 24:8 (65): Quick-Scans: Commitments Of Traders by Bruce R. Faber

    It has always seemed to me that the Commitment Of Traders (COT) report rendered futures trading the market equivalent of Texas hold ’em poker. In Texas hold ’em, the face-up cards on the table let any and everyone know most of what is being bet on. In the futures market, the COT report does pretty much the same thing. In poker, it is your “hole” cards — the ones that are face down; in a market context it would be the trading tools you use — that make your chances of winning any different from those of others in the game.

    In the COT, as in the face-up cards, you must be aware of the value of the known quantities and the various ways you can use the information to create a winning combination. It doesn’t do you any good to see the information and not know how to use it. Likewise, in trading the futures markets, you have to know what the COT is telling you and how you can use the equivalent of the markets’ face-up cards to make the correct trades."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-65-quick-scans-commitments-of-traders-by-bruce-r-faber-20.gif"",""height"":""272"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-65-quick-scans-commitments-of-traders-by-bruce-r-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-65-quick-scans-commitments-of-traders-by-bruce-r-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246prre7,d,"{""minimum-quantity"":""1"",""path"":""ch8a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:8 (66-70): Product Review: AmiBroker 4.80 by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 24:8 (66-70): Product Review: AmiBroker 4.80 by David Penn

    From the point of view of the prospective purchaser of\ncharting analytic software, one of the most important\nthings that can be learned from a product review is how different the software under discussion is from the software that I, as the prospective purchaser, am using right now. This, of course, is an impossible point of view for a product reviewer to sustain over the course of a review. As I have written before, there may one day be a different charting analytic software program for every single trader who wants one — until then, it will simply seem so.

    The other temptation, of course, is to compare charting analytic software packages. While this approach sounds reasonable enough, it also suffers from the “chasing the horizon” phenomenon. Does “more” equal “more” when it comes to such software? When does\n“more” cross the line into being “too much” in terms of features and options? How much does price factor in the equation? How much does telephone or email support figure into this? Are frequent updates a good thing, or merely a sign that the developers are playing catch up?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-66-70-product-review-amibroker-4-80-by-david-penn-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-66-70-product-review-amibroker-4-80-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-66-70-product-review-amibroker-4-80-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247trti4,d,"{""minimum-quantity"":""1"",""path"":""ch8a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:8 (72-80): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:8 (72-80): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    This month code has been based on John Ehlers’ article in this issue, “Modeling The Market = Building Trading Strategies.” Code written in EasyLanguage for TradeStation is provided by the author in the article’s sidebars. Additional code is presented here for TradeStation, MetaStock, eSignal, AIQ, Wealth-Lab, AmiBroker, NeuroShell Trader, NeoTicker, TS Support, TradingSolutions, BioComp Systems, Tradecision, and VT Trader."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-72-80-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-72-80-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-72-80-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov248qupr,d,"{""minimum-quantity"":""1"",""path"":""ch8a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:8 (81): Quick-Scans: Predicting the Markets of Tomorrow by Bruce Faber"",""caption-linebreaks"":""Stocks & Commodities V. 24:8 (81): Quick-Scans: Predicting the Markets of Tomorrow by Bruce Faber

    At the beginning of the new millennium, the United States was speeding down a highway of peace and prosperity. For the previous 20 years, those who had been a part of the financial community, from Wall Street to Main Street, the trend had been up. Annual returns of 50% or more were not unheard of. However, anybody who then used the markets’ overall rate of return for the past 10, 15, or even 20 years as a predictor of what they were counting on for future years was soon to be disillusioned.

    In March 2000, a full year and a half before Osama bin Laden became a household name, the overall markets\nhad already reached their peak. Author James O’Shaughnessy believes that the March high of that year was the equivalent of a 100-year flood in the financial markets."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-81-quick-scans-predicting-the-markets-of-tomorrow-by-bruce-faber-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-81-quick-scans-predicting-the-markets-of-tomorrow-by-bruce-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-81-quick-scans-predicting-the-markets-of-tomorrow-by-bruce-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov248wefo,d,"{""minimum-quantity"":""1"",""path"":""ch8a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:8 (88): Websites For Traders: PowerOptions WeBlog by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 24:8 (88): Websites For Traders: PowerOptions WeBlog by David Penn

    POWEROPTIONS WEBLOG

    Consider this website review a heads up. PowerOptions WeBlog (http://blog. poweropt.com) is geared toward options trading and education, but my sense is that PowerOptions WeBlog is a project that is just getting under way and any full assessment of what it has to offer will probably be best accomplished\nmonths from now.

    So think of this as an opportunity to say you were reading the PowerOptions blog before it was cool, before “everybody” was doing it. And who knows? By\nfollowing some of the advice provided — including commentary on online trading software, specific options trading strategies, and updates on new options\nproducts (such as the new $VIX options) — you might find yourself too busy counting your earnings to brag about how long you’ve had PowerOptions bookmarked in your browser)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-88-websites-for-traders-poweroptions-weblog-by-david-penn-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-88-websites-for-traders-poweroptions-weblog-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-88-websites-for-traders-poweroptions-weblog-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov249bofo5,d,"{""minimum-quantity"":""1"",""path"":""ch8a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:8 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:8 (92): Books For Traders by Technical Analysis, Inc.

    The Complete Idiot’s Guide To Personal Financial\nDocuments (266 pages, $18.95 softcover, 2005, ISBN 1-59257-446-7), by Ken Little, published by\nAlpha Books.

    You know you should pay more attention, but every time a new bank statement arrives, you put it in a folder with all of the other number-filled documents you’ve gotten\nover the years. This book helps you figure out what all those numbers really mean. You’ll learn what to toss and what to hang onto. You will be able to organize the papers you need to do your taxes. You’ll get tips on how to find and understand the important stuff in all the documents. This guide helps you find the small print that can save you big money."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-92-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov249atcl1,d,"{""minimum-quantity"":""1"",""path"":""ch8a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:8 (98): At The Close by Marge Sherald"",""caption-linebreaks"":""Stocks & Commodities V. 24:8 (98): At The Close by Marge Sherald

    What do you think of when you think “cocoon”? Is it\nsmall, fetal, round, cozy … formative? When trader Kenneth Branch uses the term, more often than not he\nuses it in regard to trading, in reference to the growing forces within the markets. He looks for tradable financial instruments while they are still in the forming stage, covered by a “protective covering” of sorts until they are ready to burst forth in full flower. As he explains it, in the cocoon stage of market development, “there is a supply of any given security that may be purchased at low prices” before most of the market finds out about it. And it’s worked for him, because the tradables he finds\nat that point can be had at attractively low prices.

    Branch has taken a different approach to trading than most.\nHe was convicted of drug-related charges at 18, and it was during his 12-year stay in federal prison that he began to study the markets, in particular reading Stan Weinstein’s \""Secrets For Profiting In Bull And Bear Markets\"". For six years he manually charted index and stock activity, and from there he began to recognize technical patterns, subsequently developing daily trading models based on indicators. After his release\nat 30, he started Lanham, MD–based Cocoon Trade."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-98-at-the-close-by-marge-sherald-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-98-at-the-close-by-marge-sherald-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-8-98-at-the-close-by-marge-sherald-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241leto8,d,"{""minimum-quantity"":""1"",""path"":""ch9s203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:9 (10-13): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:9 (10-13): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist.

    IMPLIED VOLATILITY

    Editor,

    I enjoyed Sam Bhugaloo’s recent article in STOCKS & COMMODITIES (“The Power Of Implied Volatility,” July\n2006); the beer froth analogy really helped explain exactly what is going on. I have some questions:

    1. Some charts use two years of implied volatility data and others used six months. Doesn’t that have an impact on the percentage increase or decrease? How do you know which time to use?

    2. What sources offer the information you used in the article so I can begin to track some of the implied volatility? I see that you’ve used Optionetics; are\nthere others?

    MARTIN BEDICK

    Sam Bhugaloo replies:

    Thanks for your email. I have had much positive feedback since the article was published and I am currently working on another that I hope will be published also in due course..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-10-13-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-10-13-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-10-13-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241fofo7,d,"{""minimum-quantity"":""1"",""path"":""ch9s203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:9 (14-16): Forex Focus by Darrell Jobman"",""caption-linebreaks"":""Stocks & Commodities V. 24:9 (14-16): Forex Focus by Darrell Jobman

    Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. With that in mind, STOCKS & COMMODITIES has introduced Forex Focus to better prepare the retail trader to participate in the currency market.

    Euro Sparkling, But Faces Long-Term Challenges

    Here’s an overview of the Eurozone. With a lack of confidence in the US dollar and central bank diversification away from the US currency, the euro is in position to make further gains over the next few months, to at least 1.30 against the dollar. The Eurozone area, however, faces tough decisions on economic reform, and government weaknesses in the major economies will make it even more difficult to secure approval for key measures such as labor market reforms. Without reform, Eurozone growth is likely to falter quickly in the face of higher interest rates, with the European Central Bank (ECB) taking a firm stance that realistically could normalize interest rates to at least the 3% level by year-end.

    Eurozone growth and prospects for the euro will be particularly vulnerable if there is a downturn in global growth. In these circumstances, there would be pressure for a renewed cut in interest rates and action to curb euro strength. There will also be longer-term concerns over the balance of payments position and, at the extreme, fears that Italy could leave the euro arena. Euro gains, therefore, could prove to be fragile and temporary, with confidence faltering from late 2005."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-14-16-forex-focus-by-darrell-jobman-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-14-16-forex-focus-by-darrell-jobman-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-14-16-forex-focus-by-darrell-jobman-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov241trfo,d,"{""minimum-quantity"":""1"",""path"":""ch9s203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:9 (19-24): Trading The Forex Wave by Raghee Horner"",""caption-linebreaks"":""Stocks & Commodities V. 24:9 (19-24): Trading The Forex Wave by Raghee Horner

    Chart patterns are powerful tools and it is important to identify them by finding their building blocks. Here’s how.

    Only after I embraced market cycles did I truly begin to understand what to do with all the lines and levels I had learned to draw on my charts. Early on, as I began teaching myself to trade in the late 1980s to early 1990s, there were few books available about technical analysis. I found myself gravitating toward price (instead of news) because my mother was a bit of a market timer (although not trained nor aware that she was indeed using market timing).

    CHARTS, CHARTS, CHARTS

    Price and price action made sense to me, and so I\nventured into charting armed with my father’s old engineering graph paper, drawing my own charts based on the closing price I would get from my commodity futures broker. It was also during this time I went to college and discovered the books that ended up shaping my view of the markets. Books by chartists Richard Schabacker and Richard Wyckoff were like the light I was searching for in my quest to become a trader. What is interesting about those books was that they were written in the early 1900s but are still as true and applicable today as anything current on my bookshelf.

    The other pivotal moment in my trading was the introduction of market cycles to my chart analysis. My bread and butter trades are momentum trades. My definition of this is an entry style based on entering a market as it breaks out or breaks down from a sideways market. Sideways markets are cycles of congestion or consolidation."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-19-24-trading-the-forex-wave-by-raghee-horner-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-19-24-trading-the-forex-wave-by-raghee-horner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-19-24-trading-the-forex-wave-by-raghee-horner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov242qaby1,d,"{""minimum-quantity"":""1"",""path"":""ch9s203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:9 (26): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 24:9 (26): Q&A by Don Bright

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    PRICING E-MINIS

    Where does ES price come from?

    ES = (SPY price)/factor + time premium

    Now that I know that e-mini price is not direct, what bids and asks should I look at to detect where there is more pressure to gauge the future ES or ER2 price? Should I look at SPY or SPX, for example? —RobertM

    You determine short-term up or down movement of the futures by the premium or discount to adjusted fair value. You take the spot price of the S&P, and add fair value for that day (check www.programtrading.com or www.indexarb.com for the daily number; there may be a slight difference, so take the average). When there is a premium, the market has an upward bias, and vice versa when there is a discount."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-26-q-a-by-don-bright-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-26-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-26-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov242wefo,d,"{""minimum-quantity"":""1"",""path"":""ch9s203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:9 (27): Websites For Traders by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 24:9 (27): Websites For Traders by Jayanthi Gopalakrishnan

    WWW.EMINIZ.COM

    Want to sit at home and trade for a few hours and then spend the rest of your time enjoying life? Who wouldn’t want to? My guess is that if you didn’t have this daydream at least once in your life, you wouldn’t be reading this magazine. It isn’t difficult to open up a futures trading account, online or otherwise, but before you do, you’ll have to decide what you want to trade and how you want to trade it. Just like with anything else, you need a game plan. To help you create that game plan, longtime STOCKS & COMMODITIES contributor John F. Ehlers has set up a website, www.eMiniZ.com, for those who trade or wish to trade e-mini futures contracts. The tradables include e-mini Standard & Poor’s 500, e-mini NASDAQ 100, e-mini S&P Midcap 400, e-mini Russell 2000, and the e-mini Dow. There\nare three levels you can choose from: silver, gold, and platinum, depending on which index you wish to trade plus your trading account size. The prices can be found on the website."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-27-websites-for-traders-by-jayanthi-gopalakrishnan-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-27-websites-for-traders-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-27-websites-for-traders-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov242siad,d,"{""minimum-quantity"":""1"",""path"":""ch9s203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:9 (28-31): Sidebar: Adaptive Price Zone EasyLanguage Code by Lee Leibfarth"",""caption-linebreaks"":""Stocks & Commodities V. 24:9 (28-31): Sidebar: Adaptive Price Zone EasyLanguage Code by Lee Leibfarth

    This article contains: Double Smooth EMA Function inputs, Adaptive Price Zone Indicator\ninputs, and Adaptive Price Zone Strategy\ninputs."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-28-31-sidebar-adaptive-price-zone-easylanguage-code-by-lee-leibfarth-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-28-31-sidebar-adaptive-price-zone-easylanguage-code-by-lee-leibfarth-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-28-31-sidebar-adaptive-price-zone-easylanguage-code-by-lee-leibfarth-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov242trwi,d,"{""minimum-quantity"":""1"",""path"":""ch9s203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:9 (28-31): Trading With An Adaptive Price Zone by Lee Leibfarth"",""caption-linebreaks"":""Stocks & Commodities V. 24:9 (28-31): Trading With An Adaptive Price Zone by Lee Leibfarth

    When the markets are moving sideways, it is difficult to identify the turning points. Here’s one indicator that can help you do that.

    Traders are always looking for innovative ways to look at the markets, ones that will give them a unique edge. The adaptive price zone provides a means of analyzing price action and spotting possible turning points in the market. In addition, this type of indicator may help\ntraders decide when to stay in the market and when to jump ship. While there is no magical indicator that can predict the direction of the markets with any great certainty, the adaptive price zone can project powerful thresholds that often lead to significant price moves.

    The adaptive price zone (APZ) forms a set of bands based on the calculations of a short-term double-smoothed exponential moving average. This forms a steady channel that surrounds the average price and tracks price fluctuations quickly, especially in volatile markets. This technical indicator can help traders find short-term trading opportunities in choppy markets since prices often bounce back and forth within this zone. As price crosses above or below the\nzone, it can signal an opportunity to buy or sell in anticipation of a reversal. This concept is shown in Figure 1, where the blue dots represent areas where price has violated the APZ.

    HOW IT WORKS

    To understand the concept of the APZ, you must first examine the importance of a moving average that tracks price action quickly and has little lag. For this I will use a double-smoothed exponential moving average (an exponential moving average of another exponential moving average) to form the basis for the APZ calculation. While simple moving averages (SMAs) calculate a value by equally weighing every datapoint in the lookback period, they often fall significantly behind the current price (known as lag)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-28-31-trading-with-an-adaptive-price-zone-by-lee-leibfarth-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-28-31-trading-with-an-adaptive-price-zone-by-lee-leibfarth-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-28-31-trading-with-an-adaptive-price-zone-by-lee-leibfarth-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244exyo2,d,"{""minimum-quantity"":""1"",""path"":""ch9s203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:9 (40): Expore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 24:9 (40): Expore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    BOX SPREAD

    Q: I know how to construct a box spread, but why does it work? Is there a way to tell which option(s) are under/overpriced?

    A: The box spread is an arbitrage play that can sometimes be used to capture risk-free profits. The difficult part is finding situations ripe for the trade’s\napplication. It is actually a combination of a bull spread and a bear spread. The spreads can be either debits or credits. Consider the following situation:

    XYZ = $47.5 a share

    September 45 call = $2.75

    September 50 call = $0.50

    September 50 put = $3.00

    September 45 put = $0.75

    The strategist creates two debit spreads, a bull call and a bear put, with the following..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-40-expore-your-options-by-tom-gentile-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-40-expore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-40-expore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244sist1,d,"{""minimum-quantity"":""1"",""path"":""ch9s203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:9 (42-44): Sidebar: Stop-Loss Methodology by Mircea Dologa, MD"",""caption-linebreaks"":""Stocks & Commodities V. 24:9 (42-44): Sidebar: Stop-Loss Methodology by Mircea Dologa, MD

    • Breaking bar: As soon as you execute your entry, enter\nat 1.5 ratio of the breaking bar plus a tick (4109.5). The\ninitial stop-loss is at -0.5 ratio of the breaking bar, minus a tick (4098.5). Observe the market closely to identify an optimal stop-loss rather than the typical stop-loss (-0.5 ratio).

    • Break-even stop (first trailing stop): When price reaches a five-point running distance, place your first trailing stop. It should fall within the average of your ATR. You could exit here, but if you are willing to take more risk, this is when you add more units to your trade with the same stop-loss or even a tighter one ."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-42-44-sidebar-stop-loss-methodology-by-mircea-dologa-md-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-42-44-sidebar-stop-loss-methodology-by-mircea-dologa-md-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-42-44-sidebar-stop-loss-methodology-by-mircea-dologa-md-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244trwa,d,"{""minimum-quantity"":""1"",""path"":""ch9s203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:9 (42-44): Trading Wave 3 by Mircea Dologa, MD"",""caption-linebreaks"":""Stocks & Commodities V. 24:9 (42-44): Trading Wave 3 by Mircea Dologa, MD

    Trading wave 3 could prove to be the most profitable of all waves in Elliott wave analysis. Here’s an example.

    In my previous two articles, I discussed various techniques you could apply to trading while a wave 3 was in process. In this, the third and final part of the series, I will walk you through a trade so you can see how to utilize everything I discussed in the first two parts.

    GETTING READY

    1. Be alert to the possibility of an extended W3 trade

    • Identify the profitable low entry.

    • Price should be near the close of the previous day.

    • Price should gap down, opening below the close,\nthen return above the close and fill the gap from the low of the day/morning, or vice versa. This is known as the oops phenomenon.

    • Price gaps down, consolidates for several bars, then\nfills the gap from the low of the morning/day. Again, you have the oops phenomenon.

    • Follow the price movement from downtrend to uptrend.

    • Once a low is formed, wait for an upswing in wave\n1/A and its retracement of wave 2/B (38.2 – 50%). After the retracement, you can set up for the wave 3/C ride.

    • Be aware that a low may not necessarily be the starting point for wave 1, but rather the end of wave B of an ABC correction. Wave C will follow, taking the form of a terminal-ascending triangle. A similar situation might take place when an impulse pattern has a wave 5 failure. This will be a classic doublebottom formation.

    • Be aware of the formation of w1 of a future W3. It can coincide with the entry (as is the case in the example). The length of the move will give the tone:

    o Five bars for a swing

    o 13 bars for an average trend, and

    o 21–34 bars for an extended wave."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-42-44-trading-wave-3-by-mircea-dologa-md-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-42-44-trading-wave-3-by-mircea-dologa-md-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-42-44-trading-wave-3-by-mircea-dologa-md-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244inth,d,"{""minimum-quantity"":""1"",""path"":""ch9s203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:9 (46-54): Interview: Thomas Bulkowski by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 24:9 (46-54): Interview: Thomas Bulkowski by Jayanthi Gopalakrishnan

    Trader and chart-pattern expert Thomas N. Bulkowski, former hardware and software engineer and current Contributing Writer for Technical Analysis of STOCKS & COMMODITIES (and best-selling author of the classic Encyclopedia Of Chart Patterns as well as Trading\nClassic Chart Patterns and Getting Started In Chart Patterns), realized the potential of the stock market when he opened a brokerage account to deposit the stock certificates he received from his employer’s stock\npurchase plan. On 27 trades, he at least doubled his money and made over 1,000% on six of his stock picks (one resulted in a 4,300% gain). It’s safe to say that he’s a successful investor. He has had 25 years of\nexperience trading stocks, and with his trading savvy, he was able to retire from his job at the age of 36, thus fulfilling the dream of trading for a living. Best of all, with his trading methods, he doesn’t have to sit in front of his computer screen all day! Find out how he does it. S&C Editor Jayanthi Gopalakrishnan interviewed Bulkowski via email on July 10, 2006.

    Q: You’ve done as much work as can be done on chart\npatterns. How did you start recognizing and realizing the importance of chart formations?

    A: I couldn’t find much information on chart patterns until I discovered STOCKS & COMMODITIES magazine. I started out wondering how often patterns worked and how often they failed, but sources I checked said patterns worked “most of the time.” What does that mean? I decided to find out, and that’s how my first book, Encyclopedia Of Chart Patterns, came about. Now, pattern traders can own a book that says “head & shoulders bottoms fail 3% of the time in a bull market and price throws back 51% of the time in a bear market.” Compared to other chart patterns, performance statistics like that give you an edge, and an edge is all you need to beat the other guy in the markets."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-46-54-interview-thomas-bulkowski-by-jayanthi-gopalakrishnan-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-46-54-interview-thomas-bulkowski-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-46-54-interview-thomas-bulkowski-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov244sitr,d,"{""minimum-quantity"":""1"",""path"":""ch9s203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:9 (46-54): Sidebar: Trading Notebook Entry For Buy Side Of Insteel Ind (IIN) by T. Bulkowski"",""caption-linebreaks"":""Stocks & Commodities V. 24:9 (46-54): Sidebar: Trading Notebook Entry For Buy Side Of Insteel Ind (IIN) by T. Bulkowski

    Date placed: 2/13/06

    Order type: Market open tomorrow

    Shares bought: Withheld

    Date Bought: 2/14/06

    Bought at: 31.03

    Stop, % loss: 27.81 or 10% down

    Volatility, stop: $1.36, 27.10, 13.1%

    Upside target: 30.21 high on 2/10 – 16.15 trend low on 12/28/05 = 14.06 height x 50% = 7.03. 30.21+7.03 = 37.24

    Future market direction: Down?

    Indicators: RSI: Oversold. CCI: Buy signal today, MACD: Very high momentum. Bollinger: Midway between middle and upper band

    Associated commodities: None

    Score and price target: +2, 39.18 using generic score

    Industry and stock rank: 18/46 and 1/10

    SAR: None above except round number at 35. Congestion from 30 to 28"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-46-54-sidebar-trading-notebook-entry-for-buy-side-of-insteel-ind-iin-by-t-bulkowski-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-46-54-sidebar-trading-notebook-entry-for-buy-side-of-insteel-ind-iin-by-t-bulkowski-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-46-54-sidebar-trading-notebook-entry-for-buy-side-of-insteel-ind-iin-by-t-bulkowski-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov245prre1,d,"{""minimum-quantity"":""1"",""path"":""ch9s203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:9 (56-60): Product Review: OmniTrader 2006 by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 24:9 (56-60): Product Review: OmniTrader 2006 by David Penn

    Have we arrived at the point yet when, instead of smiling in admiration of the old-timer who still hand-draws his own point & figure charts each evening, we can finally just say something to the effect of “Wow, so that’s what you old dudes did before OmniTrader?”

    I’m no graybeard. And I don’t consider myself a discretionary trader, either. I’ve got a system (or two), rules, even a sound money management program. I also have stacks of yellow legal pads, skinny spiral notebooks, fat manila folders and more Post-it notes than a strip mall with a Staples at one end and an Office Depot at the other, just to keep track of my “system(s).”

    Why, you might ask, do I go through all that paperwork to keep track of a system that could in all likelihood run\nby itself? Why not automate the process, save myself some time, and cut back on the inadvertent deforestation program that the reams of paper I plow\nthrough have come to represent?

    For some time, my answer has been easy: I’m a technical trader, not a computer programmer.

    Unfortunately for my ego, a product like OmniTrader 2006 (OT2006) makes my “easy” answer harder to abide by. Unlike a lot of automated trading platforms\navailable on the market, it appears as if OmniTrader 2006 has put a premium on not just effectiveness, but\nsimplicity as well. There is precious little complicated code to learn or algorithms to wade through, and the software’s “Getting Started” mini-manual is almost suspiciously straightforward and easy to understand."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-56-60-product-review-omnitrader-2006-by-david-penn-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-56-60-product-review-omnitrader-2006-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-56-60-product-review-omnitrader-2006-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246fufo,d,"{""minimum-quantity"":""1"",""path"":""ch9s203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:9 (61): Futures For You by Dan O’Neil"",""caption-linebreaks"":""Stocks & Commodities V. 24:9 (61): Futures For You by Dan O’Neil

    INSIDE THE FUTURES WORLD

    Want to learn how the futures markets really work? Dan O’Neil, a principal at online futures and forex broker XPRESSTRADE (www.xpresstrade.com), responds to\nyour questions about today’s futures markets. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be\nposted there, and selected questions will appear in a future issue of S&C.

    ABANDON SHIP?

    Many commodity markets have enjoyed fabulous bull runs. More recently, though, the rallies have sputtered, and some prices have fallen back to Earth. Was this a commodities bubble, and are we near the end of the boom?

    Nobody likes to hold on too long in any market that’s heading down. Yet without getting into any specific price\nforecasts, I would say that investors rethinking the viability of commodities in light of recent downturns in a few signature markets would do well to look at the big picture and consider this actually might be the right time to buy.

    Of course, to begin with, there’s no sense in trying to deny it. For all of the congratulations that many major commodities have enjoyed from traders over the past couple of years amid sharply rising prices, it’s only fair to accept the converse when the bull appears to have\nbeen neutered."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-61-futures-for-you-by-dan-o-neil-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-61-futures-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-61-futures-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246rire,d,"{""minimum-quantity"":""1"",""path"":""ch9s203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:9 (62-66): Risk-Adjusted Return by MH Pee"",""caption-linebreaks"":""Stocks & Commodities V. 24:9 (62-66): Risk-Adjusted Return by MH Pee

    Comparing two different trading strategies can be a challenge. Here’s a technique that does it.

    How do you compare stock trading without using leverage and trading something like futures,\nwhich does involve leverage? You could do two things. First, you can make both portfolios assume the same\namount of risk by adjusting the account size for each portfolio. The larger the account size, the smaller is the risk. If both portfolios have the same risk, then the one with the larger return is better. Second, you can vary the account size for each portfolio until both have the same return. A larger account size results in a smaller return. In that case, the one that assumes a smaller risk is superior. In this article, I use the first method — using the risk-adjusted return to make comparisons between\ndifferent portfolios.

    THE GOOD OLD DOW

    The Dow Jones Industrial Average (DJIA) may be the best-known index in the world. It consists of 30 of the US’s bluest-chip companies, including Coca-Cola and General Electric, just to name two. They are among the best-known, most widely followed and owned companies. Since January 1980, the DJIA has moved from a value of about 800 points to its current value of more than 10,000 points. Had you invested in the 30 companies in the DJIA in 1980, every dollar that you put in would currently be worth about $12.50. That represents an average annual rate of return of approximately 11.46%."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-62-66-risk-adjusted-return-by-mh-pee-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-62-66-risk-adjusted-return-by-mh-pee-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-62-66-risk-adjusted-return-by-mh-pee-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov24697we,d,"{""minimum-quantity"":""1"",""path"":""ch9s203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:9 (67, 97): Websites For Traders: www.TradingTheCharts.com by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 24:9 (67, 97): Websites For Traders: www.TradingTheCharts.com by David Penn

    What’s in a message-board? Well, if that message-board is TradingTheCharts.com, then the answer is “A boon for technical traders,” that’s what.

    Increasingly, certain forms of communication like message-boards and personal web pages (or blogs) seem to have become the veritable architecture of the\nInternet cityscape. And the near-ubiquity of these two forms says a great deal about what people find most useful about the Internet. Insofar as I have pointed to a few of what I consider the most interesting personal web pages and blogs out there for traders—with more to come—it is also worth pointing out those places where traders spend time together talking shop, comparing notes, and plotting their next move in the market.

    TradingTheCharts.com is one of those places. On the surface, TradingTheCharts appears to be just like any other message-board you might find on the Internet\nwhere fans get together to learn, speculate and gossip about the home team’s winning streak, the latest LINUX kernel improvement, or the best time to plant dahlias for the summer garden. TradingTheCharts.com consists of five main forums—a welcome forum (which\nincludes a chat room and a set of “featured charts and posts” accessible for free for non-subscribers), financial forum, market commentary, commodities,\nand tools of the trade. Each forum is further divided—for example, the financial forum is divided into subject areas: “Indices,” “Cycles,” “Currencies,” “Interest rates,” “Stocks,” and “Options.”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-67-97-websites-for-traders-www-tradingthecharts-com-by-david-penn-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-67-97-websites-for-traders-www-tradingthecharts-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-67-97-websites-for-traders-www-tradingthecharts-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov246plin,d,"{""minimum-quantity"":""1"",""path"":""ch9s203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:9 (68-71): Playing The Index Market by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 24:9 (68-71): Playing The Index Market by Tom Gentile

    Sometimes, it helps to look beyond the market averages and at specific sectors or industry groups instead.

    Quiet and trendless markets often leave index traders sidelined. Without volatility, trading indexes become more challenging because often-used strategies like bull call spreads or straddles simply don’t work. These\ntypes of strategies require vertical movement. Unfortunately, falling volatility and sideways trading\nhave become more frequent in the current market environment. Fortunately, ways to generate profits\ncan still be found even when the overall market moves sideways.

    One approach is to use a variety of strategies. Not all option strategies require vertical price movement. In fact, some do better in low-volatility situations or\nhorizontal markets. For example, butterflies or calendar spreads are strategies that do best when markets trade within a range and without significant movement.\nSo when faced with a sideways market, index traders can turn to strategies that work well in those market types.

    Alternatively, when faced with a sideways market, rather than trading more familiar indexes like the Standard & Poor’s 500 ($SPX) or the NASDAQ 100 (QQQQ), traders can focus instead on the variety of sector index products. It is this approach that we will discuss. In order to find directional trades in the index market, sometimes it helps to look beyond the usual market averages and at specific sectors or industry groups. Fortunately, index providers have developed an array of new products to work with. Unfortunately, the list has grown to the point that many traders simply can’t make sense of all the different sector indexes and exchange traded funds available. Here’s some help for those traders."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-68-71-playing-the-index-market-by-tom-gentile-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-68-71-playing-the-index-market-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-68-71-playing-the-index-market-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov247trti5,d,"{""minimum-quantity"":""1"",""path"":""ch9s203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:9 (72-81): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:9 (72-81): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    This month's Traders' Tips are based on Lee Leibfarth’s article in this issue, “Trading With An Adaptive Price Zone.” Code written in EasyLanguage for TradeStation is provided by the author in the article’s sidebar. Additional code is presented here.

    Liebfarth's formulas are presented for TradeStation, MetaStock, eSignal, AIQ, Wealth-Lab, AmiBroker, NeuroShell Trader, Investor/RT, TradingSolutions, Tradecision, BioComp, TS Support, VT Trader, and Ensign Windows."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-72-81-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-72-81-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-72-81-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov248quho,d,"{""minimum-quantity"":""1"",""path"":""ch9s203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:9 (82): Quick-Scans: Hot Trading Secrets by Bruce Faber"",""caption-linebreaks"":""Stocks & Commodities V. 24:9 (82): Quick-Scans: Hot Trading Secrets by Bruce Faber

    I decided to read Hot Trading Secrets for two reasons. First, the title promised some really good revelations. Second, I figured that as executive publisher of the Taipan Group, author J. Christoph Amberger should have an insider’s trove of information. I was not disappointed on either count. This book manages to\nreveal—in great detail—many of Taipan’s secrets for successfully picking profitable investments.

    One aspect of the book that caught me by surprise was the amount of technical analysis used by the members of the Taipan Group to select both the positions they suggest and the timing for their entry and exit from those positions. Some of the technical analysis is of a simple variety, but some of it is very elaborate. Except for the proprietary indicators, Amberger lays out each secret, in detail, with graphs, reasoning, and trigger points. Anyone willing to follow the instructions should have no problem duplicating the results."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-82-quick-scans-hot-trading-secrets-by-bruce-faber-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-82-quick-scans-hot-trading-secrets-by-bruce-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-82-quick-scans-hot-trading-secrets-by-bruce-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov249bofo6,d,"{""minimum-quantity"":""1"",""path"":""ch9s203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:9 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 24:9 (92): Books For Traders by Technical Analysis, Inc.

    Black Gold: The New Frontier In Oil For Investors\n(216 pages, $27.95 hardcover, 2006, ISBN 0-471-79268-3) by George Orwel, published by John Wiley & Sons.

    Modern living is driven by oil. Throughout the 20th century, a relatively uninterrupted supply of oil fueled our nation’s growth. Increasing demand from the United States and from rapidly developing nations like India and China has begun to strain the world’s oil reserves. Oil is nonrenewable, and will, at some future point, be exhausted. This book views the investor’s opportunity in oil from many angles. This book will change the way you view today’s energy marketplace."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov249atcl2,d,"{""minimum-quantity"":""1"",""path"":""ch9s203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 24:9 (98): At The Close by Dennis Peterson"",""caption-linebreaks"":""Stocks & Commodities V. 24:9 (98): At The Close by Dennis Peterson

    Trading The Qs

    One way to trade the NASDAQ Composite is to trade\nthe QQQQ (NASDAQ 100 exchange traded fund). In\nrecent days, trading out of my IRA has been challenging, since I can’t short any stock in that account. Trying to find a long entry in a negative market can be a challenge.

    So what I did was abandon some indicators and I started to look for lines of support and resistance instead. I would trade those for just one or two bars of profit, but my indicators are designed for swing trading, and catching a few profitable bars to trade is a different problem. I am comfortable doing this since my recollection of Gary B. Smith, formerly of TheStreet.com, is that his primary technique was to find resistance and support and/or patterns. Even when he was using patterns, I would argue it was to find resistance and support. Smith, who had a solid winning record, also used money management, but that’s another story. So this approach has the backing of someone who knows what he is doing."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-98-at-the-close-by-dennis-peterson-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-98-at-the-close-by-dennis-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-24-9-98-at-the-close-by-dennis-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251leto,d,"{""minimum-quantity"":""1"",""path"":""chapter12007"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:1 (10-15): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 25:1 (10-15): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine would not exist.

    THE SCIENTIFIC WORK OF LUNA B. LEOPOLD

    Editor,

    Curious readers may be interested in the article “Up A Lazy River” by Brian Hayes in the November/December 2006 issue of American Scientist magazine. A brief, but more accessible, article can be found at http://bit-player.org/2006/ old-man-river. Both are a tribute to the work of Luna B. Leopold, who died earlier this year. In a 1966 article, Mr. Leopold gave a lucid account of how river meanders form and why they assume their sinuous shapes.

    Mr. Leopold never knew I existed, but he had a huge impact on my view of the market. His accounts are consistent with the solution of the Drunkard’s Walk problem and, taken together, made it clear to me how the market could be both random and short-term coherent. I could never carry the solution beyond the philosophical level because both the Telegrapher’s Equation and the river meanders are boundary-value problems. It is probably impossible to demonstrate\nboundary values in market data (but it is impossible to prove impossibility).

    In any event, it was Mr. Leopold’s description of river meanders that sent me on my decades-long quest to extract short-term coherent signals from price information. So I would like to add my tribute to\nLuna Leopold. We never know how our work may influence others.

    JOHN EHLERS"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-10-15-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-10-15-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-10-15-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251bofo,d,"{""minimum-quantity"":""1"",""path"":""chapter12007"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:1 (100): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 25:1 (100): Books For Traders by Technical Analysis, Inc.

    Candlestick And Pivot Point Trading Triggers\n(353 pages, $80 hardcover, 2007, ISBN 0-471-98022-6) by John L. Person, published by John Wiley & Sons.

    To truly excel in the markets, you need a method that will allow you to identify market moves and strategies that will allow you to make the most of those moves. In his 30 years in the trading business, the author refined his trading skills and, using candlestick formations with pivot points, developed a methodology that will help you make smarter trades with less risk. This book shows\nyou how to devise your own setups and triggers based on a moving average approach. The tools and techniques are in the book and the pivot point\ncalculator and instructions are included on the companion CD."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-100-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-100-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-100-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251trsy,d,"{""minimum-quantity"":""1"",""path"":""chapter12007"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:1 (16-22): Trading Systems Defined by Martha Stokes"",""caption-linebreaks"":""Stocks & Commodities V. 25:1 (16-22): Trading Systems Defined by Martha Stokes

    What is your trading style? Here’s an overview of different types of trading systems that can be applied to different markets.

    To succeed as a trader, you must understand how the market works. This begins with a foundation of core market knowledge, as can be seen in Figure 1. The next level is trading styles, followed by trading systems, and then, at the top, the implementation of trading strategies.

    One of the least-understood aspects of this formation is the trading systems level, second from the top. Without a thorough understanding of trading systems and the strategies designed for each kind of system, your trading efforts may yield disappointing results. (See Figure 2.)

    No matter how you trade the market, you are using a\ntrading system. A trading system is not a strategy, a software program, or an entry signal. It is a set of rules and parameters developed around a formula of indicators and price action for a specific type of market condition. Often a trader will complain that a strategy doesn’t work. They struggle with meager results that entice them to continue trying but seldom pay the bills. These traders go from seminar to seminar hoping to find the “perfect” strategy. But it’s not the strategy that’s the problem. It’s the market condition under which the strategy is being applied that is not right. You must find the right strategy for the right market. Strategies work best when applied to the market conditions for which they were designed. But before you can choose a strategy for the current conditions, you must understand what a trading system is and which system works under what condition."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-16-22-trading-systems-defined-by-martha-stokes-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-16-22-trading-systems-defined-by-martha-stokes-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-16-22-trading-systems-defined-by-martha-stokes-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov252fotr,d,"{""minimum-quantity"":""1"",""path"":""chapter12007"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:1 (24-34): Fourier Transform For Traders by John F. Ehlers"",""caption-linebreaks"":""Stocks & Commodities V. 25:1 (24-34): Fourier Transform For Traders by John F. Ehlers

    When market conditions are variable, adapting to them becomes a challenge. Here’s how you can use a dominant cycle to tune the relevant indicators so you don’t have to drive through the fog.

    It is intrinsically wrong to use a 14-bar relative strength index (RSI), a nine-bar stochastic, a 5/25 double moving average crossover, or any other fixed-length\nindicator when the market conditions are variable. It’s like driving on a curving mountain road in a fog bank with your cruise control locked — and you’ve desperately got to clean your eyeglasses.

    That market conditions are continuously changing is not even a subject of debate. There have been a number of attempts to adapt to changing market conditions. Volatility-based nonlinear moving averages are just one example of adapting to market changes.\nAs I come from an information theory background, my answer to the question of how to adapt to changing conditions is to first measure the dominant market cycle and then tune the various indicators to that cycle\nperiod, or at least a fraction of it. Theoretically, an RSI\nperforms best when the computation period is just half\nof a cycle period — that is, when all the movement is\nin one direction and then reverses so all the movement\nis in the other direction over the period of one cycle —\nand you get a full amplitude swing from the RSI."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-24-34-fourier-transform-for-traders-by-john-f-ehlers-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-24-34-fourier-transform-for-traders-by-john-f-ehlers-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-24-34-fourier-transform-for-traders-by-john-f-ehlers-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov252sitr,d,"{""minimum-quantity"":""1"",""path"":""chapter12007"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:1 (24-34): Sidebar: Transformed DFT EasyLanguage code by John F. Ehlers"",""caption-linebreaks"":""Stocks & Commodities V. 25:1 (24-34): Sidebar: Transformed DFT EasyLanguage code by John F. Ehlers

    TRANSFORMED DFT EASYLANGUAGE CODE\nInputs:

    Price((H+L)/2),

    Window(50),

    ShowDC(False); ..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-24-34-sidebar-transformed-dft-easylanguage-code-by-john-f-ehlers-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-24-34-sidebar-transformed-dft-easylanguage-code-by-john-f-ehlers-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-24-34-sidebar-transformed-dft-easylanguage-code-by-john-f-ehlers-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253qaby,d,"{""minimum-quantity"":""1"",""path"":""chapter12007"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:1 (3): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 25:1 (3): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    HEDGING THE MARKET

    I was reading about taking opposite positions at the same time and referring to that as hedging. Wouldn’t that be the same as not being in the market at all?\nWhy put forth the extra effort of being in the market when you’re not going to profit either way? Or do I have this\ncompletely wrong? — Iron Fist

    The basics of hedging are this. You try to limit or eliminate “market movement risk” by being (for example) long 2,000 shares of stock A (the stronger\nstock based on your criteria) and short 2,000 shares of stock B (the weaker stock). You then look back over a year, five years, and so on, and see if their prices have criss-crossed over time. If stock B is $3 higher than stock A, you would short B and buy A. If the prices crossed, you would make $3.00.

    Another type of hedging is selling futures contracts at a premium to fair value, and buying the underlying securities. Then (often the same day) you reverse the trade at a profit by buying the futures at a discount and selling the equities (I’m using the Standard & Poor’s 500 or eminis in this example)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-3-q-a-by-don-bright-41.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-3-q-a-by-don-bright-49.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-3-q-a-by-don-bright-50.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253qaby1,d,"{""minimum-quantity"":""1"",""path"":""chapter12007"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:1 (3): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 25:1 (36-41): Forex Focus by Grace Cheng

    Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. With that in mind, STOCKS & COMMODITIES has introduced Forex Focus to better prepare the retail trader to participate in the currency market.

    Currency Cross Adventures

    Listed below are the seven most liquid US dollar (USD)–involved currency pairs, composed of the eight most-traded currencies in the world, with the first four pairs being the majors, followed by three commodity pairs:

    The majors:

    • EUR/USD

    • USD/CHF

    • GBP/USD

    • USD/JPY

    The commodity pairs:

    • USD/CAD

    • AUD/USD

    • NZD/USD

    Take a glance at these currency pairs, and you will notice a common currency among them: Yes, the almighty US dollar. That is hardly surprising, given that the United States has the largest economy in the world, and almost everyone anywhere will accept the greenback, ranging from a Persian carpet seller in Iran to a native tour guide in Africa.

    Did you know the British pound used to be king during the era of the gold standard? Times have changed, and now the US dollar, without a doubt, is the world’s unofficial reserve currency and is the main currency accumulated as reserves by foreign central banks."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-3-q-a-by-don-bright-38.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-3-q-a-by-don-bright-47.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-3-q-a-by-don-bright-48.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255dedi,d,"{""minimum-quantity"":""1"",""path"":""chapter12007"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:1 (50-53): Developing Discipline With Daily Debriefing by Van K. Tharp, Ph.D."",""caption-linebreaks"":""Stocks & Commodities V. 25:1 (50-53): Developing Discipline With Daily Debriefing by Van K. Tharp, Ph.D.

    It is easy to design a system that will produce annual returns of 100% or more. Trading the system so you will get those returns is not so easy. Here’s why it’s easy to develop such a system, why it’s so difficult to get those returns, and how to fix the problem.

    IN TERMS OF R-MULTIPLES

    First, let’s start thinking about your trading results in terms of multiples of your initial risk (Rmultiples\nfor short). A key of trading success is that you must have a predetermined exit before you enter into a trade that represents your worst-case risk. Let’s look at a few examples.

    Suppose you decide to buy a stock at $25 and that you’ll sell it if it drops 10% to $22.50. Your risk is $2.50 per share in this case. Suppose you decide to risk $1,000 in this trade. That means you can buy 400 shares of stock (that is, divide your total risk of $1,000\nby your per-share risk of $2.50 and you get 400 shares). You would be buying $10,000 worth of stocks (400 x $25), but your initial risk would only be $1,000.

    Suppose you have a $100,000 portfolio. Your risk for that position would be just 1%. Further, if your risk was 10% of the value of the stock, you could buy 10 different positions, each with 1% risk, to be fully invested. Suppose you had 10 such positions, with the results you see in Figure 1."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-50-53-developing-discipline-with-daily-debriefing-by-van-k-tharp-ph-d-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-50-53-developing-discipline-with-daily-debriefing-by-van-k-tharp-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-50-53-developing-discipline-with-daily-debriefing-by-van-k-tharp-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255dito,d,"{""minimum-quantity"":""1"",""path"":""chapter12007"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:1 (58-64): Directional To Delta Neutral by Chris Tyler"",""caption-linebreaks"":""Stocks & Commodities V. 25:1 (58-64): Directional To Delta Neutral by Chris Tyler

    Staying alert to new opportunities and changing market\nconditions means you have to adjust your positions. Here’s how.

    A Wall Street adage says winners take care of themselves. The reality, however, is that “winners” are\ntraders who manage all of their trades in a disciplined\nmanner. Seasoned traders remain successful by staying alert to fresh opportunities and changing market conditions, whether that means keeping losses small or adjusting a winning trade into a smarter position. By adhering to this discipline we reduce our stress and move toward more consistent results over the long run.

    The idea of adapting to changing market conditions by making adjustments to positions is a familiar process\nfor seasoned option traders. For new traders, however,\nthe concept can seem daunting because there are few\nwritten guidelines or rules established for when and how to make adjustments. The truth is there is no right or wrong way to adjust a position. Instead, it is often dependent on the situation, but putting that process to work on a consistent basis increases the chances of success over the long run."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-58-64-directional-to-delta-neutral-by-chris-tyler-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-58-64-directional-to-delta-neutral-by-chris-tyler-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-58-64-directional-to-delta-neutral-by-chris-tyler-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256exyo,d,"{""minimum-quantity"":""1"",""path"":""chapter12007"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:1 (65): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 25:1 (65): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    EXPIRATION QUESTION

    What happens if I hold my put option until expiration and forget to close it out? Is there anything I can do after the fact?

    The short answer is that once expiration has passed, the contract no longer exists and there is nothing left to do. But keep in mind two things can happen to an open option contract at expiration: It expires worthless or it is subject to automatic exercise.

    If an option has no intrinsic value at expiration, it will expire worthless and cease to exist. If XYZ is trading for $51 a share heading into January expiration, the XYZ January 50 put will have no intrinsic value and expire worthless. It is out-of-the-money (OTM). After all, why would someone pay for the right to sell or “put” XYZ for $50 a share, when it can be sold in the market for $51? A call option will expire worthless if the strike price of the option contract is greater than the stock price. In that\ncase, the option holder has no need to buy or “call” the stock at the strike price of the option. It would be cheaper to buy the stock than through the exercise of the option contract."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-65-explore-your-options-by-tom-gentile-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-65-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-65-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256inla,d,"{""minimum-quantity"":""1"",""path"":""chapter12007"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:1 (66-72): Interview: Larry Levin Has Those Traders’ Secrets by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 25:1 (66-72): Interview: Larry Levin Has Those Traders’ Secrets by Jayanthi Gopalakrishnan

    Larry Levin is the president of Secrets of Traders, a commodity trading educational firm dedicated to helping traders succeed in the futures markets. He trades the Standard & Poor’s 500 on the trading floor of the Chicago Mercantile Exchange (CME) and has been in and around the S&P 500 futures pit since 1989, where he started as a runner for Lind-Waldock. Levin moved up through the ranks from runner to phone clerk to desk manager of the S&P desk and began to trade for his own account in 1994. In 1998 he formed Trading Advantage, a publishing company, to distribute his self-authored trading course, Secrets of Floor Traders. In 2000 he sold the rights to the course to Secrets of Traders, LLC, to market his products. He has recently written his newest trading course, The Secrets of an Electronic Futures Trader, designed to give the electronic futures trader the competitive edge.\nSTOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Larry Levin via telephone on November 2, 2006.

    Q: Why is it so important for traders to think for themselves?

    A: Unfortunately, most people don’t want to take responsibility for their actions. The one major component an individual needs to be a successful trader is to take responsibility for their actions. They have to be an active winner and an active loser to play the market, to trade, and to be successful. If you are not willing to do these things in your own best interest, you will never have a chance to succeed. And that is the no. 1 reason most traders do not succeed.

    Q: What got you interested in trading?

    A: When I was about 19, I was a year into college trying to get a marketing degree, and a few of my friends were\nworking at the CME as runners, making maybe $3 an hour, and it looked cool. College didn’t feel like it was for me at the time. I wasn’t enjoying it at all, and what they were doing down on the trading floor, even if it was just taking orders to the trading pits and back, looked exciting. So I got a job as a runner for Lind-Waldock back in 1988. I was a year out of high school."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-66-72-interview-larry-levin-has-those-traders-secrets-by-jayanthi-gopalakrishnan-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-66-72-interview-larry-levin-has-those-traders-secrets-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-66-72-interview-larry-levin-has-those-traders-secrets-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov257fufo,d,"{""minimum-quantity"":""1"",""path"":""chapter12007"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:1 (74): Futures For You by Dan O’Neil"",""caption-linebreaks"":""Stocks & Commodities V. 25:1 (74): Futures For You by Dan O’Neil

    INSIDE THE FUTURES WORLD

    Want to learn how the futures markets really work? Dan O’Neil, a principal at online futures and forex broker XPRESSTRADE (www.xpresstrade.com), responds to\nyour questions about today’s futures markets. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be\nposted there, and selected questions will appear in a future issue of S&C.

    STOP BEFORE THE RED

    Q: How important are stop orders in futures trading?

    A: Most successful traders agree that good risk management is essential in the futures markets. To this end, trading with protective stops is an integral part\nof a disciplined trading methodology. While some traders avoid using stops for fear of being taken out of a good trade too early, the risk of inaction is often far greater. A stop is an order that becomes a market order when the futures contract reaches a particular price level; a sell-stop is placed below the market, while\na buy-stop is placed above the market. The underlying idea is to minimize losses should the market turn against you.

    In recent years trailing stops have gained in popularity because they allow the trader to profit from favorable\nmovement in the market while also having protection in place. A trailing stop is usually entered with a primary\norder to establish a new position. It is not entered at an exact price, but rather at a specified distance from the price at which the primary order will be filled. Once the primary order is executed, the trailing stop will begin to work according to market fluctuation."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-74-futures-for-you-by-dan-o-neil-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-74-futures-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-74-futures-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov25790tr,d,"{""minimum-quantity"":""1"",""path"":""chapter12007"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:1 (76-79, 90-94): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 25:1 (76-79, 90-94): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    Editor’s note: Most of this month’s Traders’ Tips are based on John Ehlers’ article in this issue, “Fourier\nTransform For Traders.” Code written in EasyLanguage for TradeStation is provided by the author in the article’s sidebar titled “Transformed DFT EasyLanguage code.” Additional code is provided for TradeStation, eSignal, Wealth-Lab, AmiBroker, NeuroShell Trader, Tradecision, StrataSearch, and MultiCharts.

    In addition, AIQ provided code for Ron McEwan's article, \""Entropic Analysis of Equity Prices,\"" and VT Trader provides information on code for the RSI/ATR system in the August 2006 Foex Focus written by Jamie Saettele."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-76-79-90-94-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-76-79-90-94-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-76-79-90-94-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov258prre,d,"{""minimum-quantity"":""1"",""path"":""chapter12007"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:1 (85): Product Review: PropFX by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 25:1 (85): Product Review: PropFX by Jayanthi Gopalakrishnan

    When trading currencies, one key factor is to get the\nbest fill. With the introduction of PropFX, FXCM offers professional traders the ability to place orders with any\nof the banks, foreign exchange market makers, or any other counterparty. Mind you, this trading platform is not a warm and fuzzy one, so retail traders are in safe territory and will not be tempted to trade with such big players. FXCM, the parent company, offers another platform more suited to retail traders. This\none is not it.

    Given that PropFX is an electronic communication network (ECN), you are trading with the market itself — that is, with the big forex players. With PropFX you will not be going through a dealing desk."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-85-product-review-propfx-by-jayanthi-gopalakrishnan-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-85-product-review-propfx-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-85-product-review-propfx-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov258prre1,d,"{""minimum-quantity"":""1"",""path"":""chapter12007"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:1 (86-88): Product Review: Reuters PowerScreener 3.0 by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 25:1 (86-88): Product Review: Reuters PowerScreener 3.0 by David Penn

    What exactly does fundamental analysis do for the\ntechnical trader or investor? While many technicians see “the fundamentals” the way Atkins dieters see chocolate cake (tempting in the short term but ultimately worse than worthless), the fact remains that many traders and investors who rely on technical tools nonetheless include some analysis of information traditionally considered “fundamental.”\nSometimes this information is unabashedly\nfundamental, such as price/earnings ratios and earnings per share analysis. Other times the technicians will find themselves at the margins of fundamental analysis, looking for clues in such behavior as institutional ownership or insider buying and selling. Moving closer to where the line between fundamental and technical analyses become blurred, many if not most technical traders and investors pay attention to factors like sentiment, contained in data\nsuch as the put/call ratio, the volatility index (VIX), and Investor’s Intelligence surveys."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-86-88-product-review-reuters-powerscreener-3-0-by-david-penn-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-86-88-product-review-reuters-powerscreener-3-0-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-1-86-88-product-review-reuters-powerscreener-3-0-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251leto9,d,"{""minimum-quantity"":""1"",""path"":""ch10o"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:10 (10-16): Letters to S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters to S&C by Technical Analysis, Inc.

    BETWEEN PRICE AND VOLUME

    Editor,

    I would like to thank Buff\nDormeier for his wellwritten\nand insightful article,\n“Between Price And\nVolume” (July 2007). I have two questions for the author regarding\nthe volume-price ratio (VPR)\nand normalization:

    1) If the purpose of the VPR is to “accentuate\nthe VPC+/- relative to the shortterm\nprice-volume relationship,” it\nseems that the formula (VPR = VWMA/\nSMA) should be flipped (VPR = SMA/\nVWMA) when the closing price is below\nthe SMA and the VWMA. As it was\npresented, the VPR would accentuate\nthe VPC when the WVMA closely follows\n(more than the SMA) rising prices,\nbut would actually decrease the VPC if\nthe WVMA closely follows falling prices."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-10-16-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-10-16-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-10-16-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251fofo8,d,"{""minimum-quantity"":""1"",""path"":""ch10o"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:10 (18-20): Forex Focus: Surviving The Trappings Of Trends by Cornelius Luca"",""caption-linebreaks"":""Forex Focus: Surviving The Trappings Of Trends by Cornelius Luca

    Faced with a choppy trend? Here’s how to analyze a\ntrend and identify some realistic opportunities.

    AH! the\ndream and promise of trends! Traders\nrightfully seek and try to follow them. However, staying with the trend is not for the fainthearted,\nand unless you are Warren Buffett or have\nsimilarly deep pockets, you may not be able to survive\nthe experience. The average trader will have to learn to\nshift between both short-term and medium-term strategies,\nand the long and short directions, regardless of the\ndirection of the major trend.

    Trends are sustained directions that last a minimum\nof five weeks or so, and a long-term trend will last more\nthan a year. While buying near the lowest levels and\nselling near the top is always a nice fantasy, let’s analyze\na trend and identify some more realistic opportunities.

    OPPORTUNITIES IN TRENDS

    Figure 1 shows the euro/dollar pair rising between the\nmiddle of November 2005 to late May 2006. This\nmedium-term uptrend was the initial rising leg of the\ntrend that formed between November 15, 2006, and\nJanuary 23, 2007, a pullback between January 24, 2007,\nand February 27, 2007, and the second rising leg between\nFebruary 28, 2007, and May 15, 2007."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-18-20-forex-focus-surviving-the-trappings-of-trends-by-cornelius-luca-20.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-18-20-forex-focus-surviving-the-trappings-of-trends-by-cornelius-luca-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-18-20-forex-focus-surviving-the-trappings-of-trends-by-cornelius-luca-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" noname3,d,"{""minimum-quantity"":""1"",""path"":""ch10o"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:10 (22-29): Forex Volatility Patterns by Ken Calhoun"",""caption-linebreaks"":""Forex Volatility Patterns by Ken Calhoun

    Want to catch 40 to 100 pips in each trade?\nHere’s how you can find those entry and exit\nsignals to make your forex trading a success.

    Capturing volatile breakouts and reversals\nin currency pair trades has long\nbeen a challenge for active foreign\nexchange traders. But how often do traders actually trade high-volatility patterns correctly?\nTrendline projections in lagging indicators\nsuch as moving averages/exponential moving averages\n(MAs/EMAs) often whipsaw traders out of positions\nand need to be modified for successfully\ntrading volatile currency pair chart patterns.

    To successfully trade the spot FX market, traders\ncan use precision technical analyses to pinpoint specific\nentries, but only when signals are combined in\na systematic, professional manner. Many traders\ntend to use multiple indicators and time frames\nincorrectly, causing needless stops and losses in their\ncurrency trades. Developing an arsenal of easy-tounderstand\nsignals that clearly identify entry and exit\ntriggers is critical to forex trading success."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-22-29-forex-volatility-patterns-by-ken-calhoun-20.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-22-29-forex-volatility-patterns-by-ken-calhoun-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-22-29-forex-volatility-patterns-by-ken-calhoun-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253tran,d,"{""minimum-quantity"":""1"",""path"":""ch10o"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:10 (30-34): Trend-Following And The Interest Carry Trade by Russell Sands"",""caption-linebreaks"":""Trend-Following And The Interest Carry Trade by Russell Sands

    Here’s a look at how the Turtle system\ncan be combined with forex trading.

    Forex trading has been\naround quite a while, and\nso has the Turtle system.\nBut it has only been\nin the last year or so I\nfigured out how to put the two together. After about six\nmonths of work, the first Turtle foreign\nexchange manual was written,\nand the system released at the beginning\nof 2007. We all know that trendfollowing\nis a valid concept of trading,\nand we also (should) all know by\nnow that currencies are among the\nbest trending of all markets, so it is\nnatural we should blend them together.

    WHAT IS THE\nCARRY TRADE?

    There is a fundamental concept of all\nforeign currency trading known as the\n“carry trade.” It is not a part of the\nTurtle trading method, but it still has\nan effect on our trading. When you\ntrade a forex pair, you are buying the\ncurrency of one country and selling\nthat of another."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-30-34-trend-following-and-the-interest-carry-trade-by-russell-sands-20.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-30-34-trend-following-and-the-interest-carry-trade-by-russell-sands-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-30-34-trend-following-and-the-interest-carry-trade-by-russell-sands-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254trtr,d,"{""minimum-quantity"":""1"",""path"":""ch10o"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:10 (40-46): Trading Trendline Breaks, Part 3 by Sylvain Vervoort"",""caption-linebreaks"":""Trading Trendline Breaks, Part 3 by Sylvain Vervoort

    Previously, I discussed how\ntrendlines are plotted and\nhow they can be used. This\ntime, I am going to show you Abercombie & Fitch Co. (ANF).\nThe numbers here represent the labels\non the chart displayed in Figure 1:

    1. There is a clear downtrend line\nbreak. There is a buy signal generated\nby the trendline break simulation\nsystem (green up arrow) at\nabout the same level of the\ntrendline break. You open a long\nposition. Typically, you would set a\nstop-loss just below the previous\nlow.

    2. The next trend is up.

    3. In February the trend starts accelerating.\nYou could either go for\nthe red uptrend line at the beginning\nof the acceleration or the\nblue uptrend line that starts shortly\nthereafter, which is even sharper.\nApplying the trendline rules as\nproposed in part II, you would,\nhowever, end up trading along the\nred uptrend line.

    4. The end of the sharper uptrend\nline is not important because you\nwould end up closing your position\nat around the same price (the\nblue exit sign), whether you are\nfollowing trendline 3 or 4.

    5. The sharper uptrend line that initiates\nfrom trendline 3.

    6. The last top is a typical example of\na sharp move down at the top. In\nsuch a scenario, you should wait a\ncouple of days before you start to\ndraw the downtrend. This is because\nyou want it to start from a\ndifferent bar than the high bar. When\nthis downtrend line is broken, you\ncan open a new long position."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-40-46-trading-trendline-breaks-part-3-by-sylvain-vervoort-21.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-40-46-trading-trendline-breaks-part-3-by-sylvain-vervoort-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-40-46-trading-trendline-breaks-part-3-by-sylvain-vervoort-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254fufo3,d,"{""minimum-quantity"":""1"",""path"":""ch10o"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:10 (48): Futurs For You by Dan O’Neil"",""caption-linebreaks"":""Futurs For You by Dan O’Neil

    MARGIN FOR ERROR

    After years of trading stocks exclusively,\nI’ve recently started trading futures.\nUnfortunately, I also just received my\nfirst margin call. While I was able to get\nthrough it without too much difficulty\nthis time, it made me realize I probably\ndidn’t do enough homework on how\nmargin works on the futures side. Can\nyou break down some of the differences\nbetween margin in the stock market and\nmargin in futures?

    A margin call is indeed a harsh welcome\nto the world of futures trading.\nBut after surviving one, the important\nthing is to learn more about how margin\nworks in order to avoid another.\nUnderstanding the several different\nkinds of margin involved in futures\ntrading is as essential to succeeding in\nthese markets as anything else you\ncould possibly learn. Having had previous\ninvestment experience in the\nstock market, your knowledge of margin\nwas likely limited to the cash down\npayment and money borrowed from\nbroker to purchase stocks. But in futures\ntrading, margin has an altogether\ndifferent meaning and serves a completely\ndifferent purpose."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-48-futurs-for-you-by-dan-o-neil-21.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-48-futurs-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-48-futurs-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255qaby1,d,"{""minimum-quantity"":""1"",""path"":""ch10o"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:10 (50): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    IMPROVING A TRADING SYSTEM

    Don, what you think about a simple\nsystem like a moving average crossover\nsystem? I’ve played with different combinations\n(50/200, 30/100, and so on) in\ndifferent markets (NASDAQ, Standard &\nPoor’s 500, and others) with equities\nonly. I got very good results with 30/100\nin NASDAQ with money management,\ninvesting about 3% per trade. My profitable\ntrades are somewhere between\n40% and 50%. What you think about the\nsystem, and how do you think I should\nimprove the trading system with additional\nindicators? Thanks. — Sudhir Cheda

    Moving average trading systems are\none of the oldest and most basic still\nbeing used today. But looking for return\non investment is one thing, actively\ntrading is another. Since many fund\nmanagers utilize moving average and\nmoving average convergence/divergence\n(MACD) techniques and generally\nreturn about the same long-term\nreturn as the overall market (actually,\nmost underperform the S&P 500),\nwould have to say that relying on this\ntype of system alone would not be the\nbest way to extract money from the\nmarket."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-50-q-a-by-don-bright-21.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-50-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-50-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255wefo2,d,"{""minimum-quantity"":""1"",""path"":""ch10o"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:10 (51): Websites For Traders: ForexFactory by David Penn"",""caption-linebreaks"":""Websites For Traders: ForexFactory by David Penn

    FOREXFACTORY.COM

    Until convinced otherwise, I still contend\nthat the message-board is the greatest\nproduct of the Internet revolution.

    Inasmuch as the Internet is about\nconnectivity, what could be more important\nthan the development of virtual\nplaces where people from different\nwalks of life can virtually meet and\nexchange often very real ideas?

    For traders, who often live a solitary\nexistence, the message-board is a great\nsource of information, observation, trading\nideas, and simply community. While\nthe loneliness of the retail trader is probably\noverdone (if we wanted to be surrounded\nby people all the time, then\nwe’d have chosen a different vocation\nother than trading), there is little doubt\nthat just about every trader from time to\ntime has wanted to whirl around in his\nor her swivel chair and say to somebody\n(anybody), “Wow! Did you see that?”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-51-websites-for-traders-forexfactory-by-david-penn-21.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-51-websites-for-traders-forexfactory-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-51-websites-for-traders-forexfactory-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255qusc1,d,"{""minimum-quantity"":""1"",""path"":""ch10o"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:10 (52): Quick Scans IBFX-GPS by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Quick Scans IBFX-GPS by Jayanthi Gopalakrishnan

    Chart pattern recognition has been an\nimportant part of technical analysis.\nGiven its subjective nature, it has always\nbeen difficult to develop a product that\nscans for such patterns. But the folks at\nInterbank FX have made that bold move\nand developed a product called IBFXGPS.\nAnd no, that doesn’t stand for global\npositioning system, so don’t get too\nexcited. The acronym stands for graphical\npattern scanner and as the name\nsuggests, the tool does exactly that. The\nobjective is to take the guesswork out of\nrecognizing patterns on your charts.

    HOW IT WORKS

    You can use IBFX-GPS on a demo account\nwith Interbank FX with limited\ncurrency pairs. Once you open your\naccount, you can download the tool\nfrom the website. It does take one business\nday to activate IBFX-GPS."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-52-quick-scans-ibfx-gps-by-jayanthi-gopalakrishnan-21.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-52-quick-scans-ibfx-gps-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-52-quick-scans-ibfx-gps-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255tast,d,"{""minimum-quantity"":""1"",""path"":""ch10o"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:10 (54-60): Tandem Studies On Market Movement by Dima Vonko"",""caption-linebreaks"":""Tandem Studies On Market Movement by Dima Vonk

    Here’s a tool that analyzes the structure of the market and\nanticipates market developments for the immediate future.

    Market movements are often referred to as trends,\nsideways movements, and consolidations. But\nwithin these movements are smaller price movements\nthat are subject to fluctuation (noise). These are difficult to analyze, which is why you must understand\nwhich phase the market is in and what the likelihood is for this\nphase to be replaced by another. It is only after knowing this\nthat you can apply any relevant technical analysis tools.

    PHASES OF THE MARKET

    The behavior of the market and the market’s participants example, the current phase will be different after a weak\nbullish trend in the previous phase than a strong bullish trend\nwould be. Tandem studies take into account these important\ndifferences between phases and how they influence the state\nof the market and the behavior of its participants.\ndiffer based on the behavior of the previous phase. For"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-54-60-tandem-studies-on-market-movement-by-dima-vonko-20.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-54-60-tandem-studies-on-market-movement-by-dima-vonko-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-54-60-tandem-studies-on-market-movement-by-dima-vonko-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256prre5,d,"{""minimum-quantity"":""1"",""path"":""ch10o"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:10 (62-63): Product Review: TradesStation 8.3 by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Product Review: TradesStation 8.3 by Jayanthi Gopalakrishnan

    Last issue I introduced you to\nsome of the features available\nin the newest version\nof the TradeStation trading\nplatform. Since then I have examined some others, such as foreign\nexchange trading and applying trading\nstrategies to your tradables. The forex\ntrading is a recent addition, giving\nTradeStation’s forex trading clients the\nability to automate trading strategies\nbased on interbank spreads. That’s an\nunusual thing for a broker to provide,\nsince the usual scenario for a forex\nbroker is to base trades on bid/ask\nspreads that are wider than the spread\nquoted by the banks. So TradeStation is\noffering their customers tighter spreads.

    Another aspect of the recent forex\naddition is that you can set your base\ncurrency. This means that all quotes,\nstop-losses, profit targets, and so forth\nwill be displayed or defined in the currency\nyou fund your account with."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-62-63-product-review-tradesstation-8-3-by-jayanthi-gopalakrishnan-20.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-62-63-product-review-tradesstation-8-3-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-62-63-product-review-tradesstation-8-3-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256exyo3,d,"{""minimum-quantity"":""1"",""path"":""ch10o"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:10 (65): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    UNDERSTANDING OPTION SYMBOLS

    I know stock symbols usually have threeor\nfour-letter symbols. Why do options\nhave five-letter symbols?

    Stocks can have one-, two-, three-,\nfour-, or even five-letter symbols. For\nexample, the symbol for Citigroup is C,\nfor Coca Cola it is KO, and International\nBusiness Machines is IBM. Option symbols\nconsist of three pieces of information\nand have between three and five symbols.\nThe first part is the option root symbol,\nwhich is often the same as the ticker for the\nstock. The root symbol for Citigroup is C.\nIn the case of a four-letter stock, the root\nsymbol is shortened to three letters. The\nstock symbol for Microsoft is MSFT and\nthe option root symbol is MSQ."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-65-explore-your-options-by-tom-gentile-20.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-65-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-65-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256inma,d,"{""minimum-quantity"":""1"",""path"":""ch10o"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:10 (66-74): Interview: A Man Of Many Talents: Dan Gramza by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Interview: A Man Of Many Talents: Dan Gramza by Jayanthi Gopalakrishnan

    Is there anything Dan Gramza hasn’t done? He’s president of Gramza Capital\nManagement and DMG Advisors, LLC. He is an author, trader, analyst, consultant\nto domestic and international clients, and an advisor to the St. Croix hedge funds.\nGramza has also appeared on CNN’s Moneyline program, Reuters TV, Bloomberg\nTV, ROB TV in Canada, and others.

    Wait, there’s more! He’s developed and presented worldwide public and private\ncourses for traders on candlestick analysis, Market Profile, technical analysis,\noptions and options trading strategies, stock and futures industry fundamentals\nand operations, and Series 3 exam preparation. He’s presented courses to traders\nfrom over 36 exchanges, 400 institutions, and 35 countries.

    He’s also a teacher. Gramza is an instructor for the Chicago Mercantile\nExchange Education Center, the Chicago Mercantile Exchange/DePaul University\nCertificate Program, The Chicago Board of Trade and the Chicago Stock\nExchange.

    STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan (JG) and Staff Writer\nBruce Faber (BF) spoke with Dan Gramza on August 8, 2007, via telephone."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-66-74-interview-a-man-of-many-talents-dan-gramza-by-jayanthi-gopalakrishnan-20.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-66-74-interview-a-man-of-many-talents-dan-gramza-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-66-74-interview-a-man-of-many-talents-dan-gramza-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov257prre8,d,"{""minimum-quantity"":""1"",""path"":""ch10o"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:10 (77-81): Product Review: FXCM Trading Station II & GFT DealBook 360 by David Penn"",""caption-linebreaks"":""Product Review: FXCM Trading Station II & GFT DealBook 360 by David Penn

    They say that success has many\nfathers. If so, then it is\nunderstandably difficult to\npoint to a single reason why foreign exchange trading has become\nso popular in recent years.

    The collapse of the US dollar that\nbegan early in 2002 gave new life to\nnumber of international currencies.\nGiven the incredible run many of these\ncurrencies have seen in recent years,\nit is often hard to recall that the euro,\nfor example, was once worth only 85\ncents and the object of ridicule by\nmany financial observers. Or that the\nCanadian dollar, which until recently\nwas moving swiftly toward parity with\nthe US dollar, not so long ago traded\nas low as 62 cents.

    But technology has definitely played\na role. In the same way that technology\nhelped stock trading become\nincreasingly accessible to everyday\nretail traders during the latter half of the\n1990s, so has technology brought\nmarket like forex to the trading attention\nof those who never could have\nparticipated as little as 10 years ago."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-77-81-product-review-fxcm-trading-station-ii-gft-dealbook-360-by-david-penn-21.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-77-81-product-review-fxcm-trading-station-ii-gft-dealbook-360-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-77-81-product-review-fxcm-trading-station-ii-gft-dealbook-360-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov259bofo7,d,"{""minimum-quantity"":""1"",""path"":""ch10o"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:10 (92) Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    • Cocktail Economics:\nDiscovering Investment\nTruths From Everyday\nConversations

    • The CRB Commodity\nYearbook\n2007

    • Secrets Of The Trading Pros: Techniques\n& Tips That Pros Use To Beat The Markets

    • The CPM Platinum\nGroup Metals Yearbook\n2007

    • Getting Started In\nCommodities

    • Inside The Investor’s\nBrain: The Power Of\nMind Over Money

    • World Event Trading:\nHow To Analyze\nAnd Profit From\nToday’s Headlines"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov2582trt,d,"{""minimum-quantity"":""1"",""path"":""ch10o"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:10 82-89) Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    • TRADECISION: ACCUMULATED RANGE RATIO INDICATOR

    Editor’s note: Code for Tradecision is already included in\nDima Vonko article in this issue, “Tandem Studies On Market\nMovement.” The code in Improvian language implements\nthe parameter values for the primary phase (the trend),\nsecondary phase (the correction), and resulting ratio. The code\ncan be used directly in Tradecision’s Phase Rover.

    • METASTOCK: ACCUMULATED RANGE RATIO INDICATOR

    Dima Vonko’s article in this issue, “Tandem Studies On\nMarket Movement,” describes the calculation and use of the\naccumulated range ratio indicator for bull markets. The\nformula for this indicator and the instructions for adding it\nto MetaStock follow.\nTo enter these indicators into MetaStock:\n1. In the Tools menu, select Indicator Builder.\n2. Click New to open the Indicator Editor for a new indicator.\n3. Type the name of the formula.\n4. Click in the larger window and type in the formula.\n5. Click OK to close the Indicator Editor."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-82-89-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-82-89-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-10-82-89-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251leto10,d,"{""minimum-quantity"":""1"",""path"":""ch11n204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:11 (10-14): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    METASTOCK FORMULAS FOR TRENDLINE BREAKS

    Editor,

    Is there anywhere on the website to find\nthe code for trendline breaks in the\nSeptember 2007 issue? It seems like\nI’m always entering the MetaStock formulas\nby hand. I am a long-time subscriber.

    JACK WILLIAMS

    You will find formulas and code from S&C\narticles posted to the Subscriber Area of\nour website, at http://technical.traders.com/\nsub/sublog.asp. (Scroll down past the Optimized\nTrading Systems section.) Login to\nthe Subscriber Area requires your subscriber\naccount number (found on your\nmailing label) and last name."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-10-14-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-10-14-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-10-14-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251fofo9,d,"{""minimum-quantity"":""1"",""path"":""ch11n204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:11 (16-18): Forex Focus: Fundamentals Or Technicals? by Boris Schlossberg"",""caption-linebreaks"":""Forex Focus: Fundamentals Or Technicals? by Boris Schlossberg

    When two are better than one: Power up your forex\ntrading by combining fundamental and technical analyses.

    Arguments between technical and fundamental traders\noften become fanatically intense as one side tries\nto prove the other wrong. Technicians assert that all news is discounted in price almost instantaneously and\ntherefore fundamental knowledge is of little use in determining\nthe forward direction of the move. Fundamentalists state\nthat technical analysis offers nothing but the summary of the\npast price action. After all, just as success in sports like tennis\ndepends not on where the ball is but where it is going, so too\nin trading, profit and loss does not depend on where the price\nstands currently but on where it will be in the future. Therefore,\nfundamentalists argue, trading technically is akin to\ndriving a car by looking in the rear-view mirror.

    THE FUNDAMENTALS

    Yet when it comes to the currency market, both technicians\nand fundamentalists could benefit for each other’s analysis.\nThe currency market, which reflects the fortunes of nations\nrather than individual companies, trades on big macro economic\nideas such as government economic reports, central\nbank announcements, and political conflicts. It is therefore\nquite sensitive to news surprises and tends to create sharp\nreactive moves."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-16-18-forex-focus-fundamentals-or-technicals-by-boris-schlossberg-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-16-18-forex-focus-fundamentals-or-technicals-by-boris-schlossberg-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-16-18-forex-focus-fundamentals-or-technicals-by-boris-schlossberg-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov252shvo,d,"{""minimum-quantity"":""1"",""path"":""ch11n204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:11 (20-26): Short-Term Volume And Price Oscillator by Sylvain Vervoort"",""caption-linebreaks"":""Short-Term Volume And Price Oscillator by Sylvain Vervoort

    Using the turning points in the oscillator gives profitable\ntrades. Come look.

    Before telling you about the construction and application\nof the short-term volume and price oscillator\n(SVAPO) I am using, let’s talk about some basics\nusing an indicator as a buy & sell trigger. The indicator must have clear reversal points and be as fast as\npossible on the entry side. The faster you can get in at a price\nreversal, the tighter your initial stop-loss can be. This will save\nyou a lot of money on those trades that move the wrong way.\nA trailing stop-loss, which is a stop-loss order that follows the\nprevailing price trend, is best set in relation to your investment\nhorizon. Are you a swing trader trying to catch all the shorter\nprofitable price moves, or a medium- to long-term trader trying\nto stay in the trade to capture the extended bigger price moves?

    OSCILLATOR AND PRICE RELATION

    There is no ideal indicator, which is why you have to protect\nyour investment with a stop order. Using an oscillator as the\nonly reference to enter or exit a trade is not a good idea. The\noscillator should instead be used as an alert for having a closer\nlook at the chart and only then making a decision, taking into\nconsideration all possible technical analysis tools."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-20-26-short-term-volume-and-price-oscillator-by-sylvain-vervoort-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-20-26-short-term-volume-and-price-oscillator-by-sylvain-vervoort-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-20-26-short-term-volume-and-price-oscillator-by-sylvain-vervoort-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov252leti,d,"{""minimum-quantity"":""1"",""path"":""ch11n204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:11 (28-34): Let The Indicator Fit The Market by Martha Stokes, CMT"",""caption-linebreaks"":""Let The Indicator Fit The Market by Martha Stokes, CMT

    Oscillators are often the first indicators to signal a breakout,\nbut most traders don’t notice. Here’s how you can interpret\noscillator patterns with confidence.

    Traders are taught that there are three types of\ntrends: up, down, and sideways. They attempt to\nselect strategies and indicators based on these\ntypes. However, there is another approach that\nmakes trading easier and more reliable.

    A far more successful approach is to let the market condition dictate what indicators you should use.\nMarket condition is not only the analysis of the relationship\nbetween the primary (long-term) trend, the intermediateterm\ntrend, and short-term trend but also the analysis of the short-term bias and the intermediate- and long-term strength\nand direction, as well as the analysis of the market participants.\nWho is trading, how are they trading, and what are they\ntrading? By understanding these facts you can read the\ncurrent market condition to determine whether it is a velocity,\nmoderately trending, platform-building, trading-range, bottoming,\nor topping market condition.

    MARKETS IN AN UPTREND

    Uptrending markets have basically three modes: valueoriented\nor accumulation by institutional investors, a moderate\ninvesting and trading growth trend where more\nmarket participant levels enter, and speculative short-term\ntrading for profits by institutional traders along with newsdriven\nemotional buying by inexperienced investors and\nretail traders."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-28-34-let-the-indicator-fit-the-market-by-martha-stokes-cmt-21.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-28-34-let-the-indicator-fit-the-market-by-martha-stokes-cmt-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-28-34-let-the-indicator-fit-the-market-by-martha-stokes-cmt-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253coop,d,"{""minimum-quantity"":""1"",""path"":""ch11n204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:11 (36-37,42): Compare Option Strikes With This by Tim Zurick"",""caption-linebreaks"":""Compare Option Strikes With This by Tim Zurick

    How do you compare options with different strikes, margin\nrequirements, and expiration dates? Here’s a tool that will help\nyou make that decision.

    More bang per buck: Many businessmen will tell\nyou that there is no more important factor in\nfinancial decision-making. Option sellers face\na specific version of this decision: How should\nlimited margin dollars be allocated among possible\ntrades to maximize return on investment? Figure 1\nframes the question.\nIs option trading an investment? Perhaps not; in several\nrespects it is a unique class of trading, because time decay,\nfluctuating margin requirements, directional bias, and shifting gamma combine to pose some unique trading questions.\nBut because profits from option selling can be enhanced by\nthe passage of time, profit potential can be evaluated in terms different strikes, margin requirements, and expiration dates.\nEnter the Zurick quotient (ZQ).\nof a rate of return over time, just like an investment. All that\nis needed is a tool that enables us to compare options with"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-36-37-42-compare-option-strikes-with-this-by-tim-zurick-21.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-36-37-42-compare-option-strikes-with-this-by-tim-zurick-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-36-37-42-compare-option-strikes-with-this-by-tim-zurick-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254guby,d,"{""minimum-quantity"":""1"",""path"":""ch11n204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:11 (44-46): Guided By Seasonal Indexes by Darin Newsom"",""caption-linebreaks"":""Guided By Seasonal Indexes by Darin Newsom

    Seasonal indexes can offer insight\ninto possible price targets.\nHere’s how.

    We’ve all done it.\nWhether you are\na banker, lawyer,\ntrader, or\nanalyst, we have\nall caught ourselves staring wistfully out\nthe office window to see\nspring turn to summer, then\nautumn, and finally winter.\nThat is the seasonal cycle of\nnature and it is just as true\nwatching commodity markets\non the computer screen as it\nis looking out the window.

    SEASONALITY IN\nCOMMODITIES

    Commodities have seasonal\ncycles that reflect the normal\nsupply and demand situation\nof the individual market\nthroughout the course of a calendar\nyear. But just as the argument\nhas been made that industrial\nprogress is changing\nthe cycles in nature, there is\ntalk that the growth of computer\ntrading in commodities\nis either changing the way seasonal\ncycles can be studied or\ndoing away with their importance\nto analysis altogether."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-44-46-guided-by-seasonal-indexes-by-darin-newsom-21.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-44-46-guided-by-seasonal-indexes-by-darin-newsom-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-44-46-guided-by-seasonal-indexes-by-darin-newsom-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254dors,d,"{""minimum-quantity"":""1"",""path"":""ch11n204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:11 (48-52): Does The RSI Give You An Edge? by Larry Connors & Ashton Dorkins"",""caption-linebreaks"":""Does The RSI Give You An Edge? by Larry Connors & Ashton Dorkins

    The relative strength index has been heavily used since its\ncreation, but does it work for you?

    The relative strength index (RSI) is one of the most\npopular tools used by traders. As such, there are\nmany books and articles written showing how to\nuse RSI. Unfortunately, most of the published\nmaterial doesn’t show any statistical evidence to support the indicator’s performance. This is surprising, considering\nhow popular the RSI is and how many traders rely\nupon it. Before using any indicator, it is important to test if the\nindicator actually works — in other words, does using a\nparticular indicator give you an edge versus a benchmark,\nlike an index or the average performance of all stocks?

    Our statistical studies helped determine that RSI is indeed\none of the best indicators available — when used correctly.\nMost traders use the 14-period RSI, but our studies have shown\nthat statistically, there is no edge going out that far. However,\nwhen you shorten the time frame, you start seeing some very impressive results. Research shows that the most robust and\nconsistent results are obtained by using a two-period RSI, and\nover the years, we have built successful trading strategies and\nsystems that incorporate the two-period RSI.

    This article is going to teach you a very simple, yet\neffective, quantified trading strategy using the two-period\nRSI. Before getting into the actual strategy, here’s some\nbackground on the RSI and how to calculate it."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-48-52-does-the-rsi-give-you-an-edge-by-larry-connors-ashton-dorkins-21.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-48-52-does-the-rsi-give-you-an-edge-by-larry-connors-ashton-dorkins-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-48-52-does-the-rsi-give-you-an-edge-by-larry-connors-ashton-dorkins-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255inch,d,"{""minimum-quantity"":""1"",""path"":""ch11n204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:11 (54-58): Interview: Charles D. Kirk of TheKirkReport.com by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Interview: Charles D. Kirk of TheKirkReport.com by Jayanthi Gopalakrishnan

    Minnesota-based Charles E. Kirk is an individual investor who has\nbeen investing and trading stocks for more than 12 years and who\ncurrently trades stocks for a living in addition to writing about the\nstock market in his blog, with more than 10,000 visitors reading his\nwebsite on a daily basis; a notable number, considering he has only\nbeen blogging since September 2003. His education and work\nexperiences are varied, including a bachelor’s degree in philosophy\nand a law degree; he worked as a private investigator for a law\nfirm as well as founding and operating the stock newsletter\nMoneyXperts. Kirk explains that his primary goals for the website\nand blog are to help the small investor and provide food for thought,\nnot blind recommendations, adding that he lives and breathes the\nstock market every day and he does it because he loves it. Kirk has\nreceived high accolades from many financial publications, including\nBarron’s, Forbes, Kiplinger’s, BusinessWeek, and The Wall\nStreet Journal, as well as this one.

    The interview was conducted via email in early September 2007\nby Technical Analysis of STOCKS & COMMODITIES Editor Jayanthi\nGopalakrishnan.

    Charles, how did you get interested\nin trading?

    After graduating from college,\nI decided it was time for me to learn everything I could about\nmutual funds. My wife had started a\nretirement account at TIAA-CREF and\nsince neither of us knew anything about\nhow to manage these kinds of investments,\nI decided to learn as much as I\ncould about them. That grew into an\navid hobby, especially after I became\ndissatisfied with the performance of the\nactively managed funds we owned. It\nalso didn’t take me long to realize that I\ncould do better by using a smart mix of\nindex funds, by picking my own stocks,\nmostly for long-term buy and holds, and\nthen trading stocks for short-term gains\nas I learned more about stock-screening\ntechniques and technical analysis."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-54-58-interview-charles-d-kirk-of-thekirkreport-com-by-jayanthi-gopalakrishnan-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-54-58-interview-charles-d-kirk-of-thekirkreport-com-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-54-58-interview-charles-d-kirk-of-thekirkreport-com-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255qaby2,d,"{""minimum-quantity"":""1"",""path"":""ch11n204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:11 (59): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    BASIC SKILLS FOR DAYTRADERS

    Don, since you think (pure) daytrading\nis a limited style, then how do other\ndaytraders make profits? Could you tell\nme some basic trading methods or skills\nfor daytraders?— Anonymous

    I’m not against daytrading, but I think\nother strategies can augment your income.\nOur new people learn how to do\n“open-only orders” (OPG) on the NYSE.\nWe enter about 50 stocks, buys, and sell\nshorts, based on fair value calculations.\nThen, when a few of the stocks gap up or\ndown, they are filled only when the\nspecialist is filled. Why not trade on the\nsame side as the guy who’s been making\nmoney for 200 years? Our daytraders\nalways have “outside envelopes,” the\npractice of having active bids a few\npennies lower than the quoted national\nbest bid or offer (NBBO) bid and active\noffers a few pennies above the sell NBBO,\nto take advantage of sweeps, either collecting\nfor providing liquidity via ARCA,\nor joining the specialist again on hybrid\noverrides (exemptions and exceptions\nto the NMS rules)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-59-q-a-by-don-bright-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-59-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-59-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256fufo2,d,"{""minimum-quantity"":""1"",""path"":""ch11n204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:11 (60): Futures For You by Dan O’Neil"",""caption-linebreaks"":""Futures For You by Dan O’Neil

    DON’T BE A SORE LOSER

    I’ve been trading futures for a while\nnow, and I’ve followed all of the standard\nadvice about doing my research\nand setting up a trading plan. However,\nI’ve found it difficult to sit by when the\nmarket starts to turn against my position.\nMy instinct tells me to take emergency\naction and do whatever it takes\nto get right again, but most of the “experts”\nseem to agree that’s a recipe for\ndisaster. In general, what is the best\nway to handle a losing streak when\nyou’re right in the middle of it?

    Welcome to the club. Every successful\nveteran trader has experienced an\noccasional run or two of poor performance\nin the futures markets; you can’t\nexpect to operate in these markets without\na few valleys to go along with the\npeaks. In truth, plenty of traders wind\nup with more losing trades than winners.\nSo how do they survive to trade\nanother day? It’s a simple, unglamorous\nanswer — by maximizing profits on\ntheir winning trades and minimizing\nlosses on the losers."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-60-futures-for-you-by-dan-o-neil-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-60-futures-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-60-futures-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256prre6,d,"{""minimum-quantity"":""1"",""path"":""ch11n204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:11 (62-65,98): Product Review: ChartSmart by David Penn"",""caption-linebreaks"":""Product Review: ChartSmart by David Penn

    A while back, it seemed a\nweek wouldn’t pass without\na query from a reader or\nsubscriber about stock\nscreeners. This quest was probably at its height just as many of the\nfree stock-screening websites of the late\n1990s were becoming either the extinct\nor fee-based stock-screening websites\nof the early 2000s.

    There remain a number of quality\nonline sources for traders and investors\nto use when looking to screen through\nhundreds or even thousands of stocks\nfor those few that meet a key set of\ncharacteristics. What I always wondered,\nthough, was why more standalone\nstock software — especially with the\nbeginner and intermediate variety —\ndid not include more robust stockscreening\nfeatures. While a few software\nmakers were doing this, I could\nnot understand why it was not more\nwidespread, particularly for software\ngeared toward both retail traders and\ntoward stock trading."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-62-65-98-product-review-chartsmart-by-david-penn-21.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-62-65-98-product-review-chartsmart-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-62-65-98-product-review-chartsmart-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256exyo4,d,"{""minimum-quantity"":""1"",""path"":""ch11n204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:11 (66): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    NOT GETTING FILLED

    I live in Europe and I often place my\norders outside of US market hours. I\nalmost always use limit orders between\nthe bid and ask. For example, I tried to\nbuy a call option the other day, but I did\nnot get filled because the stock opened\nalmost $2 higher than the previous day.\nI know this is all part of the game, but\nit’s frustrating to watch a potential\ntrade go up by about 40% in two days\nand missing out because I didn’t get\nfilled. Is there anything I can do?

    Some of your orders are not getting\nfilled for two very important reasons.\nThe first is due to the price or quote\ninformation used to set the limit orders.\nYou are taking information from the\nprior trading session, but a lot can\nchange overnight or over the weekend.\nIf you want to buy a call option on a\nvolatile tech stock, shares might open\nhigher if the US stock market is strong\nthat day. If the stock is higher than the\nprevious day, the call options will have\nincreased in value as well. If so, the\nlimit order, which is based on yesterday’s\nquote, is not going to get executed because\nthe market price is now higher."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-66-explore-your-options-by-tom-gentile-21.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-66-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-66-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256prre7,d,"{""minimum-quantity"":""1"",""path"":""ch11n204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:11 (68-69): Product Review: MultiCharts2 by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Product Review: MultiCharts2 by Jayanthi Gopalakrishnan

    Before I started working with\nMultiCharts, I thought it\nwould be just like any other\ncharting package that I’ve come across. Needless to say, I was\npleasantly surprised when I started exploring\nMultiCharts 2. Judging from the\nusers I spoke with, when the product was\nfirst released it was slow and had lots of\nbugs but after several years of development,\nTS Support has come up with\nsomething that is fast, flexible, and robust.\nThey seem to have considered the\nneeds of every type of trader when they\ndeveloped this product.

    INSTALLATION AND SETUP

    It took approximately three minutes to\ndownload the file, and installation took\nanother three to four minutes. Once\ninstallation is complete you’ll see shortcuts\nfor MultiCharts, three-dimensional\noptimization charts, PowerLanguage,\nand QuoteManager. This gives you an\nidea of the capabilities of the product —\nthat is, it optimizes, it has a language\neditor, and it supplies quotes."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-68-69-product-review-multicharts2-by-jayanthi-gopalakrishnan-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-68-69-product-review-multicharts2-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-68-69-product-review-multicharts2-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov257prre9,d,"{""minimum-quantity"":""1"",""path"":""ch11n204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:11 (70-73): Product Review: Neuroshell Trader 5 by Dennis D. Peterson"",""caption-linebreaks"":""Product Review: Neuroshell Trader 5 by Dennis D. Peterson

    NeuroShell Trader uses sophisticated\nneural network\ntechnology that you can use\nin combination with your usual trading rules for backtesting. You\ncan also use the neural network in\nstandalone fashion to predict a value,\nsuch as opening price (or, better yet,\npercentage change in opening price),\nand see the payoff (or lack thereof).\nBesides all of that, NeuroShell Trader\nalso has unique features that make\nstand out from the rest of the crowd.

    First, it will let you know which of\nyour trading rules are working and which\nare not. Let’s say you have entry rules\nlike RSI(10)>60, closing price>EMA(12)\nof closing prices, and so on, and you\nhave a set of exit rules. If you select\n“Rule optimization,” NeuroShell will try\nevery combination of rules and show\nyou the combination that worked best.\nyou pick “Full optimization,” it will not\nonly optimize on the rules but the parameters\nas well. In the example RSI(10)>60,\nthe parameters are 10 and 60."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-70-73-product-review-neuroshell-trader-5-by-dennis-d-peterson-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-70-73-product-review-neuroshell-trader-5-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-70-73-product-review-neuroshell-trader-5-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov257trti5,d,"{""minimum-quantity"":""1"",""path"":""ch11n204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:11 (74-85): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    • METASTOCK: SHORT-TERM VOLUME AND\nPRICE OSCILLATOR (SVAPO)

    Code for MetaStock for the SVAPO indicator is already\nprovided by Sylvain Vervoort in his article in this issue,\n“Short-Term Volume And Price Oscillator.” Please see the\narticle’s sidebar, “SVAPO MetaStock code.” —Editor

    • TRADESTATION: SHORT-TERM VOLUME\nAND PRICE OSCILLATOR (SVAPO)

    Sylvain Vervoort’s article in this issue, “Short-Term Volume\nAnd Price Oscillator,” describes the construction of a shortterm\noscillator based on price and volume. During uptrends,\nwhen price and volume are moving up, volume is added to the\noscillator. During downtrends, when price is moving down\nbut volume is up, volume is subtracted from the oscillator.\nDuring market phases when volume is not increasing with\nprice moves in the direction of the trend, nothing is added to\nthe oscillator."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-74-85-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-74-85-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-74-85-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov259bofo8,d,"{""minimum-quantity"":""1"",""path"":""ch11n204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:11 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    Various Book Reviews"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-11-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251fofo10,d,"{""minimum-quantity"":""1"",""path"":""ch13bis1"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:13 (10-12): Forex Focus: Targeting Price And Time With Gann by Cornelius Luca"",""caption-linebreaks"":""Forex Focus: Targeting Price And Time With Gann by Cornelius Luca

    Want to improve your trading\nperformance? Here’s a look at\nsome of W.D. Gann’s methods.

    Stocks and commodities\ntrader William Delbert\nGann (1878–1955) made\nfortunes before, during, and after the stock market crash of\n1929. His success was facilitated by\nset complex mathematical methods\nthat combined time and price analysis.\nWhile his fans and retracement\nratios have gained increasing access\nand understanding, some of Gann’s\nmethods are not as popular or clear, though they still are worth examining. Let us look at some of\nthese methods that can enhance your trading performance.

    SQUARING OF PRICE AND TIME

    The squaring of price and time refers to Gann’s technique that\ntranslates a significant high or low price for a currency pair\ninto time units, anywhere from days to years. It then adds\nthese time periods to the day the significant price was reached.\nWhen the calculated time target is reached, time and price are\nsquared, and the currency should reverse."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-10-12-forex-focus-targeting-price-and-time-with-gann-by-cornelius-luca-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-10-12-forex-focus-targeting-price-and-time-with-gann-by-cornelius-luca-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-10-12-forex-focus-targeting-price-and-time-with-gann-by-cornelius-luca-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251leto11,d,"{""minimum-quantity"":""1"",""path"":""ch12d"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:13 (10-15): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    TRIX: TRIPLE EXPONENTIAL SMOOTHING OSCILLATOR

    Editor,

    I am very interested in the indicator\ncalled TRIX, which was first described\nand presented by your publisher, Jack\nHutson, in his July/August 1983 article\nin STOCKS & COMMODITIES, “Triple\nExponential Smoothing Oscillator:\nGood TRIX.” I have a question about its\ncalculation.\nAt the website StockCharts.com,\nthere is a graph of a TRIX calculation\nplotted around what I call a zero baseline\nwith values above zero of 10%, 20%,\n30%, and 40%, and values below zero\nof 10%, 20%, and 30%:

    http://stockcharts.com/school/doku.\nphp?id=chart_school:technical_indicators:trix

    My question is simple. How would I\nplot my own TRIX indicator values for\nvarious stocks around a zero baseline\nby hand? In other words, after doing the\nTRIX calculations for a given stock using\na pen, paper, and handheld calculator,\nhow would I take those values and\ngraph them around a zero baseline?\nWhat are the necessary calculations (in\nlayman’s terms, since I am not a mathematician\nor computer programmer)?

    I have spent a great deal of time\nresearching this question on the Internet\nand am only asking you as a last resort.\nAny help will be greatly appreciated.

    MARK MCGEE"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-10-15-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""463"",""width"":""351""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-10-15-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-10-15-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251debu,d,"{""minimum-quantity"":""1"",""path"":""ch13bis1"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:13 (14-22): Defining The Bull And The Bear by Chuck Dukas"",""caption-linebreaks"":""Defining The Bull And The Bear by Chuck Dukas

    “Bullish” and “bearish” are terms frequently used\nto describe the price behavior of financial instruments.\nWhat exactly do they mean?

    All price action can be categorized into\nsix phases of trends that describe the\ncycle of markets. You can apply this insight to any financial instrument on any time frame.\nAlthough the principles will be illustrated with daily\nbars, you can utilize the concepts on intraday data, daily, weekly, or any time frames\non commodities, stocks, or indexes\nor in fact any financial instrument\nsubject to market forces.

    To be able to precisely categorize\nall price activity into the six phases enhances your ability to assess the quality of the price\nstructure of the instrument you are examining. You\ncan take this one step further by categorizing price\nwith specific moving averages enabling you to statistically\nanalyze price structure. In addition, this allows\nyou to compare the quality of different instruments\nusing specific criteria, enhance objectivity,\nand reduce subjectivity. Finally, but perhaps most\nimportant, it is a guide on how money can be deployed\nin the markets; the core principles of trend\nanalysis can be used in constructing trading systems\nor in adjusting capital exposure in an instrument\naccording to its phase."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-14-22-defining-the-bull-and-the-bear-by-chuck-dukas-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-14-22-defining-the-bull-and-the-bear-by-chuck-dukas-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-14-22-defining-the-bull-and-the-bear-by-chuck-dukas-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" noname4,d,"{""minimum-quantity"":""1"",""path"":""ch12d"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:13 (16-20): Forex Focus: Let The Technicals Do The Talking by Jared Martinez"",""caption-linebreaks"":""Forex Focus: Let The Technicals Do The Talking by Jared Martinez

    Interpreting charts is an art as well as a science, which is why\nyou need to map out all the different scenarios that can take\nplace once you place a trade. Here’s one chart interpretation\nmethod that combines technical tools.

    Understanding Fibonacci’s discoveries changed not\nonly my trading career but my life. What the Italian mathematician discovered back in the 13th century explains\nhow nature works. His discoveries proved that we are created\nin a numerical sequence, just like pine cones and pineapples.\nHis discoveries proved that the market is not a mysterious\nplace that people have to fear. It is, instead, a place where\norganized chaos exists.

    The market is a dynamic system that reflects the human\ncondition. It is the science of matter and energy and their\ninteractions: the ebb and flow, the action and reaction, the ups\nand downs of life. Humans are the market — not banks or\nfinancial institutions, but human beings with human feelings\nand human emotions. Our greed, fears, and habits create the\nmarket; we are nothing more than nature’s puppets participating\nin the balance of nature.

    Learning about Fibonacci saved my financial life. Learning\nhow to trade the Fibonacci retracement and extension\nnumbers using trendlines and candlestick formations improved\nmy trading substantially."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-16-20-forex-focus-let-the-technicals-do-the-talking-by-jared-martinez-20.gif"",""height"":""463"",""width"":""351""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-16-20-forex-focus-let-the-technicals-do-the-talking-by-jared-martinez-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-16-20-forex-focus-let-the-technicals-do-the-talking-by-jared-martinez-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov252liof,d,"{""minimum-quantity"":""1"",""path"":""ch12d"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:13 (22-29): Liquidity Of The Biofuels Market by Rick Kment"",""caption-linebreaks"":""Liquidity Of The Biofuels Market by Rick Kment

    The ethanol futures contract is relatively young, but the\nmarket has tremendous growth potential. Here’s why.

    Since the early 1970s, the ethanol and biofuels\nindustry has witnessed rapid and unprecedented\ngrowth. In the last couple of years\nin particular, the attention surrounding ethanol and biofuels has exploded on a national and global\nlevel. From celebrities and politicians, to activists and\nenvironmentalists, to the local farmers and table-talk\npundits, everyone is weighing in on the topic. The\nbiofuels industry has evolved from a sleepy, farmtown\ndream into a booming 21st-century phenomenon.

    Generally speaking, a young but profitable industry\nwith massive growth potential usually brings out\nthe eager investor in all of us. However, since the first\nethanol futures contract debuted in 2004, it has\ngenerated relatively little interest and remains today\nan illiquid market. As the industry continues to\nevolve, many investors wonder if and when this\nfledgling market will begin to flourish.

    AN APPEALING MARKET

    The recent popularity and demand for biofuels has been\npropelled by two key factors: a governmental push to reduce the country’s dependency\non foreign oil, and an increase in the\ndevelopment and implementation\nof environmental policies."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-22-29-liquidity-of-the-biofuels-market-by-rick-kment-20.gif"",""height"":""463"",""width"":""351""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-22-29-liquidity-of-the-biofuels-market-by-rick-kment-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-22-29-liquidity-of-the-biofuels-market-by-rick-kment-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov252detr,d,"{""minimum-quantity"":""1"",""path"":""ch13bis1"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:13 (24-28): The Defensive Trader by Adrienne Toghraie"",""caption-linebreaks"":""The Defensive Trader by Adrienne Toghraie

    Not trading as well as you\nwould like to? Can you take\nsome constructive criticism?\nNo?

    Sid had a problem\nwith his\ntrading that\nwas losing him\nmoney. Instead of waiting for the buy signal\nfrom his system, Sid would\nanticipate the signal and buy\ntoo soon. If the trade took a\nslight tick downward after it\nwas initiated, he would panic\nand sell. As soon as he sold,\nthe market would resume its\nupward trend and his signal\nto buy would appear.

    When asked about the\ncause of the problem, Sid\nvigorously denied that there\nwas a problem with his trading\nperformance. He blamed\nhis losses on the system he\nhad purchased and the volatility\nof the market he followed.\nIn his mind, he had\ndone everything correctly\ngiven the circumstances. For\nSid, change was going to be\nimpossible because he had\ntaken a defensive position.

    IT’S NOT LUCK

    Recently, I read a book on\nleadership in business. In\none study, the authors concluded\nthat almost no difference\nexisted between executives\nwho rose to the top\nof their field and those who\ndropped out along the way.\nThese individual managers\nwere equally intelligent, capable,"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-24-28-the-defensive-trader-by-adrienne-toghraie-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-24-28-the-defensive-trader-by-adrienne-toghraie-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-24-28-the-defensive-trader-by-adrienne-toghraie-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253fofu,d,"{""minimum-quantity"":""1"",""path"":""ch12d"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:13 (30-33): Forecasting Futures Movement by In Gyu Koh and Sung Soon Lee"",""caption-linebreaks"":""Forecasting Futures Movement by In Gyu Koh and Sung Soon Lee

    A Daytrading Method Second To None\nForecasting Futures Movement

    Is it possible to chase two rabbits at once? This intraday\ntechnique combines direction of price movement and timing\nof your entries and exits.

    IN trading, two variables to consider are direction of price\nmovement and the timing of your entries and exits.\nMost of the time you can’t catch them both at the same\ntime — it’s usually one or the other. In this article we show you how you can. We will discuss when and in which\ndirection futures prices will move during an intraday period.

    Empirically, we have found that when the 90-minute\nhistorical volatility goes below the 80% level of the 180-\nminute historical volatility, price tends to change drastically.\nAt that point, the price is apt to increase if the 75-minute\nmoving average of implied volatility is higher than the 165-\nminute moving average.

    HISTORICAL VOLATILITY

    Historical volatility (HV) is a powerful barometer of the\ndrastic change of the underlying asset. If the value of HV is\nbelow normal, rapid changes can happen within a minute.\nHowever, historical volatility by itself does not tell us anything\nabout the direction of the underlying asset’s movement.\nThough many indicators claim to show direction and timing,\nthey are not sufficient by themselves. This is because one\nindicator provides only one clue. You need at least two\nindicators to provide two independent clues. Here we will\nshow you how you can get information for two clues using\ntwo indicators — historical volatility (HV) and implied\nvolatility (IV)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-30-33-forecasting-futures-movement-by-in-gyu-koh-and-sung-soon-lee-20.gif"",""height"":""463"",""width"":""351""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-30-33-forecasting-futures-movement-by-in-gyu-koh-and-sung-soon-lee-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-30-33-forecasting-futures-movement-by-in-gyu-koh-and-sung-soon-lee-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253rech,d,"{""minimum-quantity"":""1"",""path"":""ch13bis1"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:13 (30-47): Readers’ Choice Awards 2007 by Technical Analysis, Inc."",""caption-linebreaks"":""Readers’ Choice Awards 2007 by Technical Analysis, Inc.

    We are pleased to present the Technical Analysis of STOCKS & COMMODITIES\nmagazine 2007 Readers’ Choice Awards (RCA). Each year, we put before our\nreaders a ballot of products and services related to technical analysis and trading.\nThe following pages present the products and services you and your peers chose\nthis year as your favorites.

    The Readers’ Choice Awards begins each year with a list of products gathered\nby the editors of STOCKS & COMMODITIES, with space for write-in votes (given\nthat our list doesn’t claim to be complete). Then, to find out what our readers find to be the most\nuseful for their trading, we ask them to choose their favorite products or the ones they find most"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-30-47-readers-choice-awards-2007-by-technical-analysis-inc-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-30-47-readers-choice-awards-2007-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-30-47-readers-choice-awards-2007-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253shtr,d,"{""minimum-quantity"":""1"",""path"":""ch12d"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:13 (34-42): Short-Term Trading With SVAPO by Sylavain Vervoort"",""caption-linebreaks"":""Short-Term Trading With SVAPO by Sylavain Vervoort

    The trading rules I will\ndiscuss here are based\non an eight-bar shortterm\nvolume and price\noscillator (SVAPO) period with a 1/1,000 minimum price\nchange and with an upper standard\ndeviation channel at 1.5 and 1.3 at\nthe lower side over a 100-day period,\nas discussed in my previous\narticle. The rules are:

    Rule 1: The start of a short-term up\nmove is signaled when SVAPO turns\nup from below the lower standard\ndeviation boundary as in the weekly\nchart of Hewlett-Packard (HP) in\nFigure 1. The same is valid for a\nshort-term down move when SVAPO\nturns down from above the upper\nstandard deviation boundary.

    Rule 2: Medium-term turning points\nin an uptrend or downtrend are usually\nindicated with a divergence between\nprice and SVAPO. See the divergence\n(1) at the end of April in\nFigure 2. The SVAPO has higher lows\nwhile price has lower lows. At the\nend of the medium-term uptrend at\n(3), another divergence appears with\nlower highs in SVAPO and higher\nhighs in price."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-34-42-short-term-trading-with-svapo-by-sylavain-vervoort-20.gif"",""height"":""463"",""width"":""351""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-34-42-short-term-trading-with-svapo-by-sylavain-vervoort-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-34-42-short-term-trading-with-svapo-by-sylavain-vervoort-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254inbo,d,"{""minimum-quantity"":""1"",""path"":""ch13bis1"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:13 (48-52): Interview: Bo Yoder by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Interview: Bo Yoder by Jayanthi Gopalakrishnan

    Bo Yoder is a professional trader, author, and consultant to the\nfinancial industry on matters of trading and risk management. He is a\nfrequent contributor to domestic and international trading publications,\nand also writes for RealMoney.com, Technical Analysis of\nSTOCKS & COMMODITIES, Traders, and Active Trader magazines. In\naddition, Yoder publishes the Easy Forex Course at easyforexcourse.com,\nis a featured speaker internationally at seminars and industry expos,\nand continues to work with individuals and market professionals on\nmatters of risk management and trader development. His latest book,\nMastering Futures Trading, was published by McGraw-Hill in 2004.\nS&C Editor Jayanthi Gopalakrishnan interviewed Yoder on January\n18, 2007, via telephone interview.

    BO, how did you get interested\nin trading?

    About 1995–96, I was\nworking as a cross-country ski instructor during the winter, and\nI bought a few shares of stock in the\ncompany that my father worked for. At\nthe end of the skiing season I had actually\nmade more money on the stock —\nknowing nothing about the stock market\n— than I did working my job in the\ncold. That got me interested in the financial\nmarkets.

    What did you do?

    I started reading a lot of the standard\ninvestment information — Graham-\nDodd, Warren Buffett, those sorts of\ninvesting-type tomes. I learned a lot\nabout SEC forms and actually did an\ninternship in a money management firm\nworking in the research department,\nwhere I learned how the market ignores\nfundamentals sometimes and rewards\neither bad business plans or no business\nplans. That was the beginning of the\nInternet bubble. I started to learn more\nabout trading versus speculation versus\ninvestment. I became a disciple of the\nquote from George Soros — the one\nthat goes, “The way to make money in\nthe market is to find a trend that is based\non a false premise and to ride that trend\nuntil just before it is disproven.” You can go back and look at a lot\nof the crazes we have seen,\neverything from oil to the\ntech bubble. The Krispy\nKreme case is one of my favorites.\nAt one time I believe\nit had a bigger market cap\nthan GE.

    I think you may be right!

    So you can find some markets\nthat become maniacal.\nThere is a lot of money to be\nmade in those trends because\nthey are based on emotion and greed and fear rather than fundamentals.\nThe reality is fundamentals\ndon’t change quickly, whereas perceptions\ndo. So that was my transformation\nfrom investor to trader. During the last\nfive, six, seven years I’ve been trading\nfull time. I started off mostly in stocks\nand then moved to futures, and most\nrecently I have been trading almost exclusively\nin the currency markets."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-48-52-interview-bo-yoder-by-jayanthi-gopalakrishnan-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-48-52-interview-bo-yoder-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-48-52-interview-bo-yoder-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254trpl,d,"{""minimum-quantity"":""1"",""path"":""ch12d"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:13 (48-55): The Trading Plan by John “Jay” Norris"",""caption-linebreaks"":""The Trading Plan by John “Jay” Norris

    We all know that creating a trading plan is the first\nstep in trading. Find out how one futures trader\ncreates a plan and follows it.

    Combining analytics and execution is\nnot new for individuals or professional\nentities, and most companies\nseparate the two. Many individuals\nlean toward one or the other, but traders must do both. Traders must be patient and\ndisciplined and accept that they will not have a\nchoice regarding when a trade scenario will unfold.\nTraders just need to be in the habit of being at their\nstations every trading day rested and relaxed and\nready to make their moves.

    This plan concentrates on following all markets\nwith the understanding that they will always follow\ntheir path of least resistance. If you are a novice,\nyou need to do your homework and remember that\nfutures trading carries risk of loss.

    HERE’S THE PLAN

    Prior to any analysis I need to be able to see the\nmarket on three time frames simultaneously, a\ntactic I was introduced to in Alexander Elder’s\nbook Come Into My Trading Room. Once I have the\nthree charts in front of me, I determine the long-,\nintermediate-, and short-term trends for the daily,\n240-minute, and 60-minute charts. This is a total of\nnine directional determinates that I break down\ninto a directional ratio. I record these on a simple\ngrid with up arrows, down arrows, or a hyphen\nindicating neutral or sideways.\nPrior to any analysis I need to be able to see the\nmarket on three time frames simultaneously, a\ntactic I was introduced to in Alexander Elder’s\nbook Come Into My Trading Room. Once I have the\nthree charts in front of me, I determine the long-,\nintermediate-, and short-term trends for the daily,\n240-minute, and 60-minute charts. This is a total of\nnine directional determinates that I break down\ninto a directional ratio. I record these on a simple\ngrid with up arrows, down arrows, or a hyphen\nindicating neutral or sideways."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-48-55-the-trading-plan-by-john-jay-norris-20.gif"",""height"":""463"",""width"":""351""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-48-55-the-trading-plan-by-john-jay-norris-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-48-55-the-trading-plan-by-john-jay-norris-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255trvs,d,"{""minimum-quantity"":""1"",""path"":""ch13bis1"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:13 (54-57): Trading Vs. Buy & Hold by Glenn A. Barlis"",""caption-linebreaks"":""Trading Vs. Buy & Hold by Glenn A. Barlis

    Here’s a look at the profit potential of trading\ncompared with buy & hold.

    Numerous strategies for accumulating\nwealth through stock investments\nhave held prominence\nover the years. Conventional wisdom\nused to be that you bought quality stocks\nand put them away to collect dividends and\ncapital appreciation. The late 1960s was the\nheyday of growth stocks, as popularized in\nAdam Smith’s book The Money Game. In\nrecent years, the efficient market hypothesis,\nwhich essentially states that only average\nreturns are possible, has become the foundation\nof conventional investment strategy. The\npopularity of index funds and diversified\nportfolios is an indication of this influence.

    However, Technical Analysis of STOCKS\n& COMMODITIES readers do not easily accept\nthe efficient market hypothesis. Technical\nanalysis is an attempt to use stock\nprice and volume data to achieve returns\ngreater than offered by buy & hold. In this\narticle I will examine historical data on the\nStandard & Poor’s 500 to demonstrate the\nsignificant profit potential of trading over a\nbuy & hold strategy.

    ASSUMPTIONS

    For the purpose of this analysis, I will make\nthese assumptions:

    1. The Standard & Poor’s 500 can be\ntraded throughout the study period using\na single instrument such as SPY. To\nsimplify calculations, the price/unit is\nassumed at a tenth of the index.

    2. Dividends are not accounted for in the\ncalculations, again for the sake of simplicity\nand for the lack of complete data. This understates the net return but does not\nchange the relative comparisons of different strategies."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-54-57-trading-vs-buy-hold-by-glenn-a-barlis-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-54-57-trading-vs-buy-hold-by-glenn-a-barlis-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-54-57-trading-vs-buy-hold-by-glenn-a-barlis-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255qaby3,d,"{""minimum-quantity"":""1"",""path"":""ch12d"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:13 (56): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    BLOGGING ABOUT DIVIDENDS

    Basic question about dividends. How do\nthey work? I have $2,000 to invest and I\nwas wondering how the dividend yield\nrelates to how much I am going to get. Do\nI get the dividend each month or quarter?\nThanks—Anonymous

    If a stock has a declared dividend, it\nwill have an “ex-dividend” date, which\nmeans that if you own the stock the night\nbefore this declared date, you will be\npaid the dividend amount multiplied by\nthe number of shares you own. The payment\nwill come in a couple weeks after\nthe ex-date."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-56-q-a-by-don-bright-20.gif"",""height"":""463"",""width"":""351""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-56-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-56-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255whyo,d,"{""minimum-quantity"":""1"",""path"":""ch13bis1"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:13 (58-61): What’s Your Trading Style? by Martha Stokes"",""caption-linebreaks"":""What’s Your Trading Style? by Martha Stokes

    Find out which trading style will work for you.

    There is considerable confusion among traders\nas to the difference between a strategy, a\ntrading style, and a trading system. A trading\nstyle is not a strategy or a trading system. It is\na set of parameters and rules you adhere to for\nevery trade you make.

    Trading styles are as individual as each trader. Once you\nhave a trading style fully developed and implemented, your\ntrading results will improve. A thorough understanding of\ntrading styles will help you eliminate two common problems\nthat plague traders: uncertainty and inconsistency. To understand\nthe difference between a trading style and a trading\nsystem, let’s review trading systems.

    The term trading system is used to describe a conditional\napproach to trading a certain kind of market. Trading systems\nhave been developed to function in varying market conditions.\nIt is important to understand what kind of market\ncondition the system you choose works in best because the\nmarket is ever changing. If you use the wrong trading system\nfor the current market condition, such as using a trend-based\nsystem in a consolidation or choppy market, you will get\nwhipsawed out of your trades repeatedly, eating away at your\nprofits until nothing is left of your capital. So it is critical for\nyou to know for which market condition your trading system\nwas developed to function optimally.

    TRADING STYLES

    A trading style is a predefined set of rules and parameters that\nyou use regardless of your trading strategies or trading\nsystems (Figure 1). A trading style is the first thing a trader\nneeds to develop before becoming consistently successful at trading."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-58-61-what-s-your-trading-style-by-martha-stokes-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-58-61-what-s-your-trading-style-by-martha-stokes-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-58-61-what-s-your-trading-style-by-martha-stokes-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255inji,d,"{""minimum-quantity"":""1"",""path"":""ch12d"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:13 (58-62): Interview: Jim Dalton of DLC Profiles by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Interview: Jim Dalton of DLC Profiles by Jayanthi Gopalakrishnan

    Author and former hedge fund manager James Dalton is a Market Profile believer,\nand he’d be the first to tell you that. A member of both the CBOT and the CBOE, he\nserved as executive vice president of the CBOE during its formative years. Between\nwriting Mind Over Markets and his latest book, Markets In Profile, he also served\nas director of research for managed accounts at UBS Financial Services, where he\nworked with an array of professional money managers. As a result of this\nexperience, Dalton has come to place added emphasis on employing Market\nProfile for the longer time frames.

    STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Jim Dalton on October 10, 2007, via telephone.

    Jim, how did you get interested\nin the markets?\nI came out of the Marine Corps and went to work for IBM. I was there about a year and a half.\nI was the top salesman in the country,\nand I hated every day of it. Then I went\nto work for Merrill Lynch as a broker.\nShearson Lehman hired me after that\nbut I didn’t think their research was any\nbetter, so I started doing my own research\nin stocks but that still wasn’t any\nbetter than what they had to offer.

    Then I got involved with a couple of\nprofessors at the University of California\n–Irvine campus. They had a strategy\nwhere they would be long stock and\nshort warrants, knowing that the warrants\nwould converge. I was fascinated,\nand since warrants are similar to options\nI was able to gain some background\nin options.\nDalton on October 10, 2007, via telephone.

    Eventually, I went to work for the\nChicago Board Options Exchange\n(CBOE), where I was responsible for\nresearch and public investor affairs, and\nwas the director of marketing. The early\ndays of the CBOE were interesting because\nit put me in touch with all the\nbrokerage firms and all proprietary trading\naccounts. I got a pretty good foundation\nin options."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-58-62-interview-jim-dalton-of-dlc-profiles-by-jayanthi-gopalakrishnan-20.gif"",""height"":""463"",""width"":""351""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-58-62-interview-jim-dalton-of-dlc-profiles-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-58-62-interview-jim-dalton-of-dlc-profiles-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256prre8,d,"{""minimum-quantity"":""1"",""path"":""ch12d"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:13 (64-65): Product Review: MultiCharts 2 by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Product Review: MultiCharts 2 by Jayanthi Gopalakrishnan

    Previously, I discussed the\ncharting and data features\nof MultiCharts. In this second\npart I will review the\nanalytical features available in the software as well as its backtesting\nand optimization capabilities.

    STRATEGY APPLICATION

    In Figure 1, I applied the Bollinger\nBands long entry (LE) and short entry\n(SE) strategy. Once I applied the strategy,\nMultiCharts by default backtested it and displayed the entry and exit signals\non the historical chart. The results\nof the strategy can be seen in the performance\nreport, as displayed in a tabular\nformat. This you can see displayed in\nFigure 2. Note the extensive list of tabs\nin the left-hand side of the performance\nsummary. There are about 180 performance\nindexes, including about 30 different\ntypes of charts, available in this\nprogram. Once you have reviewed the\nperformance report, the next logical step\nis to run an optimization."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-64-65-product-review-multicharts-2-by-jayanthi-gopalakrishnan-20.gif"",""height"":""463"",""width"":""350""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-64-65-product-review-multicharts-2-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-64-65-product-review-multicharts-2-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256wefo,d,"{""minimum-quantity"":""1"",""path"":""ch12d"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:13 (66-68): Websites For Traders DailyFX.com by David Penn"",""caption-linebreaks"":""Websites For Traders DailyFX.com by David Penn

    DAILYFX.COM\nIn writing about the rise of foreign exchange\ntrading among everyday retail\ntraders, a frequent lament has been the\nlack of quality news, analysis, and information\nresources. Although the currency\npages of publications like The\nFinancial Times and, to a lesser degree,\nThe Wall Street Journal have provided\na great deal of what currency traders\nneed in order to be up to date on the\nvagaries of forex trading, the fact is that\nthere remain precious few online resources\nfor forex traders compared to\nthose trading other financial instruments\nsuch as stocks or futures.

    Where, for example, is the “TheStreet”\nor the “TradingMarkets” for forex?\nWhere is the “Financial Source” of currency\ntrading?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-66-68-websites-for-traders-dailyfx-com-by-david-penn-20.gif"",""height"":""463"",""width"":""350""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-66-68-websites-for-traders-dailyfx-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-66-68-websites-for-traders-dailyfx-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256prre9,d,"{""minimum-quantity"":""1"",""path"":""ch12d"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:13 (69-71,78): Product Review Power Ratings by David Penn"",""caption-linebreaks"":""Product Review Power Ratings by David Penn

    The very first interview I ever\ndid for Technical Analysis,\nInc., was with Samuel\nEisenstadt back in October\n2000. At the time, Eisenstadt was research chairman, senior vice president,\nand a director of Value Line, Inc.\nWhat led me to interview Eisenstadt was\nthe success of the Value Line Ranking\nSystem, an approach to measuring the\nlikely performance of stocks going forward\nover the coming six to 12 months.\nSaid Eisenstadt during our conversation:

    You’re most bullish at a peak when\nthings look great and everything\ncouldn’t be better, and you’re most\nbearish at bottoms when it looks like\nall hell is breaking loose. Those are the\nemotions we really have to counteract.\nWe have a model we’ve developed that\ntries to do that, that determines our\ninvested position. That also is based on\nquantitative approach and it determines\nwhat our market position is going to be.\nIt’s unemotional. Often, it goes against\nthe market. When the market is falling\nand the data is right, it may say it’s time\nto get in. Your emotions would carry\nyou otherwise."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-69-71-78-product-review-power-ratings-by-david-penn-20.gif"",""height"":""463"",""width"":""350""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-69-71-78-product-review-power-ratings-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-69-71-78-product-review-power-ratings-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov257copr,d,"{""minimum-quantity"":""1"",""path"":""ch12d"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:13 (72-78): Confirming Price Trend by Barbara Star, PhD"",""caption-linebreaks"":""Confirming Price Trend by Barbara Star, PhD

    Regression And R-Squared, Together Again\nConfirming Price Trend

    Here’s a technique using linear regression slope and r-squared\nto confirm the price trend.

    Linear regression is a statistical method some\ntraders use to filter the static, or “noise,” created\nby day-to-day or bar-to-bar price movements.\nUsing the least-squares method, it minimizes\nthe amount of deviation among price values to determine a best-fit line. In an earlier STOCKS & COMMODITIES\narticle, I showed that applying a linear regression indicator\nto price creates less lag and more trading opportunities\nthan a moving average of the same length.

    As useful as the linear regression indicator is for detecting\nprice shifts, two other outputs derived from a linear regression may hold equal value for traders. In this article I will\nintroduce two lesser-known indicators, r-squared and linear\nregression slope, which can serve as useful adjuncts when\ndetermining price trend and price direction.

    R-SQUARED

    R-squared is a measure of association. It measures the proportion\nof explained variation between the linear regression and\nthe underlying data it is tracking. For traders that means the\nr-squared calculation identifies how closely the linear regression\nindicator matches the underlying price movement; the\nhigher the r-squared value, the greater the correlation with\nthe trending component of price. The eSignal code can be\nfound in sidebar 1, “eSignal code for r-squared.”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-72-78-confirming-price-trend-by-barbara-star-phd-20.gif"",""height"":""463"",""width"":""350""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-72-78-confirming-price-trend-by-barbara-star-phd-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-72-78-confirming-price-trend-by-barbara-star-phd-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov257exyo,d,"{""minimum-quantity"":""1"",""path"":""ch12d"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:13 (79): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    CALENDAR SPREAD QUESTIONS

    I have developed some indicators that\ngive a fairly accurate picture of when\na trend is over. In other words, when\nsignal comes, I’m about 70% sure that\nthe trend will either reverse or go flat.

    A calendar spread seems like a good\ntool for trading this kind of opportunity.\nI know what to do if the market goes\nagainst me and the trend resumes and\nknow what to do if the market goes more\nor less flat. My question is about what to\ndo if the market reverses enthusiastically\nand overruns the spread.

    Let’s say stock QRS has been declining\nthrough the month of April, then\nturns back up and I get a signal on the\n25th of the month when the price is at\n$27. I decide to put on a calendar\nspread, selling the May $30 call and\nbuying the June $30 call. But instead of\ngoing flat, the market takes off, heading\nfor $30 and maybe then some."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-79-explore-your-options-by-tom-gentile-20.gif"",""height"":""463"",""width"":""350""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-79-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-79-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov258trti1,d,"{""minimum-quantity"":""1"",""path"":""ch12d"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:13 (80-87,92): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    Editor’s note: This month’s Traders’ Tips are\nbased on Barbara Star’s article in this issue,\n“Confirming Price Trend.” Code written in\neSignal language is already provided in the\narticle’s sidebars. Code for other programs as\nwell as additional eSignal code are presented\nhere.

    Readers will find our Traders’ Tips section in its entirety at the STOCKS & COMMODITIES website at\nwww.Traders.com in the Traders’ Tips area, from where\nthe code can be copied and pasted into the appropriate\nprogram. In addition, the code for each program is usually\navailable at the respective software company’s website.\nThus, no retyping of code is required for Internet users.\nFor subscribers, code found in Star’s article can be copied\nand pasted into eSignal from the Subscriber Area at\nwww.Traders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-80-87-92-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""463"",""width"":""350""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-80-87-92-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-80-87-92-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov259nosp,d,"{""minimum-quantity"":""1"",""path"":""ch13bis1"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:13 (96-97): Novice Speculator by John Sweeney"",""caption-linebreaks"":""Novice Speculator by John Sweeney

    In honor of our 25th anniversary, we decided to re-run a\npiece written by former Editor John Sweeney when he was a\nfledgling in the trading arena back in 1984, with his addendum\nnow. How much has changed? How much hasn’t?

    Bill Wyckoff suggested I write this — not personally,\nof course, since he’s long out of print. He\njust noted in Wall Street Ventures And Adventures Through Forty Years that writing and publishing The\nTicker was a terrific way of learning about his market (the\nstock market). I can take a hint.

    I decided to write about growth. After all, nine months of\nfull-time speculation have given me more growing pains than\nI ever thought possible. It occurred to me that a careful\ndocumentation of my path might be valuable to others as well\nas to me. That this would probably highlight mistakes hasn’t\nbothered me. I know that, in theory, people actually learn\nfrom mistakes, whereas success is tough to evaluate and easy\nto forget.

    I see the world as full of restraints and pitfalls, amongst\nwhich we poke and probe for a safe, rewarding path. When a\nprobing trade comes back with two-thirds of the margin\nmissing, the novice learns to avoid something. For a novice,\nthat knowledge is enough — survival alone is the novice’s\ngoal. A trader, on the other hand, having bested the issue of\nsurvival, may probe some more, perhaps more gingerly, to\nfind a profit-maker. And by the time one is a true speculator,\nI assume one knows what is in that margin-devouring pitfall!\nAfter all, the word “speculator” comes from the Latin verb “to\nsee”; hence, a person who truly does see what is before him.\nTo become a true speculator, then, would be a great achievement, and is the goal to which these writings are dedicated."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-96-97-novice-speculator-by-john-sweeney-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-96-97-novice-speculator-by-john-sweeney-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-96-97-novice-speculator-by-john-sweeney-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov259fufo,d,"{""minimum-quantity"":""1"",""path"":""ch12d"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:13 (98): Futures For You by Dan O’Neil"",""caption-linebreaks"":""Futures For You by Dan O’Neil

    BE A MANAGER

    I’m just getting started in the commodity\nfutures markets. In your opinion,\nwhat is the most important thing\nfocus on as I begin trading?\nLike holiday shoppers looking for\nthat perfect gift, most beginning investors\nlong for the one-size-fits-all answer\nto this question. After all, from\nsearching for a good trading opportunity\nto navigating the intricacies of technical\nanalysis to trying to find the right\nbroker, new futures traders have a lot on\ntheir minds. It would certainly be helpful\nto have one overriding aspect of the\nprocess on which to focus."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-98-futures-for-you-by-dan-o-neil-20.gif"",""height"":""463"",""width"":""350""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-98-futures-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-13-98-futures-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251leto1,d,"{""minimum-quantity"":""1"",""path"":""ch2f203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:2 (10-13): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 25:2 (10-13): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist.

    SWING CHART

    Editor,

    I just read “Searching For (Trading) Certainty” by Aaron Lynch (December 2006 S&C) and would like to know\nhow to reconstruct the chart in Figure 2, “Filtering for noise.” Can you help?

    L.N. JOHNSON

    Kansas City, MO

    This type of chart is known as a kagi chart, and several software packages offer it as a charting type. (The more\ntypical options for charts are line, bar, or candlesticks.) The chart in Figure 2 was created using ProfitSource.com. —Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-10-13-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-10-13-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-10-13-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251fofo,d,"{""minimum-quantity"":""1"",""path"":""ch2f203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:2 (14-18): Forex Focus: Is Gold A Hedge Against A Falling Dollar? by John L. Momsen"",""caption-linebreaks"":""Stocks & Commodities V. 25:2 (14-18): Forex Focus: Is Gold A Hedge Against A Falling Dollar? by John L. Momsen

    Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. With that in mind, STOCKS & COMMODITIES has introduced Forex Focus to better prepare the retail trader to participate in the currency market.

    Is gold the great investment it’s said to be? Let’s take a look.

    The other day I turned on the radio to listen to my favorite radio show. It was still a bit early, so airing was an advertisement for one of those “gold investment” firms. Lately, they seem to be all over radio and television. So I listened to what the ad had to say, which\nbasically was, “Gold is a hedge against inflation! Gold is a hedge against a falling dollar! Gold offers terrific profit potential and appreciation!”

    What I heard was normal advertising rhetoric. However, since I have an affinity for the gold market (we both began trading on the futures exchanges at about the same time) and have always been interested in researching various investment vehicles, I decided to investigate the ad’s claims. Gold began to trade on the American futures exchanges in late 1974, so I used data on spot gold from the December 31, 1974, close through the August 31, 2006, close. The period of nearly 32 years of data spanned enough time periods for me to get a true research picture on the claims in the advertisement.

    SPOT GOLD VS. INFLATION

    First, I decided to investigate the claim that gold is a hedge against inflation. A hedge can be considered to be something that protects you against a financial loss. Simply stated, this means that gold will increase at or above the rate of inflation, thus protecting the buying power of your investment."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-14-18-forex-focus-is-gold-a-hedge-against-a-falling-dollar-by-john-l-momsen-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-14-18-forex-focus-is-gold-a-hedge-against-a-falling-dollar-by-john-l-momsen-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-14-18-forex-focus-is-gold-a-hedge-against-a-falling-dollar-by-john-l-momsen-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov252anmo,d,"{""minimum-quantity"":""1"",""path"":""ch2f203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:2 (20-26): Anticipating Moving Average Crossovers by Dimitris Tsokakis"",""caption-linebreaks"":""Stocks & Commodities V. 25:2 (20-26): Anticipating Moving Average Crossovers by Dimitris Tsokakis

    Although simple moving averages may be a technical\nanalyst’s best friend, they do tend to lag. Here’s how you can overcome this problem.

    Moving averages are excellent indicators to confirm existing trends in spite of their lag. To overcome this lag, several alternatives such as the exponential moving average (EMA) and the weighted moving average (WMA) have been applied to price charts. In this article, I will not tweak the simple moving average (SMA). Instead, I will decrease the lag of the SMA crossover by one day by basing it on a simple mathematical observation.

    SIMPLE MOVING AVERAGE CROSSOVER

    First, I would like to show you an arithmetic example. A five-day simple moving average (MA5) is the average of the last five closing values:

    MA5 = (C + C-1 + C-2 + C-3 + C-4)/5 = C/5 + (C-1 + C-2 + C-3 + C-4)/5\n[A1]

    In a similar fashion, a four-day SMA is:

    MA4 = (C + C-1 + C-2 + C-3)/4

    Its previous value is:

    MA4-1= (C-1 + C –2 + C –3 + C –4)/4

    or 4*MA4-1= C-1 + C –2 + C –3 + C –4

    or 4* MA4-1/5=( C-1+C –2+C –3+C –4)/5

    If you replace (C-1 + C-2 + C-3 + C-4)/5 in [A1] you get:

    MA5 = C/5 +4*MA4-1/5\nor\nMA5=(C+4*MA4-1)/5 [A2]"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-20-26-anticipating-moving-average-crossovers-by-dimitris-tsokakis-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-20-26-anticipating-moving-average-crossovers-by-dimitris-tsokakis-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-20-26-anticipating-moving-average-crossovers-by-dimitris-tsokakis-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253foth,d,"{""minimum-quantity"":""1"",""path"":""ch2f203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:2 (32-36): Follow That Trend by Michael Covel and Justin Vandergrift"",""caption-linebreaks"":""Stocks & Commodities V. 25:2 (32-36): Follow That Trend by Michael Covel and Justin Vandergrift

    Even if you are a trend-follower, you still have to be a systematic trader. Here’s why you still have to manage\ndrawdowns when the market is not trending.

    As so often happens, it’s not the answer that is wrong, but the question. People ask me how long trend-following trading will last. Well, there is no reason trend-following should ever stop. Only if markets\nwere to go sideways forever would trends cease to exist and therefore trend-following cease to work.\nTrend-following traders respond to what is happening in the market rather than anticipating what will happen. They are aggressively reactive in that they avoid forecasting and prediction at all costs. They base their trading decisions on one piece of core information: the market price.

    Most traders, on the other hand, want news. They want CNBC, The Wall Street Journal, crop reports, OPEC rumors, and daily doses of Mad Money with Jim Cramer. Why? Because they believe deep down that all of the “stories” and “data” will help them make profitable trading decisions. For trend-followers, all (and we do mean all) fundamental data is like white noise. It doesn’t matter if the market goes up or down because trend-followers only care about price action.

    Think about it: What else can you really believe in besides the market price? Or, to quote famed trader John W. Henry: “The greatest action, the wisest, the best action that you can take in almost any situation is to stay with what is, instead of jumping to conclusions or trying to come up with conclusions. Just pay attention to what is.”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-32-36-follow-that-trend-by-michael-covel-and-justin-vandergrift-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-32-36-follow-that-trend-by-michael-covel-and-justin-vandergrift-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-32-36-follow-that-trend-by-michael-covel-and-justin-vandergrift-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253exyo,d,"{""minimum-quantity"":""1"",""path"":""ch2f203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:2 (38): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 25:2 (38): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    PUTS AFTER BANKRUPTCY

    I own January 2009 puts in a company I feel will be bankrupt in the near future. I have received conflicting responses from traders to this question: What happens\nto the puts of an underlying company that announces bankruptcy? Is the put writer still obligated to buy shares of the worthless stock at the strike price? Some have said trading in the underlying halts and all the options become worthless. Is that true?

    There are no set rules about options and bankruptcy, but often, the puts will still have value and the out-of-the-money calls will expire worthless. To understand why, let’s consider what happens in a bankruptcy. If the options are trading, then shares are probably still listed on one of the stock exchanges. However, when a company files for bankruptcy, the exchange might suspend trading and maybe de-list the stock. When US Airways filed for bankruptcy several\nyears ago, the New York Stock Exchange (NYSE) released a memo stating that the NYSE would suspend trading in the stock because the company said it had filed to reorganize."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-38-explore-your-options-by-tom-gentile-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-38-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-38-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254qaby,d,"{""minimum-quantity"":""1"",""path"":""ch2f203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:2 (43): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 25:2 (43): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://\nMessage-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    KEEPING IT CONSISTENT

    When you are performing analysis on a couple of stocks for a pair trade or some sort of relative performance, or for that matter comparing advancing issues and declining issues of a limited basket (say\nthe sp100 basket), is it better to do a ratio (dividing the two) or a difference (subtract the two)? I have seen examples from different sources including\npairtrade.com when dividing and subtracting were used. When I look at the differences between the two ways of looking at the data, I notice they basically mirror each other most of the time and are almost identical, but there are times when the ratio of the two shows a spike and starts to move quicker in the opposite direction than the difference of the two. What is your take on using these two different calculations? Is one\nbetter than the other? Why on some occasions does the ratio exhibit quicker and better trend movements than the other calculation?

    In a basic spread chart, when you subtract the two different stocks or divide the two stocks so that you create a spread chart that shows more of a range-bound or oscillating quality to find those mean reverting signals, why do some people use a subtraction of the two stocks while others use a ratio or division of the two to create a new spread chart? —raker"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-43-q-a-by-don-bright-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-43-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-43-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254frni,d,"{""minimum-quantity"":""1"",""path"":""ch2f203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:2 (44-48): From Nile to NYSE by Radha Panini"",""caption-linebreaks"":""Stocks & Commodities V. 25:2 (44-48): From Nile to NYSE by Radha Panini

    Here’s an analysis of the profitability of an indicator based on the Hurst exponent.

    In researching and developing trading systems, we came across an indicator based on fractal concepts. Not only is it simple and functional, the underlying theory is elegant and introduces a new way of looking at finance. To understand it better we looked into the origins of fractal concepts in finance. Here, we begin with the historical development of the field and follow it with the underlying theory and numerical methods. Then we test the utility of a trend indicator, the fractal dimension index, based on the fractal dimension. We found that this indicator is a reliable way of improving results for any trend-sensitive system.

    FRACTALS IN FINANCE

    Finance theory has been deeply anchored in a model of asset price movement following a Gaussian distribution (see sidebar “Gaussian distribution”). The theory’s foundations lay in Louis Bachelier’s 1900 dissertation “Theory of Speculation.” Bachelier proposed that the movement of stock prices in the Paris Bourse can be modeled as a Brownian motion,\nwhich is a mathematical model that describes the random motion of pollen particles suspended in water. This model, however, had a shortcoming in that it allowed for the possibility of negative asset prices. To ensure that prices take on only positive values, Paul\nSamuelson proposed the geometric Brownian motion model under which the change in the logarithm of prices (price returns) are normally distributed (see sidebar “Models of stock price behavior”). These assumptions were accepted for their elegance\nand simplicity and led to the development of finance theories such as the efficient market hypothesis, the Black-Scholes theory for option pricing, and the capital asset pricing model (CAPM) for portfolio risk."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-44-48-from-nile-to-nyse-by-radha-panini-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-44-48-from-nile-to-nyse-by-radha-panini-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-44-48-from-nile-to-nyse-by-radha-panini-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254sibr,d,"{""minimum-quantity"":""1"",""path"":""ch2f203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:2 (44-48): Sidebar: Brownian motion and fractional Brownian motion by Radha Panini"",""caption-linebreaks"":""Stocks & Commodities V. 25:2 (44-48): Sidebar: Brownian motion and fractional Brownian motion by Radha Panini

    BROWNIAN MOTION AND FRACTIONAL BROWNIAN MOTION

    Brownian motion: A random process {Wt: t > 0} is a standard Brownian motion if:

    1. For each t> 0 and s>0, Wt+s – Wt is normally\ndistributed with mean 0 and variance s

    2. Wt+s – Wt is independent of Wt

    3. Wt is a continuous function of time and W0 = 0.

    An important property of a Brownian motion is that the\ncovariance of Wt is given by:

    E(WtWs) = min{s,t}"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-44-48-sidebar-brownian-motion-and-fractional-brownian-motion-by-radha-panini-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-44-48-sidebar-brownian-motion-and-fractional-brownian-motion-by-radha-panini-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-44-48-sidebar-brownian-motion-and-fractional-brownian-motion-by-radha-panini-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254siga,d,"{""minimum-quantity"":""1"",""path"":""ch2f203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:2 (44-48): Sidebar: Gaussian Distribution by Radha Panini"",""caption-linebreaks"":""Stocks & Commodities V. 25:2 (44-48): Sidebar: Gaussian Distribution by Radha Panini

    The Gaussian distribution is a symmetric bell-shaped\ncurve. It is fully described by two parameters, the mean µ and the variance •2. The mean determines the location of the center of the curve (the point about which it is symmetric) while •2 determines the shape of the curve. A larger value of •2 gives a flatter distribution curve, whereas a smaller value gives a narrower curve."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-44-48-sidebar-gaussian-distribution-by-radha-panini-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-44-48-sidebar-gaussian-distribution-by-radha-panini-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-44-48-sidebar-gaussian-distribution-by-radha-panini-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254simo,d,"{""minimum-quantity"":""1"",""path"":""ch2f203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:2 (44-48): Sidebar: Models of stock price behavior by Radha Panini"",""caption-linebreaks"":""Stocks & Commodities V. 25:2 (44-48): Sidebar: Models of stock price behavior by Radha Panini

    MODELS OF STOCK PRICE BEHAVIOR

    1. Brownian model (BM)

    St = S0 + µt + •Wt

    where St is the stock price at time t, S0 is the stock price at time 0, µ, and • are constants and Wt is a Brownian motion. Since Wt can take negative values, it is possible for stock prices to be negative!"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-44-48-sidebar-models-of-stock-price-behavior-by-radha-panini-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-44-48-sidebar-models-of-stock-price-behavior-by-radha-panini-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-44-48-sidebar-models-of-stock-price-behavior-by-radha-panini-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254sire,d,"{""minimum-quantity"":""1"",""path"":""ch2f203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:2 (44-48): Sidebar: Rescaled range analysis by Radha Panini"",""caption-linebreaks"":""Stocks & Commodities V. 25:2 (44-48): Sidebar: Rescaled range analysis by Radha Panini

    RESCALED RANGE ANALYSIS

    The rescaled range analysis technique to determine the Hurst exponent for a series {r(1), r(2),......,r(n)} is based on the equation:

    R(n),

    S(n) = k(nH) for some constant k.

    where n is the number of observations and H is the Hurst exponent.

    In the above equation, R(n) is the range for the cumulative mean deviation series and S(n) is the standard deviation of the series. In mathematical terms..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-44-48-sidebar-rescaled-range-analysis-by-radha-panini-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-44-48-sidebar-rescaled-range-analysis-by-radha-panini-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-44-48-sidebar-rescaled-range-analysis-by-radha-panini-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254fufo,d,"{""minimum-quantity"":""1"",""path"":""ch2f203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:2 (49): Futures For You by Dan O’Neil"",""caption-linebreaks"":""Stocks & Commodities V. 25:2 (49): Futures For You by Dan O’Neil

    INSIDE THE FUTURES WORLD

    Want to learn how the futures markets really work? Dan O’Neil, a principal at online futures and forex broker XPRESSTRADE (www.xpresstrade.com), responds to\nyour questions about today’s futures markets. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be\nposted there, and selected questions will appear in a future issue of S&C.

    OPTION PLAY

    What are some ways that traders use commodity options?

    There’s no question that commodity options are becoming increasingly popular. Traders see them not only as a great way to speculate on market direction,\nbut also as important tools to manage risk, diversify portfolios, and enhance current income. But there are\ndefinite factors to keep in mind when deciding how to incorporate them in your overall portfolio. For those with a high risk tolerance, commodity options provide a great way to speculate on the markets and an opportunity to use relatively moderate sums of money to control fairly sizable positions. For a fraction of what it would cost to buy large quantities of an actual commodity like gold, crude oil, or Treasury bonds, investors can buy calls giving them the right, but not the obligation, to buy futures contracts as a specific price (the strike price). Of course, the leverage afforded by options is a double-edged sword of sorts; the risk of loss is also greater."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-49-futures-for-you-by-dan-o-neil-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-49-futures-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-49-futures-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255whyp,d,"{""minimum-quantity"":""1"",""path"":""ch2f203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:2 (54-56): Why Position Trade? by Martha Stokes"",""caption-linebreaks"":""Stocks & Commodities V. 25:2 (54-56): Why Position Trade? by Martha Stokes

    Position trading offers some good opportunities for current market conditions. Here’s how you can benefit.

    When the stock market is dominated by short-term traders, the position trade is often forgotten in favor of the betterknown daytrading, swing, and option trading techniques. This is unfortunate because position trading offers some excellent opportunities for prevailing current market conditions. The stock market sees long periods of sideways action followed by sudden bursts of price action, both momentum patterns and gap series sequences. This kind of market action, it turns out, is ideal for position trading.

    ADVANTAGES FOR OPTION TRADERS

    If you learn to position trade, you will develop the skills necessary to determine when a stock is poised to move, how much it is likely to move, and how long the move will take. This is useful if you want to trade options.

    Time decay is an ever-present risk for buyers of calls and puts. Knowing when, how much, and how long are essential technical skills needed for higher profitability\nand fewer losses. For writers of calls or puts, being able to accurately determine whether a stock will remain in a tight consolidation or neutral position lowers the risk of being executed and increases your likelihood of success.

    Example: Figure 1 shows a typical consolidation pattern for a position trade. Each vertical line indicates a month of price action. The option player who can recognize these entry signals buys during the low-volatility phase and rides out the move as it pops out of the sideways pattern and moves up with velocity. But call writers need to be aware of the time\nframe when gap patterns are most likely to occur. Recognizing when that stock is going to pop out of its\nconsolidation will help you time your option trade so it coincides with the timing if your option contract expires."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-54-56-why-position-trade-by-martha-stokes-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-54-56-why-position-trade-by-martha-stokes-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-54-56-why-position-trade-by-martha-stokes-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255wefo,d,"{""minimum-quantity"":""1"",""path"":""ch2f203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:2 (57): Websites For Traders: Pinksheets.com by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 25:2 (57): Websites For Traders: Pinksheets.com by David Penn

    PINKSHEETS.COM

    Many is the successful broker who, although currently trading blue chips, got his or her start patrolling the market for over-the-counter stocks known as the “pink sheets,” looking to find that elusive three-dollar (or even three-cent) stock primed to go gangbusters.

    As you might imagine, three-cent stocks tend not to be the most investment grade of equities, which is one\nreason why a stock might find itself delisted from the exchanges and making a home for itself in the pink sheets (so-called because the publication in which these stocks were listed was printed on pink paper, not unlike the Financial Times). And because those stocks do not report to the Securities and Exchange Commission as do “listed” or exchange-based stocks,\nspeculation often surrounds them. I get several emails a day from advisory services telling me about the great move in XYZ—a steal at seven cents!—that I just missed, and how I’ve only got a few days before that seven-cent number goes careening toward the value of a dollar or more.

    Part of the lure of pink sheet stocks, obviously, is their low price. Beginning traders, greedy traders, and traders making their way back from ruin are often\nattracted to the idea of being able to buy 1,000 shares of stock — even if the shares can be had for some double-digit divisor of a penny each. Another lure is the potential for huge gains should one of these undiscovered, left behind, overlooked, and discounted stocks do well. After all, from an optimistic perspective,\nthere’s plenty of room to the upside for a seven-cent stock. Of course, there’s nothing stopping a seven-cent\nstock from becoming a two-cent stock or less."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-57-websites-for-traders-pinksheets-com-by-david-penn-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-57-websites-for-traders-pinksheets-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-57-websites-for-traders-pinksheets-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255injo,d,"{""minimum-quantity"":""1"",""path"":""ch2f203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:2 (58-63): Interview: John Person by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 25:2 (58-63): Interview: John Person by Jayanthi Gopalakrishnan

    John Person is a 25-year veteran of the futures and options trading industry. Person started on the floor of the Chicago Mercantile Exchange back in 1979. He then had the privilege of working with George Lane, the\ninnovator of stochastics. Person worked his way throughout the industry as a trader, broker, analyst, and branch manager for one of Chicago’s largest discount/full-service firms under the direct supervision of a former chairman of the Chicago Board of Trade.\nJohn Person is the former owner and president of First National Futures Group and is continuing his work as a registered Commodity Trading Advisor. Technical Analysis of STOCKS & COMMODITIES Editor Jayanthi\nGopalakrishnan spoke with John Person on December 6, 2006, via phone interview.

    Q: John, how did you get interested in trading?

    A: I started on the floor of the Chicago Mercantile Exchange back in 1977 for a summer job as a runner. I think the excitement, the thrill, the lights, the hustle and the bustle, the people, and the lifestyle were what interested me. One of my first jobs was for a big cattle trader. One day he pulled out a wad of hundred- dollar bills — he probably had about $5,000 or $10,000 — and peeled off a hundred and said, “Go downstairs\nand see the bartender — his name is Red — and tell him that Bruce and Ronnie want two specials.”

    Q: What were those?

    A: They were basically Bloody Marys that had no bloody in the Mary. It was pure vodka in these 16-ounce Styrofoam tumblers. It was about 9:30 am. I came back with exact change, and he said, “Did you tip Red?” I said no. He said, “Here’s $20, keep it for yourself, and\nhere’s $20, go run it down to [Red].” That was my first job as a runner.

    Q: Now let’s back up. How did you get there?

    A: I grew up in a suburb of Chicago and around there, a lot of people got jobs as runners on the floor of the exchange for the summer. I was at Loyola University studying economics, and one day I was taking the train and sat down next to George Lane. He lived in Skokie at the time and was in the train going north toward the high-rent district..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-58-63-interview-john-person-by-jayanthi-gopalakrishnan-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-58-63-interview-john-person-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-58-63-interview-john-person-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256tuin,d,"{""minimum-quantity"":""1"",""path"":""ch2f203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:2 (64-67): Tuning Intraday Strategies by Lee Leibfarth"",""caption-linebreaks"":""Stocks & Commodities V. 25:2 (64-67): Tuning Intraday Strategies by Lee Leibfarth

    Developing a daytrading strategy that is consistent across all markets is impossible. But here are some things to keep in mind when assessing your daytrading strategy.

    The growing availability of trading platforms that can\nbuild, backtest, and automate intraday trading\nstrategies is allowing more and more traders to develop and test their own unique daytrading ideas. Constructing a rulebased daytrading system using historical data can help traders develop sound,\nstatistical logic and create a higher level of confidence in their strategies.

    While most traders are familiar with the reminder that “past performance is not indicative of future results,” there is an amazing amount of confidence that can be generated from positive past results. That said, correlating the results of historical testing versus real trading for the same system is as important as the trading logic itself. Unfortunately, this aspect of system development is often overlooked as many traders look\nfor incredible historical results instead of tuning their systems to actually fit their intended markets. This article will discuss some ideas for getting better\ncorrelation between system testing and actual market trading.

    Developing daytrading strategies often requires a unique approach to the markets that may be contrary to popular conventions in trading system development. Daytrading strategies are often specific to their intended markets and are not necessarily profitable across an entire portfolio. A system designed for the e-mini Russell 2000 does not need to show a similar expectancy on the QQQQs (or rice, crude oil, or Treasury bonds, for that matter). These markets trade at much different volumes and with much different volatility. Developing a daytrading strategy that works on everything is almost impossible and can greatly compromise the profitability of the target market."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-64-67-tuning-intraday-strategies-by-lee-leibfarth-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-64-67-tuning-intraday-strategies-by-lee-leibfarth-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-64-67-tuning-intraday-strategies-by-lee-leibfarth-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256prre,d,"{""minimum-quantity"":""1"",""path"":""ch2f203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:2 (68-71): Product Review: Optionstar 2 by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 25:2 (68-71): Product Review: Optionstar 2 by David Penn

    It is difficult to fathom it has been five years since I last took a look at Optionstar, Jesse Chen’s innovative option analysis software based on Microsoft Excel. Technical Analysis of STOCKS & COMMODITIES was contacted recently by Chen, who asked if we would be interested in bringing our readers up to speed on the various enhancements and expanded capabilities he and his developers have brought to the software. Given the rise in interest in options trading among retail traders — and the length of time since we last discussed Optionstar — bringing the software back on stage seemed like a no-brainer.

    So what’s new with Optionstar — or more accurately, Optionstar 2 — that merits renewed attention? At its most basic, the changes to Optionstar 2 include a fairly significant display overhaul. In some ways, however, the current version of Optionstar 2 bears only passing, Excel-related resemblance to its predecessor.

    Optionstar 2, for example, contains just three main tabs (not including the “title” tab, which consists mostly of an end-user agreement and instructions on how to download data). These tabs each link to a different worksheet. One, labeled “chn,” is for options chains (Figure 1). The worksheet contains three main areas. In the upper left corner of the worksheet is the data entry area where traders enter the symbol for the underlying asset, the expiration month, and select from the different datafeed options. The current price of the underlying (or the delayed price) will be posted, as will the volatility and the time of the last price quote (again, because of the delayed nature of the free data). Optionstar offers four free delayed stock option datafeeds and one free end-of-day futures option datafeed."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-68-71-product-review-optionstar-2-by-david-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-68-71-product-review-optionstar-2-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-68-71-product-review-optionstar-2-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov257prre,d,"{""minimum-quantity"":""1"",""path"":""ch2f203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:2 (72-74): Product Review: VantagePoint 7.0 by Phil Crosby, CFA"",""caption-linebreaks"":""Stocks & Commodities V. 25:2 (72-74): Product Review: VantagePoint 7.0 by Phil Crosby, CFA

    Market Technologies’ flagship product, VantagePoint\nIntermarket Analysis Software, has been reviewed a\nnumber of times, but version 7.0 has so many new features it deserves a review of its own. Enhancements\nfrom version 6.0 include the addition of long-term forecasts, the major technical indicators, and many leading stocks from the Standard & Poor’s 500 as well as a new look built around portfolios that give the user easier access to charts and more flexibility in working\nwith them.

    One thing that has not changed is VantagePoint’s foundation: Intermarket analysis using neural network technology to analyze multiple related markets to look for patterns that hint at where a target market is headed. That’s the same concept that company founder and trading technology pioneer Louis Mendelsohn has used since he released the first version of VantagePoint in 1991.

    PRODUCT OVERVIEW

    VantagePoint 7.0 forecasts the outlook for more than 200 markets across 19 categories, including most major commodity and financial futures, forex pairs, exchange traded funds (ETFs), and equities within nine stock sectors. Within the commodity futures arena, VantagePoint provides forecasts for energies, grains, meats, metals, and softs. In financials, forecasts are provided for currency futures, ETFs, forex pairs, indexes, and interest rates. In stocks, forecasts are provided for individual equities within the basic materials, conglomerates, consumer goods, financials, health care, industrial goods, services, technology, and utilities areas."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-72-74-product-review-vantagepoint-7-0-by-phil-crosby-cfa-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-72-74-product-review-vantagepoint-7-0-by-phil-crosby-cfa-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-72-74-product-review-vantagepoint-7-0-by-phil-crosby-cfa-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov25778we,d,"{""minimum-quantity"":""1"",""path"":""ch2f203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:2 (75, 78): Websites For Traders: MaoXian by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 25:2 (75, 78): Websites For Traders: MaoXian by David Penn

    MAOXIAN.COM

    Come for the economic insights and financial analysis. Stay for the jpegs of Chinese hotties? I first came across MaoXian.com after spending a little time at another financial blog, TraderMike.net (tradermike.net).\nThe phrase “MaoXian” apparently means “to take a risk” and at its most basic, MaoXian.com — a blog run pseudonymously by “Chairman MaoXian” — spends much of its time discussing developments in Chinese economics and society in addition to serving up analysis and commentary on ETFs, US equities, and the markets in general. A glance at recent posts is always a good way of getting a sense of what a blog is up to lately. And such a glance in MaoXian’s direction yields a blog that is as concerned about stocks and market movement as anything else, though more than willing to engage in conversation about the topic du jour (as of this writing, the midterm elections of 2006), the\nodd social observation (an article on how “men need deep emotional connections with other men, not just their wives” that MaoXian claims is a vindication of the\nguys’-night-out poker game) and, of course, the admittedly “gratuitous cute chick pic,” which tends to consist of comely ladies from the world’s most\npopulous nation.

    Another way of getting a sense of what MaoXian is up to is by looking at the various categories (which, along with the recent posts, are arrayed along the right side of the blog) into which the posts can be divided. Through this lens, “Notable new highs,” “Stocks to watch,” “Investing,” and “China” make up most of the contributions, with a number of posts categorized as “Trading,” “Internet/Media,” and “Culture” making up the second tier of MaoXian.com’s content. Some of the most recent posts as of this writing included several updates on recent “Notable new highs,” best and worst weekly sector performance ratings, and observations about the relationship between global resource use and the industrial revolution in India and China. And, of\ncourse, there is the aforementioned “gratuitous cute chick pic.”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-75-78-websites-for-traders-maoxian-by-david-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-75-78-websites-for-traders-maoxian-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-75-78-websites-for-traders-maoxian-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov257prre1,d,"{""minimum-quantity"":""1"",""path"":""ch2f203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:2 (76-78): Product Review: eSignal 8.0 by Dennis D. Peterson"",""caption-linebreaks"":""Stocks & Commodities V. 25:2 (76-78): Product Review: eSignal 8.0 by Dennis D. Peterson

    W hile eSignal does an excellent job of providing quotes, they also offer other capabilities such as charting and backtesting, and providing a number of indicators (many free but some requiring a fee). Their\ndatafeed streams US, Canadian, South/Latin American, European, African, Asian, and Pacific Rim exchanges, as well as Level II, foreign exchange, fixed income, and more than 100 indexes. eSignal offers a lot of features and reviewing all of it in detail would take more space than we have available. So I have focused on some highlights.

    eSignal is the vendor for 13 third-party software packages, including John Ehlers’ MESA software. The advanced charting feature of eSignal includes access to more than 30 add-on studies from third-party partners.

    LEVEL II DATA

    The presentation of Level II–type data, which eSignal refers to as “market depth,” is typical of many suppliers, with bids and asks on the left and time and sales on the right. At the bottom of the depth screen (Figure 1) are viewing options labeled as “Montage, TotalView, Island, Arca, NYOB,” which are references to different views of Level II data. “Montage” is a reference to\nSuperMontage, which NASDAQ created to offer some features unique to electronic communications networks\n(ECNs).

    When your selected view is “Montage,” you are seeing the best bid or offer from a market maker or ECN. To\nclarify, suppose that a market maker has two orders, both of which are buys. If one is for $42.50 and the other for $42.45, you will only see the $42.50 offer independent of its size. If the $42.50 offer is 100 shares and the $42.45 offer is for 100,000 shares, you won’t see the liquidity sitting there because your Montage view will only show the 100-share offer. For a bid or ask size of 100 shares you will see a “1” in the HSIZE\ncolumn since the granularity is 100 shares (Figure 1)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-76-78-product-review-esignal-8-0-by-dennis-d-peterson-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-76-78-product-review-esignal-8-0-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-76-78-product-review-esignal-8-0-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov257qufo,d,"{""minimum-quantity"":""1"",""path"":""ch2f203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:2 (79): Quick-Scans: The Forewarned Investor by Bruce R. Faber"",""caption-linebreaks"":""Stocks & Commodities V. 25:2 (79): Quick-Scans: The Forewarned Investor by Bruce R. Faber

    Since the dawn of equities, investors have been made fools of over and over again by corrupt chief executive officers (CEOs). Most CEOs rise to the top of the corporate ladder because they are the cream of the crop. However, some CEOs rise because they are the most active scum. In this book of revelation, authors\nMessing and Sugarman paint a clear picture of how such scum scams the investors and steals millions from those who place their trust, their hard-earned dollars, and their life savings into the companies\nthese rogues control.

    This is not your average dry reading of Wall Street charts and numbers. I found it fascinating. In 30 seconds I was hooked. Granted, the “rogue CEOs” (which is how the authors refer to these corporate felons) are savvy and sharp as needles. In fact, some of them are the smartest guys in the room. But even if they are smart they still need help in order to be able to\nsink to the depths of disgust they all eventually attain. This guide shows how the rogues did their dirty deeds and what informed investors might have done to save at least a part of their investments.

    The scariest part? Even today, much of what the authors describe as dangerous is still blatantly evident in some circles of power. The authors lay out the basic formulas for fraud..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-79-quick-scans-the-forewarned-investor-by-bruce-r-faber-23.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-79-quick-scans-the-forewarned-investor-by-bruce-r-faber-26.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-79-quick-scans-the-forewarned-investor-by-bruce-r-faber-27.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov258trti,d,"{""minimum-quantity"":""1"",""path"":""ch2f203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:2 (80-89): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 25:2 (80-89): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    Most of this month’s Traders’ Tips are based on Dimitris Tsokakis’ article in this issue, “Anticipating\nMoving Average Crossovers.”\nCode written in AmiBroker Formula\nLanguage for AmiBroker software is\nprovided by the author in the article.\nAdditional code is presented here for TradeStation, MetaStock, eSignal, Wealth-Lab, NeuroShell Trader, NeoTicker, AIQ, SnapSheets, StrataSearch, Ensign Windows, OmniTrader Pro, VT Trader, TS Support, and Trade Navigator.

    Any other tips in this section are on a topic of the contributors’ choosing. Investor/RT chose to write about the volume breakdown (VB) indicator."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-80-89-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-80-89-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-80-89-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov259bofo,d,"{""minimum-quantity"":""1"",""path"":""ch2f203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:2 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 25:2 (92): Books For Traders by Technical Analysis, Inc.

    Anatomy of the Bear: Lessons From Wall Street’s For Great Bottoms (324 pages, $34.96 softcover, 2005, ISBN 9628606794) by Russell Napier, published by\nCLSA Books. How does one spot the bottom of a\nbear market? What brings a bear to its end? The author looks at the four occasions when US equities were undervalued and tries to answer these questions by analyzing every article in The Wall Street Journal for two months on either side of each market bottom. After examining 70,000 articles he began to understand what indicates a great buying opportunity. Here he offers investors a financial field guide to making the best financial provisions for the future."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-2-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251leto2,d,"{""minimum-quantity"":""1"",""path"":""ch3m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:3 (10-13): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 25:3 (10-13): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist.

    ALEXANDER ELDER’S MACD HISTOGRAM

    Editor,

    In David Penn’s article, “Trading the MACD Histogram,\nPart II,” (Working-Money.com, 12/29/ 2006), he mentions “P-p-P” and “m-M-m” patterns when referring\nto “change in slope on the second peal or trough in the histogram.” I would appreciate it very much if you could\nexplain this more in detail.

    JOSE NOGUEIRA DOS SANTOS

    Technical Writer David Penn replies:

    Thank you for writing. Those specific symbols come from Alexander Elder’s excellent book, \""Trading For A Living.\"" I was unsure if they would be too confusing for readers. The idea is simple, but sometimes explaining\nit using other tools only makes it seem more complicated. The “P-p-P” and “m-M-m” patterns are Elder’s shorthand way of describing how the histogram moves that can be used as triggers to initiate positions.

    For example, the “P-p-P” pattern refers to any instance when the histogram is at one level, dips down to a lower level, then rises back up. Numerically, this could be expressed as the following set of MACD histogram\nreadings: -0.221, then -0.230, then -0.208. Those histogram readings were taken from a daily chart of the\nQQQQ on December 22, 26, and 27, with a buy signal created on the 27th."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-10-13-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-10-13-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-10-13-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251fofo1,d,"{""minimum-quantity"":""1"",""path"":""ch3m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:3 (14-20): Forex Focus: Spotting Trend Reversals by Cornelius Luca"",""caption-linebreaks"":""Stocks & Commodities V. 25:3 (14-20): Forex Focus: Spotting Trend Reversals by Cornelius Luca

    Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. With that in mind, STOCKS & COMMODITIES has introduced Forex Focus to better prepare the retail trader to participate in the currency market.

    We strive to identify a trend, stay with it, and take as\nmuch profit from it as we can. Giving up on a trend, or even a lesser upmove or downmove, is not easy but is often necessary. To help you part with a trend that\nshould be abandoned, here are several methods to identify if the end of the trend is approaching.

    TRENDLINES

    Figure 1 shows a clear uptrend, a sideways area, a downtrend, and finally a recovery in the euro/dollar. The uptrend was lengthy but the first part was choppy,\nwhich likely made it difficult to hold long positions. However, daytraders probably profited from that rough period if they were able to weave their way through the market without holding positions for too long. Trendlines can be drawn to bring some order to this market. Figure 2 shows two rising trendlines, which highlight the different acceleration rates in the uptrend. The steep uptrend had only one failure during its climb, but since it was on an intraday basis, it was not technically relevant. It wasn’t until the second day after the euro/dollar posted its first top that the market closed below the support of the rising trendline, signaling the end of the uptrend."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-14-20-forex-focus-spotting-trend-reversals-by-cornelius-luca-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-14-20-forex-focus-spotting-trend-reversals-by-cornelius-luca-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-14-20-forex-focus-spotting-trend-reversals-by-cornelius-luca-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov252trin,d,"{""minimum-quantity"":""1"",""path"":""ch3m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:3 (22-24): Trading In Your IRA by John Ehlers"",""caption-linebreaks"":""Stocks & Commodities V. 25:3 (22-24): Trading In Your IRA by John Ehlers

    This concept lets you trade your IRA with performance\nthat can beat the index dramatically.

    Trading in your individual retirement account (IRA) usually means selecting which mutual fund to buy. The performance of these mutual funds is gauged relative to the Standard & Poor’s 500 or similar index. In this article I will describe some concepts that will allow you to trade your IRA with index-beating performance — sometimes dramatically. Most IRAs do not allow trading on the short side. Selling short is just the flipside of buying a long position. When you buy a long position, your strategy is to hold for a period and then sell back at a higher price for a profit. Similarly, you expect prices\nto decline if you sell short. In this case your strategy is to sell short now, hold for a period of time, and buy back at a lower price.

    BUYING OPTIONS

    Although you (usually) cannot sell short in your IRA, you can buy options to create synthetic positions. You want to use in-the-money options for these synthetic positions. You buy call options for synthetic long positions and you buy put options for synthetic short positions. Therefore, you are always buying something to establish your position in either direction. This is the fundamental concept of trading in your IRA. Simple and elegant, isn’t it?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-22-24-trading-in-your-ira-by-john-ehlers-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-22-24-trading-in-your-ira-by-john-ehlers-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-22-24-trading-in-your-ira-by-john-ehlers-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov252moav,d,"{""minimum-quantity"":""1"",""path"":""ch3m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:3 (26-34): Moving Average Crossovers Part II, by Dimitris Tsokakis"",""caption-linebreaks"":""Stocks & Commodities V. 25:3 (26-34): Moving Average Crossovers Part II, by Dimitris Tsokakis

    In the first part, we examined how to overcome the lagging tendency of the moving average crossover. In part II, we look at trading opportunities presented by decreasing the lag of a moving average crossover.

    In the first part of this series, I applied the 20-day and 30-day simple moving average (SMA) on the stocks in the NASDAQ 100 index. This time, I will use the same 100 stocks and look at them from a different perspective. I will calculate the number of moving average crossover predictions and the number of actual crossovers and plot them as daily functions. In Amibroker this can be done with the help of the\nAddToComposite() function. Now, let us create the new\nartificial tickers for the entire database of 100 stocks:

    “~DescPR,” the number of stocks with a Descending MAcross Prediction [black line]

    “~Dcr,” the number of stocks with a confirmed Descending MAcross [red line]

    “~AcrPR,” the number of stocks with an Ascending MAcross Prediction [light blue line]

    “~Acr,” the number of stocks with a confirmed Ascending MAcross [dark blue line]

    In Figure 1 you can see that the prediction lines anticipate the actual line crosses by one day. To create these tickers I used the Amibroker Formula Language (AFL) code found in the Composite Tickers sidebar. Then I plotted the chart using the code found in “The population of cross predictions vs. the actual crosses” sidebar (see page 28).

    In my market analysis I did not look at individual stocks; I counted all descending cross predictions as one and added them to come up with the final number. It is obvious from Figure 1 that the individual anticipation property is also a market property. The predictions anticipate the actual crosses by one day."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-26-34-moving-average-crossovers-part-ii-by-dimitris-tsokakis-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-26-34-moving-average-crossovers-part-ii-by-dimitris-tsokakis-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-26-34-moving-average-crossovers-part-ii-by-dimitris-tsokakis-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov252sico,d,"{""minimum-quantity"":""1"",""path"":""ch3m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:3 (26-34): Sidebars: The composite tickers, The population of cross..., by Dimitris Tsokakis"",""caption-linebreaks"":""Stocks & Commodities V. 25:3 (26-34): Sidebars: The composite tickers, The population of cross..., by Dimitris Tsokakis

    Sidebars from Dimitris Tsokakis' article Moving Average Crossovers Part II, including THE COMPOSITE TICKERS, THE POPULATION OF CROSS PREDICTIONS VS. THE ACTUAL CROSSES, PROBABLE SMA CROSS DAYS, STOCHASTIC SMA CROSSOVER PREDICTION STATISTICS, and PREDICTING SMA CROSSOVERS WITH STOCHASTICS."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-26-34-sidebars-the-composite-tickers-the-population-of-cross-by-dimitris-tsokakis-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-26-34-sidebars-the-composite-tickers-the-population-of-cross-by-dimitris-tsokakis-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-26-34-sidebars-the-composite-tickers-the-population-of-cross-by-dimitris-tsokakis-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253sima,d,"{""minimum-quantity"":""1"",""path"":""ch3m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:3 (36-42): Sidebar: MA, Breakout, and RSI system rules, by Radha Panini"",""caption-linebreaks"":""Stocks & Commodities V. 25:3 (36-42): Sidebar: MA, Breakout, and RSI system rules, by Radha Panini"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-36-42-sidebar-ma-breakout-and-rsi-system-rules-by-radha-panini-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-36-42-sidebar-ma-breakout-and-rsi-system-rules-by-radha-panini-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-36-42-sidebar-ma-breakout-and-rsi-system-rules-by-radha-panini-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253sire,d,"{""minimum-quantity"":""1"",""path"":""ch3m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:3 (36-42): Sidebar: Rescaled range analysis by Radha Panini"",""caption-linebreaks"":""Stocks & Commodities V. 25:3 (36-42): Sidebar: Rescaled range analysis by Radha Panini

    The rescaled range analysis technique to determine the Hurst exponent for a series {r(1), r(2),......,r(n)} is based on the equation ..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-36-42-sidebar-rescaled-range-analysis-by-radha-panini-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-36-42-sidebar-rescaled-range-analysis-by-radha-panini-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-36-42-sidebar-rescaled-range-analysis-by-radha-panini-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253trsy,d,"{""minimum-quantity"":""1"",""path"":""ch3m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:3 (36-42): Trading Systems And Fractals by Radha Panini"",""caption-linebreaks"":""Stocks & Commodities V. 25:3 (36-42): Trading Systems And Fractals by Radha Panini

    In the second part of this series, we look at the application of fractals to a few well-known trading\nsystems.

    There have been many applications of fractal methods to trading, the most popular of which has been an indicator based on the fractal dimension of a time series. The fractal dimension index (FDI) can be used as a filter to identify trending compared with trading range markets. Other indicators, like fractal–based adaptive moving averages, have also been proposed.\nThe idea behind such moving averages is to adapt to the randomness of a price series. If the price is more\nrandom (trading in a range) as indicated by the fractal\ndimension value, the moving average is slower, leading to fewer whipsaws. In a less random market (trending), however, the moving average is faster, leading to prompt entries and exits.

    APPLYING THE FDI

    In this article, we focus on the FDI and its application to\ntrading systems. The FDI measures the fractal dimension of a price series. Its value ranges between 1 and 2. A value less than 1.5 (a Hurst exponent greater than 0.5) indicates that the price series is persistent, or that the market is trending. On the other hand, a value greater than 1.5 indicates the series is antipersistent or that the market is trading in a range. Figure 1 shows the FDI for IBM for the period 1997–99. The FDI lies mainly above 1.5 when the prices are in a trading range (for example, between September 1997 and April 1998) and falls below 1.5 when prices are trending (for example, between October 1998 and February 1999)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-36-42-trading-systems-and-fractals-by-radha-panini-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-36-42-trading-systems-and-fractals-by-radha-panini-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-36-42-trading-systems-and-fractals-by-radha-panini-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254fufo1,d,"{""minimum-quantity"":""1"",""path"":""ch3m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:3 (43): Futures For You by Dan O’Neil"",""caption-linebreaks"":""Stocks & Commodities V. 25:3 (43): Futures For You by Dan O’Neil

    INSIDE THE FUTURES WORLD

    Want to learn how the futures markets really work? Dan O’Neil, a principal at online futures and forex broker XPRESSTRADE (www.xpresstrade.com), responds to\nyour questions about today’s futures markets. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    DON’T FAIL TO PLAN

    I’m thinking about getting into the futures markets because it seems so much more fast-paced and exciting than stocks. But a friend of mine who invests in\ncommodities told me that emotion can be a trader’s worst enemy in these markets. How can I avoid getting caught up in the emotions of trading?

    Your friend is right. Investing in futures is a thrilling thing to do — the prospect of riding a bull market to a handsome profit can be exciting. And given the liquidity and constant movement of these markets, the action and emotion is a draw. However, experiencing that emotion and trading on it should be two separate things. It comes down to trading with your head or trading with your heart, and trading with the latter may mean you won’t be trading long.

    Most long-term traders who succeed in the futures markets have removed emotion from the decision-making process by sticking to a trading plan. Many traders who are already negotiating the markets without a defined plan in place find it difficult to set aside the time and energy to create one midstream; this is a common but unfortunate situation. After all, if you were living in a house built on a shoddy foundation, would you be thankful for every day it didn’t collapse and hope that your luck continued, or would you go about finding a way to get things on solid ground?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-43-futures-for-you-by-dan-o-neil-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-43-futures-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-43-futures-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254exyo,d,"{""minimum-quantity"":""1"",""path"":""ch3m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:3 (49): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 25:3 (49): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    EARLY ASSIGNMENT ON CREDIT SPREADS

    After a credit spread on equities is executed, is there a risk of early assignment on the short leg if extrinsic value goes below $0.20? Before execution, if the short leg of a credit spread has an extrinsic value of $0.20 or less, will it ever be executed? I know there is no early assignment on calls/puts on European-style indexes.\nI’d appreciate your advice. —Paul

    You are correct that options with the European-style settlement feature do not carry any early-assignment risk because exercise and assignment can only happen at expiration. Most (but not all) index options settle European-style and can only be exercised at expiration.

    Stock options settle American-style and, as a result, exercise and assignment can happen any time prior to expiration. But it isn’t likely that an option with time value will be exercised, because the option owner would lose or sacrifice that time value if they exercise the contract.\nThey would be leaving money on the table. When time value remains, it is usually better to sell the option to close the position rather than exercise it."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-49-explore-your-options-by-tom-gentile-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-49-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-49-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255diwi,d,"{""minimum-quantity"":""1"",""path"":""ch3m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:3 (50-53): Dissecting A Winning Trade by Brett Grendahl"",""caption-linebreaks"":""Stocks & Commodities V. 25:3 (50-53): Dissecting A Winning Trade by Brett Grendahl

    There’s a good reason you should keep a trading journal: analyzing your previous trades helps you\nunderstand what you’re doing.

    One of the best ways to find winning trades in the future is to dissect a past winning setup and successful trade execution so it can be replicated. History tends to repeat itself, and being able to recognize chart patterns\nthat led to successful trades will help you bank more gains in the future.

    THE GAP: GREEN LIGHT TO MAKE THE TRADE

    One of my favorite screens to find clues in the current market is to look for gaps. What makes gaps so special and ideal for a stock trading setup? The strength of the market moving away from the previous trading day’s closing price and gapping to a new level, be it up or down, shows new volatility with the stock. A gap also indicates a shift in the current market psychology for the stock, as there is now an imbalance of buyers and sellers from the previous day’s close. This imbalance also likely will carry with it an injection of volatility that can bring profits to those who can trade the new volatility with precision.

    DISSECTING A TRADE ON WYNN

    One day while I was doing my general stock screening,\nWYNN (Wynn Resorts) caught my attention as a textbook example of a winning chart pattern setup. Let’s look at how this winning trade caught my attention and dissect how I acted to enter the position, and how the market guided the decision on when to exit and bank another profitable trade."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-50-53-dissecting-a-winning-trade-by-brett-grendahl-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-50-53-dissecting-a-winning-trade-by-brett-grendahl-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-50-53-dissecting-a-winning-trade-by-brett-grendahl-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255inal,d,"{""minimum-quantity"":""1"",""path"":""ch3m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:3 (54-60): Interview: Alan Knuckman of GlobalTec by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 25:3 (54-60): Interview: Alan Knuckman of GlobalTec by Jayanthi Gopalakrishnan

    Alan Knuckman currently serves as the president and developer of GlobalTec’s Commodity Explorer product line. In this capacity, he oversees all aspects of the decision support software, direct-access trading platform, educational training, and support. He is the expert on the daily Future Focus and Market Wrap programs on Wizetrade TV. Knuckman also is a frequent guest during CommoditiesTalk Live training broadcasts, where he answers in-the-market questions for traders. As an instructor, he also travels around the country training software users. Technical Analysis of STOCKS & COMMODITIES Editor Jayanthi\nGopalakrishnan conducted a phone interview with Alan Knuckman on January 8, 2007.

    Q: Alan, how did you get interested in trading?

    A: I was always interested in the financial markets — I traded stocks as a teenager in high school and then college. After school I moved to Chicago and while I was trying to find a real job, I would wander down to the Chicago Mercantile Exchange and hang around the viewing galleries because I was interested in finance and watching the dynamics of capitalism at its finest and all that. I was “discovered” because I was down there one day when someone came off the floor and asked me if I wanted a job. I didn’t realize until later that you started at $2.85 an hour and you had to work your way up. There was no formal education for trading, and I also realized I was immediately hired because I’m tall. That’s an advantage in the pits, which I also didn’t realize until later. But it worked out.

    Q: So did you start with commodities?

    A: Yeah, I started on the trading floor in Chicago. I worked in the grain room and moved up and started trading in the bond room and eventually traded for myself and eventually got involved in the software. I realized that trading is trading and there aren’t that many tools for the individual trader. Now with electronic\ntrading, everyone has tools to take advantage of what the big boys have always done."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-54-60-interview-alan-knuckman-of-globaltec-by-jayanthi-gopalakrishnan-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-54-60-interview-alan-knuckman-of-globaltec-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-54-60-interview-alan-knuckman-of-globaltec-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256qaby,d,"{""minimum-quantity"":""1"",""path"":""ch3m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:3 (62): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 25:3 (62): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://\nMessage-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    SWEEPS ON THE NYSE HYBRID

    I was wondering if you could elaborate on this statement you made: “You need a nimble program that looks for five cent moves in a stock and then hits it on\na sweep, or have trigger points already entered to take advantage of a sweep.” You also mentioned you were working on a program called TapeReaderPro. Are you finished? I don’t know about you guys, but my scalper friends and I are struggling anyway. Thanks for being a leader in our business. —Steelhead

    First off, thanks for the kind words. I have made comments about the state of the scalper these days on several occasions. Scalping alone is finally becoming\na thing of the past. We will always do it, but not as the primary focus. Market efficiencies have increased, but\nother doors have opened for the daytrader — we all need to adapt. Some of our guys have triggers that\nare set off when the REDI quote line changes color, indicating a sweep or some other significant action is taking place. Some look for print prices away from NBBO quote and trigger. And to be honest, some more programs are being designed, and after I test them, we may make them available to our traders."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-62-q-a-by-don-bright-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-62-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-62-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256adxr,d,"{""minimum-quantity"":""1"",""path"":""ch3m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:3 (64-67): ADX Reversal Patterns by Charles B. Schaap"",""caption-linebreaks"":""Stocks & Commodities V. 25:3 (64-67): ADX Reversal Patterns by Charles B. Schaap

    When is the trend not going to continue? The average\ndirectional movement index can provide you with information you need to differentiate between the end of a trend, a consolidation, and a reversal.

    Recognizing a change of trend is important for successful trading. The earlier you can enter a new trend, the lower the risk and the greater the chance for profit. Your trading will become more effective when you can recognize the end of one trend and the beginning of another.

    MEASURING TREND STRENGTH

    Novice traders often make judgmental statements about a stock, statements like “The stock looks good here” or “The stock is too high and ready to tank.” What does “looking good” or “too high” mean? Instead of thinking with emotions, your first step in recognizing trend reversals should be to start observing. You should base your assessment of trend on objective data, not opinion. The best indicator for assessing trend strength is average directional movement index (ADX). ADX, which can be found on most charting programs, was developed by J. Welles Wilder Jr. In my book ADXcellence, I discuss new ADX concepts and patterns, two of which I present here.

    ADX quantifies trend strength, so you don’t have to guess the strength of a trend or wonder when the trend will set up for a reversal; the ADX will tell you. The values for ADX range from zero to 100. An ADX value below 25 means trend strength is weak and can potentially retrace or reverse. Values over 25 mean the trend is strong and likely to continue."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-64-67-adx-reversal-patterns-by-charles-b-schaap-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-64-67-adx-reversal-patterns-by-charles-b-schaap-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-64-67-adx-reversal-patterns-by-charles-b-schaap-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256prre1,d,"{""minimum-quantity"":""1"",""path"":""ch3m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:3 (68-73): Product Review: Commodity Explorer by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 25:3 (68-73): Product Review: Commodity Explorer by David Penn

    The first time you log in to GlobalTec’s Commodity\nExplorer, you are required to check off (“acknowledge”)\neach one of Commodity Explorer’s “Seven Cardinal\nRules” of trading commodity futures. Literally “check off.” Each rule is presented in a separate window and if you want to move on to the next window (much less open and run the Commodity Explorer application proper), you’ve got to click “acknowledge” seven different times, testifying you fully understand each of the following:

    1. Always trade with risk capital or money you can afford to lose.

    2. Always trade with a stop-loss order in place.

    3. Never overleverage your account.

    4. Set realistic goals.

    5. Accept your losses and move on to the next trade.

    6. Protect your profits when your position is profitable.

    7. Always trade with a risk–reward ratio of 1-1.5 or greater.

    While some may quibble with aspects of these “cardinal” trading rules and regulations (many won’t trade unless the risk–reward ratio is closer to 1-3, for example), the basic wisdom in this list is more or less beyond dispute. And a cynical observer (myself occasionally included in that cohort) might consider this “checkoff” routine to be a bit of CYA (cover your, uh, aft) grandstanding, the list — and its appearance in a product like Commodity Explorer — underscore an important point — arguably the most important point about trading."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-68-73-product-review-commodity-explorer-by-david-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-68-73-product-review-commodity-explorer-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-68-73-product-review-commodity-explorer-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov25786we,d,"{""minimum-quantity"":""1"",""path"":""ch3m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:3 (74-75, 86): Websites For Traders: ETFConnect.com by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 25:3 (74-75, 86): Websites For Traders: ETFConnect.com by David Penn

    For a while, market observers were convinced that exchange traded funds (ETFs) would demolish the market for mutual funds.

    It was only a few years ago that mainstream financial publications and websites featured columnist after columnist touting the benefits of exchange traded funds. “All the diversification of a mutual fund without the fees or complicated trading restrictions!” went the\ncry. You want exposure to biotech, but can’t figure out which stocks to buy?

    Try a biotechnology ETF. Like the appreciation of bonds, but not interested in committing large sums of capital to a bond mutual fund? You’re in luck, there are more than a few fixed-income ETFs you can buy and trade “just like a stock.” Actually, the absence of an uptick rule — which makes shorting individual stocks that much trickier — means that in some ways, exchange traded funds are even better than stocks.

    Individual stocks will still be able to provide the kind of direct exposure to good companies that investors and traders will always crave, and mutual funds remain the primary way that average investors — through IRAs and 401(k) plans — invest, especially for the long term. But the underwriters and supporters of exchange traded funds continue to press what many still see as their unique advantages over both. And with websites like ETFConnect.com, those interested in trading and investing in exchange traded funds can press along\nwith them."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-74-75-86-websites-for-traders-etfconnect-com-by-david-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-74-75-86-websites-for-traders-etfconnect-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-74-75-86-websites-for-traders-etfconnect-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov257trti,d,"{""minimum-quantity"":""1"",""path"":""ch3m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:3 (76-85): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 25:3 (76-85): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    The Traders’ Tips shown here are based on Dimitris Tsokakis’ article “Moving Average Crossovers (Part II).” Code written in AmiBroker Formula Language for AmiBroker software is already provided in the article by Tsokakis. (AmiBroker provides an additional version of it here.) Coding for other software based on\nTsokakis’ concepts is presented here for TradeStation, eSignal, MetaStock, Wealth-Lab, NeuroShell, SnapSheet, NeoTicker, AIQ, Tradecision, StrataSearch, TradingSolutions, and VT Trader."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-76-85-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-76-85-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-76-85-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov258wefo,d,"{""minimum-quantity"":""1"",""path"":""ch3m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:3 (86): Websites For Traders: alphatrends.blogspot.com by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 25:3 (86): Websites For Traders: alphatrends.blogspot.com by Jayanthi Gopalakrishnan

    One of the blogs I read on a regular basis, equityinvestmentideas.blogspot.com, had a posting where author Yaser Anwar listed all the blogs and tools that he considered his favorites. In the technical analysis section within that list, one that was mentioned was Alpha Trends, mainly because of its excellent video posts. Curious because I’d never visited\na technical analysis video blog, I clicked on it. Sure enough, Brian Shannon from MarketWise had several video posts of technical charts on his blog,\nalphatrends.blogspot.com.

    Consider it the You Tube of technical analysis. Shannon discusses charts and draws trendlines, points out various scenarios on the charts, literally walks you through several charts, and gives you a condensed version of what he sees in these charts. You essentially get one-on-one tutoring with him. Some days he will discuss trading ideas; sometimes he gives a general review of the stock market, and other times he will discuss the stock of the day on Wallstrip, another blog (the review of which we will save for another issue)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-86-websites-for-traders-alphatrends-blogspot-com-by-jayanthi-gopalakrishnan-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-86-websites-for-traders-alphatrends-blogspot-com-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-86-websites-for-traders-alphatrends-blogspot-com-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov259bofo1,d,"{""minimum-quantity"":""1"",""path"":""ch3m202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:3 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 25:3 (92): Books For Traders by Technical Analysis, Inc.

    Commodities For Dummies (360 pages, $24.99 softcover, 2006, ISBN 0-470-04928-6) by Amine Bouchentouf, published by John Wiley & Sons. This guide gives you, in plain English, the basics on breaking into the market, dispels common myths, and presents a range of trading and investing strategies. It will help you diversify, measure risk, and apply market analysis techniques. You’ll see how commodities stack up against other assets, and how to avoid investing pitfalls."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-3-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251leto3,d,"{""minimum-quantity"":""1"",""path"":""ch4a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:4 (10-13): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine would not exist.

    EDUCATION IN TECHNICAL ANALYSIS

    Editor,

    I hope you can help me. I am interested in becoming more knowledgeable in technical analysis. Could you recommend companies or organizations that not only provide educational material but also have a support staff that can answer questions?

    CHUCK E., Chicago, IL

    Technical Writer David Penn replies:

    Various educational websites could help, such as TradingEducation.com. Some websites include forums for questions and discussions with other users. I’ve\nwritten on some of these educational websites in the past in our Websites For Traders column and will continue to write about them in future columns. (Past\ncolumns can be viewed at our website, www.Traders.com, in the back-issue archives area.)

    Another approach you could take is to purchase or subscribe to some technical analysis software that offers a combination of online support, message boards, peer support, and so on, such as TC2000 or other software that is usable by all levels of traders. Search for other such programs online or by perusing our Traders’ Resource database of products at our website, www.Traders.com.

    A third option is to listen to technical analysis radio programs over the Internet, like Gary Kaltbaum’s program (garyk.com) or The Stock Doctors (stockdr.com). These kinds of programs can provide real-time instruction on technical analysis of stocks and markets..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-10-13-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-10-13-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-10-13-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251fofo2,d,"{""minimum-quantity"":""1"",""path"":""ch4a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:4 (14-17): Forex Focus: Recycle Your Data by Patrick S. Nouvion"",""caption-linebreaks"":""Stocks & Commodities V. 25:4 (14-17): Forex Focus: Recycle Your Data by Patrick S. Nouvion

    Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. With that in mind, STOCKS & COMMODITIES has introduced Forex Focus to better prepare the retail trader to participate in the currency market.

    My job has always been to design new tools for traders, and though I am a trader myself I still find it difficult — because most everything has already been done, and done repeatedly.

    You see, the challenge in my position is to create something that is new and useful. You often see variations of the same concepts and tools. Unfortunately, these are often of no help and no better than the originals. For instance, the moving average convergence/divergence (MACD) indicator was defined with 12- and 26-period exponential moving averages (EMA). People insist on changing the parameters of the averages periods as well as the method and refer to it by a different name. And this is just one example.

    TRADING FOREX

    Being a foreign exchange trader, my attention is primarily focused on the forex market. Lately, the buzz has been about the Commitment of Traders data (COT). I programmed a few indicators that would read the COT data and import it into the Interbank FX Trader 4 platform. While COT data certainly has its merits, it is something new and useful for the forex trader. I thought we might have overlooked something that was a little more obvious and just as useful, if not better.

    As a currency trader, if I were to use some data not directly related to the forex market, my choice would more than likely be oil prices, gold prices, the Nikkei index, and other values that have a proven and direct effect on the currency market. Even the US dollar futures contract data would be useful to have an overview of the dollar’s strength and help me trade based on currency pairs."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-14-17-forex-focus-recycle-your-data-by-patrick-s-nouvion-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-14-17-forex-focus-recycle-your-data-by-patrick-s-nouvion-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-14-17-forex-focus-recycle-your-data-by-patrick-s-nouvion-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251micy,d,"{""minimum-quantity"":""1"",""path"":""ch4a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:4 (18-24): The Missing Cycle by Martha Stokes"",""caption-linebreaks"":""Stocks & Commodities V. 25:4 (18-24): The Missing Cycle by Martha Stokes

    If you think cycles are all about identifying turning points so you can buy at the low and sell at the high, think again. Here’s really what to pay attention to.

    In the year 2002, predictions of a major economic deflationary period and massive unemployment, followed by a great depression, were featured news items. The predictions were based on popular wave, cycle, and economic theories. Despite the pessimistic mood of the day, the stock market hit bottom in 2002 and started the uptrend that remains intact today.

    In 2000, the Y2K calamity was supposed to topple world governments and destroy civilization. In 1995, 1991, 1987, 1984, 1979, and 1972, terrible worldwide\ncalamities followed by a worldwide depression were predicted based upon known and documented cycle theory.

    THE NATURE OF CYCLES

    Why the inaccuracies, you ask? To answer that question it is necessary to understand the nature of cycles. Cycle theory for stock markets and economies is relatively young. It began in the mid-1930s, when cycle theorists began to see a correlation between cycles found in nature, the environment, climate, human population, and the stock market. The first theories relating to the stock market–based cycles on the presumption that natural events such as corn production were the primary cycles that caused the\nstock market to rise and fall. But as cycle theory developed, it became evident that more than the cycles of nature were causing changes in the stock market. Climate was studied, population cycles were studied, and finally fiscal monetary policy was studied. The business cycle theory became highly publicized\nand is still used today to explain the phenomenon of the ups and downs of the stock market (Figure 1)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-18-24-the-missing-cycle-by-martha-stokes-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-18-24-the-missing-cycle-by-martha-stokes-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-18-24-the-missing-cycle-by-martha-stokes-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov252twpr,d,"{""minimum-quantity"":""1"",""path"":""ch4a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:4 (26-30): Two-Point Problem Of The Rate Of Change by Martti Luoma and Jussi Nikkinen"",""caption-linebreaks"":""Stocks & Commodities V. 25:4 (26-30): Two-Point Problem Of The Rate Of Change by Martti Luoma and Jussi Nikkinen

    Here’s a look at a modified version of the rate of change indicator, free of its detracting problem.

    The rate of change indicator (ROC), one of the best-known oscillators in technical analysis, is an important measure of momentum. It describes\nthe rate at which price changes occur. ROC can be defined as a relative change. This definition of the percentage change provides a natural and commonly used way to measure changes in business and economics. Given the intuitiveness and predictive power of ROC, it is not surprising that it has become such a popular indicator in technical analysis.

    There is a downside to the rate of change indicator, of course, and it is that the actual applications of the indicator suffer from some problems related to the lack of natural smoothing, loss of important relevant information, and the misinterpretation of information. In this article we discuss the major problems associated with the use of ROC and present a new version free\nfrom these problems.

    The Rate of Change Indicator

    It is well known that the nomenclature in technical analysis is inconsistent, and so it should come as no surprise that this also holds true for the ROC. First, we will define the rate of change indicator as..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-26-30-two-point-problem-of-the-rate-of-change-by-martti-luoma-and-jussi-nikkinen-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-26-30-two-point-problem-of-the-rate-of-change-by-martti-luoma-and-jussi-nikkinen-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-26-30-two-point-problem-of-the-rate-of-change-by-martti-luoma-and-jussi-nikkinen-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov25387qa,d,"{""minimum-quantity"":""1"",""path"":""ch4a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:4 (31, 87): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 25:4 (31, 87): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    TRADE ADJUSTMENTS

    How do people adjust their trades if the market is expected to open higher or if the market is expected to open flat or lower? The night before, I do my research\nand create a list to trade but don’t see how to find a way to integrate it with the market open situation. Any suggestions?— Jim Clark

    We monitor the S&P futures contracts (e-minis) after adjusting the spot price to fair value, right before the market opens (see www.stocktrading. com/ Tradinginfo.htm for an example). This gives us the expected percentage of up or down opening points (extremely accurate by definition). To better understand\nfair value calculations, check out www.programtrading.com and www.indexarb.com."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-31-87-q-a-by-don-bright-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-31-87-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-31-87-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253whto,d,"{""minimum-quantity"":""1"",""path"":""ch4a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:4 (32-34): When To Trade With Cycles by John F. Ehlers"",""caption-linebreaks"":""Stocks & Commodities V. 25:4 (32-34): When To Trade With Cycles by John F. Ehlers

    When should you trade the cycle mode in a market and when should you trade the trend mode? Find out with this indicator.

    In theory, trading with cycles is easy — just buy at the valley and sell at the crest. This is just a variation of the\nold buy–low, sell–high dictum. In practice, however, trading with cycles is far more difficult. Just for openers, the very existence of market cycles is ephemeral and\nwe must jump on them quickly to take advantage of any market inefficiency they represent. This is demonstrated by the MESA8 measurement of the historical spectra of the Standard & Poor’s futures contract seen in Figure 1. The spectra are shown colorized over a 20-decibel range from white-hot, through red-hot, to ice-cold. Colorizing this way enables the display in a subgraph in synchronism with the bar chart. Figure 1 clearly shows how the dominant cycle in the data varies with time.

    In addition, there are a number of other conditions that make trading with cycles more difficult besides temporal variability, perhaps to the point that the real question is, “When should I not trade with cycles?” The\nmost significant among these conditions are signal to noise ratios, being swamped by the trend, and trend persistence."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-32-34-when-to-trade-with-cycles-by-john-f-ehlers-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-32-34-when-to-trade-with-cycles-by-john-f-ehlers-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-32-34-when-to-trade-with-cycles-by-john-f-ehlers-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253fran,d,"{""minimum-quantity"":""1"",""path"":""ch4a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:4 (36-39): Fractal Analysis by James R. Williamson Jr."",""caption-linebreaks"":""Stocks & Commodities V. 25:4 (36-39): Fractal Analysis by James R. Williamson Jr.

    Can the complex behavior of the stock market really be reduced to something simple?

    This article will demonstrate that, over the last 30 to 40 years, the seemingly complex behavior of the stock market (as exemplified by the Standard & Poor’s 500) can be reduced to one essential principle: impulse and correction. The values of impulse and correction can be specifically measured and are found to be 3 and -1. The complexity of the market is then generated by the self-replication of these two numbers. More formally, they are the seed value of a recursive fractal expressed by (3, -1)F. Finally, now that the market has been accurately described or modeled, predictive uses and weaknesses can be evaluated.

    SMOOTH OR ROUGH?

    Fractals are all around us in the forms of a snowflake, a fern leaf, a shoreline. Fractals are patterns that are self-similar regardless of scale. Whether you zoom in or zoom out, the same overall forms are there. Fractals exist as a self-organizing force in nature, but they also exist in stock market data. Why? This leads to my first assumption: The stock market, as it reflects the global economy, is a force of nature. It is beyond the control of one man, one company, one scandal, or one corporate bankruptcy. It must adhere to certain natural laws, one of them being fractal relationships. Did you ever notice a pattern on a weekly chart that was virtually identical to a five-minute chart? Did you dismiss the observation as an oddity and move on?

    The stock market took a big hit in October 1987, when the Dow Jones Industrial Average (DJIA) fell more than 22% in one day (Monday, October 19). At the time, market cians could find no one precipitous cause, no smoking gun. Was it the advent of program trading? Was it poor risk management by professionals? Economists dismissed the sharp drop as part of the\ninternal mechanics of trading dynamics. Statisticians assured us it could be ignored as uncharacteristic since it was an outlier — an event more than two or three standard deviations from the norm."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-36-39-fractal-analysis-by-james-r-williamson-jr-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-36-39-fractal-analysis-by-james-r-williamson-jr-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-36-39-fractal-analysis-by-james-r-williamson-jr-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254hema,d,"{""minimum-quantity"":""1"",""path"":""ch4a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:4 (44-47): Hedging Market Corrections Using SPY Puts by Matthew J. Stander"",""caption-linebreaks"":""Stocks & Commodities V. 25:4 (44-47): Hedging Market Corrections Using SPY Puts by Matthew J. Stander

    How do you protect your actively traded portfolio from the adverse effects of market corrections?

    Most active traders are well aware of the impact that global macro economic events can have on individual\nstocks. With the threat of rising energy prices, the Federal Reserve poised to fight inflation, a slowing housing market, monstrous levels of consumer debt, and pressure on the US dollar, there are plenty of reasons to be concerned. But at the same time, not participating in the market could mean missing substantial opportunities as these risk factors subside and good news emerges.

    This leads to the question of how we can protect an actively traded portfolio from the adverse effects of a market correction. A bullish position on even the best stock can be negatively affected by an overall market correction.

    One potentially powerful tool for protecting a portfolio against a significant market correction is a protective put on the SPY exchange traded fund (ETF). Buying put options on SPY, which tracks the Standard & Poor’s 500, can offer insurance against negative market moves and protect a portfolio. This article explains how to determine the potential sensitivity of a portfolio to market moves, how to calculate the number of puts needed to offset a correction, and how to decide which puts to purchase. Because it analyzes puts for their insurance value as a hedge against the SPY, we will only consider purchasing puts with strike prices below the current SPY price. Different types of analysis should be used when evaluating the purchase of puts with strike prices greater than the current SPY price (in-the-money puts)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-44-47-hedging-market-corrections-using-spy-puts-by-matthew-j-stander-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-44-47-hedging-market-corrections-using-spy-puts-by-matthew-j-stander-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-44-47-hedging-market-corrections-using-spy-puts-by-matthew-j-stander-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254inbi,d,"{""minimum-quantity"":""1"",""path"":""ch4a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:4 (48-53): Interview: Bill Meridian And Those Long-Term Cycles by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 25:4 (48-53): Interview: Bill Meridian And Those Long-Term Cycles by Jayanthi Gopalakrishnan

    Cycles theorist Bill Meridian began on Wall Street in a most conventional way, as a fundamental analyst at the Value Line Investment Survey, where he began to develop his work on cash flow. Then in 1978, he began to design computer programs to perform the number-crunching required to relate stock market\nmovements to cycles.

    By 1981, he had written a simple spreadsheet program in Lotus to calculate stock market cycles, followed by more sophisticated software. He has worked both the buy and sell sides of Wall Street, most recently spending 14 years in the Middle East as a fund manager and strategist.

    He currently operates his own business from his home in Europe, traveling to Vienna, London, Tokyo, and Abu Dhabi for his clients. How did Meridian get started on cycles, anyway? Technical Analysis of STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Meridian on February 6, 2007, via telephone\nto find out.

    Q: Bill, what path brought you to where you are now in cycles research?

    A: When I was a boy I read a lot about history, and then as a teenager I studied books on technical analysis. As a result, I was very aware of market movements during my college and graduate-school years. Technical analysis will take you so far, I discovered, but I liked anything that projected into the future, and that is how I first got interested in cycles in relation to the markets.\nIt looked as if some of these historical cycles repeated. And that’s what got me interested.

    Q: When you say these cycles repeated historically, did you recognize that a certain number of years would have similar patterns?

    A: Yes. My old neighbor in Greenwich Village, George Lindsay, was the first person I discovered to write about this. He wrote a book called The Other History, and in it he pointed out there are numerous cycles. When you get numerous cycles overlapping, you get a major event. I wrote an article about it for the Market Technicians Association Journal, in which I explained what Lindsay did. Then I applied the theory myself and concluded that the United States would either become more isolationist or more internationalist in 2000–01.\nThat article was repeated in the first new journal of the Foundation for the Study of Cycles, which is coming back into existence.

    The cycles theory is pretty far-reaching, too. I lived for 14 years in Abu Dhabi, and if you read Sir John Glubb’s A Short History Of The Arab Peoples, he mentions cycles there. You would be surprised about how many cycles\nare 220 to 240 years long. Dynasties or whole civilizations or tribes have been in power for that one cycle."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-48-53-interview-bill-meridian-and-those-long-term-cycles-by-jayanthi-gopalakrishnan-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-48-53-interview-bill-meridian-and-those-long-term-cycles-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-48-53-interview-bill-meridian-and-those-long-term-cycles-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255exyo,d,"{""minimum-quantity"":""1"",""path"":""ch4a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:4 (57): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 25:4 (57): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    EXERCISE AND ASSIGNMENT

    Q: I hear the terms “exercise” and “assignment” used interchangeably, but don’t they have different meanings?

    A: Exercise and assignment are two sides of the same coin. The terms are used when an option owner decides to take advantage of the terms afforded by the options contract. For a stock option, exercise and assignment involves the transfer of shares from one party to another. For futures options, it involves the transfer of a futures contract. For index options, cash changes hands. The difference between exercise and\nassignment is that the option owner is the one exercising their right to buy or sell the underlying asset. The option seller is the one being assigned. For example, I own January 50 calls on XYZ Corp. I can exercise my contract and buy, or call, XYZ shares from the person short the XYZ January calls. If so, the option seller has been assigned and must deliver XYZ at $50 a share."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-57-explore-your-options-by-tom-gentile-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-57-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-57-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255prre,d,"{""minimum-quantity"":""1"",""path"":""ch4a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:4 (58-60): Product Review: Foundational Analysis: Select Winning Stocks...by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 25:4 (58-60): Product Review: Foundational Analysis: Select Winning Stocks...by David Penn

    If there is a trend in technical analysis I am welcoming\nwith open arms, a trend that is truly a friend to technical\ntraders, then that trend is a shift toward a greater simplicity in both technical analysis and technical trading. Often, when reading about the work of various technical analysts or reviewing the latest technical analysis software product, I become concerned that we have allowed a fascination with what are ultimately nothing more than the ephemera of technical trading to replace the fundamental (dare I say “foundational”?) basics of technical trading. Too often technical analysis\nbecomes an exercise in the invention of elegant (or\nnot so elegant) twittering machines that display knowledge about mathematics or coding skill, yet in the end are no better capable of helping technical traders\nmake sound trading decisions than is a simple trendline or a few basic money management rules.

    This theme appears with regularity during the presentation by David S. Nassar that composes his contribution to the TradeSecrets DVD Series, Foundational Analysis: Selecting Winning Stocks With David S. Nassar. Nassar is founder of MarketWise, a company that has grown from being a provider of electronic direct-access trading resources to a major source of educational material about technical trading through its affiliation with CBS Marketwatch."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-58-60-product-review-foundational-analysis-select-winning-stocks-by-david-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-58-60-product-review-foundational-analysis-select-winning-stocks-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-58-60-product-review-foundational-analysis-select-winning-stocks-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256fufo,d,"{""minimum-quantity"":""1"",""path"":""ch4a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:4 (62-93): Futures For You by Dan O’Neil"",""caption-linebreaks"":""Stocks & Commodities V. 25:4 (62-93): Futures For You by Dan O’Neil

    INSIDE THE FUTURES WORLD

    Want to learn how the futures markets really work? Dan O’Neil, a principal at online futures and forex broker XPRESSTRADE (www.xpresstrade.com), responds to\nyour questions about today’s futures markets. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    ANALYSIS PARALYSIS

    I know some traders prefer the charts and graphs of technical analysis while others focus on fundamental factors. Which method is a better means of\nfiguring out the futures markets?

    This is an age-old debate in the futures markets, mainly because there is no one right answer. While some traders swear by the fundamental factors affecting the markets they follow, others pay little or no attention to the news and rely more heavily upon various statistical models to make their trading decisions. It’s possible to succeed with either approach; it depends on the style and preferences of the individual trader. Let’s look at both methods..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-62-93-futures-for-you-by-dan-o-neil-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-62-93-futures-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-62-93-futures-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256wean,d,"{""minimum-quantity"":""1"",""path"":""ch4a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:4 (63-64): Websites: Angrybear.blogspot.com and Kudlowsmoneypolitics.blogspot.com by D. Penn"",""caption-linebreaks"":""Stocks & Commodities V. 25:4 (63-64): Websites: Angrybear.blogspot.com and Kudlowsmoneypolitics.blogspot.com by D. Penn

    A staple of public television — and cable news, before it blew up in the Bush era — dueling commentators from the political left and the political right used to be the chief expression of political partisanship in the media: “From the left, I’m so-and-so.” “And from the right, I’m the-other-guy.” That collegiality — however exaggerated for effect — is not nearly as common in recent years as it was, say, a decade ago. But it is with that sentiment that I present a pair of blogs about money, the economy, and finance that may be of interest to traders, speculators, and investors of a particularly partisan political bent. Sure, we all know as speculators that we are more often far better off leaving our politics at the door of our trading room. And I suspect as many Republicans have lost money betting that the markets wouldn’t go up under Democratic rule as have Democrats gone broke trying to fade the effects of a GOP-sponsored dividend tax cut.

    But the fact of the matter is that even those of us who don’t have a political axe to grind need be wary of those who do. Harry S Truman famously asked for a “one-armed economist” who would not provide, basically, two answers for every question. So here we provide instead two “one-armed” economists and their blogs, representing a view of the financial world through blue- and red-state filters, respectively: Angrybear.blogspot.com and Kudlowsmoneypolitics.blogspot.com."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-63-64-websites-angrybear-blogspot-com-and-kudlowsmoneypolitics-blogspot-com-by-d-penn-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-63-64-websites-angrybear-blogspot-com-and-kudlowsmoneypolitics-blogspot-com-by-d-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-63-64-websites-angrybear-blogspot-com-and-kudlowsmoneypolitics-blogspot-com-by-d-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256qust,d,"{""minimum-quantity"":""1"",""path"":""ch4a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:4 (65): Quick-Scans: Stock Trading Success by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 25:4 (65): Quick-Scans: Stock Trading Success by Jayanthi Gopalakrishnan

    STOCK TRADING SUCCESS

    www.stocktradingsuccess.com

    Product: 12-volume plus two bonus DVDs

    Price: $975

    Steve Nison has always been associated with candlestick chart patterns. Ken Calhoun has been associated with identifying entries and exits to make profitable day and swing trades. The two have put their heads together and created a 12-volume DVD series with the intention of teaching intraday and swing traders\nto trade successfully. Each DVD is part of a recording of a two-day seminar. Nison and Calhoun are extremely\ninteractive, giving each of the attendees an opportunity to participate in discussions and feedback. The attendees are encouraged to give examples of some of\nthe stocks they picked for their trades and back up their reasoning with an objective analysis. I perceive the series to be an effective educational tool since it forces each participant to evaluate themselves against their peers."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-65-quick-scans-stock-trading-success-by-jayanthi-gopalakrishnan-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-65-quick-scans-stock-trading-success-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-65-quick-scans-stock-trading-success-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256trti,d,"{""minimum-quantity"":""1"",""path"":""ch4a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:4 (66-77): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 25:4 (66-77): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    Editor’s note: Most of the Traders’ Tips shown here are based on Martti Luoma’s and Jussi Nikkinen’s article in this issue, “Two-Point Problem Of The Rate Of Change.” Code written in MetaStock format is already\nprovided in the article by the authors. Coding for other software-- TradeStation, eSignal, Wealth-Lab, AmiBroker, Worden, NeoTicker, AIQ, StrataSearch, BioComp Dakota, Tradecision, TradingSolutions, OmniTrader, and VT Trader -- are presented here. VT Trader also provided code for Radha Panini’s article from the March 2007 issue, “Trading Systems And Fractals.\"""",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-66-77-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-66-77-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-66-77-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov257moin,d,"{""minimum-quantity"":""1"",""path"":""ch4a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:4 (78-79): Momentum Indicators and Market Cycles by John Nicholas"",""caption-linebreaks"":""Stocks & Commodities V. 25:4 (78-79): Momentum Indicators and Market Cycles by John Nicholas

    Here’s an article we originally published 23 years ago, two years after Technical Analysis of STOCKS & COMMODITIES broke ground, proving that, yes, cycles are enduring.

    The techniques used for stock and commodity analysis range from the naïvely simple to the stunningly complex. Some are based on sound mathematical and philosophical principles while others border on witchcraft. This article discusses one major indicator and how it relates to price movement. We often hear the markets described as “overbought” or “oversold.” Usually “oscillators” are used to help define these conditions. These same “oscillators” were called “momentum” by Larry Williams. In statistics, they are termed “moving percentages,” “rate of change,” or “differencing.” All of these terms refer to basically the same mathematical procedure. We will use the term “differencing” for the remainder of the article.

    As the name implies, differencing involves subtraction,\nspecifically the subtraction of a price some number of days in the past from the most recent price. If each day we were to subtract the closing price of some commodity 10 days in the past from today’s price we would be differencing over a 10-day interval. The number we would calculate would be both positive and negative and would tend to move from one extreme, through zero, and the other extreme, up and down in a rather regular pattern. The interval that is used in\ndifferencing is very important. In order to illustrate how the length of the interval affects the behavior of this indicator, we’ll apply various intervals of differencing to one dataset."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-78-79-momentum-indicators-and-market-cycles-by-john-nicholas-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-78-79-momentum-indicators-and-market-cycles-by-john-nicholas-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-78-79-momentum-indicators-and-market-cycles-by-john-nicholas-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov259bofo2,d,"{""minimum-quantity"":""1"",""path"":""ch4a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:4 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 25:4 (92): Books For Traders by Technical Analysis, Inc.

    Adventures Of A Currency Trader: A Fable About Trading, Courage, And Doing The Right Thing (221 pages, $55 hardcover, 2007, ISBN 978-0-470-\n04948-8) by Rob Booker, published by John Wiley & Sons. Via the fictional Harry Banes, a small trader with ambition beyond his ability, author Rob Booker shows how determination can prevail over difficulty. Both entertaining and educational, this book demonstrates\nwhat it takes to capitalize on today’s foreign exchange markets. Through a filing clerk’s eyes this book explains how you can implement a consistent trading approach in currencies and become a financially independent trader. This guide is technical as well as motivational in providing the reader a firm foundation in the field of currency trading."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov25996at,d,"{""minimum-quantity"":""1"",""path"":""ch4a203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:4 (98, 96): At The Close by Jeffrey P. Seyler"",""caption-linebreaks"":""Stocks & Commodities V. 25:4 (98, 96): At The Close by Jeffrey P. Seyler

    An Update On Single-Stock Futures

    Now that single-stock futures (SSF) have been trading\nfor more than four years, we have had an opportunity to see how they have developed and observe some of the changes that have occurred as a part of a growing new market. Several notable changes have taken place since they began trading in November 2002. One of the two original exchanges, NQLX, is gone, leaving OneChicago as the only exchange offering these products. From the outset, OneChicago was the clear leader, so that should come as no surprise. The only advantage I saw that NQLX offered over OneChicago was a contract length out to 15 months, and frankly all of my single-stock trades have been of a much shorter duration.

    Another big change is that the microsector indexes, which never were offered by NQLX, have been shelved for the time being by OneChicago. They have not been eliminated and, as explained to me by the nice folks there, will be brought back any time there appears to be a demand for them. In addition, the exchange is actually offering custom-designed indexes for specific institutional traders based on specific demand, but I will restrict this discussion to single-stock futures."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-98-96-at-the-close-by-jeffrey-p-seyler-21.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-98-96-at-the-close-by-jeffrey-p-seyler-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-4-98-96-at-the-close-by-jeffrey-p-seyler-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251leto4,d,"{""minimum-quantity"":""1"",""path"":""ch5m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:5 (10): Letters to S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 25:5 (10): Letters to S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine would not exist.

    METASTOCK CODE

    Editor,

    I am a 20+ year subscriber. Can you tell me where on your website I can find the MetaStock code that accompanied Robert Colby’s interview (S&C, December 2006)? It is the formulation for his “stochastics with long-term EMA filter rule.”

    DON V.

    You will find this MetaStock code and other code appearing in this magazine in the Subscriber Area of our website at http://technical.traders.com/sub/2006List.asp. Code listed there can be copied and pasted into your program. Alternatively, go to our home page at www.Traders.com and click on “Article code” in the red box on the lefthand side. Login to the Subscriber Area\nis required using your last name and subscriber number (found on your magazine mailing label).—Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-10-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-10-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-10-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251fofo3,d,"{""minimum-quantity"":""1"",""path"":""ch5m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:5 (12-16): Forex Focus: Gann And Forex by Cornelius Luca"",""caption-linebreaks"":""Stocks & Commodities V. 25:5 (12-16): Forex Focus: Gann And Forex by Cornelius Luca

    Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. With that in mind, STOCKS & COMMODITIES has introduced Forex Focus to better prepare the retail trader to participate in the currency market.

    Famed stocks and commodities trader William Delbert\nGann (1878–1955) was known not only for his profitability but also for his influential set of technical\ntools. Gann refined several mathematical methods that combined time and price analysis. The complex result helped him make 264 successful trades out of 286\ntransactions in various stocks in only 25 market days during October 1909 — an incredible feat for a trader!\nGann identified four different phases of the market, which his methods can be applied to: bull, peaking, bear, and bottoming markets. The most important features of Gann analysis are:

    • Geometric forms

    • Geometric angles

    • Ratios

    • Squaring of price and time

    • Cardinal square

    GANN GEOMETRIC FORMS

    W.D. Gann used basic forms of geometry: squares, circles, and triangles. Let’s look at circles first. A circle has 360 degrees, and this number, along with fractions of 360, is widely present in Gann’s research. In order to reach his time targets, he extrapolated 30, 90, 120, 180, and 360 days from significant chart points. These forward periods are potential reversal dates. The secondary reversal dates are 45, 135, 225, and 315.

    You can also plot the number of weeks in a year around the circumference of a circle. If you divide the circle into quarters, you will obtain the following numbers: 13, 26, 39, and 52 weeks. Any of these dates from a significant peak or trough should be targeted for possible trend reversals."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-12-16-forex-focus-gann-and-forex-by-cornelius-luca-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-12-16-forex-focus-gann-and-forex-by-cornelius-luca-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-12-16-forex-focus-gann-and-forex-by-cornelius-luca-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251casp,d,"{""minimum-quantity"":""1"",""path"":""ch5m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:5 (18-26): Calendar Sprerads With Dan Sheridan by John A. Sarkett"",""caption-linebreaks"":""Stocks & Commodities V. 25:5 (18-26): Calendar Sprerads With Dan Sheridan by John A. Sarkett

    In the first part of a series based on a seminar on option strategies with Dan Sheridan, we take a look at calendar spreads.

    Options and seminars go together like yin and yang, baseball and hot dogs, Abbott and Costello. Can’t separate ‘em, wouldn’t want to. Ten or more years ago, some of the prominent seminars focused on straightforward strategies like put selling or vertical spreads. In a surging NASDAQ market, these one-day affairs served their purpose in helping retail stock traders become more knowledgeable and comfortable\nwith options.

    Then after the 2000–01 stock market crash and with the equity markets in the doldrums came delta-neutral\nstrategies, making money in options when stocks weren’t moving — timely and helpful. You might have seen infomercials for these “wealth creation”\nseminars.

    But not all the attendees were successful, nor even\nthe gurus themselves. One notable “expert” expanded\nfrom giving seminars to managing an option trading\nfund. The fund lost 40% in six months before closing.\nThere are and have been many, many other seminars\nand countless newsletters, and we’ve all been invited\nby direct mail to attend or subscribe. Or both. Some of us have, or at least been tempted."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-18-26-calendar-sprerads-with-dan-sheridan-by-john-a-sarkett-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-18-26-calendar-sprerads-with-dan-sheridan-by-john-a-sarkett-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-18-26-calendar-sprerads-with-dan-sheridan-by-john-a-sarkett-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251sitr,d,"{""minimum-quantity"":""1"",""path"":""ch5m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:5 (18-26): Sidebar: Trader Dan on guerrilla calendars by John A. Sarkett"",""caption-linebreaks"":""Stocks & Commodities V. 25:5 (18-26): Sidebar: Trader Dan on guerrilla calendars by John A. Sarkett

    Guerrilla Calendars

    What are they? Sell one month and buy next month out.

    Example:

    Citigroup: $50 buy 10 November 50 calls and sell 10 October 50 calls

    Is this an income spread?

    Yes, we hope to make money by the near-month time premium decaying faster than the second month and the stock staying in the vicinity of the short strike.

    How to find guerrilla calendars: Implied volatility is between 14 and 28. You’re looking to pay as little as you can for the spread. Most desirable time to put on: 25–35 days from expiration."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-18-26-sidebar-trader-dan-on-guerrilla-calendars-by-john-a-sarkett-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-18-26-sidebar-trader-dan-on-guerrilla-calendars-by-john-a-sarkett-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-18-26-sidebar-trader-dan-on-guerrilla-calendars-by-john-a-sarkett-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov252moav1,d,"{""minimum-quantity"":""1"",""path"":""ch5m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:5 (28-33): Moving Averages: Long On Talk, Short On Action by Anthony Trongone, Ph.D."",""caption-linebreaks"":""Stocks & Commodities V. 25:5 (28-33): Moving Averages: Long On Talk, Short On Action by Anthony Trongone, Ph.D.

    Making a minor adjustment to a popular indicator can make all the difference in profitability.

    Although the technical literature is replete with articles discussing the efficacy of moving averages to forecast future stock prices, after analyzing the three-, eight-, 13-, 21-, 34-, 50-, 100-, and 200-day simple moving averages, the results were disappointing. In looking back at the performance of the regular trading session (November 1, 2002–December 31, 2006), the single positive result came from the 34-day moving average,\nwhich had an insignificant gain of 68.5 cents (Figure 1).\nSo why should we keep subscribing to trading moving averages? Because by making two simple adjustments, our average profit improves to $124 for\neach 1,000-share long position along with an impressive 71% winning percentage.

    MONITORING PERFORMANCE

    With an advance of $18.60 we would certainly expect moving averages to produce stunning results. This gain, however, is somewhat deceptive, because the 1,049 trading days gave us a regular session loss of $1.64. Therefore, when restricting our trading to the 09:30–16:00 ET time frame, we would anticipate a small setback."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-28-33-moving-averages-long-on-talk-short-on-action-by-anthony-trongone-ph-d-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-28-33-moving-averages-long-on-talk-short-on-action-by-anthony-trongone-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-28-33-moving-averages-long-on-talk-short-on-action-by-anthony-trongone-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253sisa,d,"{""minimum-quantity"":""1"",""path"":""ch5m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:5 (34-37): Sidebar: Save the COT!, How to build your own COTS database by Alex Roslin"",""caption-linebreaks"":""Stocks & Commodities V. 25:5 (34-37): Sidebar: Save the COT!, How to build your own COTS database by Alex Roslin

    The Commitments of Traders reports are safe. Thanks to an overwhelming public outburst of support, the Commodity Futures Trading Commission says the 44-year-old reports won’t be discontinued. The commission announced in December 2006 it would keep publishing the data unchanged and start a new weekly report for some agricultural commodities to reflect the rise of index trading.

    “The reports will continue,” says John Fenton, the commission’s director of market surveillance.

    The commission sparked an outcry last June when it issued a call for comments on the reports, suggesting the data may be skewed by changing patterns in trading activity in some commodities. The notice asked for public comment on whether the reports provide a\n“public benefit” and should be discontinued. It said it was under no legal or regulatory obligation to keep publishing the data.

    An unprecedented 4,659 responses came from 23 countries — by far the largest number the commission has received in response to such a notice in its 31-year history. (The previous record was 1,062 comments.)\nThe response was unanimous. Not one respondent said the reports should go. “Please do not discontinue this very valuable report,” one said. “Don’t you dare,” said another. “Leave it alone, you knuckleheads,” the CFTC was advised. “Save the COT.”

    Instead of dropping the reports, the commission decided to break out a new index trader category for 12 commodities, drawn from the current commercial and noncommercial groups. The new report will be tried as a pilot project for two years. The CFTC will then decide\nwhether to expand it to other physical commodities."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-34-37-sidebar-save-the-cot-how-to-build-your-own-cots-database-by-alex-roslin-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-34-37-sidebar-save-the-cot-how-to-build-your-own-cots-database-by-alex-roslin-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-34-37-sidebar-save-the-cot-how-to-build-your-own-cots-database-by-alex-roslin-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253tima,d,"{""minimum-quantity"":""1"",""path"":""ch5m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:5 (34-37): Timing The Market With COTS by Alex Roslin"",""caption-linebreaks"":""Stocks & Commodities V. 25:5 (34-37): Timing The Market With COTS by Alex Roslin

    Who says you can’t time trades using the Commitments of Traders reports? This COTS-based\nmechanical system beat the NASDAQ by 728 percentage points — with only one trade needed per year.

    Ever wonder what the smart money is doing in the markets? How do the folks with the best information and deepest pockets invest their wealth? A handful of analysts and traders have found an interesting way to tell. It’s called the Commitments Of Traders report, and its devoted fans say the report is the closest to a holy grail of market forecasting they’ve found.

    The COTs, as they’re known, don’t make headlines\nlike those celebrities of the world of economic indicators, the Consumer Price Index (CPI) or the unemployment numbers. But a growing legion of “commitments analysts” are glued to computers each Friday at 3:30 pm (Eastern time) when the Commodity Futures Trading Commission releases the latest weekly COTs numbers.

    The data, which used to be available only to paying subscribers but is now free, shows how many of the world’s largest commodity-producing firms, index funds, and hedge funds are positioning trillions of dollars of futures and options bets in more than 90 markets — everything from frozen pork bellies to the Standard & Poor’s 500, orange juice, the Canadian dollar, and unleaded gas."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-34-37-timing-the-market-with-cots-by-alex-roslin-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-34-37-timing-the-market-with-cots-by-alex-roslin-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-34-37-timing-the-market-with-cots-by-alex-roslin-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254qaby1,d,"{""minimum-quantity"":""1"",""path"":""ch5m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:5 (44): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 25:5 (44): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    BASING MY TRADES

    I don’t know what to base my trades off since there is no specialist to follow. Are there guys still making money based on specialist prints?

    You need a nimble program that looks for five-cent moves in a stock and then hits it on a sweep, or have trigger points already entered to take advantage of a\nsweep. Working pretty well, according to my guys.

    SCALING OUT

    Do your traders “scale out” of positions, or do they close all at once? Does it depend on their strategy or technique? —Trader92

    Some do and some don’t, depending on the individual situation, and, as you pointed out, it varies depending on strategy. I do my “opening only” strategy with two layers entered, one for 2,000 shares and another (wider envelope) for 1,000 shares. When I get filled, my\nautomated program sends in a retracement order (for profits) for half of my position in each stock. I then\nprefer to tape-read and get out of the balance manually, thus “scaling out.”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-44-q-a-by-don-bright-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-44-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-44-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254mady,d,"{""minimum-quantity"":""1"",""path"":""ch5m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:5 (46-56): Managing Dynamic Portfolios by Kevin Morgan"",""caption-linebreaks"":""Stocks & Commodities V. 25:5 (46-56): Managing Dynamic Portfolios by Kevin Morgan

    Here’s how to build an automated trading system that reselects its preferred trading symbols on a recurring basis.

    Computerized trading system development and execution platforms are oriented around trading a single or fixed set of stock, index, or commodity symbols. Backtesting, walk-forward testing, and real-time incremental execution occur against this fixed symbol set. Changing the set is a manual process, and the backtesting and generation of integrated results for a sequence of different symbol portfolios over time are not typically supported functions.

    At the highest level of its design, an advanced trading system may utilize a methodology for regularly reselecting a preferred set of trading vehicles (say, stock). By adapting the preferred set of stocks to be traded, a more aggressive and adaptive “trade with the trend” approach can be implemented, versus using a fixed set of trading vehicles and waiting for them to demonstrate preferred trading behaviors.

    $PECIAL-K

    On a weekly basis, the $pecial-K trading system reselects its preferred set of approximately 100 leading stocks from the NYSE, AMEX, and NASDAQ universes based on technical and fundamental factors. The approach is to trade short term, generating relatively small per-trade profits with a high win/loss ratio. The entry management logic focuses strictly on short-term price behaviors for entry selection. You achieve superior results by making sure your entry takes place only on stocks that show strong and consistent upward trends."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-46-56-managing-dynamic-portfolios-by-kevin-morgan-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-46-56-managing-dynamic-portfolios-by-kevin-morgan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-46-56-managing-dynamic-portfolios-by-kevin-morgan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254sipe,d,"{""minimum-quantity"":""1"",""path"":""ch5m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:5 (46-56): Sidebar: Perl code for merge_symbols program by Kevin Morgan"",""caption-linebreaks"":""Stocks & Commodities V. 25:5 (46-56): Sidebar: Perl code for merge_symbols program by Kevin Morgan

    # Program: merge_symbols.pl

    # Copyright (c) 2006, Special-K Trading, LLC

    # All rights reserved.

    # This Perl program opens and reads in two files, old_open_syms_next and

    # preferred_syms. All the symbols from old_open_syms_next file are merged

    # into the list of symbols from preferred_syms, and output to a file

    # all_syms, avoiding duplication. Any existing copy of all_syms is

    # overwritten.

    # A file called old_open_syms is created (overwriting any previous version),

    # and all symbols in old_open_syms_next that are NOT in the preferred_syms

    # file are written to it. A file called new_syms is created (also with

    # overwriting). new_syms is written with the symbols that were uniquely in

    # the preferred_syms file (relative to the old_open_syms_next file."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-46-56-sidebar-perl-code-for-merge-symbols-program-by-kevin-morgan-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-46-56-sidebar-perl-code-for-merge-symbols-program-by-kevin-morgan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-46-56-sidebar-perl-code-for-merge-symbols-program-by-kevin-morgan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254sipe1,d,"{""minimum-quantity"":""1"",""path"":""ch5m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:5 (46-56): Sidebar: Perl code snippets for Seer trading platform by Kevin Morgan"",""caption-linebreaks"":""Stocks & Commodities V. 25:5 (46-56): Sidebar: Perl code snippets for Seer trading platform by Kevin Morgan

    # Program: merge_symbols.pl

    # Copyright (c) 2006, Special-K Trading, LLC

    # All rights reserved.

    # CODE SNIPPET #1: Read the old open symbols file during initialization.

    # The following is a code snippet used inside a Seer trading platform

    # Begin function at the trading account level. It reads in the entire

    # old_open_syms file into an array. The date code in the first line of this

    # file is shifted out and put into a global variable.

    # The array variable is declared within Seer as a Seer trading account wide

    # global variable, and is used as a reference to a new array created to hold

    # the symbols.

    # Open and read the old_open_syms file into a referenced array, using a

    # global variable for the referencing. This array can then be used through

    # this variable in the Bar function and End function.)"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-46-56-sidebar-perl-code-snippets-for-seer-trading-platform-by-kevin-morgan-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-46-56-sidebar-perl-code-snippets-for-seer-trading-platform-by-kevin-morgan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-46-56-sidebar-perl-code-snippets-for-seer-trading-platform-by-kevin-morgan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255fufo,d,"{""minimum-quantity"":""1"",""path"":""ch5m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:5 (57): Futures For You by Dan O’Neil"",""caption-linebreaks"":""Stocks & Commodities V. 25:5 (57): Futures For You by Dan O’Neil

    INSIDE THE FUTURES WORLD

    Want to learn how the futures markets really work? Dan O’Neil, a principal at online futures and forex broker XPRESSTRADE (www.xpresstrade.com), responds to your questions about today’s futures markets. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    MAY I TAKE YOUR ORDER?

    I’m just getting started trading futures and I’m confused about all of the different orders available. What are the basic futures order types, and how do I know which one to use?

    Traders have several choices when it comes to placing orders to buy or sell commodity and financial futures. For example, you can instruct your broker to buy or sell at a specified price. Or you can direct the broker to buy or sell on your behalf immediately, wherever the market\nis trading right now. You even have control over how long your order will be active in the marketplace — you can place an order that is good for one day or for an extended period.

    Understanding how different types of orders work may make a difference in whether your trade gets executed and at what price, but not every exchange accepts\nevery order type so it’s important to check exchange guidelines before trading. Here are some common futures order types from which to choose..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-57-futures-for-you-by-dan-o-neil-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-57-futures-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-57-futures-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255opar,d,"{""minimum-quantity"":""1"",""path"":""ch5m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:5 (58-60): Options Arbitrage by Jesse Chen"",""caption-linebreaks"":""Stocks & Commodities V. 25:5 (58-60): Options Arbitrage by Jesse Chen

    What is arbitrage? Is it really for you?

    Of all the option analysis strategies, arbitrage trades seem to be one of the most intriguing and elusive strategies. Arbitrage is defined as the buying and selling of a financial instrument in order to profit from the price differential. This traditionally occurs between\ntwo different exchanges, possibly between a domestic and foreign exchange where one exchange has not adjusted for the constantly changing currency rates. Arbitrage was made famous in the movie Rogue Trader, in which Nick Leason supposedly made millions arbitraging the Nikkei index between the Singapore and UK exchanges.

    Option arbitrage involves the simultaneous buying and selling of options either between exchanges or the same exchange. We will cover six different types of option strategies: strike, calendar, intramarket, and conversions, boxes, and straddles. When trading arbs, take into account that there can be early assignment of any in-the-money options for all American-style exercise options (exercise before expiration). In addition, possible dividend liability exists on any exercised short puts during dividend dates.

    CALENDAR OPTION ARBITRAGE

    A calendar arbitrage involves the buying and selling of options with the same underlying options, strike, and type (call or put), but different months where the nearer month is sold for more than the farther month is bought (Figure 1). Calendar arbitrages may require longer periods in order to realize the small profit."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-58-60-options-arbitrage-by-jesse-chen-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-58-60-options-arbitrage-by-jesse-chen-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-58-60-options-arbitrage-by-jesse-chen-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256exyo1,d,"{""minimum-quantity"":""1"",""path"":""ch5m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:5 (61): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 25:5 (61): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    STRADDLES AND STRANGLES

    I’ve been looking at some straddles and strangles on stocks that I think will see an increase in volatility over the next month or two. But I’m not sure if I should use a\nstraddle or a strangle. Also, how big of a move does the stock need to make before I make money on the puts or the calls?

    Straddles and strangles work great in volatile markets and can also offer a good way to partially hedge a stock\nportfolio. Both trades consist of purchases of puts and calls on the same underlying stock with the same expiration months. The straddle uses options with the same strike price. The options are both at the money, which means the strike price is equal to (or very close to) the stock price. The strangle, on the other hand, uses out of the money options, which means that the strike price of the call is higher than the stock price and the strike price of the put is lower than the stock price."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-61-explore-your-options-by-tom-gentile-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-61-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-61-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256inle,d,"{""minimum-quantity"":""1"",""path"":""ch5m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:5 (62-68): Interview: Lee Lowell by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 25:5 (62-68): Interview: Lee Lowell by Jayanthi Gopalakrishnan

    Having spent six years as an option market maker on the floor of the New York Mercantile Exchange, Mt. Vernon Research commodities trading expert Lee\nLowell is one of very few privy to the rare insider tips and secrets that the pros use every day to make money. In his new book Get Rich With Options: Four Winning\nStrategies Straight From The Exchange Floor, he reveals the strategies he uses to churn out profits for him in the option arena. And using real-life examples of actual trades, Lowell shows how to use techniques for the fastest route to riches in the option trading game.

    Lowell is also a regular contributor to the Accelerated Profits Report newsletter and the twice-weekly Smart Options eReport, and he is the editor of the Delta Force\nTrader — a trading service that specializes in commodity investing. Technical Analysis of STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Lee Lowell via telephone on March 7, 2007.

    Q: How did you get into option trading?

    A: My option trading career hired by a Chicago-based option market-making firm that had started a branch in New York City. We traded in the energy markets, specifically crude oil, natural gas, heating oil, and unleaded gasoline options. About a year later I was promoted to option trader. I worked with this company for about five years as an option market maker, trading those crude oil and natural gas options. Then I went off to trade on my own using my own capital, still trading on the floor of the New York Mercantile Exchange (NYMEX).

    I did that for another year, at which point I moved off the floor to trade over the Internet. I realized getting quotes\nover the Internet was easy. I didn’t need to be down in the pits as much, concentrating on only one commodity; I could watch the computer at home and trade different commodities. I could save myself a lot of money on the seat lease I had to pay for the NYMEX.

    Once I learned that having a computer and an Internet connection was all I needed, I realized I could work anywhere in the world. I moved myself and my family out to Hawaii for four years, and traded out there over the computer."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-62-68-interview-lee-lowell-by-jayanthi-gopalakrishnan-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-62-68-interview-lee-lowell-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-62-68-interview-lee-lowell-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov257prre2,d,"{""minimum-quantity"":""1"",""path"":""ch5m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:5 (70-72): Product Review: Options Spreads: Generating Exceptional Returns... by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 25:5 (70-72): Product Review: Options Spreads: Generating Exceptional Returns... by David Penn

    TRADESECRETS DVD SERIES

    www.traderslibrary.com/tradesecrets

    Product: Presentation on DVD

    Price: $99

    I suppose if I had made more than 200% on my first option trade, I’d be pretty keen on options too. But Tony Ciccone, who shares a little about his own trading background and experiences with options during his informative presentation in video form, Option Spreads: Generating Exceptional Returns, believes this kind of option trading success is more accessible than most\nwould-be and struggling option traders might believe. If you trade within your means, start small and stick to those trading opportunities with a high probability for strong returns and manageable risk, Ciccone suggests in the conclusion of his presentation, then success\nat option trading can be yours.

    That said, there are a number of ways to skin the cat, and no fewer ways for traders and speculators to make money trading options. And while a great many option traders have started out with stock ‘n’ option trades like covered calls, and a significant number of traders have\ntried buying naked calls and puts, Ciccone lets you know that there are other ways of trading options rather\nthan just marrying them to stocks or treating them like stock substitutes."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-70-72-product-review-options-spreads-generating-exceptional-returns-by-david-penn-21.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-70-72-product-review-options-spreads-generating-exceptional-returns-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-70-72-product-review-options-spreads-generating-exceptional-returns-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov257prre3,d,"{""minimum-quantity"":""1"",""path"":""ch5m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:5 (73-75): Product Review: MetaStock Professional 10 by Dennis D. Peterson"",""caption-linebreaks"":""Stocks & Commodities V. 25:5 (73-75): Product Review: MetaStock Professional 10 by Dennis D. Peterson

    Equis International, which is the developer and distributor of MetaStock, the popular standalone application for traders, has released version 10. This version uses Reuters Quote Center, which is a real-time streaming feed with Market Depth windows, and time and sales. Included is an interface from Dynamic Trend, which can now use Quote Center or eSignal for its data. A version of MetaStock Pro 10 using\neSignal will be available in a few months, depending on eSignal’s schedule.

    Quote Center has several pricing options, with a bias toward bundling services. You can only get North American data bundled with North American futures and forex data at $135 a month. If you want to add Asian/Pacific data worldwide futures or European quotes, that costs an additional $75 a month. Or you can get each (North American, Asian, and so forth) separately for $135 a month. Once you buy a bundle for\n$135 a month, you get extras for an additional $75 a month. The Quote Center provides 30 days of tick data or 60,000 bars for each symbol going back as far as 30 years. In addition, you can set the intraday time interval to be something more than 60 minutes (for example,\ntwo hours) — something that foreign exchange traders have expressed an interest in.

    METASTOCK PRO 10 & DYNAMIC TREND CONNECTION

    Dynamic Trend uses a screen called a Dynamic Trend Profile (see Figure 1), which looks like a matrix with each cell representing a time frame. These cells are called rooms, and if a room shows a trade building, you can rightclick the background of a room and create a MetaStock chart (see Figure 2). Trigger price, target, and stop are transferred to the chart."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-73-75-product-review-metastock-professional-10-by-dennis-d-peterson-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-73-75-product-review-metastock-professional-10-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-73-75-product-review-metastock-professional-10-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov25796tr,d,"{""minimum-quantity"":""1"",""path"":""ch5m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:5 (76-83, 96): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 25:5 (76-83, 96): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    This month’s Traders’ Tips are based on Anthony Trongone’s article in this issue, “Moving Averages: Long On Talk, Short On Action.”

    Trongone's code is available for: TradeStation, MetaStock, eSignal, Wealth-Lab, AmiBroker, NeuroShell Trader, AIQ, StrataSearch, Tradecision, and Trade Navigator."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-76-83-96-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""267"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-76-83-96-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-76-83-96-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov259bofo3,d,"{""minimum-quantity"":""1"",""path"":""ch5m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:5 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 25:5 (92): Books For Traders by Technical Analysis, Inc.

    Chart Your Way To Profits (410 pages, $70 hardcover,\n2007, ISBN 978-0-470-04350-9) by Tim Knight, published by John Wiley & Sons. Making\nmoney in today’s market isn’t easy, but with the right\napproach, you can succeed. In this book you are shown how to use the powerful technology available online in conjunction with technical analysis to analyze markets and make the most profitable trading decisions. You will be introduced to online charts and how to perform your own analysis. You will become familiar with some of the most important rules for sound trading. This book is filled with indepth insight and practical advice. Consistent analysis produces consistent profits. In these pages you can find out how to combine technical\nanalysis and online charting tools to achieve trading success."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-92-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov259qutr,d,"{""minimum-quantity"":""1"",""path"":""ch5m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:5 (98): Quick-Scans: TradeTheNews Newsstation by J. Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 25:5 (98): Quick-Scans: TradeTheNews Newsstation by J. Gopalakrishnan

    How do you trade the news? The answer to that question would depend on the type of trader you are: Daytrader, futures trader, forex trader, or option trader. If you believe news moves price action in the markets, then you need to get that news quickly, preferably before it gets to everybody else. As we all know, the markets react to any news within seconds and its impact withers just as quickly.

    FEATURES

    TradeTheNews.com is an independent financial news service company that offers you real-time market news in audio and text format via the Internet. There are three audio channels: global equities, Standard & Poor’s 500, and credit/FX. The global equities channel broadcasts all relevant news items such as analyst upgrades/downgrades, initial public offerings (IPOs), economic news, earnings announcements, and key technical levels."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-98-quick-scans-tradethenews-newsstation-by-j-gopalakrishnan-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-98-quick-scans-tradethenews-newsstation-by-j-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-5-98-quick-scans-tradethenews-newsstation-by-j-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251leto5,d,"{""minimum-quantity"":""1"",""path"":""ch6j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:6 (10): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 25:6 (10): Letters To S&C by Technical Analysis, Inc.

    The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine\nwould not exist.

    TECHNICAL ANALYSIS SOFTWARE

    Editor,

    I am looking for trading software that can be used for the Indian stock market. Can you provide software that offers a free trial?

    GAJAPATHY BHASKARAN\nAndhra Pradesh, India

    Many technical analysis software packages could work for you as long as it will accept the datafeed you need for the exchanges you are trading in. For a list of technical analysis software and some of the features of each, try browsing the Traders’ Resource database of products and services at our website at http://\ntechnical.traders.com/Products/home.asp. You can use the search box there to look for certain criteria, such as\nfree trials, within the software category.

    —Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-10-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-10-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-10-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251fofo4,d,"{""minimum-quantity"":""1"",""path"":""ch6j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:6 (12-14): Forex Focus by Brent Donnelly"",""caption-linebreaks"":""Stocks & Commodities V. 25:6 (12-14): Forex Focus by Brent Donnelly

    Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. With that in mind, STOCKS & COMMODITIES has introduced Forex Focus to better prepare the retail trader to participate in the currency market.

    Position yourself in the foreign exchange market using a reliable chart pattern.

    A reliable trading pattern in foreign exchange markets is the false break and reverse, or slingshot reversal pattern. In this article I will introduce the slingshot reversal, discuss how the pattern is traded, and provide a recent example from the AUD/USD (Australian dollar) market.

    A slingshot reversal occurs when a major support is broken but the price does not hold and the market then reverses, going back up through the old support level. Here I am referring to a broken support but everything described also applies to the opposite formation, where resistance breaks and the rally fails and reverses back below the resistance. This pattern works so well because the downside break of the major technical level clears existing long positions and creates new weak shorts. The large number of breakout systems and momentum models in foreign exchange further enhances the reliability of the structure. The slingshot reversal pattern is not unique to forex markets, however. The pattern can be exploited profitably in other markets as well; entry/exit parameters need to be adjusted for other commodities, but the concepts are identical."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-12-14-forex-focus-by-brent-donnelly-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-12-14-forex-focus-by-brent-donnelly-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-12-14-forex-focus-by-brent-donnelly-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251howe,d,"{""minimum-quantity"":""1"",""path"":""ch6j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:6 (16-26): How Effective Are Rectangles? by Markos Katsanos"",""caption-linebreaks"":""Stocks & Commodities V. 25:6 (16-26): How Effective Are Rectangles? by Markos Katsanos

    It’s one of the oldest patterns in technical analysis, but how reliable is it? By statistically evaluating the performance of rectangle formations, we can derive a new formula that can remove the guesswork from estimating the price target.

    After having traded rectangle formations for some time, I discovered the traditional measuring formula to be too conservative and its use almost always resulted in premature exits. Technical literature about these formations provides only a minimum price objective but not an average or most likely target. The classical method used for measuring these reliable and profitable formations is simple and straightforward, but how accurate and reliable is it? Given the limited amount of statistical studies on the subject, I decided to investigate.

    For the purpose of this study I found 100 rectangle\nformations for the preceding two-year 2004–05 period.\nMy criterion for including a pattern in the list was a sideways price action bounded by two horizontal or nearly horizontal support & resistance lines. I then made note of the price level of the support & resistance lines, the rectangle duration, slope and volume trend, the price at the breakout above the upper rectangle boundary, and the first short-term top. Other interesting statistics I noted were the volume on the breakout day, the duration, magnitude, and timing of any throwbacks following the initial breakout, and also the direction of any premature or false breakouts. Statistical analysis of the results revealed some surprising findings contradicting some widely accepted principles."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-16-26-how-effective-are-rectangles-by-markos-katsanos-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-16-26-how-effective-are-rectangles-by-markos-katsanos-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-16-26-how-effective-are-rectangles-by-markos-katsanos-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov252trra,d,"{""minimum-quantity"":""1"",""path"":""ch6j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:6 (28-34): Trading Range Bars by Suri Duddella"",""caption-linebreaks"":""Stocks & Commodities V. 25:6 (28-34): Trading Range Bars by Suri Duddella

    There are different ways to chart price movements. Here we look at range bars and how they help identify the underlying trend.

    Bar charts, candlestick charts, and line charts are the most popular when it comes to charting, but what about range bars? Range bars are a unique way of building price charts and are excellent in finding the underlying trend and movement of the current bar. Since each bar on the chart has the same range (high to low), it reduces the volatility and noise within the range of the bar. Range bars are generated continuously as a new tick is formed outside the minimum price range. They are closely related to point & figure or renko charts, which are also based on equal price range change. The range bar chart is a study of pure price movement, and time is not taken into consideration while plotting the price action. Range bar movement is not time-dependent but does depend on price movement when a preset range of a price bar is complete; hence, the time axis (x-axis) on a range bar chart is irrelevant.

    When range bars are constructed, chart dependency on the time scale (x-axis) has been removed as it produces its own price scale on the y-axis. This helps\nremove gaps and produce clear levels of support & resistance. Range bars also work with other trend indicators, all instruments, and all time frame trading. Range bar charts are great for observing active market\nactivity and are helpful in identifying support & resistance lines, buy/sell signals, and trendlines."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-28-34-trading-range-bars-by-suri-duddella-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-28-34-trading-range-bars-by-suri-duddella-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-28-34-trading-range-bars-by-suri-duddella-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253exyo1,d,"{""minimum-quantity"":""1"",""path"":""ch6j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:6 (35): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Stocks & Commodities V. 25:6 (35): Explore Your Options by Tom Gentile

    Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    DOES VOLATILITY MATTER FOR\nSHORT-TERM TRADES?

    I trade call options on a short-term basis. I typically hold positions from one to five days. The only factor I consider when trading call options is delta. I usually pick options with 30 to 60 days until expiration. My target delta is 0.75, but I will trade options with 0.65 to 0.85\ndeltas. For the most part the options I trade do follow the stock price closely, as prescribed by delta. My question concerns the option’s volatility. I do not consider volatility whatsoever when selecting the call option to trade. Am I doing myself an injustice by not paying attention to volatility? Does volatility matter when trading for the short term? Would I improve my chances for greater gain by considering volatility? If so, what should I look for? Thanks.

    —George

    Thanks for the question. As you know, several different factors can affect the value of an option contract. The most important is the price of the underlying asset. In your example, you are trading equity calls, and the price of the stock will be the single most important factor in determining the value of the call. If the stock price rises, the call will increase in value. If the stock price falls, the call will decrease in value."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-35-explore-your-options-by-tom-gentile-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-35-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-35-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253doca,d,"{""minimum-quantity"":""1"",""path"":""ch6j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:6 (36-39): Double Calendars And Condors by John A. Sarkett"",""caption-linebreaks"":""Stocks & Commodities V. 25:6 (36-39): Double Calendars And Condors by John A. Sarkett

    In this, the second part of a series based on an option seminar with trader Dan Sheridan, we look at the double calendar and condor strategies.

    With a stock at 50, an option strategist could put on a call calendar at 55 and a put calendar at 45, short June, long November, hence creating a “double calendar.” Is this a good vehicle? Trader Dan Sheridan is ambivalent: “I’d rather put the calendar right at 50 and make the stock prove it’s going to move, and then adjust by putting on another calendar at a higher or lower level.”

    A “better” double calendar, in Sheridan’s opinion, is an\nadjusted single calendar. If the stock moves up to 55, sell the July 55 calls, buy the November 55 calls. The risk curve changes to look like the chart in Figure 1.

    DOUBLE CALENDARS

    Double calendars work best in a low-volatility environment. (Double diagonals work in both low- and high-volatility environments.) If the strategist turns bullish, a calendar can also be adjusted into a diagonal. In the case study used as an example in this article, with HDI moving up to 50.93, a strategist adjusts by selling his June 50 call and buying the November 50 call, while staying short the June 55 call (Figure 2). This forces the stock to move to 55 before profit decline sets in. The risk curve then looks like what you see in Figure 3.

    CONDORS

    An iron condor is two credit spreads, a call credit spread above the market and a put credit spread below. (A credit spread is where you buy one option and sell another, and receive money or a “credit.” A debit spread is where you buy one option and sell another and pay money to do it.) Other condors can be constructed of just puts or just calls, but mixing calls and puts makes this one an “iron” condor. The risk is limited to the amount between the two strikes, typically 10 points minus the credit received."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-36-39-double-calendars-and-condors-by-john-a-sarkett-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-36-39-double-calendars-and-condors-by-john-a-sarkett-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-36-39-double-calendars-and-condors-by-john-a-sarkett-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253sitr,d,"{""minimum-quantity"":""1"",""path"":""ch6j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:6 (36-39): Sidebar: Trader Dan on Index Condors and Daily Condor Checklist by John A. Sarkett"",""caption-linebreaks"":""Stocks & Commodities V. 25:6 (36-39): Sidebar: Trader Dan on Index Condors and Daily Condor Checklist by John A. Sarkett

    TRADER DAN ON INDEX CONDORS

    • Put on five to seven weeks from expiration (preferably 49 days for new students)

    • Strike width: Five to 20 points in SPX & RUT; NDX 25 to 50 points

    • Strike width: One to five points in DIA, SPY, IWM..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-36-39-sidebar-trader-dan-on-index-condors-and-daily-condor-checklist-by-john-a-sarkett-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-36-39-sidebar-trader-dan-on-index-condors-and-daily-condor-checklist-by-john-a-sarkett-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-36-39-sidebar-trader-dan-on-index-condors-and-daily-condor-checklist-by-john-a-sarkett-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254qaby2,d,"{""minimum-quantity"":""1"",""path"":""ch6j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:6 (43): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 25:6 (43): Q&A by Don Bright

    SINCE YOU ASKED

    Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

    FACTS OF (TRADING) LIFE

    I just started my second year of trading, and while I’m not making any money yet, hopefully I will be soon. Would you say that a negative state of mind and the psychology of trading are why so many fail?

    —pamjoey

    As I tell all my traders, “Trading is simple, but the psychology involved is murder.” And the “trading is simple” part only applies if you have taken the time to learn what the heck you should be doing. I can’t believe that I still get people who think that “trading” is either “picking stocks” or “choosing market direction” — and I have to explain the facts of trading life to them. Most “trainers” and “book writers” want to make the masses believe they can run their $25,000 account into lots of money with a system of some kind or another. The working strategies tend to be “lower risk, higher reward, but capital-intensive” for the most part. Market-neutral strategies have been working well in recent markets, and made for hardly a hiccup on the February 27th selloff (down 400-plus points in the market)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-43-q-a-by-don-bright-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-43-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-43-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254bobo,d,"{""minimum-quantity"":""1"",""path"":""ch6j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:6 (46-48): Bonanza Bottoms by Scott Brown Ph.D."",""caption-linebreaks"":""Stocks & Commodities V. 25:6 (46-48): Bonanza Bottoms by Scott Brown Ph.D.

    Powerful reversal patterns are synonymous with good\nbuying opportunities. Here’s how to identify them.

    To succeed in the stock market you must buy low and sell high. Why is this so hard to implement for most investors? In this article, we’ll find out by examining the forces driving stock prices and how to identify the real deals in the stock market, all through bonanza bottoms.

    WHY BUY LOW AND SELL HIGH?

    The only way you can get rich is to buy low and sell high or sell high and buy it back low. You will be pitched many different strategies as an investor, but wealth-building ones, as opposed to income-producing\nones, simply amount to acquiring an asset at a lower\nprice than you sell it. It’s mainly due to your social wiring that buying low and selling high is so difficult to implement. You have learned that when something you buy is a real bargain it is most likely of inferior quality — defective or spoiled or out of date. This helps you as a\nshopper but hurts you as an investor. But if something is priced high, we normally assume it is of higher quality.

    FINANCIALLY HARMFUL SOCIAL WIRING

    Experienced investors buy stocks when the outlook for those stocks looks bleak. In fact, when the stock market really stinks, like after a severe bear market, successful investors go on a buying spree while the uninformed public shy away from stocks."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-46-48-bonanza-bottoms-by-scott-brown-ph-d-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-46-48-bonanza-bottoms-by-scott-brown-ph-d-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-46-48-bonanza-bottoms-by-scott-brown-ph-d-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255inin,d,"{""minimum-quantity"":""1"",""path"":""ch6j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:6 (50-56): Interview: In Synch With Steven Primo by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Stocks & Commodities V. 25:6 (50-56): Interview: In Synch With Steven Primo by Jayanthi Gopalakrishnan

    Are you trading according to your trading personality? Steven Primo can give you a clue about that. A nearly 30-year Wall Street veteran, Primo is the director of education for TradingMarkets. Currently, he also heads a private investment partnership where he is general partner and head trader. Previously, Primo was a nine-year specialist for Donaldson, Lufkin and Jenrette (DLJ), one of the premier investment firms on Wall Street. STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Steven Primo on April 12, 2007, by telephone.

    Q: Steve, how did you get involved in trading?

    A: That’s a funny story. I don’t have any background in finance. In fact, I graduated from Loyola University with a degree in music. But my father was a stockbroker. He was always trying to get me involved in the markets, but I had no interest in the subject. The summer I graduated from college, I was in downtown Los Angeles looking to buy a cheap saxophone, and I saw the Pacific Stock Exchange. I thought, “My dad always talked about this place!” So I went up to the visitors’ gallery and saw the paper on the floor and all the people screaming and making hand signals —and I was hooked. So I got a haircut and applied for a job the next day.

    Q: When was this?

    A: The summer of 1977. I got hired as a runner, where you stood in front of the specialist and literally wrote down all the trades on a piece of paper and once a trade occurred, you wrote down the share size, the name of the stock and the price, and then took it over to the teletype operator and she put it up on the tape. I started out doing that and seven years later I became a specialist for Donaldson, Lufkin and Jenrette (DLJ)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-50-56-interview-in-synch-with-steven-primo-by-jayanthi-gopalakrishnan-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-50-56-interview-in-synch-with-steven-primo-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-50-56-interview-in-synch-with-steven-primo-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255fufo1,d,"{""minimum-quantity"":""1"",""path"":""ch6j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:6 (57): Futures For You by Dan O’Neil"",""caption-linebreaks"":""Stocks & Commodities V. 25:6 (57): Futures For You by Dan O’Neil

    INSIDE THE FUTURES WORLD

    Want to learn how the futures markets really work? Dan O’Neil, a principal at online futures and forex broker XPRESSTRADE (www.xpresstrade.com), responds to\nyour questions about today’s futures markets. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be\nposted there, and selected questions will appear in a future issue of S&C.

    MONEY TALKS

    I’d like to start trading foreign currencies, but I’m not sure whether the futures market or the spot forex market is a better choice. What are the pros and cons of each?

    With transactions representing nearly $2 trillion each day, the foreign exchange market affects almost every nation’s economy and is the world’s largest financial market. Many economic forces affect the world’s currencies, including interest rate differentials, domestic money supply growth, comparative rates of inflation, central bank intervention, and political stability.\nIn times of global uncertainty, some currencies may benefit from perceived “flight-to-safety” status. Or if one\ncountry’s economic outlook or political conditions are perceived as strong by market forces, its currency may be firmer than another country’s currency.

    Financial institutions, investment managers, corporations, and private investors use both currency futures and transactions in the spot forex market as hedges to manage the risks associated with currency rate fluctuations, and to take advantage of profit opportunities stemming from changes in currency\nrates."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-57-futures-for-you-by-dan-o-neil-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-57-futures-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-57-futures-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255wefo1,d,"{""minimum-quantity"":""1"",""path"":""ch6j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:6 (58-59): Website For Traders: optionMONSTER by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 25:6 (58-59): Website For Traders: optionMONSTER by David Penn

    OPTIONMONSTER.COM

    It is always interesting to see a new website that sets out to be a one-stop shop for market news and analysis. There are already more than a few such websites on the Internet, many of which have been around for several years. So one of the most obvious questions that comes to mind when encountering what is effectively a startup in this business is, “What have you got that the others don’t?”

    After all, headlines are headlines, most actives are most active, and you would have to search far and wide for competing market summaries on a given trading day that differed by more than a point or two of emphasis. As I was discussing with a colleague recently, one of the ways these websites distinguish themselves from each other is the path to being a paid customer. Many ostensibly free financial information websites provide a certain amount of free content but then begin to scale up, offering ever more “exclusive” or “professional” or “premium” content for those willing to cough up a few bucks. Like the free stuff? Try the newsletter. Like the newsletter? Try a subscription to our fully automated trading service that does all the work for you.

    You might call it the “For a few dollars more” strategy."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-58-59-website-for-traders-optionmonster-by-david-penn-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-58-59-website-for-traders-optionmonster-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-58-59-website-for-traders-optionmonster-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256prre2,d,"{""minimum-quantity"":""1"",""path"":""ch6j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:6 (64-69): Product Review: Direct Pro by David Penn"",""caption-linebreaks"":""Stocks & Commodities V. 25:6 (64-69): Product Review: Direct Pro by David Penn

    It would probably be too much to say that the merger of\nRush Financial Technologies — a Dallas, TX–based\nbroker–dealer — with Terra Nova Financial in May 2006 has revitalized an organization that was itself in the midst of a number of other major changes (including new ownership that loosened but did not sever the links between Terra Nova and Townsend Analytics).

    At the same time, however, it is clear that the principals of Terra Nova Financial believe that the acquisition of Rush Group — and more specifically, Rush Group’s suite of proprietary trading platfeatures forms, Direct Pro, Direct Plus, and Direct— will play a major role in the new products and services the company will offer to both its current and new customer base. With applications for on-the-go traders (the browser-based Direct platform), part-time retail traders (Direct Plus), and active/institutional traders (Direct Pro), the new suite of trading platforms available through Terra Nova Financial will likely go some distance toward elevating Terra Nova’s status as a provider of direct-access trading platform options to an even wider range of customers.

    In speaking with Mark Patel, director of business development with Terra Nova Financial, it is clear that the Direct series is part of an effort to expand both from within as well as from without. Adding three new platforms to the services Terra Nova already provides will make it that much easier for thecompany to reach out into the various niches of active, part-time, mobile/ on-the-go, and institutional traders."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-64-69-product-review-direct-pro-by-david-penn-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-64-69-product-review-direct-pro-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-64-69-product-review-direct-pro-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov257prre4,d,"{""minimum-quantity"":""1"",""path"":""ch6j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:6 (70-71): Product Review: Random Walk Trading by Jonathon Brubaker"",""caption-linebreaks"":""Stocks & Commodities V. 25:6 (70-71): Product Review: Random Walk Trading by Jonathon Brubaker

    Think And Grow Rich, Chicken Soup For The Soul, Rich Dad, Poor Dad, the Bible — every so often an instructional manual comes along that changes the way we think. The J.L. Lord collection of option trading texts are just such books. After reading through the series, I wouldn’t be surprised to see them gain recognition as the bibles of option trading as their content becomes synonymous with expert trading techniques that, until now, have not been exposed to the retail public.

    The Lord collection starts out from the remedial and fluidly travels through the expert level without leaving the reader behind or confused. The four books are each broken down into specific strategies and cover everything a trader needs to know about each strategy. The way in which they are written for all levels of proficiency is what makes these texts stand apart from other instructional manuals.

    Although these books cover the theoretical process by which the trades work, they also go into practical applications. Each text has specific step-by-step criteria, making trading the strategy as simple as reading a cooking recipe. Financial foie gras, anyone?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-70-71-product-review-random-walk-trading-by-jonathon-brubaker-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-70-71-product-review-random-walk-trading-by-jonathon-brubaker-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-70-71-product-review-random-walk-trading-by-jonathon-brubaker-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov257trti1,d,"{""minimum-quantity"":""1"",""path"":""ch6j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:6 (76-85): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 25:6 (76-85): Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    Most of this month’s Traders’ Tips are based on Markos Katsanos’ article in this issue, “How\nEffective Are Rectangles?” Code for this article are provided by TradeStation, StrataSearch, eSignal, Wealth-Lab, NeuroShell Trader, AIQ, Tradecision, and SwingTracker.

    Other Tips in this section were provided by NinjaTrader for \""Two-Point Problem Of The Rate Of Change\"" by Martti Luomo and Jussi Nikkinen, March 2007 S&C, and VT Trader for \""Developing Your Own Indicators\"" by Lee Leibfarth, January 2006 S&C."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-76-85-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-76-85-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-76-85-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov259bofo4,d,"{""minimum-quantity"":""1"",""path"":""ch6j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:6 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 25:6 (92): Books For Traders by Technical Analysis, Inc.

    The CPM Gold Yearbook 2007 (187 pages, $150 hardcover, 2007, ISBN 978-0-470-04951-8) by CPM Group, published by John Wiley & Sons. Gold is widely sought after for its investment value and industrial uses. Gold can provide investors with a financial safety net against sharp drops in assets like stocks and bonds. This resource provides a wealth of information for those who need to make informed decisions with regard to this commodity, whether looking at the global market or buying physical bullion, futures, options, or mining equities."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-92-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov25997at,d,"{""minimum-quantity"":""1"",""path"":""ch6j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:6 (98, 97): At The Close by J.L. Lord"",""caption-linebreaks"":""Stocks & Commodities V. 25:6 (98, 97): At The Close by J.L. Lord

    New Margin Rules (Part I)

    On April 2, 2007, the Securities and Exchange Commission (SEC) granted permission to the retail brokerage industry to adopt margin requirements in the style of those used by the Chicago Board Options Exchange (CBOE). For many investors, the new rules represent a significant addition to their purchasing power. It makes sense that these investors would want to know not only how they got the extra money, but what they are allowed to do with it.

    WHAT IS MARGIN?

    Whenever a trader initiates a trade, a broker will require\nmoney from that trader up front in order to help ensure that the winning party gets paid. That amount of money is referred to as a margin requirement.

    The typical margin requirement for a stock purchase is\n50% of the purchase price of the stock. For an investor\nlooking to purchase 100 shares of Google, Inc. (GOOG), currently trading for $450 per share, the funds necessary to own this position would be:

    $450 (per share) x 50% x 100 shares = $22,500

    The idea is that if GOOG loses half of its value, the broker has set aside enough funds to pay for his investor’s loss."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-98-97-at-the-close-by-j-l-lord-20.gif"",""height"":""261"",""width"":""202""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-98-97-at-the-close-by-j-l-lord-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-6-98-97-at-the-close-by-j-l-lord-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251leto6,d,"{""minimum-quantity"":""1"",""path"":""ch7j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:7 (10-12): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    KAGI SYSTEM\nEditor,\nI am a longtime and appreciative subscriber\nof your trading magazine.\nI need information about where, how,\nor who could help me in finding the\nprogramming in AmiBroker language\nfor Japanese kagi charting. It should be\nusable in different time frames including\ntick to tick.\nHave you published any articles in\nthe past on this? If so, please let me\nknow when, because I have the entire\ncollection of your magazines.\nIf you haven’t published this (and I\ndon’t believe you have), maybe you\ncould put me in touch with someone\nwho could provide it, whether for free\nor for a fee.\nJESUS GUILABERT MIRALLES\nCrevillente, Spain

    We published an article on creating\nkagi charts in our April 2000 issue, but\nit did not include AmiBroker formula\nlanguage:\nGopalakrishnan, Jayanthi [2000].\n“Kagi Charts,” Technical Analysis of\nSTOCKS & COMMODITIES, Volume\n18: April.\nMeanwhile, we checked with AmiBroker,\nwho replies that kagi charts are available\nfor AmiBroker as code from their\nonline formula library at:\nhttp://www.amibroker.com/library/\ndetail.php?id=236\nHope this is helpful.—Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-10-12-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""258"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-10-12-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-10-12-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251fofo5,d,"{""minimum-quantity"":""1"",""path"":""ch7j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:7 (14-19): Forex Focus by Darrell Jobman"",""caption-linebreaks"":""Forex Focus by Darrell Jobman

    Can The US Dollar Hang On?

    To answer that question, you need to read\nthis analysis of the greenback.

    How many times have people buried the US dollar for\none reason or another, only to see the dollar bounce\nback? The dollar is at it again as recent US economic data has\ncaused some doubts about the strength of the greenback.\nHowever, near-term US growth trends should still offer\nshort-term dollar protection as expectations of a cut in interest\nrates appears likely to fade again.\nThe US dollar could secure further strong buying support\nif traders start to price in an interest rate increase later in 2007,\nalthough such a move carries some risks that the economy\nwill deteriorate further, with the housing sector still an\nimportant component to consider.

    CURRENT ACCOUNT CONCERN

    Although the US trade deficit seemed to be stabilizing in the\nfirst quarter of 2007, that was due primarily to a decline in\nenergy prices. The current account deficit is still running at\nunsustainable levels. Therefore, the US currency remains\nvulnerable on structural grounds. A key factor is that any US\ndollar rallies are likely to attract considerable selling interest\nas central banks look to reduce their dollar holdings in favor\nof other currencies for their reserve accounts. This selling\nwill severely curtail the potential for substantial dollar gains.\nConfidence in the Eurozone economy should remain firm\nin the short term, with particular optimism about Germany’s\nstatus. The European Central Bank (ECB) still has room to\nincrease interest rates, but expectations over further increases\nmay be scaled back, given that Eurozone inflation seems to be\ncontained below 2.0%."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-14-19-forex-focus-by-darrell-jobman-20.gif"",""height"":""258"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-14-19-forex-focus-by-darrell-jobman-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-14-19-forex-focus-by-darrell-jobman-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov252bepr,d,"{""minimum-quantity"":""1"",""path"":""ch7j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:7 (20-30): Between Price And Volume by Buff Pelz Dormeier, CMT"",""caption-linebreaks"":""Between Price And Volume by Buff Pelz Dormeier, CMT

    Here’s an indicator that can be used to measure the\nintrinsic relationship between price and volume.

    When securities change hands on a securities\nauction market, the volume of\nshares bought always matches the\nvolume sold. When the price rises, the upward movement reflects that demand exceeds supply\nor buyers are in control. Likewise, when the price\nfalls it implies that supply exceeds demand or that\nsellers are in control. Over time, these trends of\nsupply and demand form accumulation and distribution\npatterns. What if there were a way to look deep\ninside price and volume trends to find out if current\nprices were supported by volume? This is the objective\nof the volume price confirmation indicator (VPCI),\na methodology that measures the intrinsic relationship\nbetween price and volume."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-20-30-between-price-and-volume-by-buff-pelz-dormeier-cmt-20.gif"",""height"":""258"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-20-30-between-price-and-volume-by-buff-pelz-dormeier-cmt-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-20-30-between-price-and-volume-by-buff-pelz-dormeier-cmt-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253qaby2,d,"{""minimum-quantity"":""1"",""path"":""ch7j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:7 (31): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    ABOUT THE PREMIUM INDEX

    I am from Argentina and I work in a\nproprietary firm. I have some questions\nabout the premium index. First, is the\npremium Standard & Poor’s 500 futures\n– S&P 500 cash index or is S&P\n500 futures – S&P 500 cash index + FV\nspread? I understand that the premium\nis S&P 500 futures – S&P 500 cash but\nin the web of my broker, you see that\npremium is S&P 500 futures – S&P 500\ncash index + FV spread. Which is correct?\nSecond, do you use only premium\nwhen breaking program levels?—Sheik\nBoth your definitions are correct.\nCertain data vendors use the PREM symbol\nfor the difference between the spot\nprice of the S&P 500 index and the S&P\nfutures. Our traders consider fair value\nin our PREM equation. We take the spot\nprice + estimated fair value (which is\nbasically a cost of carry calculation based\non interest rates and time until expiration\nof the futures contract), plus or\nminus the futures price)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-31-q-a-by-don-bright-20.gif"",""height"":""258"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-31-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-31-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253laan,d,"{""minimum-quantity"":""1"",""path"":""ch7j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:7 (32-34): Laps And Gaps To Get Your Edge by Larry Connors and Ashton Dorkins"",""caption-linebreaks"":""Laps And Gaps To Get Your Edge by Larry Connors and Ashton Dorkins

    When a stock gaps higher at the open on bullish news, will\nthat lead to even higher prices?

    When a stock gaps higher at the open on bullish\nnews, will that lead to even higher prices? This\nis the question that many traders ask before the\nmarket opens. You watch the financial news in\nthe morning and hear a list of stocks set to open higher due to positive news overnight. Then you see a live\nreport from the floor of the exchange that shows traders\ngathered around the post where XYZ stock is traded. You’re\ntold that stock is due to open 10% higher from the previous\nday’s close. And it’s all accompanied by a great story. If you already own it, you’re probably thinking you couldn’t ask for\nbetter news. And if you don’t own XYZ, you may be wondering\nif you should buy the stock. But…\nIn the final minutes before opening bell, you begin to recall\ninstances in which stocks like this one actually closed lower by\nthe end of the day. How that is possible with such bullish news?

    QUICK REVIEW OF LAPS AND GAPS

    Recently, we conducted new quantitative research on laps\nand gaps. We looked at the relationship between a stock’s\nopening price and closing price on the previous day. To draw\nvalid conclusions, we analyzed more than seven million\ntrades from January 1, 1995, to June 30, 2006."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-32-34-laps-and-gaps-to-get-your-edge-by-larry-connors-and-ashton-dorkins-20.gif"",""height"":""258"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-32-34-laps-and-gaps-to-get-your-edge-by-larry-connors-and-ashton-dorkins-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-32-34-laps-and-gaps-to-get-your-edge-by-larry-connors-and-ashton-dorkins-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253fufo,d,"{""minimum-quantity"":""1"",""path"":""ch7j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:7 (35): Futures For You by Dan O’Neil"",""caption-linebreaks"":""Futures For You by Dan O’Neil

    Rookie mistakes: This month, we’ll look\nat a pair of common questions that many\nnew traders come across when they first\nwade into the commodity markets.

    HOW MANY MARKETS AT ONCE?

    I’m ready to start trading futures, and\nwhile I’m interested in a number of\ndifferent markets, I’m not sure how many\nit makes sense to get into right away. Is\nthere any kind of “magic number” of\nhow many markets a trader can reasonably\nfollow?\nThe number of markets we should\nfollow is certainly not set in stone, as\nindividual traders tend to have different\ncomfort and commitment levels. Some\nspeculators spread their accounts across\ndozens of products, preferring a more\ndiversified commodity portfolio. Other\ntraders like to specialize in only one\ncommodity, allowing them to focus on\nall of the technical studies and fundamental\nnews surrounding just that particular\nmarket to get a feel for exactly how\nbehaves. In truth, however, the closest\nthing to an ideal situation probably lies\nsomewhere between these two extremes."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-35-futures-for-you-by-dan-o-neil-20.gif"",""height"":""258"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-35-futures-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-35-futures-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253prpr,d,"{""minimum-quantity"":""1"",""path"":""ch7j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:7 (36-39): Premarket Prediction by Victoria Wang"",""caption-linebreaks"":""Premarket Prediction by Victoria Wang

    Can premarket activity be a\npowerful predictor as to how\nunderlying stocks will perform\nduring regular market hours? Will\nthis knowledge be advantageous\nto traders?

    Premarket activity\nrefers to stocks that\nundergo active trading\nbefore the US\nmarket opens —\nthat is, before 9:30 ET. This activity may be caused by\nearning announcements from either\nbefore the market opens or\nafter yesterday’s close, upgrading\nor downgrading by analysts, or\nother news that may influence the\nstocks’ movement. After analyzing\nabout a half-year’s data, we\nare beginning to uncover the connections\nbetween premarket activity\nand stock trends during regular\ntrading hours.

    DATA COLLECTION

    The first step in the analysis is\ndata collection. The premarket\ndata was collected from the\nNASDAQ website from February\n1, 2006, to July 31, 2006. We\nwrote a program that fetched the\ndata from the website every\nmorning around 9:25 ET. This\ndata includes the current price\nbefore the market opens,\nyesterday’s closing price, and\nthe premarket trading volume.\nUsing this data, we were able to calculate the percentage change of the current price relative\nto yesterday’s close, referred to as percent change.\nWe will discuss the effects of these data on the underlying\nstocks’ movements during regular trading hours. Trading\nactivity involves entering a position at the open price and\nexiting the position at the close of the day; therefore, this is a daytrading system. For short positions, we are limited\nto stocks with a price above $6."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-36-39-premarket-prediction-by-victoria-wang-20.gif"",""height"":""258"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-36-39-premarket-prediction-by-victoria-wang-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-36-39-premarket-prediction-by-victoria-wang-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" v254dodiandb,d,"{""minimum-quantity"":""1"",""path"":""ch7j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:7 (44-49): Double Diagonals And Butterfly Spreads by John A. Sarkett"",""caption-linebreaks"":""Trading With Dan Sheridan (Part 3)

    Double Diagonals And Butterfly Spreads by John A. Sarkett

    The third part of this series with trader Dan Sheridan looks\nat double diagonals with long, protective wings one or more\nmonths out from the short options, as well as the butterfly\nspread, an income-generating strategy.

    Double diagonals are Dan Sheridan’s single favorite\nstrategy, and he likes to mix double\ndiagonals in a portfolio with condors for diversification.\nHere’s why: While increasing volatilities\nhurts the condors, it helps the diagonals. So one offsets the other. Let’s look at double diagonals first.

    DOUBLE DIAGONALS

    In addition, the double diagonals strategy has a more favorable\nrisk–reward ratio than other income strategies — 1:2,\n1:3, 1:4, compared with 1:10 for condors. The yields can\nreach 15% to 30% for 30 days on average.\nRemember, this is a business — “An insurance company\nwithout the overhead,” as Sheridan says. Remember, he was\na market maker for 22 years. Everything he does is hedged,\nquantified, managed, and managed in advance, “managed in\ntimes of peace, not in times of war,” as he puts it.\nBest option candidates for double diagonal strategy\n• Stock is greater than $30\n• Implied volatility (IV) in lowest two thirds of its\ntwo-year range\n• Nontrenders, sideways movers\n• Low volatilities (for nonmovers, we want to go\nsideways)\n• Skews (volatilities near and far) in line, not more\nthan four points apart\n• Nonearnings months — again, we don’t want\nmovement due to news\n• Boring, sideways, predictable industries, no\nbiotech startups or the like."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-44-49-double-diagonals-and-butterfly-spreads-by-john-a-sarkett-20.gif"",""height"":""462"",""width"":""359""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-44-49-double-diagonals-and-butterfly-spreads-by-john-a-sarkett-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-44-49-double-diagonals-and-butterfly-spreads-by-john-a-sarkett-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255exyo1,d,"{""minimum-quantity"":""1"",""path"":""ch7j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:7 (55): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    OPTIONS AND SHORT-TERM PRICE MOVES

    I’ve been working on a system that works\nwell in predicting the moves in the Dow\nJones Industrial Average (DJIA) over one\nto two weeks. It is a purely technical\nsystem. I have been using the Dow Jones\ndiamonds (DIA) exchange traded fund\n(ETF) as a vehicle for the system. What\nother “options” do I have? — Mike

    In addition to the DIA, you can also\ntrade options on the DIA, index options\non the DJIA, or Dow futures. The futures\nwill require a separate trading\naccount because futures and options on\nfutures are regulated differently from\nstocks, stock options, and index options.\nYou can trade DIA or index options\nin the same account as your DIA\ntrades if you have option approval from\nyour broker, which requires paperwork\nand a signature. Ask your broker. ... continuded"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-55-explore-your-options-by-tom-gentile-20.gif"",""height"":""464"",""width"":""360""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-55-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-55-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255trtr,d,"{""minimum-quantity"":""1"",""path"":""ch7j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:7 (56-58): Trading Trendline Breaks (Part 1) by Sylvain Vervoot"",""caption-linebreaks"":""Trading Trendline Breaks (Part 1) by Sylvain Vervoot

    One of the best trading methods in technical analysis is the\napplication of trendline breaks. Find out why.

    am convinced that one of the best trading methods\nusing technical analysis is the application of\ntrendline breaks. Let me convince you too. Let’s\nstart off by discussing the differences and similarities of linear and logarithmic scaling. First of all, take a look\nat your charts. Are they linear both horizontally for the time\nsetting and vertically for the price setting? Or do you have to use\na semilogarithmic scale with a linear scaling on the time\naxis and a logarithmic scaling on the price axis?

    Linear scaling: If you are using a division of five points on\nthe linear scaling, then for a price change from $25 to $50\nthere are five divisions. For a price change from $50 to $100\nthere are 10 divisions. This means that the distance on the\nvertical axis from $50 to $100 is twice as large as the one\nfrom $25 to $50 (Figure 1)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-56-58-trading-trendline-breaks-part-1-by-sylvain-vervoot-20.gif"",""height"":""258"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-56-58-trading-trendline-breaks-part-1-by-sylvain-vervoot-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-56-58-trading-trendline-breaks-part-1-by-sylvain-vervoot-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256injo,d,"{""minimum-quantity"":""1"",""path"":""ch7j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:7 (60-66): Interview: John Netto, On Trading And Inflection Points by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Interview: John Netto, On Trading And Inflection Points by Jayanthi Gopalakrishnan

    John Netto is the president of One Shot — One Kill Trading, LLC, and the\nauthor of the book One Shot — One Kill Trading (McGraw-Hill). He is a\nprincipal in Triple Witch Metals Management, a hedge fund focused on the\ntrading of precious metals, and he frequently contributes market insight\nthrough his blog, “Netto’s Numbers.” Netto is a nine-year US Marine Corps\nveteran who served throughout the Far East and speaks, reads, and writes\nJapanese and Mandarin. He can be heard regularly on Las Vegas–area radio\nto analyze sports handicapping and poker opportunities.

    Technical Analysis of STOCKS & COMMODITIES Editor Jayanthi\nGopalakrishnan interviewed John Netto on May 2, 2007, via telephone.

    John, how did you get interested\nin trading?

    I have always been fand with certain degrees of chaos. The\nfirst kind of risk adventure I went into was\nsports betting, when I was eight or nine,\nbetting on football games. It was nothing\nsubstantial, but it always fascinated me.\nThen when I was 11, I saw the movie\nWall Street with Michael Douglas and\nCharlie Sheen. The lightbulb went on. I\nknew right then and there what I wanted\nto do. When I saw the excitement, the\npeople screaming on the floor of the New\nYork Stock Exchange, it just hooked me.

    So then what happened?

    I started researching. I subscribed to\nwhat is now Investor’s Business Daily.\nI read The Wall Street Journal, studied\noptions, read a book when I was 13\ncalled Stock Market Logic, by Norm\nFosback. Back then, I didn’t understand\nwhat technicals were. I didn’t understand\nwhat a moving average was, or\nwhat price action was.\nThe breakthrough for me came in\n1997, my third year in the Marine Corps.

    How did you end up in the Marines?

    Well, to get there, you have to understand\nI ran a gambling operation in high\nschool. I was a high school bookie. I\nended up with a 1.7 grade-point average,\nand when I graduated it was time for me to make a change. So I joined\nthe Marines and became, of all things,\na weather forecaster. I went from\ntrying to prognosticate one bit of\nrandomness to another. I was stationed\nin Japan, and because I wanted\nto speak Japanese when I was over\nthere, I studied it and ended up stationed\nat the US Embassy in Tokyo.\nI worked there for the State Department,\nand I had a lot of night watches,\nso I started following the US markets\nagain at night. I opened up my first\nE*Trade account for trading and read\nas much as I could.\nI was assigned back to the United\nStates in 1998. A while after that, I\nhappened to read a book titled Trading With DiNapoli Levels by Joe\nDiNapoli. That made all the difference.

    "",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-60-66-interview-john-netto-on-trading-and-inflection-points-by-jayanthi-gopalakrishnan-20.gif"",""height"":""258"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-60-66-interview-john-netto-on-trading-and-inflection-points-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-60-66-interview-john-netto-on-trading-and-inflection-points-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256qutr,d,"{""minimum-quantity"":""1"",""path"":""ch7j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:7 (67): Quick-Scans: Trade the Right Stocks at the Right Time by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Quick-Scans: Trade the Right Stocks at the Right Time by Jayanthi Gopalakrishnan

    TRADE THE RIGHT STOCKS\nAT THE RIGHT TIME

    When a market is rallying, does that\nmean that any stock you pick is sure to\nbe a winner? No. So how do you pick\nstocks that have a high probability of\nmoving in your favor?\nIn this four-module, three-part DVD\nseries by Toni Turner, you will learn how\nto identify outperforming or underperforming\nsectors. These are based on\nthe different stages of the business or\nstock market cycles."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-67-quick-scans-trade-the-right-stocks-at-the-right-time-by-jayanthi-gopalakrishnan-20.gif"",""height"":""258"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-67-quick-scans-trade-the-right-stocks-at-the-right-time-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-67-quick-scans-trade-the-right-stocks-at-the-right-time-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256prre3,d,"{""minimum-quantity"":""1"",""path"":""ch7j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:7 (68-72): Product Review: Odds Maker by David Penn"",""caption-linebreaks"":""Product Review: Odds Maker by David Penn

    If a picture could tell a thousand\nwords, then how many\npictures would it take to tell\nthe story of Odds Maker,\nthe deceptively simple to use risk assessment add-on offered by\nTrade Ideas, the developers of Trade\nIdeas Pro?

    In the words of Dan Mirkin, David\nAferiat, and Jamie Hodge — managing\npartners and director of customer education,\nrespectively, at Trade Ideas LLC\n— Odds Maker goes where no other\nsoftware product on the market has gone\nbefore. Not only does the software watch\n“every tick of every stock all the time,”\nbut it also runs every tick of every stock\nthrough its extensive set of\npreconfigured trading strategies to determine\nwhich methods, which algorithms,\nare “working” right now. The software allows traders to go back up to\nabout two and a half weeks of stock\nmarket history and review up to 100\ntrades a day. Of course, as traders become\nmore comfortable and knowledgeable\nabout the software, they will take\nadvantages of Odds Maker’s strategy\nbuilding tools to create as complex or as\nsimple algorithms as they choose —\nwithout relying on a scripting language."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-68-72-product-review-odds-maker-by-david-penn-20.gif"",""height"":""258"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-68-72-product-review-odds-maker-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-68-72-product-review-odds-maker-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov257trti2,d,"{""minimum-quantity"":""1"",""path"":""ch7j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:7 (74-83): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

     TRADESTATION: VOLUME PRICE CONFIRMATION\nINDICATOR (VPCI)

    Buff Dormeier’s article in this issue, “Between Price And\nVolume,” describes calculation of the volume price confirmation\nindicator (VPCI) and suggests a strategy for trading\nwith it.\nThe strategy consists of a moving average convergencedivergence\n(MACD) signal, which is confirmed based on\nreadings of the VPCI. The article then compares the VPCI’s\nvalue as a confirming indicator with on-balance volume\n(OBV) and average directional index (ADX). To perform this\ntest, a strategy was created in EasyLanguage with “on-off”\ninput switches, allowing the trader to select the desired\nconfirming indicator.\nCode for a VPCI indicator and strategy are given here. The\nindicator plots the raw and smoothed VPCI. The strategy uses\nMACD to generate trading signals, but it trades only if the\nselected confirming indicator agrees.\nTo download the code, go to the Support Center at\nTradeStation.com and search for the file “VPCI.ELD.”\nTradeStation does not endorse or recommend any particular\nstrategy."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-74-83-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""258"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-74-83-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-74-83-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov258wefo1,d,"{""minimum-quantity"":""1"",""path"":""ch7j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:7 (88-89): Websites For Traders: ConsensusTraders.com by David Penn"",""caption-linebreaks"":""Websites For Traders: ConsensusTraders.com by David Penn

    CONSENSUSTRADERS.COM

    Who hasn’t wondered at one point or\nanother if you could take all of the\nstocks, indexes, and averages out there\nand run them past all the various indicators\nand oscillators in technical analysis\nand come up with some massive, allencompassing\ntechnical screener? You\ncould filter for only the kind of technical\nindicators you are interested in, as\nwell as filtering in only those stocks,\nindexes, or market averages that you\nwanted to follow. At a glance — and\nafter flipping through more than a few\npages — you would have an excellent\nsense of how the world of technical\nindicators perceives the chances for your\nstock, index, or average to go up, go\ndown, or go nowhere anytime soon.

    If you’ve thought about this, there is\na good chance the developers of\nConsensusTraders.com have sensed\nyour thoughts. Their website allows traders\nto make just that sort of technical\nquery without having to download and\ninstall a massive database of stocks and\ntechnical indicators. Simply enter the\nsymbol of the stock you are interested\nin, select the time frame, include as\nmany or as few technical indicators as\nyou want, and that’s it. The “consensus”\nof technical opinion on your stock\nwill arrive shortly."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-88-89-websites-for-traders-consensustraders-com-by-david-penn-20.gif"",""height"":""258"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-88-89-websites-for-traders-consensustraders-com-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-88-89-websites-for-traders-consensustraders-com-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov259bofo5,d,"{""minimum-quantity"":""1"",""path"":""ch7j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:7 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    The Big Money

    Competitive Equity: A\nBetter Way To Organize\nMutual Funds

    Crash Proof

    Finding The Next\nStarbucks

    Getting Started In\nSwing Trading

    Honey… Who Shrunk Our Money?

    Quantitative Trading\nSystems:\nPractical Methods\nFor Design, Testing,\nAnd Validation

    The Three Skills Of\nTop Trading"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-92-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""258"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov25997at1,d,"{""minimum-quantity"":""1"",""path"":""ch7j204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:7 (98, 97): At The Close: Sugar: Beyond The Bear Market by John Rose"",""caption-linebreaks"":""At The Close: Sugar: Beyond The Bear Market by John Rose

    Sugar: Beyond The Bear Market

    On May 9, 2006, the New York Board of Trade\nsponsored its first sugar convention in New York\nCity. The event was well attended, and many of the major\nplayers in the sugar industry were in attendance. Needless to\nsay, the bullish tone of the event marked a top in the sugar\nmarket, and futures have retraced over 50% since then.\nOne of the event’s key speakers was Brazil’s Eduardo\nPereira De Carvalho, the head of the Union of Sugarcane\nAgroindustry. The Brazilian stance regarding sugar has\nchanged considerably since the government adopted an ethanol strategy. At this time, Brazil views\nsugar as an energy source first and a\nfood source second. Keep in mind that\nBrazil was viewed with amusement\nwhen it began its ethanol program.\nBack then, oil was trading in the low\nteens and gasoline was abundant and\ncheap. The courage and foresight Brazil\ndemonstrated is beginning to show\nreal benefits. You can bet the Brazilian\ngovernment will be pushing its longstanding\nethanol program worldwide,\nas any pioneer in an industry should.\nThe result of this ethanol push can only\ncome at the expense of white sugar."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-98-97-at-the-close-sugar-beyond-the-bear-market-by-john-rose-20.gif"",""height"":""258"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-98-97-at-the-close-sugar-beyond-the-bear-market-by-john-rose-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-7-98-97-at-the-close-sugar-beyond-the-bear-market-by-john-rose-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251leto7,d,"{""minimum-quantity"":""1"",""path"":""chapter8august"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:8 (10-13): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    METASTOCK CODE FOR\nMOVING AVERAGE CROSSOVERS

    Editor,

    I am looking for the MetaStock code for\nDimitris Tsokakis’ article, “Anticipating\nMoving Average Crossovers” (February\n2007 S&C). Your Traders’ Tips\nsection of that issue refers readers to your\nwebsite for the rest of the MetaStock\nlisting. Could you please advise where I\nmay find the complete listing?

    KEN KOSCHEL

    Complete code from the February 2007\nTraders’ Tips section can be found here:

    http://www.traders.com/Documentation/\nFEEDbk_docs/Archive/022007/\nTradersTips/TradersTips.html

    Or, to navigate to this web page from\nour homepage, go to www.Traders.com,\nand in the red box at left, click on\nSTOCKS & COMMODITIES, then click on\n“Back Issue Index” in the right-hand\ncolumn underneath the “Tour” button,\nthen click on “2007 articles,” then look\nfor the February listing."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-10-13-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""251"",""width"":""194""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-10-13-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-10-13-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251fofo6,d,"{""minimum-quantity"":""1"",""path"":""chapter8august"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:8 (14-17): Forex Focus by James Chen"",""caption-linebreaks"":""Forex Focus by James Chen

    Support & Resistance Precision In Forex

    Currency markets tend to follow support & resistance levels. Use\nthose levels to identify entries and exits, and to apply risk\nmanagement.

    Many foreign exchange traders rely on the accuracy\nof support & resistance levels so evident on currency\nprice charts. Some of these traders will eschew the use\nof mathematically derived indicators or back-tested systems\nas primary trade decision tools, preferring instead to allow\ntheir manually drawn lines to dictate entries and exits.\nBACK TO BASICS\nThere is much to be said for this back-to-the-basics brand of\ntechnical analysis. Even a glance at a long-term currency\nchart will substantiate that key price levels appear to be\nremarkably well-respected time and again. This applies to\nboth diagonally drawn uptrend and downtrend lines, as well\nas to horizontal support & resistance lines.\nCentral to these principles of support/resistance (S/R)\nwithin the greater context of technical analysis is the premise\nthat a truly valid S/R level will eventually be tested on both\nsides; support will become resistance and resistance will\nbecome support. A line that is tested on both sides often\nproves to be strong and stable and will frequently sustain its\nvalidity for an extended period of time, as support or as\nresistance."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-14-17-forex-focus-by-james-chen-20.gif"",""height"":""251"",""width"":""194""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-14-17-forex-focus-by-james-chen-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-14-17-forex-focus-by-james-chen-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251butr,d,"{""minimum-quantity"":""1"",""path"":""chapter8august"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:8 (18-30): Building A Trading Template by Girogos Siligardos"",""caption-linebreaks"":""Building A Trading Template by Girogos Siligardos

    A template makes things so much easier for so many\nthings, trading included. What should you build into\nyours to manage your trading?

    roper trade management and money management\nare a must for all types of market participants. Even though there are many tradingrelated\nsoftware packages, few, if any, provide a\ntemplate for monitoring trades based on trade management\n(TM) and money management (MM) rules\nnot related to mechanical trading methods. In this\narticle I will discuss the main parts of such a template\nthat can be implemented in Microsoft Excel and\napplied to mechanical and proprietary trading.

    DEFINING SYSTEM MANAGEMENT

    Money management and trade management are terms\nthat are often misrepresented. This is because they\nare unrelated to entry setups but instead are related to\nthe risk associated with the trade. Traders usually\nrefer to position sizing when it comes to money\nmanagement. But whatever term you use, there are\ndifferences between money management and trade\nmanagement."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-18-30-building-a-trading-template-by-girogos-siligardos-20.gif"",""height"":""251"",""width"":""195""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-18-30-building-a-trading-template-by-girogos-siligardos-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-18-30-building-a-trading-template-by-girogos-siligardos-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov252butr,d,"{""minimum-quantity"":""1"",""path"":""chapter8august"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:8 (20): Building A Trading Template by Girogos Siligardos"",""caption-linebreaks"":""Building A Trading Template by Girogos Siligardos

    CALCULATING THE STOPS BARRIER IN METASTOCK

    INSTRUCTIONS\nOpen the Indicator Builder and create a new indicator\nnamed “stops barrier (SB).” The formula for the indicator is\nprovided below. To apply the SB indicator, insert the entry\ndate and the minDRR when prompted."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-20-building-a-trading-template-by-girogos-siligardos-20.gif"",""height"":""251"",""width"":""194""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-20-building-a-trading-template-by-girogos-siligardos-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-20-building-a-trading-template-by-girogos-siligardos-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov252butr1,d,"{""minimum-quantity"":""1"",""path"":""chapter8august"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:8 (25): Building A Trading Template by Girogos Siligardos"",""caption-linebreaks"":""Building A Trading Template by Girogos Siligardos

    ORDERS AND ACTIVE TRADES SHEET

    As with all sheets in the SMT, you can only change the green\nand pink cells. Insert the parameters of each trade in the green\ncells and place an “X” in the corresponding active cell for open\ntrades. Microsoft Excel automatically makes the necessary\ncalculations and shows important information about the status\nof the entire portfolio and the status of each trade or order."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-25-building-a-trading-template-by-girogos-siligardos-20.gif"",""height"":""251"",""width"":""194""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-25-building-a-trading-template-by-girogos-siligardos-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-25-building-a-trading-template-by-girogos-siligardos-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253fifl,d,"{""minimum-quantity"":""1"",""path"":""chapter8august"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:8 (32-34): Fixing The Flaws In Fixed-Fractional Position Sizing by Christian B. Smart, PhD"",""caption-linebreaks"":""Fixing The Flaws In Fixed-Fractional Position Sizing by Christian B. Smart, PhD

    Fixed-fractional position sizing is a time-tested method for\nmoney management, but in the long run, it will never achieve\nsystem expectancy. Here’s how you can fix this flaw.

    Fixed-fractional position sizing is a popular\nand time-tested method for money management.\nIn the strategy, a fixed percentage of\nequity is risked per trade. The formula is\ngiven here as:\nAmount risked per trade = Equity * f\nwhere f is the fixed percentage of equity risked per trade.\nFixed-fractional money management is an intuitive method\nin which bet size increases when equity increases and bet size decreases when equity decreases. This form of money management\nis conservative in that it dramatically decreases risk\nof ruin.

    A concept related to money management is system expectancy.\nA system’s expectancy is the average, or expected,\namount of money an investor expects to make per dollar\nrisked. For example, a trading system with a winning percentage\nof 40%, whose average win is equal to twice the average\nloss, has an expectancy approximately equal to 0.40 * 2 – 0.60\n= 0.80 – 0.60 = 0.20."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-32-34-fixing-the-flaws-in-fixed-fractional-position-sizing-by-christian-b-smart-phd-20.gif"",""height"":""251"",""width"":""195""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-32-34-fixing-the-flaws-in-fixed-fractional-position-sizing-by-christian-b-smart-phd-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-32-34-fixing-the-flaws-in-fixed-fractional-position-sizing-by-christian-b-smart-phd-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254fufo2,d,"{""minimum-quantity"":""1"",""path"":""chapter8august"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:8 (44): Futures For You by Dan O’Neil"",""caption-linebreaks"":""Futures For You by Dan O’Neil

    TECHNICALITIES

    It doesn’t seem like you can trade commodities\nwithout at least some knowledge\nof technical analysis. What are some of\nthe more popular technical indicators to\nincorporate into my research?

    There’s no question charting and technical\nanalysis play significant roles in the\nfutures markets. Even traders who focus\non the fundamentals tend to incorporate\nsome technical analysis into their decision-\nmaking. Trading based at least in\npart on the established statistical movement\nof some markets can spare a trader\nnot only from the emotional swings of\ntrading, but the confusion of weeding\nthrough a conflicting picture as well. ....(continued)"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-44-futures-for-you-by-dan-o-neil-20.gif"",""height"":""251"",""width"":""195""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-44-futures-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-44-futures-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254trre,d,"{""minimum-quantity"":""1"",""path"":""chapter8august"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:8 (46-52): Trading Renko Charts by Suri Duddella"",""caption-linebreaks"":""Trading Renko Charts by Suri Duddella

    This charting technique can be used to display trends that\nmay not be that obvious in a bar or candlestick chart.

    Renko charts were invented by Japanese traders\nhundreds of years ago and named for renga, a\nJapanese word for “brick.” How are they different\nfrom bar or candlestick charts? First of all they are\nvisually attractive, making it easy to filter noise and isolate trends. They show symmetry and are effective in determining\nthe major trend and support & resistance areas. Renko\ncharts are also efficient in signaling trend-reversal patterns.

    WHAT ARE THEY?

    Renko charts are another way of representing price changes.\nThey display trends in such a way that may not be obvious in\na bar or candlestick chart. Renko charts are able to suppress\nthe noise display and produce uniformity in the underlying\ntrend. Although useful, renko charts also produce whipsaws\nand have serious trading caveats, but overall there are advantages\nto renko-based trading. One is that a trader tends to stay\nin a trade longer than other trend-following techniques."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-46-52-trading-renko-charts-by-suri-duddella-20.gif"",""height"":""251"",""width"":""195""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-46-52-trading-renko-charts-by-suri-duddella-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-46-52-trading-renko-charts-by-suri-duddella-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255qaby,d,"{""minimum-quantity"":""1"",""path"":""chapter8august"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:8 (53): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    ON PIVOT POINTS AND DAYTRADING

    Is there any relationship between pivot\npoints and daytrading? I believe there is,\nbut I do not know what it is. Could you\ngive me some help?—robinxing

    We use the pivot points of the futures in\nour entry/exit decisions during the day in\nthis way: We consider the trading troughs\nbetween pivot and R1 or S1, S1 and S2,\nand so on, to be “mini” support/resistance\nlevels. (We use resistance levels 1, 2, 3,\nand 4, and support levels 1, 2, 3, and 4.)\nThey tend to be a self-fulfilling prophecy,\nsince the large futures traders on the floor\n(and off) tend to stall at these levels.

    We don’t necessarily use the individual\nstock pivot points; we merely consider\nthe overall market trading range or level\nalong with other indicators."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-53-q-a-by-don-bright-20.gif"",""height"":""251"",""width"":""195""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-53-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-53-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255qusc,d,"{""minimum-quantity"":""1"",""path"":""chapter8august"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:8 (59): Quick Scans: Profitunity Home Study Course by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Quick Scans: Profitunity Home Study Course by Jayanthi Gopalakrishnan

    Being calm, focused, and in touch with\nyour inner self are characteristics that\nwill give you strength. Or so I’ve been\ntold. But I never for a moment thought\nabout extending that thought process to\nthe trading field, at least not until I reviewed\nthe Profitunity Home Study\nCourse. If that was my impression after\na few days of familiarizing myself with\nthe product, I can only imagine that after\neight weeks of this course, you would\nprobably be deeply immersed into being\nin unity with your trading. Discipline,\ndiscipline, and discipline, as well as commitment\nand focus is really what it’s all\nabout. If you think about it, trading involves\na lot more than placing entries\nand exits and looking at charts, which is\nprecisely what trader Bill Williams and\nhis daughter Justine set out to do when\nthey created this course."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-59-quick-scans-profitunity-home-study-course-by-jayanthi-gopalakrishnan-20.gif"",""height"":""251"",""width"":""194""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-59-quick-scans-profitunity-home-study-course-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-59-quick-scans-profitunity-home-study-course-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256adlo,d,"{""minimum-quantity"":""1"",""path"":""chapter8august"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:8 (60-64): Adjusting A Long Call With The Synthetic Straddle by Chris Tyler"",""caption-linebreaks"":""Adjusting A Long Call With The Synthetic Straddle by Chris Tyler

    In this, the second and\nconcluding part of this series,\nwe focus on applying money\nmanagement with the use of\nadjustments.

    IN the January 2007\nSTOCKS & COMMODITIES\nwe began a case\nstudy of XM Satellite (XMSR) using a double bottom/\nFibonacci butterfly\nchart pattern along with\nmultiple time frame analysis.\nIn part 1, the reader was\nintroduced to the characteristics\nof the Fibonacci-based\nbutterfly pattern, the application\nof confirmation patterns,\nmultiple time frame\nanalysis, and candlestick entries.\nAfter reading that article,\nreaders should have felt\nmore confident about the\ntrading process through the\nuse of popular technical tools\nand methods.

    The purpose of that article\nwas to help traders turn\nan uncertain situation into a\nstronger, well-conceived alternative.\nThis was accomplished\nby locating a limited\nrisk position in the option\nmarket that satisfies our trade\nobjectives better than the underlying\ninstrument itself."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-60-64-adjusting-a-long-call-with-the-synthetic-straddle-by-chris-tyler-20.gif"",""height"":""251"",""width"":""194""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-60-64-adjusting-a-long-call-with-the-synthetic-straddle-by-chris-tyler-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-60-64-adjusting-a-long-call-with-the-synthetic-straddle-by-chris-tyler-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256exyo2,d,"{""minimum-quantity"":""1"",""path"":""chapter8august"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:8 (65): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    SELLING TO BUY

    I’ve heard the term “selling to buy”\nwhen discussing put options. I am not\nsure what it means and when to apply it\nin my trading.

    If you are selling to buy, you are\nselling or writing options and are willing\nto buy the underlying security. The\nmost common way of doing this is to\nsell puts on stocks you want to own. For\nexample, if I want to buy a stock for $50\na share and the stock is currently trading\nat $50.50, I can sell put options with\na strike price of 50. Depending on how\nmuch time is left until expiration, I\nmight get a few hundred dollars per\ncontract for writing the put."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-65-explore-your-options-by-tom-gentile-20.gif"",""height"":""251"",""width"":""194""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-65-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-65-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256inri,d,"{""minimum-quantity"":""1"",""path"":""chapter8august"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:8 (66-71): Interview: Risky Positions With Keith Fitschen Of TradeSystem, Inc. by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Interview: Risky Positions With Keith Fitschen Of TradeSystem, Inc. by Jayanthi Gopalakrishnan

    Keith Fitschen has been developing technical trading systems for the futures\nmarkets for 20 years, actively trading his systems. His initial research was on the\nquantification of curve-fitting in system development and resulted in a methodology\nthat relates the degree of overfitting to the number of trades in the development\nsample. With this method he developed the mechanical system Aberration. Developed\nin 1986, it was commercially released in 1993 and has been feted as one of\nthe top 10 trading systems by Futures Truth. Fitschen also developed the Start-\nTrade Drawdown criteria, which is a better measure of risk to a small-account\ntrader than traditional drawdown metrics.

    Fitschen, who has a master’s degree in electrical engineering (with an emphasis\non stochastic estimation), has developed guidance systems for tactical airlaunched\nweapons and acoustic tracking systems. This expertise in noisy time\nseries data has led to his success in developing trading systems for noisy market\ndata. He is the president of TradeSystem and provides trading system information\non his website, www.keithstrading.com.

    STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan spoke to Keith\nFitschen on June 5, 2007, via telephone.

    Keith, how did you get interested\nin trading?

    I was in the Air Force and\nI had a degree in electrical engineering. The Air Force decided to send me to graduate school. When I\nshowed up, my advisors said, “You are\ngoing to take something called stochastic\nestimation.” I didn’t know what that\nwas, so I suggested I should perhaps do\nsomething digital. They said, “No. This\nis what you are going to do.” So I got the\ndegree."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-66-71-interview-risky-positions-with-keith-fitschen-of-tradesystem-inc-by-jayanthi-gopalakrishnan-20.gif"",""height"":""251"",""width"":""194""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-66-71-interview-risky-positions-with-keith-fitschen-of-tradesystem-inc-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-66-71-interview-risky-positions-with-keith-fitschen-of-tradesystem-inc-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov257prre5,d,"{""minimum-quantity"":""1"",""path"":""chapter8august"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:8 (72-74): Product Review: Steve Nison’s Profiting: Using Candlesticks In Forex by David Penn"",""caption-linebreaks"":""Product Review: Steve Nison’s Profiting: Using Candlesticks In Forex by David Penn

    I wrote in my last review of a\ntechnical trading DVD (David\nNassar’s Foundational Analysis) that if there was one trend in technical trading that I was welcoming,\nit was a trend toward greater simplicity\nand directness, a movement away\nfrom mathematical abstractions of price\naction and back toward the essentials of\nthe open, high, low, and close.

    Spending more than a few hours with\nSteve Nison’s new DVD series, Steve\nNison’s Profiting In Forex, I found myself\nback in the glow of technical simplicity\nand efficiency. Nison, who is\nwidely regarded as the leading authority\non Japanese candlestick analysis and trading,\nprovides his seminar attendees with\na clear understanding of what candlesticks\nare and are not, what they can and\ncannot do, and how they can be optimized\nby adding “Western technicals.”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-72-74-product-review-steve-nison-s-profiting-using-candlesticks-in-forex-by-david-penn-20.gif"",""height"":""251"",""width"":""194""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-72-74-product-review-steve-nison-s-profiting-using-candlesticks-in-forex-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-72-74-product-review-steve-nison-s-profiting-using-candlesticks-in-forex-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov257trti3,d,"{""minimum-quantity"":""1"",""path"":""chapter8august"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:8 (76-86): Traders Tips’ by Technical Analysis, Inc."",""caption-linebreaks"":""Traders Tips’ by Technical Analysis, Inc.

    Editor’s note: Most of this\nmonth’s collection of Traders’\nTips are based on\nGiorgos Siligardos’ article\nin this issue, “Building A\nTrading Template.” Other\ncontributions are on a topic\nof the software developers’\nchoosing.

    TRADESTATION: BUILDING A TRADING TEMPLATE

    Giorgos Siligardos’ article in this issue, “Building A Trading\nTemplate,” describes using an Excel spreadsheet for managing\na portfolio of stocks. The trading rules are roughly based\non the trading rules developed by a group of traders known as\nthe Turtles. The rules allow for only long positions (no short\nsales). The following code simulates a trading history using\nSiligardos’ rules. The simulation is done entirely within\nTradeStation.

    eSIGNAL: ENTROPIC ANALYSIS OF EQUITY PRICES

    For this month’s Traders’ Tips, we’ve provided the formula\n“Entropy.efs,” based on Ron McEwan’s article from the\nNovember 2006 issue, “Entropic Analysis Of Equity Prices.”

    The formula parameters may be configured through the\nEdit Studies option in the Advanced Chart to change the\nnumber of periods as well as the color and thickness of the\nindicator line. The study is a nonprice study by default. To\noverlay the study on the price window, hold down the Shift\nkey and then drag and drop the indicator pane onto the price\nwindow. Figure 2 shows a sample chart."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-76-86-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""464"",""width"":""359""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-76-86-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-76-86-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov259bofo6,d,"{""minimum-quantity"":""1"",""path"":""chapter8august"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:8 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    The 10 Essential Of Forex Trading

    30 Days To Market Mastery

    Around The Horn: A Trader’s Guide To Consistently\nScoring In The Markets

    Charting The Major Forex Pairs

    The Handbook Of Portfolio Mathematics

    Option Volatility Trading Strategies

    Survival Guide To The Stock Market: How To Prosper In\nThe Wall Street Jungle

    Extraordinary Comebacks"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-92-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""251"",""width"":""194""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov259atcl,d,"{""minimum-quantity"":""1"",""path"":""chapter8august"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:8 (97-98): At The Close: New Margin Rules (Part II) by J.L. Lord"",""caption-linebreaks"":""At The Close: New Margin Rules (Part II) by J.L. Lord

    New Margin Rules (Part II)

    AS I wrote in the June 2007 issue of STOCKS &\nCOMMODITIES, while the new margin rules are a\npowerful addition to retail traders, they do not imply there is\nfree money to be had. Interest is a key component of the new\nmargin requirements. Under the old rules, the interest component\nwas overshadowed largely by the excessive capital\nrequirements that unnecessarily reduced your purchasing\npower. In the new world of risk-based margin, the interest\ncomponent now stands out as a significant portion of the\npuzzle.

    WHY IS THERE AN INTEREST CALCULATION?

    Suppose you purchase 100 shares of Google, Inc. (GOOG),\nfor $450 per share. The total cost of that investment would be\n$45,000. There are several ways to come up with the money.\nYou can take the money out of your bank account. If you had\n$45,000 sitting in the bank, it was comfortably earning a\ncertain amount of interest. Another way to make the purchase\nis to borrow some or all of the money. In this case, you would\nbe responsible for making interest payments to the establishment\nthat lent you the money. A third way would be a\ncombination of the two. When a broker allows you to buy\nstock on 50% margin, you are responsible for coming up with\nthe interest on the 50% of the money you borrowed in order to complete your stock purchase."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-97-98-at-the-close-new-margin-rules-part-ii-by-j-l-lord-20.gif"",""height"":""251"",""width"":""194""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-97-98-at-the-close-new-margin-rules-part-ii-by-j-l-lord-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-8-97-98-at-the-close-new-margin-rules-part-ii-by-j-l-lord-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251leto8,d,"{""minimum-quantity"":""1"",""path"":""ch9s"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:9 (10-14): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""VANTAGEPOINT REVIEW

    Editor,\nI have just purchased\nVantagePoint software\nand I noted with interest\nyour review by Phil\nCrosby published earlier\nthis year (“VantagePoint 7.0,” February\n2007 S&C). In the review, he\nstates that he uses the system in conjunction\nwith other tools. I would be\ninterested to know what these additional\ntools are. Perhaps Mr. Crosby\ncould write another article about this, as\nI am sure that many of your readers\nwould be interested as well. -FATIMA RIORDAN

    Phil Crosby replies:

    I use a few other tools for trading beyond\nVantagePoint. I primarily use\nTradeStation, since it allows traders to\neasily code trading strategies using its\nrules-based EasyLanguage tools. Once\nthese strategies are coded, they can be\nbacktested to understand their validity.\nIt takes a short time to gain proficiency\nin EasyLanguage, and once you understand\nit, you can very quickly test out\ndifferent ideas and backtest them."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-10-14-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-10-14-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-10-14-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251fofo7,d,"{""minimum-quantity"":""1"",""path"":""ch9s"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:9 (16-18): Forex Focus by Patrick Nouvion"",""caption-linebreaks"":""Forex Focus by Patrick Nouvion

    Backtesting And Forex

    Does backtesting produce valid results for\nforeign exchange trading? Here’s a study\nthat answers this question.

    For many years, backtesting and simulations\nhave been banished from my toolbox. I only use these tools as debuggers\nand I never look at the results. I have told\npeople that backtesting is useless without\nactual historical tick data, and only a dreamer\nwould believe all these simulation reports. I\njust got my hands on historical tick data from\nmy broker, so I thought I would do some\ntesting. I decided to check to see if I was\nwrong in steering people clear of backtesting\nand overoptimized systems. Or was I right in assuming that without historical tick data, simulations were\na waste of time?

    The first thing I did was choose a system to test. The moving\naverage convergence/divergence (MACD) sample that comes by default with MetaTrader is available for free and everyone\nwho uses MetaTrader has access to it. Using the default\nsettings on the MACD sample, I ran a simulation on a oneminute\nchart of EUR/USD from January 1, 2002, to April 1,\n2007, using every tick option (Figure 1). The results are\ndisplayed in Figure 2.

    "",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-16-18-forex-focus-by-patrick-nouvion-21.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-16-18-forex-focus-by-patrick-nouvion-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-16-18-forex-focus-by-patrick-nouvion-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov251qaby,d,"{""minimum-quantity"":""1"",""path"":""ch9s"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:9 (19): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    IS AUTOMATION THE ANSWER?

    I’ve been trading for about seven\nmonths. I’m a good trader when it comes\nto entering trades and gauging the\nmarket’s strength and direction, but I\nhave no risk tolerance, perhaps because\nI don’t have a lot of money in my account\nand I tend to butcher the trade\n(for example, I was in the airlines before\nthe market yesterday but got out\nway too soon, and they were the strongest\nsector). I thought the best method\nmight be to get an automated program\nthat would exit my positions for me,\nthereby getting rid of the emotional\nfactor that’s killing my profit potential.\nWhat do you advise traders as the best\nway to overcome this large obstacle?\nAnd do you think an automated program\nis the answer?—Joseph

    Your concern is a common one when\ntraders are trying to play with too little\nmoney — like being short-stacked in a\npoker game, tough to compete.

    Automating just might make things\nworse — visual monitoring and reading\nthe market is still better than any computer\nprogram. For example, you buy\nsomething at 31.20, plan an exit at 31.55."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-19-q-a-by-don-bright-21.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-19-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-19-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov252trtr,d,"{""minimum-quantity"":""1"",""path"":""ch9s"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:9 (20-28): Trading Trendline Breaks by Sylvain Vervoort"",""caption-linebreaks"":""Trading Trendline Breaks - PT 2 by Sylvain Vervoort

    Trendlines are common technical analysis\ncharting tools, but there are a number of ways\nto implement them in your trading. Here’s an\nin-depth look at trendlines.

    Previously, I discussed how trendlines are\nplotted, emphasizing that logarithmic\ntrendlines are more effective than linear\nones. This time, I’ll discuss how to trade breaks in\ntrendlines as well as the system I apply to my trading.\nA long-term investor using monthly data could act\nupon a number of trendlines in Figure 1. Assuming\nyou can trade this stock both long and short:

    1. At the end of 1992 the closing price breaks\nthrough the downtrend line. This is a buy signal.

    2. After a first reaction, the price moves\nup again during the second half of\n1993. This is a clear second pivot point\nfor drawing a longer-term uptrend line.\nNote from this point on that the price\nis accelerating and with time, moving\nfarther away from the uptrend line.\nThe best thing to do when this kind of\nmove develops is to follow the new\nmove with a new trendline, as shown.

    3. Beginning in 1994 the price drops\nbelow the uptrend line. It’s time to\nclose the long position and open a\nshort one. The idea is to buy the stock\nback at a later date for a lower price so\nyou can make a profit.

    4. In the second quarter of 1995, the\nprice rises above the downtrend line.\nThis is a signal to close the short\nposition and open a new long one."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-20-28-trading-trendline-breaks-by-sylvain-vervoort-21.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-20-28-trading-trendline-breaks-by-sylvain-vervoort-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-20-28-trading-trendline-breaks-by-sylvain-vervoort-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253trcu,d,"{""minimum-quantity"":""1"",""path"":""ch9s"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:9 (30-32): Trading The Cup & Handle by Larry Swing"",""caption-linebreaks"":""Trading The Cup & Handle by Larry Swing

    Guidelines For A New Classic...Cup & handle patterns may be tricky to identify. But if you\nfollow these guidelines you will be able to identify them more\neasily and accurately.

    Although it didn’t come from the traditional trading\npatterns, today the cup & handle pattern is\nnearly synonymous with the rest of the classics.\nAccording to many technical analysts, the classic patterns are the triangle, rectangle, head & shoulders,\npennant, flag, double bottom, and double top. These are\njust a few classical formations that many have come to know.\nWhen William O’Neil, founder of Investor’s Business\nDaily, who turned himself from a modest investor into a\nmultimillionaire, published his book How To Make Money In\nStocks, he stated that during his time as an investor, he\nidentified a few price patterns of his own to find successful\nsetups. In his book, he revealed a few of the patterns he identified, coined, and used to make a profit. We’ve all heard\nabout trading patterns, but very few really know the characteristics,\nlet alone how to trade them. The cup & handle\npattern usually forms during the late stages of the bull\nmarkets, when corrections tend to be deeper.

    IDENTIFYING CUPS & HANDLES

    You can see an example of a cup & handle pattern in Figure\n1. In many ways, this pattern looks similar to the ascending\ntriangle where if a trendline is drawn from the low of the cup\nto the low of the handle, it would resemble what you see in\nFigure 2."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-30-32-trading-the-cup-handle-by-larry-swing-20.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-30-32-trading-the-cup-handle-by-larry-swing-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-30-32-trading-the-cup-handle-by-larry-swing-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov253icki,d,"{""minimum-quantity"":""1"",""path"":""ch9s"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:9 (34-36): Ichimoku Kinko Hyo Charts by Nicole Elliott"",""caption-linebreaks"":""Ichimoku Kinko Hyo Charts by Nicole Elliott

    Here’s another charting method that’s been around for\ndecades, and yet can be brand-new to most Western audiences.

    Ichimoku kinko hyo is a method of technical analysis\nthat has been around since before World War II, yet\nis virtually brand-new to most Western audiences.\nWhy? Because textbooks on the subject have been,\nuntil recently, available only in Japanese.

    I joined Mizuho Bank as a senior analyst 10 years ago.\nWhen I arrived, I realized much to my horror that all the\nJapanese dealers I would be working with were well up to\nspeed with charts, and they used an incredibly complex\nmethod that I hadn’t a clue about. These charts looked like a writhing mass of multicolored, tangled spaghetti! But curiosity\ngot the better of me. Risking the loss of face and career\nprospects, I approached the Japanese dealer who spoke the\nclearest English and asked him to explain. “Oh, these? They\nare cloud charts,” he said, “and we use them all the time.” And\nas I found out, Japanese dealers really do, and if you are\ntrading anything yen-related I urge you not to ignore them.

    THE BUILDING BLOCKS

    The key concept behind the ichimoku method is that price and\ntime are inextricably linked. Via laborious backtesting (by\nhand!), newspaper writer Goichi Hosoda (who used the\npseudonym Ichimoku Sanjin) came up with four useful moving\naverage–type lines before World War II, finally publishing\na book on the subject in 1968. The lines are displaced forward and backward around\nthe basic building block, which\nare daily candlesticks. These\nare used just as conventional\nbar charts: plotting trends,\nlooking for patterns, areas of\nsupport and resistance, reversals,\nand so on."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-34-36-ichimoku-kinko-hyo-charts-by-nicole-elliott-20.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-34-36-ichimoku-kinko-hyo-charts-by-nicole-elliott-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-34-36-ichimoku-kinko-hyo-charts-by-nicole-elliott-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254wefo,d,"{""minimum-quantity"":""1"",""path"":""ch9s"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:9 (43): Websites For Traders Chart Ex by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Websites For Traders Chart Ex by Jayanthi Gopalakrishnan

    WWW.CHART-EX.COM

    Lisa Erdmier, president and cofounder\nof the Chart-Ex website, which displays\nfree commodity charts, developed a data\nvisualization tool that displays volume\nat price in a unique format. It is similar\nto the Market Profile format in that it\ncompares volume at price for one time\nframe to another.\nAfter spending several years as a floor\ntrader, Erdmier wanted to develop a\ntrading tool that would give the offfloor\ntrader a picture of what goes on\nbehind the numbers seen on a computer\nscreen. The display, if you look at Figure\n1, shows volume as histogram for a\ntrading range of July 18 and 19 on the\nmini–gold contract. The horizontal lines\nrepresent volume for each corresponding\nprice, which indicates where the\nhigh and low volume areas are at a\nglance."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-43-websites-for-traders-chart-ex-by-jayanthi-gopalakrishnan-20.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-43-websites-for-traders-chart-ex-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-43-websites-for-traders-chart-ex-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254howm,d,"{""minimum-quantity"":""1"",""path"":""ch9s"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:9 (44-45): How Much Money Should You Allocate? by Torbjorn Iwarson"",""caption-linebreaks"":""How Much Money Should You Allocate? by Torbjorn Iwarson

    If this question is niggling at you, consider how risk-averse you\nare. That may give you the answer you’re looking for.

    Trying to figure out how much money you should\nallocate to your trading is a difficult task. How\nrisk-aversive are you? To get the answer, I will\nlook at the traditional stocks and bonds and a trendfollowing\nmethod applied to gold, EUR/USD, and the Standard & Poor’s 500, covering different asset classes.

    THE TRADING SYSTEM

    I use point & figure for the signals, using 2% sized boxes and\nthree-box reversals. Point & figure was the first method I learned\n20 years ago and I have found it mimics the way most professional traders think if they are not using some other system.

    Using this method on your own trading strategies, you can\nback-test how much you should allocate to your trading\nstrategy and how much you should keep in other assets such\nas stocks and bonds."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-44-45-how-much-money-should-you-allocate-by-torbjorn-iwarson-20.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-44-45-how-much-money-should-you-allocate-by-torbjorn-iwarson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-44-45-how-much-money-should-you-allocate-by-torbjorn-iwarson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov254exyo1,d,"{""minimum-quantity"":""1"",""path"":""ch9s"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:9 (46): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    FOCUSED ON THE FINANCIALS

    The recent problems at the brokerage\nfirms has me concerned about wider\ncredit problems. Is there a way to protect\nmy portfolio from future volatility\nin the banks and brokerage sector?\nGood question. Volatility in the financial\nsector is at its highest levels in\nyears because of worries about hedge\nfund and credit problems. The trend has\nhad an important impact on overall levels\nof volatility in the stock market\nbecause the financials are the largest\nsector within the Standard & Poor’s\n500. As a result, the financial sector\nwill have a strong influence on the\nvolatility and performance of the entire\nUS stock market."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-46-explore-your-options-by-tom-gentile-20.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-46-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-46-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov255anof,d,"{""minimum-quantity"":""1"",""path"":""ch9s"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:9 (54-58): The Angle Of Ascent by Martha Stokes, CMT"",""caption-linebreaks"":""The Angle Of Ascent by Martha Stokes, CMT

    Understanding the concept of the angle of ascent will help\nyou make strong entries and protect your profits.

    Successful traders know that technical analysis\nskills require an understanding of buy signals\nand indicators. Today, we tackle angle of ascent.\nAngle of ascent involves price, which is the most\nimportant aspect of technical analysis and an\nindicator onto itself. Yes, price is an indicator — the most important of any. Why? Because the stock market,\nwhile closely tied to mathematical concepts, is even more\nclosely related to biology. If that seems foreign, think of it this\nway. Humans are not mathematical formulas; we are biological\ncreatures. We think with our minds and emotions and feel\nour way through life. Human beings move price action in the\nstock market. Consequently, the ability to analyze price\naction and determine what it is telling you is a crucial, and generally misunderstood, aspect of trading and investing.\nPrice analysis is overlooked so often that traders bond in\nsolidarity at trade shows, discussion forums, and lecture\ncircuits over the common problem. The gist of the issue is\nthis: When traders go in search of stocks to trade, they often\nenter stocks just as a run is weakening or about to reverse. If\nyou understand the concept of angle of ascent, you will be\nable to avoid weak entries and protect profits against bounces,\nwhipsaws, and trend reversals.

    WHAT IS IT?

    The angle of ascent is the degree at which price rises in its\ntrendline. It is relevant to all trading and investing timelines\nand can forewarn of weaker entries and topping and bottoming\npatterns before these patterns can be identified. Traders\nwho use angle of ascent analysis increase their success rate by\ndiscarding weaker angle patterns and selecting more ideal\nentries for their trades."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-54-58-the-angle-of-ascent-by-martha-stokes-cmt-20.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-54-58-the-angle-of-ascent-by-martha-stokes-cmt-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-54-58-the-angle-of-ascent-by-martha-stokes-cmt-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256inhe,d,"{""minimum-quantity"":""1"",""path"":""ch9s"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:9 (60-66): Interview Henry Hank Pruden: What The Future Holds by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Interview Henry Hank Pruden: What The Future Holds by Jayanthi Gopalakrishnan

    Hank, why don’t you start by\ntelling us how you got interested\nin the Wyckoff method.

    What attracted me to the Wyckoff method can be summarized\nunder my notions of Wyckoff the man,\nWyckoff the method, and Wyckoff the\nmystique. An excellent article written\nby David Penn and published in your\nmagazine a few years ago had a profile\nof Richard Wyckoff, and it was well\ndone. I really thought he was an outstanding\ncharacter in the history of technical\nanalysis thinking. So early on I was\nattracted to Wyckoff. I thought he was a\ncareful and responsible individual, in\nterms of taking the best practices on Wall\nStreet and codifying them, as he said, to\nmake up “the real rules of the game.”

    There was another element that attracted\nme to the Wyckoff method. I had\na friend who was an engineer with an\nairline in Lebanon before the conflict\ndrove him and his family out of there.\nAs an engineer, he found the Wyckoff\nmethod to be a solid methodology and\nhe used it effectively. That drew me to\ntaking the correspondence course from\nthe Stock Market Institute (SMI) in the\nlate 1970s. That’s pretty much what\nbrought me into the method. I liked the\nmethod; it was very systematic. I liked\nthe math, I liked that there were a number of schematics to follow as well as\nchecklists and rules."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-60-66-interview-henry-hank-pruden-what-the-future-holds-by-jayanthi-gopalakrishnan-20.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-60-66-interview-henry-hank-pruden-what-the-future-holds-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-60-66-interview-henry-hank-pruden-what-the-future-holds-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256fufo1,d,"{""minimum-quantity"":""1"",""path"":""ch9s"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:9 (67): Futures For You by Dan O’Neil"",""caption-linebreaks"":""Futures For You by Dan O’Neil

    GOING SOFT

    What are “soft” commodities and where\ndo they trade?

    Also known as the “food and fiber”\ncategory or the “tropical softs,” this\nmarket sector is composed of five products\ntraded primarily at the New York\nBoard of Trade (NYBOT) — coffee,\nsugar, cocoa, cotton, and orange juice.\nThese products trade both in the physical\nopen outcry pits at NYBOT and electronically\non the state-of-the-art Intercontinental\nExchange (ICE) platform.\nIn fact, much of the volume in the softs\nthese days has migrated to the electronic\narena, where traders can enjoy\nfaster and more transparent trading\nnearly 14 hours per day."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-67-futures-for-you-by-dan-o-neil-20.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-67-futures-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-67-futures-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov256prre4,d,"{""minimum-quantity"":""1"",""path"":""ch9s"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:9 (68-71): Product Review: Elwave 8 by David Penn"",""caption-linebreaks"":""Product Review: Elwave 8 by David Penn

    If you want to use Elliott wave\nanalysis in your trading, then\nyou’ve got three main options.\nThe first is to pick up a copy of A.J. Frost’s and Robert Prechter’s\nbook, Elliott Wave Principle, and maybe\nthe collected letters of R.N. Elliott, who\ninvented Elliott wave theory. You could\npick up a few copies of Prechter’s other\nbooks while you’re at it, particularly\nThe Wave Principle Of Human Social\nBehavior or At The Crest Of The Tidal\nWave, both of which include a great\ndeal of background geared to helping\nthe budding Elliott wave theorist get his\nor her Elliott wave game on.

    A second approach is, to be blunt, to\nlet somebody else do it. Robert Prechter\nfounded Elliott Wave International (EWI),\nin part, just for this reason. The basics of\nElliott wave theory are not impossible to\nunderstand, but applying Elliott wave\nprinciples to price charts do not always\nbehave as tidily as those idealized wave\ncounts and cherry-picked examples\nwould have us believe. Subscribing to an\nElliott wave analysis service such as EWI\nis one way to have professional analysts\ndo the analysis for you."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-68-71-product-review-elwave-8-by-david-penn-21.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-68-71-product-review-elwave-8-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-68-71-product-review-elwave-8-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov257prre6,d,"{""minimum-quantity"":""1"",""path"":""ch9s"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:9 (72-73): Product Review Strategy Desk by Sharon Yamanaka"",""caption-linebreaks"":""Product Review Strategy Desk by Sharon Yamanaka

    IN the annals of stock trading\nthere is a maxim that says\nall gaps get filled. TD\nAmeritrade’s StrategyDesk has come forward to fill the void between\ndiscount brokerages and fullfledged,\ntrendy, often spendy professional\nstock analysis and trading\nplatforms. Originally launched in November\n2006 for TD Ameritrade’s Apex\nclients, the program proved to be so\npopular that they decided to open it up to\nall their clients. When asked about the\nsophistication of the program, Jay\nPestrichelli, managing director of TD\nAmeritrade’s active trader group, said\nthis tool was primarily used by intermediate\nto advanced traders, and often used\nby daytraders. But the extensive help\nfiles, manuals, and particularly the TD\nAmeritrade associates on their help line\nwere all ready to assist first-time users."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-72-73-product-review-strategy-desk-by-sharon-yamanaka-21.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-72-73-product-review-strategy-desk-by-sharon-yamanaka-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-72-73-product-review-strategy-desk-by-sharon-yamanaka-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov257prre7,d,"{""minimum-quantity"":""1"",""path"":""ch9s"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:9 (74-75): Product Review: TradeStation 8.3 by Jayanthi Gopalakkrishnan"",""caption-linebreaks"":""Product Review: TradeStation 8.3 by Jayanthi Gopalakkrishnan

    IT'S been a long time since I\nlast used TradeStation.\nThe first thought that\ncrossed my mind when I began to review this product was that\nit’s a trading platform on steroids. After\nall, look at it: It includes strategy\nbacktesting and automation on equities,\noptions, futures, historical and real-time\ndata, charting analysis, programming\ncapabilities, easy entry/exit orders,\nscreening, option analysis, news, research,\nand most recently, forex trading\nstrategies based on interbank spreads. It’s powerful — so much so, in fact,\nthat the number of features will be\ndifficult to cover in one review. Because\nof that I will focus on the\ninterface, order entry, and matrix\nthis time. I’ll cover its application of\nforex trading strategies, which is the\nlatest feature, in the next issue."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-74-75-product-review-tradestation-8-3-by-jayanthi-gopalakkrishnan-21.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-74-75-product-review-tradestation-8-3-by-jayanthi-gopalakkrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-74-75-product-review-tradestation-8-3-by-jayanthi-gopalakkrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov257trti4,d,"{""minimum-quantity"":""1"",""path"":""ch9s"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:9 (76-84): Traders Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders Tips by Technical Analysis, Inc.

    • METASTOCK: TRADING TRENDLINE BREAKS

    For the MetaStock code to implement the techniques discussed\nin Sylvain Vervoort’s article in this issue, “Trading\nTrendline Breaks, Part 2,” see the sidebar in the article on\npage 24 for code provided by Vervoort.—Editor

    • TRADESTATION: TRADING TRENDLINE BREAKS

    Sylvain Vervoort’s articles in his two-part series, “Trading\nTrendline Breaks,” describe the use of trendline breaks in\ntrading. The articles include code that approximates the author’s\ntrading style. Vervoort’s code identifies zigzag peaks and\ntroughs in the present by looking at future price data. Obviously,\nthis cannot be done in actual trading. The code given\nhere identifies zigzag peaks and troughs in the present without\nlooking at price data in the future."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-76-84-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-76-84-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-76-84-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov259atcl1,d,"{""minimum-quantity"":""1"",""path"":""ch9s"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 25:9 (97-98): At The Close by William Ferree"",""caption-linebreaks"":""At The Close by William Ferree

    Where Do Indexes\nReverse?

    Those big round numbers have an\ninfluence on prices…sometimes great,\nand sometimes (surprisingly) not so great.

    Big round numbers, those with\na single digit followed by zeroes,\nobviously have an influence on\nprices, and most major reversals have\noccurred as a popular index was hitting\none. The Dow Jones Industrial\nAverage (DJIA) has long represented\nthe market to most observers, and\nFigure 1 shows that near the turn of\nthe last century, it reversed six times\nfrom the 100 level. After finally breaking\nabove the resistance around 100,\nit passed through 200 and 300 to peak\nsomewhere near 400. During the crash\nof 1929, there were brief bear rallies to\nnear 300 and 200, and it bottomed\nnear 40. After the crash, it rallied near\n80, fell near 50, rebounded to 100,\ncorrected to 90, rose near the next big\nround number of 200, and fell all the\nway back to 100. It then broke away\nand rose rapidly, correcting with small\nbear markets from 200, near 300, and\n500. After nearing 1000, it repeated\nthe experience at 100 by reversing\ninto severe bear markets five times\nfrom that level."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-97-98-at-the-close-by-william-ferree-21.gif"",""height"":""250"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-97-98-at-the-close-by-william-ferree-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-25-9-97-98-at-the-close-by-william-ferree-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261leto,d,"{""minimum-quantity"":""1"",""path"":""ch1j1"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:1 (10-12): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    SVAPO (SHORT-TERM VOLUME AND\nPRICE OSCILLATOR)

    Editor,\nI enjoyed Sylvain\nVervoort’s article in the\nNovember 2007 issue of\nSTOCKS & COMMODITIES\non the SVAPO indicator\n(“Short-Term Volume And Price\nOscillator”). I use MetaStock for all my\ntechnical analysis and am currently using\nMetaStock 10.\nI have entered all the info for the\nindicator, and I am particularly interested\nin the code for the MetaStock Expert\nthat you presented in Figure 8. I like\nyour concept of increasing price with\nincreasing volume and then being able to\nidentify the corrections with decreasing\nvolume for the longs and then doing the\ncomplete reverse for the shorts.\nCan you tell me what the code is that\nallows the MetaStock Expert to create\nthe single colored arrows in Figure 8?\nDJ VATALERO

    Sylvain Vervoort replies:\nPlease note that all arrows on all the\ncharts in the November 2007 article on\nSVAPO are put on manually just to show\nthe exact coincidence between price\nand SVAPO turning points. SVAPO is not\nmeant to be used as a mechanical trading\nsystem. Please read how I apply the\nSVAPO in the December 2007 issue of\nS&C (“Short-Term Trading With SVAPO”). (CONTINUDED)"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-10-12-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""257"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-10-12-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-10-12-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261fofo,d,"{""minimum-quantity"":""1"",""path"":""ch1j1"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:1 (14-16): Forex Focus: The Alligator Indicator by Alexander Sabodin"",""caption-linebreaks"":""Forex Focus: The Alligator Indicator by Alexander Sabodin

    Here’s a trading system you can apply to trending markets\nsuch as the currencies.

    There is a moving\naverage–based trading system that I\nhave found works best\nin trending markets,\nwith its main instrument\nthe alligator indicator.\nThe alligator was first\ndescribed by Bill Williams\nin his book New\nTrading Dimensions.\nSome software packages\ninclude the alligator\nindicator, but if it’s\nnot available, all you\nhave to do is take three\nsmoothed moving averages\nusing 13, eight, and\nfive periods and shift them by eight, five, and three bars into the future. The longest\nperiod line is blue (the alligator’s jaw), the middle one is red\n(the alligator’s teeth), and the shortest one is green (the\nalligator’s lips).

    According to Williams, when these three moving averages\nare twisted together, it means the alligator indicator rests, and\nso we also rest. But the longer the alligator sleeps, the\nhungrier it is. So when the alligator awakes after a good, long\nrest it is very hungry to hunt for food. And its food is price."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-14-16-forex-focus-the-alligator-indicator-by-alexander-sabodin-20.gif"",""height"":""257"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-14-16-forex-focus-the-alligator-indicator-by-alexander-sabodin-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-14-16-forex-focus-the-alligator-indicator-by-alexander-sabodin-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261prlo,d,"{""minimum-quantity"":""1"",""path"":""ch1j1"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:1 (18-26): Profit Locking And The Relative Price Channel by Leon Wilson"",""caption-linebreaks"":""Profit Locking And The Relative Price Channel by Leon Wilson

    Here’s a technique that will help you identify sustainable\nprice action and overbought periods, and strong\nbreakouts.

    In the July 2006 STOCKS & COMMODITIES, I\nintroduced the concept of applying conventional indicators such as the relative strength\nindex (RSI) to price action. For details, please refer to\nthat article. For now, adapting range-bound indexes\nto price action highlights the bilateral relationship\nbetween price direction and price bias. In order to\nfully appreciate the correlation between dynamic\nbias and price action, you must draw a corresponding\nyet singular relationship between price and the indicator.

    The moving average convergence/divergence\n(MACD) defines the dynamic relationship between\ntwo moving averages while moving averages are\nrelative to price behavior and direction. The fluctuation\nin price is reflected within moving average\ndynamics, while the disparity between moving average\nvalues is quantified by the MACD. The MACD\nbecomes a tertiary link to price. Naturally, price\naction is the primary source of data while moving\naverages from which the MACD is derived is the\nconnecting link to price.

    NO CONNECTING LINK

    The problem with bias-based range-bound indexes\nsuch as the RSI involves having both primary and\ntertiary data but no connecting link between price and index. Adapting such indicators to prices allows\nyou to perform analysis in accordance with price\ndynamics. As the RSI defines bias within price dynamics\nit is logical to use this relationship to define\na point of unsustainability against price itself. So\nhow do you solve this problem?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-18-26-profit-locking-and-the-relative-price-channel-by-leon-wilson-21.gif"",""height"":""257"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-18-26-profit-locking-and-the-relative-price-channel-by-leon-wilson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-18-26-profit-locking-and-the-relative-price-channel-by-leon-wilson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov262whwo,d,"{""minimum-quantity"":""1"",""path"":""ch1j1"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:1 (28-35): What Works, What Doesn’t In Stock Market History by Mark Vakkur"",""caption-linebreaks"":""What Works, What Doesn’t In Stock Market History by Mark Vakkur

    Using Summary Statistics, In Over 60 Years

    And here for your education and edification, Standard & Poor’s\n500 summary statistics from January 1945 to May 2007! Some\nfactors are strongly correlated with rising or falling markets.\nFind out what they are, in part 1 of a two-part series.

    In trading, as in poker, it pays to know the odds.\nAlthough the Standard & Poor’s 500 is far from\npredictable, certain factors are strongly correlated\nwith rising or falling markets. There is no guarantee that these relationships will continue, but comprehending\n60 years of stock market history helps us understand\nwhen we’re holding a full house or a low pair. In this article,\nI’ll summarize and update an overview of several factors that over the years continue to influence stock market returns —\nearnings and dividend yield; interest rates; and seasonality,\nincluding month of year and the Presidential election cycle.

    THE S&P ITSELF: DESCRIPTIVE STATISTICS

    Before searching for extraordinary subsequent periods of S&P\n500 performance, it is best to first define “ordinary.” To do this\nyou must know the range of values in the S&P 500 historically.\nSince the variable of interest in this article will be the 12-\nmonth percentage change, I will start by examining all rolling\n(overlapping) 12-month S&P 500 percentage changes (excluding\ndividends) to get a feel for what “normal” is (Figure 1)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-28-35-what-works-what-doesn-t-in-stock-market-history-by-mark-vakkur-21.gif"",""height"":""257"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-28-35-what-works-what-doesn-t-in-stock-market-history-by-mark-vakkur-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-28-35-what-works-what-doesn-t-in-stock-market-history-by-mark-vakkur-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov264fote,d,"{""minimum-quantity"":""1"",""path"":""ch1j1"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:1 (42-44): Forward Testing by Martha Stokes, CMT"",""caption-linebreaks"":""Forward Testing by Martha Stokes, CMT

    A Solution To Backtesting

    A simple technique, it can reveal the true profit or loss\ncapabilities of a trading system.

    Backtesting has been popular among traders for many\nyears. The concept is that you take a set number of\nmonths or years and test a trading strategy over that\nperiod’s data. You calculate the average results and performance of that trading strategy as it performed during that\ntime. In theory this sounds like a fantastic tool for traders —\nbacktest and know if the strategy works. But that is not what\nbacktesting this way actually gives a trader.

    WHAT EXACTLY IS IT?

    Backtesting can be defined in two popular ways:

    1. The process of optimizing a trading strategy using historical data and then seeing whether it has predictive\nvalidity on current data.

    2. The process of testing a trading strategy on prior time\nperiods. Instead of applying a strategy for the time\nperiod forward, which could take years, a trader can\ndo a simulation of his or her trading strategy on\nrelevant past data in order to gauge its effectiveness.

    Most technical analysis strategies are tested with this\napproach. At first glance, it makes sense. Go backward,\npretend you’re using your strategy or system on a historical\nchart and see what would happen. Sounds good, right?\nUnfortunately, there are problems — inherent and significant\n— that cause backtesting to fail.

    The problem:\nBacktesting a trading strategy or system does not take into account whether a market is in an uptrend, downtrend, or\nsideways trend. It does not determine what market condition\nis prevailing during current trading. Therefore, a trader has no\nway to determine and apply the correct market condition to\nthe backtested time period. The results of the backtested\nperiod are averaged to give you a profit to loss ratio for that\ntrading strategy. An average of historical data over several\nyears doesn’t give you the facts you need about a system’s\nviability and true potential profitability."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-42-44-forward-testing-by-martha-stokes-cmt-20.gif"",""height"":""257"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-42-44-forward-testing-by-martha-stokes-cmt-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-42-44-forward-testing-by-martha-stokes-cmt-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov264qaby,d,"{""minimum-quantity"":""1"",""path"":""ch1j1"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:1 (45): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    NOW IF

    Can someone tell me if all the assets of\na company were worth $1 million and\nthe total number of shares available for\nthe full amount of the company were\n100,000 (each share being $10) and\nregardless of the revenue, the company\n(always) returned 10% net on the $\nmillion dollars each year — that is,\n$100,000 — at what price range would\nthe company’s shares trade the second\nyear? How about the third year?

    Now if we take away the company’s\nassets and say the company leases everything\nbut total revenue was $1 million,\nwith net income $100,000, at what\nprice range should the company’s stock\ntrade? —bluud

    What you have presented represents\na market capitalization at parity with\nthe company’s book value. Very few\nstocks have a 1-to-1 price/book ratio.\nThe multiples of the price to book are\nused to determine which stock is bettervalued\nthan another using fundamental\nanalysis. If you pay off all the bills and\nsell everything, the amount you’re left\nwith is book value. (CONTINUDED) ..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-45-q-a-by-don-bright-20.gif"",""height"":""257"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-45-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-45-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265exyo,d,"{""minimum-quantity"":""1"",""path"":""ch1j1"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:1 (51) Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    DOLLAR BOUNCE

    The US dollar has performed miserably\nagainst the euro in recent years. I think\nit’s overdone, but I have heard that some\nanalysts say the euro could move all the\nway up to 1.50. If so, I think the dollar will\nbounce from there. What strategies can I\nuse? I have heard of shorting gold. Does\nthat make sense?

    The dollar has really suffered serious\nlosses against the euro in recent years.\nFrom November 2006 to November 2007,\nthe euro rose from less than 1.20 to its\ncurrent levels near 1.47. Seven years ago,\none euro could only buy 0.82 dollars!\nTimes have changed. The long-term trend\ncurrently favors the euro and it is possible\nthat the European currency continues its\nmove to record highs. (continuded) ..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-51-explore-your-options-by-tom-gentile-20.gif"",""height"":""257"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-51-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-51-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265stap,d,"{""minimum-quantity"":""1"",""path"":""ch1j1"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:1 (52-57) A Structured Approach To Option Trading by Jay Kaeppel"",""caption-linebreaks"":""A Structured Approach To Option Trading by Jay Kaeppel

    This is the first in a series of articles about\noption trading with the PROVEST option\ntrading method. The PROVEST method is\nnot a trading system. Rather, it utilizes a\nseries of criteria that can aid option traders\nin choosing the proper trading strategy for\na given situation. Likewise, traders are free\nto choose different parameters to apply to\neach of the key criteria. This month’s article\nlays the groundwork for the strategy pieces\nto follow in the months ahead.

    Option trading volume has\nproliferated in recent years.\nPart of this is due to the\nadvent of electronic trading,\nwhich has greatly facilitated\nthe flow of information and trading\nactivity. In many cases, traders can get\ninto and out of trades almost instantaneously.\nThis spectacular growth in trading\nvolume has also been fueled by the fact\nthat so many individuals have become\nmore knowledgeable about the varied uses\nof options that allow them to achieve specific\nspeculative and hedging objectives.

    Yet even as the business of option\ntrading evolves, in the end the act of\ntrading options remains an art form.\nUnlike trading a stock or futures contract\ndirectly — where you either go\nlong and make money if that security\ngoes up or lose money if it goes down,\nor vice versa if you are holding a short\nposition — with options there can be\nmany shades of gray. This creates opportunities\nand risks unique to option\ntraders."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-52-57-a-structured-approach-to-option-trading-by-jay-kaeppel-20.gif"",""height"":""257"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-52-57-a-structured-approach-to-option-trading-by-jay-kaeppel-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-52-57-a-structured-approach-to-option-trading-by-jay-kaeppel-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265moth,d,"{""minimum-quantity"":""1"",""path"":""ch1j1"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:1 (58-64) More Than A Trading System With Adrienne Toghraie by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""More Than A Trading System With Adrienne Toghraie by Jayanthi Gopalakrishnan

    Adrienne Laris Toghraie is an internationally recognized authority in the field of\nhuman development and a master practitioner of Neuro-Linguistic Programming\n(NLP) for the financial and business communities. She is the founder of Trading on\nTarget and Enriching Life Seminars, companies dedicated to helping traders,\nsalespeople, and other high achievers to increase profits and success. Using her\n20 years of study in the science of modeling excellence/NLP and other forms of\npsychological development, Toghraie has helped her clients push through their\nself-imposed limitations to new levels of success. Her seminars and private\ncounseling have achieved a wide level of recognition and popularity, as well as her\ntelevision appearances on CNBC and keynote addresses at most of the major\nindustry conferences.

    STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Adrienne\nToghraie on November 5, 2007.

    Adrienne, thank you for taking\nthe time to speak with\nme. Why don’t you start by\ntelling us what you do?

    I work with people who want to become\nmore successful. Since 1989, I\nhave specialized in helping traders and\ninvestors reach their next level of success\nby overcoming their self-imposed\nlimitations. I do this through several\ntypes of studies, one of which is Neuro-\nLinguistic Programming (NLP), the science\nof modeling. I have also integrated\nover 20 other disciplines into my practice\nto form my own method.

    What are some of the issues you see\nmost traders facing in their trading?

    I can sum it up by saying it’s all about\nfear. Fear has many faces. Some of the\nfaces of fear are fear of success, fear of\nbeing wrong, fear of failure, limiting\nbeliefs — anything that holds the person\nback from following his or her own\nrules, because ultimately a trader must\nfollow those rules.

    Fear of loss is probably the most\nprevalent fear in trading. People are afraid\nof loss because it is a part of everything\nnegative that has ever happened in their\nlives. These feelings of loss are stored in\nthemselves, in a dark and disturbing place\nthat is impossible for most people to access on their own. And even if they\ndo, they do not know how to deal with\nit, much less transform it."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-58-64-more-than-a-trading-system-with-adrienne-toghraie-by-jayanthi-gopalakrishnan-21.gif"",""height"":""257"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-58-64-more-than-a-trading-system-with-adrienne-toghraie-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-58-64-more-than-a-trading-system-with-adrienne-toghraie-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266fufo,d,"{""minimum-quantity"":""1"",""path"":""ch1j1"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:1 (65): Futures For You by Dan O’Neil"",""caption-linebreaks"":""Futures For You by Dan O’Neil

    OPEN INTEREST AND WHAT IT SAYS

    What is open interest and what can it tell\nme about a market?

    Open interest is the total number of\nfutures or options on futures contracts\nthat have not yet been offset or fulfilled\nby delivery. Open interest is an indicator\nof the depth or liquidity of a market,\nwhich influences the ability to buy or\nsell at or near a given price. Because\ngood and timely fills can be hard to\nobtain in illiquid markets, many traders\nsee very low open interest in a market as\na reason to steer clear.

    As an analysis tool, changes in open\ninterest can be used to help confirm\ntechnical signals, helping traders gauge\nhow much money is flowing into or out\nof a given market. This is helpful when\nlooking at a trending market. If open\ninterest is increasing, then the trend will\nprobably continue in its present direction,\neither up or down. And if open\ninterest is declining, this can be interpreted\nas a signal that the current trend\nmay be about to end."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-65-futures-for-you-by-dan-o-neil-21.gif"",""height"":""257"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-65-futures-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-65-futures-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266prre,d,"{""minimum-quantity"":""1"",""path"":""ch1j1"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:1 (66-67): Product Review: GTS Pro by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Product Review: GTS Pro by Jayanthi Gopalakrishnan

    FX SOLUTIONS

    An umpteen number of foreign\nexchange brokerages out\nthere are each offering their\nown versions of a trading platform. They all include necessities\nsuch as order entry, charting, and news\nservices, and each tries to offer an iteration\nof any of these features to make\nthem stand out among their competitors.

    When FX Solutions introduced GTS\nPro they kept the experienced forex\ntrader in mind and added features such\nas one-click trading, the ability to place\nmultiple stops, alarms, hedging capabilities,\nand a more sophisticated forex\ncalculator. That is not to say that a forex\nnewbie should stay away from GTS Pro.\nGiven that it is very customizable, a less\nexperienced forex trader can certainly\nset up the platform to meet his or her\nneeds (Figure 1). And speaking of\ncustomizable, you have several options\nwhen it comes to layouts, and you can\nchange your leverage or number of units\nyou’re trading easily and quickly. FX Solutions has also enhanced their charting\npackage with the introduction of\nAccucharts, which can be used with\nGTS Pro."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-66-67-product-review-gts-pro-by-jayanthi-gopalakrishnan-21.gif"",""height"":""257"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-66-67-product-review-gts-pro-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-66-67-product-review-gts-pro-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266prre1,d,"{""minimum-quantity"":""1"",""path"":""ch1j1"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:1 (68-73): Product Review: High Growth Stock Invstor by Leslie N. Masonson"",""caption-linebreaks"":""Product Review: High Growth Stock Invstor by Leslie N. Masonson

    INDUSTRY MONITORS

    There are countless end-ofday\nstock evaluation software\nprograms for sale. However,\ntoo many of them are\neither too cumbersome to use or offer only a basic charting capability,\nor provide the user with minimal\ncustomization capabilities. High Growth\nStock Investor software (HGSI) offers\nusers the ability to customize the stock\nscreening process as well as rank and sort\nstocks to meet their individual investment\nor trading criteria. In addition, a superior\ncharting capability is built in.

    HGSI was designed for self-directed\ninvestors, traders, and professionals. The\nsoftware provides an array of seamless forthinteractive\nfundamental and technical\ninvesting tools to assess buy and sell\n(short) candidates for those individuals\ninterested in growth, value, and momentum\nstyles. Since September 2006,\nwhen I began using the software, I have\nbeen amazed by its capabilities and powerful\nscanning options. Using only a\nfew keystrokes, I sliced-and-diced the\nmarket into the best- or worst-performing\nsecurities by industry groups, sectors,\nor customized criteria over varying\ntime frames within the 10-year database\nhistory."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-68-73-product-review-high-growth-stock-invstor-by-leslie-n-masonson-20.gif"",""height"":""257"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-68-73-product-review-high-growth-stock-invstor-by-leslie-n-masonson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-68-73-product-review-high-growth-stock-invstor-by-leslie-n-masonson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov267trti,d,"{""minimum-quantity"":""1"",""path"":""ch1j1"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:1 (74-84): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    Editor’s note: This month’s Traders’\nTips are based on Leon Wilson’s\narticle in this issue, “Profit Locking\nAnd The Relative Price Channel.”\nCode written for BullCharts and\nMetaStock is already provided in\nthe article’s sidebars. Code for other\nprograms is presented here.

    Readers will find our Traders’ Tips section in its entirety\nat the STOCKS & COMMODITIES website at www.Traders.com\nin the Traders’ Tips area, from where the code can be copied\nand pasted into the appropriate program. In addition, the\ncode for each program is usually available at the respective\nsoftware company’s website. Thus, no retyping of code is\nrequired for Internet users.

    For subscribers, code found in Wilson’s article can be\ncopied from our Subscriber Area at www.Traders.com.\nLogin is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-74-84-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""257"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-74-84-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-74-84-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov269bofo,d,"{""minimum-quantity"":""1"",""path"":""ch1j1"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:1 (92): Books for Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books for Traders by Technical Analysis, Inc.

    • Range-Bound Markets

    • The Complete Turtle Trader: The Legend, The Lessons, The Results

    • Forecasting Expected\nReturns In The Financial\nMarkets

    • How To Make Money\nIn Stocks: A Winning\nSystem In Good\nTimes or Bad, 3rd\nEd.

    • Electronic And Algorithmic\nTrading Technology:\nThe Complete Guide

    • Forex Simplified

    • Finding Midas: Investing\nIn Entrepreneurial\nCEOs With The Golden\nTouch

    • Commodity Strategies:\nHigh-Profit\nTechniques For\nInvestors & Traders"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""257"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-1-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261leto6,d,"{""minimum-quantity"":""1"",""path"":""ch11n205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:11 (10-11): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    THE BEST INDICATORS TO USE?\nEditor,\nAs it has been for many other investors, the past year has been very challenging for me. I read and reread your magazine, but what I’d like to know is:\nIs there a handful of indicators you would recommend plotting on a stock or index chart to get a very accurate read of what’s happening or what’s about to come? There are so many indicators, so I’m asking for the ones you feel give the most accurate readings. Something that helps you prosper 80% of the time or better.\nMARTY FERULLO

    You are correct in that there are a lot of indicators. There’s no right or wrong set of indicators to use because it’s impossible to know what is about to come. It is how you apply them that makes all the difference."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-10-11-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""295"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-10-11-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-10-11-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261fofo7,d,"{""minimum-quantity"":""1"",""path"":""ch11n205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:11 (14-17): Forex Focus: The Trend Determining Method by Aleksey Yudin"",""caption-linebreaks"":""The Trend Determining Method by Aleksey Yudin

    This model is based on the theory of determined chaos, which\nposits that accurate market forecasts can be generated when\ntrading the currency markets.

    Determined chaos theory has attracted many followers in recent years in various fields of knowledge. Unfortunately,\nalong with its many advantages, such nonlinear methods of analysis have their own deficiencies — namely, the very short time horizon for forecasts. This problem could be solved by applying additional methods with a longer time\nhorizon for forecasting, but that would create a complex and\ntime-consuming system. Nevertheless, it is possible to balance sensitivity and “short memory” of a method and produce trades with a high winning percentage. This can be done by applying simple models based on the theory of determined chaos.

    DETERMINED CHAOS\nAmong system creators there is endless debate on what\nnumber or type of parameters is best used to describe the\nmarket. Most trading systems are built around one parameter\n— price. Using price alone, or any indicator based solely on\nprice, cannot explain or predict market movements with any\nregularity.

    The system described here is based on the concept that\nmarkets are driven solely by supply and demand. Market\norder flow can in fact be accurately tracked by analyzing\nvolume and open interest in conjunction with market price.\nWhile price is an important aspect of our system, it is more a product of how supply and demand interacts rather than the determining factor when it comes to market forecasts.

    Because forex is traded over the counter and not through a\ncentral exchange, open interest is not available. Because\nfutures are the derivatives of the cash market, there is a strong correlation between the two so you can use open interest from the futures contract as a proxy.

    A deeper discussion of volume and open interest in different\nmarkets is beyond the scope of this article. What is important to understand is that there is a connection between open interest, volume, and price, and by exploiting this relationship, you can generate consistent profits."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-14-17-forex-focus-the-trend-determining-method-by-aleksey-yudin-21.gif"",""height"":""297"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-14-17-forex-focus-the-trend-determining-method-by-aleksey-yudin-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-14-17-forex-focus-the-trend-determining-method-by-aleksey-yudin-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261coch,d,"{""minimum-quantity"":""1"",""path"":""ch11n205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:11 (18-24): Corona Charts by John F. Ehlers"",""caption-linebreaks"":""Corona Charts by John F. Ehlers

    Look! Up In The Sky!\nSupercomputers, superdelegates, and now, superindicators. Here’s a look at the up-and-coming group of indicators that tell you when a signal is strong and when it’s not.

    Never heard of corona charts? You will. They are the next-generation group of superindicators because they not only give you a multidimensional view of market activity, but also because each indicator alerts you when its signal is strong and when it is weak.

    Each indicator in this group is based on sound scientific measurements rather than on anecdotal evidence and heuristics. All the indicators start with the measurement of the dominant cycle and are therefore adaptive to market conditions. There are a total of four indicators in the corona chart series. These are:

    1) The spectrum (from which the dominant cycle is extracted)

    2) The cycle signal to noise ratio

    3) The swing position

    and

    4) The trend vigor.

    The spectrum measures cyclic activity over a cycle period\nrange from six bars to 30 in a bank of continuous digital filters. Longer cycle periods are not taken into consideration because they can be viewed as trend segments. Shorter cycle periods are not considered because of the aliasing† noise encountered with the data sampling process. The amplitude of each filter output is compared to the strongest signal, and the result is displayed over an amplitude range of 20 decibels (dB). This display is in the form of a heat map. Now, imagine the strongest signal being white-hot. As the amplitudes decrease, the display “cools off” through red-hot to ice-cold. The colors range from bright yellow for the strongest signal to black for the weakest.

    The dominant cycle line is extracted from the strongest signals in the spectrum. The spectrum display is described with reference to Figure 1. The spectrum is time-synchronized with the bar chart above it. The vertical axis of the display shows the measured cycle period over the range, again from six bars to 30. The ideal condition is a thin horizontal yellow line. This denotes a consistent cycle period that is well focused at the dominant cycle."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-18-24-corona-charts-by-john-f-ehlers-21.gif"",""height"":""285"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-18-24-corona-charts-by-john-f-ehlers-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-18-24-corona-charts-by-john-f-ehlers-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov262keto,d,"{""minimum-quantity"":""1"",""path"":""ch11n205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:11 (26-30): The Keys To Trend-Following by Donald W. Pendergast Jr."",""caption-linebreaks"":""The Keys To Trend-Following by Donald W. Pendergast Jr.

    Weekly Trend-Following With EMAs.\nSuccessful trend-following requires time, patience, an unshakable belief in the power of statistics, and, above\nall, the willingness to fearlessly seize prime trading opportunities.

    It can be a challenge to time the markets on a short-term basis, yet that seems to be the driving motive behind the marketing of most trading systems, charting packages, and stock/option newsletters. This article provides a simple framework around which technicians could build a\nsimple and profitable trend-following method.\nWeekly trend-following takes a longer-term approach,\nallowing fundamental supply/demand forces to create opportune, low-risk technical entry points.

    TREND-FOLLOWING ESSENTIALS

    When a stock, fund, exchange traded fund (ETF), or commodity breaks out or develops other characteristics\nthat imply a major trend confirmation, the smart money will initiate positions once the move is already under way, following the emerging trend. It is the opposite strategy of\nthose traders who (sometimes unwisely) attempt to pick tops and bottoms or attempt to predict market reversal points. Trend-following will never get you in at the beginning\nof a market move, but it does ensure that the market will already be moving in the desired direction before you invest your trading capital.

    The goal of the successful trend-follower is to profit from\nthe primary thrust of every sustained long-term trend movement. If such traders can keep the losses on their losing trades small, they can still enjoy worthwhile profits over time."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-26-30-the-keys-to-trend-following-by-donald-w-pendergast-jr-21.gif"",""height"":""291"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-26-30-the-keys-to-trend-following-by-donald-w-pendergast-jr-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-26-30-the-keys-to-trend-following-by-donald-w-pendergast-jr-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov263myko,d,"{""minimum-quantity"":""1"",""path"":""ch11n205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:11 (32-36): My Kondratieff Wave by Koos van der Merwe"",""caption-linebreaks"":""My Kondratieff Wave by Koos van der Merwe

    The Boom & The Bust.\nRussian economist Nikolai Kondratieff believed that a collapse in the economy would be caused by companies that would not be able to repay their loans and would go bankrupt. Are we at that point?

    Nikolai Kondratieff was a Russian economist (1892–1938) who observed that capitalist economies could be analyzed by\nwave theory. Kondratieff theorized that economic forces repeated themselves in a pattern of a 54- to 55-year boom-and-bust cycle. He described a boom’s collapse as characterized by “renunciation of debt.” He believed that the collapse would be caused by companies that would not be able to repay their loans and would go bankrupt.

    Whether it is company debt, mutual fund popularity,\ntechnology investment, or a mortgage subprime excess,\nKondratieff would have described the bursting of the\npresent stock market bubble as just another “loan renunciation,” which today’s subprime crisis basically boils\ndown to.

    For his effort, and his failure to proclaim the death of\ncapitalism, he was arrested and eventually executed by the\nStalinist regime.

    THE KONDRATIEFF WAVE

    Many writers have argued that the Kondratieff wave, or the\nK-wave as it is commonly known, is only a study of long\ncycles of debt buildup and repudiation; that it is not exclusively a cycle about price inflation and deflation periods."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-32-36-my-kondratieff-wave-by-koos-van-der-merwe-21.gif"",""height"":""270"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-32-36-my-kondratieff-wave-by-koos-van-der-merwe-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-32-36-my-kondratieff-wave-by-koos-van-der-merwe-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov264esri,d,"{""minimum-quantity"":""1"",""path"":""ch11n205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:11 (40-45): Establishing Risk And Reward by Cory Mitchell"",""caption-linebreaks"":""Establishing Risk And Reward by Cory Mitchell

    Approaching The Markets.\nHere’s how you can manage risk when you’re trading specific chart patterns.

    Trading with profit targets is a sensible way to approach the markets. Doing so allows you to establish risk–reward ratios before making a trade. You can then accept or reject a trade based on how much reward you can reasonably expect based on the risk you have established for the trade.

    This is a powerful process. It ensures that a trader has\nestablished the risk of each trade before taking that trade.\nBefore placing a trade, you should calculate the maximum\nloss you can take. The risk limits based on technical analysis will let you know if you should not be in the market in the direction you have chosen.

    Once the risk is known, a trader can then determine if a\ntrade is worth taking based on what profit can be expected\nfrom the trade. Many traders have touted that there should\nbe at least a 3-to-1 reward-to-risk ratio for each trade. While this is a good rule of thumb and may service many traders’ needs, it is not an all-encompassing rule. Since each trader has a different style and trades over different time frames, it would be impossible to establish a set risk and reward rule for all traders.

    Each trader must establish a risk–reward ratio based on\ntheir trading performance. That said, the 3-to-1 reward-to-risk ratio allows the trader freedom to take losses and still be profitable as long as risk is kept in check and trades are allowed to reach the profit targets as often as possible. In this way, the trader can be wrong three times, right only once, and still break even."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-40-45-establishing-risk-and-reward-by-cory-mitchell-21.gif"",""height"":""276"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-40-45-establishing-risk-and-reward-by-cory-mitchell-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-40-45-establishing-risk-and-reward-by-cory-mitchell-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov264loof,d,"{""minimum-quantity"":""1"",""path"":""ch11n205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:11 (46-50): The Logic Of Pivot Trading by Jim White"",""caption-linebreaks"":""The Logic Of Pivot Trading by Jim White

    About Those Short-Term Market Trends.\nThis methodology takes advantage of the short-term trends in\nthe market and applies a pivot trading technique to earn\nsuperior returns.

    In 1998 I wrote a paper that became the foundation of a trading methodology I refer to as pivot trading. This methodology takes advantage of a fundamental characteristic of freely traded markets — that is, the persistence of price movement. This article will describe the underlying\nlogic of the methodology, provide an example of the\nstatistical verification of persistence, and outline how\ntraders can use it to their advantage.

    WHAT IS PERSISTENCE?

    Persistence is the tendency of a market to move in one\ndirection over a period of time before reversing course. The\nmovements can also be referred to as runs or short-term\ntrends. Those who claim that markets are random admit to the\nexistence of persistence but explain it as a consequence of run theory, where each day has an equal probability of being up or down and the probability of continuing a run declines as the run gets longer. These market participants believe there is no feedforward of information from one day’s activity to influence a future day’s activity."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-46-50-the-logic-of-pivot-trading-by-jim-white-21.gif"",""height"":""287"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-46-50-the-logic-of-pivot-trading-by-jim-white-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-46-50-the-logic-of-pivot-trading-by-jim-white-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265qaby2,d,"{""minimum-quantity"":""1"",""path"":""ch11n205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:11 (52): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    RATIO WRITE

    I’ve been trading options for about 10 years. One strategy I enjoy but seldom use is a “ratio write” — for example,\nbuy 100 shares of a stock, sell a covered call (near the market), and sell a second call near the market: 2-to-1 ratio write. (Assume call premiums are at $6.) This gives good downside protection of $12 and an upside profit range. Occasionally, I go long on a parity call (deep-in-the-\nmoney) in place of the stock.

    My question applies to either strategy. I’ve had good success in a falling market or a flat market. Sometimes I\nwill buy a “protective put” at the foot of the protective range ($12 below market) — if the price is right. My thinking is unclear when it comes to adjusting for a rising market. Certainly, if the option closing is near and the market has reached the call strike price, I can buy another 100 shares of stock and have two safe covered calls. How’s that sound to you? —Jim TaV

    First off, a ratio covered-call write can be pretty risky, but let’s take a step back before getting into your specific\ntrades. Option pricing is determined by historical volatility, interest rates, and days until expiration."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-52-q-a-by-don-bright-21.gif"",""height"":""292"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-52-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-52-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265injo,d,"{""minimum-quantity"":""1"",""path"":""ch11n205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:11 (56-60): Interview: Joshua Hayes Of Big Wave Trading by J. Gopalakrishnan & B. Faber"",""caption-linebreaks"":""Joshua Hayes Of Big Wave Trading by J. Gopalakrishnan & B. Faber

    Surfer Trader Dude.

    Is it the ideal life? Joshua Hayes is CEO, president, and founder of Big Wave Trading, a Maui, HI–based stock market advisory service. Hayes is a well-respected stockpicker and technician who combines fundamentals, psychology, and money management to trade professionally. Hayes also runs BigWaveTrading.com, an online stock market commentary and stock selection service for short- and intermediate-term investment strategies using CANSLIM and other strategies.\nHayes has been a contributor to TeleChart, Realmoney.com, and TokyoJoe.com. He is currently a contributor to SeekingAlpha.com, iStockAnalyst.com, BestWayToInvest.com, StraightStocks.com, and InvestorsParadise.com. He also posts trading advice at MauiTrader.blogspot.com.\nSTOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan and Staff Writer Bruce Faber interviewed Joshua Hayes on September 8, 2008, via telephone.

    Joshua, how did you get interested in trading?

    Early on, I used to go over to my friend’s house and his\ndad would have the CNBC ticker on and I recognized two stocks, Iomega and AOL. There were others but these two\nreally stuck out for me. By the time I was 16, I had developed a major passion for the markets and my father helped start me out by suggesting I read [what was then] Investor’s Daily. He recommended it because his grandmother recommended it to him two weeks before she died. So I read it.

    Intrigued, I got William O’Neil’s book, How To Make Money In Stocks. It clicked with me immediately, and off I went."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-56-60-interview-joshua-hayes-of-big-wave-trading-by-j-gopalakrishnan-b-faber-21.gif"",""height"":""253"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-56-60-interview-joshua-hayes-of-big-wave-trading-by-j-gopalakrishnan-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-56-60-interview-joshua-hayes-of-big-wave-trading-by-j-gopalakrishnan-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266prre13,d,"{""minimum-quantity"":""1"",""path"":""ch11n205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:11 (62-64): Product Review: Channalyze by D. W. Davies"",""caption-linebreaks"":""Product Review: Channalyze by D. W. Davies

    QUDOS MARKET INSIGHT

    Brian J. Millard, the developer of Channalyze, claims that after many years of research into cycles and channels, he has produced the world’s first cycle scanning program.

    I’m always skeptical of self-promotion. So, did Channalyze fulfill Millard’s primary claim and the other promises\nmade? Let’s find out.

    Millard is a longtime disciple of J.M. Hurst, the doyen of cyclical analysis of stocks. Since at least 1991, Millard has been working on a process to accurately define present and future price and time cycles of stocks.

    The focus of the program is twofold. First, there’s the cycle analysis of market data, and isolating which cycles are currently going through a stable phase. The second is the channel analysis as described by Hurst, and later, Millard.

    The software features automatic or manual manipulation of channels. Included is the proprietary Sigma-p, which gives improved prediction of future channel movement. Traders who are unfamiliar working in this area of relating price channels and time cycles will quickly become comfortable after a few sessions with the software.

    The Channalyze program operates on end-of-day data in MetaStock format, but it can also read data held as .csv\ntext files."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-62-64-product-review-channalyze-by-d-w-davies-21.gif"",""height"":""269"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-62-64-product-review-channalyze-by-d-w-davies-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-62-64-product-review-channalyze-by-d-w-davies-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov26666in,d,"{""minimum-quantity"":""1"",""path"":""ch12d204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:11 (64, 66-70): Interview: Tuning Into The Pits With Jack Broz"",""caption-linebreaks"":""Interview: Tuning Into The Pits With Jack Broz

    Amid these turbulent times in the market, Jack Broz is keeping\nan ear out on what’s happening on the trading floor. He has\nbeen a member of the Chicago Board of Trade (CBOT) since\n1996 and has traded bond and Dow futures since then. He is\nfounder of The Marlin Letter (www.themarlinletter.com), a\ntrading advisory and education company and sole producer of\nthe information content. Broz provides two live interactive,\nInternet-based trading rooms direct from the floor of the CBOT\nfive days a week, seven hours a day.\nSTOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan\n(JG) and Staff Writer Bruce Faber (BF) interviewed Jack Broz\nvia telephone on October 10, 2008.

    Jack, how did you get started\nin trading?

    I ran health clubs for 15\nyears and noticed a customer one day\nwho would always come in to work out,\nand then go surf. After seeing him do\nthat for a month or so, I asked him what\nhe did for a living. He said he traded\noptions on the OEX. I knew nothing\nabout the markets — this was in the\nmid-1980s — but I knew that options\nwere something in the financial industry.\nSo he took me under his wing a bit\nand started showing me some ways to\nanalyze the stock market and suggested\na few good books to read and a few good\nsources of information. For a year I\nstudied charts, and I found I enjoyed it.

    We were talking at one point about\ntrading commodities, and he said that he\nwould not touch them. So I figured that\nhad to be where the money was really at,\nif someone who seemed to know what he\nwas doing was wary of them. I was from\nChicago, so I came back to Chicago. I\nthought that if I could get a job at one of\nthe exchanges I could really learn this\ncommodities stuff. So I got a job at the\nChicago Mercantile Exchange to work\nin the pits as a price reporter."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-64-66-70-interview-tuning-into-the-pits-with-jack-broz-21.gif"",""height"":""257"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-64-66-70-interview-tuning-into-the-pits-with-jack-broz-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-64-66-70-interview-tuning-into-the-pits-with-jack-broz-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266exyo4,d,"{""minimum-quantity"":""1"",""path"":""ch11n205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:11 (66): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    ETFS 101

    What are ETFs? Can you give me a quick ETF 101 course?

    “ETF” is short for “exchange traded fund.” These investment vehicles trade on the US stock exchanges, mostly the\nAmerican Stock Exchange. Each ETF holds a group or basket of stocks. Some hold the same stocks that make up a popular index. For example, the Dow Jones diamonds (DIA) is an ETF that holds the same 30 stocks as the Dow Jones Industrial Average (DJIA).

    Other ETFs are created to track specific sectors or asset classes. The Semiconductor HOLDRS (SMH) is an example of a popular sector fund. As another example, the iShares Russell 2000 Small Cap ETF (IWM) is one of the most actively\ntraded ETFs today. It holds shares of smaller companies (by market value).

    There are literally thousands of ETFs to choose from today. One way to start is to look for lists of the most actively\ntraded exchange traded funds and ETF options. The information is available on popular websites, including the investing section of Yahoo! Finance as well as the exchanges where ETF options trade (the Chicago Board Options Exchange, the American Stock Exchange, the International Securities Exchange, and the Philadelphia Stock Exchange)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-66-explore-your-options-by-tom-gentile-21.gif"",""height"":""297"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-66-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-66-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266prre14,d,"{""minimum-quantity"":""1"",""path"":""ch11n205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:11 (67): Product Review: PatternMatcher by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Product Review: PatternMatcher by Jayanthi Gopalakrishnan

    TD AMERITRADE

    Cup with handle, double tops, head & shoulders... there are numerous patterns that can appear on a chart. Identifying them can take time, especially in a market like we have today.

    TD Ameritrade has introduced a tool in its repertoire called PatternMatcher, part of the Command Center platform, that actually identifies patterns that have either completed or are emerging. It’s available to TD Ameritrade clients at no charge.

    FEATURES

    Once you launch Command Center from your TD Ameritrade\naccount, you just click on the PatternMatcher button to access this program. You’ll see a display similar to what you see in Figure 1. The various patterns are listed (in this case, 12) with a note on how many stocks meet that pattern criteria. I selected the head & shoulders pattern since that pattern had the highest number of stocks out of all the patterns, which can be expected given the current\nsituation in the market."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-67-product-review-patternmatcher-by-jayanthi-gopalakrishnan-21.gif"",""height"":""263"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-67-product-review-patternmatcher-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-67-product-review-patternmatcher-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266fufo3,d,"{""minimum-quantity"":""1"",""path"":""ch11n205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:11 (68): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    BUY OR SELL?

    Is it better to buy or sell options?

    My favorite college finance professor used to answer questions with the phrase, “It depends.” In trading and\nfinance alike there are no black and white answers. The answer is based on your personal risk and reward profile as\nwell as market conditions, and not necessarily my judgment. However, since you asked, I will give you my opinion.

    A successful long option trader must be exceptionally patient and have excellent timing; there is little room for\nerror. Anyone can get lucky from time to time, and in some cases, a long option can seem like a lottery ticket to the\nfortunate holder; however, those stories are few and far between. Most option buyers are forced to watch helplessly as the values of their options tank. Conversely, during times of low volatility, option buyers drastically increase their odds of making a profit because the potential of a subsequent explosion in volatility will have the same impact on their long option trade."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-68-futures-for-you-by-carley-garner-21.gif"",""height"":""294"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-68-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-68-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov267trti6,d,"{""minimum-quantity"":""1"",""path"":""ch11n205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:11 (74-82): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    Some of this month’s Traders’ Tips are based on John Ehlers’s article in this issue, “Corona Charts.” Other\ntips are based on past articles in S&C at the choosing of the contributors.

    Code for TradeStation’s Easy-Language is already provided by Ehlers for his article and can be found at www.Traders.com. Additional code is presented here as contributed by software developers.

    Readers will find our Traders’ Tips section in its entirety\nat the STOCKS & COMMODITIES website at www.Traders.com\nin the Traders’ Tips area, from where the code can be copied\nand pasted into the appropriate program. In addition, the\ncode for each program is usually available at the respective\nsoftware company’s website. Thus, no retyping of code is\nrequired for Internet users.

    For subscribers, the EasyLanguage code found in Ehlers’s\narticle can be copied and pasted into TradeStation from the\nSubscriber Area at www.Traders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-74-82-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""289"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-74-82-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-74-82-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov269bofo8,d,"{""minimum-quantity"":""1"",""path"":""ch11n205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:11 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    In this issue:

    •Becoming Your Own China Stock Guru by James Trippon

    •Fibonacci Analysis by Constance Brown

    •Inside The Investor’s Brain: The Power Of Mind Over Money\nby Richard L. Peterson

    •Trading ETFs: Gaining An Edge With Technical Analysis\nby Deron Wagner

    •Trading Futures For Dummies by Joe Duarte, MD

    •Trading Option Greeks: How Time, Volatility And Other\nPricing Factors Drive Profit by Dan Passarelli"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""296"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov269atcl,d,"{""minimum-quantity"":""1"",""path"":""ch11n205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:11 (96-98): At The Close by Eliot Brenner"",""caption-linebreaks"":""Practice Mindfulness To Increase Your Profits by Eliot Brenner

    Emotionally intelligent people know that sometimes it is a good idea to act on your thoughts and feelings, and sometimes it is not. When your mother-in-law offends you,\nemotionally intelligent people know it is probably best to\nsmile and let go of your angry thoughts and feelings. On the\nother hand, when you are walking past a dark alley and\nsomeone lunges at you, it is probably a good idea to fight or run away.

    Trading is no different. There are times when it is important to act on your thoughts and feelings, and times when it pays to let them go.

    Mindfulness is a form of Eastern meditation that involves\nbecoming more aware of your thoughts, feelings, and physical\nsensations and learning to take a neutral, more accepting\nstance toward them. Over the past 10 years, Eastern philosophy and the practice of mindfulness have entered the Western mainstream of medicine and psychology. For example, psychological research has shown that people who struggle with emotional pain such as anxiety and depression often get\nbetter when they become more mindful. Although most traders do not suffer from clinical depression or anxiety, they\ncan still use mindfulness to increase their profits, sense of well-being, and job satisfaction."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-96-98-at-the-close-by-eliot-brenner-21.gif"",""height"":""295"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-96-98-at-the-close-by-eliot-brenner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-11-96-98-at-the-close-by-eliot-brenner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261leto7,d,"{""minimum-quantity"":""1"",""path"":""ch12d204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:12 (10-12): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    MAC SOFTWARE REVISITED

    Editor,

    In your September 2008 Letters To S&C column, letter-writer John Hammerstrom inquired about programs available for\nApple Macintosh computers.

    I am writing to let readers know about a software program called Parallels Desktop for Mac, which sells for less than $100. This program creates a “parallel environment” within the Mac that runs any Windows-based program. I use Parallels\nnightly to run my Worden and Advanced GET programs; it’s wonderful.\nMERRILL S. LICHTENFELD

    Thank you for writing in with your suggestion.—Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-10-12-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""296"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-10-12-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-10-12-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261fofo8,d,"{""minimum-quantity"":""1"",""path"":""ch12d204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:12 (14-16): Forex Focus: The Intraday Trade by Alexander Sabodin"",""caption-linebreaks"":""The Intraday Trade by Alexander Sabodin

    Here’s a low-risk/high-profit trend-following method that\nyou can apply to the forex markets.

    The idea of a short-term trade itself is very attractive,\njust like a romantic cruise. It’s alluring to sit by the computer for an hour or two when no one distracts you, and\nearn money getting pleasure from your work.

    But there are pitfalls on the way to success. One of the\nmajor ones is not having a system-defined trade that results\nin a lack of consistency in your trades. You must understand\nthat any trade must have a plan of action, and your task is to follow that plan without inventing new rules impulsively.\nKeep on that plan and you’ll be more likely to achieve success and join the elite group of professionals that really make money.

    So how do you get into that elite group? Here is a system\nyou can try, by applying to intraday trading."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-14-16-forex-focus-the-intraday-trade-by-alexander-sabodin-21.gif"",""height"":""298"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-14-16-forex-focus-the-intraday-trade-by-alexander-sabodin-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-14-16-forex-focus-the-intraday-trade-by-alexander-sabodin-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261trel,d,"{""minimum-quantity"":""1"",""path"":""ch12d204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:12 (19-22): Trading The Electronic Futures Market by Charles M. Steiner"",""caption-linebreaks"":""Trading The Electronic Futures Market by Charles M. Steiner

    Using this technique, you can visualize market direction\nand identify supply and demand zones so you\ncan enter trades with a high probability of success.

    Data available to futures traders for analysis is price, time, volume, and open interest. All analytic methods use this information to display price action and to create technical indicators derived from these four datasets:

    ■ Price is available as open, high, low, close for a\nfinite time period such a daily, weekly, monthly,\nor segments of a trading day such as portions of an\nhour or day.

    ■ Volume for any given period can be broken down\nfor any given time segment and displayed as an\nindicator or used to construct volume-based bars.

    ■ Open interest is largely ignored in technical analysis\nbecause the fluctuation of open interest is thought to play a minor role in trading decisions and rarely triggers a trade.

    ■ Time segments during a 24-hour electronic trading day are of interest because of spikes in volume related to news events, volume during the open outcry pit sessions, and volume from various parts of the world as trading progresses from East to West, continent to continent, as the 24-hour electronic trading day progresses."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-19-22-trading-the-electronic-futures-market-by-charles-m-steiner-21.gif"",""height"":""283"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-19-22-trading-the-electronic-futures-market-by-charles-m-steiner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-19-22-trading-the-electronic-futures-market-by-charles-m-steiner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov2622830,d,"{""minimum-quantity"":""1"",""path"":""ch12d204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:12 (24-26, 28, 30): Iron Butterfly And Condor Slices by Tony Saliba and Joe Corona"",""caption-linebreaks"":""Iron Butterfly And Condor Slices by Tony Saliba and Joe Corona

    This option strategy may be effective when the market is\ntransitioning from trending to trendless.

    Markets, market sectors, and individual stocks can cycle between states of price balance and imbalance. An underlying market, market sector, or stock is in a state of price balance when there is equilibrium between buyers, sellers, and the underlying market moves in a trendless or sideways fashion. A market is in a state of price imbalance when buyers overwhelm sellers and prices trend higher, or sellers overwhelm buyers and prices trend lower. An imbalanced (trending) market will eventually reach a price where sufficient buying or selling is attracted to correct the imbalance and the market will begin to move in a trendless fashion until the next event pushes it into imbalance, and the process starts over.

    Capturing and profiting from the transition from a trending\nmarket to a trendless market is a tricky business. Expressions such as “the trend is your friend,” “never try to pick the top,” and “never catch a falling knife” can be found in most trading literature (and overheard in the bars near the exchanges). However, these common expressions tend to apply more to trading the underlying stocks or futures than options on those stocks or futures."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-24-26-28-30-iron-butterfly-and-condor-slices-by-tony-saliba-and-joe-corona-21.gif"",""height"":""259"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-24-26-28-30-iron-butterfly-and-condor-slices-by-tony-saliba-and-joe-corona-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-24-26-28-30-iron-butterfly-and-condor-slices-by-tony-saliba-and-joe-corona-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov26336we,d,"{""minimum-quantity"":""1"",""path"":""ch12d204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:12 (32-34, 36): Weather And The AG Markets by Joseph S. D’Aleo and Todd Crawford"",""caption-linebreaks"":""Weather And The AG Markets by Joseph S. D’Aleo and Todd Crawford

    When trading agricultural commodities it is important to\nhave a solid understanding of how weather affects these\nmarkets. Here’s a quick lesson.

    The tremendous volatility in many of the agricultural\ncommodity markets during 2008 was\nat least partially due to the impact of weather,\nin particular the record flooding in the Plains\nand the Midwest. As larger entities (investment banks, hedge funds) continue to move into the agricultural\nmarkets, their influence will likely change the dynamics\nof the marketplace.

    A similar paradigm shift has\noccurred during the past decade\nin the energy markets, where deregulation\nhas resulted in more\nliquidity and volatility due to the\nimpact of weather. Since these\nbig players already understand\nhow weather can affect the energy\nmarkets, they will likely\nbring that knowledge with them\nas they expand into the corn,\nwheat, and soybean markets,\namong others. For this reason, it\nis important for the smaller trader\nto develop a solid understanding\nof how various weather phenomena\ninfluence these crops and\ntheir market prices."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-32-34-36-weather-and-the-ag-markets-by-joseph-s-d-aleo-and-todd-crawford-21.gif"",""height"":""286"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-32-34-36-weather-and-the-ag-markets-by-joseph-s-d-aleo-and-todd-crawford-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-32-34-36-weather-and-the-ag-markets-by-joseph-s-d-aleo-and-todd-crawford-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov264spkp,d,"{""minimum-quantity"":""1"",""path"":""ch12d204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:12 (44-48): The Special K, Part1 by Martin J. Pring"",""caption-linebreaks"":""The Special K, Part1 by Martin J. Pring

    This indicator points you in the\ndirection of the primary trend,\ntriggers short-term buy & sell\nsignals, and signals reversals in\nthe primary trend at an early stage.\nIn part 1, we look at how to identify\nthe direction of the primary trend.

    Recently, I had the opportunity\nof cowriting\na new technical book\nwith my friend and\npartner, Assad Hamzeh, specifically\naimed at Middle Eastern markets.\nAs so often happens during\nsuch projects, I came up with what\nI believe to be a logical extension\nof the KST, an indicator that I\noriginally introduced in a series of\nTechnical Analysis of STOCKS &\nCOMMODITIES articles in the\n1990s.

    THE THREE TRENDS

    Price at any given time is determined\nby the interaction of numerous\ntime cycles. Figure 1 features\nthree of the most widely recognized\nones. The thick green line\nrepresents the primary trend, commonly\nknown as bull and bear\nmarkets. The bull and bear markets\nlast on average between nine\nmonths to two years each and revolve\naround the four-year business\ncycle. Markets rarely move\nin straight lines, so the primary\ntrend is interrupted by intermediate\nprice movements that average\nbetween six weeks and nine\nmonths. This trend is represented\nby the blue line. Finally, the red\ndashed line flags short-term price\nmovements that average between\nthree to six weeks. The KST formulas\nI devised were an attempt to represent these three trends in\nthe form of smoothed momentum\nindicators."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-44-48-the-special-k-part1-by-martin-j-pring-21.gif"",""height"":""284"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-44-48-the-special-k-part1-by-martin-j-pring-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-44-48-the-special-k-part1-by-martin-j-pring-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov264qaby1,d,"{""minimum-quantity"":""1"",""path"":""ch12d204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:12 (49): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    GOING LONG?

    If you believe stocks return 10% a year,\nis it better to go long: 1) ES future\ncontracts? 2) SPY options? —Sky123987

    One of the biggest deceptions pulled\non the investing public, historically, is\nthe ROI of “the market.” Well, “the\nmarket” consisted of stocks only, not\nindexes, for most of its life. The Dow\nJones 30 has had the individual stocks\nreplaced over and over during the past\n80 years or so. In fact, the only original\nstock is GE. So, since you could not\ninvest in the Dow Jones Industrial Average\n(DJIA), only individual stocks,\nthere was nowhere near a 10% return as\nadvertised.

    Nowadays, you can invest in indexes,\nreplacement stocks and all — but then,\nyou need to think about that timing\naspect to it. So yes, you can get 10% and\nmore if your timing is good — otherwise,\nit’s very doubtful."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-49-q-a-by-don-bright-21.gif"",""height"":""282"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-49-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-49-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265trwi,d,"{""minimum-quantity"":""1"",""path"":""ch12d204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:12 (50-57): Trading With The Heikin-Ashi Candlestick Oscillator by Sylvain Vervoort"",""caption-linebreaks"":""Trading With The Heikin-Ashi Candlestick Oscillator by Sylvain Vervoort

    This visual tool complements candlesticks that will help you\nenter and exit trades, resulting in higher profits per trade.

    Analyzing a candlestick chart gives a good idea\nof what is going on in the market. Candlestick\npatterns, resistance or support from price\npivots, rising or falling windows, and the use\nof trendlines are all excellent technical trading\ntools. But initiating a trade and deciding when to close it,\ncandle after candle, remains a difficult task. It would be nice to have a complementary visual aid when looking at a candle\nchart.

    Figure 1, a daily chart for Ford Motor Co., uses an expert\nfunction for color-coding the candlesticks. On November 21,\n2006, the price falls through the uptrend line after a number of green candles. This means it’s time to close any long position and open a new short position. As long as there are red candles, we will keep the short trade open. On December\n20, 2006, there is a new green candle. Drawing a downtrend\nline up to this point, we see that it is broken to the upside. It’s time to close the short position and open a new long position."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-50-57-trading-with-the-heikin-ashi-candlestick-oscillator-by-sylvain-vervoort-21.gif"",""height"":""256"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-50-57-trading-with-the-heikin-ashi-candlestick-oscillator-by-sylvain-vervoort-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-50-57-trading-with-the-heikin-ashi-candlestick-oscillator-by-sylvain-vervoort-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266exyo5,d,"{""minimum-quantity"":""1"",""path"":""ch12d204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:12 (62): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    COLLAR ADJUSTMENTS

    I have a collar on a stock. I am still very\nbullish and the stock has come down\nquite a bit, so when does it make sense\nto buy back the call for a profit and let\nit ride?

    The collar is becoming a more popular\nstrategy after the latest selloff. A lot\nof investors who want to buy are looking\nat how far some stocks have fallen.\nThe problem is, prices are still falling\nand volatility is high. Fear is at an\nextreme, and many investors are reluctant\nto buy stocks despite the bargains\nthat now seem to exist.

    The collar offers a limited-risk way\nto buy stocks. The trade is a combination\nof a protective put (long puts, long\nstock) and a covered call (long stock,\nshort calls). It is created by buying\nshares, buying puts, and selling calls\n(and can also be applied to an existing\nposition). The put provides a floor under\nthe stock and the sale of calls helps\npay for the put. In addition, since implied\nvolatility is so high right now,\noption premiums are very expensive\nand it makes sense to sell some call\npremium to pay for the put options."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-62-explore-your-options-by-tom-gentile-21.gif"",""height"":""295"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-62-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-62-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266prre15,d,"{""minimum-quantity"":""1"",""path"":""ch12d204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:12 (63): Product Review: TradeStation 8.4 by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Product Review: TradeStation 8.4 by Jayanthi Gopalakrishnan

    TRADESTATION SECURITIES, INC.

    Internet: www.tradestation.com

    In this most recent version of\nTradeStation, the one new\nfeature that should be emphasized\nis the Scanner. It\nis a new global scanning\nwindow that allows the user to scan the\nuniverse of US stocks, bonds, forex,\nindexes, index options, and futures, including\nthose traded on the EUREX.

    FEATURES

    The scans can be done on any number of\nvariables ranging from price, volume,\noptions-related data, technical indicators\n(including custom), ShowMe studies,\nall the way to PaintBar studies. This\nalone gives you an idea of how extensive\nand powerful this scanning tool is.\nEven though there are prebuilt scans,\nyou have the flexibility of creating your\nown and if you create your own indicators,\nyou can incorporate them as well."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-63-product-review-tradestation-8-4-by-jayanthi-gopalakrishnan-21.gif"",""height"":""258"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-63-product-review-tradestation-8-4-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-63-product-review-tradestation-8-4-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov267fufo1,d,"{""minimum-quantity"":""1"",""path"":""ch12d204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:12 (71): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    TIME TO BUY GRAIN?

    In theory, the grain complex should\nhave seen the harvest lows in the September/\nOctober time frame. Should we\nbe buying agricultural commodities?

    We all watched in awe as the grain\ncomplex shattered their all-time-high\nprice records and continued to march\nhigher during the 2007–08 rally. Subsequently,\nmany retail traders and perhaps\neven fund managers watched in\nhorror as the grains made their way\nrelentlessly lower in the summer of 2008.

    Several theories attempt to explain\nthe magnitude of the up move from\nethanol demand, long-only hedge funds\nand exchange traded fund (ETFs), and\nsheer market exuberance in the absence\nof an attractive equity market. One\nthing’s for sure — the market overshot\nits equilibrium price. It was unrealistic\nto expect that market fundamentals could\nmaintain $8 corn, $13 wheat, and $17\nsoybeans, but nobody knew just high\nprices might go before falling to a more\nrational level, and those who tried to\n“fight City Hall” likely paid dearly."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-71-futures-for-you-by-carley-garner-21.gif"",""height"":""296"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-71-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-71-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov267prre,d,"{""minimum-quantity"":""1"",""path"":""ch12d204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:12 (72-75): Product Review: Red Rock Pattern Strategy by Dennis D. Peterson"",""caption-linebreaks"":""Product Review: Red Rock Pattern Strategy by Dennis D. Peterson

    EQUIS INTERNATIONAL

    Internet: www.equis.com

    Red Rock Pattern Strategies\n(RRS) is a MetaStock plugin\ndeveloped by Jeff Crystal,\nwhose resume includes being\na former hedge fund\nmanager. Although he is busy as a consultant,\nhe still takes the time to educate\ntraders to his way of trading. Talking to\nCrystal and listening in on the free class\nwill get you thinking about the market\nand trading in the ways of the skilled\ntrader. If you are just starting out, this\nwill feel like drinking from a firehose.\nActually, it will feel like drinking from\na big firehose.

    So what is this all about? As the name\nimplies, it’s about patterns. “What\nkind?” you might ask. Crystal will tell\nyou that many are based on Elliott waves\nand/or Fibonacci retracements. But he\nwill readily agree that if you pick five\nElliotticians you might get five answers.

    But before we start to worry about\nwhether a price pattern is an Elliott\nwave you would recognize, first we’ve\ngot to find a way to identify pivot peaks\nand valleys."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-72-75-product-review-red-rock-pattern-strategy-by-dennis-d-peterson-21.gif"",""height"":""258"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-72-75-product-review-red-rock-pattern-strategy-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-72-75-product-review-red-rock-pattern-strategy-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov2679295,d,"{""minimum-quantity"":""1"",""path"":""ch12d204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:12 (76-82, 92-93, 95): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    Most of this month’s\nTraders’ Tips are\nbased on Sylvain\nVervoort’s article in\nthis issue, “Trading\nWith The Heikin-Ashi\nCandlestick Oscillator.”\nOther tips are on\na topic of the contributor’s\nchoosing.

    Code for MetaStock is already provided in Vervoort’s article\nelsewhere in this issue. Additional code is presented here as\ncontributed by software developers.

    Readers will find our Traders’ Tips section in its entirety at\nthe STOCKS & COMMODITIES website at www.Traders.com in\nthe Traders’ Tips area, from where the code can be copied\nand pasted into the appropriate program. In addition, the\ncode for each program is usually available at the respective\nsoftware company’s website. Thus, no retyping of code is\nrequired for Internet users.

    For subscribers, the MetaStock code found in Vervoort’s\narticle can be copied and pasted into MetaStock from the\nSubscriber Area at www.Traders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-76-82-92-93-95-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""792"",""width"":""612""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-76-82-92-93-95-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-76-82-92-93-95-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov269atcl1,d,"{""minimum-quantity"":""1"",""path"":""ch12d204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:12 (98-97): At The Close by Don Bright"",""caption-linebreaks"":""At The Close by Don Bright

    Transitioning To Trading For A Living

    Every\nmonth I interview\ndozens of potential\nnew traders, and the question of transitioning from\nthe safety of a paycheck to successful\ntrading comes up often.\nIn my opinion, there’s no need\nto leave job security behind.\nLet’s discuss a few scenarios.

    THE BUSINESS\nOF TRADING

    One of the first things to take\ninto consideration is to realize\nthat trading is, indeed, a business,\nand must be treated as such.\nWith this in mind, let’s cover\nsome business basics. One of the\nprimary reasons for not succeeding\nin any business is lack of\ncapital. I’m speaking of capital\nto properly run the business, not\nliving expenses, which we’ll get\nto later. Many books and seminars\nand TV ads attempt to convince\nthe public that money can\nbe made with their products with\nonly a $25,000 retail brokerage account. This is extremely\ndifficult. Can you and should you invest your own money\nwith a retail account? Sure you should! Do your homework\nand trust yourself, not a stockbroker, to make investing\ndecisions for you. But investing is not trading for a living."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-98-97-at-the-close-by-don-bright-21.gif"",""height"":""267"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-98-97-at-the-close-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-12-98-97-at-the-close-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261focr,d,"{""minimum-quantity"":""1"",""path"":""ch13b202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:13 (16-21): Following The Crowd After A One-Day Correction by A. Trongone, PhD, CFP, CTA"",""caption-linebreaks"":""Following The Crowd After A One-Day Correction by A. Trongone, PhD, CFP, CTA

    All is not lost after a meltdown in the markets. Here’s\nhow you can find profitable opportunities.

    IN the days following a nasty single-day\ncorrection, if the overnight session advances,\nare daytraders more receptive\nto taking a long position during the regular trading session? The trading days following\na painful meltdown can offer a profitable opportunity\nby simply tagging along with the current direction of\nthe morning market.

    After experiencing an extreme loss during the\nregular trading session, if there is an overnight run to\nthe upside, a daytrader’s psychological response is to\ntake a long position. Apparently the prospect of\nmissing the opportunity to get their portfolio back to\nprecorrection days is incentive enough to dismiss the\nconcerns of doomsayers. Conversely, the fear of\nexacerbating yesterday’s loss can keep you on the\nsidelines until the dust settles.

    This phenomenon is more compelling with the\nnew country funds, especially those funds enjoying\nlofty returns. The attraction of trading these indexes\nstems from the perception that the countries will\ngenerate sustainable economic growth.

    China, which has been dominating the financial\npapers, has been a lucrative play. A good way to\nposition yourself in this market is to play the iShares\nFTSE/Xinhua China 25 Index. In its 786 trading days,\nthis country fund has gone from a starting price of\n$53.60 (October 12, 2004) to $172.29 (November\n23, 2007). Despite this excellent performance, a\n$128.50 profit was during the overnight trading\nsession, whereas the regular trading session was unprofitable, losing $9.81.

    Here is a system that maximizes profits by either\nrefraining from trading or entering into a long position\nafter a meltdown — that is, in the days following\na regular trading session loss of a full percentage\npoint or more."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-13-16-21-following-the-crowd-after-a-one-day-correction-by-a-trongone-phd-cfp-cta-21.gif"",""height"":""265"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-13-16-21-following-the-crowd-after-a-one-day-correction-by-a-trongone-phd-cfp-cta-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-13-16-21-following-the-crowd-after-a-one-day-correction-by-a-trongone-phd-cfp-cta-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov262titr,d,"{""minimum-quantity"":""1"",""path"":""ch13b202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:13 (22-25): Tips & Tricks For Trading Commodities by Carley Garner"",""caption-linebreaks"":""Tips & Tricks For Trading Commodities by Carley Garner

    Discover some of the less talked about aspects of trading in\nthis highly competitive market.

    A quick trip through the finance aisle at your\nlocal bookstore will make you realize quickly\nthat despite the fact that most Americans\nhaven’t been exposed to the world of futures\ntrading, there is an abundance of material written on the subject. However, it seems as though a lot of\nwhat you read in those books or learn in seminars and courses\ndon’t apply in the real world. You can master each trading theory and memorize every technical formation, but turning\nthat into live and profitable trades is a different story.

    Sometimes the difference between success and failure lies\nin understanding how everything comes together to form the\nbig picture. In this article, we are going to touch on some of\nthe less talked about, but just as important, aspects of trading\ncommodity options and futures. Without the basic knowledge\nof such things, you could be putting yourself and your\ntrading account behind the eight ball.

    THE COLD HARD FACTS

    One of my pet peeves is to hear people refer to trading\ncommodities as an investment. Futures trading is not the same thing as investing; it is highly leveraged speculation\non price movement. The risk is high, but\nso is the profit potential.

    Some people argue that by properly\nfunding an account to lessen the leverage\naspect, futures trading becomes\nan investment. However, this\ncan be misleading. Commodity\nprices fluctuate in a longterm\nprice envelope; unlike\nthe stock market,\nwhich has a long-term\ntendency to go up, commodities\ntend to trade\nin a range. Thus, a buy\n& hold technique\ndoesn’t infer success\nin commodities as it\nmay in terms of stocks,\nand it creates a trading\narena rather than an investment\nvehicle."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-13-22-25-tips-tricks-for-trading-commodities-by-carley-garner-21.gif"",""height"":""265"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-13-22-25-tips-tricks-for-trading-commodities-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-13-22-25-tips-tricks-for-trading-commodities-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov262joof,d,"{""minimum-quantity"":""1"",""path"":""ch13b202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:13 (26-29): Jokes Of (Trading) Wisdom by Giorgos E. Siligardos, PhD"",""caption-linebreaks"":""Jokes Of (Trading) Wisdom by Giorgos E. Siligardos, PhD

    I have always been fascinated by funny\nstories that incorporate wisdom and have a\nbottom-line moral. In this article I present\nthe nine most important jokes of wisdom I know. Each has a moral with real-life applications and\nparticularly in the world of trading.

    1. THE LORD OF THE UNIVERSE

    During his afternoon walk in the park, George noticed\na man preaching on a wooden pedestal. There\nwas a group of people making fun of the preacher,\nlaughing at him, deriding him, and calling him crazy.\nGeorge stood for a while and listened to the preacher’s\nwords:

    “Oh, you humans — why are you fighting with\neach other? Why do you hate each other so much?\nYou are all part of the same world, you are all under the same\nsun, you all live on the same Earth. Why are you killing each\nother instead of living peacefully?”

    “Fancy that!” thought George. “They may call him crazy,\nbut he is right!”

    And the preacher continued: “Oh, you humans — why are\nyou killing each other? You are all part of the same universe.

    And who is the lord of this universe? It is I!”

    The moral of the story, as it applies to trading?

    • Don’t blindly follow the advice of someone who has\nhad some solid and meaningful thoughts in the past.

    • Although in the markets the consensus is usually\nwrong, this is not the case with investment advisors.\nWhen you hear a lot of people blaming an investment\nadvisor, be cautious about him, no matter how convincing\nhis or her words are."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-13-26-29-jokes-of-trading-wisdom-by-giorgos-e-siligardos-phd-20.gif"",""height"":""259"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-13-26-29-jokes-of-trading-wisdom-by-giorgos-e-siligardos-phd-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-13-26-29-jokes-of-trading-wisdom-by-giorgos-e-siligardos-phd-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov26320re,d,"{""minimum-quantity"":""1"",""path"":""ch13b202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:13 (30-47): 2008 Readers’ Choice Awards by Technical Analysis, Inc."",""caption-linebreaks"":""2008 Readers’ Choice Awards by Technical Analysis, Inc.

    We are pleased to present the Technical Analysis of STOCKS & COMMODITIES\nmagazine 2008 Readers’ Choice Awards (RCA). Each year, we put before our\nreaders a ballot of products and services related to technical analysis and trading.\nThe following pages present the products and services you and your peers chose\nthis year as your favorites.

    The Readers’ Choice Awards begins each year with a list of products gathered\nby the editors of STOCKS & COMMODITIES, with space for write-in votes (given that our list doesn’t claim to be complete). Then, to find out what our readers find to be the most\nuseful for their trading, we ask them to choose their favorite products or the ones they find most useful from various categories by going to our website, Traders.com,\nand filling out the survey there. After that, we compile the results, just\nin time for the Bonus Issue you hold in your hands.

    Products are categorized by their primary purpose. Just because a service or\nproduct is not listed does not necessarily mean that the product does not have\nfeatures germane to the category; otherwise, a number of products could be\nlisted in numerous categories. In addition, some categories are divided by\ncost so that the comparisons can be made on a more level playing field.

    The winners in the Readers’ Choice Awards are almost always the\ndominant players in their niche, and rightfully so. You may have special\nneeds for your trading, however, so you should keep in mind those\nproducts that are not the big names in the category of your interest\nbefore you make your final decision. The RCA is designed to be an aid\nfor you when you are deciding on which of the numerous products and\nservices currently available to use for your trading and investing. With\nthat in mind, we think you’ll find the Readers’ Choices a terrific guide\nto products and services that you’ll be interested in."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-13-30-47-2008-readers-choice-awards-by-technical-analysis-inc-21.gif"",""height"":""259"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-13-30-47-2008-readers-choice-awards-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-13-30-47-2008-readers-choice-awards-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov264inla,d,"{""minimum-quantity"":""1"",""path"":""ch13b202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:13 (48-53): Interview: Lane Mendelsohn Of TradingEducation.com by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Interview: Lane Mendelsohn Of TradingEducation.com by Jayanthi Gopalakrishnan

    Lane Mendelsohn, the publisher of TradingEducation.com, has been involved in\nthe financial software industry on a full-time basis since 1993 and became an\nassociate member of the Market Technicians Association in 2001. He has helped\neducate thousands of individual traders to become more successful through his\nexpertise with trading software. In 2005, his vision for utilizing the Internet as an\neducational tool for traders resulted in the launch of www.TradingEducation.com.\nSince then he has been instrumental in launching several other, advertisersupported,\nfree educational websites dedicated to helping stock, forex and futures\ntraders. Is the name somehow familiar? It should be. His father is trading software\ndeveloper Louis Mendelsohn, an early proponent for intermarket analysis, who\nhas been in the industry for more than 30 years.

    STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan (JG) and Staff Writer\nBruce Faber (BF) spoke to Lane Mendelsohn on January 23, 2008, via a\nconference call.

    How did you get interested in\ntrading? Or was there never a\ntime when you weren’t?

    It was an interesting and H\nunique way to get into such an exciting\nindustry. As you know, my father, Lou\nMendelsohn, is one of the pioneers of\nthis industry and has been involved for\ndecades. When I first got interested in\nwhat he was doing, I didn’t even know\nI was interested. He was selling the\nProfit Taker futures trading software,\nand it was on five and a quarter–inch\nfloppy disks. At the time, in the early\n1980s, you could not buy preformatted\ndisks. Someone had to format each disk\nand make sure there were no problems\nwith it. You could then copy the software\nonto the disks to send out to your\ncustomer. It was not a stimulating job\nbut it had to be done, and each disk had\nto be done, one by one. I was getting five\ncents a disk doing that on nights and\nweekends. That was my first job, and\nthat’s when my father and I started\nworking together.

    JG: How old were you?

    I was six. At the time, we had a ranch\njust outside of Tampa and the office was\nlocated on the property. So anytime I wanted to go to the office, all I had to do\nwas take a little walk over the bridge\nand through the woods, and I was at the\noffice. That was a great learning laboratory\nfor me. I was listening to customers\nreceiving technical support. I heard my\ndad do business worldwide.

    There has been nothing else that I\nhave done in my career. I am young, but\nI have been working at this for quite a\nwhile now. This is the only thing that\nhas ever grabbed my attention. Nothing\nelse that I have seen or experienced has\ncaptured my attention like this has.

    JG: That’s amazing.

    So that is how I started doing some of\nthe more menial tasks. I had a pretty\nimportant title at one point — I was the\noperations manager of facilities. That\nmeant I took out the trash, cleaned the\nbathrooms, and did what had to get\ndone. But again, my father was teaching\nme the value of a dollar, and giving me\nan opportunity to work in the office.

    When I was about 12 or 13, my father\nstarted taking me to industry conferences,\nand meetings with his colleagues\nand friends in the industry. I met a lot of\ngreat people. Some of the people I met\nduring those years I have developed professional relationships with now. That is\nhow I formed TradingEducation.com,\nby reaching out to people I originally met\nthrough my father."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-13-48-53-interview-lane-mendelsohn-of-tradingeducation-com-by-jayanthi-gopalakrishnan-20.gif"",""height"":""265"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-13-48-53-interview-lane-mendelsohn-of-tradingeducation-com-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-13-48-53-interview-lane-mendelsohn-of-tradingeducation-com-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265opcr,d,"{""minimum-quantity"":""1"",""path"":""ch13b202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:13 (54-62): Option Credit Spreads On Commodities by Sam Bhugaloo"",""caption-linebreaks"":""Option Credit Spreads On Commodities by Sam Bhugaloo

    Here are some techniques for selling\nout-of-the-money credit spreads that\ncan ensure a favorable percentage of\nsuccess.

    AS I write this in late August\n2007, the headlines\nacross the world are all\nabout the credit crunch\nthat has affected all stock exchanges. The US Federal Reserve\nsurprised markets on Friday,\nAugust 17, 2007, by cutting the primary\ndiscount rate, which governs direct\nloans from the Federal Reserve to\nbanks by 50 basis points. The week also\nhad other dramatic headlines such as\nCountrywide Financial, the biggest US\nmortgage lender, borrowing the entire\n$11.5 billion available in bank credit\nlines after finding itself unable to access\nshort-term financing. Japan’s\nbenchmark Nikkei index fell almost\n9% as Asian markets fretted over the\nsubprime cuts. The CBOE Volatility\nIndex, also known as Wall Street’s “Fear\nGauge,” rose to 37.50. That is its highest\nsince October 2002, when the bull\nmarket in stocks began.

    Hedge fund managers in 2007 have\nhad to add a new category to their\ninvestment calls. In addition to the categories\nof “buy,” “sell,” and “hold,”\nthere is “apologize.” Analysts said quantitative\nhedge funds (or quants), who use\ncomputers to make trades based on mathematical\nequations and account for a\nquarter of all equity hedge funds, had\nbeen battered in recent weeks amid persistent\nrumors of forced selling as their models failed to cope\nwith heightened volatility.

    In the UK, pension funds have lost billions of pounds as a\nresult of the credit crunch fear. According to actuaries Aon\nConsulting, the UK’s 200 biggest final salary pension schemes\nhad a deficit of £26 billion at the end of trading on Thursday,\nAugust 16, 2007. We all appreciate that investment in equities\nand its returns are considered to be a long-term strategy and that a week’s decline in the stock markets should be viewed in\nthe context of the overall economic factors. However, this may\nbe of little comfort; those who are close to retirement and not\non a guaranteed benefit pension could feel the pinch, as they do\nnot have time to ride out the market volatility and make back\nlosses. The current problems should act as a reminder for\npension fund managers and trustees about the dangers that are\ninherent in investing too heavily in equities."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-13-54-62-option-credit-spreads-on-commodities-by-sam-bhugaloo-20.gif"",""height"":""265"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-13-54-62-option-credit-spreads-on-commodities-by-sam-bhugaloo-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-13-54-62-option-credit-spreads-on-commodities-by-sam-bhugaloo-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov268fofo,d,"{""minimum-quantity"":""1"",""path"":""ch13b202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:13 (8-14): Forex Focus: Determining The End Of The Trend by Jody Samuels"",""caption-linebreaks"":""Forex Focus: Determining The End Of The Trend by Jody Samuels

    One of the keys to doing well in the forex\nmarket is to apply reversal pattern and\nindicator tools to know when the trend is\nover and when the next one is starting.\nHere’s how.

    Would you like to be able to target\nthe end of a sequence so you don’t end up holding the bag? Or would\nyou rather continue to do what most novice\ntraders pretend not to do, which is to\nbuy highs and sell lows? In the 1930s,\nRalph Nelson Elliott discovered that stock\nmarkets traded in repetitive cycles that\nwere actually a reflection of the emotions\nof investors. By understanding Elliott’s\ncontributions depicting the psychological\nstructure of market behavior and combining\nit with other patterns and indicators,\nwe will be able to plan for the future\nand develop a framework for establishing\npositions before the market turns.

    In this article, we assume we have the\nfollowing basic knowledge of Elliott wave\ntheory, which is that markets move in impulsive five-wave sequences in the direction of trend and\ncorrect in one or more three-wave patterns in the opposite\ndirection before resuming the trend.

    THE “END OF THE TREND” CHECKLIST

    Several techniques are used to pinpoint the end of a trend. We\nwill present a checklist of six confirming methods, which\nwhen combined will impart the necessary confidence to plan\nthe trade and trade the plan. The checklist includes:

    1.) Channeling to target the end of a sequence\nThe channeling technique is a useful tool for projecting the\nend of a trend-defining five-wave sequence. Elliott noted that\ntrend moves are usually contained within parallel lines or channels. This channeling methodology is often used to\ndelineate exhaustion zones, after which we would expect to\nsee a trend reversal as long as the other confirmation signals\nare also present. It serves as an optimal timing guide, giving\nthe trader a competitive edge."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-13-8-14-forex-focus-determining-the-end-of-the-trend-by-jody-samuels-20.gif"",""height"":""265"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-13-8-14-forex-focus-determining-the-end-of-the-trend-by-jody-samuels-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-13-8-14-forex-focus-determining-the-end-of-the-trend-by-jody-samuels-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261leto1,d,"{""minimum-quantity"":""1"",""path"":""ch2f"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:2 (10-11): Letters to S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters to S&C by Technical Analysis, Inc.

    SHORT-PERIOD RSI

    Editor,

    Regarding the November 2007 S&C article\n“Does The RSI Give You An Edge?”\nby Larry Connors and Ashton Dorkins, I\nam wondering if the short period RSI was\ntested against the S&P 500 index or any\nother index or commodity. - GREG COSTEENS

    The article mentions they looked at more\nthan eight million trades the authors made\nfrom January 1, 1995, to December 31,\n2006. It doesn’t specifically mention they\nconducted the test on the S&P 500 or any\ncommodity. It’s likely the results will be\nsimilar. If you have access to the data, it\nwouldn’t be too difficult to apply their\nstrategy to any tradable.—Editor\nCarson City, NV"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-10-11-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-10-11-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-10-11-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261fofo1,d,"{""minimum-quantity"":""1"",""path"":""ch2f"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:2 (12-14): Forex Focus: Point & Figure For Forex by James Chen, CTA"",""caption-linebreaks"":""Forex Focus: Point & Figure For Forex by James Chen, CTA

    Here’s an age-old charting technique that you can use\neffectively in the foreign exchange markets.

    To trade using point & figure charts is to trade based on\npure price action. One of the best-kept secrets about this granddaddy of technical analysis charting methods lies in\nthe fact that it is ideally suited to analyzing and trading the\nforex market.

    THE BASICS

    Point & figure (P&F) charts originated in the 19th century as\nan innovative method for graphically plotting price action in\nthe financial markets. One of the unique aspects of P&F\ncharting is that generally, only the most important aspect of\ntechnical analysis — price — is recorded on the charts.\nUnlike the more widely used bar or candlestick charts, P&F\ncharts customarily exclude volume, time, and open/close\ndelineations. After all of this is left out, that which remains is\njust the purity of price action. With only price as the sole\nanalytical factor, P&F charts are uniquely capable of revealing\na clearer, less muddled representation of such vital\ntechnical analysis dynamics as trend, support/resistance, and\nbreakouts."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-12-14-forex-focus-point-figure-for-forex-by-james-chen-cta-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-12-14-forex-focus-point-figure-for-forex-by-james-chen-cta-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-12-14-forex-focus-point-figure-for-forex-by-james-chen-cta-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261trme,d,"{""minimum-quantity"":""1"",""path"":""ch2f"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:2 (16-22): Trading Medium-Term Divergences by Sylvain Vervoort"",""caption-linebreaks"":""Trading Medium-Term Divergences by Sylvain Vervoort

    Detect medium-term divergences by using the\nzero-lagging exponential moving average,\nsupport and resistance lines, and trendlines.

    When a stock price and an oscillator\nmove in the same direction it’s\nknown as a convergence. When\nprice and oscillator move in opposite directions, it’s known as a divergence. In\nlooking at the lows of the oscillator and comparing\nthem with the lows in price, we can define\nthree different situations (see Figure 1):

    ■ When the price and oscillator make higher\nor equal bottoms, they converge. Until there\nis no other indication, the most probable\nprice move is a continuation of the uptrend.

    ■ When the oscillator creates a higher bottom\nwhile the price makes a lower bottom,\nthey diverge. This is mostly found at\nthe end of a downtrend, indicating an\nuptrend reversal.

    ■ When the oscillator has a lower bottom\nwhile the price sets a higher bottom, they\ndiverge. This is mostly found in a price\nuptrend after a price correction, indicating\na continuation of the uptrend."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-16-22-trading-medium-term-divergences-by-sylvain-vervoort-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-16-22-trading-medium-term-divergences-by-sylvain-vervoort-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-16-22-trading-medium-term-divergences-by-sylvain-vervoort-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov262trwi,d,"{""minimum-quantity"":""1"",""path"":""ch2f"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:2 (24-28): Trading With The Directional Ratio by John “Jay” Norris"",""caption-linebreaks"":""Trading With The Directional Ratio by John “Jay” Norris

    Whether you trade long term, short term, or intermediate term,\nyou need to know the direction of the trend. Here’s a simple way\nto find out.

    If you are an active trader, or if you manage traders,\nyou probably already know the importance\nof differentiating between a “trend trade” and a\n“countertrend trade.” By using the highs and\nlows on the chart to determine overall direction, it should be a simple matter to determine a market’s current\nstance for a particular time period, be it 15 candles or 60.\nHowever, once you add up the long-, intermediate-, and\nshort-term trends on the daily, 240-minute, and 60-minute\ncharts, the moving parts start to blur.

    UP, DOWN, OR SIDEWAYS

    To help gauge the trend on the different time frames, I break\nit down into simple numbers. There are three things a market\ncan do: go up, go down, and go sideways; and there are three\ndifferent time frames to do it in: long term, intermediate term,\nand short term. That’s nine directional determinates, or a\ndirectional ratio, that when tabulated can help define trend\ntrades versus countertrend trades at a glance. Imagine how\nthis can help you in the decision-making process when\nscanning multiple markets on multiple time frames in search\nof familiar patterns and trade setups."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-24-28-trading-with-the-directional-ratio-by-john-jay-norris-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-24-28-trading-with-the-directional-ratio-by-john-jay-norris-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-24-28-trading-with-the-directional-ratio-by-john-jay-norris-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov263cant,d,"{""minimum-quantity"":""1"",""path"":""ch2f"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:2 (34-38): Can Technical Factors Gauge What Works In The Stock Market? by Mark Vakkur"",""caption-linebreaks"":""Can Technical Factors Gauge What Works In The Stock Market? by Mark Vakkur

    In the second part of this series\nwe look at the technical factors\nyou can use to gauge the\nmagnitude and direction of the\ntrends in the S&P 500.

    Using only month-tomonth,\nclose-to-close\nfigures, it is difficult\nto find any meaningful,\nconsistent information in the price performance of the Standard\n& Poor’s 500 itself by using\ntechnical analysis. This does not\nmean that technical analysis is\nuseless, just that when looking at\nthe monthly trend it is difficult to\nfind exploitable patterns.

    ARE DOWN YEARS\nFOLLOWED BY RISING ONES?

    The rate of return indicator is one\nof the oldest and most robust\ngauges of the magnitude and direction\nof an asset’s trend. Trendfollowers\nwill buy an asset whose\nrate of change is high and rising.\nSwing traders can use it as an\noscillator, helping to identify periods\nwhen the asset is oversold\n(very negative) or overbought\n(very positive)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-34-38-can-technical-factors-gauge-what-works-in-the-stock-market-by-mark-vakkur-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-34-38-can-technical-factors-gauge-what-works-in-the-stock-market-by-mark-vakkur-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-34-38-can-technical-factors-gauge-what-works-in-the-stock-market-by-mark-vakkur-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov263bupu,d,"{""minimum-quantity"":""1"",""path"":""ch2f"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:2 (39-45): Buying Puts And Calls With PROVEST by Jay Kappel"",""caption-linebreaks"":""Buying Puts And Calls With PROVEST by Jay Kappel

    The second article in this series discusses the details of the\nPROVEST strategy and how you can apply it to trade calls and/\nor puts.

    As discussed in the first part of this series, several\nkey factors should be considered in determining\nthe best option trading strategy to use at\nany given point in time for any given security.\nLikewise, these criteria can also be used to zero in on the best option or options to trade in executing a\nparticular strategy. Selecting the proper strategy involves\nknowing what to look for in terms of the following variables:

    • Probability

    • Volatility

    • Time left until option expiration

    • The “skew” of implied volatility across strike prices\nand/or expiration months

    • Timing of market price movement.

    The PROVEST option trading method criteria were developed\nto identify specific criteria in each of these key areas.\nThe primary factors and key considerations are summarized\nin Figure 1. In this installment we will look at a specific\ntrading strategy — buying naked calls or puts — and how to\nuse the PROVEST criteria to identify trading opportunities."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-39-45-buying-puts-and-calls-with-provest-by-jay-kappel-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-39-45-buying-puts-and-calls-with-provest-by-jay-kappel-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-39-45-buying-puts-and-calls-with-provest-by-jay-kappel-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265qula,d,"{""minimum-quantity"":""1"",""path"":""ch2f"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:2 (52): Quick-Scans: Larry Levin’s LIVN by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Quick-Scans: Larry Levin’s LIVN by Jayanthi Gopalakrishnan

    I have always found listening to stories\nfrom floor traders a real treat, mostly\nbecause I always felt that they are the\nones who know what really goes on in\nthe trading world. In this three-DVD set\nfrom Larry Levin’s Secrets of Traders,\na taping of one of his trading seminars,\nyou will hear from well-known names\nand faces in the industry such as Rick\nSantelli, Jack Bouroudjian, and of course\nLarry Levin himself. And from listening\nto insights from these successful\ntraders, you really do learn a great deal."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-52-quick-scans-larry-levin-s-livn-by-jayanthi-gopalakrishnan-21.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-52-quick-scans-larry-levin-s-livn-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-52-quick-scans-larry-levin-s-livn-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265exyo1,d,"{""minimum-quantity"":""1"",""path"":""ch2f"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:2 (53): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    SEASONALITY

    I know seasonality is an important factor\nin the commodities markets. Is there\nany way to play seasonality in the stock\nmarket? Can you give an example?

    Important seasonal patterns exist, not\njust in the commodities market, but in\nthe stock market as well. One seasonal\ntrend that you might have seen in the\ncommodities market is natural gas.\nPrices move higher before the winter\nbecause colder weather creates an increase\nin demand for the commodity.\nAs temperatures drop, consumers need\nmore heat and also more natural gas.

    In the stock market, there are seasonal\npatterns related to the weather\nand other events. For example, stock of\nnatural gas companies like Williams\nCos. (WMB) reacts to changes in natural\ngas prices. So there is sometimes a\nseasonal pattern in WMB and other commodity-\nrelated stocks, which is tied to\nthe price moves of the commodity."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-53-explore-your-options-by-tom-gentile-21.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-53-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-53-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265inwo,d,"{""minimum-quantity"":""1"",""path"":""ch2f"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:2 (54-59): Interview The World Of Commodities With Carley Garner by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Interview The World Of Commodities With Carley Garner by Jayanthi Gopalakrishnan

    Alaron broker and analyst Carley Garner has been involved with the markets for\nyears and is actively educating traders through web content and online seminars\nat CommodityTradingSchool.com and through the web newsletters she writes\n(The Dow/NASDAQ Report and The Bond Report). She has just cowritten with\npartner Paul Brittain Optionology 101, a guide to option trading, which is\nscheduled to be published later this year by FT Press.

    STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan conducted this\ninterview with Garner via email in early December 2007.

    Carley, how did you get interested\nin trading?

    As a finance and accounting set on being a stockbroker. After a\nlengthy internship at a brokerage firm,\nthough, I realized that selling high-load\nmutual funds wasn’t enough to keep me\ninterested. I needed to be doing something\nwith a little more action, but more\nimportant, I wanted to be in an arena in\nwhich I felt like my services could make\na difference. Even inexperienced investors\ncan put their money in a properly\ndiversified and age-adjusted mutual fund\nthat requires essentially no maintenance.\nIt seemed counterproductive to expect\ninvestors to pay high transaction costs\nin the form of loads for something that\nthey could do without my help.

    Although the risks are higher in the\nworld of futures and options, I thought\nI could offer more value to my clients.\nI’m the first to admit to clients that\nprofitable trades are not guaranteed;\neven the most experienced and educated\ntraders have failing moments. But\nif the investors are willing to accept the\nrisks involved, I’m more than happy to\nshow them how to increase their odds of\nsuccess.

    What are some milestones you’ve\nachieved along the way to get you to\nwhat you’re doing now?

    I can honestly say I’ve enjoyed every\nminute of my career. Most people don’t\nrealize how difficult it is to make a\nliving as a commodity broker. After\nwatching the movie Trading Places, I\nknow it’s hard to imagine that some\nbrokers could make more money flipping\nburgers, but it is true! For those\nwho are willing to put in the time and\neffort, as well as be honest, even if it\nmeans missing out on a potential client,\nthis industry can be very rewarding.\nmajor in college, I was"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-54-59-interview-the-world-of-commodities-with-carley-garner-by-jayanthi-gopalakrishnan-21.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-54-59-interview-the-world-of-commodities-with-carley-garner-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-54-59-interview-the-world-of-commodities-with-carley-garner-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266qaby,d,"{""minimum-quantity"":""1"",""path"":""ch2f"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:2 (60-61): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    MESQUITE RETREAT

    Hello, STOCKS & COMMODITIES readers!\nBright Trading recently held one of\nour retreats for our traders in Mesquite,\nNV. We had approximately 70 attendees,\nincluding some “non-Bright” traders,\nwho seemed to find the weekend\nboth educational and entertaining. Traders\nasking other traders questions is always\ninteresting and of great value to the\nwhole group, including the Bright family.\nI’m going to paraphrase some requests\nand questions, along with a variety\nof answers.

    My request is for some informal presentations\nfrom traders — just a few minutes\nfrom a few traders of varied amounts\nof experience telling their trading stories.\nNot just stories about their best or\nworst trades, but about the business of\ntrading. Bottom line, just how did you\ngrow your trading business? One example\ncomes to mind. Don, you said a\nwhile back that one trader had made\nseveral hundred thousand dollars doing\njust “opening-only” orders. I would\nlike to hear more about that.

    Without giving away any secrets,\nI’ll do my best to give two differing\nexamples of how our top traders are\nmaking so much on this strategy. One\nlongtime trader places “opening-only”\norders, with an auto-entry Excel\nworksheet, on hundreds of stocks and\nmultiple-pricing layers (limit orders,\nof course). He may get filled on 50 or\nmore stocks that have gapped up or\ndown more than his expected criteria,\nthus entering with a high probability of\nsuccess."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-60-61-q-a-by-don-bright-21.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-60-61-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-60-61-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266prre2,d,"{""minimum-quantity"":""1"",""path"":""ch2f"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:2 (62-63): Product Review: AbleTrend 7 by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Product Review: AbleTrend 7 by Jayanthi Gopalakrishnan

    Whenever you attend a trading\nseminar, workshop,\nor course, you always\nhear that “trading is hard work.” Well, it’s true. You really have\nto do your homework if you want to\nsucceed. I’ll have to admit that when I\ncame across AbleTrend 7, the most recent\nproduct of Ablesys Corp., I eyed it\nwith caution. It is a proprietary trading\nsystem that gives you very little room to\nmake any kind of changes to your trading\nsystem. It’s a fully automated trading\nsystem that takes all the guesswork out of trading. All you have to do is enter your\ntrades when the system signals you to do\nso. You also have the option to directly\nsend your orders through Interactive Brokers\nand FXCM. It can’t get much easier\nthan this.

    INSTALLATION AND SETUP

    Downloading and installing AbleTrend\n7 is simple. You need to be a registered\naccount holder to have access to the\nproduct. You could take advantage of\nthe 30-day trial, which is a relief, given\nthat the product is on the expensive side.\nYou need to have a datafeed to use\nAbleTrend 7. For this you have several\noptions. If all you need is an end of day\n(EOD) datafeed, you can use the AbleSys\nEOD data for free. For other data options\nyou can use AbleRT, AbleFeed, and\neSignal (EOD, DELAYED or RT). All\nthese do charge a fee. Once you are set\nup with a datafeed, you are ready to start\nusing AbleTrend 7."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-62-63-product-review-abletrend-7-by-jayanthi-gopalakrishnan-21.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-62-63-product-review-abletrend-7-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-62-63-product-review-abletrend-7-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266prre3,d,"{""minimum-quantity"":""1"",""path"":""ch2f"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:2 (64-66): Product Review: Sierra Chart by Dennis D. Peterson"",""caption-linebreaks"":""Product Review: Sierra Chart by Dennis D. Peterson

    A charting package for as low\nas $17 a month and no fee\nfor the datafeed?! Sound too\ngood to be true? Fortunately,\nit is the real deal for a few thousand subscribers of Sierra Chart.\nThe package interfaces with several\ndatafeeds, one of them being Interactive\nBrokers (IB). If you open an account\nwith IB, pay a $5,000 deposit, and at\nleast $30 in commissions per month, a\n$10 monthly fee is waived for a bundle\nthat includes Chicago Mercantile Exchange\n(CME) products such as emini\nand North American equities.

    There are other ways to skin the datafeed\ncat. You might look into brokerages that\nuse Transact Futures or Open E Cry,\nboth supported by Sierra Chart, to find\nother free datafeed opportunities.

    Sierra Chart started in 1996 as a oneperson\noperation. The developer saw a need to provide an\ninexpensive, easy-to-use software package\nto trade stocks and commodities.\nThe company has since expanded. It has\nthe usual features for a charting package\nand special wrinkles, making it a standout\n(besides its price)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-64-66-product-review-sierra-chart-by-dennis-d-peterson-21.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-64-66-product-review-sierra-chart-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-64-66-product-review-sierra-chart-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266hows,d,"{""minimum-quantity"":""1"",""path"":""ch2f"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:2 (68-71): How Secure Are Your Securities? by John A. Sarkett"",""caption-linebreaks"":""How Secure Are Your Securities? by John A. Sarkett

    How well protected are your stocks and options in\nyour brokerage account?

    Two classic Zen koans and one modern\nriddle you may never have considered: What\nis the sound of one hand clapping? Does a\ndog have Buddha nature? And how well protected\nare the stocks and options in your brokerage\naccount — not their value, which fluctuates, but\ntheir very existence? In peaceful financial times,\nthat last query rarely arises.

    These are not peaceful financial times. The\nsubprime shakeout has caused bank runs (Countrywide,\nNorthern Rock), toppled CEOs (Merrill Lynch,\nCitigroup), and devastated broker stock values.\nThe charts of Merrill Lynch (Figure 1), Bear Stearns (Figure 2), and E*Trade Financial (Figure 3) clearly\ndepict the picture. Worse, it may not be over. More\nsubprime loans will reset in the months ahead. The\nrisk to the global financial system may be in the\ntrillions of dollars.

    By getting involved in credit derivatives and\nmortgage loans, major financial firms such as Merrill\nLynch, Bear Stearns, Lehman Brothers, Citigroup,\nand E*Trade, among others, have put their shareholders\nat risk for billions. Even more chilling, they\nmay have also put in the same position their brokerage\ncustomers — that is, you."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-68-71-how-secure-are-your-securities-by-john-a-sarkett-21.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-68-71-how-secure-are-your-securities-by-john-a-sarkett-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-68-71-how-secure-are-your-securities-by-john-a-sarkett-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov267fufo,d,"{""minimum-quantity"":""1"",""path"":""ch2f"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:2 (72): Futures For You by Dan O’Neil"",""caption-linebreaks"":""Futures For You by Dan O’Neil

    WORKING THE SYSTEM

    Do you believe the claim that some\nsystem marketers use that their system\nworks across all time frames and all\ntypes of futures (emini indexes, grains,\nsofts, energies, and so forth)? Have you\never seen or heard anything that indicates\nthat this could be true?—Randy Glick

    Before we jump into the verity of\npublished trading results, let’s start by\ntaking a look at just what a trading\nsystem is. Trading systems — also\nknown as “black boxes” — use a set of\nrules or computer algorithms to decide\nwhen and what to buy or sell, with exit\nand entry criteria based on parameters\nthat have been validated by historical\ntesting on quantifiable data. The trading\ncriteria for a particular system can\ninclude all kinds of technical indicators,\nchart patterns, volume, open interest,\nand even fundamental factors."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-72-futures-for-you-by-dan-o-neil-21.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-72-futures-for-you-by-dan-o-neil-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-72-futures-for-you-by-dan-o-neil-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov267trti1,d,"{""minimum-quantity"":""1"",""path"":""ch2f"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:2 (79-89): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    Editor’s note: This month’s Traders’\nTips are based on Sylvain\nVervoort’s article in this issue, “Trading\nMedium-Term Divergences.”\nCode written for MetaStock is already\nprovided in the article’s\nsidebars. Code for other programs\nis presented here.

    Readers will find our Traders’ Tips section in its entirety\nat the STOCKS & COMMODITIES website at www.Traders.com\nin the Traders’ Tips area, from where the code can be copied\nand pasted into the appropriate program. In addition, the\ncode for each program is usually available at the respective\nsoftware company’s website. Thus, no retyping of code is\nrequired for Internet users.

    For subscribers, code found in Vervoort’s article can be\ncopied from our Subscriber Area at www.Traders.com.\nLogin is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-79-89-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-79-89-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-79-89-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov269bofo1,d,"{""minimum-quantity"":""1"",""path"":""ch2f"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:2 (98): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    • Stock Trader’s Almanac 2008

    • Commodity Trader’s Almanac 2008

    • Contrarian Ripple Trading

    • The Forex Trading\nCourse: A Self-Study\nGuide To Becoming A\nSuccessful Currency\nTrader

    • Invest Like A Shark

    • The Little Book That Makes You Rich

    • Millionaire Traders:\nHow Everyday\nPeople Are Beating\nWall Street At Its Own\nGame"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-98-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-98-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-2-98-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261leto2,d,"{""minimum-quantity"":""1"",""path"":""chapter3march"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:3 (10-11): Letters to S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters to S&C by Technical Analysis, Inc.

    METASTOCK CODE FOR\nTHE FRACTAL DIMENSION INDEX?

    Editor,\nI found Radha Panini’s\narticles, “From Nile To\nNYSE” (February 2007\nS&C) and “Trading Systems\nAnd Fractals” (March 2007 S&C), very interesting. At your\nwebsite, I see that it’s possible to get the\ncode for some software, but I could not\nfind code for MetaStock. Do you have\nany suggestions on where I can find\nMetaStock code for the fractal dimension\nindex (FDI)? - MATTHIAS FREY, Germany

    MetaStock has not sent us code for the\nfractal dimension index. However, there\nis a MetaStock user forum that you can\naccess through the Equis website at\nwww.MetaStock.com. I would recommend\nthat you ask at the forum if anyone\nhas developed MetaStock code for the\nFDI indicator.—Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-10-11-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-10-11-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-10-11-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261fofo2,d,"{""minimum-quantity"":""1"",""path"":""chapter3march"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:3 (12-15): Forex Focus: An MACD Trading System by Alexander Sabodin"",""caption-linebreaks"":""Forex Focus: An MACD Trading System by Alexander Sabodin

    This simple trading system was\napplied successfully to forex pairs\nusing the moving average\nconvergence/divergence. See if it’ll\nwork for you.

    Today, we see advertisements\nof different automatic trading systems at numerous websites\nand forums. If we took those ads\nseriously, all we would have to do\nis click the mouse and money\nwould pour into our pockets. Not\nonly that, such black boxes usually\ndon’t come cheap. Keeping all that\nin mind, let’s try to create our own\ntrading system. As long as you\ndon’t lay claim to the holy grail, a\ntrading system can help you make\nthat trade.

    THE MACD TRADING SYSTEM\nTo build our own trading system,\nwe will use the following indicators:

    1. Bollinger Bands: Period 20, deviations 2, shift 0,\napply to close.

    2. MACD: Fast exponential moving averages (EMA) 12,\nslow EMA26, apply to close.

    3. Stochastic oscillator: %K period 5, %D period 3,\nslowing 3, price field close/close."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-12-15-forex-focus-an-macd-trading-system-by-alexander-sabodin-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-12-15-forex-focus-an-macd-trading-system-by-alexander-sabodin-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-12-15-forex-focus-an-macd-trading-system-by-alexander-sabodin-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261mecy,d,"{""minimum-quantity"":""1"",""path"":""chapter3march"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:3 (16-22): Measuring Cycle Periods by John F. Ehlers"",""caption-linebreaks"":""Measuring Cycle Periods by John F. Ehlers

    Measuring cycle periods allows you to adjust your\nindicators so they adapt to current market conditions.\nHere’s how.

    IF you want to make your indicators and\nstrategies adaptive to current market conditions,\nyou must first measure the cycle\nperiods that are present in the data. Given that you know the dominant cycle, you can then use\nthat information to dynamically adjust your computations.\nFor example, you can set the observation period\nof the relative strength index (RSI) to be half the\ndominant cycle. I have previously described a practical\nway to use direct Fourier transform (DFT) to\nestimate the market spectrum. But a DFT is not the only\nway to estimate the market spectrum.

    USING BANDPASS FILTERS

    In this article I describe a way to use bandpass filters\nto make the spectral estimate. Bandpass filters are\nadvantageous in that the selectivity and the filter\ntransient response can be controlled. This is important\nbecause not all filters are good for trading, since filters induce lag in the output and therefore\ncause a delay in your making trading\ndecisions. In general, the more complicated\na filter, the more lag is induced. The\nsimple two-pole bandpass filter is nice\nbecause it provides no lag at the output for\na steady state input signal at the frequency\nto which the bandpass filter is tuned.

    First, let’s understand some basics about\nbandpass filters. The response of the filter\ncan be seen in Figure 1. This means that when equal amplitude signals at all relative frequencies\nare applied to the input of the filter, the filter\nrejects frequency components that are both higher\nand lower than the filter’s tuned frequency. The\nfrequency components at the output of the filter have\ntheir amplitudes shaped by the filter. The region\nwithin relative frequencies -0.5 to +0.5 is the passband\nof the bandpass filter because most of the\nenergy getting through the filter falls in this range."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-16-22-measuring-cycle-periods-by-john-f-ehlers-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-16-22-measuring-cycle-periods-by-john-f-ehlers-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-16-22-measuring-cycle-periods-by-john-f-ehlers-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov262bust,d,"{""minimum-quantity"":""1"",""path"":""chapter3march"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:3 (24-32) Buying Straddles by Jay Kaeppel"",""caption-linebreaks"":""Buying Straddles by Jay Kaeppel

    In this, the third article of the series, the strategy of buying a\nstraddle is discussed, which gives option traders an opportunity\nnot available to others.

    AS discussed in the first article in this series, there\nare several key factors to consider in determining\nthe best option trading strategy to use at any\ngiven point for a given security. Likewise,\nthese criteria can be used to zero in on the specific best option or options to trade in executing a particular\nstrategy. Selecting the proper strategy involves knowing\nwhat to look for in terms of the following variables:

    ■ Probability

    ■ Volatility

    ■ Time left until option expiration

    ■ The “skew” of implied volatility across strike\nprices and/or expiration months

    ■ Timing of market price movement.

    The PROVEST option trading method criteria were developed\nto identify specific criteria in each of these key areas.\nThe primary factors and key considerations are summarized\nin Figure 1.

    In this installment we will look at a specific trading\nstrategy — buying a long straddle — and how to use the\nPROVEST criteria to identify trading opportunities."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-24-32-buying-straddles-by-jay-kaeppel-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-24-32-buying-straddles-by-jay-kaeppel-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-24-32-buying-straddles-by-jay-kaeppel-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov263rure,d,"{""minimum-quantity"":""1"",""path"":""chapter3march"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:3 (38-39): The Russell Reconstitution: Plan For 2008 by Don Bright"",""caption-linebreaks"":""The Russell Reconstitution: Plan For 2008 by Don Bright

    Are there still profit-making opportunities in the Russell\n2000? Find out here.

    There has been a lot of discussion about the “Russell\nreconstitution” and whether there would still be a good\nprofit opportunity for professional traders. Some have\nopined the “edge is gone,” but I am here to say, “No, it isn’t.” I have hundreds of traders, many of whom made excellent\nmoney using various strategies, all focusing on this event.

    RECONSTITUTION

    First off, here’s a basic description of what we’re talking\nabout. Each stock market index is composed of individual stocks. The Dow Jones Industrial Average (DJIA) has only 30\nstocks, and the Standard & Poor’s 500 holds 500, obviously.\nThe Russell 2000 is made up of 2,000 small- to mediumcapitalization\ncompanies (1,001st through the 3,000th largest\ndomestic stocks as judged by market capitalization). The\nreconstitution is simply the replacement of certain stocks\nwith others. You have “adds” and “takeouts.” The most\nrecent replacement day was June 22, 2007.

    The reasoning behind the concern about making profits\nwas based on the fact that the stocks being swapped are\nknown well in advance of the actual event. This is not the case\nwith the S&P 500 (they use a closed approach). This knowledge\nleads to what is referred to as “front-running” — buying\nthe adds and shorting the takeouts ahead of the event. Bright Trading had traders who did, in fact, begin their trading\nweeks ahead of the June 22nd date. Our people tended to\nclose most positions ahead of June 22 profitably and then take\na clean slate for the actual event. Simply knowing the new\ncomposition of stocks ahead of time is not enough to guarantee\nprofits (“guarantee” is a tough word to use in this business\nanyway), but when combined with some market savvy,\naccess to enough capital (via professional capital-use capabilities),\nour traders did very well."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-38-39-the-russell-reconstitution-plan-for-2008-by-don-bright-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-38-39-the-russell-reconstitution-plan-for-2008-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-38-39-the-russell-reconstitution-plan-for-2008-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov264trby,d,"{""minimum-quantity"":""1"",""path"":""chapter3march"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:3 (46-47): Trading By Tape-Reading by Adam Wasserman"",""caption-linebreaks"":""Trading By Tape-Reading by Adam Wasserman

    The foundation of all trading systems, indicators, and chart\npatterns is the battle of the tape. If you master that, it can\nmake all the difference in your trading.

    Regarded as one of the first-ever successful\nstrategies for traders, tape-reading is trading in\nits purest form. Charts, technical indicators,\nred lights, and green lights work wonderfully\nwhen mastered, but all are products of the tape and don’t exist without it. By withstanding the test of time, tape-reading has proven to be the most consistent method of\npulling money out of the stock market for a trader.

    WHAT IS THE TAPE?

    To understand tape-reading, we must understand the fundamentals\nthat make up the New York Stock Exchange (NYSE).\nThe NYSE trades in a continuous auction format, one that is\ndriven higher by aggressive buyers or forced lower by aggressive\nsellers. The tape is made up of integral variables: the\nsymbol, last price, last trade size, net change, bid, ask, bid size,\nask size, high, low, and volume (Figure 1). From reading these,\na trader is privy to recognizing patterns that define the amount of stock to be purchased\nat a higher price and the\namount of stock to be\nsold at a lower price."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-46-47-trading-by-tape-reading-by-adam-wasserman-21.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-46-47-trading-by-tape-reading-by-adam-wasserman-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-46-47-trading-by-tape-reading-by-adam-wasserman-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov264inda,d,"{""minimum-quantity"":""1"",""path"":""chapter3march"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:3 (48-54): Interview: Daytrading With The StockBandit’s Jeff White by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Interview: Daytrading With The StockBandit’s Jeff White by Jayanthi Gopalakrishnan

    Jeff White, founder and chief technical analyst of TheStockBandit.com, started trading the\nmarkets in 1998 and has since gained extensive experience in both stocks and options. His\ntrading style has gradually evolved over the years, including, as he mentions in the interview,\nunderstanding the true usefulness of the exchange of ideas for an individual’s trading.

    STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan (JG) and Staff Writer Bruce\nFaber (BF) interviewed White via a conference call on January 7, 2008.

    JG: Jeff, how did you get interested in\ntrading?

    My wife and I put some savings into\nmutual funds in the summer of 1998.\nThat third quarter the market corrected\nand we lost money. So I decided that I\nwould rather learn how to do it myself\nand turn to individual stocks rather\nthan just mutual funds. That is when I\nbecame a trader.

    JG: How often did you trade starting\nout? How long did you hold onto your\npositions?

    Back then, I would hold onto things\none to two weeks at a time. We got into\na period not long after I started when\nthe market saw a lot of what turned out\nto be excessive momentum, with the\nNASDAQ virtually tripling in the next\nyear and a half. So it was a good time\nfor momentum trading. I found that I\nliked to grab stocks as they were starting\nto break out of patterns. Because I\nwas trading short term, I turned away\nfrom fundamental concepts and went\npurely into the technicals based on the\nprice action. As I saw resistance levels\nbeing broken, with demand increasing\nfor a stock, I saw that was breaking\nthrough ceilings, and that was how I\nwas basing my entries. I would take my\nentry and ride the move as long as I\ncould until it fizzled out. Then I would\nmove on to the next idea.

    JG: It sounds like it is extremely simple,\nbut we all know it’s not. First of all, you mentioned that you were looking for\nstocks that were breaking out of patterns.\nAre there any specific patterns\nyou like to look at?

    I look for classic chart patterns like\nbear and bull flags, wedge patterns,\ntriangles, and consolidation-type patterns\nlike rectangles or channels. Those\nare the ones I key in on. It is not that I’ve\nfound they work so much better than\nsome other method. What they do is\nkeep me disciplined. They make things\nblack & white for me as far as when to\nbe in and out of trades. That is what is\nmost important to me because I try to\napproach my trading with a survival\norientation. I want to preserve my capital\nfirst and foremost. Yet I put that\ncapital at risk in order to turn a profit."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-48-54-interview-daytrading-with-the-stockbandit-s-jeff-white-by-jayanthi-gopalakrishnan-21.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-48-54-interview-daytrading-with-the-stockbandit-s-jeff-white-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-48-54-interview-daytrading-with-the-stockbandit-s-jeff-white-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265qaby,d,"{""minimum-quantity"":""1"",""path"":""chapter3march"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:3 (55): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    EXITING TRADES

    I’ve been trading for about a year. I’ve\nstarted using a combination of gray\nboxes, which keeps me focused and disciplined.\nMy entries have been consistently\nprofitable and timed well, but my\nexits have not been because I always\nsell too early. My most profitable system\nhas been to pick the strongest 30\nstocks every day, and by strong I mean\nwhat doesn’t go down when the market\nis going down — my gray box then buys\nthem after 2:00 pm Eastern time on a\nmoving average convergence/divergence\n(MACD) crossover with a\nmidrange relative strength index (RSI).\nRight now, my exits have been when the\nMACD crosses back down, but it’s not\ngreat and I know there’s better. What do\nyou look at to exit long positions on\nstrong stocks? What’s the best way to\nuse stops? — Joseph Klar

    Your entry time is generally a good\none, after the lunch hour(s) in New York.\nI’m going to assume you’re daytrading\nand not keeping positions overnight."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-55-q-a-by-don-bright-21.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-55-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-55-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265prre,d,"{""minimum-quantity"":""1"",""path"":""chapter3march"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:3 (56-61): Product Review: eSignal 10 and Advanced GET Edition (Part 1)"",""caption-linebreaks"":""Product Review: eSignal 10 and Advanced GET Edition (Part 1)

    New technology, new trading\nvehicles, and new trading\nmethods have given rise to\never more trading choices and opportunities. Long gone are the\ndays when delayed quotes, frequent calls to the broker, and end-of-day data\nwere sufficient to monitor trades or\nmake trading decisions. The rapid\nchange and high volatility that characterize\ntoday’s markets require access\nto news, data, and research in the blink\nof an Internet connection.

    For years, eSignal has supplied the\ntools and services necessary to keep\nup with, and often ahead of, the demands\nof the trading community. A\nwell-known division of parent company\nInteractive Data Corp., eSignal\nprovides a broad-based real-time quote\nand charting program for stock, commodity,\nforeign exchange, and mutual\nfund traders."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-56-61-product-review-esignal-10-and-advanced-get-edition-part-1-21.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-56-61-product-review-esignal-10-and-advanced-get-edition-part-1-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-56-61-product-review-esignal-10-and-advanced-get-edition-part-1-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266exyo,d,"{""minimum-quantity"":""1"",""path"":""chapter3march"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:3 (62): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    SIZING UP A STRADDLE BUY

    I was looking at a particular stock for a\npossible straddle. The company is expected\nto release earnings in 10 days.\nSuppose I intend to purchase options\nthat have 50 days left until expiration.\nAccording to my calculations, the\nstraddle can be initiated for a debit of\n$400 ($2.00 for the put and $2.00 for\nthe call), which is also my maximum\nrisk. If I intend to hold this trade for\nonly 10 days, would 5% of my account\nsize be a prudent amount to risk? For\nexample, if my account size is $10,000,\nI can only do one contract straddle if I\nwas holding the trade close to expiry,\nbut I can do more if I was only holding\nit for only 10 days. Am I right? The risk\nis less if my time frame is 10 days\ninstead of 50?

    Your question brings up some important\nfactors that should be considered\nwhen evaluating a potential straddle: time\ndecay, implied volatility, and maximum\nrisk. The straddle, as you know, includes\na put and a call on the same stock. Both\nputs and calls have the same strike price\nand the same expiration months. The\nidea is for the stock to make a big move\nhigher or lower. If it rallies, the call can\nbegin to yield profits if it increases\nenough in value (in this case, $4.00 or\nmore). If the stock tanks, the puts increase\nin value and can provide the profits.\nA big move in the near future is the\nbest-case scenario."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-62-explore-your-options-by-tom-gentile-21.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-62-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-62-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266qusc,d,"{""minimum-quantity"":""1"",""path"":""chapter3march"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:3 (63): Quick Scan Daedalus Add On 2.0 by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Quick Scan Daedalus Add On 2.0 by Jayanthi Gopalakrishnan

    We knew you were waiting for it:\nDaedalus, the character in Greek mythology\nwho was known for his soaring creativity,\nand technical analysis — together\nat last! And for good reason. When you\ncombine charting and the legendary abilities\nof Daedalus, you can take technical\nanalysis to new levels, which is what\nGiorgos Siligardos, creator of the Daedalus\nadd-on (and contributor to STOCKS & COMMODITIES),\nattempts to do.

    Daedalus is a visual charting package\nthat helps you identify the behavior of\nthe market. It is not a trading system but\na set of tools that you can use to analyze\nmarket behavior to better time your entries\nand exits."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-63-quick-scan-daedalus-add-on-2-0-by-jayanthi-gopalakrishnan-21.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-63-quick-scan-daedalus-add-on-2-0-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-63-quick-scan-daedalus-add-on-2-0-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266prre4,d,"{""minimum-quantity"":""1"",""path"":""chapter3march"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:3 (64-67): Product Review: ChartFilter by Sean Moore"",""caption-linebreaks"":""Product Review: ChartFilter by Sean Moore

    ChartFilter.com provides\ncharting software and stock\nscreening at an attractive\nprice — free! Last reviewed in STOCKS & COMMODITIES in the June\n2005 issue, ChartFilter.com hasn’t\nchanged all that much, with the exception\nof upgrades and the added support\nof the Macintosh and Linux operating\nsystems. The biggest change can be\nfound in the pricing structure. Instead of\nthe monthly fee that was the norm previously,\nthe software is now free to use\nafter an email registration.

    After registering with your name,\nusername, and email address, a password\nis sent to your email account. Log\nin with your password to get to the main\nservices window (Figure 1).

    ChartFilter.com features two main\nproducts, StockTools and StockScreener.\nStockTools is a Java-based charting program,\nwhile StockScreener is a collection\nof tools for finding stocks based on\ntechnical and fundamental indicators.\nIn addition, from the ChartFilter.com\nhomepage you can access additional\nstock screeners and a wealth of technical\nanalysis educational resources."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-64-67-product-review-chartfilter-by-sean-moore-21.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-64-67-product-review-chartfilter-by-sean-moore-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-64-67-product-review-chartfilter-by-sean-moore-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266fufo1,d,"{""minimum-quantity"":""1"",""path"":""chapter3march"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:3 (68): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    WHY TRADE FUTURES?

    Many beginning commodity traders are\nmigrants from the world of stock trading,\nbut before making the transition\nthey often ask why they should trade\nfutures. The answer is simple, but the\ndecision to move forward isn’t.

    No interest on leverage: The futures

    market is a convenient venue for speculators\nin that the leverage is high and the\nability to buy or sell in any order is\nabundant. Unlike equity traders who\nmust borrow shares of stock from their\nbrokerage firm before short-selling and\nare then subject to interest charges,\nfutures traders can sell something they\nhave never owned and buy it back at\nsome point in the future — hopefully at\na lower price."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-68-futures-for-you-by-carley-garner-21.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-68-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-68-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266trti,d,"{""minimum-quantity"":""1"",""path"":""chapter3march"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:3 (69-84): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    Editor’s note: Most of this\nmonth’s Traders’ Tips are based\non John Ehlers’ article in this\nissue, “Measuring Cycle Periods.”\nCode written in Easy-\nLanguage for TradeStation is\nalready provided by Ehlers in\nthe article’s sidebars. Additional\ncode is presented here.

    Other tips presented in this section are based on articles\nof the contributors’ choosing.

    Readers will find our Traders’ Tips section in its entirety\nat the STOCKS & COMMODITIES website at www.Traders.com\nin the Traders’ Tips area, from where the code can be copied\nand pasted into the appropriate program. In addition, the\ncode for each program is usually available at the respective\nsoftware company’s website. Thus, no retyping of code is\nrequired for Internet users.

    For subscribers, code found in John Ehlers’ article can be\ncopied and pasted into TradeStation from the Subscriber\nArea at www.Traders.com. Login is required using your\nsubscriber number (found on your magazine mailing label)\nand last name."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-69-84-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-69-84-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-69-84-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov269bofo2,d,"{""minimum-quantity"":""1"",""path"":""chapter3march"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:3 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    • 2008 Edition: The Neatest Little Guide To Stock Market\nInvesting

    • Beat The Market The Easy Way!

    • Day Trading For Dummies

    • Surviving The Storm

    • Timing Techniques For Commodity Futures Markets

    • Trade What You See: How To Profit From Pattern Recognition

    • The Ultimate Dividend Playbook"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-92-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-3-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261leto3,d,"{""minimum-quantity"":""1"",""path"":""ch4a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:4 (10-11): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    ICHIMOKU CHARTS

    Editor,

    I am interested in using ichimoku charts.\nCan you tell me of any charting services\nthat provide access to this type of chart?

    KIRBY OWEN Yulee, FL

    A check of our Traders’ Resource database\nof products and services at our\nwebsite (http://technical.traders.com/\nProducts/searchinfo.asp) for software\nthat lists ichimoku charts as a feature\ncomes up with PatternExplorer for\nAmiBroker. You may wish to give that a\nlook at www.PatternExplorer.com.\nIn our September 2007 issue, we published\nan article by Nicole Elliott titled\n“Ichimoku Kinko Hyo Charts.” In that\narticle, she used Reuters Graphics Professional\nto plot ichimoku charts. In our\nOctober 2000 issue, we published an\narticle by Ken Muranaka titled “Ichimoku\nCharts.” In that same issue, our Traders’\nTips section covered ichimoku charts."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-10-11-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""460"",""width"":""349""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-10-11-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-10-11-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261fofo3,d,"{""minimum-quantity"":""1"",""path"":""ch4a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:4 (12-17): Forex Focus: Making Sense Of Currency Movements by Grace Cheng"",""caption-linebreaks"":""Forex Focus: Making Sense Of Currency Movements by Grace Cheng

    With currency movements so randomized,\nhow could you possibly know\nwhen to enter and exit trades?

    One of the most frequently asked\nquestions among forex traders is certainly this: What on earth is [any\ncurrency pair] doing? This question\ntends to come up especially when you\nhave open positions in the forex market.\nThe nonstop fluctuations of a currency\npair’s exchange rate may seem\ntotally random. Some traders will question\nif it is possible to even trade accurately\nin such a random market.

    Making sense of currency price\nmovements is not transgenic science.\nOnce you know the core behavior of\ncurrencies, you will find it easier to\nunderstand their movements and exploit\nthem for profitable trading opportunities.

    FUNDAMENTAL BEHAVIOR OF CURRENCY PRICES

    Currency pairs either move in a trend or within a range. This\nconcept is so simple and yet so revealing that I have to say it\nagain. Currency pairs either move in a trend or within a\nrange. Once you digest this fact, you will come to the\nrealization that currency price behavior can be understood to\na large extent and exploited to your advantage."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-12-17-forex-focus-making-sense-of-currency-movements-by-grace-cheng-21.gif"",""height"":""248"",""width"":""188""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-12-17-forex-focus-making-sense-of-currency-movements-by-grace-cheng-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-12-17-forex-focus-making-sense-of-currency-movements-by-grace-cheng-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261didd,d,"{""minimum-quantity"":""1"",""path"":""ch4a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:4 (19-24): Did Dow Theory Fail? by Tim W. Wood, CPA"",""caption-linebreaks"":""Did Dow Theory Fail? by Tim W. Wood, CPA

    Here’s a look at the chain of events that have\ntaken place since 2002 and what we can learn\nfrom them.

    AS the Dow Jones industrials topped out in\n2000 and plunged nearly 38% into the 2002 low, every indication, according to Dow theory,\nwas that an extended secular bear market had begun.\nIn addition, because of Dow theory phasing along\nwith the normal bull and bear market relationships,\nindications were that this was the rally separating\nphase I from phase II of a much longer-term bear\nmarket. So what went wrong? I will examine the\nchain of events that have transpired since the 2002\nlow and in doing so look at where we are and what we\nhave learned.

    BASIC DOW

    Let’s begin with a basic and nonsubjective principle\nof Dow theory. According to Dow theory, confirmation\nof a primary uptrend occurs when both averages\nbetter their previous “secondary high point.” At the\nopposite end of the spectrum, confirmation of a\nprimary downtrend occurs when both averages fall\nbelow their previous “secondary low point.”

    When I say “both” averages I’m talking in Dow\ntheory terms, and this refers to the industrials and the\ntransports only. The utilities are not and have never\nbeen a part of Dow theory. In fact, the utilities did not\neven come into existence until 1929, some 33 years\nafter Charles Henry Dow developed the industrials\nand what was at the time known as the “rails,” what\nlater became known as the transports."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-19-24-did-dow-theory-fail-by-tim-w-wood-cpa-21.gif"",""height"":""248"",""width"":""188""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-19-24-did-dow-theory-fail-by-tim-w-wood-cpa-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-19-24-did-dow-theory-fail-by-tim-w-wood-cpa-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov262qaby,d,"{""minimum-quantity"":""1"",""path"":""ch4a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:4 (25): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    NOT SUPER-FANCY

    Maybe Don or somebody else can tell\nme how to calculate S&P futures. I\nremember back in the early 1990s, one\nguy at the quote terminal would calculate\nit by having a Standard & Poor’s\n500 call and put option quote with the\nS&P 500 indicator. Somehow, you\nwould subtract the price difference of\none or both contracts and come up with\na number (if it was less than 10, the\nmarket was discount, and if it was\ngreater than 10, it was at premium) that\nwould indicate an imminent sell or buy.\nIt worked very well. Not only that, I\nwant to get a real-time tick.

    I used to have this on my DBC/\nQuoTrek machine in the early to mid-\n1990s and it was great buy/sell indicator\nwhen it went -900 or +600.

    I’m not super-fancy and don’t have\nthe systems most of you guys have. If\nyou know how I can get a real-time tick,\nsend me a holler. Thanks. — dsq"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-25-q-a-by-don-bright-21.gif"",""height"":""248"",""width"":""188""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-25-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-25-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov262trpr,d,"{""minimum-quantity"":""1"",""path"":""ch4a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:4 (26-31): True Price Value by Daryl Guppy and Chen Jing"",""caption-linebreaks"":""True Price Value by Daryl Guppy and Chen Jing

    What is more important in determining market behavior and\nmarket pricing, fair value based on fundamentals or the\nmarket value created by psychological trading behavior?

    The classic economic and market models rest on\nfair value and describe pricing activity in the\nmarket as subject to “irrational exuberance.” An\nanalysis of the China and Hong Kong markets with a parallel listing of China-based companies suggest that\npsychological trading behavior has a much greater role to\nplay in correct market pricing. The study suggests that the\nmarket price is the rational and valid price and acknowledges\nan emotional component in pricing. This confirms the role\nthat technical analysis plays in understanding market behavior\nand making sound trading and investment decisions.

    The variety and difference in trend behavior in these parallel\nlisted stocks challenge many assumptions about the relationship\nbetween price, value, fair pricing, and the extent of the role\nof emotional behavior in setting enduring price relationships.

    FUNDAMENTAL OR TECHNICAL?

    Many traders believe financial markets are a fabrication\nwhere the price of a traded stock is driven primarily by the\nemotions and behavior of participants. These traders make\nprofits by understanding the psychology of the market and\nusing charting and technical analysis methods to identify\npoints of trend change or trend continuation.

    In comparison, many investors believe the market is about\nfundamental value based on the real business and performance\nof the company. When the traded price moves above\nor below this true value, the investors lament the distortions\nintroduced by market emotions and overreactions. They view the market as rational or irrational, forgetting that even the\nmost excited person believes he is making a rational decision\nto buy. Their investment technique often rests on locating\ncompanies trading below their true value on the assumption\nthat the market price will eventually lift to match and reflect\nthe true value."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-26-31-true-price-value-by-daryl-guppy-and-chen-jing-21.gif"",""height"":""248"",""width"":""188""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-26-31-true-price-value-by-daryl-guppy-and-chen-jing-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-26-31-true-price-value-by-daryl-guppy-and-chen-jing-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov263bupu1,d,"{""minimum-quantity"":""1"",""path"":""ch4a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:4 (32-38) Bull Put Spreads by Jay Kaeppel"",""caption-linebreaks"":""Bull Put Spreads by Jay Kaeppel

    In part 4 of this series, you’ll find\nout more about the bull put spread\nstrategy.

    AS discussed in the first\narticle in this series,\nseveral key factors\nshould be considered in determining the best option trading\nstrategy to use at any given time\nfor a given security. In this installment\nwe will look at a specific\ntrading strategy — the bull put\nspread — and how to use the\nPROVEST criteria to identify trading\nopportunities.

    STRATEGY:\nBULL PUT SPREADS

    As I have stated in the past, one of\nthe most attractive features about\ntrading options is the ability to create\npositions that you cannot create\nby just trading a stock or a futures\ncontract. If you trade stocks or futures\ndirectly, you essentially have\nthree choices: You can buy long, sell\nshort, or go flat. If you buy, you then\nneed that security to go up in price in\norder to profit. If you sell short, you\nneed that security to go down in\nprice in order to profit. And if you\nare flat, you hold no position at all\nand cannot make or lose any money.

    By using options you have many\nother choices. In the March 2008\nissue of STOCKS & COMMODITIES,\nI wrote about buying a straddle —\nsimultaneously buying a call and a\nput on the same underlying security.\nThat strategy offers unlimited\nprofit potential if the underlying\nsecurity makes a meaningful move\nin either direction. This month, we will look at another\nstrategy that can only be implemented through the use of\noptions. This strategy is referred to as a credit spread,\nbecause the trader actually takes in money — referred to as a\ncredit — at the time the trade is entered. This strategy is often\nreferred to as a bull put spread. (For the record, there is an inverse strategy known as a bear call spread. For our purposes\nhere, we will focus on the bull put spread. However, a\ntrader can simply use the inverse rules and logic described in\nthis article to trade the bear call spread.)"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-32-38-bull-put-spreads-by-jay-kaeppel-21.gif"",""height"":""248"",""width"":""188""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-32-38-bull-put-spreads-by-jay-kaeppel-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-32-38-bull-put-spreads-by-jay-kaeppel-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov264rsib,d,"{""minimum-quantity"":""1"",""path"":""ch4a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:4 (44-47): RSI Bands by Francois Bertrand"",""caption-linebreaks"":""RSI Bands by Francois Bertrand

    In this twist on the traditional relative strength index, find out\nhow it can be used as a visual analytical tool and with other\ntechnical indicators.

    The relative strength index (RSI) is a popular\nindicator to evaluate if a stock is overbought\nor oversold. However, its values range from\nzero to 100 and must be evaluated in a separate\nwindow, making its correlation with price\nand trends more difficult than other indicators\nthat are overlaid directly on price charts such as the\nBollinger bands.

    In this article I present a way of calculating RSI bands,\nwhich trace RSI overbought/oversold levels directly over\nprice data, making this indicator more intuitive to use and\nopening up new analysis and signaling possibilities.

    CALCULATING RSI BANDS

    RSI bands are calculated by answering the question, “What\nprice should the stock have to reach today to be considered overbought/oversold, given yesterday’s RSI?”

    Each band corresponds to a certain level. Typically, 70 and\n30 have been used as overbought/oversold levels, so we\nwould draw one band for 70 and one band for 30. Because\ncalculations are based on the original RSI calculations, bands\ncan be drawn for any level and any period of time. If given\nextreme values (such as a very short period), however, the\nbands get very volatile. The addition of an optional clamping\nalgorithm solves that problem.

    The code used to calculate RSI bands can be found in the\nsidebar “AmiBroker code for calculating RSI bands.”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-44-47-rsi-bands-by-francois-bertrand-21.gif"",""height"":""248"",""width"":""188""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-44-47-rsi-bands-by-francois-bertrand-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-44-47-rsi-bands-by-francois-bertrand-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265inpa,d,"{""minimum-quantity"":""1"",""path"":""ch4a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:4 (52-55): Interview: Paul Hickey & Justin Walters of Bespoke by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Interview: Paul Hickey & Justin Walters of Bespoke by Jayanthi Gopalakrishnan

    It’s a classic situation: Young bucks learn all they can from the\nseasoned veteran, and once they have, it’s time for them to\nmove on, to put their own stamp on the horizon. It’s been true\nall throughout time, and in this case, it’s Wall Street instead\nof the Wild West. Paul Hickey and Justin Walters spent time\nat Birinyi Associates learning and absorbing all they could\nfrom technician Laszlo Birinyi before going out on their own,\nsetting up Bespoke Investment Group in May 2007.

    Paul Hickey’s professional experience in finance runs\nthe spectrum of equities, fixed income, and structured\nproducts. He served over six years as a research analyst for\nBirinyi, during which time he conceived and implemented\nin-depth and original research projects on domestic and\nglobal financial markets for institutional clients. His reports\nand findings have been extensively featured in publications\nincluding The Wall Street Journal, The New York\nTimes, The Financial Times, Barron’s, and USA Today.\nHickey frequently appears on CNBC and Bloomberg TV.

    Justin Walters was a research analyst and trader at\nBirinyi Associates, and during his four-year tenure there, he\ndeveloped numerous equity trading strategies based on\nproprietary fundamental and technical models that he created. His work on the underlying intraday and long-term price\nmoves of equities and indexes has been featured in multiple\npublications and articles, and he has made appearances on CNBC\nand Bloomberg TV. Prior to his departure from Birinyi, he also\nheaded the firm´s subscription level research product.

    STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan\ninterviewed them via email on February 11, 2008.

    Paul and Justin, tell me about\nyour backgrounds.

    Paul Hickey: I knew I kets since I was eight and my school\nwent on a class trip to the New York\nStock Exchange. The energy was addictive,\nand from then on I was into stocks.\nAfter graduating from college, I was\nhired in spring 1997 by Smith Barney\nfor their emerging market structured\nproducts group. I started at Birinyi Associates\nin summer 2000 where I worked\nin equity research through April 2007.\nIn May 2007, Justin and I left to form\nBespoke Investment Group.

    Justin Walters: I’ve been interested\nin the markets since I was very young,\ntoo. My father has been an advisor for\nMorgan Stanley for close to 30 years,\nand one of the first birthday gifts I can\nremember receiving from him was a\nstock certificate for 10 shares of Boston Celtics Limited Partnership. Collecting\nand trading baseball cards when I was\nsix or seven was the start of my investment\ncareer. I tried to be the “boy\nplunger” of my block as far as card\ncollecting went. Since then I’ve been\ninto trading and dealmaking.

    What led to your decision to start Bespoke?

    Working at Birinyi Associates was an\ninvaluable experience. We both learned\nmore about the markets there than we\ncould have possibly learned anywhere\nelse. One of the beauties about working\nthere was that we didn’t just learn from\nLaszlo [Birinyi], he encouraged us and\ngave us latitude to pursue and develop\nour own interests. We decided to make\nthe transition and start our own firm\nbecause we’ve both always had entrepreneurial\nspirits. One of the great things\nabout working in the financial markets is\nwanted to work in the marthat you always know exactly where you\nstand. It’s similar when you are running\nyour own business.

    I’m sure you learned a lot at Birinyi.\nWhat did you learn there to help you\nbecome good traders?

    One theme we’ve kept with us from\nour time there is to always question the\nsource of any research or advice, and ask\nas many questions as possible about the\nagenda or bias of the writer. Currently,\nWall Street strategists are relatively bullish\nin their outlooks, but they are always\nbullish. The job of the firms that sign\ntheir paychecks is to sell stocks. Similarly,\nthe rating agencies are under a lot\nof scrutiny because they still have AAA\nratings on the monoline insurers, but\nanybody who’s paid attention knows\nabout the inherent conflicts of interest\nwith the current system. The ratings agencies\nare paid by the companies they cover."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-52-55-interview-paul-hickey-justin-walters-of-bespoke-by-jayanthi-gopalakrishnan-21.gif"",""height"":""248"",""width"":""188""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-52-55-interview-paul-hickey-justin-walters-of-bespoke-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-52-55-interview-paul-hickey-justin-walters-of-bespoke-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265mi10,d,"{""minimum-quantity"":""1"",""path"":""ch4a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:4 (56-57): Missing The 10 Best Days by Richard Ahrens"",""caption-linebreaks"":""Missing The 10 Best Days by Richard Ahrens

    Would missing the 10 best days in the last 20 years have a\nnegative impact on your portfolio?

    One of the standard arguments against attempting to\ntime the market says that if you missed the 10 best\ndays in the last 20 years, the long-term value of your\nportfolio would be significantly less than if you had\njust stayed the course. Using price data from the Standard & Poor’s 500, I decided to find out if this argument\nwas really true. Rather than limiting the search to just the 10\nbiggest one-day gains in the last 10 or 20 years, I tracked down\nthe 20 biggest gains in the last 50 years (Figure 1).

    HERE’S WHAT I FOUND

    The largest one-day gain in the last 50 years was a huge 9.1%\nleap. The day before that was remarkable too. It was the\nfourth-largest one-day move, causing the market to jump\n5.3%. In just two days the market blazed upward beyond\n14%. Those two days were Tuesday and Wednesday, October\n20 and 21, 1987. But in order to be in the market to capture\nthat windfall, the odds were high that you were also in the\nmarket on October 19, when the market dropped more than\n20% in one day.

    The second-biggest one-day jump was a tidy 5.7% gain on\nJuly 24, 2002. This day was also surrounded by other big\ngainers: the third biggest, July 29, 5.4%; the 20th biggest,\nAugust 14, 4%; and the 12th biggest, October 15, 4.7%. In a matter of a few months, those four days alone carried the\nmarket forward nearly 20%. Of course, it should be noted that\nat the time, the market was trying to recover from a disastrous\n45% drop from the market peak in August 2000."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-56-57-missing-the-10-best-days-by-richard-ahrens-21.gif"",""height"":""248"",""width"":""188""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-56-57-missing-the-10-best-days-by-richard-ahrens-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-56-57-missing-the-10-best-days-by-richard-ahrens-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265prre1,d,"{""minimum-quantity"":""1"",""path"":""ch4a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:4 (58-64): Product Review: eSignal 10 & Advanced Get Edition (pt 2) by Barbara Star, PhD"",""caption-linebreaks"":""Product Review: eSignal 10 & Advanced Get Edition (pt 2) by Barbara Star, PhD

    eSignal is a leading provider\nof real-time quotes, charting,\nand information for the\ntrading community. Part 1\nof this review dealt with the features available to traders who subscribe\nto eSignal version 10. That version\noffers a platform that gives traders\naccess to a full range of tools and services,\nincluding real-time and end-ofday\nquotes for stocks, commodities,\nmutual funds, options, and forex prices.\nIt also incorporates charts, indicators,\nnews, research, scanners, alerts,\nbacktesting capabilities, custom study\ncreation, and integrated trading with\nseveral direct-access brokerages. Some\nof those features can be seen in the\ncustomized workspace in Figure 1.

    For many traders the basic platform\nfits the bill for their trading needs. But\nfor traders who want to kick it up a\nnotch with indicators and strategies not\navailable elsewhere, eSignal also offers\nan Advanced GET edition. Advanced\nGET contains all the features of eSignal\n10, but unlike the basic platform that can\nbe leased on a monthly or annual basis,\nthe Advanced GET edition is only available by purchasing the software.\nAs with the standard\nversion 10, data and exchange\nfees are extra.

    The “GET” in Advanced\nGET stands for “Gann and\nElliott Trader.” The program\ncontains proprietary tools\nbased on Gann, Elliott, and Fibonacci calculations that may be used\non any price chart and in any time frame.\nWith such broad applicability, it is equally\nappropriate for use by mutual fund traders\nas by currency traders and by intraday\ntraders as well as swing traders and longterm\ninvestors. The package includes\ntwo other components — the Advanced\nGET scanner and the dashboard — both\nof which are designed to be used in\nconjunction with Advanced GET tools\nand strategies."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-58-64-product-review-esignal-10-advanced-get-edition-pt-2-by-barbara-star-phd-21.gif"",""height"":""248"",""width"":""188""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-58-64-product-review-esignal-10-advanced-get-edition-pt-2-by-barbara-star-phd-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-58-64-product-review-esignal-10-advanced-get-edition-pt-2-by-barbara-star-phd-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266exyo1,d,"{""minimum-quantity"":""1"",""path"":""ch4a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:4 (65): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    THE COLLAR VS. THE BULL CALL SPREAD

    I know that owning shares of stock and\na put option are equivalent to simply\nholding a call option. If so, then the\ncollar should represent the equivalent\nof the bull call spread. Since collars\nrequire so much more capital, why do\nmany investors prefer the collar over\nthe bull call spread? Wouldn’t it be\nbetter to use a bull call spread and then\nget the interest from a money market\naccount?

    Great question. You are absolutely\ncorrect that buying shares and a put is\nthe synthetic equivalent of owning a\nlong call. If you buy 100 shares of stock\nand one put option, the risk and reward\nfrom the position is going to be the\nsame as buying one call option. Both\nwill feel the same impact from time\ndecay, both have limited risk and limited\nreward, and both will generate profits\nfrom a move higher in the stock\nprice."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-65-explore-your-options-by-tom-gentile-21.gif"",""height"":""248"",""width"":""188""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-65-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-65-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266qust,d,"{""minimum-quantity"":""1"",""path"":""ch4a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:4 (66): Quick-Scan: Stockreflex by Dennis D. Peterson"",""caption-linebreaks"":""Quick-Scan: Stockreflex by Dennis D. Peterson

    StockReflex is a simple program that\nhelps you refine your trading skills. It\nreplays end-of-day data using data from Yahoo! Finance, which means the\ndatafeed is free. Your cost is $99 and\nthat’s it. The creator of this program\nwanted to improve his visual trading\nskills and wrote this software to that\nend. I asked him about Yahoo! Finance\nchanging its API or format and he said\nthat his servers would catch changes.

    Presentation of the data is straightforward\n(Figure 1) with OHLC price\nbars above and volume below. The developer\nis working on displaying candlestick\ncharts. The only indicators available\nare two moving averages and the\nonly drawing tool is a straight line."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-66-quick-scan-stockreflex-by-dennis-d-peterson-21.gif"",""height"":""248"",""width"":""188""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-66-quick-scan-stockreflex-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-66-quick-scan-stockreflex-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266fufo2,d,"{""minimum-quantity"":""1"",""path"":""ch4a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:4 (67): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    OPTIONS OR FUTURES?

    Should I be trading commodity options\nor commodity futures?

    This is a difficult question to answer\nbecause it is a decision that traders must\nmake based on their tolerance for risk,\ntheir personality, and trading style. However,\nit is my opinion that in general,\noption trading is the optimal choice.

    I am not referring to long option–only\nstrategies, although sometimes they are\nappropriate. Instead, I believe that option\nselling or option spread trades that\ninvolve both long and short options are\npreferential. We all agree that the key to\nsuccessful trading is putting probabilities\nin your favor. Going against the\ngrain or taking long shots may pay out at\ntimes, but it isn’t likely to be a viable\nlong-term approach."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-67-futures-for-you-by-carley-garner-21.gif"",""height"":""248"",""width"":""188""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-67-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-67-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov267quib,d,"{""minimum-quantity"":""1"",""path"":""ch4a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:4 (70-71): Quick-Scans: IB RiskNavigator by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Quick-Scans: IB RiskNavigator by Jayanthi Gopalakrishnan

    Whether you are a short-term or longterm\ntrader or an investor, risk plays a\ncritical role in the management of your\nassets. Your objective is to minimize\nyour risks and maximize your rewards.\nBut often this concept is not given the\nemphasis it needs since it’s not easy to\nquantify, especially if you trade options\nor futures. Fortunately, those traders\nwho have an account with Interactive\nBrokers get to enjoy the benefits of the\nnew addition to IB’s repertoire of products\nand services, Risk Navigator. IB\nRisk Navigator has some advanced risk\nmanagement features that make it a\ngreat tool for options and futures traders.\nKeep in mind that the data is realtime\nand gets refreshed every 10 seconds\nor whenever you make any changes\nto your positions.

    FEATURES

    Risk Navigator is a program that helps\nyou evaluate your risks in an easy-toread\nformat. It does this by creating\nvarious reports that display different\nrisk metrics. These include profit &\nloss, risk exposure, value at risk (VAR),\nand the greeks (Figure 1)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-70-71-quick-scans-ib-risknavigator-by-jayanthi-gopalakrishnan-21.gif"",""height"":""248"",""width"":""188""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-70-71-quick-scans-ib-risknavigator-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-70-71-quick-scans-ib-risknavigator-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov267trti2,d,"{""minimum-quantity"":""1"",""path"":""ch4a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:4 (72-82): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    Editor’s note: This month’s Traders’ Tips\nare based on François Bertrand’s article in\nthis issue, “RSI Bands.” Code written in the\nAmiBroker formula language is already provided\nby Bertrand in the article’s sidebars.\nAdditional code is presented here.

    Readers will find our Traders’ Tips section\nin its entirety at the STOCKS & COMMODITIES\nwebsite at www.Traders.com in the Traders’ Tips area,\nfrom where the code can be copied and pasted into the\nappropriate program. In addition, the code for each program\nis usually available at the respective software company’s\nwebsite. Thus, no retyping of code is required for Internet\nusers.

    For subscribers, code found in François Bertrand’s article\ncan be copied and pasted into AmiBroker from the Subscriber\nArea at www.Traders.com. Login is required using\nyour subscriber number (found on your magazine mailing\nlabel) and last name."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-72-82-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""248"",""width"":""188""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-72-82-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-72-82-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov26892bo,d,"{""minimum-quantity"":""1"",""path"":""ch4a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:4 (84, 92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    • 100 Minds That Made The Market

    • A Lesson A Day For Traders

    • Active Value Investing: Making Money In Range-Bound Markets

    • Marber On Markets: How To Make Money From Charts

    • Create Your Own ETF Hedge Fund: A Do-It-Yourself ETF Strategy For Private Wealth Management

    • Mobs, Messiahs, And Markets: Surviving The Public\nSpectacle In Finance And Politics

    • Stocks For The Long Run, 4th Edition

    • STOP And Make Money"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-84-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""248"",""width"":""188""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-84-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-4-84-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov2618993,d,"{""minimum-quantity"":""1"",""path"":""ch5m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:5 (10-12, 89, 93, 95, 98): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    FINDING THE DOMINANT CYCLE

    Editor,

    I found John Ehlers’ article in the March\n2008 S&C, “Measuring Cycle Periods,”\na very interesting way to adjust my indicators.\nBut I have a question: How do I\nfind out what the dominant cycle is, and\nhow do I calculate it? I am asking because\nthis is the key thing to start with.

    KLEMEN VATOVEC, Slovenia

    John Ehlers replies:

    The default setting to display the dominant\ncycle is FALSE, as shown in the\nthird line of code on page 18 of the\nMarch 2008 issue. When run in\nTradeStation, this input is easily\nchanged to TRUE so the dominant cycle\nis plotted as an overlay on the spectrum.\nWhen using the dominant cycle to adjust\nother indicators, I suggest using\nhalf of the dominant cycle period for\noscillators such as the RSI or stochastics,\nwhere a peak-to-valley swing is desired.\nOn the other hand, one should use\nthe full dominant cycle period for determining\nthe true slope of a trend by\ntaking a momentum over the full period,\nor for indicators such as the CCI to\ndetermine a trading channel."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-10-12-89-93-95-98-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-10-12-89-93-95-98-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-10-12-89-93-95-98-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261opmi,d,"{""minimum-quantity"":""1"",""path"":""ch5m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:5 (14-19): Options: The Missing Link by Martha Stokes, CMT"",""caption-linebreaks"":""Options: The Missing Link by Martha Stokes, CMT

    What’s the link between an option and a stock?

    growing numbers year after year. The Options Industry\nCouncil offers excellent free education on options,\nand there are good option courses out there.\nThe lure of options is undeniable. Every year,\nthousands of traders attend seminars and buy books\non options in their pursuit of profit. The desire to\nleverage a small amount of capital to make huge\ngains in the market draws people to options in ever-growing numbers year after year. The Options Industry\nCouncil offers excellent free education on options,\nand there are good option courses out there.

    However, most option players spend more money\nstudying strategies at option seminars than they ever\nmake back in profits from trading options. Option\nplayers generally do far worse on their return on\ninvestment than investors who simply buy & hold\nstocks long term. Why do option players, with the\npower of leverage behind them, do so poorly compared\nto their buy & hold counterparts? The answer\nis more basic than you might think.

    THE MISSING LINK

    There must be a connection or link between the\nunderlying stock price action and the selected option\nstrategy. Without this crucial link, option players\nstruggle with mediocre results. To explain this, it is\nimportant to take a brief history lesson.

    Candlestick charting, which is frequently taught\nalongside option strategies, was first developed in\nJapan in the 1700s, used in the rice exchange that was\nset up in the late 1600s (the world’s first, according\nto Steve Nison). So futures markets have been around\nfor a long time as well as stock markets. The differences\nbetween futures markets and stock markets,\nhowever, are numerous.

    "",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-14-19-options-the-missing-link-by-martha-stokes-cmt-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-14-19-options-the-missing-link-by-martha-stokes-cmt-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-14-19-options-the-missing-link-by-martha-stokes-cmt-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov262qufo,d,"{""minimum-quantity"":""1"",""path"":""ch5m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:5 (20-25): The Quest For Reliable Crossovers by Sylvania Vervoort"",""caption-linebreaks"":""The Quest For Reliable Crossovers by Sylvania Vervoort

    Moving average crossovers should be reliable and they\nneed to have minimal lag. Here’s a technique to achieve it.

    Generally, it’s a contradiction to have a smooth\nreliable moving average crossover on one side\nwhile having a fast reaction to price turning\npoints on the other. “Faster” normally refers to\nshorter moving averages, but that in turn will result in more choppy moves, creating more false buy and sell\nsignals. So if you want to create fast and reliable crossovers,\nthe first thing you have to look at is a way to smooth closing prices with as little lag as possible. In Figure 1 you can see\nthree different averages on the daily price bars:

    The green line represents the 10-day exponential moving\naverage (EMA). The main disadvantage seems to be\nthat this average lags. It takes a couple of weeks for it\nto signal a new uptrend.

    The red line represents the 10-day TEMA (triple exponential\nmoving average). You can see that this average\nresponds quickly, but there’s not enough smoothing.\nIt’s almost as choppy as the closing prices.

    The blue line is a 10-day TEMA based on the heikinashi\nclosing prices. It looks good; you can tell that it\nis fast, and the smoothing is excellent."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-20-25-the-quest-for-reliable-crossovers-by-sylvania-vervoort-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-20-25-the-quest-for-reliable-crossovers-by-sylvania-vervoort-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-20-25-the-quest-for-reliable-crossovers-by-sylvania-vervoort-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov263pali,d,"{""minimum-quantity"":""1"",""path"":""ch5m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:5 (30-37): Parallel Listings And True Price Value by Daryl Guppy and Chen Jing"",""caption-linebreaks"":""Parallel Listings And True Price Value by Daryl Guppy and Chen Jing

    In the second part of this series we continue to look at the\ndifferences in traders’ perceptions by analyzing stocks listed\nin the Shanghai market and their counterpart listing in the\nHong Kong market.

    Trends and their behavior provide an analysis of\nlonger-term market behavior. Chart patterns are a\nreflection of trading psychology and provide a\nrange of high-probability outcomes. The patterns develop in response to traders’ perceptions of opportunity.\nAlthough the link with fundamental developments may be\nmore tenuous, we would still expect to see a similar pattern\ndevelopment in this parallel-listed stock. A range of different\npatterns confirms the importance of psychology in determining\nmarket pricing.

    PATTERN TRADING

    The Shanghai-listed Jiangxi Copper (Figure 1) shows a\ncomplex level of trend behavior and pattern development\n(note that all China stocks are shown with a China chart\ndisplay: red = up). Trendline B defines the trend break\nstarting in March 2007. This support line is broken in May\n2007, and it provides a resistance point for the rally peak in\nJune 2007.

    Trendline A is displayed for historical convenience. The\ntwo starting points in January and February 2007 are not\nconfirmed until July 2007. This trendline is easy to plot\nretrospectively, but in real time it is more difficult.

    Trendline C is a much more definite trendline. Projected\nfrom the starting point in July 2007, it can be used to manage\na trend entry in August and early September. However, it is fair\nto conclude that trendline analysis is not the most effective way to define the trending behavior of\nShanghai-listed Jiangxi Copper.\nShorter-term trading opportunities are\nnot well defined with this method."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-30-37-parallel-listings-and-true-price-value-by-daryl-guppy-and-chen-jing-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-30-37-parallel-listings-and-true-price-value-by-daryl-guppy-and-chen-jing-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-30-37-parallel-listings-and-true-price-value-by-daryl-guppy-and-chen-jing-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov263begr,d,"{""minimum-quantity"":""1"",""path"":""ch5m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:5 (38-40): Beware The Greeks by Ron Ianieri"",""caption-linebreaks"":""Beware The Greeks by Ron Ianieri

    Confused about option greeks?\nFind out what each means and\nhow they affect price movement.

    IN recent months, individual\ninvestors\nhave been flocking\nto the option\nmarket in record numbers and with good reason.\nWhen used properly, options\ngive the investor many advantages\nover simply using the underlying\ninstruments such as\nstocks. The mad rush into the\noption market is likely to continue\nas the popularity of options\ngrows and expands.

    Several recent news announcements\nhave helped investors realize\nthe truth about options. The\nfirst big news is that the NASDAQ\nis going to list options! That’s\nright, the powerful NASDAQ is\ngoing into the option market because\nit recognizes the investment\nlegitimacy and future of options.\nOn top of that, the NASDAQ petitioned\nthe SEC to allow options to\ntrade in pennies. This makes options\nmore economically attractive\nto investors. Finally, the SEC\nis starting to lighten up the margin\nrequirements for option positions,\nmaking options even\nmore cost-efficient.

    At this point you are probably\nthinking that options sound\ntoo good to be true. However,\noptions do have a drawback.\nOptions are a more sophisticated\nproduct than their underlying\ninstruments. Being more sophisticated, they have many more topics and concepts\nthat must be mastered in order to use their power properly.\nWith options, as with any other highly technical vehicle,\na solid foundation is the key to understanding.

    THE BASICS

    One of the foundational concepts of options is the “greeks.”\nThere seems to be confusion about how greeks should be\napproached and taught, if at all. Many option instructors consider the greeks to be an advanced topic, so they schedule\nit last. Some instructors consider the greeks to be unimportant\nand not only don’t teach them, but tell their students to ignore\nthem as useless concepts. We see the greeks as a necessary\nconcept that should be stressed and taught first, even before\noption strategies."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-38-40-beware-the-greeks-by-ron-ianieri-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-38-40-beware-the-greeks-by-ron-ianieri-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-38-40-beware-the-greeks-by-ron-ianieri-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov264exyo,d,"{""minimum-quantity"":""1"",""path"":""ch5m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:5 (45): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    CRUDE AWAKENING

    Crude oil keeps moving to record highs,\nbut I don’t think it can stay above $100\na barrel for much longer. However, I\ndon’t trade commodities or futures. Do\nI have any other options if I think crude\nis going to fall during the second half of\nthe year?

    If you don’t want to trade futures,\nyou can play crude oil in a few different\nways — directly and indirectly through\nyour brokerage account. Indirectly, you\ncan often profit from moves in oil\nthrough options on energy-related companies\nlike Exxon Mobil (XOM) or\nHalliburton (HAL). Since the profits of\noil and oil drilling companies are related\nto the price of oil (the higher the\nbetter), their stock prices are sensitive\nto changes in the oil markets. If you\nexpect oil to see a dramatic decline, you\nmight short shares of oil companies or\ncreate bearish trades using options.

    You can also trade indexes and exchange\ntraded funds (ETFs) that track\nbaskets of energy-related stocks. The\nOil Service HOLDRS (OIH), for example,\nis a fund that tracks the performance of\nHalliburton and 15 other oil drillers.\nThe OIH is very liquid and the puts and\ncalls are also actively traded. Shares\ncan be bought or sold short. Meanwhile,\nthe options allow investors to\nplay industry trends.

    The PHLX Oil Service Index ($OSX)\nand the AMEX Oil Index ($XOI) are\nexamples of indexes that have listed\noptions and can be used to play the next\nmove in crude oil. These indexes also\ntrack groups or baskets of major oil\ncompanies. However, unlike the Oil\nService HOLDRS, the OSX and XOI don’t\nhave listed shares and, as a result, can’t\nbe bought or sold. The only way to trade\nthem is with options."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-45-explore-your-options-by-tom-gentile-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-45-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-45-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov264trop,d,"{""minimum-quantity"":""1"",""path"":""ch5m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:5 (46-53): Trading Options With Anthony Saliba by Jayanthi Gopalakrishnan & Bruce Faber"",""caption-linebreaks"":""Trading Options With Anthony Saliba by Jayanthi Gopalakrishnan & Bruce Faber

    Anthony J. Saliba began his career trading equity options as an independent\nmarket maker at the Chicago Board Options Exchange (CBOE) in 1979. Over the\nnext decade, he gained extensive experience in trading currencies, equities, and\nStandard & Poor’s 500 and S&P 100 contracts. In each of these markets, he\nemerged as a leading and respected presence, and quickly acquired a reputation\nas one of the top traders. His trading accomplishments, most notably his success\nduring the market correction of 1987, earned him a place in the national bestseller\nMarket Wizards.

    Due to his innovative trading ideas, Saliba has become an internationally\nrecognized consultant on the emergence and function of electronic markets and\ntrading systems. He is often quoted in industry publications, including The Wall\nStreet Journal and Financial Times, and is frequently invited to speak at industry\nforums. He has founded numerous industry-related companies including\nLiquidPoint, a broker–dealer offering options execution/facilitation for many\nlarge Wall Street firms; Saliba Portfolio Management, a portfolio management\nfirm providing state-of-the-art investment enhancement techniques through the\nuse of options; and the International Trading Institute, a derivatives training\ncompany. His latest book, Option Strategies For Directionless Markets, is available\nfrom Bloomberg Press.

    STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan (JG) and Staff Writer\nBruce Faber (BF) interviewed Anthony Saliba on March 11, 2008, via a conference\ncall.

    Tony, why don’t you tell us\nabout yourself and how\nyou got interested in trading\noptions.

    I took a job as a stockbroker right out\nof college. Since options were the latest\nthing, they gave it to the new kid to read\nand learn about. This was in 1977 and\noptions had been around for about three\nand a half years, but most shops — and\nthis was a small brokerage firm out of\nIndianapolis — weren’t dealing with\noptions at all. But these were two fairly\nprogressive guys who said, “Hey, kid,\nyou should learn about options. It’s the\nnew thing. You’re right out of school,\nand it fits what you probably want to\ndo.”

    So I read everything I could get my\nhands on about it, and took a liking to it.\nThere were a bunch of market timer–\nand daytrader-sort of magazines that\nwere circulating at the time, and I subscribed.\nIt was a way for me to learn\nmore than the average person. It was interesting, and I actually developed a\nsmall clientele while I was there.

    One day I asked one of the old guys\nsmoking a cigar — back then you could\nsmoke in the offices — “Who makes all\nthe money in this industry?” At that\npoint I was out selling economic development\nbonds in rural Indiana to farmers.\nBack then a big day on Wall Street\nwas 11 million shares, and these days\nwe do that in the first 30 or 40 seconds\nof the open. Anyway, the old guy said,\n“You’ve got to be down on the floor.”\nAnd I said, “I know what that means.” I\ngrew up in Highland Park, which is a\nnorthern suburb of Chicago. So I came\nback to Chicago to be with my roots."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-46-53-trading-options-with-anthony-saliba-by-jayanthi-gopalakrishnan-bruce-faber-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-46-53-trading-options-with-anthony-saliba-by-jayanthi-gopalakrishnan-bruce-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-46-53-trading-options-with-anthony-saliba-by-jayanthi-gopalakrishnan-bruce-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265fofo,d,"{""minimum-quantity"":""1"",""path"":""ch5m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:5 (54-55): Forex Focus: Allied Currencies by Alexander Sabodin"",""caption-linebreaks"":""Forex Focus: Allied Currencies by Alexander Sabodin

    When trading, who or what can be\nyour ally?

    Working in the financial markets\nas a trader can be fascinating, considering it gives you the opportunity\nto earn money and do so independently.\nYou can trade from anywhere in the world\nwith the help of a computer and the\nInternet. But any medal has its reverse.\nSuch types of jobs come with their fair\nshare of risks. First of all, there is the\ndanger of losing money. Second, the responsibility\nof making the buying and\nselling decisions is entirely on your shoulders;\nyou can’t depend on anybody else.\nYou are essentially on the battlefield alone\nand fighting your enemies alone.

    In any battle, you should have allies\nthat help you make the right decisions and keep you away\nfrom making the wrong ones, or at least you hope that is the\ncase. When trading, who or what can be your ally? Believe\nit or not, a tradable that is correlated with another in terms of\nprice movement can be.

    ALLY CURRENCIES

    In the foreign exchange market, the USD/CHF currency pair\nis an ally to the EUR/USD pair. The economics of Switzerland\nare closely connected with the economics of the countries of\nthe European zone, which is not surprising given that Switzerland\nis located in the central part of Europe. In addition,\nif you look at the charts of these currencies with respect to the\nUS dollar, they look like mirror-image twins.

    Our tactics are relatively simple. If these two currency\npairs move synchronously and give confirming signals, we\nconsider it a strong signal and open a position. If we get a\nsignal from one currency pair and the second pair doesn’t\nprovide a corresponding signal, we stay out of the market\nuntil we get a confirmation. That’s all there is to this system.

    HEAD & SHOULDERS

    Let’s consider two neckline breakthrough signals on the EUR/\nUSD (Figure 1A) and USD/CHF (Figure 1B). The first breakthrough\nis fake; it is marked by the number “1.” In a situation\nlike this you could give into emotions and start selling EUR/\nUSD (pay attention to the long pin), but the USD/CHF told us\na different story. These conflicting signals kept us out of\nplacing a trade. In a few days, the USD/CHF breaks the\nneckline. This is marked by the number “2.” At this point, I\ndon’t have complete confidence to open a position in the EUR/\nUSD since it lags behind the USD/CHF. If on the next trading\nday the movement continues in the same direction, then I\nwould consider opening a position."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-54-55-forex-focus-allied-currencies-by-alexander-sabodin-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-54-55-forex-focus-allied-currencies-by-alexander-sabodin-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-54-55-forex-focus-allied-currencies-by-alexander-sabodin-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265fufo,d,"{""minimum-quantity"":""1"",""path"":""ch5m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:5 (56): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    As a futures trader, should I place stop\norders in the electronic overnight markets\nor only in the day session?

    This is a personal preference and the\ndecision should be made independently\nfor each market. Several years ago,\novernight sessions were extremely thin\nand often resulted in stops being triggered\nthat arguably shouldn’t have been.\nHowever, as the electronic markets have\nbecome more popular and trading increasingly\nglobal, the liquidity in the\novernight sessions has picked up dramatically\nin most markets. The volume\nimprovements make working stop orders\novernight much more attractive.

    In my opinion, stop orders should be\nplaced in the overnight session for most\nmarkets. With the exception of the CME\nmeat markets, the overnight markets\nhave become relatively fluid and in\ndoing so may avoid slippage due to\ngaps on the day session charts resulting\nfrom large overnight moves.

    With that said, it is important to realize\nthat some markets don’t give you a\nchoice and others make it extremely\ninconvenient to do so. In the case of the\nCME currencies, all orders are placed\non their Globex electronic platform.\nThis means that a good till canceled\n(GTC) order will work around the clock,\nexcept when the market is closed. Due\nto the nature of the currency market,\nhowever, this makes sense. Currency\ntrading is so global it is not uncommon\nfor prices to move more when many of\nus are in bed than otherwise."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-56-futures-for-you-by-carley-garner-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-56-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-56-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265reri,d,"{""minimum-quantity"":""1"",""path"":""ch5m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:5 (58-61) Reducing Risk With Delta-Vega Hedging by Seongjin Cho & Ingyu Koh"",""caption-linebreaks"":""Reducing Risk With Delta-Vega Hedging by Seongjin Cho & Ingyu Koh

    Predicting market movements with\noptions can be profitable but risky —\nhere’s how to make it safer.

    The size of the option\nmarket has increased significantly,\nthanks to high\nleverage. Many investors\nhave come up with various portfolios based on individual\nanalysis in hopes of gaining profits. In\nparticular, strategy combination of options\nis a popular method among traders\nand makes use of an option’s time\nvalue for gains. Essentially, you take a\nshort position and get rewarded for\nholding your position as time passes\nas long as the underlying assets remain\nunchanged. If there is a drastic\nchange in the underlying asset, however,\nthere is a risk of a large loss.

    As we all know, it is difficult to\npredict which direction the underlying\nassets will move. Because of that,\nit is necessary to eliminate or at least\nminimize the directional effect of the\nunderlying asset. So it is crucial that\nyou offset the impact of the underlying\nasset and volatility."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-58-61-reducing-risk-with-delta-vega-hedging-by-seongjin-cho-ingyu-koh-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-58-61-reducing-risk-with-delta-vega-hedging-by-seongjin-cho-ingyu-koh-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-58-61-reducing-risk-with-delta-vega-hedging-by-seongjin-cho-ingyu-koh-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266prre5,d,"{""minimum-quantity"":""1"",""path"":""ch5m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:5 (62-63): Product Review: PowerOptions by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Product Review: PowerOptions by Jayanthi Gopalakrishnan

    The advantage of trading options\nover anything else is\nthat you have several different\nstrategies that you can\napply. But the downside of so many strategies is that you have a lot\nmore to learn. So given that you have\nmore than 3,300 optionable stocks, exchange\ntraded funds (ETFs), and indexes,\neach with multiple strategies you\ncan apply, how are you supposed to\nselect the best ones to trade? To ease the\nprocess, Power Financial introduced\nPowerOptions, an online tool that can\ngo through all your options based on\nyour selected criteria and find the best\nones for you.

    HOW DOES IT WORK?

    You can start immediately if you opt for\nthe 14-day trial. You will receive a\nusername and password. Once you sign\nin with this information you are ready to\nget started. It’s web-based so there’s no\nneed to download anything. Your starting\npoint is the home page (Figure 1)\nfrom where you can link to the quick\nstart guide and user guide, both of which\ngive you step-by-step instructions on\nhow to use the site. There are three\nservices offered: PowerOptions, the\neducational kit, and the advisory site.\nWe will just focus on the PowerOptions\nproduct for this review.

    On the home page you see several\ntabs along the top. These are mostly\noption strategies such as covered call,\nbull put credit, long call, naked put, bear\ncall credit, and calendar call. The company\nsupports 23 different option strategies.\nAll you have to do is select one of\nthese strategies to do your screening.\nMy first search was based on the calendar\ncall spread, and this spit out more\nthan 400 results. I customized the search criteria by adding a few filters and ended\nup with 42 results (Figure 2). The patented\ntechnology behind the search is\ncalled SmartSearchXL. Adjacent to each\nresult is an arrow from which you can\nlink to more information about each of\nthese stocks. From here you can link to\nyour broker — that is, if your broker is\nOptionsXpress. You can get stock\ncharts, company information, profit/loss\ncharts, option chains, and a handy option\ncalculator. Selecting the profit/loss\nchart will display a risk-reward graph\nsuch as the one seen in Figure 3."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-62-63-product-review-poweroptions-by-jayanthi-gopalakrishnan-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-62-63-product-review-poweroptions-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-62-63-product-review-poweroptions-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266prre6,d,"{""minimum-quantity"":""1"",""path"":""ch5m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:5 (64-66): Product Review: Market Technician by Dennis D. Peterson"",""caption-linebreaks"":""Product Review: Market Technician by Dennis D. Peterson

    Market Technician is a website\nfor traders interested\nin market timing analysis.\nSince John Bollinger\nis the creator of this site, it is more than a safe bet that this is\nsomething unique and useful.

    You basically choose an indicator,\napply it to a time series and then see if it\ntrades or predicts well for the same or\ndifferent time series. For example, you\ncould ask, “If I were to use a volume\nindex based on the NYSE Composite,\nwould it trade or predict the NYSE Composite\nor perhaps trade or predict the\nStandard & Poor’s 500 even better?”\nYou can perform an analysis using 26\ndifferent time series, predominantly indexes,\nranging from the familiar Dow\nJones Industrial Average to the lesserknown\nAMEX Gold Bugs Index. A range\nof indicators are available such as the\nmoving average convergence/divergence\n(MACD) or the volume index.

    While you might argue that the variety\nof indexes is unique for a single\nwebsite, the even more exciting feature\nof this site is the manner in which the\nindicators are evaluated."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-64-66-product-review-market-technician-by-dennis-d-peterson-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-64-66-product-review-market-technician-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-64-66-product-review-market-technician-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266qaby1,d,"{""minimum-quantity"":""1"",""path"":""ch5m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:5 (67) Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    MARKET ON CLOSE

    What significance does the 3:40 pm\nending order imbalances entail for\ndaytrading? Also, can you recommend\nany books that will expound on the\nsubject? Thank you in advance. — Marcus

    MOC imbalances are fundamental to\nall types of trading. Suppose you’re\ntrading all day long, and you’re long\n2,000 shares at 3:30 or so — you think\nyou want to get out, but you might wait\nuntil 3:40 to see if there is a buy or sell\nimbalance. If it’s a buy, wait; if it’s a\nsell, sell immediately. Of course, you’ll\nhave to monitor each of your “children”\n(stocks you trade day in and day out)\nduring all the time frames near the end\nof day — 3:30, 3:40, 3:50 (republish),\n4:00 bell, and the final MOC price. I\nprovide my traders with software to do\nthat for them (with futures as well so we\ncan tell if price movement is related to\nan imbalance or simply a basic market\nmove at end of day). Hope this helps."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-67-q-a-by-don-bright-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-67-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-67-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266trti1,d,"{""minimum-quantity"":""1"",""path"":""ch5m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:5 (68-82): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    Editor’s note: This month’s Traders’ Tips\nare based on Sylvain Vervoort’s article in\nthis issue, “The Quest For Reliable Crossovers.”\nCode written for MetaStock is already\nprovided by the author in the article’s\nsidebars. Additional code is presented here.

    Readers will find our Traders’ Tips section\nin its entirety at the STOCKS & COMMODITIES\nwebsite at www.Traders.com in\nthe Traders’ Tips area, from where the code can be copied and pasted into the appropriate program.\nIn addition, the code for each program is usually\navailable at the respective software company’s website.\nThus, no retyping of code is required for Internet users.

    For subscribers, code found in Vervoort’s article can be\ncopied and pasted into MetaStock from the Subscriber Area\nat www.Traders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-68-82-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-68-82-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-68-82-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov269bofo3,d,"{""minimum-quantity"":""1"",""path"":""ch5m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:5 (92) Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    • A Beginner’s Guide To Charting Financial Markets

    • Hedge Fund Due Diligence

    • Make Money Trading

    • Mastering Trading Stress

    • The Rookie’s Guide To Options

    • Technical Analysis Tools

    • Trade Your Way To Wealth

    • Trend Trading For A Living"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-5-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov26185le,d,"{""minimum-quantity"":""1"",""path"":""ch6j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:6 (10-14, 85): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    OPTION CREDIT SPREADS

    Editor,

    I just read Sam Bhugaloo’s article on\noption credit spreads in the STOCKS &\nCOMMODITIES annual Bonus Issue. The\narticle was well written, easily understood,\nand fascinating. I would like to\nknow if there are any other articles\navailable by the same author.\nI have a question relating to the article:\nWhen trading option credit spreads\non commodities, how many front months\nshould I be considering?

    JACQUES

    Sam Bhugaloo replies:

    I am pleased you enjoyed the article.\nWhen trading bull put option credit\nspreads or bear call option credit\nspreads, you should consider the commodities\nwith 50–90 days’ expiration.\nRemember that time decay is your friend,\nso you don’t want to trade months that\nare too near or too far out.

    I have had two articles published\npreviously in S&C magazine: “The\nPower Of Implied Volatility” (July 2006)\nand “Watch The Commercials” (October\n2006). I believe both of these articles\ncan be purchased from the STOCKS\n& COMMODITIES online store at\nwww.Traders.com."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-10-14-85-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-10-14-85-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-10-14-85-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261paym,d,"{""minimum-quantity"":""1"",""path"":""ch6j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:6 (16-17): Pay More, Profit More by Vikram Murarka"",""caption-linebreaks"":""Pay More, Profit More by Vikram Murarka

    Paying a higher premium may mean an\nopportunity for greater profits. Look at this\nexample of the GBP/USD trade.

    It is an open secret that every corporate\nhedger wants to pay zero for an option that he buys. Banks oblige by\nconstructing “zero-cost” strategies. The\nconcept of zero-cost structures has become\nso ingrained in the market psyche that when,\nat a seminar, we suggested buying call\nspreads at a cost, an experienced hedger\nasked, “But aren’t call spreads supposed to\nbe zero cost?” No!

    Like anyone else, we would love to be able to buy cheap options. However, we are open to the idea\nof not only paying premium, but also the idea of paying\nhigher premium if there is an opportunity to make greater\nprofits. If this sounds contradictory, perhaps this trade example\nwill illustrate.

    IN-THE-MONEY PUT OPTION

    The GBP/USD was trading near 1.9690 (Figure 1) on the\nmorning of January 4, 2008, looking to fall toward 1.95 over\na one-month period and possibly toward 1.90 over three to\nfour months. While an eventual fall looked certain, an interim\nrally toward 1.98–99 could not be ruled out."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-16-17-pay-more-profit-more-by-vikram-murarka-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-16-17-pay-more-profit-more-by-vikram-murarka-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-16-17-pay-more-profit-more-by-vikram-murarka-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov262prwi,d,"{""minimum-quantity"":""1"",""path"":""ch6j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:6 (20-24) Profit With ETFs by Gerald Gardner and Trent Gardner"",""caption-linebreaks"":""Profit With ETFs by Gerald Gardner and Trent Gardner

    Here’s a timing method you can use to trade exchange\ntraded funds.

    Exchange traded funds (ETFs) are ideal\ncandidates with which to explore the\ntiming of investments. More than 400\nETFs are tradable and represent various\nsectors of the US economy, specific country funds, and commodities. An advantage\nto ETFs is that they offer daily continuous\npricing that mirrors the share price performance of\nthe underlying security with flexibility in the timing\nof purchases or sales.

    For this study we picked three funds to invest in\nfrom a universe of 100. A backtest of our model\nsuggests that you can achieve a return of almost 18%\nand a low drawdown of 8%. Before examining the\ntiming model, we will review some of the principles\nthat drive the development of the timing paradigm.

    Timing is a technique of tracking market movements\nto find patterns of prices so you can capitalize\non market behavior and anomalies. The primary aim\nof the market timer is to focus on the volatility of\nprice movements and identify trends in price series.\nTiming enhances returns and minimizes drawdown\nby making buy or sell decisions using these distortions\nof the market."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-20-24-profit-with-etfs-by-gerald-gardner-and-trent-gardner-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-20-24-profit-with-etfs-by-gerald-gardner-and-trent-gardner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-20-24-profit-with-etfs-by-gerald-gardner-and-trent-gardner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov262ovbu,d,"{""minimum-quantity"":""1"",""path"":""ch6j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:6 (26-30) The Overlooked But Profitable Volume by Cory Mitchell"",""caption-linebreaks"":""The Overlooked But Profitable Volume by Cory Mitchell

    It’s ubiquitous, easy to use, and can lead to\noutstanding results.

    The number of stock shares that change hands\nover a given length of time is one of the most\nsignificant pieces of information we have. Yet\nmore often than not, the average trader takes that information for granted. Volume is provided, by default,\non any website that provides stock data, in newspapers, and\non charting websites and software. Volume information can\nbe found almost everywhere, which may be the reason many traders don’t pay as much attention to it as they should. It may\nbe that they feel the information is tedious or since the\ninformation is so readily available it couldn’t possibly be a\ngreat trading tool. And this, of course, could not be farther\nfrom the truth.

    While the number of shares that change hands in a given\nstock — the volume — is not a complex algorithm or intricate\nquantitative indicator, it does provide relevant information that\ncan lead the astute market watcher to outperforming profits.

    WHAT DOES VOLUME TELL YOU?

    Volume is the ultimate telltale sign of accumulation or\ndistribution in a stock. If a stock is rising on heavy volume,the stock is being accumulated, meaning buyers are willing to\npay a higher price in order to attain or accumulate shares. If\na stock is falling on heavy volume, it is being distributed,\nmeaning sellers are willing to get rid of their shares at a lower\nprice just to dispose of them. A stock that is not moving but\nis stuck in a channel on heavy volume implies buyers and\nsellers are battling, both with strong convictions. During\ntimes like these, the winner is not immediately evident until\na breakout occurs (on heavy volume, preferably).

    By recognizing that most major moves in tradables take\nplace because there is a large accumulation or distribution of\nshares, the trader can make more informed and higher-profit\nprobability trading decisions.

    Analyzing volume can be used to aid a trader in entering a\nposition. It may be used as a tool while in a trade to determine\nif the trade should be kept on or if profits/losses should be\ntaken and the position closed."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-26-30-the-overlooked-but-profitable-volume-by-cory-mitchell-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-26-30-the-overlooked-but-profitable-volume-by-cory-mitchell-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-26-30-the-overlooked-but-profitable-volume-by-cory-mitchell-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov263qaby,d,"{""minimum-quantity"":""1"",""path"":""ch6j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:6 (35): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    TAPE READING ON THE INTERNET?

    I am a Chinese student who graduated\nfrom university four months ago. Now I\nhave a daytrading job. I concentrate on\nthe NYSE stock market and my trading\nstyle is scalping. So tape reading is very\nimportant for me. But I find it’s hard to\nget this type of article from the Internet.\nI hope you can help me and send me\nsome information to improve my tapereading\nskills (Level II and time & sales\nreading is the best, because I can’t read\nthe chart), or tell me how to find this sort\nof information. Thank you. — lacan

    Okay, we teach “all-encompassing”\ntape reading. This includes keeping a\nPREM/DISC to fair value tick chart, real\ntime, for the emini futures. Basic market\nmechanics dictate that when you see\nfutures trading at a premium to the current-\nday fair value, the floor traders and\nother institutional trading groups will\nbe selling that premium and hedging off\nby buying baskets of stocks, or even all\n500 underlying equities."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-35-q-a-by-don-bright-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-35-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-35-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov263rotr,d,"{""minimum-quantity"":""1"",""path"":""ch6j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:6 (36-40): Robotic Trading by Martha Stokes"",""caption-linebreaks"":""Robotic Trading by Martha Stokes

    What works and what doesn’t? Only experience will tell. Find\nout why you need to constantly modify a trading system so it\ngives you the results you want.

    At a recent investment trade show I attended, the\nbooths displaying charting software looked nearly\nidentical. High-tech charts blinking red and green had hordes of traders gathered around them. Vendors were\nproclaiming the age of the emotionless trade, triggered by an\nautomatic buy or sell signal generated by a computer that\nnever makes a mistake. Traders have flocked to these automated\ntrading systems in recent years in a mass frenzy typical\nof a market boom.

    COMPUTERS OR THE HUMAN BRAIN?

    Look around you. If these automated trading systems are so\nperfect, if the computer is better at selecting stocks than a\nhuman brain — the most advanced and complex organism on\nthe planet — then why aren’t those retail traders doing better\nin the stock market? For that matter, why would large\ninstitutional investor and trader firms even need high-salary\nmanagers and advisors? Stock prices do not follow a set\nmathematical process, which is how computers are able to\ncrunch numbers instantaneously and how most automated\ntrading systems function.

    Contrary to popular opinion, computers have not gotten\nany smarter since the day Bill Gates started Microsoft. In fact,\ncomputers are only capable of following a set sequential list\nof commands written by a human brain. And at this point,\ncomputers are highly limited to mathematical formulas that"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-36-40-robotic-trading-by-martha-stokes-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-36-40-robotic-trading-by-martha-stokes-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-36-40-robotic-trading-by-martha-stokes-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov264fufo,d,"{""minimum-quantity"":""1"",""path"":""ch6j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:6 (41): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    With margins at or near all-time highs,\nhow should a small speculator approach\ncommodity trading?

    Very carefully. The futures exchanges\nhave effectively doubled, even\ntripled, if not more, the margin required\nto hold many popular futures contracts.\nIt wasn’t that long ago that the margin\non a full-sized corn futures was near\n$400; now, the Chicago Board of Trade\n(CBOT) requires that you have at least\n$2,025 in your account before putting\non a contract. As a result of the margin\nincreases, many of the small speculators\nfeel as if they are being squeezed\nout of commodity trading.

    However, there are affordable ways\nto get involved in the markets. In the\ncase of the grain complex, the mini\ncontracts have suddenly become very\nattractive. A few years ago, it was difficult\nto make enough money trading\nmini–grain futures to make up the transaction\ncosts, let alone give traders the\nadrenaline rush or profit potential that\nmany are yearning for."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-41-futures-for-you-by-carley-garner-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-41-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-41-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov264exem,d,"{""minimum-quantity"":""1"",""path"":""ch6j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:6 (42-46): Examining the EMA by Tim Treloar"",""caption-linebreaks"":""Examining the EMA by Tim Treloar

    You know how to apply the exponential\nmoving average, but what do you\nknow about its development and behavior?\nHere’s a deeper look at the\npopular moving average.

    The popular exponential\nmoving average (EMA)\ndepends on data to develop\nits distinctive characteristics,\nand when it comes to data, more is better. But\nbefore you put an EMA to work as a\ntechnical indicator, a deeper understanding\nof its development and behavior\nis advised. At the very least, a\ndeeper understanding will justify the\npractical application of it and at most\ndispel some misconceptions associated\nwith it.

    IN THEORY

    An EMA is essentially a type of\nweighted average. The idea of a\nweighted average is simple: each element\nin a collection of numerical data\nis multiplied by a number ranging from\nzero to 1 (the decimal equivalent of the\npercentile range zero to 100), called a\nweight, such that the sum of the weights\nalways totals 1, and the weighted elements\nare then added together.

    A simple moving average (MA) is\nperhaps the simplest example of a\nweighted average in that all the elements\nreceive exactly the same weight.\nIn an exponential moving average, the\nweight of each element decreases progressively,\nusually according to its age\nand usually by powers of a particular factor."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-42-46-examining-the-ema-by-tim-treloar-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-42-46-examining-the-ema-by-tim-treloar-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-42-46-examining-the-ema-by-tim-treloar-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov264were,d,"{""minimum-quantity"":""1"",""path"":""ch6j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:6 (47): Website Review: StockPicker.com by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Website Review: StockPicker.com by Jayanthi Gopalakrishnan

    WWW.STOCKPICKR.COM

    How many websites can you visit in one\nday? As many as you have time for, I\nsuppose, but the human brain is limited\nin the amount of information it can absorb\nat any given time. This may be why,\nat least for me, finding a website that has\nenough information I need for any given\ntrade is one that I treat like gold. Of\ncourse, the information you find useful\nmay differ from the information I find\nuseful, but one website I like to visit on a\npretty regular basis is stockpickr.com.\nThe first impression is that it has a lot of\ninformation. But in order to take advantage\nof all that information, you need to\nregister and become a member of the\nstockpickr.com community. Why do I\nfind this site all-encompassing? Here are\nsome of its features."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-47-website-review-stockpicker-com-by-jayanthi-gopalakrishnan-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-47-website-review-stockpicker-com-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-47-website-review-stockpicker-com-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov26595ex,d,"{""minimum-quantity"":""1"",""path"":""ch6j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:6 (51, 95): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    FIGHTING INFLATION

    Commodity prices are surging. With\nthe Federal Reserve lowering rates\naggressively, I am now more worried\nthan ever about the risk of inflation. Is\nthere a way to trade inflation directly,\nlike an inflation index?

    Interesting question. I don’t know of\nany index that has been created to trade\ninflation directly. Indirectly, gold has\nhistorically served as a good hedge\nagainst the risk of inflation. During\ntimes of inflation, gold prices tend to\nrise, and during periods of falling prices\nor deflation, gold prices tend to fall.

    If you don’t have a futures account,\nanother option is to trade the Street\nTracks Gold Fund (GLD), which is an\nexchange traded fund that holds the\nyellow metal. No options are listed on\nthe GLD, but could be listed in the near\nfuture. Alternatively, you can take bullish\npositions in gold mining companies\nor on the PHLX Gold and Silver Mining\nIndex ($XAU), which is an index that\ntracks the performance of 12 gold mining\nstocks."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-51-95-explore-your-options-by-tom-gentile-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-51-95-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-51-95-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265tore,d,"{""minimum-quantity"":""1"",""path"":""ch6j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:6 (52-53): Top-Performing Reversal Candles by Thomas Bulkowski"",""caption-linebreaks"":""Top-Performing Reversal Candles by Thomas Bulkowski

    Three candle patterns outperform all others. Can you guess\nwhich ones?

    During research for my latest book, Encyclopedia Of\nCandlestick Charts, I explored the world of candlesticks\nand found which ones worked and which ones\ndidn’t. In this article, I take a closer look at the methodology I used and discuss three candle patterns that\nwork exceptionally well.

    METHODOLOGY

    I spent a lot of time trying to figure out how to test short-term\nprice patterns and found a method I believe works best. For\na candlestick that acts as a reversal, price should enter the\ncandle from one direction and exit it in the opposite direction. For example, a bearish harami has price rising into the\ncandlestick pattern, by definition. In order for the candle to\nact as a reversal, price must exit downward.

    What is meant by exit? I used a close either above the top\n(highest high) or below the bottom (lowest low) of the candle\npattern to determine the exit trend. The logic behind this\ndesignation is that a candle that is supposed to act as a reversal\nshould cause price to reverse immediately, not next week or\nnext month, and have a lasting effect. It does no good if price\nreverses by dropping a penny the next day before rising again\nthereafter. This breakout definition shows both force of the\nmove and the direction.

    THE BEST REVERSALS

    What are the best reversal candles of the 103 types I looked\nat? In a bull market, “three stars in the south” wins the prize\nby working best as a reversal 86% of the time. I’ll bet you’ve never heard of that one, have you?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-52-53-top-performing-reversal-candles-by-thomas-bulkowski-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-52-53-top-performing-reversal-candles-by-thomas-bulkowski-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-52-53-top-performing-reversal-candles-by-thomas-bulkowski-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265maof,d,"{""minimum-quantity"":""1"",""path"":""ch6j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:6 (54-55): The Magic Of Time Value by Jesse Chen"",""caption-linebreaks"":""The Magic Of Time Value by Jesse Chen

    With this simple method you can sort\nthrough various option spreads and\nfind the best conversion spread.

    Too often in the world of option\nanalysis, simple indicators\nare overlooked\nfor more advanced mathematical\nmodels. Traders always try to\nstay delta-neutral or rack in maximum\ntheta. Option gurus tout exotic option\nspreads, which monitor positive gamma\nvega and theta convergences.

    These Black Scholes–based greek\nand volatility formulas can be very powerful\ntools if used correctly. Otherwise,\nthe trader could end up being overwhelmed\nby the number crunching and facing the next trade\ndecision, frozen like a deer in headlights.

    TIME VALUE

    A very simple indicator you can use is time value, which\nshows what you are paying for the option in addition to its\nexercise value. Generally, the more time an option has until\nexpiration, the higher the time value. Volatility also increases\ntime value.

    Time value is the excess value in an option price above the\nintrinsic value:

    Intrinsic value (calls) = Current underlying price – Strike price\nIntrinsic value (puts) = Strike price – Current underlying price\n\nTime value = Option price – Intrinsic value"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-54-55-the-magic-of-time-value-by-jesse-chen-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-54-55-the-magic-of-time-value-by-jesse-chen-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-54-55-the-magic-of-time-value-by-jesse-chen-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265tran,d,"{""minimum-quantity"":""1"",""path"":""ch6j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:6 (56-60): Trading And Teaching: Tom Busby by Jayanthi Gopalakrishnan & Bruce Faber"",""caption-linebreaks"":""Trading And Teaching: Tom Busby by Jayanthi Gopalakrishnan & Bruce Faber

    Tom Busby’s long career in the markets started as a broker then money\nmanager with some of the world’s largest wire houses. He then moved into the\nprivate sector and started training others about the global markets. He has\ndone guest spots on Bloomberg and CNBC and is also the author of two bestselling\nbooks, Winning The Day Trading Game and The Markets Never\nSleep. Busby also hosts a daily online live trading room where traders from\nall over the globe join him as he covers the daily action in markets such as the\nemini, the Dow Jones and DAX index futures, as well as his personal stock\npicks. He is also the host of “The Market Buzz,” a radio show on the Houston,\nTX–based BizRadio Network.

    Busby holds a bachelor’s degree in business administration from the\nUniversity of Georgia and a juris doctorate degree from Oklahoma City\nUniversity School of Law. He was a distinguished graduate of the United States\nAir Force Budget Officer School and served seven years in the US Air Force\nbefore becoming a professional securities broker and trader.

    Technical Analysis of STOCKS & COMMODITIES Editor Jayanthi\nGopalakrishnan (JG) and Staff Writer Bruce Faber (BF) interviewed Tom\nBusby via telephone and email on March 31, 2008.

    To get things started, can\nyou give us a summary\nof how you got started\ntrading?

    I got started in the markets when I\nwas still in the Air Force. One of the\nguys in my squadron was trading pork\nbellies. It seemed exciting and so I decided\nto open a stock account, not knowing\nthe difference between pork bellies\nand stocks. With that account I bought a\ncouple of stocks. Both of them have gone\ninto the history books as not good buys.

    JG: What were they?

    One was Pan Am and the other Eastern\nAirlines. Eventually, I transferred\nthose stocks into the brokerage office of\nMerrill Lynch in Oklahoma City. I was\nfortunate. I had a great broker named\nHenry, who taught me a lot about the\nmarkets and also taught me about the\noption market. Well, I fell in love with\nthe option market, because I made a\nbunch of money real quick. By that time\nI was going to law school and Merrill\noffered me a job. We worked out a deal\nwhere I could go to law school at night and be a broker during the day. I\nstarted doing it, fell in love with it,\nand I am still doing it to this day.

    Once the S&P came along in\n1982, I knew the S&P market was\nfor me because there I had a market that I could trade both up and down.\nThat was a luxury in those days, because\nmost everybody would trade to\nthe long side. I was an expert in everything\nassociated with trading back then.\nI was trading stocks, futures, and options,\nand doing real well until the crash\nof 1987. That wiped me out.

    JG: That happened to a lot of people.

    It took me a while to get my confidence\nback and get together enough\nmoney to start over again. After four or\nfive years, I started trading again. Then\nin 1996 a friend of mine from my Merrill\nLynch days came to me because he had\ngone to a school for trading and he was\nunhappy because they just took his\nmoney and would not give him any\nsupport. After some prodding, he convinced\nme to start the school I currently\nrun today. He said that it would make me a better trader if I taught other people.\nI agreed with that, and now, the more\npeople I get to meet, the more people I\nget to teach, and the better I get."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-56-60-trading-and-teaching-tom-busby-by-jayanthi-gopalakrishnan-bruce-faber-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-56-60-trading-and-teaching-tom-busby-by-jayanthi-gopalakrishnan-bruce-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-56-60-trading-and-teaching-tom-busby-by-jayanthi-gopalakrishnan-bruce-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266prre7,d,"{""minimum-quantity"":""1"",""path"":""ch6j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:6 (62-66): Product Review: Best Choice Software by Barbara Star, PhD."",""caption-linebreaks"":""Product Review: Best Choice Software by Barbara Star, PhD.

    Although luck may play a role,\nmost trading is all about decision\nmaking — decisions\nabout what to trade, when to trade, how to trade, and how much\nto risk. The better our decision\nmaking, the more likely our success.

    Best Choice Software is an endof-\nday program that offers many\nfeatures to increase the probability\nof successful decision making\nin the selection and timing for\ntrading stocks, commodities, and\nmutual funds for trading. What\nbegan in the 1980s as a personal\ntrading aid for program developer\nPeter Hoyt evolved over the\nnext several years to incorporate\ncomponents that reflected the\nchanges in market conditions.

    Now, Best Choice offers separate\nmodules for long-term investing, short-term swing trading, and cyclic\nseasonal trades, all available in one program.

    A LICENSE TO TRADE

    The program may be downloaded from\na CD-ROM or directly from the Best\nChoice website. It will only run in a\nlimited demo mode to evaluate the\nprogram’s features. Once a user purchases\nthe trial or full version, the company\nlicenses the user’s computer for\nall features. The licensing procedure\nutilizes the computer’s internal identification\nas part of a security measure to\nprevent unauthorized usage. This means\nthat any internal hardware changes that\nhave not been reported to the company\nin advance will cause the program not to\nrecognize the computer and temporarily\nrevert to demo mode."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-62-66-product-review-best-choice-software-by-barbara-star-phd-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-62-66-product-review-best-choice-software-by-barbara-star-phd-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-62-66-product-review-best-choice-software-by-barbara-star-phd-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266trti2,d,"{""minimum-quantity"":""1"",""path"":""ch6j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:6 (68-79): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    Editor’s note: This month’s\nTraders’ Tips are based on\nGerald and Trent Gardner’s article\nin this issue, “Profit With\nETFs.” Code written for Wealth-\nLab is already provided by the\nauthors in the article’s sidebar.\nAdditional code for Wealth-Lab\nas well as other programs is presented here.

    Readers will find our Traders’ Tips section in its entirety\nat the STOCKS & COMMODITIES website at www.Traders.com\nin the Traders’ Tips area, from where the code can be copied\nand pasted into the appropriate program. In addition, the\ncode for each program is usually available at the respective\nsoftware company’s website. Thus, no retyping of code is\nrequired for Internet users.

    For subscribers, code found in Gerald and Trent Gardner’s\narticle can be copied and pasted into Wealth-Lab from the\nSubscriber Area at www.Traders.com. (Login is required.)"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-68-79-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-68-79-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-68-79-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov269bofo4,d,"{""minimum-quantity"":""1"",""path"":""ch6j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:6 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    Equity Valuation, Risk, And Investment: A\nPractitioner’s Roadmap

    The New Day Trader Advantage

    The Secret Science Of Price And Volume

    Fast Profits In Hard Times: 10 Secret Strategies\nTo Make You Rich In An Up Or Down Economy

    Optimize Your Trading Edge

    The Individual Investor’s Guide To The Top Mutual\nFunds

    Hedge Fund Leadership: How To Inspire Peak Performance\nFrom Traders & Money Managers

    OptionStrategies For Directionless Markets: Trading\nWith Butterflies, Iron Butterflies, And Condors"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-6-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261leto4,d,"{""minimum-quantity"":""1"",""path"":""ch7j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:7 (10-13): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    OPTIONS: THE MISSING LINK

    Editor,

    In the May 2008 STOCKS\n& COMMODITIES article\n“Options: The Missing\nLink,” author Martha\nStokes makes some good points about the dangers of option trading\nand the necessity of understanding\nthe basics of stock trading. But the article\nalso contains some statements that\nare likely to confuse people who are not\nwell-versed in option strategies.

    For example, in the last paragraph of\nthe section “Smaller capital base = more\nrisks,” Stokes states, “If the stock moves\nup then the sell option expires worthless,\nbut the buy option makes money\nand vice versa.” However, in a straddle,\nthe trader is either a) buying a call and\nbuying a put, or b) selling a call and\nselling a put. There is no such thing as a\n“buy option” and “sell option” within\nthe same straddle. You’re either buying\nboth options or selling both options."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-10-13-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-10-13-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-10-13-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261fofo4,d,"{""minimum-quantity"":""1"",""path"":""ch7j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:7 (14-16): Forex Focus: Hedging Against A Bear Market by Matthew Caruso"",""caption-linebreaks"":""Forex Focus: Hedging Against A Bear Market by Matthew Caruso

    Ever considered foreign currencies during a bear market?\nHere’s why you should.

    It has been more than five years since the last bear\nmarket in US equities ended. The recent explosion in volatility in the markets and the 507-point, or 4.19%, oneweek\nfall in the Dow Jones Industrial Average (DJIA) during\nthe week of January 18, 2008, has led to many inquiries about\nthe best way to hedge against a bear market in US equities.

    Buying gold is often said to be the simple solution to\nhedging against a falling stock market, but gold fell $16, or\n1.8%, during January’s largest weekly decline. Anyone seeking\nshelter in gold was shocked with a loss rather than a profit\nto offset the weak stock market performance. Perhaps the\nmarket wisdom of hedging a falling stock market by buying\ngold may not be true. A good starting point in seeking the best\nstock market hedge would be to examine which markets\nwould have produced a profitable alternative to equities\nduring the stock market’s large weekly decline.

    PROFITABLE ALTERNATIVES

    Alternative markets related to the equity markets include\nforeign currencies, bonds, and precious metals. They will be\nexamined in order to see if any of these provided a good\nhedge in January’s largest weekly decline as well as in past bear\nmarkets. In addition, sectors within the market such as consumer\nstaple stocks and utilities are often cited as a way to sit out market\ncorrections due to their position in the economy and their typical\nstatus of being large dividend payers. Therefore, stocks from\nthese sectors will also be studied in detail."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-14-16-forex-focus-hedging-against-a-bear-market-by-matthew-caruso-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-14-16-forex-focus-hedging-against-a-bear-market-by-matthew-caruso-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-14-16-forex-focus-hedging-against-a-bear-market-by-matthew-caruso-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261inex,d,"{""minimum-quantity"":""1"",""path"":""ch7j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:7 (18-22): Intrabar Execution Tools by Suri Duddella"",""caption-linebreaks"":""Intrabar Execution Tools by Suri Duddella

    These two intrabar indicators can help discretionary\ntraders make the right trading decisions.

    One of the most misunderstood or ignored\nconcept in trading is time. Most traders\nconcentrate on price- or volume-based\nindicators, but in discretionary trading, execution time (that is, entry/exits) is the single most\nimportant factor for the success or failure of a trader.\nDiscretionary traders can use very good momentum\nand pattern-based techniques with intrabar setups, but\nintrabar execution always seems to be a problem\nbecause the time factor is ignored.

    Trading intrabar volatility is why many traders lose\nmoney but why many seasoned traders make money.\nHere are two intraday indicators, one that shows the\ncurrent bar strength with its reliance on current elapsed\ntime (inside bar), and one that shows the bar time\nindicator and its mechanics. These tools will help\ndiscretionary traders make the right decisions.

    CHARTING TIME FRAMES

    Most scalp/daytraders use either tick charts (89, 233,\nor 610 ticks) or minute charts (five, 15, or 30 minutes).\nI know some claim to be trading 15 seconds, 30\nseconds, or two-, 10-, or 50-tick charts. More power\nto them, but I know I can’t trade anything below fiveminute\ncharts or 610-tick charts on emini Russell\n2000 (ER2) contracts or a 233-tick chart on Dow\nmini (YM)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-18-22-intrabar-execution-tools-by-suri-duddella-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-18-22-intrabar-execution-tools-by-suri-duddella-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-18-22-intrabar-execution-tools-by-suri-duddella-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov262leof,d,"{""minimum-quantity"":""1"",""path"":""ch7j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:7 (24-33): Leader Of The MACD by Giorgos Siligardos"",""caption-linebreaks"":""Leader Of The MACD by Giorgos Siligardos

    If the moving average convergence/divergence (MACD) is\nessential to your analysis, then an indicator that often leads\nit at critical situations will be of great interest to you.

    The moving average convergence/divergence\n(MACD) is one of the best-known trend momentum\nindicators. Introduced by Gerald Appel in the 1960s,\nit later became widely used with the popularization of personal computers as both an analysis tool and an essential\ncomponent of trading systems. Its popularity, however,\nmay be why it has lost much of its prestige in the current era.\nAlthough MACD has been criticized as a trend indicator that\nproduces many whipsaws and is inappropriate for simple\ntrading decisions, it is nevertheless heavily used as a trendanalysis\ntool and is offered in most technical analysis reports\nand newsletters. This article is for those who actively use the\nMACD and would like to know how to get warning signals of\npossible changes in its direction.

    A SHORT OVERVIEW OF MACD

    The MACD is computed by subtracting a 26-period exponential\nmoving average (EMA) of the closing price from a 12-\nperiod EMA of the closing price:

    MACD = EMA(12)-EMA(26)

    The main purpose of MACD is to provide a smooth trend\nindicator, and many analysts use its sign to characterize the\nlong-term trend as bullish or bearish: When MACD is positive,\nthe long-term trend is considered bullish, and when\nMACD is negative, the long-term trend is considered bearish.\nFor the characterization of the short-term trend, a nine-period\nEMA of MACD is usually used as a signal line: When MACD\nis greater than its signal line, the short-term trend is considered\nbullish, and when MACD is lower than its signal line, the\nshort-term trend is considered bearish."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-24-33-leader-of-the-macd-by-giorgos-siligardos-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-24-33-leader-of-the-macd-by-giorgos-siligardos-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-24-33-leader-of-the-macd-by-giorgos-siligardos-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov263fosi,d,"{""minimum-quantity"":""1"",""path"":""ch7j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:7 (38-40): Forecasting Singular Spectrum Analysis by S. Drogobetskii and V. Smolynsky"",""caption-linebreaks"":""Forecasting Singular Spectrum Analysis by S. Drogobetskii and V. Smolynsky

    Find components in the markets such\nas trends and random noise that can\nhelp you analyze and forecast the\nfinancial markets.

    Applying mathematical\nstatistics to analyze and\nforecast the commodity\nand financial markets is nothing new. Traders have been applying\nclassical models of trend plus\nnoise or autoregression (moving average)\nand come up with satisfactory\nresults. But those models tend to be\nsimple in structure. The peculiarity of\nmarket behavior is that its characteristics\n(price, amount of transactions,\nindicators, and so forth) are made up of\nseveral components: a slow component,\nwhich is the trend; periodical, or\noscillatory; and a random component\ndescribed by the randomness of the\nprice series. The periodical component\nis made up of periodicity with\nvariable period and amplitude.

    The classic methods of analysis\nsuch as Fourier analysis, regression\nanalysis, or wavelet analysis tend to\ndecompose the initial function into a\nseries using a fixed system of basic\nfunctions such as sines and cosines,\nwhich produce strong periodicity\nproperty. In this article, I will discuss\nsingular spectrum analysis\n(SSA), which is data-adaptive and a\nnonparametric method."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-38-40-forecasting-singular-spectrum-analysis-by-s-drogobetskii-and-v-smolynsky-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-38-40-forecasting-singular-spectrum-analysis-by-s-drogobetskii-and-v-smolynsky-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-38-40-forecasting-singular-spectrum-analysis-by-s-drogobetskii-and-v-smolynsky-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov264fufo1,d,"{""minimum-quantity"":""1"",""path"":""ch7j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:7 (41): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    SEASONS

    How can we take advantage of seasonal\ntendencies?

    It is no secret that true commodities\nsuch as the grains and energies have\ndistinct seasonal patterns. These seasonal\ntendencies are often the result of annual\nharvest cycles or product demand cycles.\nAccordingly, you may have heard the\nterm “harvest lows” used in reference to\nmarkets such as soybeans or corn. Likewise,\nthe media refers to the summer driving\nseason as a catalyst for energy prices.

    Beginning traders often assume that\nmaking money is as easy as buying unleaded\nfutures at the end of May. Yet it is\nimportant to realize that the markets (in\nthe long run) are efficient."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-41-futures-for-you-by-carley-garner-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-41-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-41-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov264aftr,d,"{""minimum-quantity"":""1"",""path"":""ch7j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:7 (48-52): After-Hours Trading with Victoria Wang"",""caption-linebreaks"":""After-Hours Trading with Victoria Wang

    Stock prices tend to fluctuate dramatically after the market\nclose, when companies release important news or statements.\nFind out how you can understand and determine the\nrelationship between after-hours activity and the following\nday’s closing price.

    After-hours trading” refers to trading activity\nthat takes place after normal trading hours\nfrom 9:30 AM to 4:00 PM Eastern time. With\nthe development of electronic communication networks (ECNs) and the availability of online after-hour\ntrading provided by brokerage firms, investors and traders\nare able to take part in after-hours trading. Stock prices tend\nto fluctuate dramatically during the after-hours period when\ncompanies release important news or statements following the market’s close. Poor earnings announcements or other\nunfavorable news may immediately drive the price down\nsignificantly. Conversely, good news may boost demands for\nthe stock. Understanding and determining the relationship\nbetween an after-hours price movement and the following\nday’s closing price will provide valuable information to\nsavvy traders. This article studies the effect of an after-hours\nprice movement on the next day’s closing for the underlying\nstocks. It is the second of a systematic study of stock market\nprice patterns. (See my July 2007 S&C article for the first.)

    DATA COLLECTION

    After-hours trading activity was analyzed from a dataset\ncollected between February 8, 2006, and June 21, 2007. It\nwas downloaded from the NASDAQ website every evening\nafter the close of after-hours trading. The collected data includes the price of the stock at the close of\nafter-hours trading, termed “current price,”\nthe price percentage change of its current\nprice relative to its closing price that day at\n4:00 PM, the after-hours trading volume, and\nthe following day’s closing price during normal\ntrading hours."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-48-52-after-hours-trading-with-victoria-wang-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-48-52-after-hours-trading-with-victoria-wang-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-48-52-after-hours-trading-with-victoria-wang-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265qaby1,d,"{""minimum-quantity"":""1"",""path"":""ch7j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:7 (53): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    MARKET MOVEMENTS

    Lately, when I place trades, I have noticed\na market moving favorably in my\ndirection before my stop is placed in the\nemini NASDAQ. After I place my stop,\nalmost immediately, prices reverse to\nwhere I placed the stop. Sometimes they\ngo further — I feel justified! More often\nthan not, prices reverse on me again\nafter I am out of position, continuing in\nthe direction I was originally. When this\nhappens several consecutive times,\nstep aside, often missing a big move.\nCan my opponents see my stop when\ntrading Globex eminis?—Mh"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-53-q-a-by-don-bright-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-53-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-53-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265bebe,d,"{""minimum-quantity"":""1"",""path"":""ch7j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:7 (54-57): Beating The Benchmark by Roberto Chahin"",""caption-linebreaks"":""Beating The Benchmark by Roberto Chahin

    Use out-of-the money covered calls to improve your buy &\nhold portfolio’s risk efficiency.

    Unlike investors, most traders look at buy & hold\nstrategies as a necessary evil at best. Traders may\nhave a large portion of their portfolio in a basket\nof stocks or exchange traded funds (ETFs) that they allow to roll with the market, hoping to at least get the\nsame returns as the benchmark of their preference, be it the\nStandard & Poor’s 500 or the NASDAQ 100. The remainder of\ntheir portfolio would be in their trading capital. Some simple\nmethods can improve the risk-adjusted return of this side of a\nportfolio by using out-of-the-money covered calls. This can\nalso be complemented with your favorite technical analysis tools to further improve risk-adjusted returns and reengage\nyourself in the active management of a buy & hold portfolio.

    OUT-OF-THE-MONEY COVERED CALLS

    An out-of-the-money covered call is simply established by\nselling a call option on the stock or ETF in the investment\nportfolio with a strike price higher than the current price of\nthe underlying. For example, if you hold SPY, the ETF that\ntracks the S&P 500, and it is trading around 150.00, you could\ninitiate an out-of-the-money covered call position by selling\nthe 30-day 155.00 call. This position allows the SPY 30 days\nto go up 5 points, or 3.3%.

    If the SPY does not close above 155.00 on option expiration\nday, you get to keep the premium collected at the sale of the\ncall option. This would act as a buffer if the stock drops in\nprice or would provide extra profit if it were to hold steady or rise less than the 5 points. If, however, the SPY closed above\n155.00 on expiration, you would have to surrender the shares\nat 155.00 and repurchase the equity position at market price.\nThe difference between the market price and the 155.00 strike\nprice would be your loss."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-54-57-beating-the-benchmark-by-roberto-chahin-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-54-57-beating-the-benchmark-by-roberto-chahin-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-54-57-beating-the-benchmark-by-roberto-chahin-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265fate,d,"{""minimum-quantity"":""1"",""path"":""ch7j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:7 (58-62): A Father-Daughter Team: Bill Williams & Justine Williams-Lara by J. “Jay” Norris"",""caption-linebreaks"":""A Father-Daughter Team: Bill Williams & Justine Williams-Lara by J. “Jay” Norris

    Bill M. Williams (BW), a former psychotherapist and founder of the\nProfitunity Trading Group, has more than 49 years of trading experience.\nBesides coaching traders in private tutorials, his three bestselling\nbooks — Trading Chaos, New Trading Dimensions, and\nTrading Chaos: Second Edition — have contributed to furthering his\nunique trading concepts. He is also well known on the speaker circuit,\nwith a loyal following of high-level traders. He has taught seminars\nthroughout Europe, Asia, and the US on subjects including the fractal\nof the Elliott wave, the money flow index, the “Wise Men,” and the\nProfitunity “Alligator.”

    His daughter, Justine Williams-Lara (JWL), is the president of the\nProfitunity Trading Group. She has been actively trading for 14 years\nin both the stock and commodity markets. She too has trained traders\nin the Profitunity methodology and teaches private tutorial classes in\nher office in California. Trading is her life, she says, and teaching\nothers to trade for their freedom is what makes her continue her\nfather’s work.

    John “Jay” Norris (JN), senior market strategist at Brewer Futures\nGroup, interviewed the Williamses in person on February 23, 2008, in\nSouthern California.

    Can you tell us how you did\nlast year trading?

    BW: Last year was our\nbest year ever. I’ve been trading now for a half century, and the year\nbefore last was our best up until that\npoint, and last year was better than that.\nI trade only stocks now, but most of my\ncareer I’d been trading commodities.\n[Earlier, Williams explained how he\nhas substituted many of the commodity\nmarkets with ETFs in the stock market.\n—JN]\nLast year, we had several different\naccounts, and one account was up over\n100%. [This account is his everyday\naccount from which he takes the profits\nonce a month and buys physical gold\nand interest-bearing gold certificates.]\nThe big account was up over 40%. We\nstarted something a couple of years\nago because I believe one of the things\nthat hurts people’s trading is that they\nget in and out too much, too quickly.\nSo I am a trend trader and like to stay in\nthe market as long as possible. I made\nthe decision two years ago that on January 1, I would put on a trade and would\nnot get out of it come hell or high water\nuntil the end of the year, and that one\ntrade was up 40% that year, and then up\n50% the year before, so by our standards\nwe’ve done quite well.

    I know you’re quite an experienced\ntrader and know a bit about commodities.\nWas there any one trade or campaign\nover the last few years that stands\nout for you?

    BW: Yes. There have been quite a\nfew. Here we are at the beginning of\n2008 and the dollar is going down real\nfast and anything that is measured by\nthe dollar is getting more expensive,\nwhether it’s wheat or gold or currencies.\nIf you look at gold, for example, it\nhas gone up tremendously in dollars.\nBut if you look at gold in some of the\nforeign currencies, the chart doesn’t look\nnearly as bullish as it does in dollars. So\nwhat we’re really talking about — and\nas we speak, we are in a housing slump\n— is most people were thinking they\nwere making money on their houses and now they are finding out they weren’t\nmaking that much money, and the underlying\nstructure of this market is that\nthe dollar is going down, so anything\nvalued in dollars is going to be more\nexpensive.

    So it’s safe to say you’re a trend trader?

    BW: Absolutely. We’ve been teaching\npeople to trade for decades now, and\none of the things that almost 100% of all\nnew traders do is they get in and out too\noften. We’ve had our best success where\nwe’ve analyzed the market, tried to figure\nout what the long-term trend is and\nget in and stay in for a while, so yes I am\ndefinitely a trend trader. Now, one of\nthe ways we get into a trade is if we see\nthat a trend has overextended itself. We\nhave what we call a bullish/bearish divergent\nbar or period where we have\nindicators that show us that the market\nhas gone up too fast, so we know how to\ncounter–trend trade that market. Often,\nour first entry into a market is with this\ncountertrend signal."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-58-62-a-father-daughter-team-bill-williams-justine-williams-lara-by-j-jay-norris-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-58-62-a-father-daughter-team-bill-williams-justine-williams-lara-by-j-jay-norris-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-58-62-a-father-daughter-team-bill-williams-justine-williams-lara-by-j-jay-norris-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266prre8,d,"{""minimum-quantity"":""1"",""path"":""ch7j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:7 (64-66): Product Review: Elwave 9 by Dennis D. Peterson"",""caption-linebreaks"":""Product Review: Elwave 9 by Dennis D. Peterson

    PROGNOSIS SOFTWARE DEVELOPMENT

    The latest release of ELWAVE\nincorporates some new features\nthat make it a stronger\nproduct. The user now has\nthe flexibility to choose between\nC# and VB to encode analysis\ntechniques into indicators so you can\nsee how Elliott wave analysis either\nconfirms or diverges from your indicator.\nThe editor comes complete with\nsyntax highlighting, keyword/function/\nvariable name completion, parameter\ninformation tool tips — in short, a professional-\nlevel code editor.

    But before examining more Elwave\nsoftware features, let’s talk about Elliott\nwave analysis for a moment. Many of\nyou have probably picked up a book on\nElliott wave analysis and scanned the\npages. When you see the price chart\nexamples, the theory looks enticing. And\nafter all, what any technician is trying to\ndo is understand market behavior — that is, human trading behavior — and Elliott\nwave analysis is just that. Unfortunately,\nwith some markets being traded with\ncomputer driven algorithms, it is almost\nproblematic to find the human behavior–\ndriven market.

    To compound the problem of finding\nthe best market, there are Elliott wave\nexperts who give different wave counts\nfor the same price data."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-64-66-product-review-elwave-9-by-dennis-d-peterson-20.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-64-66-product-review-elwave-9-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-64-66-product-review-elwave-9-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266exyo2,d,"{""minimum-quantity"":""1"",""path"":""ch7j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:7 (67): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    FROs

    How do fixed return options work?

    Fixed return options (FROs) are new\ncontracts that recently started trading on\nthe American Stock Exchange (AMEX).\nFROs are binary contracts that provide a\npayoff based on whether the equity or\nexchange traded fund (ETF) closes above\nor below the strike price of the option. It is\nsimilar to a flip of a coin — heads you win,\ntails you lose. If you are correct, one contract\npays $100. If not, the loss is equal to\nthe premium paid for the contract.

    As of this writing, FROs are listed on 20\nstocks and ETFs. Each has a unique ticker\nsymbol; for example, the fixed return\noptions on Google (GOOG) trade under\nTBA, and for the S&P Depositary Receipts\n(SPY), the FRO symbol is SQY. The\nvalue of the FRO is based on an index\ncomputed using an average of prices and\nthe settlement value is based on average\nprices on expiration Friday. The value at\nexpiration might be different from the\nstock’s actual closing price. These contracts\nsettle European style and, consequently, can\nonly be exercised at expiration."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-67-explore-your-options-by-tom-gentile-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-67-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-67-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov26693pr,d,"{""minimum-quantity"":""1"",""path"":""ch7j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:7 (68-70, 93): Product Review: Visual Trader 4.0 by Sean Moore"",""caption-linebreaks"":""Product Review: Visual Trader 4.0 by Sean Moore

    NIRVANA SYSTEMS

    VisualTrader is a powerful software\npackage that has steadily\nevolved since its introduction\nin 2002. While many charting packages are available that allow you to\nchart indicators and generate buy and\nsell signals based on various trading\nsystems and strategies, VisualTrader is\nunique in its ability to display technical\ninformation in a graphical (visual) format.\nVisualTrader also has the more\ntraditional charting and trading systems\nfeatures that you may be more accustomed\nto. Combining these traditional\nand visual features may just provide\nthat edge you need to trade profitably.

    With VisualTrader, there is a lot of\nprocessing going on behind the scenes,\nso the software does require a fairly upto-\ndate computer. A 2GHz processor,\n2GB of RAM, and a graphics card with\nat least 64 MB RAM is recommended,\nalong with a broadband connection.\nWhen you first start up the program\nafter installing, you will be asked to\nconnect to a data source. For real-time\ndata, you’ll need a data account with\neSignal, IQFeed, or QCharts. After selecting\nyour data provider, you’re ready\nto build your first map.

    THE VISUALTRADER\nTRANSFORM AND MAP

    The first step with VisualTrader is to\nbuild your stock or futures or forex\nuniverse. Select the stocks or contracts\nthat you’d like to follow and build a\nmap. You can add stocks and futures\nand forex contracts onto the same map.\nI was using an eSignal data connection\nthat had a symbol limit of 500, so I did\nhave to be careful not to add more than\n500 symbols to my map. Several prebuilt\nmaps are already loaded into\nVisualTrader: Standard & Poor’s 500,\nStandard & Poor’s 100, Dow 30,\nNASDAQ 100, Nirvana 100, and Nirvana\n300. The Nirvana100 and 300 maps\nare designed to help find group rotations\nusing highly correlated stocks.\nFigure 1 shows a map of the S&P 500\nusing a daily time frame. You can easily\nsee that it was a strong day in the market,\nwith most of the stocks trending up."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-68-70-93-product-review-visual-trader-4-0-by-sean-moore-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-68-70-93-product-review-visual-trader-4-0-by-sean-moore-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-68-70-93-product-review-visual-trader-4-0-by-sean-moore-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov267qusc,d,"{""minimum-quantity"":""1"",""path"":""ch7j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:7 (71): Quick Scans: Multicharts 3 by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Quick Scans: Multicharts 3 by Jayanthi Gopalakrishnan

    MULTICHARTS 3

    Given that I reviewed MultiCharts version\n2 in the November and December\n2007 issues of Technical Analysis of\nSTOCKS & COMMODITIES, the name of\nthis product may sound familiar to some\nof you. TS Support Plus, the developers,\nrecently released version 3, which includes\na backtesting feature that I think is\nworthy of mention. So without going\ninto all the features that were already\ndiscussed in the earlier two-part review,\nI will just focus on the backtesting feature.\nAfter all, MultiCharts was developed\nwith this feature in mind, and once\nyou see what it does, you’ll understand\nwhy this is an important release."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-71-quick-scans-multicharts-3-by-jayanthi-gopalakrishnan-21.gif"",""height"":""248"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-71-quick-scans-multicharts-3-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-71-quick-scans-multicharts-3-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov267trti3,d,"{""minimum-quantity"":""1"",""path"":""ch7j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:7 (72-85): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    Editor’s note: This month’s Traders’ Tips\nare based on Giorgos Siligardos’ article in\nthis issue, “Leader Of The MACD.”

    Readers will find our Traders’ Tips section\nin its entirety at the STOCKS & COMMODITIES\nwebsite at www.Traders.com in\nthe Traders’ Tips area, from where the\ncode can be copied and pasted into the\nappropriate program. In addition, the code\nfor each program is usually available at the respective software company’s website. Thus, no retyping\nof code is required for Internet users.

    For subscribers, code found in Siligardos’ article can be\ncopied and pasted into MetaStock or Tradecision from the\nSubscriber Area at www.Traders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-72-85-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-72-85-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-72-85-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov269bofo5,d,"{""minimum-quantity"":""1"",""path"":""ch7j205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:7 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    In this issue:

    • 7 Winning Strategies For Trading Forex

    • Winning The Day Trading Game

    • Applied Portfolio Management

    • Even Buffett Isn’t Perfect

    • Follow The Fed To Investment Success

    • Forex Simplified

    • Forty Years A Speculator

    • Winning The Trading Game"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-92-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""249"",""width"":""189""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-7-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261leto5,d,"{""minimum-quantity"":""1"",""path"":""ch8a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:8 (10-13): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    CROSSOVER PARAMETERS?

    Editor,\nThe Forex Focus article\nin your May 2008 issue,\n“Allied Currencies” by\nAlexander Sabodin, discusses\nmoving average crossovers, but the author does not reveal\nthe numbers he is using for the\ncrossover. The article is very interesting.\nCan you tell me what numbers he is\nusing?\nMARK OSMAN

    Alexander Sabodin replies:\nI prefer to use moving averages based\non Fibonacci numbers. When it comes\nto moving average crossovers, I avoid\nusing two adjacent Fibonacci numbers\nas my parameters. So I won’t use, for\nexample, 5 and 8, but instead will use 5\nand 13 as my parameters.

    When it comes to analyzing the financial\nmarkets, it’s more art than science,\nas I have stressed in my articles. When\nyou use a moving average crossover\nsystem, you can use any two parameters\nbased on what you view to be the best\nchoices based on historical performance.\nYou want to identify those with\nthe least number of false signals."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-10-13-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""259"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-10-13-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-10-13-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261fofo5,d,"{""minimum-quantity"":""1"",""path"":""ch8a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:8 (14-20): Forex Focus: Fishing For Trading Systems by Alexander Sabodin"",""caption-linebreaks"":""Forex Focus: Fishing For Trading Systems by Alexander Sabodin

    Here’s a step-by-step look at a trading system that you can\nincorporate into forex as well as other markets.

    The essence of the trading system I discuss here was\nalready proposed by Charles Henry Dow, the founder of the Dow Jones indexes and Dow theory, at the beginning\nof the 20th century. Dow pointed out three categories of\ntrends: primary, secondary, and minor. The primary trend\ntells you which way prices are flowing. The secondary is\nmade up of waves that form the flow, and the minor trends\nlook like ripples on the waves. As traders, our task is to define\nthe major trend of the direction of prices and then to find a\nwave inside it as a good point of entry.

    IS IT THAT EASY?

    Very often while analyzing the market, we can come across\ncontradictions. Let’s point out two major ones:

    1.) At various time scales, you can observe conflicting\ntrend directions. For example, on a weekly chart the\ntrend may appear to be ascending, whereas on a daily\nchart the trend may be descending. And when it\ncomes to intraday charts, the direction of the trend is\nusually vague.

    2.) Various groups of indicators may show contradictory\nsignals. While a trend indicator may suggest that the\ntrend is ascending, the oscillator may show that\ntraders are outbidding and therefore give sell signals."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-14-20-forex-focus-fishing-for-trading-systems-by-alexander-sabodin-20.gif"",""height"":""259"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-14-20-forex-focus-fishing-for-trading-systems-by-alexander-sabodin-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-14-20-forex-focus-fishing-for-trading-systems-by-alexander-sabodin-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov262tayo,d,"{""minimum-quantity"":""1"",""path"":""ch8a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:8 (22-28): Take Your Profits Or Let Them Ride? by Anthony Trongone, PhD"",""caption-linebreaks"":""Take Your Profits Or Let Them Ride? by Anthony Trongone, PhD

    Here’s how you can complement your money\nmanagement strategy with your trading system.

    Practical trading advice often takes us in\nconflicting directions. For instance,\nwhen we are in a profitable position,\nshould we take our profits or let them ride? Most articles on money management encourage\nthe reader to adopt rigid standards, such as\noffsetting a position before a small loss turns into a\nlarge one. Money management rules are to be taken\nseriously. However, they do not apply across all\nmarket conditions, nor should they hamper your\nopportunity to take advantage of current trading\nopportunities.

    PREPARING FOR THE TRADING DAY AHEAD\nIndividuals perform differently throughout the trading\nday. Some investors are better off trading in the premarket, while others are more effective\nafter the choppiness in the early\nmorning subsides. For many active investors,\nas the day continues, it becomes\neasier for them to perceive discernible\nchart patterns. For them, it is better to see\nwhat has already taken place in order to\ndetermine what might occur throughout\nthe afternoon.

    Similar to a thoroughbred racehorse,\nthe market bolts from the gate at the\nringing of the opening bell. Riders are instinctively jockeying for position as they approach\nthe first turn, but once they hit the backstretch, the\nhorses settle into a more relaxing pace."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-22-28-take-your-profits-or-let-them-ride-by-anthony-trongone-phd-20.gif"",""height"":""259"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-22-28-take-your-profits-or-let-them-ride-by-anthony-trongone-phd-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-22-28-take-your-profits-or-let-them-ride-by-anthony-trongone-phd-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov263prst,d,"{""minimum-quantity"":""1"",""path"":""ch8a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:8 (30-36): Premier Stochastic Oscillator by Lee Leibfarth"",""caption-linebreaks"":""Premier Stochastic Oscillator by Lee Leibfarth

    This indicator lets you respond quickly to changes in market direction.

    AS with any business, trading requires researching unique ideas that can be used\nto develop and maintain an edge in the markets. One place that traders can\nfind inspiration is modifying existing technical indicators to meet their\nspecific trading needs. It was this type of research and customizing that created the premier stochastic\noscillator (PSO).

    The premier stochastic oscillator\nis a technical indicator that\nprovides a quick response to\nchanges in market direction.\nThis highly sensitive indicator\nallows for early anticipation of\nprice turns and can be used to\nestablish definitive trading\nzones that identify potential\ntrading opportunities. In this\narticle, I will discuss the theory\nbehind this unique stochastic\nvariation as well as some possible\ntrading applications that\ncan be used in today’s competitive\nemini futures markets.

    DESCRIPTION

    The PSO is a rewired version of\na short-period stochastic. Unlike\na standard stochastic oscillator,\nthis indicator is normalized\nto register neutral values\nat zero while providing greater\nsensitivity to short-term price\nmoves. This indicator uses a\ncentral zero line as a reference\npoint and will oscillate above\nand below this point as price\nfluctuates. In addition, the PSO\nis smoothed by using a double\nexponential moving average to\nprovide a more even response\nto turns in the market. The price\nchart of the emini Russell 2000\nin Figure 1 shows both the PSO\nand standard, eight-period stochastic\nindicators as a comparison."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-30-36-premier-stochastic-oscillator-by-lee-leibfarth-20.gif"",""height"":""259"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-30-36-premier-stochastic-oscillator-by-lee-leibfarth-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-30-36-premier-stochastic-oscillator-by-lee-leibfarth-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov264stin,d,"{""minimum-quantity"":""1"",""path"":""ch8a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:8 (42-47): Stock Insurance Policy by Sylvain Vervoort"",""caption-linebreaks"":""Stock Insurance Policy by Sylvain Vervoort

    Here’s how you can ensure your positions in stocks by\ncombining them with options.

    There are certain facts about buying stocks, among\nwhich are:\nFact 1: When the price of a stock is making a longterm\nup move, the only mistake you can make is to buy that\nstock at the wrong time by just looking at the short term.\nFact 2: To hold a position during a longer-term price up\nmove of 30% or more, shorter-term price reactions of 10% up\nto 13% (for the more volatile stocks) must be accepted.

    From the chart of Salesforce.com (CRM) in Figure 1, it is\nlikely you will be tempted to buy the stock after the February\n2006 correction and the price breaking above the red descending\ntrendline.

    The blue dashed line is a 12% trailing stop. Using such a\nliberal stop kept us in the trade until a top at the beginning of\nFebruary, when a third sharper uptrend line was broken. A\nnumber of days later, the 12% trailing stop was broken by the\nclosing price for the first time since the start of the uptrend at the\nend of August.

    Fact 3: You should accept the fact that 50% of your trades are\ngoing to lose money. Figure 2 clearly shows that it was not the\nright time to buy CRM.

    Fact 4: If 50% of your trades are making a loss\nof 10%, then the profitable trades must make\naround 25% to end up with a high-enough\nfinal profit.

    Fact 5: When applying good money management,\nthe money lost in one single trade should\nnot exceed 1% to 2% of the total trading capital.

    Since you have to risk up to 13% of the\ninvestment when opening a position, wouldn’t\nit be nice to have some form of insurance that\nwould always limit the loss to that level, no matter\nwhat happens within a certain time period?

    OPTIONS INSURANCE POLICY

    Using put options as insurance right from the\nstart when buying stocks lets you sleep at night\nbecause you know beforehand exactly what\nrisk you are taking. This strategy is referred to\nas a synthetic long call."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-42-47-stock-insurance-policy-by-sylvain-vervoort-20.gif"",""height"":""259"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-42-47-stock-insurance-policy-by-sylvain-vervoort-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-42-47-stock-insurance-policy-by-sylvain-vervoort-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov264fufo2,d,"{""minimum-quantity"":""1"",""path"":""ch8a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:8 (48): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    Is gold really a safe haven?

    When the term “safe haven” is casually\nused to describe the precious metals\nmarkets, namely gold, I cringe. I\nfind myself wondering, safe relative to\nwhat? In my experience, gold futures\nhave proven to be on the top of the list\nof volatile commodities. Sure, if you\nare savvy enough to buy the low and\nsell the high, investing in gold is safe.\nFor those of us who can’t see into the\nfuture, buying or selling gold in the\nfutures, cash, or bullion market is purely\nspeculation. My intent isn’t to discourage\nyou from trading gold, but to make\nsure that you see it for what it is — a\ntrade and not an investment.

    This belief may stem from the days\nwhen gold was viewed as an asset, not\na currency, or subsequently in the gold\nstandard era. However, the argument\nfor safe gold doesn’t seem to have much\nvalidity in today’s markets. Gold market\nfundamentals today are a far cry\nfrom what they were in the past, yet\nmany seem to have overlooked this fact."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-48-futures-for-you-by-carley-garner-20.gif"",""height"":""259"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-48-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-48-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265sowh,d,"{""minimum-quantity"":""1"",""path"":""ch8a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:8 (52-61): So Why Do You Need Money Management? B. McDowell Tells You by J. Gopalkrishnan and B. Faber"",""caption-linebreaks"":""So Why Do You Need Money Management? B. McDowell Tells You by J. Gopalkrishnan and B. Faber

    TradersCoach.com founder and president Bennett McDowell, considered\nan expert in technical analysis and complex trading platforms, lectures\nfrequently, is internationally recognized as a leader in trading education,\nand teaches trading techniques to students worldwide. McDowell has\nwritten two books on trading, The ART Of Trading and A Trader’s Money\nManagement System, both published by John Wiley & Sons. McDowell\nresides in San Diego, CA with his wife and two children and can be reached\nat Bennett@TradersCoach.com.

    STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan (JG) and Staff\nWriter Bruce Faber (BF) interviewed Ben McDowell on June 4, 2008, via\nphone.

    Ben, tell us how you got involved\nwith trading.

    I got into trading when I\nwas working on Wall Street in the early 1980s. I also went on to\ntrading and managing money as a broker\nfor Prudential Securities and Morgan\nStanley in the 1990s, and along the\nway I’ve managed my own money as\nwell. We started TradersCoach.com\naround 1998. The firm started out by\nproviding consultation and coaching\nservices for active traders and even investors.\nWe did a lot of work with money\nmanagement. We did a lot with trading\npsychology. We built up a good referral\nbusiness. Then people started asking\nme how I traded the market. At that time\nI had developed a proprietary system,\nApplied Reality Trading (ART), which\nwe brought to the market in 2003. ART\nwas initially a home study course and\nthen we introduced software, and since\nthen it has taken off. It was a good\nproduct to offer in conjunction with our\nother services.

    JG: Why was your focus so much on\nmoney management?

    Money management is as important\nas entries and exits. A lot of people,\nespecially those just getting into the\nbusiness of trading, think that software\nis going to do it all for them. Software is\nimportant and can be used as a tool, but one of the most important skills a\ntrader has to develop is money\nmanagement. Traders also have to\ndevelop other skills such as identifying\nmarket cycles and selecting\nmarkets. But without money\nmanagement it is difficult for a\ntrader — even if they have a decent\ntrading system — to be successful.\nMoney management is\nsomething that everybody needs,\nwhether they are investors,\ndaytraders, position traders, or if\nthey trade the forex market,\nwhether they just trade stocks,\ncommodities — it doesn’t matter.\nThe money management part of\nthe equation is paramount to their\nsuccess.

    JG: Have you ever found yourself in a\nsituation where you actually placed\ntrades without stops?

    That is a great question, and the answer\nis, “Of course.” Most traders, at\nthe beginning of their careers, unless\nthey were lucky enough to be associated\nwith other traders who could teach them\nabout money management, probably\nincurred a few large losses. We have\nfound that in order to consistently implement\na money management system, you\nhave to believe you need it. And usually\nthat belief doesn’t happen until you get\nhit in the face with a large loss. That is why so many new traders focus on entries\nand exits instead of money management,\nbecause they haven’t experienced\nthe downside. Once they experience\nthat, they want to implement money\nmanagement."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-52-61-so-why-do-you-need-money-management-b-mcdowell-tells-you-by-j-gopalkrishnan-and-b-faber-20.gif"",""height"":""259"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-52-61-so-why-do-you-need-money-management-b-mcdowell-tells-you-by-j-gopalkrishnan-and-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-52-61-so-why-do-you-need-money-management-b-mcdowell-tells-you-by-j-gopalkrishnan-and-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266buof,d,"{""minimum-quantity"":""1"",""path"":""ch8a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:8 (62-63): The Business Of Trading by Don Bright"",""caption-linebreaks"":""The Business Of Trading by Don Bright

    Trading is a universally accessible\nbusiness opportunity. Here’s how\nto treat it like a business.

    Trading is a business,\nand all traders should\ntreat it as such. Over\nthe years, we’ve seen\ntrading for a living evolve from an exclusive club of\nmembers on a trading floor of some\nkind to an almost universally accessible\nbusiness opportunity. Technology\nhas had a lot to do with this\nphenomenon, but certainly that is\nnot the only factor. For instance, the\njobs market on Wall Street has tightened\nover the last decade or so,\nleaving many traders to seek alternative\nways to continue their involvement\nwith the markets. In addition,\nrecent college graduates,\nhoping to get a cushy job with a Big\nInvestment Banking Firm, have\nfound the competition brutal and\nopportunities dwindling.

    What else can these young minds\ndo to achieve success? Buy a franchise?\nStart a research firm? Start a\nhedge fund? Get a job on an exchange?\nAny of these options can\nbe exercised, but another, lessknown\nalternative not only exists\nbut is once again on the upswing."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-62-63-the-business-of-trading-by-don-bright-20.gif"",""height"":""259"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-62-63-the-business-of-trading-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-62-63-the-business-of-trading-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266prre10,d,"{""minimum-quantity"":""1"",""path"":""ch8a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:8 (64-67): Product Review: Group Power by Dennis D. Peterson"",""caption-linebreaks"":""Product Review: Group Power by Dennis D. Peterson

    GroupPower, a website created\nby analyst John\nBollinger, provides unique\nanalysis data for some 237\nindustry groups. The premise is that the market shifts its interest to\nstocks in an industry group that the market\nbelieves is growing, and sells those\nindustries that it thinks will do poorly in\nearnings, sales, or pretax profits. What\nthe site does extremely well is allow\nyou to drill down to find individual\nstocks in a group that has the potential\nof moving up or down. Used along the\nway are numerous indicators of high\nquality and techniques. It’s overwhelming, but let’s see if we can find a road\nmap (for an alternative, see the sidebar\nprovided by John Bollinger).

    MARKET OVERVIEW

    At the outset you need a sense of market\ndirection (Figure 1). Indicators that I\nhave liked, but sometimes have had a\nproblem finding, are available, such as\nhow many items are above their moving\naverage. In this case, the items are industry groups as opposed to individual\nequities. A key factor in making this\nwork is through a process Bollinger\ncalls “rational analysis,” equities that\ntrade in the same direction and are in the\nsame industry group. Thus, there isn’t\nan industry group called “Transportation”\nthat includes both United Airlines\nand Knight Transportation (trucking),\nalthough there is a sector called “Transportation”\nwith industry groups for airlines\nversus trucking.

    Datapoints for industry averages are\ncreated daily by normalizing the average\nprice for each equity within a group\nwith its average price two years ago. If\nyou have a question about calculation,\nthe upper left portion of the screen often\nprovides detail or maybe a summary\nexplanation."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-64-67-product-review-group-power-by-dennis-d-peterson-21.gif"",""height"":""259"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-64-67-product-review-group-power-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-64-67-product-review-group-power-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266exyo3,d,"{""minimum-quantity"":""1"",""path"":""ch8a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:8 (68): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    AUTOEXERCISE EXPLAINED

    If I hold a call option into expiration\nand I do nothing, what happens? Will it\nexpire no matter what, or do I need to\ntell my broker to sell it?

    If you don’t close an option position\nbefore expiration, two things can happen\ndepending on whether the option\ncontract is in-the-money (ITM), at-themoney\n(ATM), or out-of-the-money\n(OTM). Remember, an OTM call option\nis one where the strike price is higher\nthan the stock (index, exchange traded\nfund [ETF], or futures) price. An OTM\nput has a strike price below the current\nstock price. An ATM option has a strike\nprice equal to the stock price.

    OTM and ATM options expire worthless.\nThey have no embedded value and\nthere is no incentive for the holder to\nexercise that option. If I hold an XYZ\ncall option with 50 strike price and XYZ\nis trading at $49 a share, why would I\nexercise an option to buy XYZ for $50\nwhen I can pick it up in the market for\n$49 a share? On the other hand, if the\nstock is trading for $51 and I hold the\nXYZ 50 put option, there is no reason\nfor me to exercise that put and sell\nshares for $50 when the market will buy\nit for $51. There are instances when\nslightly OTM options are exercised by\nthe holder, but in most cases OTM and\nATM options will expire worthless because\nthey have no real or embedded value."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-68-explore-your-options-by-tom-gentile-20.gif"",""height"":""259"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-68-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-68-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266prre9,d,"{""minimum-quantity"":""1"",""path"":""ch8a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:8 (69): Product Review: The Million Dollar Challenge by Sean Moore"",""caption-linebreaks"":""Product Review: The Million Dollar Challenge by Sean Moore

    The Million Dollar Challenge\nhelps teach trading\nprinciples in a fun and inventive\nway: through a\nboard game. There are two different games that can be played with\nthis set, the Basics and the Million Dollar\nChallenge. The Basics, the simpler\ngame, uses smaller money denominations\nand the player with the largest\nrunning balance after completing five\ntrades wins. Once familiar with the rules,\ntwo players can expect to complete a\ngame of the Basics in about an hour. For\nthe Million Dollar Challenge, the first\nplayer to have a running balance of $1\nmillion wins."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-69-product-review-the-million-dollar-challenge-by-sean-moore-20.gif"",""height"":""259"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-69-product-review-the-million-dollar-challenge-by-sean-moore-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-69-product-review-the-million-dollar-challenge-by-sean-moore-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov267trti4,d,"{""minimum-quantity"":""1"",""path"":""ch8a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:8 (70-84): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    Editor’s note: This month’s Traders’ Tips\nare based on Lee Leibfarth’s article in this\nissue, “Premier Stochastic Oscillator.”

    Code for TradeStation is already provided\nin Leibfarth’s article. Additional\nEasyLanguage code contributed by TradeStation is presented here.

    Readers will find our Traders’ Tips section\nin its entirety at the STOCKS & COMMODITIES\nwebsite at www.Traders.com in the Traders’ Tips area, from where the code can be copied\nand pasted into the appropriate program. In addition, the\ncode for each program is usually available at the respective\nsoftware company’s website. Thus, no retyping of code is\nrequired for Internet users.

    For subscribers, the EasyLanguage code found in\nLeibfarth’s article in this issue can be copied and pasted into\nTradeStation from the Subscriber Area at www.Traders.com.\nLogin is required.\nStation is presented here."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-70-84-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""259"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-70-84-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-70-84-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov269bofo6,d,"{""minimum-quantity"":""1"",""path"":""ch8a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:8 (92) Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    • The ETF Strategist: Balancing Risk And Reward For Superior Returns

    • Full Of Bull: Do What Wall Street Does, Not What It\nSays, To Make Money in the Market

    • The Intelligent Portfolio: Practical Wisdom On Personal\nInvesting From Financial Engines

    • Sell & Sell Short

    • Study Guide For Sell & Sell Short

    • Smarter Investing In Any Economy: The Definitive Guide To\nRelative Strength Investing

    • Technical Analysis Using Multiple Timeframes

    • Value In Time: Better Trading Through Effective\nVolume"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""259"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov26997at,d,"{""minimum-quantity"":""1"",""path"":""ch8a204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:8 (98, 97) At The Close by Sarp Cercioglu"",""caption-linebreaks"":""At The Close by Sarp Cercioglu

    Trading And The Art Of War

    IF you are a trader, you may\nhave heard the expression\nthat “trading is war.” The similarities between trading and traditional\nwarfare are undeniable and if\ntrading is war, then the financial markets\nare the battlegrounds. When you\nparticipate in active trading, you engage\nin an ongoing battle against other\ntraders as well as your emotions. As a\ntrader, you have the task to determine\nwhich army is stronger, the bulls or bears, and which is more likely to prevail within your time\nhorizon. Further, as a trader, you must be able to handle the\nemotional strain that trading places on you.

    Let us explore the similarities between battles in actual\nwarfare and battles in the markets.

    DECEPTION AND SURPRISE

    One of the most effective tools used in battles was the use of\ndeception and surprise. Sun Tzu, in his military strategy book\nThe Art Of War, wrote, “Those who skillfully move opponents\nmake formations that opponents are sure to follow, give\nwhat opponents are sure to take, they move opponents with\nprospect of gain, waiting for them in ambush.” Many of\nhistory’s greatest battles were won on this principle alone. An\narmy would arrange such a formation that the troops would\nlook narrow from a distance. The other army would seize the\nperceived advantage and attack, only to be defeated."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-98-97-at-the-close-by-sarp-cercioglu-21.gif"",""height"":""259"",""width"":""200""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-98-97-at-the-close-by-sarp-cercioglu-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-8-98-97-at-the-close-by-sarp-cercioglu-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" noname5,d,"{""minimum-quantity"":""1"",""path"":""ch9s204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:9 (10-11): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    MAC USER

    Editor,

    I was a subscriber several years ago and\nenjoyed delving into the details of technical\nanalysis that your publication introduced\nme to. I am starting to get\ninvolved again and am sifting through\nthe numerous products and services\navailable to help the trader.

    I have a high-end Macintosh and know\nvery well that I’m in the minority in the\nrealm of technical analysis (compared\nto the alternatives available to PC users).\nThe programs I used to use may no\nlonger be supported.

    The new capability that I have been\nunable to evaluate is the world of online\nanalysis. If one had a Mac, what are the\ntechnical software applications available?\n(I particularly like candlesticks.)\nAre there online services that would\nmake personal software (installed on\nmy computer) unnecessary?

    Thank you for any guidance you can\nprovide.\nJOHN HAMMERSTROM"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-10-11-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""756"",""width"":""517""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-10-11-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-10-11-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261fofo6,d,"{""minimum-quantity"":""1"",""path"":""ch9s204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:9 (12-13): Forex Focus: Do You Analyze Your Trades? by P. S. Nouvion"",""caption-linebreaks"":""Forex Focus: Do You Analyze Your Trades? by P. S. Nouvion

    Access to foreign exchange trading has opened up exciting trading options for the\nretail trader. You can now trade alongside corporations and institutions in a highly\nliquid market that is global, traded around the clock, and highly leveraged. Before\njumping into this market, however, we must understand the factors that affect the\nforex market. With that in mind, STOCKS & COMMODITIES has introduced Forex\nFocus to better prepare the retail trader to participate in the currency market.

    No, seriously. Do you?

    Ever since I started trading currencies about three years\nago, I knew that I lacked the discipline to be a consistent and profitable trader. But I still love to trade; I just\ncan’t stop thinking of it as a game! I know that’s not the\n“trading guru” way of thinking, but fortunately, I do not risk\ntoo much money on the market and my primary “trade” is as\na programmer, so I guess it is okay for me to trade for fun.

    Every once in a while I try to get back on the righteous path\nand approach the forex market more seriously. Just last\nmonth I created an EA, an automated program, to manage my\norders so that I would not be tempted to gamble and be forced\nto respect my initial stop-loss and profit target. Let’s just say\nthe software was great, but I was still in there messing around\nwith the orders.

    AND SO IT GOES…\nThe issue really is that we don’t know when we’ve won\nenough pips, and we don’t know when we’ve lost enough\npips. So I looked around for money management concepts.\nStandard trailing stops were the first thing I looked at and then\nI moved on to average true range (ATR) trailing stops,\nchandelier exits, and other options. Nothing was helping, so\nI did a lot of research; I even found out that some people do\ntechnical analysis on fundamental analysis. I had been working\non pattern recognition and neural networks (still am), and\nafter going through a lot of complex concepts, I decided to\ntake a simpler approach."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-12-13-forex-focus-do-you-analyze-your-trades-by-p-s-nouvion-21.gif"",""height"":""608"",""width"":""410""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-12-13-forex-focus-do-you-analyze-your-trades-by-p-s-nouvion-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-12-13-forex-focus-do-you-analyze-your-trades-by-p-s-nouvion-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov261deyo,d,"{""minimum-quantity"":""1"",""path"":""ch9s204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:9 (14-18): Develop Your Own Market Lens by Brett Grendahl"",""caption-linebreaks"":""Develop Your Own Market Lens by Brett Grendahl

    When do you know it’s the right time to buy? When\ndo you know it’s the right time to sell? Here’s how\nyou can approach these critical decisions.

    Buying and selling decisions can plague\nyour thinking. It is only when you put\nthese questions under the lens of why you buy and sell stocks will you get consistent success in\nmaking money in the stock market. Here’s the foundation for how I approach\nthese critical decisions.

    First, how do you deal with\nthe overwhelming amount of\ninformation about buying\nstocks and researching companies\nin which to invest your\nmoney? How do you know what\nto pay attention to and what to\nthrow away? One major step in\nmy trading occurred when I\nrealized I needed to figure out\nwhen it was time to act. Before\nI even think of putting my\nmoney at risk in a stock, I first\nput it through my own market\nlens, a specific chart, that I understand.\nOne glance at my market\nlens and I’ll know if I should\nwatch this stock, if I should act\nright now, or if I should not pay\nany attention at all.

    THE MARKET LENS

    As a trader of stocks, we deal\nwith numbers every day. Part of the beauty of working with numbers is that we can\nchart daily fluctuations to improve how we view the\nprice action. That’s why charts are prevalent tools for\nthe pros, and they should be for you too. While it is\neasy to find software to chart stock price movements\n(most online brokers provide fairly decent charts), it\nis just as easy to get hung up in the minutiae of\ncharting and lose sight of why we use charts in the\nfirst place. We should use charts to improve our\ndecisions, not impede them!"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-14-18-develop-your-own-market-lens-by-brett-grendahl-21.gif"",""height"":""614"",""width"":""435""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-14-18-develop-your-own-market-lens-by-brett-grendahl-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-14-18-develop-your-own-market-lens-by-brett-grendahl-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov262styo,d,"{""minimum-quantity"":""1"",""path"":""ch9s204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:9 (20-21): Streamline Your Trading Routine by Dave Mabe"",""caption-linebreaks"":""Streamline Your Trading Routine by Dave Mabe

    Become a more profitable and\nefficient trader by automating your\ntrading. Find out how.

    How many times have you been\ntrading and come across a\ngreat entry price, only to have\nthe price cruise on by before you can get your order in? Worse, you\ndiscover you were just seconds too late\non your trade of the day as the price is\nalready extended beyond your entry\npoint. This is a frequent event in a\ntrader’s life and can often lead to frustration,\nwhich can cloud your thinking\nand even result in overtrading.\nWhen I’m too late to get in on what\nI think would have been a great trade,\nI used to get frustrated. Now I take a\nmethodical approach to analyzing\ntrades I miss by answering the following\nquestions:

    1. Was this a trade I could have\nreasonably seen in time to trade\nit? No matter how efficient your\ndaily routine, you’ll always miss\nsome trades.

    2. Given my current trading routine,\nis this a trade I should have\nseen in time? If so, why didn’t I?

    3. Is there part of my daily trading\nroutine that I could make more\nefficient so I can be prepared for\nmore trades like this?

    Answering these questions turns a\nfrustrating event into an opportunity to\nimprove. One of my goals as a discretionary\ntrader is to use automation to\nstreamline my daily trading routine as\nmuch as possible. There are a variety of aspects of your trading routine that can be streamlined\nand in many cases completely automated."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-20-21-streamline-your-trading-routine-by-dave-mabe-21.gif"",""height"":""611"",""width"":""420""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-20-21-streamline-your-trading-routine-by-dave-mabe-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-20-21-streamline-your-trading-routine-by-dave-mabe-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov262qaby1,d,"{""minimum-quantity"":""1"",""path"":""ch9s204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:9 (22): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    PARAMETER EQUATION?\nSay a stock is priced at 30 and trades\none million shares per day. If you place\na buy market order for 1,000 shares, to\nwhat price do you drive up the stock?\nThis assumes that had you not entered\nthe order, the close would have been 30.\nBasically, I’m looking for an equation\nhaving parameters: price, average daily\nvolume, and order price (and I know\nthis is difficult) for how much you affect\nthe price of the stock. Thanks.—\nSky123987"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-22-q-a-by-don-bright-21.gif"",""height"":""621"",""width"":""459""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-22-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-22-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov262mito,d,"{""minimum-quantity"":""1"",""path"":""ch9s204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:9 (24-33): The MIDAS Touch, Part 1 by Andrew Coles, PhD"",""caption-linebreaks"":""The MIDAS Touch, Part 1 by Andrew Coles, PhD

    The volume-weighted average price can be applied to\ndaytrading and short-term swing trading. Here’s how.

    IN a Technical Analysis of STOCKS & COMMODITIES\narticle published in May 2001, George\nReyna drew attention to how a certain type of\nvolume-weighted average price (VWAP) calculation\ncan be a powerful predictor of support and resistance associated with major reversals off the daily\ncharts. This is a technique that would be of interest to the\nposition trader.

    The ingenuity behind this unique application of the VWAP\nprinciple can only be appreciated in the context of standard\nVWAP calculations, which have been extensively applied in\nthe trading industry for many years. A standard VWAP calculation\nrepresents the total value of shares traded in a particular\nstock on a given day divided by the total volume of shares\ntraded in that stock on that same day. This standard calculation\nis thus a method of pricing transactions and is typically\nused as a benchmark to measure the efficiency of institutional\ntrading or the performance of traders themselves.

    As an example, in the mutual and pension funds industry\nit is used as a trading benchmark: the point of using a VWAP\ntrading target is to ensure that the trader executing the order does so in line with the market volume. This way, transaction\ncosts are reduced by minimizing market impact."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-24-33-the-midas-touch-part-1-by-andrew-coles-phd-21.gif"",""height"":""613"",""width"":""429""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-24-33-the-midas-touch-part-1-by-andrew-coles-phd-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-24-33-the-midas-touch-part-1-by-andrew-coles-phd-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov26321ce,d,"{""minimum-quantity"":""1"",""path"":""ch9s204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:9 (34-41): The 21st Century Technician by Henry “Hank” Pruden, PhD"",""caption-linebreaks"":""The 21st Century Technician by Henry “Hank” Pruden, PhD

    \nA transition to a new paradigm for\nmarket analysis and action may be\nunder way — and it may be a\ncentury old.

    Expect the professional\ntechnician of the 21st\ncentury to acquire\nmany of the attributes\nof the Wall Street technicians\nand traders from 100 years ago. Pattern recognition,\nintuition, judgment, and a feel for\nmarkets and people will become the\ndistinguishing attributes that the technician\nmay cultivate in order to secure\nan edge in 21st-century trading.

    The theme of “pattern, intuition,\njudgment, and feel” may clash with\nthe scientific information technology\napproach to technical analysis that is\ncurrently in vogue. But there are reasons\nto believe that a transition to a\nnew paradigm for market analysis\nand action is under way. Anthony\nTabell and Daniel Pink are on the\nforefront of those who believe this.

    VIEWS OF TONY TABELL

    During an address to the Society for\nthe Investigation of Recurring Events\n(SIRE) in the early 1990s, Tony\nTabell, a third-generation technician,\nconcluded that with the arrival of\nnew thinking on Wall Street (for\nexample, the rise of behavioral finance\nand chaos theory), the technician\nof the new era will hearken back\nto the old-time technicians who\nworked on Wall Street in the early\npart of the 20th century. Tabell went\non to define several important characteristics\nof the old-time technicians\nthat can be used as instructive\nguides for today’s professional technical analyst: intuitive,\ndeterministic, contrary, apocalyptic (Figure 1)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-34-41-the-21st-century-technician-by-henry-hank-pruden-phd-21.gif"",""height"":""613"",""width"":""427""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-34-41-the-21st-century-technician-by-henry-hank-pruden-phd-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-34-41-the-21st-century-technician-by-henry-hank-pruden-phd-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov26452th,d,"{""minimum-quantity"":""1"",""path"":""ch9s204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:9 (48-49, 52): Three Common Tools, One Protocol by Charles K. Langford"",""caption-linebreaks"":""Three Common Tools, One Protocol by Charles K. Langford

    Three common tools of technical\nanalysis can work together to generate\ncontinuous profits.

    Common technical tools can\nbe used together to generate\na steady profit flow by using\na single protocol. To examine\nhow this can be done, the price action\nis divided into three time sequences: exhaustion\nof a trend, advent, and birth of\nthe new trend. Among the dozens of tools\navailable in technical analysis, three represent\nthis method in a simple way: relative\nstrength index (RSI), moving average\nconvergence/divergence (MACD), and exponential\nmoving average (EMA). Used\ncorrectly, these three tools can generate\ncontinuous profits.

    Here’s an example using the wheat\nmarket. Figure 1 is of the December 2007\nCBOT contract. The daily bar chart shows\ntwo EMAs (seven and 27 periods); the\nMACD (7, 27, 7), which I find to work\nmore efficiently than the usual 12, 26, 9;\nand the 14-period RSI.

    BIRTH AND DEATH\nOF THE UPTREND\nAn uptrend is born when the two EMAs\ngive a buy signal. The signal occurs as\nthe EMA(7) crosses above the EMA(27).\nAfter several attempts, on May 25, 2007,\nthe EMA(7) crossed above the EMA(27).\nThe price at the close was 525’0 cents.\nThis was the birth of an uptrend, and as\ntime elapsed, it accelerated — that is, the\nEMA(27) became more convex. We had\na first peak at 907’0 on September 12,\n2007, when the RSI was at 84.18. A\nsecond, and the last in the chart, was at\n961’6 on September 28, when the RSI\nwas at 76.20."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-48-49-52-three-common-tools-one-protocol-by-charles-k-langford-21.gif"",""height"":""622"",""width"":""467""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-48-49-52-three-common-tools-one-protocol-by-charles-k-langford-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-48-49-52-three-common-tools-one-protocol-by-charles-k-langford-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265exyo2,d,"{""minimum-quantity"":""1"",""path"":""ch9s204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:9 (50): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    CREDIT SPREAD TO COLLAR SPREAD?

    I have heard of using a credit spread\nget into a collar. This makes sense\nme, but I’m not sure when to make the\nadjustment. Is it better to do it before or\nafter expiration?

    Rolling a credit spread into a collar\nis a reasonable strategy in certain\nsituations. Let’s first consider using\nputs to buy stock and then look at put\ncredit spreads. If you have a bullish\nview on a stock and are willing to buy\nit at a lower price from where it currently\nis, you might sell puts with strike\nprices below the current stock price and\npocket the premium. If the stock falls,\nyou get assigned on the puts and acquire\nthe stock at the strike price of the\nput option. This is a common strategy\nthat is used relatively often."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-50-explore-your-options-by-tom-gentile-20.gif"",""height"":""622"",""width"":""467""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-50-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-50-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265fufo1,d,"{""minimum-quantity"":""1"",""path"":""ch9s204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:9 (53): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    ON THE MINI-DOW

    Assuming I am long a futures contract,\nhow do I get a guaranteed stop-loss on\nthe mini-Dow?

    The truth is that stop-loss orders are\nnever guaranteed. By definition, a stop\norder becomes a market order once the\nnamed price is hit or becomes the bid or\noffer. In the case of the mini-Dow, orders\nare routed and executed electronically\nso the slippage tends to be far less\nthan what may be experienced in an open\noutcry environment. However, slippage\ncan and will happen regardless of the\nvenue. There is an order type known as\na “stop limit” in which a trader can name\nthe amount of slippage that she will\naccept, but this isn’t recommended because\nshe may end up without a stop\norder working at all. This occurs if the\nmarket drops sharply enough to trade\nthrough the stop limit price without the\nstop being filled."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-53-futures-for-you-by-carley-garner-20.gif"",""height"":""607"",""width"":""410""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-53-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-53-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov265insu,d,"{""minimum-quantity"":""1"",""path"":""ch9s204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:9 (58-64): Interview: Suri Duddella Notes by J. Gopalakrishnan and B. Faber"",""caption-linebreaks"":""Interview: Suri Duddella Notes by J. Gopalakrishnan and B. Faber

    Suri Duddella is a private trader who has been trading in the futures, equities,\nand forex markets full time for the past 12 years using his proprietary models and\nmethods. He founded a financial research and analysis company from 1998 to\n2005 specializing in financial modeling, research/analysis, and technology\narchitecture for financial institutions, investment research, and investment\nmedia companies. The company was hailed as “Best of the Web” by Forbes\nmagazine and featured in Barron’s as an “Excellent Technical Analysis Site” in\n2002. In addition, Duddella, who has published the findings of his work widely,\nhas also appeared on various TV and radio shows and presented his research at\nvarious investment conferences in the US. Duddella is also a member of the\nAmerican Association of Professional Technical Analysts. His first book, Trade\nChart Patterns Like The Pros, was published in 2007.

    Technical Analysis of STOCKS & COMMODITIES Editor Jayanthi\nGopalakrishnan and Staff Writer Bruce Faber spoke to Duddella via telephone\non July 10, 2008. For more on his research, visit surinotes.com.

    Suri, tell us how you got interested\nin trading.\nI am originally from India,\nand I am a trained robotics\nengineer. Part of my work involves\nwriting and developing a lot of application\nsoftware, which includes graphics\nand automation. Around 1992 or 1993,\nI saw that the Internet was just about to\nget popular and I knew it would be the\nfuture, so I wanted to get involved. I was\nretraining myself to do that when luck\nbrought me to a consulting company in\nWashington, DC. The company was\nbuilding power trading tools for utility\ncompanies. This was around 1995, when\nthe Power Deregulation Act came in. So\nI became a consultant for them and was\nbuilding some of their trading platforms.\nI was around traders who were using\ncharting applications and mathematics\nto actually derive the prices for power\nand energy. That’s how I got interested\nin trading. They taught me quite a bit\nabout how trading works and what goes\non in the real-time markets. That is how\nI found my true passion. I was with the\ncompany till about 1996. Then I founded\nmy own company, which provided market\nresearch and analysis for the financial\nindustry. I have been trading full\ntime since then.

    JG: You’ve been a full-time trader\nfor more than 10 years. Have you\nhad any memorable experiences during\nyour trading career?

    I don’t have a war story, but what is\nworth mentioning is how I changed my\ncareer, how I pursued my trading goals,\nand the types of objectives I set every day.\nI also changed my mindset. In the first few\nyears I traded only equities. Then when I\nwas introduced to the futures markets, I\nwas purely a countertrend trader. I found\ncountertrend trading to be pretty effective\nbecause I used market patterns to detect\ntops and bottoms, but the countertrending\nmentality is different. So how I switched\nfrom countertrend to the trending mentality\nis worth mentioning.

    First of all, I consider myself a type-\nA personality. My introduction to futures\nwas through the Dow Jones emini\nfuture (YM). I would wait for the trend\nto end and then take a countertrend\nposition. The problem with countertrending\nis that once I was in, I would constantly\nbe looking for a countertrend position.\nSo I was only taking a short time position\nbecause of the countertrend. I made\na lot of money that way, but when you\nare wrong in the countertrend, you are\ncompletely wrong. It will take all your\nprofit. Countertrend trading is like an addiction. You can’t really get out once\nyou get hooked on it.

    Once I realized that, I made a behavioral\nchange. This was around 2004 or\n2005. I had started working on my book\nand was analyzing patterns. I started\ncollecting hundreds of patterns every\nday. When I analyzed these patterns, I\nwould write various pattern recognition\nalgorithms and backtest them."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-58-64-interview-suri-duddella-notes-by-j-gopalakrishnan-and-b-faber-20.gif"",""height"":""629"",""width"":""495""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-58-64-interview-suri-duddella-notes-by-j-gopalakrishnan-and-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-58-64-interview-suri-duddella-notes-by-j-gopalakrishnan-and-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266prre11,d,"{""minimum-quantity"":""1"",""path"":""ch9s204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:9 (66-67) Product Review: QuoteMachine by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Product Review: QuoteMachine by Jayanthi Gopalakrishnan

    Traders like to receive up-to the\nminute data from financial\nmarkets. But how sophisticated\ndoes that\ndatafeed have to be? The choice is yours, and I’m sure you have\nfound several from which you could\nchoose. But before making that decision,\nhere is one more to add to your list\nof options. QuoteMachine, a product of\nOnTick.com, is a real-time datafeed\nthat was designed by traders, for traders.\nIt provides you with everything you need to trade. This includes streaming\nreal-time quotes, live intraday charts\nwith an array of technical indicators,\nalarms, option chains, scanning tools,\nand trading models. You can also easily\ngo to your brokerage’s website and\nplace your trades."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-66-67-product-review-quotemachine-by-jayanthi-gopalakrishnan-20.gif"",""height"":""622"",""width"":""462""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-66-67-product-review-quotemachine-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-66-67-product-review-quotemachine-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov266prre12,d,"{""minimum-quantity"":""1"",""path"":""ch9s204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:9 (68-70) Product Review: Zignals.com by Dennis D. Peterson"",""caption-linebreaks"":""Product Review: Zignals.com by Dennis D. Peterson

    Zignals is a website for generating\nalerts and analyzing\ncharts. My initial interest in\nthis website came from an\narticle I read in one of the local newspapers. The article said that\nMicrosoft had bought a 15% interest in\nZignals and the software detected overall\nprice movements. This piqued my\ninterest, as Microsoft has a lot of very\nsmart folks. What attracted them to\nZignals? I had to find out.

    The answer lies in the ability of the\nsite to do things that you usually have to\npay for. For example, it automatically\nfinds gaps and trendlines. The site has\ntwo halves and on one side you have the\nalert generation software, while on the\nother, there’s the charting software.

    Before you get started, you’ll need to\ninstall Silverlight, a browser plug-in,\nand you’ll need to download it twice.\nThe first download lets you install\nSilverlight 1.0, and the second lets you\ninstall Silverlight 2.0. Until Silverlight\n2.0 is installed, you won’t be able to see\nany charts (and by the time this is published,\nyou may have to download a\nstill-newer version of Silverlight). But\nyou’ll have to register first."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-68-70-product-review-zignals-com-by-dennis-d-peterson-20.gif"",""height"":""624"",""width"":""474""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-68-70-product-review-zignals-com-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-68-70-product-review-zignals-com-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov267trti5,d,"{""minimum-quantity"":""1"",""path"":""ch9s204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:9 (71-83): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    Editor’s note: This month’s Traders’ Tips\nare based on Andrew Coles’s article in this\nissue, “The MIDAS Touch, Part 1.”

    Code for MetaStock and MetaStock Pro\nis already provided in Coles’s article. Additional\ncode is presented here contributed\nby software developers.

    Readers will find our Traders’ Tips section\nin its entirety at the STOCKS & COMMODITIES\nwebsite at www.Traders.com in\nthe Traders’ Tips area, from where the code can be copied\nand pasted into the appropriate program. In addition, the\ncode for each program is usually available at the respective\nsoftware company’s website. Thus, no retyping of code is\nrequired for Internet users.

    For subscribers, the MetaStock and MetaStock Pro code\nfound in Coles’s article in this issue can be copied and\npasted into MetaStock from the Subscriber Area at\nwww.Traders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-71-83-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""617"",""width"":""442""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-71-83-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-71-83-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov269bofo7,d,"{""minimum-quantity"":""1"",""path"":""ch9s204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:9 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    • The ART Of Trading

    • Getting Started In Candlestick Charting

    • The Commitments Of Traders Bible

    • The Trading Method That Can Make You Rich: 2nd Edition

    • Guide To Hedge Funds

    • The Art Of The Trade II

    • Turning Losing Forex Trades Into Winners

    • Volatility Trading"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-92-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""608"",""width"":""411""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov26997at1,d,"{""minimum-quantity"":""1"",""path"":""ch9s204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 26:9 (98, 97): At The Close by Danish Kapur"",""caption-linebreaks"":""At The Close by Danish Kapur

    Swing Trading And Market Pace

    What do financial markets show? Personally, I don’t\nthink they show much besides the way the people associated with them are thinking. And that thinking keeps\nchanging. Sometimes people get fearful and sometimes they\nget greedy, which is why markets keep moving, frequently\nmaking swing highs and swing lows.

    So financial markets represent the psychology of the\npeople trading the markets. Everything people have on their\nminds is depicted in the form of the price on charts. Like the\nsaying goes, “Prices discount everything.” All technical\nindicators are derived from price. So we can say that all\nindicators are based on the psychology of those associated\nwith the markets.

    TRADING SWINGS

    You just have to take care to limit your loss and profit will take\ncare of itself. This is what I believe, and one of the methods to\nachieve this is to study price using swing charts along with\nstudying the pace of markets. The study of the pace of the market helps me confirm the turning points in markets."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-98-97-at-the-close-by-danish-kapur-20.gif"",""height"":""610"",""width"":""415""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-98-97-at-the-close-by-danish-kapur-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-26-9-98-97-at-the-close-by-danish-kapur-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov27197le,d,"{""minimum-quantity"":""1"",""path"":""ch1j201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:01 (10-11, 97): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Stocks & Commodities V. 27:01 (10-11, 97): Letters To S&C by Technical Analysis, Inc.

    Editor,

    John Ehlers presented\na most interesting\ndiscussion\nof corona\ncharts (“Corona Charts,” November\n2008, STOCKS & COMMODITIES) and I\nnote that while the code for TradeStation\nand a few other programs appear in your\nTraders’ Tips section of that issue and\nalso on your website, a version suitable\nfor MetaStock EOD is notably missing.\nIs this because the software is unsuitable\nfor the task, or just not available?\n- TREVOR T. BESTOW\nRoleystone, Western Australia

    The Traders’ Tips section contains code\nsubmitted by the software developers. If\nthe MetaStock code is missing, it means\nthat the code was not submitted by Equis.\nI recommend you visit the MetaStock\nusers forum and ask other users if they\nhave been able to recreate the code in\nMetaStock.—Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-10-11-97-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""756"",""width"":""510""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-10-11-97-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-10-11-97-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271fofo,d,"{""minimum-quantity"":""1"",""path"":""ch1j201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:01 (12-13): Forex Focus: The RSI Miracle by Hadi Seyedinajad"",""caption-linebreaks"":""Stocks & Commodities V. 27:01 (12-13): Forex Focus: The RSI Miracle by Hadi Seyedinajad

    If we had to choose just one indicator\nto tradethe financial markets, it would\nbe J. Welles Wilder’s RSI. It does everything\nyou expect from an indicator.\nIt’s an overbought/oversold alert system,\na convergence/divergence detector,\nand a momentum indicator, but it\ncan do even more.

    The old saying amid radical technicians, that “the price chart has everything you need,” is not just a slogan. The information that we can extract from price vs. time data is amazing and I am not sure what this reflects, human intelligence or the harmony existing in the universe. By reading a price chart we must develop mathematical functions of price. These are tools to help us interpret the raw price data or extract hidden information such as momentum or market pace.

    There are different ways to measure momentum, each differing in their definition and calculation. The one that you have learned to interpret and that fills a gap in your market analysis would be the one you pick for your analysis. I have selected the relative strength index (Rsi), which, in addition to identifying overbought/oversold areas, detecting divergences, and identifying momentum, also linearizes a trend.

    Price tops or bottoms are not always in a relatively straight trendline. By looking at the Rsi, you’ll see that a perfect trendline often manifests itself. In this article I will present examples using the currency markets."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-12-13-forex-focus-the-rsi-miracle-by-hadi-seyedinajad-21.gif"",""height"":""757"",""width"":""526""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-12-13-forex-focus-the-rsi-miracle-by-hadi-seyedinajad-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-12-13-forex-focus-the-rsi-miracle-by-hadi-seyedinajad-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271mera,d,"{""minimum-quantity"":""1"",""path"":""ch1j201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:01 (19-22): The MEGAN Ratio by Oscar Cagigas"",""caption-linebreaks"":""Stocks & Commodities V. 27:01 (19-22): The MEGAN Ratio by Oscar Cagigas

    Which system will generate more return? Here’s a metric that will help you answer that question.

    Many metrics can evaluate the performance of trading systems. These include net profit, recovery factor, Sharpe ratio, K-ratio, and risk-adjusted return. Even though you can use these metrics to select the best trading system for you, the criteria for selecting a system tend to be arbitrary. Metrics such as the Sharpe ratio or K-ratio give an indication about the slope and smoothness of the equity curve but don’t indicate which system is the best in terms of monetary performance.

    Not only that, keep in mind that the system with the best net profit after simulation is not necessarily the one that will generate a higher return when you actually trade it. Another system with fewer trades in the simulation but better statistics could produce more trades and superior performance. Real trading results will differ from simulated trades because different systems have different holding periods for trades. Those systems that generate more trades in the same period should do better (if the rest stays the same)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-19-22-the-megan-ratio-by-oscar-cagigas-21.gif"",""height"":""756"",""width"":""519""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-19-22-the-megan-ratio-by-oscar-cagigas-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-19-22-the-megan-ratio-by-oscar-cagigas-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov272idan,d,"{""minimum-quantity"":""1"",""path"":""ch1j201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:01 (28-35): Identifying And Timing With The Special K, Part 2 by Martin J. Pring"",""caption-linebreaks"":""Stocks & Commodities V. 27:01 (28-35): Identifying And Timing With The Special K, Part 2 by Martin J. Pring

    In part 1, you were introduced to the Special K indicator and its application on the weekly and daily charts. In part 2, we will show you how Special K can be used to identify major trend reversals and for timing pro trend short-term moves.

    I mentioned in part 1, my favorite method of displaying the Special K uses a calculation (see sidebar) based on daily data and exclusively incorporating simple moving averages like that displayed in Figure 1. As you can see from this chart, the movements in the daily Kst and the Special K are similar. The daily Kst shows overbought and oversold conditions, which are not apparent from the summed cyclicality of the Special K.

    Let’s see how the Special K can be used to identify major trend reversals and to time pro trend short-term moves.

    IDENTIFYING MAJOR TREND REVERSALS EARLY

    The following techniques will help better time primary trend reversals:

    1.Observing trendline breaks, such as that in late 2006 in Figure 1.

    2.Identifying a reversal in a series of rising or falling peaks and troughs. For example, the end of the bull market in November 2007 was signaled this way.

    3.Observing the crossovers of the Special K’s smoothing. In this case, I typically use a 100-day smoothing of a 100-day simple moving average, as shown in Figure 1. The series of declining peaks and troughs was still in force in mid-September 2008 as this article was written. Note that the 100/100 smoothing is not offered as the perfect solution but more as a smoothing that appears to work fairly consistently. In Figure 1, the green and red arrows show two such crossovers."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-28-35-identifying-and-timing-with-the-special-k-part-2-by-martin-j-pring-21.gif"",""height"":""756"",""width"":""570""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-28-35-identifying-and-timing-with-the-special-k-part-2-by-martin-j-pring-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-28-35-identifying-and-timing-with-the-special-k-part-2-by-martin-j-pring-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov273joba,d,"{""minimum-quantity"":""1"",""path"":""ch1j201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:01 (36-41): Join The Band by Marco Alves"",""caption-linebreaks"":""Join The Band by Marco Alves

    Apply this method to moving average crossovers to get rid of the lag and the false signals.

    One of the first indicators that any technical analysis novice studies is the moving average crossover. Moving averages (MAs) smooth a price series by determining the average closing price for a determined period (the last n bars) and, as a result, are lagging indicators, more suited to trending markets rather than rangebound ones.

    If two MAs of different periods are used together, a simple trading system can be built around it easily. Every time the shorter (faster) moving average crosses above the longer (slower) one, a buy signal is generated; a sell signal is produced when the faster average crosses below the slower one.

    As any technical analyst knows, these crossovers are prone to whipsaws; the price moves just enough in one direction to trigger a signal, then quickly changes direction, triggering an opposite signal. This causes early entries and exits that jeopardize trade performance (Figure 1).

    Whipsaws are the result of the sensitivity of MAs to data fluctuations. The classical approach to this problem has been to increase the averaging period (Figure 2) at a cost of increased lag, which, if too pronounced, may render the indicator useless.

    In addition, whipsaws tend to affect different time frames in a similar manner. For example, a set of two MAs on a daily chart will probably incur a similar frequency of false signals during the course of seven months (154 bars) as an equally parameterized set of MAs will sustain on a three-year weekly chart (3 * 52 = 156 bars). The annoyance frequency just moves to a larger time frame.

    So the problem lies in the concept: simple line crossovers must be replaced as signal generators by a different kind of triggering system."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-36-41-join-the-band-by-marco-alves-21.gif"",""height"":""756"",""width"":""540""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-36-41-join-the-band-by-marco-alves-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-36-41-join-the-band-by-marco-alves-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274qaby,d,"{""minimum-quantity"":""1"",""path"":""ch1j201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:01 (42): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 27:01 (42): Q&A by Don Bright

    OTHER OPENING STRATEGIES?

    Are there similar strategies to the opening-only strategy for the close of the market each day? Anyone care to share the idea behind them or give me a place to research if you don’t care to share? Thanks. —taclander

    First off, let’s discuss market mechanics at the end of the trading day. All-day-long orders are submitted to the New York Stock Exchange (Nyse) marked as “market on close” (Moc). These orders will be given the last trade price of the day. These orders to buy or to sell are matched with each other until the 3:40 pm cutoff for this type of order. At 3:40, the Nyse publishes the Moc imbalances, which are the excess buy or sell number of shares with this order designation. If there were one million shares to buy GE market on close and three million shares to sell Moc, there would be a negative two million excess number of shares to sell at the last price of the day. The Nyse will only accept offsetting orders after 3:40 to help cover the excess imbalance. The Nyse will republish the adjusted imbalance number at 3:50. This may bring the number down to one million or so to sell, or even reverse to an excess to buy."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-42-q-a-by-don-bright-21.gif"",""height"":""756"",""width"":""537""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-42-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-42-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274wate,d,"{""minimum-quantity"":""1"",""path"":""ch1j201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:01 (48-53): Walk-Forward Testing by Jack L. Weinberg"",""caption-linebreaks"":""Stocks & Commodities V. 27:01 (48-53): Walk-Forward Testing by Jack L. Weinberg

    Here’s how you can use walk-forward testing as a tool to compare trading systems and gain insight into comparing the future performance of systems.

    Recent advances in trading system software and powerful hardware capabilities have provided a valuable tool in evaluating the future viability of trading systems — walk-forward testing. This technique allows the trading system developer to quickly assess if the system will survive (or even prosper) in the future. It does this by segmenting the past into in-sample and out-of-sample periods, and by optimizing each successive in-sample period to provide the values for the next out-of-sample period. In addition, testing can be used to compare one system with another. Walk-forward testing provides a unique insight into comparing the projected performance of trading systems."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-48-53-walk-forward-testing-by-jack-l-weinberg-21.gif"",""height"":""757"",""width"":""523""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-48-53-walk-forward-testing-by-jack-l-weinberg-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-48-53-walk-forward-testing-by-jack-l-weinberg-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275info,d,"{""minimum-quantity"":""1"",""path"":""ch1j201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:01 (54-60): Interview: Forecasting Simplified, With Cynthia Kase by J. Gopalakrishnan"",""caption-linebreaks"":""Interview: Forecasting Simplified, With Cynthia Kase by J. Gopalakrishnan

    Cynthia Kase, president of Kase and Co., Cta, is considered by many to be the energy market’s premier technical analyst and hedging advisor. Educated as an engineer, she worked as a trader and risk manager for Chevron, Chemical Bank, and the Saudi Oil Ministry’s consulting arm, Petronal, before launching her company in 1992, which primarily focuses on providing trading and hedging strategies, software and solutions to the energy market, but also offers a trading toolbox, StatWare, on a range of trading platforms. She has been the winner of the Market Technicians Association’s Best of the Best Award, 1997, received the Key Women in Energy Award twice, first in 2002 for Vision and in 2004 for Innovation and Creativity, and in 2007 became the first American to be awarded the coveted Master of Technical Financial Analysis diploma from the International Federation of Technical Analysts.

    Stocks & Commodities Editor Jayanthi Gopalakrishnan interviewed Kase on November 1, 2008.

    Cynthia, tell us how you got started trading and what you are doing now.

    I was educated as a chemical engineer. I got a master’s degree in chemical engineering and I worked for the first 10 years of my career as an engineer. I graduated in 1973 and worked for Polaroid near Boston where I grew up and then Stauffer Chemical in the Bay Area. In January 1980 I went to work for Standard Oil Co. of California, which became Chevron. The company had a management development program where it would move people from engineering to the business side of the oil industry. In 1983 they transferred me from engineering to the trading group, and that’s how I became a trader. So really, it was by accident.

    Was that a big change?

    As an engineer I would read all the engineering magazines to try to improve my skills and knowledge. When I went over to trading in 1983, it was the same year the crude oil contract was introduced. So there were people trading physical but weren’t sure what short or long meant or what a moving average was, or anything like that. I was frustrated for a while, because here I was an engineer but I was in the middle of this fundamental, gut-feeling kind of trading instead of numbers and analysis. When I discovered technical analysis, I loved it because it gave me something to study and learn and helped me get a sense of the market.

    I was transferred to New York in 1985 to manage that office’s clean products business, including gasoline, jet fuel, and heating oil. So I traded physical cargos in New York for the rest of the 1980s, but I learned a lot about technical trading because trading became, even on the physical side, just a differential to the Nymex. So if you were going to trade a cargo of heating oil, for example, it was Nymex plus or minus something. It was a proxy for the physical.

    Also, in working for one of the huge international oil companies when brokerage commissions were around $35 a round turn in 1985–88 dollars, the brokers were only too happy to give us lots of education. Back then, the Nymex was only a small exchange that nobody had heard of.

    What did you do after that?

    I became a self-taught technician because in those days, and it still is to some degree, technical analysis was associated with voodoo. I went to work for Chemical Bank as a commodity derivatives trader at a time when the derivatives business was just in its infancy. I had a lot of time on my hands, so I started developing my own indicators and I bought all the Tag (Technical Analysis Group) tapes that the old Dow Jones Telerate used to offer."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-54-60-interview-forecasting-simplified-with-cynthia-kase-by-j-gopalakrishnan-21.gif"",""height"":""756"",""width"":""585""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-54-60-interview-forecasting-simplified-with-cynthia-kase-by-j-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-54-60-interview-forecasting-simplified-with-cynthia-kase-by-j-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276exyo,d,"{""minimum-quantity"":""1"",""path"":""ch1j201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:01 (61): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    PUTS DON'T MAKE MONEY WHEN STOCK FALLS

    I am trying to understand why I did not make any money on a put option. I am hoping you can shed some light. On October 23, 2008, I bought an Xyz put option with the 15 strike price. I bought two contracts at $2.10, or $420 total. The stock dropped to near the strike price. I sold on November 11 for $1.95 and collected $390. I lost $30 even though the stock dropped the way I thought it would. How can this happen?

    In order to answer your question, it is important that you understand that several factors will influence the value of a stock option, not just the stock price. Certainly, the price of the stock is often the most important. If I buy a call and the stock moves higher, chances are the call will increase in value. On the other hand, if I buy a put and the stock moves lower, the put will probably increase in value. Most traders understand this and, for that reason, many investors buy puts and calls as a leveraged or cheaper way to play moves in the stock."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-61-explore-your-options-by-tom-gentile-21.gif"",""height"":""756"",""width"":""512""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-61-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-61-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276prre,d,"{""minimum-quantity"":""1"",""path"":""ch1j201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:01 (62-65): Product Review: NexTrend by Dennis D. Peterson"",""caption-linebreaks"":""Product Review: NexTrend by Dennis D. Peterson

    NexTrend is what you might call one-stop shopping. It has a bit of everything for traders — streaming quotes (delayed), charting with drawing tools, indicators, news sources, sample trading results, alerts and screening, and more. With so many features, navigation could be an issue, but NexTrend has a straightforward solution.

    NAVIGATION

    The main screen shows a short menu across the top and a column of icons on the left. A click on any of those icons will open up a new page, which is any set of screens you might want displayed. This means you could have a page with monthly and daily charts with news, and on a second page you could have fundamentals with some other data.

    You create new pages by clicking on the page icon (Figure 1) and select the page you want by clicking on the tab on the bottom. You can save your pages, and once you have all of your pages loaded, you click on the tab for the one you want. “Setup” on the menu line has an automatic restore option to add whatever you want to appear when NexTrend begins execution. There are sample pages you might want to go through before setting up your own for useful ideas embedded in them."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-62-65-product-review-nextrend-by-dennis-d-peterson-21.gif"",""height"":""756"",""width"":""567""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-62-65-product-review-nextrend-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-62-65-product-review-nextrend-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276thru,d,"{""minimum-quantity"":""1"",""path"":""ch1j201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:01 (66-69): Three Rules, One Easy Way To Trade ETFs by Larry Conners and David Penn"",""caption-linebreaks"":""Three Rules, One Easy Way To Trade ETFs by Larry Conners and David Penn

    Here’s a short-term trading strategy to trade exchange traded funds.

    A famous trader once remarked that he could publish the secrets to his winning trading strategy in the newspapers and no one would follow them. The key, this famous trader explained, was consistency and discipline.

    In our opinion, when it comes to trading and trading strategies, one of the things that makes consistency easier and discipline a bit less daunting is simplicity. With few exceptions, all the trading strategies we have developed over the years have had simplicity as their hallmarks.

    What we’ve developed in this latest trading strategy is short-term trading at its simplest. Instead of stocks, we focus on the smaller universe of market index exchange-traded funds (Etfs). We also created the system as long-only — no need to worry about borrowing shares of Etfs. And last but not least, we limited the strategy to three simple rules.

    THE DOUBLE 7'S

    Before we tell you those rules, first understand a bit about this trading strategy, which we call Double 7s. We tested this strategy on both the Standard & Poor’s 500 (Spx) and the Nasdaq 100 (Ndx) from January 1995 through April 2008. The results over that time period for the S&P 500 were +1,133 points, with nearly 80% of the trades closing profitably. In the Nasdaq 100, the results were similarly impressive. From January 1995 through April 2008, the Double 7s strategy in the Nasdaq 100 yielded 2,822 points, with 79.84% of the trades closing in the green."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-66-69-three-rules-one-easy-way-to-trade-etfs-by-larry-conners-and-david-penn-21.gif"",""height"":""756"",""width"":""532""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-66-69-three-rules-one-easy-way-to-trade-etfs-by-larry-conners-and-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-66-69-three-rules-one-easy-way-to-trade-etfs-by-larry-conners-and-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov277were,d,"{""minimum-quantity"":""1"",""path"":""ch1j201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:01 (70-71): Website Review: eMiniZ.com by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Website Review: eMiniZ.com by Jayanthi Gopalakrishnan

    eMINIZ.com\nBack in September 2006, we reviewed www.eminiz.com, a website developed by John F. Ehlers. Since then there have been several additions and enhancements that make it worth looking at again.\nWhen you visit the site, the first thing that will catch your eye are four gauges. For those of you who are familiar with John Ehlers’s work on corona charts (an article on the subject was published in the November 2008 issue of S&C) will recognize the terms such as cycle period, cycle swing position, cycle S/N ratio, and the adaptive trend vigor. If you’re not familiar with corona charts, the details about what the gauges indicate are displayed prominently on the home page, and you also have access to other features that will help you understand them better. You can also download EasyLanguage indicator code for corona charts."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-70-71-website-review-eminiz-com-by-jayanthi-gopalakrishnan-21.gif"",""height"":""757"",""width"":""510""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-70-71-website-review-eminiz-com-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-70-71-website-review-eminiz-com-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov277fufo,d,"{""minimum-quantity"":""1"",""path"":""ch1j201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:01 (72): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    FULL SERVICE OR SELF SERVICE?

    Should I use a full-service futures and option broker or trade for myself online?\nThis is a decision that is often made with little research or thought but has the potential to have the biggest impact on the bottom line. I would argue that traders should put nearly as much effort into finding a broker and determining the service type that fits their needs and desires as they do researching the markets that they will be trading.\nMaking a mistake in the choice of your service level can be costly. An inexperienced trader opting for a deep-discount online rate may accumulate far more in market losses and trade placement errors than paying a full-service broker would have ever cost. This is not to imply that a full-service broker will assure accurate speculation and prevent losses, but using a good broker may avoid some of the common newbie mistakes. In addition, it is possible that having an experienced broker to bounce ideas off of may improve results."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-72-futures-for-you-by-carley-garner-20.gif"",""height"":""757"",""width"":""511""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-72-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-72-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov277trti,d,"{""minimum-quantity"":""1"",""path"":""ch1j201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:01 (73-83): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    This month’s Traders’ Tips are based on Oscar Cagigas’s article in this issue, “The Megan Ratio.”

    Code in AmiBroker Formula Language for the Megan ratio from Cagigas’s article is included at the end of this document. Additional code is presented here as contributed by software developers.

    Readers will find our Traders’ Tips section in its entirety at the Stocks & Commodities website at www.Traders.com in the Traders’ Tips area, from where the code can be copied and pasted into the appropriate program. In addition, the code for each program is usually available at the respective software company’s website. Thus, no retyping of code is required for Internet users.

    For subscribers, the AmiBroker code found in Cagigas’s article can be copied and pasted into AmiBroker from the Subscriber Area at www.Traders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-73-83-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""759"",""width"":""544""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-73-83-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-73-83-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov279bofo,d,"{""minimum-quantity"":""1"",""path"":""ch1j201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:01 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    Beat The Market: Invest By Knowing What Stocks To Buy And What To Sell

    China Fireworks: How To Make Dramatic Wealth From The Fastest-Growing Economy In The World

    DeMark Indicators

    ETFs For The Long Run

    The Stock Market Philosopher: Insights Of A Soviet-Born, New York–Bred Hedge Fund Trader

    Swing Trading For Dummies

    Stock Trader’s Almanac 2009"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-92-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""756"",""width"":""513""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov2799697,d,"{""minimum-quantity"":""1"",""path"":""ch1j201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:01 (98, 96, 97): At The Close by Adrienne Toghraie"",""caption-linebreaks"":""At The Close by Adrienne Toghraie

    When is it too soon or too late? How much is too much or not enough?

    Some of the most important questions that a trader must address have to do with getting the timing and the amount just right. There is an art to finding the right balance in life between too early and too late, and between too little and too much. For a trader, finding the right point to enter and exit a trade is critical to making money and limiting loss. Exercising the right amount of risk is also critical. Too much risk brings the possibility of losing too much money to keep you in the game. Taking on too little risk means that you will severely limit the amount of money you can make as a trader. So how do you find that point of balance?

    POINT (T) ON THE LAFFER CURVE

    If you have studied economics, you are probably familiar with the Laffer curve. For everyone else, the Laffer curve shows the relationship between taxes and tax revenue. As tax rates increase from low levels, people work harder and the government collects more taxes, but after a certain point (T), as tax rates continue to increase, people stop working harder and the revenues drop off. So governments want to find that point on the curve that simultaneously maximizes effort and tax receipts."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-98-96-97-at-the-close-by-adrienne-toghraie-20.gif"",""height"":""755"",""width"":""521""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-98-96-97-at-the-close-by-adrienne-toghraie-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-01-98-96-97-at-the-close-by-adrienne-toghraie-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275incl,d,"{""minimum-quantity"":""1"",""path"":""ch2f204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:02 (52-57): Interview: Classic Swing Trading With Linda Bradford Raschke by J. Gopalakrishnan and B. R. Faber"",""caption-linebreaks"":""Interview: Classic Swing Trading With Linda Bradford Raschke by J. Gopalakrishnan and B. R. Faber

    Hers is a name that you’ve probably heard or read any number of\ntimes if you’ve been interested in or involved in technical analysis for\nvery long. Linda Bradford Raschke began her trading career in 1981\non the floor of the Pacific Coast Stock Exchange before moving to the\nPhiladelphia Stock Exchange, eventually trading her own account from\nhome. StockS & commoditieS Editor Jayanthi Gopalakrishnan (JG)\nand Staff Writer Bruce Faber (BF) spoke to Raschke via telephone on\nDecember 4, 2008.

    Linda, how did you get interested\nin trading?

    It was when I was just out\nof college and I had these glamorous ideas that I was going to\nbe a stockbroker. I had moved to San\nFrancisco and applied to every firm in\nthe city, and got turned down by all of\nthem.

    BF: They are kicking themselves\nnow.

    Of course nobody wanted a kid out of\ncollege with no experience. So I ended\nup taking a job at Crown Zellerbach,\nwhich was right across the street from\nthe Pacific Coast Stock Exchange. Every\nmorning I would see these traders going\nin and out of the exchange wearing their\ntrading jackets. I befriended one of them\nwho taught me about options, and then\nwent through this course that the clearing\nfirm offered at the time on how to price\nthem. This was in equity options. After\nabout six months, my friend the trader\nsaw that I was still interested and offered\nto back me if I wanted to become a floor\ntrader. In those days — this was back in\n1981 — we did not have computers or\nonline trading. The only access we had\nto a short-term trading environment was\nto go to one of the exchanges and work\nyour way up by clerking or whatever you\ncould do at the time.

    I got lucky and got backing to become a trader, and that’s how I\nstarted. In this business, you\nlearn by doing. I cannot stress\nthat enough.

    JG: You started out working\non the floor and after that,\nyou just ventured out on\nyour own?

    That trader backed me to become a floor trader. A short while\nafter that, I got caught in a takeover bid\nin 1982 where I was on the wrong side.\nThat pretty much put me into debt to\nmy clearing firm. They found another\ncompany that needed a floor trader to\nexecute some of their orders and strategies\nfor them on that particular exchange,\nso that’s what I did for the next two years\nbefore I eventually moved to the Philadelphia\nStock Exchange. I still owed\nmoney to the clearing firm, but I found\nanother backer, and it took me about\nfive years to pay off that trading loss.\nBut eventually I made enough money\nto go out on my own."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-02-52-57-interview-classic-swing-trading-with-linda-bradford-raschke-by-j-gopalakrishnan-and-b-r-faber-21.gif"",""height"":""761"",""width"":""585""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-02-52-57-interview-classic-swing-trading-with-linda-bradford-raschke-by-j-gopalakrishnan-and-b-r-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-02-52-57-interview-classic-swing-trading-with-linda-bradford-raschke-by-j-gopalakrishnan-and-b-r-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276trti,d,"{""minimum-quantity"":""1"",""path"":""ch2f204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:02 (69-83): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    Most of this month’s Traders’ Tips are\nbased on Markos Katsanos’ article in\nthis issue, “Trading The Aussie.” Other\ntips are on a topic of the contributors’\nchoosing.

    Code for MetaStock for implementing\nthe forex intermarket strategy from\nKatsanos’ article is included at the end\nof this document. Additional code is presented\nhere as contributed by software\ndevelopers.

    Readers will find our Traders’ Tips section in its entirety\nthe StockS & commoditieS website at www.Traders.com\nthe Traders’ Tips area, from where the code can be copied\nand pasted into the appropriate program. In addition, the\ncode for each program is usually available at the respective\nsoftware company’s website. Thus, no retyping of code\nrequired for Internet users.

    For StockS & commoditieS subscribers, the MetaStock\ncode found in Katsanos’ article can be copied and pasted\ninto MetaStock from the Subscriber Area at www.Traders.\ncom. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-02-69-83-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""761"",""width"":""538""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-02-69-83-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-02-69-83-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271sitr,d,"{""minimum-quantity"":""1"",""path"":""ch10o205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:10 (12-16): Situational Trading by Anthony Trongone, PhD, CFP, CTA"",""caption-linebreaks"":""Situational Trading by Anthony Trongone, PhD, CFP, CTA

    How do you know the markets\nare beginning to recover?

    D\nuring periods of downslides, many cautious investors remain on the sidelines until signs of recovery emerge. Fortunately, trading activity can spot the beginning of a recovery. Sometimes, however, it can be a challenge; in the past several years, a variety of trending landscapes have presented themselves, making that hunt something of a trial.\nSometimes we do ourselves a disservice by including all the different trading patterns that have popped up into the same study. The days not specific to a particular pattern will water down our results. For instance, take the average of six random trading days:

    (2 + 2 + 2 + 11 + 14 + 17) = average 8

    But 8 is not an accurate reflection of the integrity of these numbers. The average does not place sufficient emphasis on the extreme scores, nor does it consider the order of sequence. For this article, I will limit my analysis to those days that come together to form a V-shaped pattern. The orange circles in the price chart in Figure 1 identify several of these steep corrections with abrupt recoveries."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-12-16-situational-trading-by-anthony-trongone-phd-cfp-cta-21.gif"",""height"":""622"",""width"":""440""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-12-16-situational-trading-by-anthony-trongone-phd-cfp-cta-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-12-16-situational-trading-by-anthony-trongone-phd-cfp-cta-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271hesh,d,"{""minimum-quantity"":""1"",""path"":""ch10o205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:10 (18-20): Head & Shoulders Failure by Kenny Gilliland"",""caption-linebreaks"":""Head & Shoulders Failure by Kenny Gilliland

    How can you effectively trade one of the most recognizable chart patterns?

    Imagine this scenario: You are reviewing the charts of stocks that recently declined when a pattern jumps out at you from the screen — a head & shoulders formation. You place a stop market order to sell the stock short once the neckline is pierced. The order is ultimately filled and you wait for the stock to head south. At first, it declines slightly and then begins to move sideways for a week before heading up and back through the neckline. Luckily, you placed a stop order to cover your position a few percentage points above your initial entry. You vow never to trade that stock again.

    A few months later, out of curiosity, you pull up the stock’s chart. You are shocked to see that it has lost over 40% of its value, the way you thought it would, since you placed your sell short order. You think to yourself, “What did I do wrong?”

    You can be right and still lose money, an old saying goes. Every indicator might be screaming that a stock is setting up for a terrible decline, but if you do not time the trade correctly, you can easily be whipsawed out, only to watch the stock continue to decline. Timing is especially important when selling short. Equities seldom, if ever, decline in an orderly and uniform fashion. Price movements can be fierce, violent, and scary for traders.

    The head & shoulders pattern is one of the most recognized of all chart patterns. It does not take a seasoned trading eye to spot one forming on a chart. Moreover, trading books, publications, and websites routinely tout the reliability and ease of trading the head & shoulders pattern. Anyone who has sold short can tell you that picking a spot on the chart right below a pattern confirmation and filling an order does not guarantee a successful trade. While having the correct chart pattern is indeed significant, looking at other factors can assist you in whittling down your pool of short candidates to those with the highest likelihood of a significant decline.

    "",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-18-20-head-shoulders-failure-by-kenny-gilliland-21.gif"",""height"":""629"",""width"":""471""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-18-20-head-shoulders-failure-by-kenny-gilliland-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-18-20-head-shoulders-failure-by-kenny-gilliland-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov272voma,d,"{""minimum-quantity"":""1"",""path"":""ch10o205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:10 (22-31): Volume-Weighted MACD Histogram by David Hawkins"",""caption-linebreaks"":""Volume-Weighted MACD Histogram by David Hawkins

    Find out how the performance of the Macd improves by volume-weighting it.

    MY goal was to make the Macd-histogram (Macdh) perform better by volume weighting it. It uses three exponential moving averages. So, what’s needed is to volume weight the exponential moving average (Ema). The Ema is widely used because it is more responsive than the simple moving average (Sma). The volume-weighted moving average (Vwma) responds proportionately more to higher-volume trading so it emphasizes significant trading while deemphasizing less-significant, light-volume trading. The goal here is to combine them into one moving average, the volume-weighted exponential moving average (Vwema), using an algorithm that is simple and easy to implement with indicator scripting languages in standard technical analysis programs, such as the Indicator Builder in MetaStock.

    EMA FROM THE SMA

    The Sma is just the mean of the prices of the last n trading bars. One simply takes the sum of those prices and divides by n. To make the Ema, we start by making the Sma for the first n bars in the dataset. Thereafter, the general formula is:

    Percentage * (present bar’s price)\n+ (1 – percentage)*(last bar’s Ema)

    Where, for an n-period Ema, the percentage is given by 2/(n + 1)

    This has the effect of both giving most weight to the most recent bars and of including information from all previous bars with decreasing weights going back in time."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-22-31-volume-weighted-macd-histogram-by-david-hawkins-21.gif"",""height"":""620"",""width"":""436""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-22-31-volume-weighted-macd-histogram-by-david-hawkins-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-22-31-volume-weighted-macd-histogram-by-david-hawkins-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov273arel,d,"{""minimum-quantity"":""1"",""path"":""ch10o205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:10 (32-34): Are Leveraged Sector ETFs For You? by L.A. Little"",""caption-linebreaks"":""Are Leveraged Sector ETFs For You? by L.A. Little

    Find out if you can include these products in your list of tradables.

    \nIN 1992, the American Stock Exchange (Amex) petitioned the Securities and Exchange Commission (Sec) to create a standalone index-based exchange traded fund (Etf). Upon Sec approval, Amex rolled out the first Etf product: the S&P Depository Receipts Trust Series 1, or Spdrs (Spy). It gained widespread acceptance as a way to diversify (reduce risk) and mimic the broader market of the 500 largest capitalized stocks on the New York Stock Exchange (Nyse).

    Others followed, with the Dia, which tracks the Dow Jones Industrial Average, and the Qqq (later to become the Qqqq), which tracks the 100 largest-capitalization Nasdaq stocks. In the past couple of years, the market has seen a plethora of leveraged Etf products. What are these and do they have a place in your portfolio?

    WHAT IS A LEVERAGED ETF?

    Typically, a leveraged Etf is an exchange traded fund based upon an already familiar index but provides investors with some extra juice — leverage. The goal of the leveraged Etf is to increase the returns of the underlying index for a given time frame (each day) by using financial derivatives (like options, swaps, and index futures) to provide a higher-octane return than the nonleveraged Etf. In layman’s terms, they take every dollar you invest when buying the Etf and then borrow another dollar against it to create a leveraged Etf. The leverage occurs on a daily basis and that’s the crucial difference between nonleveraged and leveraged Etf products."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-32-34-are-leveraged-sector-etfs-for-you-by-l-a-little-21.gif"",""height"":""623"",""width"":""445""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-32-34-are-leveraged-sector-etfs-for-you-by-l-a-little-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-32-34-are-leveraged-sector-etfs-for-you-by-l-a-little-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov273qaby2,d,"{""minimum-quantity"":""1"",""path"":""ch10o205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:10 (35): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    POSITION SIZING IN STOCK TRADING

    How do you position size in your stock trading? I buy strong stocks above the intraday breakout with close stops. My problem is I feel that my initial price is important, and once I add shares, it changes the whole dynamic of the trade. I know that position sizing is very important (cutting losses, adding to winners), and being that my good trades last three to four hours, it’s something I should be doing. Thank you.

    A couple of things come to mind. First, the actual intraday breakout price may or may not be a good entry. You really need to take a few more things into consideration. Where are the futures trading? Where are the “peers” trading, sector and otherwise? Basing entry points just on breakouts can be very costly in this day of high-speed algorithmic trading. Entry and exit points must be clear before you address any concern about trade size."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-35-q-a-by-don-bright-21.gif"",""height"":""617"",""width"":""426""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-35-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-35-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov273dami,d,"{""minimum-quantity"":""1"",""path"":""ch10o205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:10 (36-42): Data Mining And Cubes For Traders by Art Tennick"",""caption-linebreaks"":""Data Mining And Cubes For Traders by Art Tennick

    Here’s a technique you can apply that will show you what indicators and combination of indicators will be the most successful.

    Business intelligence (BI) is a rapidly growing area of the software market. A major part of the Microsoft BI suite of software is Sql Server Analysis Services (Ssas), a powerful and fully featured application that is transforming how many companies work with and view their data. The aim of Ssas and the other BI tools is to convert raw data into information (that is, meaningful data) and then into intelligence (information that is easily visualized, easily found, and forms the basis for sound decision making). Ssas is ideally suited to the analysis of share and option price movement data, in particular how technical and fundamental and other indicators might predict such movements.

    Ssas provides two major objects to assist you in price movement analysis and prediction. These two objects are:

    - Multidimensional cubes

    - Data mining models

    Ssas is on your Sql Server Dvd and there is no cost, provided you install it on the same computer as Sql Server. Microsoft Excel 2007 provides interfaces to view cubes and data mining models built in Ssas. In addition, Excel 2007 can be used to develop temporary and permanent data mining models using Ssas in the background for the heavy lifting. Even if you don’t have Ssas, you can easily connect Excel to Sql Server Data Services (Sds) via an Internet connection — this is analyzing in the cloud. And for those without Excel 2007 or Ssas, it is also now possible to perform data mining in the cloud from Internet Explorer. This article is an overview that explores the potential of BI for traders and gives a few guidelines for getting started with data mining in particular: namely, that cubes require a bit more work."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-36-42-data-mining-and-cubes-for-traders-by-art-tennick-21.gif"",""height"":""630"",""width"":""474""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-36-42-data-mining-and-cubes-for-traders-by-art-tennick-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-36-42-data-mining-and-cubes-for-traders-by-art-tennick-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274that,d,"{""minimum-quantity"":""1"",""path"":""ch10o205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:10 (46-48): The Thorn At The Bottom by Alexander Sabodin"",""caption-linebreaks"":""The Thorn At The Bottom by Alexander Sabodin

    Here’s a reversal pattern that occurs frequently but is\ndifficult to discern during its formation.

    \nThe thorn pattern is encountered quite frequently, but it is difficult to discern while it is being formed. Unlike other reversal models, which reflect gradual changes in trend dynamics, the thorn is a sharp jerk of the price in a given direction, immediately followed by a jerk in the opposite direction without any pause. Thorns often appear in low-liquid markets or after a news release.

    The reason behind such a situation can be attributed to the psychology of market participants. At a certain time, market participants get overwhelmed with emotions and they trade according to “the greater fool theory” — they pay a lot and hope to meet a greater fool who will pay them even more. It looks like network marketing; the last one who joins the movement loses. All logical calculations made in a quiet room before placing that trade are completely forgotten and irrational decisions come to the forefront.

    In the case of a thin market — that is, one with low liquidity — the price movement develops with acceleration, similar to what you see with the Eur/Usd in Figure 1 on December 24, 2008. Looking at the chart, you would think that the situation was beyond control. The market surpassed all conceivable and inconceivable expectations. An experienced trader knows that you need to keep alert during such situations."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-46-48-the-thorn-at-the-bottom-by-alexander-sabodin-20.gif"",""height"":""624"",""width"":""446""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-46-48-the-thorn-at-the-bottom-by-alexander-sabodin-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-46-48-the-thorn-at-the-bottom-by-alexander-sabodin-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274fufo2,d,"{""minimum-quantity"":""1"",""path"":""ch10o205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:10 (49): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    LIMITING YOUR RISK

    I like the idea of selling futures options due to what seems like better odds than buying them, but I don’t like the idea of unlimited risk. How can I collect premium in the commodity markets with limited risk?

    The strategy you are referring to is known as credit spread trading, sometimes referred to as an iron condor. In essence, it is the practice of selling options along with the purchase of insurance, which comes in the form of a long option with a distant strike price. If a trader sells a call option and purchases a call option in the same commodity and expiration month but a higher strike price, he has executed a credit spread. Keep in mind that options are versatile and there are an unlimited number of spread strategies that result in a credit (cash inflow), causing them to be referred to as credit spreads. However, the specific type we are discussing is the most common."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-49-futures-for-you-by-carley-garner-20.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-49-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-49-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275mapr,d,"{""minimum-quantity"":""1"",""path"":""ch10o205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:10 (50-56): Martin Pring and The Relevance Of Price Trends by J. Gopalakrishnan and B. R. Faber"",""caption-linebreaks"":""Martin Pring and The Relevance Of Price Trends by J. Gopalakrishnan and B. R. Faber

    Martin J. Pring entered the financial markets in 1969 and has grown to become a leader in the global investment community. In 1981 he founded Pring Research and began providing research for financial institutions and individual investors around the world. Since 1984, he has published the Intermarket Review, a monthly market review offering a long-term synopsis of the world’s major financial markets.

    He is the author of several outstanding books including Introduction To Technical Analysis, Martin Pring On Market Momentum, and Technical Analysis Explained, now in its fourth edition. Since this book first appeared in 1979, Technical Analysis Explained has established itself as the premier guide of its kind.

    Over the past 34 years, his research has led to the development of reliable financial and economic indicators for timely and effective forecasting. Pring’s personal barometers for the bond, stock, and commodity markets have identified major turning points since the 1950s on a timely basis and outperformed the buy/hold approach by a wide margin. He is also chairman of the Pring Turner Capital Group, a conservative money management firm dedicated to allocating assets according to business cycle conditions. He may be reached at pring.com.

    Stocks & Commodities Editor Jayanthi Gopalakrishnan (JG) and Staff Writer Bruce Faber (BF) spoke with Martin Pring via the telephone on August 5, 2009.

    Martin, how did you get interested in technical analysis?

    I started off as a stockbroker in Toronto, Canada, working for a company called AE Ames. They had a great trading program and a great library. In that library was a book titled Technical Analysis Of Stock Trends by Robert Edwards and John Magee, which I found to be absolutely fascinating. It didn’t send me to sleep like it sent most of my friends to sleep. I enjoyed that book tremendously. Then I was promoted to be a manager up in Owen Sound, about 125 miles north of Toronto, and I used technical analysis to sell stocks to my clients. That is how I got interested in technical analysis.

    JG: You place a lot of emphasis on economic cycles. What is the link between the stock market and the economic cycles?

    In most cycles, there is a pretty close link between the level of economic activity and where the stock market is. The stock market typically bottoms when downside momentum is greatest in the economy, and to some extent it also peaks when the economic growth pattern is at its height (Figure 1). There are obviously exceptions because there are no perfect rules.

    Actually, it is very consistent at bottoms, but not so at tops. In the last bottom there was an exception where the economy basically bottomed at the end of 2001, and the stock market did not respond until October 2002, which is why I always like to combine some kind of a trend measurement of the stock market to my economic stuff. I want to make sure that the stock market is responding to favorable or unfavorable conditions, depending on what we are looking at."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-50-56-martin-pring-and-the-relevance-of-price-trends-by-j-gopalakrishnan-and-b-r-faber-20.gif"",""height"":""633"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-50-56-martin-pring-and-the-relevance-of-price-trends-by-j-gopalakrishnan-and-b-r-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-50-56-martin-pring-and-the-relevance-of-price-trends-by-j-gopalakrishnan-and-b-r-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275exyo2,d,"{""minimum-quantity"":""1"",""path"":""ch10o205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:10 (57): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    MEchanics of a Dividend Play\nIn early August, Intel (Intc) saw huge contract volume in a handful of deep in-the-money calls. The largest activity occurred in the August 16 and 17 calls with more than 200,000 contracts trading on each strike. The heavy trading happened in front of shares going ex-dividend. With the value of the August 16/17 vertical being maxed out — that is, trading at $1.00 — can you tell me what was going on that day?\nWhat you saw were traders attempting to capture the dividend. By buying and/or selling a deep vertical and exercising his long contract, the trader could be left holding a buy-write if the short contract remains unassigned in front of the ex-date. If all goes according to plan and the inventory of unassigned short contracts is large enough, a quick windfall of overnight profits should greet the trader the next morning as the shares go ex-dividend."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-57-explore-your-options-by-tom-gentile-20.gif"",""height"":""616"",""width"":""422""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-57-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-57-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276prre7,d,"{""minimum-quantity"":""1"",""path"":""ch10o205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:10 (61-62): Product Review eSiganl 10.5 by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Product Review eSiganl 10.5 by Jayanthi Gopalakrishnan

    eSignal 10.5 is a stable trading platform packed with features that seasoned traders will find very useful. Although the look and feel of the product hasn’t changed much over the years, some new features have been added to this latest version that make it a more robust and competitive product.

    INSTALLATION AND SETUP

    Installation is a snap. It took a few minutes to download and install the program from eSignal’s home page. Once installed, if you are a first-time user, you will be asked to enter your username and password, after which you are ready to go. But where do you start? No worries, because they have made it easy for you."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-61-62-product-review-esiganl-10-5-by-jayanthi-gopalakrishnan-20.gif"",""height"":""625"",""width"":""458""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-61-62-product-review-esiganl-10-5-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-61-62-product-review-esiganl-10-5-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276womo,d,"{""minimum-quantity"":""1"",""path"":""ch10o205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:10 (64): Working Money Trading Channels by Chaitali Mohile"",""caption-linebreaks"":""Working Money Trading Channels by Chaitali Mohile

    A wise trader will continuously analyze new trading strategies in different market situations. The year 2008 began on a depressing note and the global economy entered a recessionary period as the market corrections hit lower lows in 2008. It was a challenging time for traders. By the time the nature of the market correction was recognized, many market participants had lost 50% of their gains and were on the verge of withdrawing altogether from the trading business. This is why it is essential to identify a correct trading strategy so you don’t find yourself in such a situation.

    WHAT TIME FRAME IS BEST?

    In volatile markets, you cannot rely on one particular technical aspect. You need to thoroughly test a combination of technical tools. Channel trading could be one of the good strategies during the uncertainty in the financial markets. But if this strategy were combined with candlestick patterns, reliable momentum indicators, breakouts, and so on, you could make handsome profits. Channels can move upward, downward, or horizontally (flat), so the first step is to identify the type of channel being formed. To do this, three pivots that usually appear in early trading hours must be marked."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-64-working-money-trading-channels-by-chaitali-mohile-20.gif"",""height"":""628"",""width"":""464""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-64-working-money-trading-channels-by-chaitali-mohile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-64-working-money-trading-channels-by-chaitali-mohile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276prre8,d,"{""minimum-quantity"":""1"",""path"":""ch10o205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:10 (64-66): Product Review Pro-Mark by Dennis Peterson"",""caption-linebreaks"":""Stocks & Commodities V. 27:10 (64-66): Product Review Pro-Mark by Dennis Peterson

    Pro-Mark is Java-based software offered by Patsystems for end-users. The brokerage or clearing firm is the actual Patsystems customer. Hence, the price is whatever the brokerage or clearing firm might charge for Pro-Mark. While there is a third-party plug-in that provides some basic charting, Pro-Mark’s selling point is that it is an execution platform designed for the commodities market. It offers the ability to have a single mouse-click place an order, it gives access to quotes in a couple of ways, and it offers the ability to autospread.

    Patsystems originated in England and still carries some unique British terms such as “bidding a dime.” There is no Help on the menu line, but you can access a Pro-Mark user’s manual by going to http://chicago.Patsystems.com.

    TRADING SCREENS

    Two screens allow you to place orders: Reflector and Live Quote. Using the Reflector screen, you can buy or sell by clicking below the yellow line on either the “Bid” or “Offer” volume columns (Figure 1). To set up a Reflector screen, you have to first select a contract, and you do that by using the Selector screen. The Selector screen lets you see the individual contract dates. Click on the date and drag it over to a Reflector screen to start trading the contract of your choice. Clicking and dragging specific contracts from the Selector screen to another screen is the typical technique used by Pro-Mark to update a screen with the contract you want, thus minimizing typing."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-64-66-product-review-pro-mark-by-dennis-peterson-20.gif"",""height"":""626"",""width"":""462""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-64-66-product-review-pro-mark-by-dennis-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-64-66-product-review-pro-mark-by-dennis-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov277trti6,d,"{""minimum-quantity"":""1"",""path"":""ch10o205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:10 (72-83): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    This month’s Traders’ Tips are based on David Hawkins’ article in this issue, “Volume-Weighted Macd Histogram.” Others are on a topic of the contributors’ choosing.

    MetaStock code to help implement the strategy is provided in Hawkins’ article elsewhere in this issue, and at the end of this document. Additional code is presented here as contributed by various software developers.

    Readers will find our Traders’ Tips section in its entirety at the Stocks & Commodities website at www.Traders.com in the Traders’ Tips area, from where the code can be copied and pasted into the appropriate program. In addition, the code for each program is usually available at the respective software company’s website. Thus, no

    For Stocks & Commodities subscribers, the MetaStock code found in Hawkins’ article can be copied and pasted into MetaStock from the Subscriber Area at www.Traders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-72-83-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""619"",""width"":""430""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-72-83-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-72-83-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov278leto3,d,"{""minimum-quantity"":""1"",""path"":""ch10o205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:10 (8): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""TWO TRADERS, TWO METHODS

    Editor,

    Just wanted to comment on a very interesting interview you conducted with Gavin Mok and Kevin Haygreen (“Two Traders, Two Methods,” June 2009 S&C). I read many articles with trader profiles, and it is good to get insight from the traders who are just starting out or who are struggling to get to their desired level. Too many times, I find interviews to be about the lifestyles of the successful traders. But in reality, they are the exception, and only a small percentile of our peers are consistently profitable.\nOnce again, great job.

    Mike Toma"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-8-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""618"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-8-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-8-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov279bofo8,d,"{""minimum-quantity"":""1"",""path"":""ch10o205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:10 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    - The Daily Trading Coach: 101 Lessons For Becoming Your Own Trading Psychologist

    - Essential Investment: An A-Z Guide: 2nd Edition

    - Inside The Mind Of The Turtles: How The World’s Best Traders Master Risk

    - The New Paradigm Investor

    - Sell Short: A Simpler, Safer Way To Profit When Stocks Go Down

    - Trading Regime Analysis: The Probability Of Volatility"",""imageFields"":{},""relations"":[]}" stcov27997at3,d,"{""minimum-quantity"":""1"",""path"":""ch10o205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:10 (98, 97): At The Close by Don Bright"",""caption-linebreaks"":""At The Close by Don Bright

    Starting To Trade For A Living

    Ever thought of trading for a living and didn’t know where to start?

    receive dozens of phone calls and hundreds of emails each month from those who think they want to get involved in trading for a living. So much of our industry is simply misunderstood that I thought it was time for an analysis, hoping to help those in their quest.

    RETAIL ACCOUNT TRADING

    Not much has changed over the years in the retail world. Basically, investors/traders can open up an account with any of the multitude of retail brokers available. The services vary widely, and each person should first determine what they are going to be doing with this retail account.

    The days of broker assistance is pretty much over, morphing into individual online access. The investor will likely look more to financial advisors for advice rather than a stockbroker. For active trading, the novice may want to look for something like the ability to short stocks easily. The world of buy & hold has pretty much gone the way of telephone service from a broker. You’ll want to be able to receive interest on your short stock sale monies. You’ll also need to qualify as a pattern daytrader (Pdt) if you plan on making a few trades in the same stocks each week. This requires a minimum balance of $25,000, and allows for 4:1 margin vs. the standard 2:1.

    Be sure you’re using capital, not just overleveraging yourself with additional shares and additional risk. It’s hard to make an actual living with accounts like these. What kinds of groups are out there for traders?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-98-97-at-the-close-by-don-bright-21.gif"",""height"":""625"",""width"":""458""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-98-97-at-the-close-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-10-98-97-at-the-close-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271sesy,d,"{""minimum-quantity"":""1"",""path"":""ch11n206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:11 (10-16): A Seasonal System For Soybean Futures by Markos Katsanos"",""caption-linebreaks"":""A Seasonal System For Soybean Futures by Markos Katsanos

    Here’s a system that exploits\nhistorical seasonal patterns to\ntrade soybean futures.

    Some markets are affected by certain fundamental factors that are seasonal in nature. These tend to recur at the same time each year, influencing the price trend of these markets. The commodity markets have always offered seasonal trading opportunities. Soybeans, corn, and heating oil are three examples of typical seasonal markets. In the case of grains, seasonality is defined by planting and harvest.

    SEASONALITY

    Normally, we can expect prices to be low during harvest when supply tends to be largest and higher during growing because supplies are not readily available and the new yield is still uncertain. From these seasonal patterns, we can derive a seasonal trading approach that is designed to anticipate and capture seasonal price trends.

    The United States is the world’s biggest soybean exporter (38% of world production), followed by Brazil (25%) and Argentina (19%). In the US, most of the soybean crops are grown in the Midwest and the Mississippi Delta regions.

    Typically, the southernmost areas will begin planting first in late April, followed by the northern states in the beginning of May. Harvest activity in the US usually starts in the third week of September, reaches a peak in October, and finishes in the beginning or mid-November, depending on the geographic latitude. The November contract is therefore the new crop, while the July contract, which has been sitting in storage since last year, is the old crop."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-10-16-a-seasonal-system-for-soybean-futures-by-markos-katsanos-21.gif"",""height"":""621"",""width"":""438""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-10-16-a-seasonal-system-for-soybean-futures-by-markos-katsanos-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-10-16-a-seasonal-system-for-soybean-futures-by-markos-katsanos-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271usem,d,"{""minimum-quantity"":""1"",""path"":""ch11n206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:11 (18-20): Using The Emini S&P 500 To Trade Options by Tom Busby"",""caption-linebreaks"":""Using The Emini S&P 500 To Trade Options by Tom Busby

    Here’s a technique one veteran S&P futures trader uses to trade options.

    I rarely come across a trader who has not traded options at one time or another. Option strategies come in many shapes and forms, but they are all intended to do one thing: make money. I’ve been trading since 1980 and was at one time one of the largest option traders in the brokerage industry until the crash of 1987, which made me realize that holding a leveraged position overnight could be devastating.

    Though I still trade options, I have a totally different perspective on how and when to trade them. First of all, I am an S&P futures trader. I have been trading and following the S&P futures since they began trading in 1982. So I have learned to trade options based on the one thing I know best, the Standard & Poor’s 500 futures.

    The S&P 500 futures contracts of the 1980s were very different from those we know today. Because of the boom in technology over the past 15 years, most of the trading done now is electronic, as opposed to the way we used to trade, by picking up the phone and calling a broker or the pit. Not only that, the economy today is now global instead of being country-specific."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-18-20-using-the-emini-s-p-500-to-trade-options-by-tom-busby-21.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-18-20-using-the-emini-s-p-500-to-trade-options-by-tom-busby-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-18-20-using-the-emini-s-p-500-to-trade-options-by-tom-busby-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov272shpr,d,"{""minimum-quantity"":""1"",""path"":""ch11n206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:11 (22-27): Short-Term Profits With Gap Trading by Glaister Welsh"",""caption-linebreaks"":""Short-Term Profits With Gap Trading by Glaister Welsh

    Mispriced stocks are often caused by gaps, which you can take advantage of by applying a strategy that generates above-average returns while reducing your risk. Check it out.

    A convergence trading strategy is based on the theory that when the price of a stock or stock portfolio significantly deviates from its long-term trend, it will return to its original trend sooner or later. Normally, convergence trades tend to move prices toward their long-term equilibrium values and, thereby, stabilize markets. However, some research suggests that if convergence trades are “unwound” prematurely, asset prices would tend to diverge further from their equilibrium values instead of converging. Convergence traders with logarithmic utility functions could trade in ways that stabilize markets but will amplify market shocks if the shocks are large enough to severely deplete their capital.

    Additional research also shows that asset prices converge more slowly to their fundamental levels when the traders’ capital has been impaired by trading losses. Not only that, if stocks are underpriced, abnormal returns can be generated over a three-year period as arbitrageurs act to eliminate the inconsistency in stock price.

    So how can traders use this?

    LEAN SIX SIGMA

    I applied a Lean Six Sigma (Lss) approach for the definition and analysis of this work. While Lss tools and techniques are typically used to improve industrial and service processes, I utilized the tools to improve a stock trading plan based on the hypothesis that gapping stocks will eventually converge to some normal trading range."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-22-27-short-term-profits-with-gap-trading-by-glaister-welsh-20.gif"",""height"":""631"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-22-27-short-term-profits-with-gap-trading-by-glaister-welsh-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-22-27-short-term-profits-with-gap-trading-by-glaister-welsh-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov273sptr,d,"{""minimum-quantity"":""1"",""path"":""ch11n206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:11 (32-34): Spread Trading to Reduce Risk by L.A. Little"",""caption-linebreaks"":""Spread Trading to Reduce Risk by L.A. Little

    What are spread trades, how do they work, and how can we use them?

    The spread trading strategy receives too little attention even though a well-designed spread can offer excellent profit potential while decreasing risk. Spread trading isn’t viewed to be as glamorous as directional trades, so at the risk of turning you off I am going to turn your attention to what spread trades are and how they work; when they make sense; and how to implement them. Finally, I will show you a concrete example of how spread trades work in an actual trade.

    WHAT ARE SPECIAL TRADES?

    A spread trade essentially involves at least two trades. One side of the trade is a short trade, while the other side of the trade is a long one — hence the term spread. A pure spread trade usually has both the long and short sides roughly equivalent in terms of size (total dollar exposure). In a market that carries elevated risk for each trade made (the volatility is higher than normal) and suffers from larger-than-normal price dislocations, spread trading provides an excellent opportunity to capture the volatility while reducing risk. Typically, in such an environment, the market participants are necessarily holding higher levels of cash as a result of the volatility. Rather than have that cash just lying around, involving it in a hedge trade offers a viable alternative.

    Although there are many paired trades (spreads) that can be made (in a higher-risk market environment), an excellent way to spread trade is to go either long or short a particular equity while simultaneously trading the sector in the opposite direction. In a higher-volatility market, price disruptions are more common and usually results in greater-than-normal spreads.

    Since almost any sector can be traded via an exchange traded fund (Etf) product, this strategy is easily implemented. A sector is, by definition, a group of related equities that have commonality in that the products or services they sell are either the same or similar. For example, the semiconductor sector consists of companies that either manufacture semiconductor chips or sell equipment to other companies that manufacture semiconductor chips. In the semiconductor sector Etf (Smh), there is currently a list of 18 companies that are part of that sector."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-32-34-spread-trading-to-reduce-risk-by-l-a-little-20.gif"",""height"":""620"",""width"":""436""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-32-34-spread-trading-to-reduce-risk-by-l-a-little-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-32-34-spread-trading-to-reduce-risk-by-l-a-little-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov273fufo,d,"{""minimum-quantity"":""1"",""path"":""ch11n206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:11 (39): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    VIX FUTURES

    How can I trade Vix futures?

    On March 26, 2004, the Chicago Board Options Exchange (Cboe) listed a futures contract with its volatility index (Vix), often referred to as the fear index, as the underlying asset. Although the Vix has been in existence for some time, it wasn’t always tradable via futures contracts. As is the case with any new listed product, liquidity has been an issue for Vix speculators; however, volume and open interest are on the rise.

    That said, don’t make the mistake of attempting to trade the miniversion of the Vix. It is common to see fewer than 20 contracts traded in a session and the lack of volume in the minicontract creates large bid/ask spreads, increasing the intrinsic costs of participating in the market. This might make exiting the trade difficult and expensive in fast-moving market conditions.

    The value of the Vix is relative to real-time prices of options on the Standard & Poor’s 500 (Spx) also listed on the Cboe. The Vix is intended to reflect the investor’s consensus view of future market volatility over the next 30 days or so and will fluctuate with the implied volatility built into option pricing."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-39-futures-for-you-by-carley-garner-20.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-39-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-39-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274loat,d,"{""minimum-quantity"":""1"",""path"":""ch11n206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:11 (40-46): Looking At The Market With Auction Market Analysis by Tom Alexander"",""caption-linebreaks"":""Looking At The Market With Auction Market Analysis by Tom Alexander

    Here’s a look at the volatile periods in the broader markets going back to 1928. How do they compare to the 2008–09 market? Check it out with Market Profile.

    First, what exactly is Market Profile? It is a charting format that displays a horizontal view as well as a vertical one of market development. Initially the brainchild of Peter Steidlmayer and his work of the early to mid-1980s, it is a methodological concept that continues to evolve to this day. Basically, it “explains” the organizational activity of how an auction market works and develops.

    THE AUCTION MARKET

    In 1993, Donald Jones published the book Value Based Power Trading, which presents a statistically rigorous model that expands the original profile concept. In that book Jones based his work and his ongoing research under the umbrella of what he refers to as auction market value theory (Amtv). Amtv posits that in an auction market, a given market unit (the same development process occurs regardless of the degree of time involved, so a unit can be a day or several days, weeks, months, or even years) is driven by a search for value.

    Value is ultimately determined by the market participants themselves — the buyers and sellers. The buying and selling conducted by the market participants in a given market auction creates activity in the auction range (a profile “unit”). There is a different amount of activity within the range depending on the relative perception of value, or the lack thereof, by the market participants. Traders will spend the most time and conduct the greatest amount of business at prices considered by both parties to be fair. The least amount of trading between buyers and sellers will occur at prices that are unfair for either the buyer or seller."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-40-46-looking-at-the-market-with-auction-market-analysis-by-tom-alexander-20.gif"",""height"":""619"",""width"":""433""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-40-46-looking-at-the-market-with-auction-market-analysis-by-tom-alexander-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-40-46-looking-at-the-market-with-auction-market-analysis-by-tom-alexander-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274qaby3,d,"{""minimum-quantity"":""1"",""path"":""ch11n206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:11 (47): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    IMBALANCES

    I’ve been watching end-of-day (Eod) imbalances to see what effect they may have on price and I can’t find any pattern. Do market-on-close (Moc) imbalances mean anything? I read recently on Yahoo that in theory, a large buy imbalance would cause a stock to gap up at the closing price to accommodate the order and the reverse would be true for a sell imbalance, which should gap down the stock price. Traders would profit from the move with a buy imbalance by buying the stock right before the close and sending an immediate sell on close order. This way, the buy imbalance is reduced by long traders who are seeking a profit and ease the specialists’ job. But I haven’t really observed this as a reliable pattern. — Donna

    Yes, we have been using the Moc imbalances for years in various fashions. There is one benefit for many of our traders who focus on trading the same two or three stocks, day in and day out, in that they may be long or short at the time of the Moc imbalance, and when they see a significant number, they can respond to the close or ride the imbalance if it fits their position. These traders learn how their stocks react to various levels of published imbalances. We provide a spreadsheet to take snapshots at 3:30 pm (Nyse time), 3:40 (first imbalance), 3:50 (second imbalance), 4:00 (end of day), and then the actual Moc price, which usually hits a couple of minutes later. We also track where the S&P futures are trading at those times to see if the price movement is being caused by the overall market, or by the imbalance."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-47-q-a-by-don-bright-20.gif"",""height"":""616"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-47-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-47-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274copr,d,"{""minimum-quantity"":""1"",""path"":""ch11n206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:11 (48-52): Continuation Price Patterns by Alexander Sabodin"",""caption-linebreaks"":""Continuation Price Patterns by Alexander Sabodin

    Take a look at some of the more common continuation patterns that you find on charts.

    Like reversal models (or patterns), continuation models are formed during periods of market instability. These appear when bullish and bearish forces are about equal. As a result, price stops moving in the direction of the trend and starts to fluctuate within a range. The appearance of continuation models usually indicates that the period of price standstill that you see on a chart is nothing more than a pause in the development of the prevailing trend. The trend direction will not change after the consolidation period has ended. This is one feature that distinguishes continuation models from reversal models, which were discussed in earlier articles. Reversal models usually reflect a turnaround in the prevailing trend.

    Another difference between a reversal and continuation model is the duration of their formation. Reversal models, which tend to display crucial changes in price dynamics, usually last for a longer time, whereas trend continuation models are relatively shorter.

    CONTINUATION PATTERNS

    Some of the common continuation patterns are triangles, flags, and pennants. Let’s look at each.

    Triangles

    If the range of a price consolidation is limited within support and resistance lines and crosses either of them some time in the near future, the model is known as a triangle. Depending on how the support and resistance lines are arranged, you can have symmetrical triangles, ascending triangles, descending triangles, and expanding triangles (Figure 1). For the pattern to be valid, there must be at least two points at the resistance level and two points at the support level."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-48-52-continuation-price-patterns-by-alexander-sabodin-20.gif"",""height"":""620"",""width"":""433""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-48-52-continuation-price-patterns-by-alexander-sabodin-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-48-52-continuation-price-patterns-by-alexander-sabodin-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275exyo3,d,"{""minimum-quantity"":""1"",""path"":""ch11n206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:11 (53): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    SHORT STOCK RISK IN CALL CALENDAR

    Sears Holding (Shld) was brought to my attention after Barron’s profiled the shares as being overvalued. Looking at the premiums, I noticed a distinct skew between the calls and puts. On the surface, the pricing makes the call calendar appear artificially cheap versus its put counterpart. I’m skeptical, but I’m having problems figuring out if some other factor is at work. Can you help?

    Great question and a hat tip for seeing potential trouble rather than establishing a position that could be riskier than it appears. I checked the option premiums in Shld and what’s being priced into the attractive-looking call calendar is a potential hard-to-borrow or threshold situation in the underlying shares.

    When a security becomes threatened or is in the midst of being difficult or impossible to short due to existing and heavy short interest, call prices will have a strong tendency to trade at a theoretical discount to the same strike put."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-53-explore-your-options-by-tom-gentile-20.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-53-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-53-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275jayk,d,"{""minimum-quantity"":""1"",""path"":""ch11n206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:11 (54-62): Jay Kaeppel On Trading Futures, Options, Gold, Sectors by J. Gopalakrishnan and B.R. Faber"",""caption-linebreaks"":""Jay Kaeppel On Trading Futures, Options, Gold, Sectors by J. Gopalakrishnan and B.R. Faber

    Independent trader and author Jay Kaeppel is a trading strategist with Optionetics, Inc., and writes a weekly column titled “Kaeppel’s Corner” for Optionetics.com, conducts online seminars, and contributes material to new trading courses. He was Head Trader at a commodities trading advisor for nine years as well as a trading system and trading software developer for 15. A prolific writer, Kaeppel has penned numerous articles for Stock & Commodities over the years, including a series of articles on his Provest option trading method in 2008. An avid systems developer, in 2007 he collaborated with Optionetics to create the Optionetics Futures & Commodities Home Study Course, and in 2008 he collaborated with Rick Pendergraft of the Pendergraft Research Organization and Tom Gentile, cofounder of Optionetics, to create the Velocity Strategy system.

    Kaeppel is the author of a number of outstanding books including his current one, Seasonal Stock Market Trends (Wiley 2009), as well as The Four Biggest Mistakes In Option Trading, The Four Biggest Mistakes In Futures Trading, and The Option Trader’s Guide To Probability, Volatility And Timing.

    S&C Editor Jayanthi Gopalakrishnan (JG) and Staff Writer Bruce Faber (BF) interviewed Jay Kaeppel via telephone on September 9, 2009.

    Jay, how did you get interested in technical analysis?

    I started out interested in numbers. I was always a sports numbers guy. I knew everybody’s batting average and all that. When I got to college, though, I realized this wasn’t going to do me much good. Then I happened upon the business page of the newspaper one day and I noticed the stock prices, and it was like, “Wow! There sure are a lot of numbers here. I wonder what this is all about.” It started from there and progressed.

    After I got out of college I was in accounting for a while, still fixated on numbers, but then I started following the stock market. I began reading everything I could. I was looking at fundamentals and technicals, and I fell into the technical end of things. I could read all about the fundamentals and analyze them, but the analysis I was doing there wasn’t doing me any good.

    JG: Why do you think that was?

    I would read about earnings forecasts and things like that, and it drove me crazy that you could get a company that comes out with record earnings, but the earnings would be three cents off of what the analysts expected and the stock would be down 15% for the day. That still happens today and that still drives people crazy. When you get the call right but you still lose money, that is tough.

    JG: It is! Please continue on your journey into technical analysis.

    The company I was with got bought out, so I got laid off. In the mid-1980s I started writing a newsletter on mutual funds and trading on my own. In the late 1980s I joined Essex Trading, which at the time was a software firm, and we put out programs like Futures Pro and Option Pro. They were quite popular for a while. Then in 1995 we became commodity trading advisors (Ctas). I was the head trader for that. I developed all the trading methodologies we used, and risk management techniques. I did that for nine years, and we made money in eight years out of those nine. The other year we lost 2%.

    At the end we went from a maximum drawdown of 8% to a maximum drawdown of about 13% and some of our biggest customers felt that was a warning sign, so they pulled their money out, and at that point the business wasn’t there any more. So I left Essex and joined up with Optionetics in 2004. I’ve been consulting with them for about five years. I write a weekly column for them on Optionetics.com called “Kaeppel’s Corner.” I can basically write about any topic I’d like. I also work on projects for them.

    A couple of years ago I did the Optionetics Futures and Commodities Home Study Course. It was about three days of taping for six hours of video and by the end I really did not want it to end. During the last hour we were just bantering about markets and trading, and it was a lot of fun. I also do a lot of writing, as you know. I write articles, and I have written four books."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-54-62-jay-kaeppel-on-trading-futures-options-gold-sectors-by-j-gopalakrishnan-and-b-r-faber-20.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-54-62-jay-kaeppel-on-trading-futures-options-gold-sectors-by-j-gopalakrishnan-and-b-r-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-54-62-jay-kaeppel-on-trading-futures-options-gold-sectors-by-j-gopalakrishnan-and-b-r-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276wefo3,d,"{""minimum-quantity"":""1"",""path"":""ch11n206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:11 (64-65): Websites For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Websites For Traders by Technical Analysis, Inc.

    NEWSIMPACT.COM

    NewsImpact.com is a website devoted to foreign exchange. It has two major components: alerts that can be sent to your cell phone, and SpikeCharts. The alerts, which are sent as Sms messages, are of two types: news and price. The news alerts are received when economic data is released and price alerts are received when the price level you set your alert to is hit. This is very useful when you are not sitting in front of your quote screen; given that forex trades around the clock, there is a strong chance that you are not going to be at your desk 24 hours a day. You can set your alert specifications online. All you have to do is enter your cell phone number and the alerts are sent to your phone. The costs of the services vary. For SpikeCharts it is $20 per month, mobile price alerts are $20 a month, and mobile news alerts are $20 a month. They do have bundle offers: You can have any two services for $30 a month or all three services for $40 per month."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-64-65-websites-for-traders-by-technical-analysis-inc-21.gif"",""height"":""636"",""width"":""465""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-64-65-websites-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-64-65-websites-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276prre9,d,"{""minimum-quantity"":""1"",""path"":""ch11n206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:11 (66-67): Product Review: eSignal 10.5, Part 2 by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Product Review: eSignal 10.5, Part 2 by Jayanthi Gopalakrishnan

    IN the first part of this review I covered the basic features of eSignal 10.5. Those features are just the tip of the iceberg. The core, the strength, of eSignal 10.5 lies in its powerful programming capabilities. Creating unique trading systems is what sets one trader apart from others. Unfortunately, many traders tend to be intimidated by the idea of creating their own systems, but it doesn’t have to be difficult. While it is true that learning how to write code in a language with which you are not familiar may sound like a challenge, you’ll find out that it doesn’t have to be.

    CREATING FORMULAS

    eSignal does use a complex JavaScript programming language known as the eSignal Formula Script (Efs). However, they have gone to great lengths to make it easy for you to get started. To begin with, they have included several built-in formulas that you can easily implement into your charts. You will find that the built-in studies are the same as those you find in the Add Study menu, but the built-in studies are saved in .efs format, which means you can edit them and make them more complex if you wish. All formulas are saved in the formulas folder in the eSignal directory."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-66-67-product-review-esignal-10-5-part-2-by-jayanthi-gopalakrishnan-21.gif"",""height"":""626"",""width"":""464""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-66-67-product-review-esignal-10-5-part-2-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-66-67-product-review-esignal-10-5-part-2-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276trti3,d,"{""minimum-quantity"":""1"",""path"":""ch11n206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:11 (68-82): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    Most of this month’s Traders’ Tips are based on Markos Katsanos’ article in this issue, “A Seasonal System For Trading Soybean Futures.” Others are on a topic of the contributors’ choosing.

    Code for use in Multi Charts is provided in Katsanos’ article, as well as at the end of this document. Additional code is presented here as contributed by various software developers.

    Readers will find our Traders’ Tips section in its entirety at the Stocks & Commodities website at www.Traders.com in the Traders’ Tips area, from where the code can be copied and pasted into the appropriate program. In addition, the code for each program is usually available at the respective software company’s website. Thus, no retyping of code is required for Internet users.

    For Stocks & Commodities subscribers, the MultiCharts code found in Katsanos’ article can be copied and pasted into MultiCharts from the Subscriber Area at www.Traders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-68-82-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""621"",""width"":""440""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-68-82-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-68-82-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov278leto4,d,"{""minimum-quantity"":""1"",""path"":""ch11n206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:11 (8): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    INTERVIEW WITH GREG MORRIS

    Editor,

    Thanks for the interview with Greg Morris (“The Danger Zone With Gregory Morris,” interview, September 2009 S&C). It especially hit home for me since I too was reading Zahorchak in 1974, using multicolored pens to keep track of weekly prices on a big analysis pad I kept for about 50 high-beta stocks. I too got the data from my weekly Barron’s and kept track of the Nyse A/D line. I was taking a course in stock market analysis. Fifty of us in the class had a trading contest. I came in second using Zahorchak’s methods. Since académe’s focus at the time was random walk theory, to ensure my A-, I had to “admit” I was just lucky.

    Duane Runnels"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-8-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""623"",""width"":""448""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-8-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-8-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov279bofo9,d,"{""minimum-quantity"":""1"",""path"":""ch11n206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:11 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    • Electronic Exchanges: The Global Transformation From Pits To Bits

    • Financial Instruments: Equities, Debt, Derivatives, And Alternative Investments

    • The Midas Touch: The Strategies That Have Made Warren Buffett The World’s Most Successful Investor

    • The Leverage Space Trading Model: Reconciling Portfolio Management Strategies and Economic Theory

    • Reading Price Charts Bar By Bar: The Technical Analysis Of Price Action For The Serious Trader

    • The Truth About Day Trading Stocks: A Cautionary Tale About Hard Challenges, And What It Takes To Succeed"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""615"",""width"":""418""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov27997at4,d,"{""minimum-quantity"":""1"",""path"":""ch11n206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:11 (98, 97): At The Close by Dan Altman"",""caption-linebreaks"":""At The Close by Dan Altman

    Is Trading Right For You?

    If you are interested in becoming a trader, this is\na very important question to ask yourself.

    ost traders new to the business don’t ask themselves if trading is right for them. They may assume that trading is the thing for them because they have the desire to trade. Anyone who wants to trade should consider whether it is a good fit for them personally. Every profession has its rewards and challenges, including the requirements of hard work and years of practice. However, trading in its specifics is unique.

    MISCONCEPTIONS ABOUT TRADING

    Misconceptions about trading abound because it is a profession foreign to most people. Trading is not gambling, but that is a common impression. Some think that making money trading is easy and doesn’t take much effort, while others believe it is impossible to beat the markets, or that being in the markets has no redeeming social value. How many traders have had the experience of having another professional comment that trading can’t be as demanding as practicing medicine or law? It isn’t easy to acquire an accurate concept of what trading is like and its daily emotional demands unless you actually do it.

    Historically, traders were a small group who had little interaction with the outside world. Since the advent of the Internet, however, ordinary people living anywhere in the world with Internet access can trade. In the 1970s, you needed the services of a stockbroker if you wanted to buy and sell on Wall Street. A transaction could cost more than 5% of the value of the security and take days to complete. Ordinary people had to have a long holding period just to overcome transaction costs. Futures and option markets were as exotic as aardvarks.

    Today, trading for a living is an occupation with low barriers to entry for anyone with ambition and a few dollars, but its lure is deceptive. Available to the would-be trader are seminars and trading books that purport to explain how to do it. You may think once you read a few books and understand some mechanical basics, you’ll be able to. Beware! Most of these books and seminars are run by people who do not trade for a living. Few other professions have so many nonperformers passing themselves off as experts, preying on the unsophisticated.

    Trading done correctly can be lucrative, much more so than giving seminars or writing books. This is particularly true if you have the ability to leverage your trading into the real business of running a successful trading firm, which is no mean feat. It is a lot more difficult to run a trading firm than many other types of businesses because of the risk controls necessary and the difficulty of finding, training, and keeping good traders.

    Not many people who know how to trade well teach or write about it. There are some excellent books on trading and some excellent teachers of trading, but the number is small considering what is available, and you have to be selective. Good traders trade, and they aren’t any more likely to be good teachers or writers than anyone else. Trading as a basic skill can be taught to anyone with the minimum talents necessary for it. To become an outstanding trader requires a lot more."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-98-97-at-the-close-by-dan-altman-21.gif"",""height"":""620"",""width"":""435""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-98-97-at-the-close-by-dan-altman-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-11-98-97-at-the-close-by-dan-altman-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271siup,d,"{""minimum-quantity"":""1"",""path"":""ch12d205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:12 (12-16): Sizing Up For Success by John Sarkett"",""caption-linebreaks"":""Sizing Up For Success by John Sarkett

    Here’s a look at how an option trader started small and graduated to trading “more size.”

    True to his name, option trader Tony Sizemore trades “more size” than most. After a long career in mortgage lending, which included more than a passing interest in the financial markets, he turned his attention full time to options, specifically monthly income strategies from options. “This was the first time I had enough liquid capital to pursue trading as a business, and I reasoned that if I got serious about it, I could be successful as a trader,” he said.

    Getting the right teacher makes all the difference, and that’s where things took off for Sizemore. After trading futures on his own for years with up and down results, he connected with option mentor Dan Sheridan. By employing the former Cboe trader’s unique risk management methodologies, Sizemore became consistently profitable.

    Gradually, Sizemore sized up, now trading a prodigious 500 to 1,000 contracts per week — and profitably (ranging annually from 41% to 119% increases), because he learned his craft and methodology slowly but surely, eventually becoming expert enough to advance and adapt as the market changed.

    CBOE WEBSITE AS THE SOURCE

    The strategies Sheridan was employing were similar to what Sizemore had done in the past but Sheridan’s worked better because his strategies had a plan, and he showed how to adjust these strategies based on market conditions. “I began making money using the basic strategies I learned,” Sizemore says.

    Although Sizemore had traded options for about 10 years, he signed up for mentoring with Sheridan. Under Sheridan’s tutelage, Sizemore began trading the condor, calendar, and double diagonal. He learned that every strategy has its own place and should be managed differently, he said, adding that “knowing which type of strategy is conducive to certain market conditions.”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-12-16-sizing-up-for-success-by-john-sarkett-21.gif"",""height"":""628"",""width"":""467""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-12-16-sizing-up-for-success-by-john-sarkett-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-12-16-sizing-up-for-success-by-john-sarkett-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271mamo,d,"{""minimum-quantity"":""1"",""path"":""ch12d205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:12 (18-25): Making The Most Of A Trend With The Disparity Index by Dan Valcu"",""caption-linebreaks"":""Making The Most Of A Trend With The Disparity Index by Dan Valcu

    In volatile markets, it’s difficult to forecast the formation of peaks and troughs. The disparity index is an indicator that helps you squeeze the best out of a trend whether you are trading equities, futures, or forex.

    Prices often rise or fall rapidly in a short period of time. But what is considered too far and too fast? How can we quantify these terms? Many techniques and indicators are used already to deal with this task, among them trendline slopes, breakouts, up and down gaps, and oscillators (rate of change, moving average convergence/divergence [Macd]).

    In these fast rises and falls, it is only natural and normal to miss the peaks and troughs. At any given time, there is at least one market and several sectors and stocks that display excess. Is there an indicator that can improve your entries and exits? In this article I describe a simple indicator called the disparity index (Dix) and its use in warning about the formation of possible peaks and troughs in volatile market conditions. The Dix can best be used in situations when prices rise or decline rapidly in a short period of time.

    DISPARITY INDEX

    How many times have you given back the market too much of your gains? If it happens more often than not, the disparity index is for you. The index is a simple statistical measure of price deviation from a mean. It is used as a tool, together with other indicators, for fine-tuning your trades.

    If you stretch a coil, the more you pull at both ends the greater the danger of it snapping. However, when released, the coil returns to its initial position. A rubber band and, to some extent, a pendulum display similar behavior. After being stretched or swung, both return to a neutral state before going the other direction. Asset prices behave in a similar way; the more they deviate from a reference value, the greater the probability is to return to the original level or even exceed it. Simply, it is a reversal to the mean."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-18-25-making-the-most-of-a-trend-with-the-disparity-index-by-dan-valcu-20.gif"",""height"":""620"",""width"":""439""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-18-25-making-the-most-of-a-trend-with-the-disparity-index-by-dan-valcu-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-18-25-making-the-most-of-a-trend-with-the-disparity-index-by-dan-valcu-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov272trvo,d,"{""minimum-quantity"":""1"",""path"":""ch12d205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:12 (26-28): Trading Volatility by Russell Rhoads, CFA"",""caption-linebreaks"":""Taking A Position On A Measure Of Fear, Trading Volatility by Russell Rhoads, CFA

    The Cboe Volatility Index has been used as a measure of fear in the market, but there’s more to it than that. Find out how you can use the Vix to take a position when you have an opinion about the direction of volatility in the equity market.

    Throughout the stock market goofiness in the second half of 2008, we were constantly told there was panic and the high level of the Cboe Volatility Index (Vix) was cited. If you were even just a passive viewer of Cnbc or any business program, you got the impression that the Vix was a measure of fear and the higher the Vix went, the more frightened investors became.

    There is a lot more to Vix than using it to tell the public there is fear in the market. In fact, there are ways that traders can take a position when they have an opinion of the future direction of volatility in the equity market.

    A QUICK VIX HISTORY

    The history of the CBOE volatility index stretches back to 1993, when Robert Whaley of Vanderbilt University published a paper on calculating volatility. His methodology in 1993 was to measure the stock market’s expectation of a 30-day volatility that was implied by at-the-money Standard & Poor’s 100 or OEX option prices. In 2003, the CBOE along with Goldman Sachs updated the VIX to reflect a new way to measure expected volatility. This new method involved calculating market volatility through averaging the weighted prices of S&P 500 (SPX) puts and calls over a range of strike prices. The updated calculation also takes pricing from two expiration dates instead of just the closest expiration date.

    With the popularity of the VIX as a market monitoring tool, the CBOE introduced a variety of volatility measures to the marketplace. The CBOE now calculates and publishes data on several other stock market indexes, including the CBOE Nasdaq 100 volatility index (VXN), CBOE DJIA volatility index (VXD), and the CBOE Russell 2000 volatility index (RVX). Finally, in 2008 the exchange branched out into measuring volatility to include alternative investments through the CBOE crude oil volatility index (OVX), CBOE gold volatility index (GVZ), and the CBOE eurocurrency volatility index (EVZ).

    TRADING THE VIX

    Most traders have heard of the VIX, especially about the incredible levels it reached at times in 2008. However, there are some who are not aware that there is a variety of ways to trade expectations of the VIX. The CBOE offers futures contracts and options on the VIX, while there are exchange traded notes (ETNS) that trade based on near-term and longer-term market expectations of volatility. Because of the increase in volatility that the financial markets have experienced in the past couple of years, these products continue to interest traders. The result has been liquid tradable markets in all available instruments related to movements in the Vix."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-26-28-trading-volatility-by-russell-rhoads-cfa-20.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-26-28-trading-volatility-by-russell-rhoads-cfa-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-26-28-trading-volatility-by-russell-rhoads-cfa-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov273oldt,d,"{""minimum-quantity"":""1"",""path"":""ch12d205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:12 (30-33): Old Trendlines to Predict Future Movements by Cory Mitchell, CMT"",""caption-linebreaks"":""Read The Future By Looking Back, Old Trendlines to Predict Future Movements by Cory Mitchell, CMT

    Can you extend old trendlines into time and use them to anticipate future price movements?

    Trendlines are well known to most traders, but most traders don’t know all the ways trendlines can be used. Trendlines are often drawn, but when they are broken they are deleted. While a trendline does provide the function of acting as support in a downtrend or resistance in an uptrend, as well indicating a break of those trends when the trendline is broken, you can continue to extend old (broken) trendlines out into time, and they can often predict future price movements.

    DRAWING TRENDLINES

    Trendlines are dynamic, and if you are going to extend them out into the future, you must make sure you draw them accurately so that future price actions are more likely to correspond with these broken lines.

    What you should realize is that a trend may have several trendlines, not just one. Since the market does not always move with the same aggressiveness, you may have a trend that is quite steep and another that is much flatter. For this reason you should draw trendlines based on normalized movement, as well as lines that correspond to irregular movements or spikes.

    A normalized trendline allows you to connect multiple tops and bottoms, possibly by passing through an extreme high or low instead of passing right along the top (downtrend) or bottom (uptrend) of that spike. You should also draw a trendline using the extreme high or low of a price spike. Often, spikes will connect with future spikes. This is why in real time you draw a normalized and spike trendline. If price action passes through your normalized trendline, it is likely to move to your spike trendline. Beyond this, the price action is likely to move to other trendlines.

    You should draw trendlines wherever you can connect three or more points (highs or lows) on your chart; these points should be in relatively close proximity to the trendline, although only two actually need to be touching the line.

    "",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-30-33-old-trendlines-to-predict-future-movements-by-cory-mitchell-cmt-20.gif"",""height"":""626"",""width"":""459""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-30-33-old-trendlines-to-predict-future-movements-by-cory-mitchell-cmt-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-30-33-old-trendlines-to-predict-future-movements-by-cory-mitchell-cmt-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov273hiti,d,"{""minimum-quantity"":""1"",""path"":""ch12d205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:12 (38-42): Highs & Tight Flags by Thomas Bulkowski"",""caption-linebreaks"":""Stocks & Commodities V. 27:12 (38-42): Highs & Tight Flags by Thomas Bulkowski

    Does the high & tight flag work as well as\nsome say? Find out here.

    I have spent 30 years playing the markets. During that time, I have written several books including two encyclopedias covering 166 price patterns from chart patterns to event patterns to candlesticks, but one pattern outperforms the rest: the high & tight flag. New research indicates that this chart pattern may not live up to expectations. Let’s take a closer look.

    WHAT IS IT?

    The high & tight flag was popularized by William O’Neil in his book, How To Make Money In Stocks. He mentions several identifying characteristics, but I let the pattern’s performance statistics tell me what is or is not important. We agree that a substantial price rise should occur quickly: a move of at least 90% (nearly a double) within about two months.

    The flag portion of the high and tight flag (Htf) need not look like a flag at all. In fact, many Htfs sport a loose collection of price movement that doesn’t resemble any recognizable pattern. What you are looking for is a consolidation region near where price doubles.

    For example, Figure 1 shows what a high & tight flag looks like. Price begins its climb from a low of 1.86 on January 23, 2009 (point A), and reaches a high of 3.78 on March 25, 2009 (point B), or a 103% move in 42 trading days, which is also the maximum time I allow.

    After price doubles, it consolidates, dropping back to a low at C of 2.92, for a drop of 23% in about a week. This Htf has a nice flag pattern. That means once the stock reaches the flagpole top, price trends downward following two parallel lines, resembling a flag on a pole. I show that on Figure 1 outlined in blue."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-38-42-highs-tight-flags-by-thomas-bulkowski-20.gif"",""height"":""604"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-38-42-highs-tight-flags-by-thomas-bulkowski-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-38-42-highs-tight-flags-by-thomas-bulkowski-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274exyo,d,"{""minimum-quantity"":""1"",""path"":""ch12d205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:12 (43): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    SHORT STRADDLE TO HEDGE?

    What’s your opinion on establishing a short straddle hedge to offset the risk of a long straddle?

    If a trader wants to establish offsetting straddle positions in different contract months, the combined spreads can be an effective means of reducing the risks associated with the greeks of theta and vega. The net position is commonly referred to as a double diagonal.

    A long double diagonal can be approached when a trader wants to hold long curvature or premium in a longer-dated straddle in anticipation of a stock move and/or increase in implied volatility but is concerned that a quiet near-term underlying instrument will pressure the spread."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-43-explore-your-options-by-tom-gentile-20.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-43-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-43-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274trfo,d,"{""minimum-quantity"":""1"",""path"":""ch12d205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:12 (44-47): Trading Forex by Koos van der Merwe"",""caption-linebreaks"":""Trading Forex by Koos van der Merwe

    So you want to trade the foreign exchange market, do you? Have you really thought this through?

    IF trading forex is what you really want to do, then the first thing is for you to decide how you want to trade. Do you want to trade short term, medium term, or long term? Whatever you choose, you must first understand what the forex market is. The foreign exchange industry exists whenever one currency is traded for another. The currency market is the largest in the world in terms of cash value traded, and that includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. Trading volume is extremely high and since the market is traded all over the world, that makes it a 24-hour commercial forum. Its liquidity and the fact that the market is always open are what attract short-term traders to the forex market.

    All successful forex traders, whether long-term or short-term speculators, analyze world news and take a bet on a currency based on their interpretation of that news. The best example of this is the 1992 trade by George Soros. He came to the conclusion that Great Britain would be rejected by the Economic and Monetary Union (incorrectly known as the European Monetary Union)(Emu). He then placed a $10 billion short position in the market.

    The Bank of England tried to stabilize the pound’s value by intervening and depleting all of its foreign currency reserves, but in spite of its efforts, on September 16, 1992, known around the world as Black Wednesday, the pound plummeted as Great Britain was forced to withdraw from the Emu. And thus, in one day, George Soros earned $1 billion."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-44-47-trading-forex-by-koos-van-der-merwe-20.gif"",""height"":""620"",""width"":""437""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-44-47-trading-forex-by-koos-van-der-merwe-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-44-47-trading-forex-by-koos-van-der-merwe-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275fufo2,d,"{""minimum-quantity"":""1"",""path"":""ch12d205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:12 (51): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    SIDE-BY-SIDE TRADING

    What is “side-by-side” trading and what does it mean to me as a speculator?

    A majority of futures contracts now offer side-by-side trading in which speculators have a choice between open outcry and electronic execution venues. If you are unfamiliar with these terms, “open outcry” is the original method of execution for the futures and options industry and is also referred to as pit trading. Pit traded contracts are bought and sold by traders in a tiered area, normally shaped in an octagon, waving and yelling orders to buy or sell an instrument. You’ve probably seen glimpses of the process on television or in movies. Do you remember the orange juice trading pit in the movie Trading Places? The practice is loud and exciting and best described as organized chaos.

    “Electronic execution,” on the other hand, doesn’t involve a physical and centralized location. Instead, it is the exchanges’ method of matching buy and sell orders via electronic means with little or no human intervention."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-51-futures-for-you-by-carley-garner-20.gif"",""height"":""616"",""width"":""422""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-51-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-51-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275wefo,d,"{""minimum-quantity"":""1"",""path"":""ch12d205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:12 (52-53): Websites For Traders: FX360.com by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Websites For Traders: FX360.com by Jayanthi Gopalakrishnan

    WWW.FX360.COM

    Just the Url should give you a pretty good idea of what you can expect from this website. You will note from the home page that it has a user-friendly layout. All the features are laid out clearly, making it easy to navigate around the site. At the top is a window rotating through five news or analysis articles, which are probably the more significant articles to read for that specific trading day. Below that you will see the market commentary section written by two well-known individuals in the forex arena, Kathy Lien and Boris Schlossberg. There’s also an economic calendar, technical analysis reports by Roger A. Stojsic and Bradley W. Gareiss, latest business news, and a forum for traders. Along the right-hand side you will see trade recommendations, a quoteboard, and central bank rates. In addition to forex quotes, you can find quotes of gold, silver, oil, and US/European/Asian equity and bond markets. The most recent addition to their feature set has been the FX360 iPhone application."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-52-53-websites-for-traders-fx360-com-by-jayanthi-gopalakrishnan-20.gif"",""height"":""613"",""width"":""410""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-52-53-websites-for-traders-fx360-com-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-52-53-websites-for-traders-fx360-com-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275qaby2,d,"{""minimum-quantity"":""1"",""path"":""ch12d205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:12 (54): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    MYSTERIOUS NUMBERS

    I started using a prominent retail brokerage firm a few months ago and using their depth of market (Dom) to place trades. On the Dom, when a bid or offer is lifted, it displays for example “1 @ 34.35” or “4 @ 34.32” and such to indicate the 100-share lots at that price. Most of the time, this matches the L2 and the time & sales prints, but often I see “100 @” or “800 @” and there is nothing even close to that kind of size on the L2 or T&S, even if you add a stream of prints together at a given price. Do you know where those numbers come from and why they are not reflected elsewhere? — NoDoji

    Hard to say without actually seeing the monitors. However, we teach our traders to monitor the bid size and ask size and watch the numbers change quickly, often with no trades taking place. These numbers change because many automated programs use “if–then” orders. If Xyz trades at 20.40, then place a bid for Abc of 20.10. Cancel if Xyz trades at 20.35. These automated order entries and cancels make the bid-ask size bounce around like crazy."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-54-q-a-by-don-bright-23.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-54-q-a-by-don-bright-26.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-54-q-a-by-don-bright-27.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275lofo,d,"{""minimum-quantity"":""1"",""path"":""ch12d205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:12 (56-62): Looking Forward With Jeff Parent by J. Gopalakrishnan"",""caption-linebreaks"":""Looking Forward With Jeff Parent by J. Gopalakrishnan

    Jeff Parent has been providing wealth management services to his high net worth clients since 1992. From many years of experience, he has become proficient in portfolio management techniques and has a broad knowledge of estate and tax planning. In his portfolio management role at Quadrexx Asset Management, he applies a strong price discipline to help control risk and improve returns. His specialty is technical analysis with a focus on quantitative methods. He regularly appears on Business News Network and is a recognized writer, public speaker, and educator. Parent is also the past president of the Canadian Society of Technical Analysts.

    Stocks & Commodities Editor Jayanthi Gopalakrishnan interviewed Jeff Parent on October 8, 2009.

    Jeff, what attracted you to technical analysis?

    I always had an interest in math and finance. When I was 15, my dad had this idea on how we could make money selling personalized mortgage tables. So we bought a personal computer in the early 1980s, which at the time was unusual. We showed people how changing or accelerating their mortgage payments could save them a lot of money — interest rates were high back then, if you’ll recall. So we turned it into a business and since I did the computer programming myself, I saw firsthand how math and finance intersected. That created an interest that has lasted over the years.

    When did you start your financial career?

    I started off working for a financial planner who sold mutual funds and life insurance. There wasn’t a lot of math in that, but calculating the returns for the clients did involve some. Eventually, I got interested in getting into stocks and bonds working for an investment firm in 1997. That’s when the idea of technical analysis came to me, because when you’re a stockbroker, you’re trying to differentiate yourself from all the others. And going out there and talking about the same mutual funds or the same stock that everyone else is talking about doesn’t allow you to do that. Even the research wasn’t very different, and it didn’t seem to be as critical as it should have been. And these days, brokers are selling essentially the same in-house products so it’s hard to differentiate yourself. So technical analysis was something you could talk to people about. You could talk about some of the main aspects of technical analysis, like looking at a chart, or the discipline, or something other than just the buy & hold approach."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-56-62-looking-forward-with-jeff-parent-by-j-gopalakrishnan-21.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-56-62-looking-forward-with-jeff-parent-by-j-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-56-62-looking-forward-with-jeff-parent-by-j-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov277trti7,d,"{""minimum-quantity"":""1"",""path"":""ch12d205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:12 (72-84): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    Here is this month’s selection of Traders’ Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue.

    Internet users will also find these and most previous Traders’ Tips at our website at www.Traders.com. To locate the various tips, use our site’s search engine, or click on the Stocks & Commodities magazine link on the left-hand side of our home page, then scroll down to the “This month in S&C” heading in the middle section and click on“Traders’ Tips.” For previously published Traders’ Tips, visit the “Back issues archive” located at http://www.traders.com/Documentation/FEEDbk_docs/backissues.html. Code can then be copied and pasted into your program.

    This month’s Traders’ Tips are based on Dan Valcu’s article in this issue, “Making The Most Of A Trend With The Disparity Index.” Code for AmiBroker is already provided in the article’s sidebar to help implement the strategy. Additional code is presented here as contributed by various software developers.\nReaders will find our Traders’ Tips section in its entirety at the Stocks & Commodities website at www.Traders.com in the Traders’ Tips area, from where the code can be copied and pasted into the appropriate program. In addition, the code for each program is usually available at the respective software company’s website. Thus, no retyping of code is required for Internet users.

    For Stocks & Commodities subscribers, the AmiBroker code found in Valcu’s article can be copied and pasted into AmiBroker from the Subscriber Area at www.Traders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-72-84-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""619"",""width"":""435""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-72-84-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-72-84-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov278leto5,d,"{""minimum-quantity"":""1"",""path"":""ch12d205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:12 (8-10): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    Volume-Weighted MACD\nEditor,\nThe article “Volume- Weighted Macd Histogram” by David Hawkins in the October 2009 issue is certainly well written and instructive. However, it fails to note that the Vwmacd was originally developed by Buff Dormeier, Cmt. His 2007 paper, “Price & Volume, Digging Deeper,” on volume-weighted moving averages, is available at:

    http://www.mta.org/eweb/docs/2007DowAward.pdf

    The earliest reference to the Vwmacd actually appears to be in Bollinger On Bollinger Bands, John Bollinger’s excellent 2002 book. Bollinger attributes the idea to Dormeier in Chapter 18 and presents the formulas for the indicator. I believe at that time, Dormeier’s work was unpublished.\nThe field of technical analysis has a deep history. Dormeier’s work is a valuable addition to that, and David Hawkins demonstrates how to extend the original idea. They both deserve recognition in your magazine.

    Mike Carr"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-8-10-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""619"",""width"":""429""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-8-10-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-8-10-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov278oppo,d,"{""minimum-quantity"":""1"",""path"":""ch12d205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:12 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    • Benjamin Graham On Investing

    • The Complete Guide To Option Selling: 2nd Edition

    • Forex Trading

    • High Probability ETF Trading

    • Nerds On Wall Street

    • Trade The Patterns: The Revolutionary Way Of Trading the CCI"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""614"",""width"":""415""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov27997at5,d,"{""minimum-quantity"":""1"",""path"":""ch12d205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:12 (98, 97): At The Close by Michael Radkay"",""caption-linebreaks"":""At The Close by Michael Radkay

    It’s that time of the trading day when anything and everything is possible…

    It’s a little past 5 am Pacific time and I am ready to trade the US commodity futures session. It’s early, but my day is going to end around 8 am. I can live with that! I have a lot of inner chatter going on because it’s 5:19 and it’s one minute to game time. It’s time for my morning ritual to calm my inner chatter: “If I follow my game plan, I am a great trader! If I adjust to my opponent, I am an experienced trader! If I follow my game plan and adjust to my opponent when necessary, I am a master trader!”

    ADJUSTING TO YOUR OPPONENT

    The essence of this article is captured in the part of my ritual when I mention “adjusting to my opponent.” Who are my opponents in electronic trading? I can’t see them. As market commentator Rick Santelli points out, “Electronic trading is like playing a game, but you can only watch the scoreboard,” so who are we playing against? When I talk about my opponents in electronic trading, they are either buyers or sellers. When I am a short player (seller first), my opponents are the buyers and my teammates are the sellers. When I am a long player (buyer first), my opponents are the sellers and my teammates are the buyers. I am always interested in the health of both teams."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-98-97-at-the-close-by-michael-radkay-21.gif"",""height"":""619"",""width"":""433""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-98-97-at-the-close-by-michael-radkay-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-12-98-97-at-the-close-by-michael-radkay-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271rein,d,"{""minimum-quantity"":""1"",""path"":""ch13b203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:13 (12-15): Reversals In Weekly Stock Returns by A. Tezel, PhD, and R. Sharma, PhD"",""caption-linebreaks"":""Reversals In Weekly Stock Returns by A. Tezel, PhD, and R. Sharma, PhD

    Nasdaq stocks provide the highest net returns from a long strategy after a week of declining returns and declining highs and lows.

    Stock prices with strong momentum during the prior week or month tend to reverse in subsequent weeks. Strong positive (negative) momentum leads to overbought (oversold) conditions, implying a short-term drop (rise) in prices. Here you will see the relationship of weekly return reversal to weekly return consistency as well as to weekly high/low consistency. Stocks with positive (negative) return consistency have a high frequency of positive (negative) returns during a given period. Using return consistency for five days (that is, five days in a row the stock had a positive or negative return), we found a statistically significant effect of return consistency on subsequent reversals. However, net of transaction costs, only negatively consistent stocks led to profitable trades, and the Nasdaq stocks yielded returns above 30% a year.

    Typically, a rising market is considered healthy if prices make higher highs and higher lows. A percent retracement following higher highs and higher lows is an example of a short-term reversal. A five-day positive high/low consistency means that the stock has higher highs and higher lows in each of the five trading days. A five-day negative high/low consistency means that the stock has lower highs and lower lows in each of the five days. The results of high/low consistency are similar to those of return consistency. Our test results show that only negatively consistent high/low stocks yield profitable trades statistically. Nasdaq stocks earn the highest returns.

    DATA AND METHODS

    The data for stocks is from January 1983 to December 2005 and is obtained from Center for Research in Security Prices (Crsp) database from Wharton Research Data Services (Wrds). We identify a date as day zero if the stock has exhibited return consistency and/or high/low consistency. Return consistency exists for five days if for all five days the stock had a positive or negative return. Similarly, positive (negative) high/low consistency for five days exists if each day out of five days the stock had higher (lower) highs and higher (lower) lows."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-13-12-15-reversals-in-weekly-stock-returns-by-a-tezel-phd-and-r-sharma-phd-21.gif"",""height"":""621"",""width"":""441""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-13-12-15-reversals-in-weekly-stock-returns-by-a-tezel-phd-and-r-sharma-phd-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-13-12-15-reversals-in-weekly-stock-returns-by-a-tezel-phd-and-r-sharma-phd-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271mapa,d,"{""minimum-quantity"":""1"",""path"":""ch13b203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:13 (16-20): An MACD Parallax View by Edward Donie"",""caption-linebreaks"":""An MACD Parallax View by Edward Donie

    Fundamental to technical analysis are indicators and signals, such as moving averages. Here are situations where variations of these indicators are helpful in decision-making for traders.

    Fundamental to technical analysis are indicators, among which are the simple moving average (Sma), exponential moving average (Ema), and the moving average convergence/divergence (Macd). There are situations in which variations of indicators are helpful in decision-making for traders. Day-to-day prices change with volatility, responding to the news and data of the day. Because of this, day-to-day movements do not provide insight into price trends.

    SIMPLE MOVING AVERAGE

    The simple moving average (SMA) is one of the most common technical indicators. In application it is the sum of the closing prices over a specific number of days divided by the number of days. For example, a 12-day moving average is the sum of the closing prices of the last 12 trading days divided by 12. As each day passes, the oldest closing price is dropped and the latest is added. At the end of each trading day, the 12-day Sma is the sum of the closing prices of the 12 most recent trading days divided by 12. The SMA can be used for any number of days. The Sma is the basis for the development of many other indicators and signals.

    EXPONENTIAL MOVING AVERAGE

    Another moving average is the exponential moving average (Ema). The Ema takes a fraction of yesterday’s average and combines it with a fraction of today’s close. The fractions are normally expressed as percentages and the two must add up to 100% (Figure 1)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-13-16-20-an-macd-parallax-view-by-edward-donie-21.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-13-16-20-an-macd-parallax-view-by-edward-donie-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-13-16-20-an-macd-parallax-view-by-edward-donie-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov272rech,d,"{""minimum-quantity"":""1"",""path"":""ch13b203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:13 (22-36): Readers’ Choice Awards by Technical Analysis, Inc."",""caption-linebreaks"":""Readers’ Choice Awards by Technical Analysis, Inc.

    We are pleased to present the Technical Analysis of Stocks & Commodities magazine 2009 Readers’ Choice Awards (Rca). Each year, we put before our readers a ballot of products and services related to technical analysis and trading. The following pages present the products and services you and your peers chose this year as your favorites.

    The Readers’ Choice Awards begins each year with a list of products gathered by the editors of Stocks & Commodities, with space for write-in votes (given that our list doesn’t claim to be complete). Then, to find out what our readers find to be the most useful for their trading, we ask them to choose their favorite products or the ones they find most useful from various categories by going to our website, Traders.com, and filling out the survey there. After that, we compile the results, just in time for the Bonus Issue you hold in your hands.

    Products are categorized by their primary purpose. Just because a service or product is not listed does not necessarily mean that the product does not have features germane to the category; otherwise, a number of products could be listed in numerous categories. In addition, some categories are divided by cost so that the comparisons can be made on a more level playing field.

    The winners in the Readers’ Choice Awards are almost always the dominant players in their niche, and rightfully so. You may have special needs for your trading, however, so you should keep in mind those products that are not the big names in the category of your interest before you make your final decision. The Rca is designed to be an aid for you when you are deciding on which of the numerous products and services currently available to use for your trading and investing. With that in mind, we think you’ll find the Readers’ Choices a terrific guide to products and services that you’ll be interested in."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-13-22-36-readers-choice-awards-by-technical-analysis-inc-21.gif"",""height"":""628"",""width"":""466""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-13-22-36-readers-choice-awards-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-13-22-36-readers-choice-awards-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov273extr,d,"{""minimum-quantity"":""1"",""path"":""ch13b203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:13 (38-41,46-47): Extreme Trading by Carley Garner"",""caption-linebreaks"":""Extreme Trading by Carley Garner

    Approaching trading a market with an extreme sport mindset and with a similar view to the risks and rewards makes sense. How? Find out here.

    You may have heard of extreme sports, but have you ever heard of extreme trading? Activities dubbed as “extreme” are perceived as having a high level of inherent danger or difficulty and are most often individual activities. Each of these characteristics can, and do, describe the experience of being exposed to risk in any given market. Thus, approaching a market with an extreme sport mindset and with similar respect in regards to the risks and rewards of trading makes sense.

    Being an extreme trader means entering a market with a contrarian trade in spite of popular opinion. It is important to note that there is a big difference between being “extreme” and being foolish. Trying to pick a top or bottom through the purchase or sale of a futures contract can be a form of financial suicide if the circumstances are against you. Only those who can relatively accurately predict the future should be comfortable buying or selling futures against the grain; sadly, I am not one of those people. If you are lucky enough to be that talented, you are probably not reading this article.

    Times of high volatility and excessive pricing are perfect opportunities to sell option premium. During such market conditions, it is possible to sell options significantly out-of-the-money for a handsome reward, assuming that you are willing to accept the related risks.

    For example, when the stock market was seemingly in freefall in mid-August 2007 following news of the subprime fallout, an extreme trader may have been selling puts while the broad market was trading as if the world was coming to an end. Executing such a trade may feel like bungee-jumping or parachuting. Timing is crucial and there is no room for panic.

    OPTION SELLING BASICS

    Option sellers attempt to collect premium in hopes that the time erosion and volatility decay will overcome any adverse price movement in the underlying futures market. The strategy offers unlimited risk and limited reward, but the odds of success on any given option are arguably better for the buyer than the seller."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-13-38-41-46-47-extreme-trading-by-carley-garner-21.gif"",""height"":""626"",""width"":""462""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-13-38-41-46-47-extreme-trading-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-13-38-41-46-47-extreme-trading-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274adop,d,"{""minimum-quantity"":""1"",""path"":""ch13b203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:13 (42-45): Adjusting Option Trades With Bill Ladd by John Sarkett"",""caption-linebreaks"":""Adjusting Option Trades With Bill Ladd by John Sarkett

    Bill Ladd, a full-time, independent option trader, spent 20-some years in the pharmaceutical industry (Burroughs Wellcome, which became Glaxo Smith/Kline) as a certified internal auditor and a certified fraud examiner. Ladd was one of the early students of 22-year Cboe veteran turned teacher Dan Sheridan, regarded as one of the foremost option mentors.\nWhen he’s not trading, Greensboro, NC–based Ladd volunteers for the Service Core of Retired Executives (Score) organization and also at a local retirement community. He agreed to answer some questions on August 22, 2008. The interview was conducted by Stocks & Commodities contributor John Sarkett.

    Bill, when and how did you begin trading?

    I was interested in options for several years before I began trading. After I left the pharmaceutical industry and began my own consulting business, I started to trade covered calls on stocks I currently owned, but only had limited success.

    How did you come in contact with Dan Sheridan and his option mentoring service?

    I met Sheridan through OptionVue. I was using OptionVue software and their representative told me about his mentoring program. So I was introduced to his style of monthly income strategy trading that way.\nSome of Sheridan’s students seem to specialize in condors. Is that what you do?

    No, but I do trade high- and low-probability iron condors, calendars, and broken-wing butterflies. Each strategy has its own entry and exit rules. Managing trades once they are on is the heart and soul of option trading, and that only comes with experience."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-13-42-45-adjusting-option-trades-with-bill-ladd-by-john-sarkett-21.gif"",""height"":""633"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-13-42-45-adjusting-option-trades-with-bill-ladd-by-john-sarkett-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-13-42-45-adjusting-option-trades-with-bill-ladd-by-john-sarkett-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275puan,d,"{""minimum-quantity"":""1"",""path"":""ch13b203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:13 (56-57): Puts and Covered Calls For Newbies by Moses Sanchez"",""caption-linebreaks"":""Puts and Covered Calls For Newbies by Moses Sanchez

    Options are complex vehicles but useful for conservative traders who want to purchase their favorite high-yielding dividend stock without having a large downside risk. Here’s how you can trade options even if you’re just starting out as a trader.

    IN\nthis trading environment, a beginner trader may worry about jumping in to buy their favorite stock. That concern is justified, with recent volatility hitting record highs. So what are novice traders supposed to do in order to protect their investment and feel confident about it? Most beginner traders do not want to short stocks, and I would not recommend them to do so. But buying puts on their trades is a good strategy for any beginner and easy to implement. The most difficult part of this strategy is learning about options themselves."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-13-56-57-puts-and-covered-calls-for-newbies-by-moses-sanchez-21.gif"",""height"":""620"",""width"":""439""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-13-56-57-puts-and-covered-calls-for-newbies-by-moses-sanchez-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-13-56-57-puts-and-covered-calls-for-newbies-by-moses-sanchez-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov278prpi,d,"{""minimum-quantity"":""1"",""path"":""ch13b203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:13 (8-11): Profits, Pitfalls, Patience by Donald W. Pendergast Jr."",""caption-linebreaks"":""Profits, Pitfalls, Patience by Donald W. Pendergast Jr.

    Plan your trade, trade your plan. Here’s what can happen when a trader plunges into a position without following a trading blueprint.

    God really watches over children and fools, then I must have been among that special group of foolish, childlike traders who were “miraculously” bailed out of trades that tragically went wrong. Here’s what happened when a fundamentally sound, long-term position trade gathered steam, peaked, and then crashed before finally recovering, eventually regaining most of the profits, despite taking twice as long as planned to realize them.

    THE TRADE SETUP OF A LIFETIME

    In autumn 2001, I received an advertisement that extolled the value of silver, a commodity that was languishing in the cellar of a 20-year-old bear market, but which was now also giving evidence that a major bottom had formed (Figure 1). At $4.50 an ounce, it was hard to reconcile the advertisement’s ultrabullish prognostications with the dirt-cheap asking price for the beaten-down commodity.

    I thought nothing more about it until May 2003. At that point, after making the dead low in November 2001, silver had already begun to trace out a series of higher highs and higher lows and was trading at $4.80. Once again, I received the same ultrabullish sales pitch to buy silver. After doing some research, I decided that the downside risk of approximately $1 an ounce was well within my risk tolerance. The global supply/demand situation for the metal was bullish, and the world was on the verge of a new commodity bull market. Of course, the ad copy’s suggestion that silver could eventually top $50 put a potent dose of confidence behind my decision to buy.

    SCALING IN

    I began to accumulate silver in early July 2003 (Figure 2), paying $4.89 for my initial position of real metal (no futures contracts were used in this trade). Since I decided to scale in as price moved (hopefully) higher, I waited for a few months, jumping in again in early November at about $5.28 an ounce. I still held a mental stop at $4, just in case there was some unexpected turbulence. By then the series of higher highs/higher lows was well established, and my heart raced in anticipation of a sudden surge in price."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-13-8-11-profits-pitfalls-patience-by-donald-w-pendergast-jr-21.gif"",""height"":""626"",""width"":""457""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-13-8-11-profits-pitfalls-patience-by-donald-w-pendergast-jr-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-13-8-11-profits-pitfalls-patience-by-donald-w-pendergast-jr-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov27184le,d,"{""minimum-quantity"":""1"",""path"":""ch2f204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:2 (11-12, 84-85): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    TAXES AND TRADING

    Editor,\nI have been a subscriber to\nSTOCKS & COMMODITIES\nfor about two years now. I\nfind some of the articles\nvery useful and it’s the only\nmagazine that I actually\nkeep in a library.

    The point at which I started subscribing\nwas about the time I switched from\nbeing an investor to a trader. I am looking\nfor a tax service that understands\nthat, unlike investors, traders make\nmore than a few trades a year and who\nwon’t run away at the sight of a trader’s\nledger.

    Your magazine has many great articles\non trading systems, indicators,\nformulas for trading platforms, and so\non, but just as any good trading plan has\nexit rules to capture winning trades or\nminimize losing ones, the trader needs a\ngood plan to keep more of his hardearned\nmoney, just like any business\ndoes. How or where does one find a\nCPA who is capable of doing these\nkinds of tax returns? Is there software\nthat can help?

    RICK FINKLE"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-11-12-84-85-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""617"",""width"":""420""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-11-12-84-85-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-11-12-84-85-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271sure,d,"{""minimum-quantity"":""1"",""path"":""ch2f204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:2 (12-17): Support & Resistance Axioms by David G. Ondercin, Phd"",""caption-linebreaks"":""Support & Resistance Axioms by David G. Ondercin, Phd

    Here are seven axioms for the practical application of support\nand resistance levels to your trading.

    Support and resistance are of central importance to all\ntraders and a necessary starting point for new traders.\nThere are self-evident truths concerning support and\nresistance of financial markets, so let us examine some of these axioms for their practical application to trading.

    AXIOM 1

    The concept of support and resistance is important because\ntraders believe it is important.

    The belief is self-fulfilling. Traders are certain, for example,\nthat the violation of an established high means that the\nsecurity will likely go higher. Likewise, when a significant\nlow has been penetrated, traders believe that the market in\nquestion will go lower. They hold these beliefs because it\nhappens over and over again.

    Traders act on their beliefs about how the market moves.\nTherefore, when they see that the market is bouncing off support,\nothers with the same belief will join in and buy that particular\nmarket. That sends the market in an upward direction."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-12-17-support-resistance-axioms-by-david-g-ondercin-phd-21.gif"",""height"":""756"",""width"":""531""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-12-17-support-resistance-axioms-by-david-g-ondercin-phd-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-12-17-support-resistance-axioms-by-david-g-ondercin-phd-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271howi,d,"{""minimum-quantity"":""1"",""path"":""ch2f204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:2 (18-26): How I Stopped Holding And Learned To Love The Death Cross by Greg Gazurian"",""caption-linebreaks"":""How I Stopped Holding And Learned To Love The Death Cross by Greg Gazurian

    Check out this exit strategy, which may be what you\nneed when a specific stock or market is weakening or\nbearish, compared to the (classic but not necessarily\ndesirable) buy & hold strategy.

    Traditionally, buy & hold investors have\nsought to buy low and sell high to\nmaximize returns. Although this sounds\nattractive, there are several problems in\nusing only this approach in the stock market. One of\nthe most common is the round trip, where the investor\nbuys the stock at a relatively low price, holds the\nstock as it goes up, continues to hold as the stock\nloses the gains, until it returns to the price at which it\nwas bought.

    Unfortunately, many investors have found themselves\nholding after the gains disappear and losses\ncontinue, hoping the stock will make a comeback.\nSome buy even more, regardless of the losses they\nare still holding, in a feeble attempt to offset the\nlosses by buying when it’s inexpensive. This type of\naveraging down happens when emotions overtake\nlogic, and it is usually for the worst.

    BUY & HOLD APPROACH

    Look at how the buy & hold investor begins to invest\nin the market. First, the investor must determine the\ncurrent value of the stock. Fundamental analysis of a\nstock is the most commonly used method to gauge\nmarket value. One of the prerequisites for fundamental\nanalysis is that the accounting data or financial\noutlook that the company provides is accurate and a\nreflection of the company’s business status for that\nreporting period."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-18-26-how-i-stopped-holding-and-learned-to-love-the-death-cross-by-greg-gazurian-21.gif"",""height"":""756"",""width"":""525""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-18-26-how-i-stopped-holding-and-learned-to-love-the-death-cross-by-greg-gazurian-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-18-26-how-i-stopped-holding-and-learned-to-love-the-death-cross-by-greg-gazurian-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov272trau,d,"{""minimum-quantity"":""1"",""path"":""ch2f204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:2 (28-36): Trading The Aussie by Markos Katsanos"",""caption-linebreaks"":""Trading The Aussie by Markos Katsanos

    This system exploits the traditionally\nstrong correlation between\nthe Australian dollar and\ncommodities.

    The Australian dollar,\nalong with the\nCanadian dollar,\nthe New Zealand\ndollar, and the South African rand, is regarded\nas a “commodity currency,” owing\nto the sizable role of commodity\nproduction in the Australian\neconomy. In 2008–09,\niron ore is forecast to be\nAustralia’s largest export commodity\n(in value terms), followed\nby coal, gold, and crude\noil. The country’s largest agricultural\nexport commodity is\nwheat, ranked 10th overall in\ncommodity export earnings. In\naddition, Australia is the world’s\nbiggest exporter of metallurgical\ncoal, which is used by\nsteelmakers.

    Although trading the Australian\ndollar is not as popular\nas trading the euro or the yen, it\nis a fascinating currency because\nof its strong historical\ncorrelation to gold and the\nwhole commodity complex.\nThe direction of commodity\nprices, interest rate differentials\nwith the US, Japan, and other\ncountries, commodity prices,\nand the AUD/JPY carry trade†\nare all key variables moving\nthe Aussie dollar.

    For the last 10 years, the\naussie had a strong correlation\ncoefficient with gold and other\ncommodities (see Figures 1 and\n2). In fact, gold correlated better with the aussie (p = 0.88) than with silver\n(p = 0.84)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-28-36-trading-the-aussie-by-markos-katsanos-21.gif"",""height"":""756"",""width"":""562""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-28-36-trading-the-aussie-by-markos-katsanos-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-28-36-trading-the-aussie-by-markos-katsanos-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov273qaby,d,"{""minimum-quantity"":""1"",""path"":""ch2f204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:2 (37): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    DAYTRADING CRITERIA

    What time frame bars and other criteria\nare used for daytrading? —dafong

    Entry and exit points for daytrading\ntend to be determined by a couple of\nthings. First, we look at the premium\n(PREM) or discount (DISC) to fair value\non a emini tick chart. This will tell us\nwhen the money is going after the stocks.\nWhen futures houses can sell futures at\na high PREM, they will hedge with underlying\nsecurities. This can be seen\nwith any spreadsheet.

    Then we look to see where the peers\nare trading, which helps to determine\nthe strength of the stock in relation to\nothers and to the overall market. This\nhelps with “strong vs. weak” stock determination. (CONTINUED...)"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-37-q-a-by-don-bright-21.gif"",""height"":""756"",""width"":""538""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-37-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-37-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov273exyo,d,"{""minimum-quantity"":""1"",""path"":""ch2f204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:2 (38): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    BUY-WRITES?

    A report in Baron's said now was a good time for \""buy-writes\"" and said the trade was buying stock and selling calls. This sounds like covered calls. Is there a difference and, if not, do you think it IS a good time?

    You are correct, the buy-write and the covered call are the same strategy. \""Buy-write\"" refers to the fact that the trade involves buying shares and writing calls."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-38-explore-your-options-by-tom-gentile-21.gif"",""height"":""756"",""width"":""510""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-38-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-38-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274elwa,d,"{""minimum-quantity"":""1"",""path"":""ch2f204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:2 (40-45): Elliott Wave Theory, Simplified by Koos van der Merwe"",""caption-linebreaks"":""Elliott Wave Theory, Simplified by Koos van der Merwe

    Elliott wave counts can get complicated,\nbut it doesn’t have to. Here’s a simplified\nlook at how to study Elliott wave theory.

    IN the late 1920s, Ralph\nNelson Elliott came to the\nconclusion that the movement\nof the stock market\ncould be predicted by identifying\na repetitive pattern of waves. He\ntheorized that movement in the market\nwas the result of investors’ reaction to\noutside influences.

    Over my years as a trader and investor\nin the stock market, I came to realize that\nthe outside influences that Ralph Elliott\nbelieved moved the market was nothing\nother than emotion. In my 50 years as a\npharmacist, I found that emotion played a\ntremendous part in the physical and mental\nhealth of a patient. I also found that\nhealth and emotion occurred in cycles\nmore obvious in women than in men.\nEventually, I determined that the gravitational\nattraction by the moon plays a real\npart in how a trader trades. After all, the\ngravitational pull creates the tides in the\nocean. More than 80% of the human body\nconsists of water. So even by a small\ndegree, that same lunar gravitation must\ninfluence the movement of water, chemicals,\nand proteins within the human body,\nand in this way influence the emotions of\na person, especially of a trader who lives\nhigh on the knife edge of emotion.

    Ralph Elliott came to the conclusion that the market moves upward in five\nwaves, and corrects in three waves. I first\nencountered the Elliott wave theory in 1969 and have been an avid follower and student since then.\nI have studied wave patterns but over the years have found\nthat the complexity of the wave theory leads only to complexity\nin interpretation. Thus, I decided that simplicity was the\nanswer, and so, the simpler the wave, the easier the interpretation.\nTo achieve this simplification, I decided on the following\nset of rules."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-40-45-elliott-wave-theory-simplified-by-koos-van-der-merwe-21.gif"",""height"":""756"",""width"":""526""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-40-45-elliott-wave-theory-simplified-by-koos-van-der-merwe-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-40-45-elliott-wave-theory-simplified-by-koos-van-der-merwe-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274dipo,d,"{""minimum-quantity"":""1"",""path"":""ch2f204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:2 (48-51): Discerning Portfolio Patterns Using Data Animation by Bruce Peterson, PhD"",""caption-linebreaks"":""Discerning Portfolio Patterns Using Data Animation by Bruce Peterson, PhD

    Here is a method using animation that helps you visualize\npatterns of stock behavior for an entire portfolio.

    Traders have long used technical indicators and\ncharts to identify patterns characterizing trading\nopportunities for individual stocks. With the\nadvent of fast computers and easily available historical data, the number of indicators and charts available\nhas greatly expanded. This can become burdensome when\ntracking a portfolio with many stocks. A dozen stocks with\nfive charts each result in 60 charts to be reviewed and actions\nevaluated.

    A VISUAL TREAT

    Data animation is a method to present stock data for the portfolio\nas an interactive animation. Standard static charts plot a\ntechnical indicator as a function of time in a time series plot.\nIn data animation, time is an implicit variable used to index\na sequence of animation frames. Key independent technical\nindicators are used to define the axes of a three-dimensional\nplot in each frame. A symbol for each stock in the portfolio\nis placed in the plot according to the value of its technical\nindicators at that time.

    A portfolio trading policy is the set of rules used to select an\naction such as buy, sell, short, cover, or watch to be performed\nwith stocks in the portfolio. A policy based on static charts\nis typically set with empirical pattern recognition methods. These are difficult to implement consistently or algorithmically\nwithin a portfolio. Trade actions may\nbe instigated based on different patterns for different\nstocks. Empirical patterns may be difficult to code\nin a form sufficiently precise for a computer."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-48-51-discerning-portfolio-patterns-using-data-animation-by-bruce-peterson-phd-21.gif"",""height"":""762"",""width"":""565""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-48-51-discerning-portfolio-patterns-using-data-animation-by-bruce-peterson-phd-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-48-51-discerning-portfolio-patterns-using-data-animation-by-bruce-peterson-phd-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276entr,d,"{""minimum-quantity"":""1"",""path"":""ch2f204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:2 (60-62): Entering Trades At Pullbacks by Candy Schaap"",""caption-linebreaks"":""Entering Trades At Pullbacks by Candy Schaap

    When opportunities knock, tell them to come in! Here’s how\npullbacks in trends offer opportunity.

    Anybody who has ever bought an asset, whether it’s\nbonds, stocks, mutual funds, or real estate, knows\nthat prices go up and down. Prices fluctuate between\nsupport and resistance most of the time.\nThis is information that technical analysts use for trend trading and countertrend trades. A countertrend trade is\nalso known as a scalp trade. As price moves back to support\nin an uptrend, or up to resistance in a downtrend, there is an\nopportunity to make money in the trend.

    Let’s look at trend dynamics to understand how to make\nentries into a trend by entering at pullbacks.

    FOLLOWING THE MOVE

    One aspect of technical analysis is the study of price activity\nand trend. Traders cannot control price, but how they react to\nits movements is the difference between profit, a small loss,\nand a large loss. Using a trendline can help you identify a\ntrend, a pullback in a trend, and when a pullback becomes a\nreversal. A trendline will also give you an objective way to\nmanage risk.

    Figure 1 shows a price chart, pivots, and a trendline. The\narrows point to pivot lows. It takes a minimum of two pivot\npoints to draw a trendline. The solid line is the start of the trendline connecting a pivot low and a higher pivot low.\nThe extension of the line (dotted) shows the trendline as\nvisual support."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-60-62-entering-trades-at-pullbacks-by-candy-schaap-26.gif"",""height"":""756"",""width"":""546""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-60-62-entering-trades-at-pullbacks-by-candy-schaap-29.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-60-62-entering-trades-at-pullbacks-by-candy-schaap-30.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276fufo,d,"{""minimum-quantity"":""1"",""path"":""ch2f204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:2 (63): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    BUTTERFLY VS. CONDOR

    What is the difference between an iron\nbutterfly and a condor?

    Before examining the discrepancies\nbetween these strategies along with their\nadvantages and disadvantages, let me\nnote that option terminology differs\ndepending on where you are. The two\nUS financial hubs, New York and Chicago,\nhave their own language when it\ncomes to option strategies. A broker on\nthe CME floor may have a slightly different\nview on what exactly a condor is\nrelative to someone standing in a NYMEX\noption trading pit. That said, you should\nbe familiar with the details of the strategies\nas well as the name. Knowledge\ncould avoid costly communication errors\nbetween yourself and your broker."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-63-futures-for-you-by-carley-garner-21.gif"",""height"":""764"",""width"":""520""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-63-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-63-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276qusc,d,"{""minimum-quantity"":""1"",""path"":""ch2f204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:2 (64-66): Quick Scans: Tsunami Trading Systems by Barbara Star, Phd"",""caption-linebreaks"":""Quick Scans: Tsunami Trading Systems by Barbara Star, Phd

    Question: What do most traders want?\nAnswer: An easy-to-follow system with\nreliable buy and sell signals that works\non everything and generates consistent\nprofits. Now tell me, is that asking for\ntoo much? Not at all, according to Tsunami\nTrading. And with the latest addition\nto the program, the software will\neven talk to you, telling you when to buy\nor sell and letting you know when a\nprofit target has been reached. The wonders\nof technology!

    The technology that enables charting\nsoftware to turn complex mathematical\nformulas into colorful indicators that\ninstantly appear on the screen has also\nmade possible the mechanization of part\nor all of the trading process. The more\nmechanical the system, the less time-consuming\nand less subjective the decisionmaking\nprocess is for the trader. With that\nin mind, Tsunami Trading Educators has\ncreated a mechanical system with\nnonoptimized proprietary formulas."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-64-66-quick-scans-tsunami-trading-systems-by-barbara-star-phd-21.gif"",""height"":""764"",""width"":""521""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-64-66-quick-scans-tsunami-trading-systems-by-barbara-star-phd-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-64-66-quick-scans-tsunami-trading-systems-by-barbara-star-phd-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276wefo,d,"{""minimum-quantity"":""1"",""path"":""ch2f204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:2 (67): Websites For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Websites For Traders by Technical Analysis, Inc.

    WWW.TRADERPLANET.COM

    With social networks such as Facebook,\nMySpace, and Twitter gaining so much\npopularity, I have no doubt that one dedicated\nto traders and investors could do the\nsame. TraderPlanet.com, founded by Lane\nMendelsohn, was created to provide traders\nand investors specifically a place to\ninteract and network with like-minded\nindividuals. Some of you may recall Lane\nMendelsohn from TraderEducation.com\nand Market Technologies. You’ll see some\nsimilarities between TraderEducation.com\nand TraderPlanet.com. The difference is\nthat TraderEducation.com is more focused\non educating traders, whereas\nTraderPlanet is more focused on building\na community of traders. The objective is\nstill to educate traders."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-67-websites-for-traders-by-technical-analysis-inc-21.gif"",""height"":""764"",""width"":""532""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-67-websites-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-67-websites-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov279bofo1,d,"{""minimum-quantity"":""1"",""path"":""ch2f204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:2 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    - A Way To Wealth: The\nArt Of Investing In Common\nStocks

    - Commodity Modeling\nAnd Pricing: Methods\nFor Analyzing Resource\nMarket Behavior

    - Enhanced Indexing\nStrategies: Utilizing Futures\nAnd Options To\nAchieve Higher Performance

    - The Forever Portfolio:\nHow To Pick Stocks\nThat You Can Hold For\nThe Long Run

    - Keynes And The Market

    - Commodity Trader’s Almanac\n2009

    - Introduction To\nAmiBroker: Advanced\nTechnical\nAnalysis Software\nFor Charting And\nTrading System Development"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""756"",""width"":""510""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov27997at,d,"{""minimum-quantity"":""1"",""path"":""ch2f204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:2 (98, 97)): At The Close by Moses Sanchez"",""caption-linebreaks"":""At The Close by Moses Sanchez

    Many people can be grouped into one of two categories.\nI am an eternal optimist while my wife is\npessimistic and we complement each other perfectly.\nInvestors or traders need to know which category they\nfall into and acknowledge it as soon as they get involved with\nthe market because it can have devastating effects on their\ndecisions otherwise.

    In late 2007, a colleague of mine — let’s call him Optimistic\nOscar — was buying what he considered good deals. He\ndid his homework and analysis both fundamentally and\ntechnically, and concluded that purchasing stock of some\nquality companies prior to the holidays was a good idea.\nCompanies like Goldman Sachs (GS), Apple (AAPL),\nHoneywell (HON), Research in Motion (RIMM), and Amazon\n(AMZN) were solid companies, and I didn’t think what he had\nin mind was a bad idea.

    From mid-September to mid-October 2007, Goldman Sachs\njumped $40 from $187 to $227 a share, and on a minor\npullback he decided to purchase more shares because as far\nas he was concerned (being Optimistic Oscar), they were\ngoing to continue going up.

    Meanwhile, Research in Motion (the makers of the\nBlackBerry handheld device), a company having nothing to\ndo with the financial industry, ran up from the mid-$80s to\n$117 a share during the same time frame. Charting RIMM,\nOptimistic Oscar figured as long as it kept breaking out, he\nwould keep buying on the pullbacks, and he did."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-98-97-at-the-close-by-moses-sanchez-21.gif"",""height"":""756"",""width"":""516""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-98-97-at-the-close-by-moses-sanchez-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-2-98-97-at-the-close-by-moses-sanchez-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271trsy,d,"{""minimum-quantity"":""1"",""path"":""ch2m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:3 (10-15): Trade System Evaluation by Donald W. Pendergast Jr."",""caption-linebreaks"":""Trade System Evaluation by Donald W. Pendergast Jr.

    Here we evaluate a simple trading\nsystem that will enable you to\nsimulate the results of realistic\ntrading with a portfolio of stocks.

    Evaluating your trading system\nperformance before you\nput real money on the line is\nessential to your profitability. In this article, we’ll evaluate a\nsimple momentum-based system\nusing TradeSim Enterprise, a\nMonte Carlo simulation/\nbacktesting program that enables\na trader to simulate the results of\nrealistic trading with a portfolio\nof stocks. Then we’ll dig a little\ndeeper, learning how to best interpret\nthe statistics, matching system\nperformance characteristics\nto a trader’s temperament.

    A BASIC SYSTEM

    A simple, daily-based momentum\nsystem provides the basis for all\nof the statistical analysis here. It’s\na moving average convergence/\ndivergence (MACD) crossover system,\nbut with the entry and exit triggers reversed. The system\nenters at the next day’s open after a buy signal, and it exits at\nthe next day’s open after a sell signal. No stop-loss is used.\nOnly long entries were taken, and no margin was used in\ntesting. All key portfolio trade parameters are listed later in\nthis article. This system is included with TradeSim.

    BACKTESTING, MONTE CARLO STYLE

    Portfolio backtesting is the only practical way to obtain\nrealistic trading system test results, especially if you trade a\nvariety of stocks (futures, mutual funds, and so on) at any\ngiven time. Further, such portfolio backtesting needs to be\nsimulated using thousands of different iterations to ensure\nthat any given mix of tradables will reliably attain profitability.\nTradeSim Enterprise easily automates portfolio\nbacktesting with its advanced Monte Carlo analysis."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-10-15-trade-system-evaluation-by-donald-w-pendergast-jr-20.gif"",""height"":""792"",""width"":""612""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-10-15-trade-system-evaluation-by-donald-w-pendergast-jr-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-10-15-trade-system-evaluation-by-donald-w-pendergast-jr-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271onpr,d,"{""minimum-quantity"":""1"",""path"":""ch2m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:3 (16-21): On The Precipice Of The Nearest Dollar Increment by A. Trongone, Phd, CFP, CTA"",""caption-linebreaks"":""On The Precipice Of The Nearest Dollar Increment by A. Trongone, Phd, CFP, CTA

    In a bear market, any piece of information that\nwill give traders a slight edge in performance is\nalways welcome. Here’s how a stock performs\nwhen it is trading in the vicinity of the nearest\ndollar increment.

    Success often results from analyzing\nthe smallest pieces of information. On\na daily basis, some price patterns may\nappear unimportant; over a series of trading days, however, they can contribute significantly\nto your profitability. With the continuing\ndowntrend in worldwide markets, existing trading\nsystems are performing poorly, causing market\nparticipants to abandon previous trading strategies.\nIn this current environment, traders are grateful for\nany new information, especially if it will give them\nthe slightest performance edge. Say a stock begins\ntrading at $40.03 (three cents above the next dollar\nmark) or $39.97 (three cents below). Does this\nslightly above/below situation provide us with a\ntrading advantage?

    This article analyzes the opening decimal price\nagainst differences in the performance of the overnight\ntrading session. It acknowledges the meltdown\nin equity prices by assessing the performance\nof this system in the current bearish trading environment.\nInstead of examining each decimal combination,\nwe collapse the opening price into the four\nbrackets seen in Figure 1.

    With an average trading volume of 182 million\nshares in 2007, the PowerShares QQQ are a good\nrepresentation of investor psychology. The Qs represent the intraday movements of 100 companies, but\nthey trade as a single security, allowing investors to\nparticipate in the collective performance of a portfolio\nof companies. As a result, I am confining this\ninvestigation to this most active instrument when it\nis trading during the regular session. In 1,465 trading\ndays (January 02, 2003–October 24, 2008),\nthey have fallen $18.69 during the regular trading\nsession (Figure 2). You can easily download these\nhistorical numbers from finance.yahoo.com into an\nExcel worksheet."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-16-21-on-the-precipice-of-the-nearest-dollar-increment-by-a-trongone-phd-cfp-cta-20.gif"",""height"":""613"",""width"":""428""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-16-21-on-the-precipice-of-the-nearest-dollar-increment-by-a-trongone-phd-cfp-cta-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-16-21-on-the-precipice-of-the-nearest-dollar-increment-by-a-trongone-phd-cfp-cta-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov272sech,d,"{""minimum-quantity"":""1"",""path"":""ch2m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:3 (22-32): Second Chance Options by Barbara Star"",""caption-linebreaks"":""Second Chance Options by Barbara Star

    Optionable stocks allow traders to use\nshort-term strategies that combine technical\nanalysis with the right option\nstrike price and realistic targets to\nprovide an edge.

    What could be better than\npicking up a quality\nstock for pennies on the\ndollar? And not only\nduring times of economic\ndistress, but also during times of economic growth.\nOptionable stocks make it possible to\npick up a quality stock for pennies on\nthe dollar by allowing traders to “lease”\ngood companies as a substitute for actually\nowning the stock outright and\nfor far less money than it would cost to\npurchase the underlying stock. Buying\nputs and calls on stocks offers greater\nleverage with limited risk than buying\nthe stock outright. Of course, like any\nlease agreement, it is time limited. And\nif the price of the stock you leased\ndoesn’t move quickly enough in the\ndesired direction during the specified\ntime limit, you can lose your initial\ninvestment.

    However, just as problematic as selecting\nthe right stock is knowing when\nto purchase an option on that stock.\nThe usual mantra for option traders\nbegins with: If you think price is going\nup, buy a call; if you think price is\ngoing down, buy a put. There is no\nbetter illustration of the difficulty in\npredicting price turns than the 2008\ncrude oil market. Analysts began calling\nfor a top when a barrel of crude\nneared $100 and continued calling for\na top as it soared beyond $120, $130,\nand $140. Then they claimed crude oil would climb to $200 a barrel. Wrong again! Crude oil peaked\nin July at $147, which led to a steep decline in oil-related\nstocks as crude oil prices subsequently plummeted below the\n$70 a barrel mark."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-22-32-second-chance-options-by-barbara-star-20.gif"",""height"":""614"",""width"":""433""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-22-32-second-chance-options-by-barbara-star-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-22-32-second-chance-options-by-barbara-star-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274qaby1,d,"{""minimum-quantity"":""1"",""path"":""ch2m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:3 (43): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    BEFORE THE OPEN

    Don, I was wondering if you could answer\nthis. I have heard that there is a data\nsource that tells you the estimated opening\nof NYSE stocks before the open. Have\nyou heard this? Thanks. — Sky123987

    I’ve not heard of any particular site, but\nI can tell you what we use. We see\npremarket imbalances (excess shares) of\nopening-only orders, and NYSE specialists\nsometimes publish an estimated opening\nprice range as well. We also look at the\nelectronic communications network’s\n(ECN) trading levels, premarket. This helps\nconsiderably with our opening-only order\nstrategy by allowing us to adjust bid and\noffer prices. We also calculate estimated\nopening stock prices based on fair value–\nadjusted futures trading ranges as well.\nWe take the closing price of the Standard\n& Poor’s 500 spot price (SPX), add or\nsubtract the fair value number (basically\nthe cost of carry to expiration date, minus\ndividends), and then compare where this\nnumber related to the emini futures (CME/\nGlobex) premarket. Hope this helps!"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-43-q-a-by-don-bright-21.gif"",""height"":""617"",""width"":""420""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-43-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-43-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274trpl,d,"{""minimum-quantity"":""1"",""path"":""ch2m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:3 (44-49): The Trading Plan by Cory Mitchell"",""caption-linebreaks"":""The Trading Plan by Cory Mitchell

    When creating a trading plan, you have to take into account\nall the possible contingencies. Here are the steps you should\ngo through when designing your game plan.

    Atrading plan is your carefully thought-out and\ntested way of approaching and beating the market\nover the long term. It is the course of action for\nentering, exiting, and managing your trades so\nthat all contingencies are considered before a\ntrade ever takes place. With such a plan, emotions are left out of the trading equation, and only tangible criteria\nare used to make trades. Emotions can cause many problems\nin trading, including entering trades out of boredom, entering trades too early or not at all because of anxiety, staying in\ntrades after profits should have been taken due to an emotional\nattachment to a tradable, or exiting too early and for a\nminuscule profit when it should have been left open longer.

    THE BENEFITS

    Having a trading plan will allow you to navigate different\ncircumstances methodically and logically. This process can\nbe repeated, tested, and then altered if results are not up to\nyour standards. If you trade based on emotion, you will not be\nable to go through this process because your emotions will\nalways get in the way and you will react accordingly. Problems\ncan be avoided by not having to trade on reactions to the\nmoment. The market is in constant flux, which in turn means\nemotions can be in constant flux. Well-laid-out trading plans will allow traders to avoid this\nbarrage of emotion as they will\nknow in advance how to handle\neach situation as it arises."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-44-49-the-trading-plan-by-cory-mitchell-21.gif"",""height"":""614"",""width"":""433""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-44-49-the-trading-plan-by-cory-mitchell-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-44-49-the-trading-plan-by-cory-mitchell-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275fuse,d,"{""minimum-quantity"":""1"",""path"":""ch2m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:3 (50-51): Full Service by Moses Sanchez"",""caption-linebreaks"":""Full Service by Moses Sanchez

    It’s nice to have a hand to hold when you are confused about the market.

    The way many traders do\nwhen they are starting\nout, I went to a “free” workshop on options and trading\nwhen I first got interested in the\nmarkets. Once there, they offered\nto teach me to trade for a fee I\ncould not afford. Undaunted, I figured\nI could learn the lessons they\noffered just by visiting my local\nlibrary. So I did: I started reading\nwhat was available there to feed\nmy own interest about the wonderful\nworld of stocks, options,\nand commodities.\nAfter much study, I decided I\nwas ready to start trading options\nby using a combination of methods\nthat would (theoretically)\nmake me the money I wanted. So\nI asked my broker at the time, T\nRowe Price, for permission to trade\noptions in my brokerage account.\nI knew what I wanted to do but\nactually doing it right was more\ndifficult than I expected. Was I\nsupposed to “buy to open” or “buy\nto close,” and what was “fill or\nkill”? Abbreviations such as FOK,\nIOC, and GTC made absolutely no\nsense to me, since the books I had\nread didn’t explain the actual process\nof trading options very thoroughly.\nAll my research on the\ncompanies I wanted to try new\nstrategies with was the least of my\nworries, because I couldn’t even\nput the trade on!"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-50-51-full-service-by-moses-sanchez-21.gif"",""height"":""622"",""width"":""438""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-50-51-full-service-by-moses-sanchez-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-50-51-full-service-by-moses-sanchez-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275dowt,d,"{""minimum-quantity"":""1"",""path"":""ch2m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:3 (52-55): Dow Theory Direction by Tim W. Wood, CPA"",""caption-linebreaks"":""Dow Theory Direction by Tim W. Wood, CPA

    Why do opinions on Dow theory so often vary, and why do\nDow theory “signals” so often fail?

    Typically, there is one common denominator that\nbecomes immediately apparent in most articles\nabout Dow theory: too many of the authors of\nthose articles have not studied the original writings\nof Charles H. Dow, William Peter Hamilton, or Robert Rhea. These original writings and particularly\nthose of Robert Rhea are essential if we are to understand\nwhat has come to be known as Dow theory. The only other\nperson I know who has studied the original writings by Dow,\nHamilton, and Rhea is Richard Russell. As a result, Russell\nis the only other orthodox Dow theorist I know of, and he has\nfought misquotes, misunderstandings, and erroneously written\narticles about Dow theory his entire career.

    NONCONFIRMATION AND THE ONGOING BEAR

    I first warned about the Dow theory nonconfirmation, and the\nimpending bear market, in October 2007. There was approximately\na four-week period following the October 9, 2007,\nclosing high on the Dow Jones industrials that was a classic\n“sell spot” in accordance with orthodox Dow theory. It was\nduring this time that I began warning my subscribers and\nguided them through the developments as we watched the\nprimary bearish trend take root."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-52-55-dow-theory-direction-by-tim-w-wood-cpa-21.gif"",""height"":""614"",""width"":""431""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-52-55-dow-theory-direction-by-tim-w-wood-cpa-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-52-55-dow-theory-direction-by-tim-w-wood-cpa-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275sute,d,"{""minimum-quantity"":""1"",""path"":""ch2m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:3 (58-60): Surviving The Test of Time With J. Welles Wilder by Brian Twomey"",""caption-linebreaks"":""Surviving The Test of Time With J. Welles Wilder by Brian Twomey

    J. Welles Wilder is an author, market technician, and inventor of indicators and\ntrading systems that have become classics over time. Without Wilder’s contributions\nto technical analysis, it would be hard to imagine what we would have in the\nfield, considering so many of the basics are derived from his work — relative\nstrength index, average directional movement index, directional movement index,\naverage true range, parabolic stop & reverse … and there’s more that will\ninfluence traders for many years to come. Wilder also founded Delta Society\nInternational, expounding the theory of the delta phenomenon in the 1980s, about\nwhat he refers to the perfect order of the markets.

    Wilder is the author of four books: The Delta Phenomenon; Wisdom Of The\nAges In Acquiring Wealth; Adam Theory Of Markets; and his most famous work,\nNew Concepts In Technical Trading Systems.

    STOCKS & COMMODITIES contributor Brian Twomey conducted this interview in\nJuly 2008.

    Earlier interviews alluded to\nyour degree in mechanical\nengineering from North\nCarolina State University and your prior work as a real estate\ndeveloper before your career in trading.\nWere you born and bred in North\nCarolina?

    I was born in Norris, TN, in the middle\nof the Great Depression. My father,\nwho had a master’s degree, worked on a\nTennessee Valley Authority coffer dam\nwith a pick and shovel. In my first three\nyears, we moved from state to state\nbefore we ended up in Greensboro, NC.\nAnd that has been my home for the last\n70 years. Since 1986, I have also had a\nhome in Christchurch, New Zealand.

    Using work from your book The Delta\nPhenomenon, could you expand on\nthe perfect order of markets in relation\nto movement and time? What does this\nsay about today’s market watchers and\ntechnicians?

    All markets have a perfect order in\nfive different time frames. The shortest\ntime frame is intraday or a four-day\nseries. The longest time frame is 19\nyears. There are only two markets with\nenough data to solve for the super longterm\ndelta order. Those are the Treasury\nbonds and the stock market.

    Each perfect order relates to two\nthings. First is the number of turning\npoints in the series for that particular\nmarket, and second is where the inversion\ncomes. The inversion always comes\nat point 1. For example, let’s say that a\nmarket has 10 turning points. From point\n1 to point 10, there is a high/low order or\na low/high order that this particular\nmarket follows.

    This order of the markets is the number\nof points and at which point the\ninversion can occur. This order is perfect,\nand once it is discovered, it will\nnever change. Although the delta points\nhave a perfect order according to these\nparameters, the exact placement of the\npoints is not perfect."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-58-60-surviving-the-test-of-time-with-j-welles-wilder-by-brian-twomey-21.gif"",""height"":""636"",""width"":""502""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-58-60-surviving-the-test-of-time-with-j-welles-wilder-by-brian-twomey-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-58-60-surviving-the-test-of-time-with-j-welles-wilder-by-brian-twomey-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276exyo1,d,"{""minimum-quantity"":""1"",""path"":""ch2m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:3 (62): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    TO CLOSE OR NOT TO CLOSE

    I have a put credit spread on a stock\nwhere the sold leg is out-of-the-money\nand the bought leg is deep in-the-money.\nI have already bought back the sold leg\nand the bought leg is left to be exercised.\nShould I let the buy leg be exercised\nand reap the profit or should I\nclose it out before expiration?

    If you have a put credit spread, the\ntrade was entered by selling a put and\nalso buying a put with a lower strike\nprice. Basically, selling the put credit\nspread is the same as selling a put, but\nanother put with a lower strike is purchased\nas a hedge. Simply selling puts\nwould expose the investor to more risk\nthan trading the credit spread.\nThe “credit” from the put credit spread\ncomes from the fact that the option with\nthe higher strike price has more premium\nthan the put with a lower strike\nprice. Puts with higher strike prices are\nworth more than puts with lower strike\nprices."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-62-explore-your-options-by-tom-gentile-21.gif"",""height"":""764"",""width"":""520""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-62-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-62-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276prre1,d,"{""minimum-quantity"":""1"",""path"":""ch2m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:3 (64-66): Product Review: Big Trends Toolkit 2.0 by Dennis D. Peterson"",""caption-linebreaks"":""Product Review: Big Trends Toolkit 2.0 by Dennis D. Peterson

    Big Trends Toolkit 2.0 is a\nMetaStock plugin with 17\ndifferent indicators, 12 templates\nwith a combination of 16 explorations, system tests, and\nexpert advisors, all dealing with trends\nin one way or another. Given that this is\na Price Headley product, you would\nexpect the quality to be high and possibly\nhave some insight into option trades.\nLogically this makes sense, since software\nthat is trying to find trends would\nalso have something useful to say about\noptions, as profiting from options is tied\nto knowing the direction or trend of the\nunderlying.

    The first thing I liked about this plugin\nwas the manual that comes in the CD\ncase. It explains through words and\nprice charts how to use each of the 17\ndifferent indicators. Another plus is that\nit incorporates these indicators into system\ntests so you can backtest the performance.\nHaving a means to backtest is a quality feature that I don’t see enough\nof, so this was a pleasant surprise. As I\nwas going through the manual, the first\nindicator to catch my attention was the\ndirectional movement indicator (DMI)\ndifference indicator."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-64-66-product-review-big-trends-toolkit-2-0-by-dennis-d-peterson-21.gif"",""height"":""610"",""width"":""417""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-64-66-product-review-big-trends-toolkit-2-0-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-64-66-product-review-big-trends-toolkit-2-0-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276fufo1,d,"{""minimum-quantity"":""1"",""path"":""ch2m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:3 (67): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    ON SPREADS

    What is a futures spread?

    The terminology involved in futures\nspread trading often seems like a foreign\nlanguage. This can cause those who aren’t\nfamiliar with the practice to misinterpret\nthe vocabulary. Despite the complexity of\nthe topic on the surface, once you understand\na few key concepts, you will gain an\nimmediate understanding.

    A futures spread is a trade in which\nopposite positions are taken in similar\nfutures contracts. Simply put, it is the\npurchase of one commodity and the sale\nof another related commodity with the\nintention of profiting from changes in the\nspread, or differences in the relation of the\ntwo prices."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-67-futures-for-you-by-carley-garner-21.gif"",""height"":""608"",""width"":""411""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-67-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-67-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276wefo1,d,"{""minimum-quantity"":""1"",""path"":""ch2m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:3 (68): Websites For Traders: ForexFactory.com by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Websites For Traders: ForexFactory.com by Jayanthi Gopalakrishnan

    WWW.FOREXFACTORY.COM

    Gone are the days when the foreign\nexchange market, the world’s largest\nover-the-counter market, is restricted to\nbanks, hedge funds, and other large\nfinancial institutions. With trading volume\ngrowing even in these volatile\ntimes, the pressure is strong for those\nservices that want to meet the needs of\nthe retail forex trader.

    ForexFactory.com, a popular financial\nwebsite focused on providing services\nto forex traders, has added new\nfeatures to its website in response to the\nincreasing number of retail forex traders.\nForexfactory.com is a community of\nforex traders. Members of this community\ncan participate in forums, read forexrelated\nmarket news and commentary,\nand gain access to the forex calendar. We\nfirst reviewed ForexFactory.com back\nin October 2007, and since then, the\nforex calendar (Figure 1) has had some\nnew features added to it, which are\nworth looking at."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-68-websites-for-traders-forexfactory-com-by-jayanthi-gopalakrishnan-20.gif"",""height"":""617"",""width"":""420""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-68-websites-for-traders-forexfactory-com-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-68-websites-for-traders-forexfactory-com-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov277trti1,d,"{""minimum-quantity"":""1"",""path"":""ch2m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:3 (70-82): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    Most of this month’s Traders’ Tips are\nbased on Donald Pendergast’s article in\nthis issue, “Trade System Evaluation.”\nOther tips are on a topic of the contributors’\nchoosing.

    Code for MetaStock for implementing\nthe reversed MACD crossover system\nfrom the Pendergast’s article is included\nat the end of this document. Additional\ncode is presented here as contributed\nby software developers.

    Readers will find our Traders’ Tips section in its entirety at\nthe StockS & commoditieS website at www.Traders.com in\nthe Traders’ Tips area, from where the code can be copied\nand pasted into the appropriate program. In addition, the\ncode for each program is usually available at the respective\nsoftware company’s website. Thus, no retyping of code is\nrequired for Internet users.\nK"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-70-82-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""625"",""width"":""440""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-70-82-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-70-82-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" noname6,d,"{""minimum-quantity"":""1"",""path"":""ch2m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:3 (8-9): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    GOOD ISSUE

    Editor,

    I enjoyed the January\n2009 issue of STOCKS &\nCOMMODITIES. Larry\nConnors and David\nPenn’s article, “Three Rules, One Easy Way To Trade ETFs,”\nwas informative. Cynthia Kase [interviewed\nfor that issue] said it best: “Just\nlearn a market and trade it up and down,\nup and down on the pure technicals.\nThat’s the thing to do!”\nYour magazine is a must-read for all\ntraders.

    CJ CASEBEER\nNampa, ID

    Thank you for your feedback. We are\nglad you are enjoying the magazine."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-8-9-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""792"",""width"":""612""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-8-9-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-8-9-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov279bofo2,d,"{""minimum-quantity"":""1"",""path"":""ch2m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:3 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    • Day Trading &\nSwing Trading The\nCurrency Market:\n2nd Edition

    • The Forex Options\nCourse

    • Frontiers In\nQuantitative Finance:\nVolatility\nAnd Credit Risk\nModeling

    • Invest With\nSuccess: Big\nProfits For\nSmall Investors

    • Short Term\nTrading Strategies\nThat\nWork

    • Thackray’s 2009\nInvestor’s Guide"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-92-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""615"",""width"":""414""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov27997at1,d,"{""minimum-quantity"":""1"",""path"":""ch2m20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:3 (98, 97): At The Close: Understanding The Trading Enviornment by Joseph J. Mertes"",""caption-linebreaks"":""At The Close: Understanding The Trading Enviornment by Joseph J. Mertes

    Spending time to assess the market\nenvironment you are trading is a\ngood habit to develop.

    I have a lot of trading experience\nfrom trading — some good, some bad, but great\nlessons all. One of the lessons\nI’ve learned has been about the use of the chart. Understanding the chart is important. Understanding\nwhat drives the chart is invaluable.

    I use the Market Development and Market Structure methodology.\nWhat drives the method is Auction Market Theory,\nwhere a willing buyer and a willing seller agree on price.\nWhen you have many buyers and sellers coming together and\nagreeing on price, they determine where value is for whatever\ncommodity they are trading. It is the determination of value\nand depicting value on the profile chart that gives us the\ninformation that is the basis of a trade or investing strategy.

    MAKING AN AGREEMENT

    Behind the buyer and seller agreeing on price (value) is a\ngreater force that makes the determination of value possible,\nand that is the psychology of the players in that market or\ninstrument. When the trading psychology involved in a\nmarket or equity changes its outlook on that market or equity,\nit will move price (value) to a different level. Understanding\nthe mindset of the players in a market can give an advantage\nin trading and investing."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-98-97-at-the-close-understanding-the-trading-enviornment-by-joseph-j-mertes-20.gif"",""height"":""620"",""width"":""431""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-98-97-at-the-close-understanding-the-trading-enviornment-by-joseph-j-mertes-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-3-98-97-at-the-close-understanding-the-trading-enviornment-by-joseph-j-mertes-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271wipe,d,"{""minimum-quantity"":""1"",""path"":""ch4a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:4 (10-14): Winning Percentage Of A Trading System by Oscar G. Cagigas"",""caption-linebreaks"":""Winning Percentage Of A Trading System by Oscar G. Cagigas

    The winning percentage is a critical statistic that can influence the speed at which your capital grows. Find out how you can apply it to your trading system.

    When developing a trading system, the tendency is to select a particular approach that suits your personality. With this in mind, you can develop a system with a high percentage of winning trades or one with a lower winning percentage, depending on what works best for you. A typical example is a trend-following approach. These systems usually have a winning percentage of 40–50%. Given that it is a system with a good positive expectancy, it doesn’t matter whether this system has a high winning percentage.

    Developing a system based on expectancy and opportunity is popular. However, the reality is that the winning percentage is a critical statistic that influences the speed at which your capital grows. In this article, I will demonstrate this with a couple of examples.

    FROM A KELLY PERSPECTIVE

    Suppose we have two different systems. Both have an expectancy of 50 cents per dollar risked. The first system has a winning percentage of 40%; it is a typical trend-following system. The second system has a winning percentage of 90%. It is a typical profit-taking system that takes frequent, small profits."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-10-14-winning-percentage-of-a-trading-system-by-oscar-g-cagigas-20.gif"",""height"":""621"",""width"":""435""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-10-14-winning-percentage-of-a-trading-system-by-oscar-g-cagigas-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-10-14-winning-percentage-of-a-trading-system-by-oscar-g-cagigas-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271prwi,d,"{""minimum-quantity"":""1"",""path"":""ch4a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:4 (16-21): Profit With High Relative Strength Mutual Funds by Gerald Gardner"",""caption-linebreaks"":""Profit With High Relative Strength Mutual Funds by Gerald Gardner

    This timing method will maximize profit\nand reduce drawdown.

    Correlation of equity funds phenomena manifests itself in many stock data series. For this study, I explored the correlation of two mutual funds and methods of timing one fund to maximize profit and reduce drawdown. Backtesting a specific model indicates that a 10.82% return and a maximum drawdown of about 11% over the last six years is possible. Before looking at the model, a brief review of funds shows the qualitative nature of correlation and a visual depiction of the timing method.

    MUTUAL FUND SELECTION

    Two mutual funds are considered correlated if they generally rise and fall during the same period. I studied the use of the Federated High Yield fund (Fhytx) and the FundX Aggressive Upgrader fund (Hotfx). Looking at Figure 1, you can see that Fhytx and Hotfx are correlated. The high-yield fund frequently moves later, compared to the equity fund during price upturns, and trends downward earlier than the equity fund. The statistical measure — beta — shows a correlation of only 0.865 with the Standard & Poor’s 500, so it is possible that the correlation of high-yield bonds versus equities is not exact. I use five- and 10-year average beta values and believe this is a good proxy for most equity trends.

    Look at Figure 1 and imagine trading Hotfx during periods when high-yield bonds are trending up in price. I add a 10-day simple moving average to Fhytx to serve as a signal line so that a rise above the line indicates a buy and prices below the line serve as a sell signal. A select period shows the example with B (buy) and S (sell) labels at obvious crossovers. The entire period of six years is not present due to space constraints. Visual inspection indicates that a profit is possible."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-16-21-profit-with-high-relative-strength-mutual-funds-by-gerald-gardner-20.gif"",""height"":""624"",""width"":""445""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-16-21-profit-with-high-relative-strength-mutual-funds-by-gerald-gardner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-16-21-profit-with-high-relative-strength-mutual-funds-by-gerald-gardner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov272fito,d,"{""minimum-quantity"":""1"",""path"":""ch4a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:4 (26-29): Fibonacci Tools by Alexander Sabondin"",""caption-linebreaks"":""Fibonacci Tools by Alexander Sabondin

    Here’s a look at the numbers behind the Fibonacci sequence and how it can be applied to your charts.

    The sequence of the Fibonacci numbers is considered to have been discovered by Leo-nardo of Pisa, better known as “Fibonacci,” a 13th-century Italian mathematician. (“Fibonacci” is an abbreviation of filius Bonacci; filius is Latin for “son of.”) In the early 1200s, after traveling through parts of the Middle East and studying with Arab mathematicians, Fibonacci published his book Liber Abaci, or “Book of Calculation,” which introduced to the West something that is one of the greatest discoveries of all time: the decimal numeration system, including the position of zero as the first number in the number sequence. This system, known as the Hindu-Arabic numeral system, includes zero, 1, 2, 3, 4, 5, 6, 7, 8, and 9 and is commonly used today instead of Roman numerals.

    Fibonacci became one of the best-known mathematicians of his time. He wrote three essential, ground-breaking books on mathematics: Liber Abaci, published in 1202 and updated in 1228; Practica Geometriae (“Practical Geometry,” a compendium on geometry and trigonometry), published in 1220; and Liber Quadratorum (“The Book of Squares”).

    THE FIBONACCI SEQUENCE

    In Liber Abaci, Leonardo presented the following task: “How many couples of rabbits, placed into a rabbit corral, can be produced for a year by a rabbit couple, if each couple produces one more couple every month since the second month?” This resulted in the Fibonacci sequence of numbers:

    1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144…"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-26-29-fibonacci-tools-by-alexander-sabondin-21.gif"",""height"":""625"",""width"":""446""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-26-29-fibonacci-tools-by-alexander-sabondin-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-26-29-fibonacci-tools-by-alexander-sabondin-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov273sean,d,"{""minimum-quantity"":""1"",""path"":""ch4a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:4 (30-32): Secular And Cyclical Cycles by Moses Sanchez"",""caption-linebreaks"":""Secular And Cyclical Cycles by Moses Sanchez

    Secular and cyclical cycles are common, but what do they really mean?

    The terms secular and cyclical are tossed around by business news pundits on a daily basis. A search on either topic does give some explanations, but how can you apply these definitions to your trading strategy in order to make smart trades?

    A secular market\nFirst of all, you need to understand what a secular market means. In the financial markets, a secular cycle means a long-term boom or bust. This time frame has been debated as being anywhere between five and 20 years, but I am going to define it as lasting at least 10 years.

    A couple of examples that economists agree as being secular bull or bear cycles include the time period between 1906 through 2000. During the 1906–21 period, the annual real return was -1.9%. In the following eight years, from 1921 to 1929, there was a +24.8% annual return. The return in the 20-year period following that was +1.2%, and the following 17-year period brought in +14.1%. The last couple of secular cycles took place from 1966 through 1982, with the bear market returning -1.5% and from 1982 through 2000, which brought in a +14.8% return.

    In a secular bull market, strong investor sentiment is among the key forces driving prices higher. In a secular bear market, weak investor sentiment causes a drop in prices. Other factors affecting both secular cycles include national and worldwide events such as war, population changes, cultural changes, and political policies or government changes.

    Cyclical and noncyclical stocks are terms that get tossed around and even mixed up with secular and nonsecular. To clarify these terms, I will go over them individually and summarize them overall."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-30-32-secular-and-cyclical-cycles-by-moses-sanchez-21.gif"",""height"":""621"",""width"":""436""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-30-32-secular-and-cyclical-cycles-by-moses-sanchez-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-30-32-secular-and-cyclical-cycles-by-moses-sanchez-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov273flst,d,"{""minimum-quantity"":""1"",""path"":""ch4a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:4 (34-41): A Flexible Strategy For Volatile Markets by John Manley"",""caption-linebreaks"":""A Flexible Strategy For Volatile Markets by John Manley

    Profit from option spreads on the S&P 500 by applying the same tactic as you would playing chess. Here’s how.

    Good chess players are always focusing on a couple of moves in advance of the current one being considered. They are peering out into the future of possible opponent maneuvers and thinking of ways to counter them. We can apply the same principle when we’re looking at how to profit (up, down, and flat) with option spreads on the Standard & Poor’s 500 (Spy) through the exchange traded fund (Etf). Here’s a breakdown and analysis of a real strategy.

    RATIONALE FOR INITIAL STRATEGY

    The first part of this strategy was initiated on March 14, 2008. At the time, the Spys were in the process of testing the lows made two months earlier in January 2008, around the 126–127 levels. (See Figure 1.)

    At the time, the Spy had the potential to break support to the downside because of the fear and confusion in the markets. If it did break support, I wanted to be able to profit from that move. I had specific downside price targets based on Fibonacci extensions of the last impulse move up. A break to the downside would also support the volatility (vega) component of the spread and add to profitability. Generally, falling prices support a rise in volatility.

    On the other hand, the markets also reached extreme negative sentiment measures, technical support, and indicator divergence, which could favor a surprise snapback rally. With that scenario, I wanted to find a way to profit as well. Taking all of that into consideration, I decided to start off with an April/June put diagonal spread on the Spy."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-34-41-a-flexible-strategy-for-volatile-markets-by-john-manley-21.gif"",""height"":""624"",""width"":""447""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-34-41-a-flexible-strategy-for-volatile-markets-by-john-manley-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-34-41-a-flexible-strategy-for-volatile-markets-by-john-manley-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274wayf,d,"{""minimum-quantity"":""1"",""path"":""ch4a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:4 (42-45):Which Way For The Forex Carry Trade? by Brian Twomey"",""caption-linebreaks"":""Which Way For The Forex Carry Trade? by Brian Twomey

    Apply this very popular trading strategy to 2009 trades.

    The foreign exchange carry trade has been a popular trading strategy for the past 10 years due to growing economies and rising interest rates. This period of world growth was precipitated by the last economic downturn in world economies (1998) that lasted approximately two years. Currently, with a credit crunch upon us and recession gripping world economies in late 2008 and forecast to last well into 2009, all nations are in the process of slashing interest rates. Where does that leave this most popular and profitable of trading strategies? In this article, I will examine the carry trade, its definition, its uses, its purposes, and a compendium of possibilities for 2009.

    THE CARRY TRADE

    The carry trade, more commonly known as the crosses, is a simple and popular trading strategy in the currency market. This trade involves buying a high-yielding/high interest rate currency and selling a low-yielding/low interest rate currency. For many years, the Japanese yen has been the most favored carry trade strategy because of its traditionally low or no interest rate governmental policy. By matching the yen with a high-yielding currency from a growing economy, you can earn interest on a daily basis because of the difference in yield. By choosing a nation coming out of a recession and on its way to solid long-term growth with the possibility of rising interest rates, you can earn years of yield credited on a daily basis.

    For example, since the last world recession, New Zealand has had a growing economy with a steady increase in interest rates. At one point in 2008, New Zealand achieved an interest rate of 8%. By matching the New Zealand dollar (better known as the kiwi) with the yen, which traditionally has had a zero interest rate policy — that is, trade the Nzd/Jpy — you can use the carry trade effectively to earn a large return on interest with the intention to also earn capital appreciation on this trade from a growing economy."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-42-45-which-way-for-the-forex-carry-trade-by-brian-twomey-21.gif"",""height"":""618"",""width"":""425""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-42-45-which-way-for-the-forex-carry-trade-by-brian-twomey-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-42-45-which-way-for-the-forex-carry-trade-by-brian-twomey-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274anlo,d,"{""minimum-quantity"":""1"",""path"":""ch4a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:4 (46-51): Andrew Lo And The Future of Technical Analysis by J. Gopalakrishnan & B. Faber"",""caption-linebreaks"":""Andrew Lo And The Future of Technical Analysis by J. Gopalakrishnan & B. Faber

    Andrew Lo, who is the Harris & Harris Group Professor of Finance at the Massachusetts Institute of Technology’s (MIT) Sloan School of Management and director of MIT’s Laboratory for Financial Engineering, and founder and chief scientific officer of the AlphaSimplex Group, a Cambridge, MA–based quantitative investment management company, is a radical of sorts, an academic who believes in technical analysis. In his latest work, The Heretics Of Finance (cowritten by Jasmina Hasanhodzic), more than a dozen notable technicians are interviewed about their views on technical analysis and how it influences their trading. Interviews aren’t unusual — but what Andrew Lo wants to do with the sum of their knowledge is.

    STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan and Staff Writer Bruce Faber spoke with him via telephone on February 6, 2009.

    Andrew, what got you interested in technical analysis?

    I’ve been interested in technical analysis since high school. It was a bit of a hobby in terms of looking at various charts and patterns and trying to understand what implications they might have for the markets. I actually did not get a lot of time to devote to it because as part of my doctoral program in economics, I was taught early on that technical analysis was a waste of time. I was still interested in it, but certainly that interest was dampened by the training I received as an economist.

    JG: When did that change?

    It wasn’t until I was an assistant professor at the Wharton School and started doing original research on testing the Random Walk hypothesis that it became clear to me that, first of all, the Random Walk was not a good model for stock market prices, and second, if the stock market was not described by Random Walk, then maybe there was something to all of these technical patterns I had read about. So I got interested again in the possibility of technical analysis having something to say about financial markets. And shortly after that, I began doing some direct research on technical indicators.

    JG: Many of our readers are diehard technical analysts and may not be that familiar with the Random Walk hypothesis, so can you explain what it is?

    Sure. It was an idea developed in the 1950s and 1960s theorizing that market prices are unpredictable, at least as applied to the financial markets. From the economic perspective, the reason why is that many individuals are trying to forecast them, and the more that people try to forecast them and incorporate their information into market prices, the less easy it will be to predict and the more likely the prices will look random. So the theory of the Random Walk basically says: Since so many people are trying to predict markets, and since information is therefore incorporated into market prices, you cannot predict market prices. So if you can’t predict market prices, then you might as well give up on technical analysis as well as other forms of active investment management."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-46-51-andrew-lo-and-the-future-of-technical-analysis-by-j-gopalakrishnan-b-faber-21.gif"",""height"":""510"",""width"":""402""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-46-51-andrew-lo-and-the-future-of-technical-analysis-by-j-gopalakrishnan-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-46-51-andrew-lo-and-the-future-of-technical-analysis-by-j-gopalakrishnan-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275exyo,d,"{""minimum-quantity"":""1"",""path"":""ch4a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:4 (52-53): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    LEAPING INTO CALENDAR SPREADS?

    I see some Leap options are not that expensive given the amount of time they’ve got — about two years. There are 23 months you can sell against it. That’s got to be a good trade. Where am I wrong? I know there must be things that I haven’t properly thought through.

    For example, I’m looking at a calendar spread with 2011 leaps. The far month (January 2011) costs me about $4 to enter, and the near month (February 2009) brings in about 70 cents. Is this a bad idea? What are potential pitfalls?\nLong-term Equity Anticipation Securities, or Leaps, are option contracts with one or two years of life remaining. Many of the more actively traded equities, exchange traded funds (Etfs), and indexes have Leap contracts available and they make great tools for certain option strategies."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-52-53-explore-your-options-by-tom-gentile-21.gif"",""height"":""617"",""width"":""420""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-52-53-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-52-53-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275prre,d,"{""minimum-quantity"":""1"",""path"":""ch4a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:4 (54-57): Product Review: Jurik Tools by Dennis D. Peterson"",""caption-linebreaks"":""Product Review: Jurik Tools by Dennis D. Peterson

    Jurik Tools are a set of indicators that can be installed on 17 different platforms, including just about every platform that has received a Stocks & Commodities Readers’ Choice Award in recent years: TradeStation, MetaStock, NeuroShell Trader, NeoTicker, and AmiBroker, to name just a few. The complete list of platforms can be found on the Jurik Research website by selecting “Platforms.” And there are more than just indicators. In MetaStock, for example, there are also screening setups and chart templates — in short, just about all you might want. The indicators are arguably the best at smoothing data, although that’s not all they do well.

    BACKGROUND

    By way of background, the creator of this product, Mark Jurik, approached the design of these tools in an analytical fashion by requiring that his indicators be shift- and scale-invariant. If the terms “scale” and “shift” are unfamiliar to you, don’t be embarrassed. This is one of those rare occasions when a technician has been successful putting forward performance criteria that help us understand the behavior of indicators.

    “Shift” invariance means that if you were to add a constant to every close of a price series, the indicator would behave the same as before. “Scale” invariance means that if you were to multiply a constant amount to every close — say, going from a range of $20–30 to a range of $200–300 — the results would be the same."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-54-57-product-review-jurik-tools-by-dennis-d-peterson-21.gif"",""height"":""621"",""width"":""436""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-54-57-product-review-jurik-tools-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-54-57-product-review-jurik-tools-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275qaby,d,"{""minimum-quantity"":""1"",""path"":""ch4a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:4 (58): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    THE SHAPE OF THINGS TO COME

    I have been studying for my Series 7. So\nI’m studying up and learning as much\nas possible. What’s your personal opinion\nfor, say, the next five years in regards\nto the industry? Do you see any\nmajor changes coming that would affect\nthe entire trading community? How\ndo you feel about the future for pair\nstrategies, open orders, and all that? I\nam seriously dedicating my life and\nfuture to this path, and I am curious\nwhat someone of your knowledge thinks\nwill be happening in the next five to 10\nyears in the industry. Thanks. —Shane

    Hi Shane, good luck with your studies!\nThe naysayers have been predicting\nthe end of trading as we know it for\ndecades. The way I look at it is this: The\nglobal marketplace needs providers of\nliquidity, and by definition, risk-takers.\nMany have been lobbying for the “perfect\nmarkets,” which is really an oxymoron.\nCapitalism (or “markets”) require\nbuyers and sellers. I have often\nsaid “Be careful what you wish for” to\nthose suggesting total transparency.\nImagine going to your local warehouse\nstore to buy shares in GE at a specific\nprice — not much incentive to buy,\nright? So philosophically, I think the\nmarkets will continue for some time."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-58-q-a-by-don-bright-21.gif"",""height"":""624"",""width"":""446""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-58-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-58-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276fufo2,d,"{""minimum-quantity"":""1"",""path"":""ch4a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:4 (60): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    COMMODITIES AND RECESSIONS

    Is it safe to invest in commodities during\nan economic recession?

    Given the economic turmoil we are\nexperiencing, I have been asked this\nquestion often. Before I answer, there\nare a few points I would like to make.\nI have yet to find a scenario in which\nit is appropriate to use the word “safe”\nwhen trading in options and futures.\nThere are strategies in which risk can be\nrelatively low, but in my opinion, “safe”\nimplies there is no risk, and that isn’t the\ncase. My idea of a safe investment is the\npurchase of Treasury bills, not speculating\nin highly leveraged markets."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-60-futures-for-you-by-carley-garner-20.gif"",""height"":""617"",""width"":""420""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-60-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-60-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276wefo2,d,"{""minimum-quantity"":""1"",""path"":""ch4a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:4 (64-65): Websites For Traders: DailyMarkets.com by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Websites For Traders: DailyMarkets.com by Jayanthi Gopalakrishnan

    DAILYMARKETS.COM

    Most traders start their day browsing\nthrough market-relevant news headlines\nto get an idea of what they can expect in\nthe trading day. Dailymarkets.com is\none site that offers this service. On the\nhome page (Figure 1) you have a live\nnewsfeed with the most recent news highlighted,\nprominently displaying how\nmany minutes have elapsed since the\nnews headline was released. Each news\nstory has a small icon next to it, indicating\nwhether the particular story is forex\nrelated, equity related, commodity related,\neconomy related, or just a headline. You\nalso see an update on the global markets as\nwell as articles, which I thought made for\ninteresting reading. Many of these articles\nare oriented toward technical analysis,\nand it is always educational to read\narticles that describe price behavior using\nclearly marked charts."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-64-65-websites-for-traders-dailymarkets-com-by-jayanthi-gopalakrishnan-20.gif"",""height"":""617"",""width"":""418""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-64-65-websites-for-traders-dailymarkets-com-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-64-65-websites-for-traders-dailymarkets-com-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276prre2,d,"{""minimum-quantity"":""1"",""path"":""ch4a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:4 (66): Product Review: Charlie’s Cat by Sean Moore"",""caption-linebreaks"":""Product Review: Charlie’s Cat by Sean Moore

    Charlie’s Cat is software designed to\nhelp you sharpen your chart reading\nskills. When looking at a historical\nchart, the chart patterns and breakouts that\nworked stand out because you can see what\nactually happened in the time frames. You\nmay consciously or unconsciously ignore\nother signal breaks because you can see\nthat they were not successful. When trading\nlive, however, you don’t have the\nprivilege of knowing what is going to\nhappen. Toward that end, Charlie’s Cat is\na good training tool for viewing historical\ncharts in a real-time environment."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-66-product-review-charlie-s-cat-by-sean-moore-20.gif"",""height"":""624"",""width"":""446""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-66-product-review-charlie-s-cat-by-sean-moore-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-66-product-review-charlie-s-cat-by-sean-moore-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276vois,d,"{""minimum-quantity"":""1"",""path"":""ch4a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:4 (68-69): Volatility Is Dominant Theme In Stocks by Michael Carr, CMT"",""caption-linebreaks"":""Volatility Is Dominant Theme In Stocks by Michael Carr, CMT

    The market may be setting up for a period of consolidation.

    From a technical perspective,\nthe biggest factor\nin the markets is\nvolatility (Figure\n1). Since the large down move in autumn\n2008, price action has\nsettled into a consolidation pattern.\nWhile some technical indicators\nshow signs of strength,\nothers indicate further weakness.\nBollinger bands, the technical\ntrading tool developed by\nJohn Bollinger in the early\n1980s, quantifies the observation\nthat volatility is dynamic, described by Bollinger as\nmeaning that periods of low volatility are inevitably followed\nby periods of high volatility and vice versa."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-68-69-volatility-is-dominant-theme-in-stocks-by-michael-carr-cmt-20.gif"",""height"":""621"",""width"":""437""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-68-69-volatility-is-dominant-theme-in-stocks-by-michael-carr-cmt-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-68-69-volatility-is-dominant-theme-in-stocks-by-michael-carr-cmt-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov277trti2,d,"{""minimum-quantity"":""1"",""path"":""ch4a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:4 (73-83): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    This month’s Traders’\nTips are based on Gerald\nGardner’s article in\nthis issue, “Profit With\nHigh Relative Strength\nMutual Funds.”

    Code for Wealth-Lab\nis already provided in\nGardner’s article elsewhere\nin this issue. Additional code is presented here as\ncontributed by various software developers.

    Readers will find our Traders’ Tips section in its entirety at\nthe StockS & commoditieS website at www.Traders.com in\nthe Traders’ Tips area, from where the code can be copied\nand pasted into the appropriate program. In addition, the\ncode for each program is usually available at the respective\nsoftware company’s website. Thus, no retyping of code is\nrequired for Internet users.

    For Stocks & commodities subscribers, the Wealth-\nLab code found in Gardner’s article can be copied and\npasted into Wealth-Lab from the Subscriber Area at www.\nTraders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-73-83-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""617"",""width"":""432""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-73-83-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-73-83-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov278leto,d,"{""minimum-quantity"":""1"",""path"":""ch4a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:4 (8-9): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    WEINSTEIN CONFUSION

    Editor,\nOn page 46 of the February 2009 issue of Technical Analysis of Stocks & Commodities, in the article “Weinstein’s Theory Of Relativity” by Larry Swing, Swing alludes to Stan Weinstein as the highest-percentage trader featured in Jack Schwager’s book, The Market Wizards. Is it possible that he has Stan Weinstein confused with Mark Weinstein? There’s no mention of a Stan Weinstein in Schwager’s book.\nEdward Chang

    Yes, you are correct that he must have meant “Mark Weinstein.” Thank you for writing.—Editor

    LOGARITHMIC GRAPHING PAPER

    Editor,\nIn the February 2009 issue in your Letters To S&C section, reader Allen Bains states he is looking for logarithmic paper. I wanted to let him know that logarithmic paper is provided in the classic book by Edwards and Magee, Technical Analysis Of Stock Trends.\nJay

    Thank you for providing this information.—Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-8-9-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""610"",""width"":""418""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-8-9-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-8-9-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov279bofo3,d,"{""minimum-quantity"":""1"",""path"":""ch4a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:4 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    * CDS Delivery Option:\nBetter Pricing Of\nCredit Default Swaps

    * Currency Trading\nAnd Intermarket\nAnalysis

    * Game Over: How You\nCan Prosper In A Shattered\nEconomy

    * Quantitative Trading:\nHow To Build\nYour Own Algorithmic\nTrading Business

    * Show Me The Money:\nCovered Calls & Naked\nPuts For A\nMonthly Cash Income

    * Trading Without\nGambling: Develop\nA Game Plan For\nUltimate Trading\nSuccess"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-92-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""616"",""width"":""415""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov27996at,d,"{""minimum-quantity"":""1"",""path"":""ch4a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:4 (98, 96-97): At The Close by Wallace Wang"",""caption-linebreaks"":""At The Close by Wallace Wang

    It can be done, and here’s how.

    It's a fact of modern-day life\nthat no matter what kind of computer you use today, you’re\ngoing to have to replace it tomorrow.\nMost traders these days are\nprobably using Windows XP, but\nif you are using a computer with the\nVista operating system (OS), you\nmay find that some trading software\nmay not run the way it should.\nThat’s because it will take time for all\ntrading software to make the transition.\nIn case of such an event, you may want to\nconsider keeping your current computer for\ntrading and get a second, more modern computer\nfor activities like organizing digital photographs\nand browsing the Internet. Or rather than\nuse two separate computers, consider the alternative,\nand that’s switching from a Windows machine to\nan Apple Macintosh computer.

    Although trading programs for Windows far outnumber\ntrading programs for the Macintosh, you can still use a Mac\nfor trading and technical analysis. In fact, the transition from\nthe Windows OS to a Macintosh may be far easier, and more\ncost-effective, than you might think.

    MACINTOSH-SPECIFIC SOFTWARE

    If you already have a Macintosh or are thinking about buying\none, rest assured you can find plenty of trading software for\nthe Mac that’s comparable to the most popular programs that\nonly run on Windows. Even better, most comparable\nMacintosh trading programs cost only a fraction of their\nWindows counterparts while offering many of the same\nfeatures. Here’s a look at a few of them."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-98-96-97-at-the-close-by-wallace-wang-20.gif"",""height"":""611"",""width"":""440""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-98-96-97-at-the-close-by-wallace-wang-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-4-98-96-97-at-the-close-by-wallace-wang-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271trra,d,"{""minimum-quantity"":""1"",""path"":""ch5m205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:5 (14-17): True Range, Reward/Risk, And Position Size by Alan M. Binder"",""caption-linebreaks"":""True Range, Reward/Risk, And Position Size by Alan M. Binder

    \nThis method uses the concept of value at risk and true range to determine a reward to risk ratio and position size for trading stocks. The process has been reduced to two Excel spreadsheets for ease of calculation.

    Reward/risk ratio and position size are two variables you need to know before you initiate a trade. Value at risk (Var) will help you calculate these two variables. The Var of an equity position is the amount of money that you can expect to lose during a fixed period within a certain probability. Using the usual measure of mean and standard deviation of percentage price changes as a measure of risk, you can measure the underlying stock risk to determine if it falls within acceptable limits based on your account size and the amount you are willing to lose on the trade.

    Position size tells you how many units, or shares, you are going to put on, given the size of your account. Position-sizing is the essence of money management. Too few shares or units and your return will be inadequate. Too many and your risk will be too high.

    By using a security’s volatility or true range (TR) to evaluate Var, you can determine the appropriate position size based on your risk tolerance and the typical price movement of the security over a specific period of time."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-14-17-true-range-reward-risk-and-position-size-by-alan-m-binder-20.gif"",""height"":""627"",""width"":""458""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-14-17-true-range-reward-risk-and-position-size-by-alan-m-binder-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-14-17-true-range-reward-risk-and-position-size-by-alan-m-binder-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271dopr,d,"{""minimum-quantity"":""1"",""path"":""ch5m205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:5 (18-25): Downside Protection With Double-Digit Returns by John Manley"",""caption-linebreaks"":""Downside Protection With Double-Digit Returns by John Manley

    This strategy has potential for double-digit returns with a large built-in hedge.

    Current market conditions have set up a unique opportunity to build a conservative portfolio that will profit even if the market falls by a certain percent, stays flat, or eventually rises over the remainder of the year. It goes without saying we have witnessed the most violent and dramatic market moves of the last 75 years of late. After falling a whopping 38.5% in 2008, the Standard & Poor’s 500 is already down another 21% in the first eight weeks of 2009. How does a traditional investor defend himself against this kind of market volatility and still have a chance of making money?

    THE PREMISE

    What if you could build a diversified portfolio of quality stocks or exchange traded funds (Etfs) with a large built-in hedge of anywhere from 20% to 40% below entry prices and still pull off double-digit gains at the end of the year, even if the markets go nowhere? You can. Welcome to the in-the-money covered-call portfolio!

    What makes this strategy particularly attractive right now is that we have two favorable conditions present — depressed stock prices (subjectively, prices could fall further, but I am about to show you that’s okay) and high premiums for options (elevated implied volatility priced into options). One of the other desirable attributes of this strategy is that it is relatively low maintenance. It is perfect for the busy trader or investor who doesn’t have time to check the markets all the time — and it keeps transaction costs down."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-18-25-downside-protection-with-double-digit-returns-by-john-manley-20.gif"",""height"":""624"",""width"":""445""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-18-25-downside-protection-with-double-digit-returns-by-john-manley-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-18-25-downside-protection-with-double-digit-returns-by-john-manley-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov272opon,d,"{""minimum-quantity"":""1"",""path"":""ch5m205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:5 (26-34): Options On Futures by John “Jay” Norris"",""caption-linebreaks"":""Options On Futures by John “Jay” Norris

    Here’s how to identify the appropriate underlying conditions and timing for option strategies.

    The first two things industry insiders will tell you about options on futures is that more than 80% of them expire worthless, and that selling naked options on a monthly basis is frequently referred to as “picking up dimes in front of a steamroller.” Put those together and you get losses more often than not if you buy them or you get paid a meager sum on a regular basis if you sell them, and hope you figure out a better way quickly before you get crushed by the steamroller. Trading futures and options on futures carries a substantial risk of loss and is not suitable for every investor. As with any type of investment, you have to do your homework and understand the risks.

    DRIVE THE STEAMROLLER

    In my opinion, the “better” way is to use options in conjunction with the opposite position in the underlying futures contract, or when a market is starting to experience a long-term trend shift and an attractive risk/reward ratio justifies the possibility of a small loss. These strategies can mean you still sweep up those dimes but you don’t have to worry about the steamroller or, even better, set yourself up to drive the steamroller.

    Before we get into option strategies that might apply to setups and situations in the markets you follow, we need to define the basic instruments and terms used. An option is a derivative product of a security, commodity, or other financial product that allows the holder or buyer the right to control the underlying product at a specific price at a future date. Once that date passes, the option is either exercised, meaning that the option holder takes control of the asset because price is beyond the price specified in the option, or the option expires worthless because the price did not reach the point specified in the option. Over the course of its life, the option will fluctuate in price, as will the price of the underlying product."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-26-34-options-on-futures-by-john-jay-norris-20.gif"",""height"":""624"",""width"":""446""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-26-34-options-on-futures-by-john-jay-norris-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-26-34-options-on-futures-by-john-jay-norris-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov273usin,d,"{""minimum-quantity"":""1"",""path"":""ch5m205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:5 (36-43): Using Initial And Trailing Stops by Sylvain Vervoort"",""caption-linebreaks"":""Using Initial And Trailing Stops by Sylvain Vervoort

    \nIn this first of a three-part series, we will look at initial stop methods and compare trailing-stop strategies starting with a fixed-percentage trailing stop.

    Most people have no problem buying a stock, but selling it is another matter. Selling is best accomplished based on technical analysis signals reaching a price target, breaking a trend, money management, or whatever rules you apply for trading the stock market. But you must also consider a last warning signal. This warning is an initial stop and a trailing-stop signal.

    In this series of three articles, we will look at initial stop methods and compare trailing-stop methods using a fixed- percentage trailing stop, an average true range (Atr) trailing stop, a modified Atr trailing stop, and Tr&nds (read Trends), a “trailing resistance and support” stop.

    INITIAL STOP

    The initial stop is set when you open your trade. When this stop level is broken, it is the ultimate and last warning sign to close your position. Setting the initial stop requires applying technical analysis basics and risk/reward ratio. Here are a few examples.

    In the daily chart of Allis Chalmers (Aly) in Figure 1, you see a significant short-term correction, one that would make you consider opening a trade. But where would you set the initial stop? There is a positive confirmed bullish harami pattern in the candlestick chart.

    Logically, you would use the bottom level of the bullish harami pattern and consider the support level broken when the closing price falls below this line. This means buying now at a closing price of $12.02 and setting a stop at $10.12 or a loss of about 20%. If you are like me, you probably wouldn’t like the idea that this trade may result in a 20% loss. The first resistance for a further up move is at $14, which is a last top in the previous downtrend. Buying at $12.02 with a stop at $10.12 and a first price target at $14 gives you a risk/reward ratio of not much more than 1, which is not attractive. There should be at minimum a ratio of 2:1, but 3:1 is preferred. This is the main reason why I would not open a trade here. There are more technical reasons why I would not take this trade, but I am just going to look at the use of stops."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-36-43-using-initial-and-trailing-stops-by-sylvain-vervoort-20.gif"",""height"":""626"",""width"":""453""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-36-43-using-initial-and-trailing-stops-by-sylvain-vervoort-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-36-43-using-initial-and-trailing-stops-by-sylvain-vervoort-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274doch,d,"{""minimum-quantity"":""1"",""path"":""ch5m205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:5 (48-50): Do Chart Patterns Still Work? Thomas Bulkowski"",""caption-linebreaks"":""Do Chart Patterns Still Work? Thomas Bulkowski

    Has the failure rate of chart patterns increased in recent years?

    IN the last several years, have you found it more difficult to make money in the stock market? Do you get the feeling that indicators are less effective than they used to be in spotting profitable opportunities? I decided to find the answers to those questions with a new study. I spent a week updating a database of chart patterns that I used during research for writing my books, and found an alarming result.

    In my investigation, I used 13,932 chart patterns spread over the years from 1991 to 2008. I did not use all of the chart pattern types in my analysis but concentrated on 23 of the most common and popular. They are: diamond tops and bottoms; double tops and bottoms (eight types of Adam and Eve combinations); triple tops and bottoms; rising and falling wedges; head & shoulders tops and bottoms (four types of simple and complex); ascending, descending, and symmetrical triangles; and rectangle tops and bottoms."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-48-50-do-chart-patterns-still-work-thomas-bulkowski-20.gif"",""height"":""792"",""width"":""612""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-48-50-do-chart-patterns-still-work-thomas-bulkowski-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-48-50-do-chart-patterns-still-work-thomas-bulkowski-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275qaby1,d,"{""minimum-quantity"":""1"",""path"":""ch5m205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:5 (51): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    NO STOP-LOSSES IN OPENING-ONLY STRATEGIES?

    I have heard you say that you don’t like using stop-loss orders when you trade the opening-only strategy. Why is that? Most “experts” preach that you must use stops. Can you shed some light on this? —Chico

    Sure, let me try to explain this often-confusing strategy, or lack thereof.

    First off, you can check past issues of Stocks & Commodities to get an in-depth idea of what we do each day at the opening of the markets. To summarize, each day, Bright traders place buy orders and sell short orders on hundreds of stock prior to market opening. Each trader may place orders on from 10 to 200 different stock symbols. We have a methodology for determining the actual order pricing, based on estimated opening prices, overall market and so forth. We hope to get filled only on the stocks that gap way up or way down. We know that when stocks do that, the Nyse specialist will be on the same side that we are. If they are short, so are we."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-51-q-a-by-don-bright-20.gif"",""height"":""619"",""width"":""430""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-51-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-51-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275fufo,d,"{""minimum-quantity"":""1"",""path"":""ch5m205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:5 (54): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    SPLITTING THE BID?

    Option traders often talk about “splitting the bid” or “midpoint”; what are they referring to?

    All markets, whether we are talking about cars, houses, groceries, stocks, currencies, futures, or options, have two prices at any given time. There is a price at which an asset can be purchased and one at which it can be sold. In the world of trading, the difference is known as the bid/ask spread. The spread between the two prices is the compensation that the executor requires to accept the risk involved in making a market.

    For instance, your local grocer buys products to stock his shelves at a wholesale price, only to turn around and sell it to you at a retail price. The difference between the price that he pays for items and what he sells it for is referred to as the margin in retail, identical to the bid/ask spread in the financial markets. The grocer is accepting the risk of not being able to sell the items purchased at wholesale and therefore must charge a markup in order to compensate him for his efforts."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-54-futures-for-you-by-carley-garner-20.gif"",""height"":""617"",""width"":""421""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-54-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-54-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275geto,d,"{""minimum-quantity"":""1"",""path"":""ch5m205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:5 (56-60): Getting To Know Options With Dan Passarelli by J. Gopalakrishnan & B. Faber"",""caption-linebreaks"":""Getting To Know Options With Dan Passarelli by J. Gopalakrishnan & B. Faber

    If you want to learn more about options, here’s a trader who might be able to help you. Dan Passarelli is the author of the book Trading Option Greeks and president of Market Taker Mentoring, Llc (www.MarketTaker.com), which provides personalized one-on-one mentoring for option traders. Passarelli started his trading career on the floor of the Chicago Board Options Exchange (Cboe) as an equity option market maker. He also traded agricultural options and futures on the floor of the Chicago Board of Trade (Cbot). In 2005, Passarelli joined Cboe’s Options Institute and began teaching both basic and advanced trading concepts to retail traders, brokers, institutional traders, financial planners and advisors, money managers, and market makers. In addition to his work with the Cboe, he taught option strategies at the Options Industry Council (Oic). Passarelli has been featured on television and radio and has written numerous articles in the financial press.

    Dan Passarelli was interviewed on March 11, 2009, via telephone by Stocks & Commodities Editor Jayanthi Gopalakrishnan (JG) and Staff Writer Bruce Faber (BF).

    Dan, how did you get interested in trading?

    Ever since I was a kid I was interested in trading. I enjoyed looking up the stocks in the Sunday newspaper and trying to figure it all out, as far back as I can remember. I went to college here in Chicago and I would walk down to the Board of Trade when it was open to the public. I would go up to the visitors’ gallery and just watch the trading on the floor. I found it all fascinating.

    JG: What was your first job that was related to trading?

    I got into the trading business the old-fashioned way. I didn’t really know anyone down on the floor, so after college I printed up a stack of resumes, put on my best suit, and went into the Chicago Board of Trade (Cbot) building, and I knocked on every single door in the entire building from the ground floor to the top. If someone answered, I handed out my resume and said, “I want a job doing something here, anything, whatever that might be.”

    BF: Did that work?

    I ended up getting a job as a runner, which is basically somebody who runs back and forth carrying an order, or a piece of paper, or a note, or something to one of the traders on the floor. It was an entry-level job, but I worked my way up and ended up as a clerk for a trader. As a clerk, I would watch all the trades that the trader would make and try to figure out why he would do it, and learned by basically looking over his shoulder.

    JG: How long were you a clerk?

    A couple of years. After that, I decided I would do it on my own. I looked around for a backer and hooked up with the late Steve Fossett. I traded for him for about seven years.

    JG: What were you trading at that point?

    Equity options. I traded in the Ford Motor pit. I traded options on about 20 to 25 stocks."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-56-60-getting-to-know-options-with-dan-passarelli-by-j-gopalakrishnan-b-faber-20.gif"",""height"":""638"",""width"":""505""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-56-60-getting-to-know-options-with-dan-passarelli-by-j-gopalakrishnan-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-56-60-getting-to-know-options-with-dan-passarelli-by-j-gopalakrishnan-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276exyo2,d,"{""minimum-quantity"":""1"",""path"":""ch5m205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:5 (62): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    COLLAR CONFUSION

    I read some messages from other traders about collars and I’m confused. My understanding is these were a bearish strategy, but above all they’re for insurance on your stock. What I don’t understand is many forum contributors advise that collars are a bullish strategy! Sure, I want my stock to go up ... but if I’ve already got stock, then taking out a collar seems impossible to make money in a bullish market (over and above a gain in stock price). If my puts keep expiring worthless, and I have to keep buying my calls back at a higher price and then selling the next month, it’s going to cost me a fortune! All my profit from the rising stock is being eaten up by rolling up my calls!

    Your understanding of collars is correct. The trade is created by selling calls and buying puts. Without any stock, the strategy is bearish because both short calls and long puts have negative deltas. Therefore, they will decrease in value as the stock moves higher and increase in value as the stock price moves lower.\nSince the collar consists of long shares and puts along with short calls, it can also be viewed as a protective put (shares protected with puts) along with short calls. Or it can be considered a combination of a protective put and a covered call (buying stock and selling calls). The calls help pay for the puts, but also limits the upside."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-62-explore-your-options-by-tom-gentile-20.gif"",""height"":""617"",""width"":""421""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-62-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-62-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276prre3,d,"{""minimum-quantity"":""1"",""path"":""ch5m205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:5 (64-68): Product Review: StockCharts.com by Technical Analysis, Inc."",""caption-linebreaks"":""Product Review: StockCharts.com by Technical Analysis, Inc.

    StockCharts.com, Inc.

    tockCharts.com’s website has consistently won the Stocks & Commodities’ Readers’ Choice Award for Best Technical Analysis Website over the last seven years. The principal products offered by StockCharts.com are charting, market analysis, and technical analysis explanations/definitions. Market analysis covers several areas: sector analysis, newsletters, blogs, and Market Carpet, a visual presentation of marketwide data for user-selected dates and time spans, unique to StockCharts.com.

    CHARTING

    Charting is free and for a fee (ExtraRT! Charting: $34.90 a month), the data is real-time with no delays. StockCharts takes pride in its accuracy. One example is a calculation done by almost all packages and websites, namely an exponential moving average (Ema). If you look at the actual definition of an Ema, you’ll find that the period translates to a percentage used in weighting each item, such as daily closing prices, and that the calculation is basically unlimited in terms of how far back in time it goes. From a practical standpoint, it is usually not necessary to go back any more than what is on the chart. StockCharts.com goes at least n + 250 additional periods beyond the left edge of the chart when calculating an n-period Ema."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-64-68-product-review-stockcharts-com-by-technical-analysis-inc-20.gif"",""height"":""633"",""width"":""482""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-64-68-product-review-stockcharts-com-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-64-68-product-review-stockcharts-com-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276trti1,d,"{""minimum-quantity"":""1"",""path"":""ch5m205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:5 (69-82): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    All of this month’s Traders’ Tips are based on Sylvain Vervoort’s article in this issue, “Using Initial And Trailing Stops.”

    Code for MetaStock to implement the fixed-percentage stop method is already provided in Vervoort’s article elsewhere in this issue. Additional code is presented here as contributed by various software developers.

    Readers will find our Traders’ Tips section in its entirety at the Stocks & Commodities website at www.Traders.com in the Traders’ Tips area, from where the code can be copied and pasted into the appropriate program. In addition, the code for each program is usually available at the respective software company’s website. Thus, no retyping of code is required for Internet users."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-69-82-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""623"",""width"":""439""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-69-82-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-69-82-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov278leto1,d,"{""minimum-quantity"":""1"",""path"":""ch5m205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:5 (8-12): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    CLARIFICATION ON DOUBLE 7s STRATEGY

    Editor,

    In the January 2009 S&C article, “Three Rules, One Easy Way To Trade Etfs,” Figure 2 shows point B and the caption refers to “a new, seven-day low at point B.” However, two days earlier, the price bar is lower than the bar pointed to at B (using a magnifying glass).

    A check of my data shows the same results. Point B, on December 14, 2007, has a low of 50.92, but on December 12, the low is at 50.89, according to data from Yahoo! Finance. Is it possible the arrow is pointing to the next day, or do the authors mean a “new, lower close?”

    Tom Bulkowski

    Yes, in this case, authors Larry Connors and David Penn mean a new, lower close, even though the intraday low may have been lower two days ago. This is based on the second rule, which states that if the Etf closes at a seven-day low, you would buy on the close.

    —Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-8-12-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""617"",""width"":""420""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-8-12-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-8-12-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov279bofo4,d,"{""minimum-quantity"":""1"",""path"":""ch5m205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:5 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    • Do-It-Yourself Hedge Funds: Everything You Need To Make Millions Right Now

    • The Great Depression Ahead: How To Prosper In The Crash Following The Greatest Boom in History

    • The Heretics Of Finance

    • Intermarket Trading Strategies

    • Trade To Win: Proven Strategies To Make Money

    • The Zulu Principle: Making Extraordinary Profits From Ordinary Shares"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-92-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""615"",""width"":""414""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov279atcl,d,"{""minimum-quantity"":""1"",""path"":""ch5m205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:5 (98,97): At The Close by L.A. Little"",""caption-linebreaks"":""At The Close by L.A. Little

    The Measure Of A Trader

    What makes a successful trader?

    IN 1973, Burton Malkiel published a book titled A Random Walk Down Wall Street, where he argued that asset prices typically exhibit signs of random walk behavior and that we cannot consistently outperform market averages.

    Independent of the questions raised by this and subsequent works, the idea that should concern you is that it is impossible to consistently outperform the market averages. If that is true, then why are we all wasting our time? Further, is that really true?

    HOW DO YOU MEASURE SUCCESS?

    If you want to measure your success as a trader, there are three critical components. The first is that you must consistently outperform the average of the indexes that you trade. This is very close to what Malkiel said was impossible to do. A little later, I’ll deal with why this is quite possible.

    The second component is that not only do you have to outperform the average of the indexes that you trade but your overall returns must be positive. It doesn’t mean anything if you were to outperform the average of the indexes when the indexes lost 40% and you only lost 25%. Losing 25% of your money is a failure, no matter how you look at it. In fact, the way you consistently outperform the indexes over a long period of time is that you don’t ride the market up and then back down, losing most or all the gains you made over the years. The real key to making money is keeping it!

    The final component is that your gains have to outpace inflation. Now, we can argue what to use as an accurate measure of the real rate of inflation, but that’s an argument for another time. Your returns need to outpace the consumer price index (Cpi), if not some tougher measure. If the returns are not greater than the rate of inflation for the period being measured, then you are not really getting anywhere; instead, you are losing ground."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-98-97-at-the-close-by-l-a-little-20.gif"",""height"":""618"",""width"":""424""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-98-97-at-the-close-by-l-a-little-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-5-98-97-at-the-close-by-l-a-little-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271foco,d,"{""minimum-quantity"":""1"",""path"":""ch6j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:6 (10-13): Forward Contracts Vs Spot Currency by Brian Twomey"",""caption-linebreaks"":""Forward Contracts Vs Spot Currency by Brian Twomey

    Here are some methods you can use to trade currency pairs that are just as or even more profitable than trading the spot market.

    What most traders understand about currency trading is the basic buying and selling of currency pairs based on what the indicators will determine. These are basic trades that take place in the spot market. But in the spot market there is much more than just these basic trades. Since interest rates between two pairs are the overall driver of spot prices, there are other methods to trade pairs. Arbitrage, forward contracts, bond yield correlations, and spot differentials in interest rates, referred to as swaps, are just a few opportunities I will examine.

    OPPORTUNITY FOR ARBITRAGE

    Arbitrage opportunities exist to take advantage of the difference of interest rates between two nations. In currency trading, arbitrage simply refers to the simultaneous buying and selling of a currency pair to take advantage of interest rate differentials."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-10-13-forward-contracts-vs-spot-currency-by-brian-twomey-21.gif"",""height"":""627"",""width"":""458""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-10-13-forward-contracts-vs-spot-currency-by-brian-twomey-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-10-13-forward-contracts-vs-spot-currency-by-brian-twomey-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271shtr,d,"{""minimum-quantity"":""1"",""path"":""ch6j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:6 (14-22): Short-Term Trend Trading by Russell Rhoads, CFA"",""caption-linebreaks"":""Short-Term Trend Trading by Russell Rhoads, CFA

    This basic system can be traded profitably\non a short-term basis.



    Some of the most basic systems can be the most effective means of making money in the futures markets. In this article I will demonstrate one of the simple systems that can be traded successfully on a daily basis. There are no complex calculations to determine entry and exit points nor indicator crossovers to determine entry and exit points. If you can add two numbers and then divide them by 2, you can do the most difficult calculation involved in this system. All this system does is some near-term price comparison, placing a stop order to keep losses in control and determining the time to exit the trade with your (hopefully) profit or loss.

    MY TRADING DAY

    The basic philosophy behind this system is to latch onto a trend that is in place based on the first half or so of a trading day. As many markets have gone to 24 hours a day, it’s difficult to determine exactly what entails a day of trading. I like to divide things by who is awake and trading at any given time, at least those of us who live normal lives and don’t live in Chicago and trade Tokyo hours. And because I live in Chicago, I usually designate 6:00 am Central Time (CT) to 3:00 pm CT as my trading day."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-14-22-short-term-trend-trading-by-russell-rhoads-cfa-21.gif"",""height"":""631"",""width"":""476""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-14-22-short-term-trend-trading-by-russell-rhoads-cfa-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-14-22-short-term-trend-trading-by-russell-rhoads-cfa-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov272demy,d,"{""minimum-quantity"":""1"",""path"":""ch6j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:6 (24-33): Developing My Trading Strategy by Leonardo Jafet"",""caption-linebreaks"":""Developing My Trading Strategy by Leonardo Jafet

    Are the risks and returns involved in a more active investment style compatible with your resources and financial goals? Here’s a trading approach that can help answer your questions.

    ntry in my mental trading journal, circa October 2008: The demise of buy & hope investing (and ensuing losses in my portfolio) is the nudge I need to finally consider developing a trading strategy in which I would have enough confidence to take some smarter risks. The first question I should ask myself is, “Are the risks and returns involved in a more active investment style compatible with my resources and financial goals?” Maybe. All I know is that I could do much better than buy & hold. But how? I haven’t been able to sort through the cacophony of analysts, pundits, and stockpickers. I just know I need a more objective, systematic approach to investing.\nI have been a casual student of technical analysis for a few years and am finally convinced it is the investing approach that best fits my personality and probably the healthiest for my wallet going forward. Do I have everything I need? Let’s see:\n• Magazines about technical analysis? 4\n• Books about technical analysis? 4\n• Bookmarked technical analysis websites? 4\n• Technical analysis–based software? 4

    Let’s see what I can do."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-24-33-developing-my-trading-strategy-by-leonardo-jafet-21.gif"",""height"":""625"",""width"":""449""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-24-33-developing-my-trading-strategy-by-leonardo-jafet-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-24-33-developing-my-trading-strategy-by-leonardo-jafet-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov273avtr,d,"{""minimum-quantity"":""1"",""path"":""ch6j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:6 (34-40): Average True Range Trailing Stops by Sylvain Vervoort"",""caption-linebreaks"":""Average True Range Trailing Stops by Sylvain Vervoort

    In this second of a three-part series we will compare trailing-stop methods using an average true range (Atr) trailing stop.

    by Sylvain Vervoort

    The average true range (Atr) was developed by J. Welles Wilder and introduced in his book New Concepts In Technical Trading Systems. The Atr indicator measures a security’s volatility. Wilder defined the true range concept as the greatest value of the:

    • Current high less the current low

    • Absolute value of the current high less the previous close

    • Absolute value of the current low less the previous close

    Wilder then calculated an average of this value for creating the average true range.

    Like most technical analysis programs, MetaStock has a predefined Atr indicator (Atr (period)). But if you need to calculate it yourself, it can be created as follows:

    \n{Get the required ATR period;}\nperiod:=Input(“ATR Period :”,1,100,5);\n{Calculate the biggest difference based on the true range concept;}\ndiff1:=Max(H-L,Abs(H-Ref(C,-1)));\ndiff2:=Max(diff1,Abs(L-Ref(C,-1)));\n{Use Wilders’ moving average method to calculate the Average True Range;}\nMov(diff2,period*2-1,E)

    \nWith this formula you could create an Atr value based on something other than the close, such as an average price."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-34-40-average-true-range-trailing-stops-by-sylvain-vervoort-21.gif"",""height"":""624"",""width"":""446""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-34-40-average-true-range-trailing-stops-by-sylvain-vervoort-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-34-40-average-true-range-trailing-stops-by-sylvain-vervoort-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274qaby2,d,"{""minimum-quantity"":""1"",""path"":""ch6j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:6 (41): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    BREAKOUT/BREAKDOWN

    I’ve been analyzing breakouts from consolidation and wanted to get your feedback about the viability of a strategy I was considering. I posted this on an Internet thread a while back and got no response, leading me to believe perhaps no one actually trades this way.

    Yesterday, Pru started hitting the high ticker as it broke through the Hod and rallied to $22, where it then ranged between $21.75 and $21.99 for almost two hours before breaking through $22 and rapidly hitting $22.59 on the breakout.

    When a stock consolidates midday and trades within a tight range, it will either break out of consolidation in the same direction as the earlier trend, or it will break down to reverse the trend. Have you any experience with placing two limit orders outside the trading range, assuming the one that gets filled places you in the direction of the breakout? So with Pru, you would place a short order at $21.70 and a long order at $22.05 and catch the ride when the big boys come out to play late in the day. Thanks in advance!

    —Donna"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-41-q-a-by-don-bright-20.gif"",""height"":""616"",""width"":""419""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-41-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-41-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274twot,d,"{""minimum-quantity"":""1"",""path"":""ch6j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:6 (42-49): Two Traders, Two Methods by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Two Traders, Two Methods by Jayanthi Gopalakrishnan

    The idea of daytrading has captured the attention of many market enthusiasts, but it’s not an easy path to riches. It takes years to master, a tremendous amount of patience, and consistency in your results. But most important, each trader has a unique methodology that works for him or her. We interviewed Kevin Haygreen and Gavin Mok, both of whom came to daytrading and blogging about it from very different backgrounds, but they have in common a keen interest in the quick pace that the trading style affords. Britain-based Kevin Haygreen (not pictured) is a full-time home-based futures trader, while Gavin Mok lives in Melbourne, Australia, and trades currencies part-time from home. Kevin posts entries about his trades on his blog EMini S&P Trading (http://868347.blogspot.com), while Gavin writes about his trading at www.tradergav.com.

    Stocks & Commodities Editor Jayanthi Gopalakrishnan interviewed the two daytraders in early April 2009 via email correspondence.

    Kevin, tell us about yourself.

    I am 24 and live in Leeds, in the United Kingdom. I’m a full-time trader, and nowadays I trade from home, but I used to be a prop trader. I started off trading European fixed-income markets, mainly the Bund and Schatz, but now I mostly trade the emini Standard & Poor’s 500.

    How did you get interested in trading?

    This is where I sound very cliché. I was always interested in the financial markets, but a few things happened when I was younger that made me look seriously into the idea of being a trader. When I was 16, I was thrown out of home without a penny to my name, and after spending time homeless and living in shelters, I decided that I never wanted to ever be poor again, and to me trading seemed like a way to a better life.

    I pulled myself out of that situation by working nights in a supermarket and at McDonald’s. I managed to get my own place, and I saved every penny I could. I sat and read everything about trading that I could get my hands on, via books and Internet forums. Once I started to develop a basic understanding of trading futures, trading started to become a passion for me, but at that point I still had never looked at a live chart.

    What do you think helped you gain the confidence to trade your own account?

    Time. I went through a phase of being afraid when I was trading. I think this was because I had a lot riding on it. I didn’t have any money, couldn’t afford to pay the rent or the bills, and the thought of losing money and digging myself into a deeper hole paralyzed my trading. Time was a great healer for me, but this is a personal journey that is different for every trader, and it is a journey that a trader has to complete on his or her own."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-42-49-two-traders-two-methods-by-jayanthi-gopalakrishnan-20.gif"",""height"":""566"",""width"":""450""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-42-49-two-traders-two-methods-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-42-49-two-traders-two-methods-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275trkn,d,"{""minimum-quantity"":""1"",""path"":""ch6j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:6 (50-52): Trader, Know Thyself by Ray Johns"",""caption-linebreaks"":""Trader, Know Thyself by Ray Johns

    Want to become a successful trader? Then it’s important to understand how your mind works.

    by Ray Johns

    IN trading, when something goes wrong and you lose money, nine times out of 10 it’s nobody’s fault but your own. Most of the time the breakdown occurs in how the trade is managed, since many trades do go into and out of the money during the course of their respective durations. Unless you just hit a bad trade that drops like a rock, there is at least (typically) some opportunity to take a profit along the way. In these cases, trade management is one of the most important factors in realizing a gain. Moreover, how you manage your emotions while managing any specific trade often plays a key role in determining the final outcome of a trade as well.

    Many traders, especially those new to Wall Street, focus heavily on learning the market. In my view, however, becoming a successful daytrader has more to do with learning about yourself and less to do with learning about the market. Over the years I have been trading, I have seen many individuals try their hand at becoming traders. Some have been successful, while others have not. Some have given up and decided that they are simply not cut out to be traders, while others blow out, taking on too much risk, unable (or unwilling) to correct problems that keep them from becoming profitable over the long term. As most seasoned daytraders will tell you, learning to become a consistent, profitable trader is generally a long, expensive, and difficult road."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-50-52-trader-know-thyself-by-ray-johns-20.gif"",""height"":""635"",""width"":""495""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-50-52-trader-know-thyself-by-ray-johns-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-50-52-trader-know-thyself-by-ray-johns-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275fufo1,d,"{""minimum-quantity"":""1"",""path"":""ch6j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:6 (53): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    CALCULATING

    With Treasury futures at or near an all-time high, I would like to begin trading options on bond and note futures but I am having difficulty calculating profit, loss, and risk.

    Figuring in Treasury options often causes confusion for two primary reasons. First, both options and futures in Treasuries are traded in fractions. Second, unlike other commodities and financial futures, bond and note options differ in the manner in which they are quoted from their futures contract counterparts. Before you can understand how to calculate Treasury options, you must be comfortable with calculating in the corresponding futures contracts. Keep in mind that if you are capable of computing in Treasury bonds, you will be proficient in T-notes."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-53-futures-for-you-by-carley-garner-20.gif"",""height"":""617"",""width"":""420""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-53-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-53-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275lotr,d,"{""minimum-quantity"":""1"",""path"":""ch6j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:6 (56-59): Low-Risk Trades Using Cup-With-Handle by Dale Glaspie"",""caption-linebreaks"":""Low-Risk Trades Using Cup-With-Handle by Dale Glaspie

    Here’s how a popular pattern can present trading opportunities in a bear market.

    The year 2008 marked the beginning of one of the worst economic crises of our country’s history. But just like all other economic crises, it too will come to an end, and when it does, those who have prepared will profit in a big way. How? Most stock traders have either traded or at least heard of the cup-with-handle formation. It has long been recognized as one of the most useful technical patterns, and I have been fascinated by the versatility it possesses from the time I started using it.

    Like other bullish patterns, however, it fails sharply when the markets turn bearish. Thus, I began my quest for an indicator that would perform in a bear market the same way that the cup-with-handle performs in a bull market. As a result, I developed the inverted cup-with-handle and was pleased at how these two indicators worked to offer some of the best trades available. The problem is trying to find these little nuggets in a timely manner.

    THE INVERTED CUP-WITH-HANDLE

    By studying the relationship between the cup-with-handle and the inverted cup-with-handle formations, I discovered eight different trades, four associated with each formation. To make it easier to explain, I look at the cup-with-handle as one mother and the inverted cup-with-handle as another mother. Each of these parents have three offshoots called “handle,” “bounce off,” and “reversed.” I put a “C” in front of those associated with the cup-with-handle and an “I” in front of those associated with the inverted cup-with-handle. So we have two families: one made up of cup-with-handle; CHandle, CBounceOff, and reversed cup-with-handle; while the other is composed of inverted cup-with-handle, IHandle, IBounceOff, and reversed inverted cup-with-handle."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-56-59-low-risk-trades-using-cup-with-handle-by-dale-glaspie-20.gif"",""height"":""624"",""width"":""445""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-56-59-low-risk-trades-using-cup-with-handle-by-dale-glaspie-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-56-59-low-risk-trades-using-cup-with-handle-by-dale-glaspie-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276exyo3,d,"{""minimum-quantity"":""1"",""path"":""ch6j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:6 (62): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    VOLATILITY RISK

    A stock I like has been trending higher, and I was considering a credit spread expiring in May. However, the earnings report is due May 7 and I can’t determine whether this volatility rush will negatively affect my position... any advice for me?

    You are correct, knowing the earnings reporting date when trading individual stocks can be very important. In addition, there is often a volatility rush ahead of earnings. In other words, the implied volatility (IV) of the options will begin to move higher prior to the earnings release. Why?

    The market is very efficient when it comes to anticipating future volatility. When a stock is expected to make a big move, the option premiums become more expensive because big moves make it more likely that an option can move in-the-money by expiration."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-62-explore-your-options-by-tom-gentile-20.gif"",""height"":""617"",""width"":""420""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-62-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-62-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276prre4,d,"{""minimum-quantity"":""1"",""path"":""ch6j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:6 (64-66): Product Review: Chartpattern by Dennis Peterson"",""caption-linebreaks"":""Product Review: Chartpattern by Dennis Peterson

    ChartPattern is a website product by Dan Zanger, who gained fame and fortune by taking a brokerage account from $11,000 to $42 million in 23 months during the big bull runup from 1998 to 1999. He must be doing something right, wouldn’t you think?\nWith a website name like “ChartPattern,” you get one guess what he uses. But it is kind of a trick question. Zanger does use patterns, but he also uses his knowledge about how the market works. For example, the market buys on the rumor or expectation, and sells on the reality. He told me a story. A while back, he said, Yahoo’s earnings came in better than expected but the stock went nowhere, and then the market waited for another Internet stock, eBay, to report its earnings.\neBay was breaking down technically so it would take spectacular earnings for a move up. eBay’s earnings were modest, and the company lowered forward guidance and the stock plunged $20 after hours, but Zanger had already shorted 160,000 shares of eBay and made $3 million.

    To enjoy Dan Zanger’s kind of success, it helps to know chart patterns, but it takes more. Putting aside his knowledge of “how the market works,” you’re probably wondering which pattern tool he’s using because there’s really only one good one, and it didn’t exist when Zanger made his initial fortune. This is a bit of a stumper, but rather than keep you in suspense, I’ll tell you. Each day he manually goes through 1,200 to 1,300 daily stock price charts, sometimes twice."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-64-66-product-review-chartpattern-by-dennis-peterson-20.gif"",""height"":""629"",""width"":""469""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-64-66-product-review-chartpattern-by-dennis-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-64-66-product-review-chartpattern-by-dennis-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276vere,d,"{""minimum-quantity"":""1"",""path"":""ch7j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:6 (64-69): VectorVest RealTime by Barbara Star"",""caption-linebreaks"":""VectorVest RealTime by Barbara Star

    There’s a new player in the real-time trading arena. VectorVest recently joined the fray with its unique search, sort, ranking, and buy/sell recommendation program for stocks, sectors, industry groups, and indexes. The original proprietary VectorVest market features, including market timing, update continuously throughout the trading day and, if desired, during the extended market hours, providing information on more than 8,000 US stocks, 60 market indexes, 225 industry groups, and 40 sectors.

    VectorVest RealTime now makes it possible to use the many search functions that combine fundamental and technical information, plus the ability to backtest those searches on an intraday as well as end-of-day basis.

    Easy access\nThe software, easily downloadable from the VectorVest.com website, displays a colorful home page in a three-column format that is informative and easy to understand."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-64-69-vectorvest-realtime-by-barbara-star-20.gif"",""height"":""625"",""width"":""458""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-64-69-vectorvest-realtime-by-barbara-star-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-64-69-vectorvest-realtime-by-barbara-star-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276trti2,d,"{""minimum-quantity"":""1"",""path"":""ch6j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:6 (67-81): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""All of this month’s Traders’ Tips are based on Sylvain Vervoort’s article in this issue, “Average True Range Trailing Stops.”

    Code for MetaStock to implement Vervoort’s average true range (ATR) stop method is already provided in Vervoort’s article elsewhere in this issue. Additional code is presented here as contributed by various software developers.

    Readers will find our Traders’ Tips section in its entirety at the Stocks & Commodities website at www.Traders.com in the Traders’ Tips area, from where the code can be copied and pasted into the appropriate program. In addition, the code for each program is usually available at the respective software company’s website. Thus, no retyping of code is required for Internet users.

    For Stocks & Commodities subscribers, the MetaStock code found in Vervoort’s article can be copied and pasted into MetaStock from the Subscriber Area at www.Traders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-67-81-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""622"",""width"":""436""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-67-81-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-67-81-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov278leto2,d,"{""minimum-quantity"":""1"",""path"":""ch6j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:6 (8-9,87): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    TRADING ON A MAC

    Editor,\nDo you ever provide Traders’ Tips for Mac applications?\nDave Rich\nDurango, CO

    Our Traders’ Tips section is made up by contributions from outside software developers (we don’t write them ourselves). Currently, no Mac-based developers are contributing, but we could try extending an invitation to some of the companies mentioned in the April 2009 S&C article, “Trading On A Mac” by Wallace Wang. We previously have published Traders’ Tips contributions from Linn Software for the Mac-based Investor/RT program.

    Thanks for writing."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-8-9-87-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""617"",""width"":""420""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-8-9-87-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-8-9-87-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov278wefo,d,"{""minimum-quantity"":""1"",""path"":""ch6j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:6 (86): Websites For Traders: Crimsonmind.com by Jayanthi Gopalkrishnan"",""caption-linebreaks"":""Websites For Traders: Crimsonmind.com by Jayanthi Gopalkrishnan

    Unusual activity in the option markets can reveal a ton of information about the markets. Crimsonmind.com is one site that provides this type of information, along with other option-related data. There is a ton of information you can find on this site that will help you do some in-depth analysis of the option market and ultimately help you decide if you should open or close any positions.

    FEATURES

    When identifying unusual option activity, it is necessary to compare the put/call volume with the average daily volume. You may also need to compare volume against open interest or see if there is any new activity. To put it simply, there’s a lot of analysis that goes into option trading. And you can find all the data you need to perform these types of analysis on this site."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-86-websites-for-traders-crimsonmind-com-by-jayanthi-gopalkrishnan-21.gif"",""height"":""618"",""width"":""422""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-86-websites-for-traders-crimsonmind-com-by-jayanthi-gopalkrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-86-websites-for-traders-crimsonmind-com-by-jayanthi-gopalkrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov279bofo5,d,"{""minimum-quantity"":""1"",""path"":""ch6j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:6 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""• Commodity Options: Trading And Hedging Volatility In The World’s Most Lucrative Market

    • The Complete Idiot’s Guide To Value Investing

    • Pioneering Portfolio Management: An Unconventional Approach To Institutional Investment

    • Seasonal Stock Market Trends: The Definitive Guide To Calendar-Based Stock Market Trading

    • The Swing Trader’s Bible: Strategies To Profit From Market Volatility

    • Systems Trading For Spread Betting: An End-To-End Guide For Developing Spread Betting Systems"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""616"",""width"":""415""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov27997at2,d,"{""minimum-quantity"":""1"",""path"":""ch6j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:6 (98, 97): At The Close by L.A. Little"",""caption-linebreaks"":""At The Close by L.A. Little

    The name of Charles Ponzi, the Boston financier and swindler, has come to symbolize the idea of fraudulent investment operations where investors are paid handsome returns by subsequent investors rather than from profits. This activity is known elsewhere as illegal pyramiding, but whatever the name, a Ponzi scheme is where the victim of the scheme is forever separated from his or her money by underhanded means. The victim’s greed gets the best of them and the swindler takes advantage.

    AVOID BEING A VICTIM. WALK AWAY.

    With so many large-scale Ponzi schemes coming to light as a result of these turbulent times (with Bernard Madoff and R. Allen Stanford recent names in the headlines), it is a good time to consider how you can easily avoid being victimized by this type of investment fraud. It is not that difficult."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-98-97-at-the-close-by-l-a-little-21.gif"",""height"":""629"",""width"":""469""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-98-97-at-the-close-by-l-a-little-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-6-98-97-at-the-close-by-l-a-little-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271golo,d,"{""minimum-quantity"":""1"",""path"":""ch7j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:7 (10-14): Going Long vs. Going Short by Zvi Benyamini"",""caption-linebreaks"":""Going Long vs. Going Short by Zvi Benyamini

    There’s a world of difference between uptrends and downtrends. Here’s a look at different setups and how you can use them to succeed in long and short positions.

    When I first began selling short a few years back, I didn’t do very well. I was stopped out of trade after trade, and I kept missing out on the best opportunities. At first I didn’t understand what was wrong: I was using the exact same methods that I had used successfully to go long, and simply reversed the rules and setups. Why wasn’t it working?

    At some point I realized this was a mistake. Why? Because if you examine the charts of uptrends and downtrends carefully, you will see a world of differences between them. Understanding these differences is crucial to successful short-selling.

    I would like to demonstrate a few of the differences between common chart patterns in uptrends and downtrends. I will show how they affect my entry setups, stop placement, and profit-taking when going short, compared to going long.

    #1: DOWNTREND PULLBACKS ARE DEEPER

    In an uptrend, pullbacks are usually weak and shallow compared to the rallies. Pullbacks in downtrends, on the other hand, tend to be much stronger and deeper.\nSo if we try using the same entry rules for going short on pullbacks, we are likely to miss out on the best trades. We need two different sets of entry rules: one for buying pullbacks in an uptrend, and one for shorting pullbacks in a downtrend. The “buying rules” should avoid strong pullbacks, while the “shorting rules” should allow them."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-10-14-going-long-vs-going-short-by-zvi-benyamini-21.gif"",""height"":""623"",""width"":""447""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-10-14-going-long-vs-going-short-by-zvi-benyamini-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-10-14-going-long-vs-going-short-by-zvi-benyamini-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271pide,d,"{""minimum-quantity"":""1"",""path"":""ch7j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:7 (16-24): The Pivot Detector Oscillator, Simplified by Giorgos Siligardos"",""caption-linebreaks"":""The Pivot Detector Oscillator, Simplified by Giorgos Siligardos

    See how you can use a simplified version of the Pid oscillator to improve your timing by leaps and bounds.

    A coherent unification model for trend indicators and oscillators is to technical analysis what a unification model of the microcosmos and the macrocosmos is to physics. Although both models may still be far from being constructed, there is nonetheless a way of using trend indicators and oscillators to derive virtually instantaneous signals. Here I will describe a simplified version of the pivot detector (Pid) oscillator and its signals, which were used in Daedalus, an add-on for MetaStock I created some years ago.

    THE DR. JEKYLL & MR. THE DR. JEKYLL & MR. HYDE RSI

    Among the various better-known oscillators, the relative strength index (Rsi) stands out. J. Welles Wilder introduced the Rsi in his book New Concepts In Technical Trading Systems, and it has been a standard tool for technical analysts ever since. By its construction, the Rsi takes on values between zero and 100, and Wilder proposed a 14-period parameter for it along with the 30 to 70 levels as oversold/overbought thresholds. The Rsi, however, does not differ from other classic technical oscillators in that it produces multiple erroneous signals during strong trending markets."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-16-24-the-pivot-detector-oscillator-simplified-by-giorgos-siligardos-20.gif"",""height"":""637"",""width"":""466""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-16-24-the-pivot-detector-oscillator-simplified-by-giorgos-siligardos-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-16-24-the-pivot-detector-oscillator-simplified-by-giorgos-siligardos-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov272qaby,d,"{""minimum-quantity"":""1"",""path"":""ch7j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:7 (25): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    STOCKS OVER OPTIONS AND FUTURES?

    I’ve noticed over the years of reading your column in Stocks & Commodities that you and your firm focus on equities. I have limited capital and have been trying to learn options and futures for the leverage. Is there a reason you prefer stocks? I read somewhere that you used to trade options and futures.—Chad in Florida

    Good question! You actually gave one of the reasons I cite for not trading options these days. In general, retail options and futures trading is done because of limited capital. Please note, however, I have respect for my many floor trader friends who engage in options and futures. Even though they have plenty of capital, they choose to trade those instruments."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-25-q-a-by-don-bright-20.gif"",""height"":""616"",""width"":""422""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-25-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-25-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov272trre,d,"{""minimum-quantity"":""1"",""path"":""ch7j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:7 (26-30): Trailing Resistance And Support Stops by Sylvain Vervoort"",""caption-linebreaks"":""Trailing Resistance And Support Stops by Sylvain Vervoort

    In this, the final part of a three-part series, we will look at a short-term trailing stop that moves close to the price action.

    The different trailing stops I discussed in parts 1 and 2 allow for enough of a price reaction that makes them most effective for medium-term trend trading. Using lower percentages or a smaller multiplication factor for the average true range (Atr) trailing stop will mostly result in too many losing trades. If you want a short-term trailing stop, it will have to move much closer to the price action. With that in mind, I created Tr&nds, an acronym (more or less) for trailing resistance & support stop, which will look directly at the price movement. The most reliable reference is price support and resistance, and the main item here is price turning points.

    SUPPORT TRAILING STOP

    I define a pivot support point in an up move when there is a low price that is equal or lower than the two prices preceding and following this low price. You can use the following MetaStock expression for this:

    support:=If(L>=Ref(L,-2) AND Ref(L,-1)>=Ref(L,-2)\nAND Ref(L,-3)>=Ref(L,-2) AND Ref(L,-4)>= Ref\n(L,-2),Ref(L,-2),{else}

    In Figure 1, you can see that this follows the uptrend in the Amd chart. But there are a couple of bigger price moves where the trailing stop stays too far away from the price action. How do we account for them?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-26-30-trailing-resistance-and-support-stops-by-sylvain-vervoort-21.gif"",""height"":""620"",""width"":""429""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-26-30-trailing-resistance-and-support-stops-by-sylvain-vervoort-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-26-30-trailing-resistance-and-support-stops-by-sylvain-vervoort-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov273matr,d,"{""minimum-quantity"":""1"",""path"":""ch7j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:7 (32-37): Market Trend And Midas by Andrew Coles and David Hawkins"",""caption-linebreaks"":""Market Trend And Midas by Andrew Coles and David Hawkins

    Here’s an in-depth look at an indicator that is part of Midas, the well-known market data analysis system. In this, the first of a three-part series, we will look at the formula used to calculate it.

    The innovative work of the late technical analyst Paul Levine into the application of volume-weighted average price (Vwap) principles to the financial markets has drawn attention in recent years. One result of this work is an indicator many readers will by now be familiar with. Levine called it Midas, an acronym for the market interpretation/data analysis system. The other result of this work is an indicator Levine called the “topfinder/bottomfinder,” the subject of this article.

    Outside of Levine’s work, a standard Vwap calculation (the total value of shares traded in a particular stock on a given day divided by the total volume of shares traded in that stock on that same day) is typically used as a benchmark to measure the efficiency of institutional trading. It is also a standard tool in the brokerage industry in that a Vwap execution is a way of earning a trader’s commission. Beyond this, rudimentary Vwap calculations have played a limited role in trading decisions, as in technician Kevin Haggerty’s methodology of establishing whether a stock price has closed above its daily VWAP.

    A radical extension of this standard Vwap calculation, however, has resulted in a technical charting indicator capable of fractal market analysis across multiple chart time frames. As George Reyna showed in his article in the May 2001 issue of Stocks & Commodities (see “Suggested reading” at the end of this article), the Midas indicator on the daily charts generates robust nonlinear support and resistance curves that indicate major trend reversals."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-32-37-market-trend-and-midas-by-andrew-coles-and-david-hawkins-20.gif"",""height"":""629"",""width"":""470""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-32-37-market-trend-and-midas-by-andrew-coles-and-david-hawkins-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-32-37-market-trend-and-midas-by-andrew-coles-and-david-hawkins-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov273idma,d,"{""minimum-quantity"":""1"",""path"":""ch7j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:7 (38-40): Identifying Market Reversals by Jim White"",""caption-linebreaks"":""Identifying Market Reversals by Jim White

    Here’s a specific technique warning about coming reversals and the steps to apply the methodology.

    Back in the November 2008 issue of Stocks & Commodities, I pointed out how you could reduce risk and increase trading returns by trading as close as possible to market reversals or, as I call them, pivot points. I also hinted that by using the %R oscillator and the price position in a channel, you could anticipate the reversal and be prepared to trade it. In this article I will provide a specific technique for warning about coming reversals and detail the steps to apply the methodology.

    ABOUT OSCILLATORS

    Oscillators use some algorithm of price to measure overbought and oversold conditions of a market based on a certain lookback period. The oscillator is coded to range between a designated upper and lower value. The overbought and oversold conditions occur when the oscillator moves near these extreme values. These are considered warning areas where trend reversals may occur. Actual trading signals are given when the oscillator reverses direction in the overbought/oversold region or exits the region.

    One such oscillator, %R, measures the last price as a percent of the range of price over the lookback period. The overbought/oversold areas are usually 80% and 20%, so when price is above 80%, it is considered overbought and when below 20%, it is considered oversold."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-38-40-identifying-market-reversals-by-jim-white-20.gif"",""height"":""622"",""width"":""446""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-38-40-identifying-market-reversals-by-jim-white-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-38-40-identifying-market-reversals-by-jim-white-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274fufo,d,"{""minimum-quantity"":""1"",""path"":""ch7j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:7 (41): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    LIQUID MARKETS

    The liquid futures markets seem to be the most efficient and as a result the most difficult to profit from, especially when compared to stocks or options. Do you agree?

    It is true that more futures (and options on futures) traders lose money than not. However, the same odds seem to apply to active stock and stock option speculators. I am not referring to stock investors who buy and hold, but those trying to beat the market via aggressive trading strategies.

    There are, however, a couple of factors that may make the futures markets a little more difficult to master than equities — leverage and perceived price volatility. It is also these factors that make such markets attractive trading arenas."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-41-futures-for-you-by-carley-garner-21.gif"",""height"":""616"",""width"":""422""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-41-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-41-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274quan,d,"{""minimum-quantity"":""1"",""path"":""ch7j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:7 (42-49): Quant and Consultant Ernest P. Chan by J. Gopalakrishnan and B. Faber"",""caption-linebreaks"":""Quant and Consultant Ernest P. Chan by J. Gopalakrishnan and B. Faber

    If you’re a trader who wants to design your own strategies but would like some guidance, here’s someone who’s right up your alley. Ernest Chan is a quantitative trader and consultant who advises clients on how to implement automated\nstatistical trading strategies. He has worked as a quantitative researcher and trader in various investment banks including Morgan Stanley and Credit Suisse, as well as hedge funds such as Mapleridge Capital, Millennium Partners, and Mane Fund Management before striking out on his own. Chan, who earned a doctorate in physics from Cornell University, wrote a book, Quantitative Trading: How To Build Your Own Algorithmic Trading Business, available from John Wiley & Sons.

    Stocks & Commodities Editor Jayanthi Gopalakrishan (JG) and Staff Writer Bruce R. Faber (BF) interviewed Ernest Chan via telephone on May 6, 2009.

    Ernie, what led you to\nbecoming an independent trader, considering your quantitative background?

    Until 2006 I always\nworked for large institutions, investment banks like Morgan Stanley or Credit Suisse and hedge funds such as Millennium Partners or Maple Ridge Capital. I brought a history of sophisticated research in computer science and statistics to these firms. I thought that based on my academic knowledge I would be able to really bring a lot of profit to my employers. But that turned out not to be the case.

    JG: Why?

    Despite building complex models, I found that often the real-time results diverged from what the model or the backtest showed. So in 2006, partly based on my family relocation back to Canada and also because of a disillusionment with advanced computer science and statistical techniques, I decided to trade for myself. Instead of spending my employers’ money, I decided to use my own capital and adopt a different style in my trading to see if I could make a go of it.

    JG: How was it different?

    First of all, I did not have the excuse of having a manager interfere with my operation. If I lost money it was my fault and not because somebody else overrode my model. Second, I could try models that were not constrained by so-called risk management measures imposed by investment banks or hedge funds. I don’t believe they really reduce risk, but they are just used to satisfy senior management who have no idea what risk really is, as evidenced by the recent debacle with the banks.

    So I started trading on my own. I opened a brokerage account and decided to do some backtesting and read up on everything I could. Of course I continued to read academic papers published by business school finance professors. I also read trading magazines such as Stocks & Commodities and blogs. I sucked up information from everywhere.

    I tried to select the simplest strategies, because as an independent trader I could not afford to run the kind of strategy the big banks use. I do not have the sophisticated programs they have. I do not have the computational power they have, and I do not have the vast amount of historical data and real-time data and the superfast execution systems that institutional traders have. I stick to the simplest and the most basic strategies. I find that to be profitable. And that is how I started on the road to profitability. It has been quite a difference from my experience at the investment banks and funds."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-42-49-quant-and-consultant-ernest-p-chan-by-j-gopalakrishnan-and-b-faber-21.gif"",""height"":""631"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-42-49-quant-and-consultant-ernest-p-chan-by-j-gopalakrishnan-and-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-42-49-quant-and-consultant-ernest-p-chan-by-j-gopalakrishnan-and-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275exyo1,d,"{""minimum-quantity"":""1"",""path"":""ch7j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:7 (54): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    VIEWS ON VOLATILITY

    Is it important to look at the volatility chart of an option that you would like to buy or sell? And if you are trying to determine whether volatility is high or low before you buy an option?

    Option traders use different tools to measure volatility. Some option analysis software allows traders to plot historical volatility (HV) and implied volatility (IV). Both are helpful when looking at possible trading opportunities.

    Historical volatility, for example, tells us how a stock (index, futures, exchange traded fund, and so on) has been behaving. If a stock is volatile, like shares of some of the banks recently, it will have high historical volatility. Stocks that trade quietly and in a range, like utilities, have low historical volatility."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-54-explore-your-options-by-tom-gentile-21.gif"",""height"":""616"",""width"":""422""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-54-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-54-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275tris,d,"{""minimum-quantity"":""1"",""path"":""ch7j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:7 (56-57): The Trend Is Your Friend by Alexander Sabodin"",""caption-linebreaks"":""The Trend Is Your Friend by Alexander Sabodin

    In this, the first part of a price model series,\nwe look at trends.

    The fundamentals of technical analysis have been discussed to great lengths in the past. This includes topics such as support, resistance, trendlines, and channel lines. Now we can move one step forward and begin to study the graphic models of these different types of charting tools.

    One of the tenets of technical analysis is that price movement is subject to trends. One glance at a price graph will reveal its distinguishing feature: Price is always moving. This movement gives you the opportunity to make money. The old saying “the trend is your friend” is important for every trader.

    Analysts have noticed one more specific feature of price movement: A trend reversal does not occur instantaneously with a wave of a wand. In most cases, a trend slows down and stops before reversing. A pause occurs in the movement — a transition period — after which the trend continues or reverses. During transition periods, various price configurations occur, which allow you to predict further price movement. I refer to these price formations that regularly emerge in price charts as models.

    These price formations reflect the mass psychology of market participants. Since they are based on human psychology, which does not change over the years, the formations may be divided into certain groups and used to predict further dynamics of the market."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-56-57-the-trend-is-your-friend-by-alexander-sabodin-21.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-56-57-the-trend-is-your-friend-by-alexander-sabodin-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-56-57-the-trend-is-your-friend-by-alexander-sabodin-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275opdy,d,"{""minimum-quantity"":""1"",""path"":""ch7j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:7 (58-61): Option Dynamics by Dennis Peterson"",""caption-linebreaks"":""Option Dynamics by Dennis Peterson

    Option Dynamics is a software product created by Tom Joseph and his team. As the software name implies, it works with options, but as any option trader knows, your success as an option trader is tied to knowing which direction the underlying is going to move. The underlying in this case is stocks. I first ran across Joseph’s name in a stock club meeting many years ago when the presenter discussed software that would perform an Elliott wave analysis. The strategy of the software was to identify setups for wave 5 by analyzing the behavior of wave 4. Just having a way of tackling Elliott waves is impressive, so you would expect the Option Dynamic software to offer some unique insight, notwithstanding the fact that Tom Joseph has traded options for more than 20 years.

    OPTION TRADERS REQUIREMENTS

    Becoming a successful option trader requires knowing two things: (1) the direction of the underlying asset and (2) whether the option price is under- or overvalued. What you need is software that will give you information on both, and Option Dynamics does just that."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-58-61-option-dynamics-by-dennis-peterson-21.gif"",""height"":""625"",""width"":""458""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-58-61-option-dynamics-by-dennis-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-58-61-option-dynamics-by-dennis-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov277trti3,d,"{""minimum-quantity"":""1"",""path"":""ch7j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:7 (72-83): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    This month’s Traders’ Tips are mainly based on Sylvain Vervoort’s article in this issue, “Trailing Resistance &nd Support Stops.” Others are on a topic of the contributors’ choosing.

    Code for MetaStock to implement Vervoort’s trailing resistance & support stop method (Tr&nds) is already provided in Vervoort’s article elsewhere in this issue. Additional code is presented here as contributed by various software developers.

    Readers will find our Traders’ Tips section in its entirety at the Stocks & Commodities website at www.Traders.com in the Traders’ Tips area, from where the code can be copied and pasted into the appropriate program. In addition, the code for each program is usually available at the respective software company’s website. Thus, no retyping of code is required for Internet users.

    For Stocks & Commodities subscribers, the MetaStock code found in Vervoort’s article can be copied and pasted into MetaStock from the Subscriber Area at www.Traders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-72-83-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""618"",""width"":""434""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-72-83-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-72-83-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov278stni,d,"{""minimum-quantity"":""1"",""path"":""ch7j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:7 (8): Steve Nison’s Candle Charting Essentials And Beyond by Sean M. Moore"",""caption-linebreaks"":""Steve Nison’s Candle Charting Essentials And Beyond by Sean M. Moore

    Technician and analyst Steve Nison first saw a candlestick chart sometime in the 1980s while working at a brokerage in New York. A coworker of his would receive chart books from Japan every week that she would use to assist her Japanese clients. Nison grew fascinated with these “new” candlestick charts and started researching and studying them. Even though the charts had been used in Japan for hundreds of years, Nison became the first to introduce them to the Western world in 1989 with the publication of his first book on candlesticks. He has spent the last 20-plus years helping others learn the art of trading with candlestick charts and has written multiple books and articles on the subject as well as taught numerous courses and seminars."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-8-steve-nison-s-candle-charting-essentials-and-beyond-by-sean-m-moore-20.gif"",""height"":""628"",""width"":""466""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-8-steve-nison-s-candle-charting-essentials-and-beyond-by-sean-m-moore-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-8-steve-nison-s-candle-charting-essentials-and-beyond-by-sean-m-moore-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov27893le,d,"{""minimum-quantity"":""1"",""path"":""ch7j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:7 (8-9, 93): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    True Range, Reward/Risk, And Position Size

    Editor,

    In the May 2009 issue of S&C is an article by Alan Binder, “True Range, Reward/Risk, And Position Size.” I have a question about the calculation of the values in cells D16, D17, and D18 of the Input sheet. Most of the information is straightforward enough, but that calculation is a mystery. Could the author illuminate?

    Joe Ziomek

    Alan Binder replies:

    The numbers refer to the number of standard deviations for the indicated certainty values. Please refer to the Stocks & Commodities article, “Value At Risk And Technical Analysis” by Luis Ballesca-Loyo (August 1999, Volume 17: Number 8)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-8-9-93-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-8-9-93-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-8-9-93-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov279bofo6,d,"{""minimum-quantity"":""1"",""path"":""ch7j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:7 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    • The Complete Guide To Investing During Retirement

    • Day Trade Online

    • Discover The Up Side Of Down: Investment Strategies For Volatile Times

    • Fisher Investments On Energy

    • The Handbook Of Market Esoterica

    • Modern Portfolio Management: Active Long/Short 130/30 Equity Strategies"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-92-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""614"",""width"":""417""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov279atcl1,d,"{""minimum-quantity"":""1"",""path"":""ch7j206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:7 (98,97): At The Close by Sarp Cercioglu"",""caption-linebreaks"":""At The Close by Sarp Cercioglu

    Although a general understanding of the intermarket dynamics between the credit and equity markets exists in the investment world, it really hasn’t gone beyond the axiom of “What’s good for bonds is bad for stocks and vice versa.” The global credit crunch over the past 18 months or so, however, brought the credit markets to the front burner of news, and as a result, these days, not many people are left who haven’t heard of Libor when just a couple of years ago, hardly anyone outside of the credit markets knew about it. The same applies to credit default swaps.

    When we take a look at the credit market indicators from a technical perspective, we see strikingly strong connections to the equity markets. I will delve farther into the complex relationship between the credit markets and equity markets and explain how we can use technical analysis to take advantage of this connection."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-98-97-at-the-close-by-sarp-cercioglu-21.gif"",""height"":""619"",""width"":""433""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-98-97-at-the-close-by-sarp-cercioglu-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-7-98-97-at-the-close-by-sarp-cercioglu-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271trti,d,"{""minimum-quantity"":""1"",""path"":""ch8a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:8 (10-18): Trendline Tips And Tricks by Sylvain Vervoort"",""caption-linebreaks"":""Trendline Tips And Tricks by Sylvain Vervoort

    How do you capture those medium- to longer-term moves when trying to enter and exit trades quickly?

    Daydreaming about trading? Get in a trade early and close to the low point; stay in as long as needed and get out fast at the top! The problem, of course, seems to be the middle part. Getting in and out quickly at turning points is not that difficult. But how do you stay in a trade to capture those medium- to longer-term moves while acting quickly to enter or exit at the same time? Let me show you some tips and tricks using trendlines that can help you achieve this.

    It is important that you always use the same number of horizontal and vertical pixels for your chart with preferably the same number of price bars. That way, you will develop the experience of looking at the slope of a trendline with respect to the time period you want to trade in.

    In Figure 1 you can see how the slope of the trendline can go from very sharp for the short term to moderate for the medium term and rather flat for the long term within the same long-term time period. The longer the time period to look at, the more reaction in price must be allowed, and hence the flatter the trendline."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-10-18-trendline-tips-and-tricks-by-sylvain-vervoort-21.gif"",""height"":""628"",""width"":""471""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-10-18-trendline-tips-and-tricks-by-sylvain-vervoort-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-10-18-trendline-tips-and-tricks-by-sylvain-vervoort-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov272codm,d,"{""minimum-quantity"":""1"",""path"":""ch8a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:8 (20-25): Combining DMI and Moving Average For A EUR/USD Trading System by Rombout Keerstens"",""caption-linebreaks"":""Combining DMI and Moving Average For A EUR/USD Trading System by Rombout Keerstens

    Here is a simple trend-following system where profits are realized in a relatively small number\nof lucrative trades.

    IN a world in which we are inundated with information, it is virtually impossible for investors to select the data they need. A trading system based on technical analysis assumes that all available data has been processed in the price history. The system makes its decisions based on this analysis. Untold volumes of information have been written on technical analysis and system trading, which means that scouring the data to select a technique that fits your requirements could end up in a long-drawn-out quest. My advice? Start simple — it’ll get complicated soon enough.

    SYSTEM TRADING, PROS AND CONS

    Investors frequently select indiscriminately from the vast array of indicators available and choose to swap indicators impulsively, sometimes even during a position, all too often leading to disappointment. Thus, it is high time for a more disciplined and systematic approach. An effective technical strategy suggests objective entry points, enabling you to disengage your emotions during a position — provided, of course, you have enough confidence in your trading system to ensure its successful application.

    System trading also has its disadvantages. Sometimes, the system will take positions that run counter to the prevailing market climate. Even the most hardened system traders will find it hard to resist intervening at that point. Morale can also be undermined by a series of losses. Five successive losing trades can be a source of considerable frustration not only financially but also intellectually. It is these moments that require discipline to stay the course."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-20-25-combining-dmi-and-moving-average-for-a-eur-usd-trading-system-by-rombout-keerstens-20.gif"",""height"":""626"",""width"":""459""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-20-25-combining-dmi-and-moving-average-for-a-eur-usd-trading-system-by-rombout-keerstens-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-20-25-combining-dmi-and-moving-average-for-a-eur-usd-trading-system-by-rombout-keerstens-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov272usbi,d,"{""minimum-quantity"":""1"",""path"":""ch8a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:8 (26-30): Using Binary Options In Forex by Dan Cook"",""caption-linebreaks"":""Using Binary Options In Forex by Dan Cook

    Managing risk and proper stop placement may be the most difficult aspects of currency trading to master. Here’s how you can use binary options to take advantage of the opportunities that volatility creates while controlling risk.

    Even during times of normal market conditions with fundamental announcements, surprise decisions from governments or central banks, and the overall volatility of all markets over the last year, it can be difficult to accurately gauge risk on any trade.

    Take, for example, the market shock of the March 2009 Federal Open Market Committee (Fomc) announcement, when the Fomc decided to embark on a $1 trillion–plus quantitative easing program. Upon this news, the market did not just move, but gapped almost 160 pips (1.3130–1.3280) in the euro–US dollar (Eur/Usd) pair! Unfortunately, this caused many currency traders, even those who had done everything technically correct by placing a stop, to lose more than they bargained for. In many cases, traders lost more than they had in their account, which left them with an outstanding debt to their brokers.

    Another example of a problem that currency traders face, one that can be particularly frustrating to new traders, is just after clicking the buy/sell button, the market makes a quick 30- or 40-pip move against the position and stops you out. Then, of course, the market moves back in the original direction of your trade, which would have created profit, but that doesn’t matter because you were stopped out. This is a natural aspect in any volatile market but is frustrating nonetheless, and costly.

    FROM SPOT FOREX TO BINARY OPTIONS

    For these reasons, many traders have transitioned into the binary options market as a complement to spot forex trading activities because doing so provides them with an instrument with which they can take advantage of the opportunities that volatility creates while controlling risk."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-26-30-using-binary-options-in-forex-by-dan-cook-20.gif"",""height"":""625"",""width"":""458""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-26-30-using-binary-options-in-forex-by-dan-cook-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-26-30-using-binary-options-in-forex-by-dan-cook-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov273qaby1,d,"{""minimum-quantity"":""1"",""path"":""ch8a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:8 (31): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    NEWBIE QUESTIONS\nI started trading recently just to get my feet wet, but there are a few things that confuse me:

    1. How do you know the total number of shares available for a particular stock? What determines the number of shares a company is divided into?

    2. Where can I find balance sheets for specific companies, and on this sheet, how do I locate “growth stocks”?

    3. What does “unch” mean?\n— jasonrest"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-31-q-a-by-don-bright-20.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-31-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-31-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov273puup,d,"{""minimum-quantity"":""1"",""path"":""ch8a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:8 (32-35): Pump Up The Volume by Todd Krueger"",""caption-linebreaks"":""Pump Up The Volume by Todd Krueger

    \nHere’s how you can use Wyckoff volume analysis to trade the forex markets.

    IT is a nearly universal belief among forex traders that volume analysis techniques cannot be utilized in their market analysis. This belief exists because spot forex does not trade on a centralized exchange and so no actual traded volume figures are available for traders to analyze. Volume analysis in the forex markets is not only possible to perform, but it in fact provides a great edge that enables the trader to properly read the chart to determine where supply/demand imbalances are occurring in real time.

    These areas of imbalance create sizable market moves that the trader can take advantage of by trading in the path of least resistance. For the volume analysis, I will be sharing techniques pioneered by Richard D. Wyckoff more than 100 years ago; these methods have withstood the test of time and are very powerful when used correctly.

    WYCOFF VOLUME

    First, let’s discuss this issue of receiving volume figures to work with. While it is true that actual traded volume figures are not available to us as traders, we still have a means to achieve the same desired effect. In the place of actual volume, we will instead use tick-based volume. Most traders believe that tick volume has little merit as a replacement for actual traded volume figures."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-32-35-pump-up-the-volume-by-todd-krueger-21.gif"",""height"":""633"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-32-35-pump-up-the-volume-by-todd-krueger-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-32-35-pump-up-the-volume-by-todd-krueger-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov273exyo1,d,"{""minimum-quantity"":""1"",""path"":""ch8a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:8 (39): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    DEBIT AND CREDIT

    What’s the difference between a debit spread and a credit spread?

    When investors buy or sell options, the transaction is either a debit or a credit. Of course, since an option contract is an agreement between two parties, each trade is for a debit to one party, but a credit to the other. Nevertheless, if I buy October 800 puts on the Standard & Poor’s 500 (Spx) for $3.50 per contract, I pay $3.50 per contract and that amount is a debit to my brokerage account. If Spx falls below 800 and I then sell the put for $10, I receive a credit in my account.

    The same principle applies to a spread. If I buy the Spx October 800 put for $3.50 and sell the Spx October 770 put for $1.00, I pay a net debit of $2.50 (or 3.50 - 1.00). I have entered a debit spread because one side of the spread costs more than the other. On the other hand, if I initiate a new position by selling the October 850 put for $10 and buying the October 800 put for $3.50, I receive a net credit of $6.50 (or 10 - 3.50). I have entered a credit spread."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-39-explore-your-options-by-tom-gentile-21.gif"",""height"":""616"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-39-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-39-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274hesh,d,"{""minimum-quantity"":""1"",""path"":""ch8a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:8 (40-42): Head & Shoulders by Alexander Sabodin"",""caption-linebreaks"":""Head & Shoulders by Alexander Sabodin

    Here’s a look at a familiar reversal pattern, the head & shoulders pattern.

    IN this installment of the price model series, we will look at a well-known trend reversal model, the head & shoulders pattern. In part 1 last issue, I explained that for a price model to form, a previous trend needs to exist. The condition for the formation of a head & shoulders pattern is an ascending movement on a price chart, when every rise and fall is higher than the previous one. In Figure 1, you can see that at a certain stage in its development, the trend has accelerated. This is shown by the second trendline, which is steeper than the original. But sooner or later all good things end. The preliminary signal of the trend slowing down occurs when price pierces both trendlines.

    The breaking of the trendline does not necessarily mean that there will be a reversal in the trend. Instead, consider it a signal to close all long positions you bought at a bargain and not open any new positions. It is like catching a cold but you know you will recover soon.

    However, you do need to be prepared if the situation gets worse. If the price overcomes the previous high, it means that the trend has recovered and the ascending trend has regained its strength. But if the price moves upward again after the downward correction but its high is lower than the previous high, it is a strong indicator of an oncoming reversal (Figure 2)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-40-42-head-shoulders-by-alexander-sabodin-20.gif"",""height"":""625"",""width"":""454""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-40-42-head-shoulders-by-alexander-sabodin-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-40-42-head-shoulders-by-alexander-sabodin-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274fxed,d,"{""minimum-quantity"":""1"",""path"":""ch8a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:8 (44-51): FXEducator’s Ed Ponsi by J. Gopalakrishnan and B. R. Faber"",""caption-linebreaks"":""FXEducator’s Ed Ponsi by J. Gopalakrishnan and B. R. Faber

    As an experienced professional trader, Ed Ponsi, the president of FXEducator.com, has advised hedge funds, institutional traders, and individuals of all levels of skill and experience. He has made numerous appearances on Cnbc, Cnn, Bbc, Fox, and ForexTV, and his dynamic and humorous style sets him apart from the suit & tie crowd. In addition, Ponsi is the author of Forex Patterns And Probabilities, a top-selling book on currency trading.

    Stocks & Commodities Editor Jayanthi Gopalakrishnan and Staff Writer Bruce Faber interviewed Ponsi via telephone on June 8, 2009.

    ED how did you get started in trading?

    My first exposure to trading was with a summer job I held at the Philadelphia exchange (Phlx). It was a clerical job, not on the floor, but it was perfect for a teenager. The trading floor of the Phlx was right down the hall. I didn’t know anything about the markets or trading, but I was close enough that I caught the trading bug. I started reading everything I could get my hands on about the subject. The first book I read was How To Buy Stocks by Louis Engel.

    Later, I worked as a musician at night and I owned a business that allowed me to finish work very early during the day, so I had time to trade during market hours. I started trading stocks in the afternoon during the Nasdaq bubble of the 1990s — trading tech stocks out of my basement on an old Compaq using a 14.4K dial-up modem, strictly Level 1. I also had a Quotrek, one of those pre-Pda portable quote devices they used to advertise on Cnbc. So I’d point this device toward the sky, looking for the radio signal that carried the quotes. I remember running down the boardwalk in a beach town in New Jersey, trying to find a pay phone so I could buy 3Com! I was clueless.

    The market was very forgiving then — you could buy the wrong stock at the wrong time and it would still go up, so trading was easy, provided you weren’t short. I built up a track record and parlayed that into an entry-level trading job at a Wall Street boutique firm. I think they hired me because I was willing to travel 100 miles to get to work every day. That was when I really learned how to trade.

    JG: What attracted you to the forex markets specifically?

    I was working as a trader in New York, and someone I used to trade with started trading forex. When he told me about the liquidity, the leverage, and the other advantages of currency trading, I didn’t believe him. Even now, when I talk to stock traders about the advantages of forex, they seem to have a hard time grasping that I’m using 100:1 leverage and collecting interest on the trade at the same time. They are used to paying for everything, including leverage.

    The other attraction was the strong trending nature of forex. I was already a trend trader in the stock market, and it only seemed natural that I should take that style and apply it to the market known for long trends."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-44-51-fxeducator-s-ed-ponsi-by-j-gopalakrishnan-and-b-r-faber-20.gif"",""height"":""631"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-44-51-fxeducator-s-ed-ponsi-by-j-gopalakrishnan-and-b-r-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-44-51-fxeducator-s-ed-ponsi-by-j-gopalakrishnan-and-b-r-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275apmi,d,"{""minimum-quantity"":""1"",""path"":""ch8a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:8 (54-61): Applying MIDAS To Daily And Weekly Charts by A. Coles and D. Hawkins"",""caption-linebreaks"":""Applying MIDAS To Daily And Weekly Charts by A. Coles and D. Hawkins

    In this second part of this series we go one step further by adding deeper insight into price action.

    SO far, we have explored what technical analyst Paul Levine called the scientific aspect of the market interpretation/data analysis system (Midas) — that is, the quantitative laws that give rise to Midas and the curves of Levine’s indicator, the topfinder/bottomfinder (TB-F). In this article, we will examine what Levine called the engineering aspect of Midas — the practical trading rules on which the system is based.\nThis first section on the application of TB-F to daily and weekly charts is largely the contribution of David Hawkins. Hawkins will expound on the rules governing the application of TB-F as recommended by Levine using StockShare (v2). As a result of Hawkins’s input, this program now has Midas and TB-F plugins for its end-of-day platform.\nLike the original WinMidas, Midas curves and the D component of the TB-F algorithm are calculated automatically in StockShare by the user selecting the curves and dragging them with a mouse.\nIt should be emphasized too that David Hawkins is more conservative than Andrew Coles in demanding the completion of half of an accelerated move before attempting to fit a TB-F curve. This is reflected in the TB-F plugin in StockShare (v2). No such limitation exists in the eSignal version."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-54-61-applying-midas-to-daily-and-weekly-charts-by-a-coles-and-d-hawkins-20.gif"",""height"":""625"",""width"":""452""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-54-61-applying-midas-to-daily-and-weekly-charts-by-a-coles-and-d-hawkins-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-54-61-applying-midas-to-daily-and-weekly-charts-by-a-coles-and-d-hawkins-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276maby,d,"{""minimum-quantity"":""1"",""path"":""ch8a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:8 (62-64): MadScan by Dennis D. Peterson"",""caption-linebreaks"":""MadScan by Dennis D. Peterson

    MadScan is software that interfaces with servers to support daytrading activities. The servers are fast enough to generate an alert you can see within 30 milliseconds of the event if you are located in the continental US and have a high-speed Internet connection. After installing this software, you are ready to configure your computer to accept alerts of your choosing. Through the use of filters you limit the alerts you want to see.

    When you start up, three windows appear: a main window with version number (Figure 1), an alert window, and a streaming news window. Typically, you would start by configuring your alert window to the type of scan you want.

    SCAN CREATION

    Configuring your scan is straightforward. You can start with either the default alert window or a blank alert window by selecting “New Signal Scan” from the File menu of the main window, right-click on any portion of the background, and see the prompt with three items: “Scan settings,” “Clone scan,” and “Background color.” Choose Scan settings and you will have an impressive number of choices (Figure 2)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-62-64-madscan-by-dennis-d-peterson-21.gif"",""height"":""627"",""width"":""459""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-62-64-madscan-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-62-64-madscan-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276fufo3,d,"{""minimum-quantity"":""1"",""path"":""ch8a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:8 (65): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    STOCK INDEX FUTURES VS EQUITY INDEX PRODUCTS

    Are there advantages to trading stock index futures over equity index products such as Spdrs or individual stocks?

    There are many more participants in the equity markets than there are in futures, and people tend to gravitate to what they are most familiar with. However, convenience and familiarity aren’t necessarily optimal. The futures markets have been labeled as dangerous due to the ease of gaining leverage and the corresponding horror stories of traders going broke, but in reality, the same risks are evident in active stock speculation. Don’t blame the trading venue, blame the participants.

    The most popular stock index futures product is the Standard & Poor’s 500. This is a futures contract written with the S&P 500 as the underlying asset. The most widely traded version of this is the emini S&P, so that will be our focus."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-65-futures-for-you-by-carley-garner-21.gif"",""height"":""618"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-65-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-65-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276bbby,d,"{""minimum-quantity"":""1"",""path"":""ch8a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:8 (66-67): BBForex.com by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""BBForex.com by Jayanthi Gopalakrishnan

    BBFOREX.COM

    When trading currencies, keeping abreast of forex-related news is very important, which is why if you go to any forex site you expect to see a real-time news update. But have you ever seen a site where the forex-related news is merged with the price chart? To see this wonderful feature, all you have to do is visit www.BBForex.com. This was what piqued my interest and encouraged me to explore the other features available on this site. Given that the website is one of John Bollinger’s collections of products, the impressive list of features should come as no surprise, given his reputation in the field of technical analysis. Still, it’s always nice to see something unique when you visit a website.

    FEATURES

    You can see an example of the merging of the chart and news feature in Figure 1. On this 30-minute chart of the Eur/Usd, I have used the colorful Bollinger bar charts. Some bars have a letter displayed on them. If you click on any of these letters, you will see the forex-related news item released on that date. On June 17, 2009, there was a news release stating that the Euro-zone exports fell 21% in the first quarter."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-66-67-bbforex-com-by-jayanthi-gopalakrishnan-21.gif"",""height"":""616"",""width"":""420""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-66-67-bbforex-com-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-66-67-bbforex-com-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276stni,d,"{""minimum-quantity"":""1"",""path"":""ch8a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:8 (68-69): Steve Nison’s Candlesticks Re-Ignited: New Tactics To Boost Confidence And Success by Sean M. Moore"",""caption-linebreaks"":""Steve Nison’s Candlesticks Re-Ignited: New Tactics To Boost Confidence And Success by Sean M. Moore

    IN the July 2009 issue of Technical Analysis of Stocks & Commodities, I reviewed the first two volumes of the new educational series produced by Candlecharts.com and taught by candlestick technician Steve Nison. This time, I’ll look at volumes 3 and 4. Volumes 3 and 4 cover the same topics as the first two volumes, but on a more advanced level. Candlecharts.com has a series of levels for traders to finish and accomplish in their candlechart training: novice, apprentice, expert, and master. Volumes 1 and 2 are designed to achieve senior apprenticeship level, while volumes 3 and 4 are geared toward the next step: Nison candlestick expert level.

    Volumes 3 and 4 are sold as a package titled “Candlesticks Re-Ignited: New Tactics to Boost Success and Confidence.” The Dvd workshop contains eight Dvds. The first seven consist of a video seminar recorded at one of Steve Nison’s live two-day seminars. The eighth Dvd is a trading-lab Dvd with example charts that you can use to test your newfound knowledge. All of the slides used in the seminar are organized into a three-ring binder and included with the Dvds."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-68-69-steve-nison-s-candlesticks-re-ignited-new-tactics-to-boost-confidence-and-success-by-sean-m-moore-20.gif"",""height"":""624"",""width"":""450""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-68-69-steve-nison-s-candlesticks-re-ignited-new-tactics-to-boost-confidence-and-success-by-sean-m-moore-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-68-69-steve-nison-s-candlesticks-re-ignited-new-tactics-to-boost-confidence-and-success-by-sean-m-moore-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov277trti4,d,"{""minimum-quantity"":""1"",""path"":""ch8a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:8 (70-82): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    This month’s Traders’ Tips are mainly based on Rombout Kerstens’ article in this issue, “Combining Dmi And Moving Average For A Eur/Usd Trading System.” Others are on a topic of the contributors’ choosing.

    EasyLanguage code to implement the strategy is provided in Kerstens’ article elsewhere in this issue, and is also available at the end of this document. Additional code is presented here as contributed by various software developers.

    Readers will find our Traders’ Tips section in its entirety at the Stocks & Commodities website at www.Traders.com in the Traders’ Tips area, from where the code can be copied and pasted into the appropriate program. In addition, the code for each program is usually available at the respective software company’s website. Thus, no retyping of code is required for Internet users.

    For Stocks & Commodities subscribers, the EasyLanguage code found in Kerstens’ article can be copied and pasted into TradeStation from the Subscriber Area at www.Traders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-70-82-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""623"",""width"":""443""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-70-82-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-70-82-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov27888le,d,"{""minimum-quantity"":""1"",""path"":""ch8a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:8 (8-9, 88): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    GOLDEN RATIO

    Editor,

    In his article in the April 2009 S&C on the Fibonacci sequence and its “golden ratio” (“Fibonacci Tools”), Alexander Sabodin points out that the golden ratio is actually an irrational number so must be approximated. Your readers may be interested to know that its exact value can be written as (1+√5)/2. This allows one to find the ratio to any accuracy using a suitable algorithm for square root.\nRick Martinelli

    I would consider as correct both this expression and the one in Alexander Sabodin’s article. The value of (1+√5)/2 is 1.61803398875…, which, as Sabodin stated in his article, is an irrational number that is approximated as 1.618.

    Note: Rick Martinelli has contributed several articles to Stocks & Commodities over the years, including “Pattern Recognition In Time Series” (January 1998), “Harnessing The (Mis)Behavior Of Markets” (June 2006), “Trading Within The Cup” (September 2001), and “Cup-with-Handle And The Computerized Approach” (October 1998). Locate electronic copies of these and other articles by using the search engine at our Online Store at our website, Traders.com.—Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-8-9-88-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-8-9-88-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-8-9-88-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov279bofo7,d,"{""minimum-quantity"":""1"",""path"":""ch8a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:8 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    - The Complete Idiot’s Guide To Active Trading

    - Essentials Of Foreign Exchange Trading

    - Free Cash Flow

    - The Long And Short Of Hedge Funds

    - Trade Like The Little Guy

    - The Wallstrip Edge"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""614"",""width"":""418""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov279atcl2,d,"{""minimum-quantity"":""1"",""path"":""ch8a205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:8 (98): At The Close by Thomas Bulkowski"",""caption-linebreaks"":""At The Close by Thomas Bulkowski

    Here’s a handy set of tips on what to look for in a stock\nto add to your portfolio.

    Traders and investors are always shopping for bargain stocks. When you log onto your favorite website and see that the price of a stock has dropped 50%, does the half-off sale mean you should buy? Perhaps. This article reviews shopping tips to help improve your chance of picking a winning stock.

    TIP #1: BUY IN A BEAR MARKET AND HOLD IN A BULL MARKET

    I computed the year-to-year price change of 565 stocks from 2000 to 2009. The table in Figure 1 shows the results. For example, the change in price from January 3, 2000, to January 2, 2001, was a drop of 1%. The bear market began in March 2000 and ended in October 2002. Look at the recovery in 2004, a year after the bear market ended. Prices climbed by 23%.

    I know from research into dead-cat bounces (a chart pattern) that the larger the drop, the greater the bounce. Since the average price of the stocks I follow dropped 62% from 2008 to 2009, I expect a large bounce after the bear market ends. The table suggests that holding a stock at least a year into a bull market following a bear market will lead to tasty gains."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-98-at-the-close-by-thomas-bulkowski-21.gif"",""height"":""630"",""width"":""476""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-98-at-the-close-by-thomas-bulkowski-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-8-98-at-the-close-by-thomas-bulkowski-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271suyo,d,"{""minimum-quantity"":""1"",""path"":""ch9s205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:9 (10-12): Surfing Your Position With Wave Stops by E. Labunsky and T. Hamilton"",""caption-linebreaks"":""Surfing Your Position With Wave Stops by E. Labunsky and T. Hamilton

    When is a good time and place to exit a position?

    \nWhether inspired by Ralph Nelson Elliott’s works or by just a casual observation of a price chart, you can’t help but notice how prices advance, then pause and correct in a wavelike action. What if you could take that basic price movement on the part of buyers and sellers, supply and demand, and use it to manage your position? That is the basic objective of wave stops, the method I developed to determine a good time and place to exit a position.

    WAVE STOPS

    Wave stops are unusual because the concept does not rely on price or volatility directly. It is a method to set a stop and exit a position based on the profit drawdown of the position. Price and volatility are taken into account, but in an indirect manner. We assume that most moves will come in a three-wave movement — that is, a strong move up, followed by a price correction, followed by the next move up, and so forth. It is not necessary to have three waves; more or less is fine. This process also works with down movements.

    Let’s look at the wave stop rules on a price movement (Figure 1). For this case, let’s use a simple long position. Take a position and set an initial profit target. Once the price gets to or above the initial profit target, apply wave stop rules. The rule states that you must monitor the position’s profit. If it corrects more than a fixed value (x%), that signals that a correction is in process. This is wave 1. Continue to monitor the profit drawdown until a second point is hit (y%). This is your exit or sell-stop level."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-10-12-surfing-your-position-with-wave-stops-by-e-labunsky-and-t-hamilton-21.gif"",""height"":""624"",""width"":""451""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-10-12-surfing-your-position-with-wave-stops-by-e-labunsky-and-t-hamilton-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-10-12-surfing-your-position-with-wave-stops-by-e-labunsky-and-t-hamilton-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271mian,d,"{""minimum-quantity"":""1"",""path"":""ch9s205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:9 (14-20): MIDAS And Intraday Charts by Andrew Coles and David Hawkins"",""caption-linebreaks"":""MIDAS And Intraday Charts by Andrew Coles and David Hawkins

    In this third and final part of this series, we will look at how to apply the TB-F algorithm to intraday charts.

    by Andrew Coles and David Hawkins

    Like Midas, which is an acronym for market interpretation/data analysis system, the principles governing the application of Paul Levine’s topfinder/bottomfinder (TB-F) algorithm to the daily charts also applies to intraday charts. In this article, Andrew Coles will follow David Hawkins’ format of combining Levine’s standard rules for applying the TB-F algorithm alongside his own preferred methods of chart analysis.

    As discussed in previous articles about Midas, what makes Levine’s volume weighted average price (Vwap) approach so conducive to intraday charts is the insight that the underlying order of market movement is a fractal hierarchy of support and resistance levels. As Coles noted, Levine did not consider the implication of fractal organization for other chart time frames. But it is central to his application of Midas to the daily charts that Midas curves should be plotted on smaller components of the trend as well as larger ones. This insight is crucial to the second role for the Midas curve as a trend overbought/oversold indicator.

    With this in mind, we have developed a version of the TB-F algorithm corresponding to the intraday version of the Midas algorithm that Coles ran on MetaStock Pro in previous articles. Like the intraday version of Midas, the only difference between the daily/weekly version of the TB-F and its intraday counterpart, the TB-Fi algorithm, is the location of the price bar in hours and minutes. Because of the essential role of interpolation in the TB-F algorithm, this intraday version has also been written in C++ by Coles and Hawkins’ colleague Satyajit Roy and is now being run in eSignal and very soon in MetaStock Pro."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-14-20-midas-and-intraday-charts-by-andrew-coles-and-david-hawkins-21.gif"",""height"":""622"",""width"":""441""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-14-20-midas-and-intraday-charts-by-andrew-coles-and-david-hawkins-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-14-20-midas-and-intraday-charts-by-andrew-coles-and-david-hawkins-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov271bofo,d,"{""minimum-quantity"":""1"",""path"":""ch9s205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:9 (181): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    • Candlestick Charts: An Introduction To Using Candlestick Charts

    • Dow Theory Unplugged: Charles Dow’s Original Editorials & Their Relevance Today

    • Option Spread Strategies: Trading Up, Down, Sideways Markets

    • The Seven Years Of Wall Street: Cash-Tested Investment Strategies That Beat The Market

    • The Individual Investor’s Guide To The Top Mutual Funds, 28th Ed.

    • The Visual Investor: How To Spot Market Trends, 2nd Ed."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-181-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""614"",""width"":""416""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-181-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-181-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov272qaby1,d,"{""minimum-quantity"":""1"",""path"":""ch9s205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:9 (21): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    YAHOO OPEN

    Why does Yahoo! Finance list the opening price for the Dow Jones Industrial Average (Djia) at 8,146.82 when on the daily chart at 8:30 the price is 8,167? This may be a newbie question, but I sure would like to know. Thanks. —newtrader80

    The opening price on the Djia is the same as the closing price from the day before. What happens is that you may see other data vendors using the 9:30 a.m. snapshot where perhaps a few Djia stocks have opened.

    A similar thing happens with individual stocks. You have what is referred to as “primary market” (Nyse, for example) versus “consolidated market” pricing used by different vendors. For example, I use primary market for all my quotes through the GS Redi platform so that I am sure of the actual opening and closing prices. Some of our traders opt for the consolidated quote that will take that same snapshot at 9:30, which may be premarket pricing on the various electronic communication networks (Ecns). Hope this helps."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-21-q-a-by-don-bright-21.gif"",""height"":""620"",""width"":""433""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-21-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-21-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov272mayo,d,"{""minimum-quantity"":""1"",""path"":""ch9s205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:9 (22-24): Manage Your Money, Or Someone Else Will by Ray Johns"",""caption-linebreaks"":""Manage Your Money, Or Someone Else Will by Ray Johns

    You can stop that from happening, and here’s how.

    Many traders, especially those new to the markets, tend to overlook a simple yet important premise when it comes to their trading: specifically, that the cornerstone of long-term profitability in the market revolves around successful money management. It may sound simple, but oftentimes, not enough emphasis is placed on the importance of proper money management. In fact, the management of your money (that is, taking steps to reduce risks and allocate funds) is so critical to success that it may be more important than making a profit in the market.

    PRESERVE CAPITAL

    The preservation of capital should be of paramount importance to any trader, and if you don’t think so, just ask anyone who has ever blown out while learning to daytrade. Many new traders (as well as investors) view making a profit as the main objective when they begin to speculate in equities, options, or currencies. However, this can be a dangerous mistake. Anytime you place making a profit ahead of protecting your core trading capital, the focus on money management and risk reduction starts to fall by the wayside.

    HOW I LEARNED TO MANAGE TRADING CAPITAL

    I learned the importance of money management not as a result of daytrading, but from learning how to play blackjack. Many traders eventually find their way to Las Vegas, either to enjoy what the city has to offer and/or the similarities that playing the stock market and gambling share. Learning to count cards can be helpful, since there are many parallels with daytrading — especially when it comes to money management."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-22-24-manage-your-money-or-someone-else-will-by-ray-johns-21.gif"",""height"":""625"",""width"":""458""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-22-24-manage-your-money-or-someone-else-will-by-ray-johns-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-22-24-manage-your-money-or-someone-else-will-by-ray-johns-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov272exyo,d,"{""minimum-quantity"":""1"",""path"":""ch9s205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:9 (29): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    TRADING PLAN

    I bought five Xyz October 160–170 call spreads for $1.79. Here’s my trading plan:\nBuy Xyz October 160–170 calls spread for $1.79\nMax loss: $1.79\nMax risk: $1.79\nMax reward: $8.29\nRatio: 4.6 to 1\nStop-loss: If Xyz stock closes below $131\nProfit stop: Exit three contracts @ tech stop $155 ($3.46 net credit exit) and let the other two contracts run.\nTime stop: 30 days to expiration\nXyz as of today’s close: $152\nCurrent value of spread: $3.00

    What else should I build into my trading plans? This is when it gets difficult for me: When I’m winning I want to do too much (make a trade adjustment, watch the market live) because I’m excited. When I’m losing, I don’t even want to open my trading account and look at the balance.

    First, let me say you’re doing the right thing by developing a detailed trading plan for your trade and at the same time examining the what-if scenarios. Next, let’s break your questions down into two parts: 1) the actual trade and 2) the psychology of trading options and spreads."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-29-explore-your-options-by-tom-gentile-21.gif"",""height"":""616"",""width"":""421""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-29-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-29-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov273spwa,d,"{""minimum-quantity"":""1"",""path"":""ch9s205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:9 (30-36): Spherical Wave Filters by Richard Johnson"",""caption-linebreaks"":""Spherical Wave Filters by Richard Johnson

    Why do Elliott wave patterns develop in price data? This may be the reason.

    OF all the geometric forms, the sphere is the simplest. On a two-dimensional plane, the sphere is displayed as a circle or ellipse. The exact center of a circle is its radius point, which is precisely halfway between any opposite surface points. The radius is in turn half of the diameter of a circle, and it is its center of mass. On a two-dimensional chart where time is displayed linearly from left to right on the x-axis (the horizontal axis in a plane coordinate), a circle cannot be displayed because it would indicate a regression in time as its curvature took it backward beyond the horizontal.

    THE BELL CURVE

    To display a circle in linear time, you need to dissect it from left to right to create two sequential and equal half-circles (Figure 1). Here we will pick up the extreme left edge of the bottom half-circle and rotate it until that edge is the extreme right surface. This creates a sine wave. By continuing the process with more circles, you end up with undulating sine waves. These waves can be considered to be linear expressions of nonlinear circles. If you segment any of these sine waves by dividing it at an extreme bottom and at the next extreme top, you will have created an S curve. If you continue from that point at the top and segment at the next extreme bottom, you would have created another but opposite S curve. When you join them all together, the famous bell curve is displayed. So the bell curve is really nothing more than a parsed segment of undulating sine waves with the basic geometric form of the circle as the source."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-30-36-spherical-wave-filters-by-richard-johnson-21.gif"",""height"":""626"",""width"":""462""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-30-36-spherical-wave-filters-by-richard-johnson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-30-36-spherical-wave-filters-by-richard-johnson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov273rima,d,"{""minimum-quantity"":""1"",""path"":""ch9s205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:9 (38-44): Risk Management, Position Sizing, And Probability by Brian Auit"",""caption-linebreaks"":""Risk Management, Position Sizing, And Probability by Brian Auit

    Implement a well-planned strategy before initiating your next trade so you can sustain losses. This methodical approach allows you to consider all the factors before initiating your next trade so you can build that elusive 45-degree angled equity curve with your trading capital.

    by Brian Ault

    Say you’ve booked 16 winning trades in a row. Your account has jumped 12% in value. Your ability to define your edge has never been more focused and your confidence increases with each and every successful outcome. But out of nowhere comes—\nNovember 18, 1985, Monday Night Football. Millions of viewers watched in horror as an event still considered to be the most shocking moment in Nfl history unfolded. Within seconds, an attempted blitz literally snapped quarterback Joe Theismann’s leg, causing a horrific compound fracture and putting a definitive end to his career.

    This event had the same characteristics that too many traders are all too familiar with, in which a trade we didn’t see coming blindsides us and not only wipes out our profit but cripples our account to the point of “retirement” without a fresh injection of capital. This happens every day in trading and perhaps it has even happened to you.

    Most of us have experienced something similar at some point in our trading career. So how could we let this happen, and more important, how can we prevent this from ever happening again? You can do this by employing three simple disciplines: risk management, position sizing, and probability."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-38-44-risk-management-position-sizing-and-probability-by-brian-auit-21.gif"",""height"":""621"",""width"":""443""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-38-44-risk-management-position-sizing-and-probability-by-brian-auit-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-38-44-risk-management-position-sizing-and-probability-by-brian-auit-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274fufo1,d,"{""minimum-quantity"":""1"",""path"":""ch9s205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:9 (45): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    AS AN INDEPENDENT TRADER

    I am currently trading with my own money on futures (commodities, indexes, interest rates, currencies, for about 10 years) and would like to start trading with larger accounts. My performance over the last year is a Sharpe ratio of 2.75. What steps should I take to find funds that could be interested in using me as an independent trader? —Michel in Belgium

    If you feel as though your futures and option trading ability may be attractive to investors who don’t have the time or the skills to trade their own account, you may want to consider becoming a Commodity Trading Advisor (Cta). Registering with the Commodity Futures Trading Commission (Cftc), along with becoming a National Futures Association (Nfa) member, gives you the ability to manage money for US clients on a fee basis. If your intention isn’t to accept US clients, Nfa and Cftc registration isn’t necessary, but it is recommended if you are trading on US exchanges. I am unfamiliar with any regulatory obligations in Belgium, but you would certainly want to ensure that you are operating within the rules."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-45-futures-for-you-by-carley-garner-20.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-45-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-45-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov274dazo,d,"{""minimum-quantity"":""1"",""path"":""ch9s205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:9 (46-54): The Danger Zone With Gregory Morris by J. Gopalakrishnan and B. Faber"",""caption-linebreaks"":""The Danger Zone With Gregory Morris by J. Gopalakrishnan and B. Faber

    As chief technical analyst for Stadion Money Management, Gregory Morris educates institutional and individual clients on the merits of technical analysis, and it is why Stadion utilizes a technical rules-based model to oversee the management of more than $1.5 billion in assets in two mutual funds, separate accounts, and 401k plans.

    Widely recognized as an expert on candlesticks and the developer of candlestick filtering, Morris has lectured around the world on the subject. From 1982 until 1993, he worked in association with N-Squared Computing, producing more than 15 technical analysis and charting software titles, some of which are still in active use today.

    He holds a bachelor’s degree in aerospace engineering from the University of Texas, authored numerous investment-related articles, speaks at numerous seminars and investment groups, and has appeared many times on Financial News Network (Fnn), Fox Business, Cnbc, and Bloomberg TV. From 1971 to 1977, Morris was a Navy F-4 fighter pilot aboard the Uss Independence and graduated from the Navy Fighter Weapons School (made famous by the movie Top Gun).

    In addition, Morris has written his second book, The Complete Guide To Market Breadth Indicators, introducing market breadth analysis for investors. A third edition to his best-selling and expanded Candlestick Charting Explained was released in March 2006.

    Stocks & Commodities Editor Jayanthi Gopalakrishnan and Staff Writer Bruce Faber interviewed Greg Morris on July 8, 2009, via telephone and email.

    Greg, how did you get interested in technical analysis?

    I got involved in the markets in the 1970s. I had some friends who were fairly active in the market. I bought a couple of stocks, and the market took off and went up for a couple of months. When you are new you think you are a genius. Unfortunately, I had no money management plan. I just thought I knew what I was doing. The value of these stocks dropped in the bear market of 1973–74 by about 60–65%. Of course, I held them all the way down, thinking the market was wrong and I was right. I knew then that there had to be another way to make investment decisions with a little more competence.

    JG: So what did you find out?

    I read The Art Of Low Risk Investing by Michael Zahorchak. He used five-, 15-, and 40-week moving averages on weekly data. He did a moving average on the New York Stock Exchange Composite, and he did it on the advance/decline line. He also put together a set of rules on how to invest and take stops when those four sets of data and their moving averages interacted. This was before even the Apple II had been introduced. I used chart paper with red, blue, and green pens, an old calculator, and a copy of Barron’s.

    So every Sunday afternoon I would sit down and chart the A/D line, the New York composite, and about 40 or 50 stocks that I followed, all using weekly data. What was interesting is that I got more involved in doing that than I did in actually following it and investing it. I don’t think that is abnormal. It is just that you get caught up in the mechanics of analyzing the market. When the Apple II finally came out, I bought one because it allowed me to do moving averages. I wrote a program to calculate moving averages.

    JG: What happened?

    In Barron’s I saw an ad for a program called the Market Analyzer by N-Squared Computing. I bought it and was very impressed with it. I wrote a letter to the developer and made some suggestions as to what he could do to enhance his program. About a month later, I got a 5¼-inch Apple II diskette in the mail. The letter attached said, “Here’s all the changes you suggested. Keep them coming.” That started a relationship with Norm North at N-Squared Computing. We worked together until 1993. We must have produced 15 technical analysis, charting and indicator building packages. We are good friends to this day.

    JG: What did you put together?

    We did a candlestick charting package. In fact, I got a call from Irwin Publishing asking if I would consider writing a book on candlestick charting. So the candlestick charting book was published in 1992. McGraw-Hill bought Irwin in 1995. The second edition came out with a new title, Candlestick Charting Explained, and a new cover. In 2005, McGraw-Hill asked if I would consider a third edition. Well, I did. I almost doubled the size of the book, and it is still selling really well."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-46-54-the-danger-zone-with-gregory-morris-by-j-gopalakrishnan-and-b-faber-20.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-46-54-the-danger-zone-with-gregory-morris-by-j-gopalakrishnan-and-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-46-54-the-danger-zone-with-gregory-morris-by-j-gopalakrishnan-and-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov275toan,d,"{""minimum-quantity"":""1"",""path"":""ch9s205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:9 (56-57): Tops And Bottoms by Alexander Sabodin"",""caption-linebreaks"":""Tops And Bottoms by Alexander Sabodin

    How do you know if the market has formed a top or a bottom? Here we look at the double-top and double-bottom patterns that occur frequently in the markets.

    When head & shoulders, double-top/bottom, and triple-top/bottom patterns are discussed, you’ll find that they are referred to as trend reversal patterns. A triple top or bottom is rarer but is really just a version of the head & shoulders pattern. The main difference between the two is that all three peaks (or three troughs) of a triple top or bottom are located at almost the same level. In the event there are two peaks (or troughs), it’s referred to as a double top (or double bottom), respectively.

    Often, you’ll find technical analysts having differing opinions about the type of price pattern that’s formed. Some may say it’s a head & shoulders pattern, while others may call it a triple top. This argument is academic, because at the core, both price models are virtually the same.

    A famous satirist remarked that a woman once asked him why chicken bouillon cubes are called cubes, when they are really parallelepipeds. That sounds funny, doesn’t it? When it comes to price patterns, the situation is quite similar. As technical analysts, our challenge lies in understanding the core of the price models and the way we can profit from them, regardless of what the price model is called.

    THE DOUBLE TOP

    I will consider the features of these models using the double top as an example, since this reversal model occurs most frequently. Please refer to the weekly chart of the Eur/Usd in Figure 1. In an ascending trend, what happens is that price establishes a new maximum (point A). This is usually accompanied by an increase in trading volume. Then there is usually an intermediate fall (point B) with declining volume. So far, everything has gone as you would expect in a typical rising trend."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-56-57-tops-and-bottoms-by-alexander-sabodin-20.gif"",""height"":""619"",""width"":""435""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-56-57-tops-and-bottoms-by-alexander-sabodin-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-56-57-tops-and-bottoms-by-alexander-sabodin-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276prre5,d,"{""minimum-quantity"":""1"",""path"":""ch9s205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:9 (62-65): Product Review: Track N Trade Live Futures by Dennis D. Peterson"",""caption-linebreaks"":""Product Review: Track N Trade Live Futures by Dennis D. Peterson

    Track N Trade (Tnt) software packages are available for daytrading commodities, stock, or forex markets. This review covers Track N Trade Live Futures. The design of this software emphasizes visual investing. Using well-thought-out graphics for orders and analytics, you can accomplish a number of tasks with just a few mouse-clicks. Even the number of mouse-clicks can be reduced. This software is built for the experienced trader who uses visual setups and wants speed in order execution. Also available is an end-of-day commodities package if you want to backtest trading strategies using continuous contracts.

    SETUP

    After paying, you’ll receive a package in the mail containing a user’s manual, a Dvd with video instructions, and a software installation disk. You can, however, download software off the Internet for a two-week demo. The user manual is 297 pages, the first 50 pages or so of which are devoted to introduction to futures, forex, and stock markets. The rest is about the product, and in keeping with the visual investing emphasis, graphics are used extensively in the explanations. In addition, there is excellent tech support."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-62-65-product-review-track-n-trade-live-futures-by-dennis-d-peterson-20.gif"",""height"":""626"",""width"":""459""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-62-65-product-review-track-n-trade-live-futures-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-62-65-product-review-track-n-trade-live-futures-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov276prre6,d,"{""minimum-quantity"":""1"",""path"":""ch9s205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:9 (66-67): Product Review: MTPredictor 6.0 by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Product Review: MTPredictor 6.0 by Jayanthi Gopalakrishnan

    What differentiates a successful trader from an unsuccessful one is how he or she manages risk. We all want to make profits, but we want to do it by minimizing our losses. There are different ways you can implement such a concept into your trading system. The MTPredictor software, developed by Steve Griffiths, uses one such method, namely an approach to Elliott waves that is referred to as an “isolation approach.” What they mean by an isolation approach is that the focus is on simplified wave structures. You are not going to find some of the more complex aspects of Elliott waves such as alternate waves or irregular complex fourth waves here.

    What the software basically does is identify trends using the simple Elliott five-wave patterns on a price chart and the a-b-c, three-wave, or zigzag correction."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-66-67-product-review-mtpredictor-6-0-by-jayanthi-gopalakrishnan-20.gif"",""height"":""626"",""width"":""459""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-66-67-product-review-mtpredictor-6-0-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-66-67-product-review-mtpredictor-6-0-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov277trti5,d,"{""minimum-quantity"":""1"",""path"":""ch9s205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:9 (76-85): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    This month’s Traders’ Tips are based mainly on Giorgos Siligardos’ July 2009 S&C article, “The Pivot Detector Oscillator, Simplified.” Others are on a topic of the contributors’ choosing.

    MetaStock code to help implement the strategy is provided in Siligardos’ article in the July 2009 issue, and at the end of this document. Additional code is presented here as contributed by various software developers.

    Readers will find our Traders’ Tips section in its entirety at the Stocks & Commodities website at www.Traders.com in the Traders’ Tips area, from where the code can be copied and pasted into the appropriate program. In addition, the code for each program is usually available at the respective software company’s website. Thus, no retyping of code is required for Internet users.

    For Stocks & Commodities subscribers, the MetaStock code found in Siligardos’ article can be copied and pasted into MetaStock from the Subscriber Area at www.Traders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-76-85-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""617"",""width"":""429""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-76-85-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-76-85-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov27873le,d,"{""minimum-quantity"":""1"",""path"":""ch9s205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:9 (8-9, 73-74): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    TR&NDS TRAILING STOP TECHNIQUE

    Editor,

    I have read Sylvain Vervoort’s article on Tr&nds (“Trailing Resistance &nd Support Stops”) in the July 2009 Stocks & Commodities and found it very helpful.

    John C.

    KEEPING IT STREAMLINED

    Editor,

    Thank you to Sylvain Vervoort for sharing his work in your magazine. I am interested in buying his book when it is available.

    I started with technical analysis as a broker in 2001. Over the years I started my own investment firm and have been using AmiBroker. (Amibroker provides programming in your Traders’ Tips section.) I’ve gotten very adept at technical analysis but sometimes feel a lack of efficiency. I think this comes from having so much information and knowledge that it becomes difficult to know what information to use. I like Vervoort’s approach because he boils it down to things that work and doesn’t pay attention to the rest.

    I’ve studied cycle analysis in depth. I ordered a copy of the seminar that J.M. Hurst put together in the early 1970s and studied it thoroughly. Also love the work that John Ehlers has done in that vein.

    Very much looking forward to knowing more about Vervoort’s systems.

    John N."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-8-9-73-74-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""618"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-8-9-73-74-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-8-9-73-74-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov27996at1,d,"{""minimum-quantity"":""1"",""path"":""ch9s205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 27:9 (98, 96-97): At The Close by Teresa Lo"",""caption-linebreaks"":""At The Close by Teresa Lo

    Looked At Market Sentiment Lately?

    The volatile markets make for uneasy market participants. Keep a calm, cool, collected eye out and don’t get swept away by the hysteria of the crowds.

    IN the summer of 2002, market participants anxiously watched the apparent neckline breach of a massive head & shoulders top formation on the Standard & Poor’s 500. From the March 24, 2000, high of 1,552.87 to the September 21, 2001, low of 944.75, the pattern measured 608 points. Subtracting that from the neckline at 944 produced a downside target of 336 (Figure 1).\nThe existence of the pattern was widely noted. Peter Brimelow of Forbes reported on January 7, 2002, that Richard Russell, publisher of the Dow Theory Letters, had identified it:

    Massive Head And Shoulders Overshadows Market\nRussell’s call, therefore, has made chartists sit up and take notice.\nInterestingly, none of the other letters that regularly note head and shoulders patterns — for example, The Dines Letter and Investors Intelligence — are talking about it now. Partly this may be because this particular head and shoulders is long term; it only becomes evident when the market is looked at over a six-year period or more. Most advisers don’t take such a long-term focus. That’s what makes Russell different: He takes a very long view."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-98-96-97-at-the-close-by-teresa-lo-20.gif"",""height"":""623"",""width"":""448""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-98-96-97-at-the-close-by-teresa-lo-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-27-9-98-96-97-at-the-close-by-teresa-lo-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281leto,d,"{""minimum-quantity"":""1"",""path"":""ch1j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:1 (10-12): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    GANN FAN

    Editor,

    Great magazine — keep it up! There are lots of Gann-based traders out there, so some Gann articles a bit more often might be appreciated by Gann folks. Best regards.\nDeonarine Gopee\nMiami, FL

    CRASH COURSE FOR NOVICE TRADERS

    Editor,

    I always start reading your magazine the day it arrives in the mail. I have been trading futures and equities for the past three years.

    As I read the article “Crash Course For Novice Traders” by Donald Pendergast (Stocks & Commodities November 2009), I was thinking the title could as well have been, “Crash Course And Checklist Before Trading.” The article enlightened me about the importance of preparation before risking capital, which can diminish before our eyes if we aren’t properly prepared for trading."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-10-12-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-10-12-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-10-12-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281qaby,d,"{""minimum-quantity"":""1"",""path"":""ch1j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:1 (13): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    FROM DON: TRADERS' PERSONALITIES

    Recently, I was asked about new traders’ success. So often people think about all the technical information available and fail to appreciate one of the most important aspects of becoming a successful trader: personality traits.

    Personality has a lot to do with new traders’ ability to grasp and properly execute market mechanics. What seems so natural to many long-term traders seems alien to novices. We try to explain what makes stocks move, and we try to show by example.

    Even with all this, a lot boils down to (yes) the personality of those new to trading. For example, a Ceo from a Fortune 500 company may delegate some of the learning process or not bother examining the particulars of, say, premium/discount to fair value and why the stocks will follow suit. They may not take the time to understand why pivot points work (often technical, always self-fulfilling). Then the new trader who has taken time to immerse themselves in the “why” of how things work will learn more quickly. One fails, one succeeds, but only one of them chooses to learn the how."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-13-q-a-by-don-bright-20.gif"",""height"":""616"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-13-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-13-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281whyo,d,"{""minimum-quantity"":""1"",""path"":""ch1j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:1 (14-19): What’s Your Trading Price? by Alexander Sabodin"",""caption-linebreaks"":""What’s Your Trading Price? by Alexander Sabodin

    The most important element of a trading system is managing risk. Here’s how you can understand the risks of the forex market and other financial markets.

    Novice traders tend to think of trading as a unique opportunity to make a large amount of money. They slip on their rose-colored glasses and envision profits that will enable them to quit their current jobs, let them travel all over the world, and work only when they feel like it. Immersed in these rainbow thoughts, they open trading accounts, begin trading, and suddenly find themselves faced with the cruel reality. Money drains out of their accounts, followed by enormous losses that force them to close their positions. They quickly realize that the market isn’t about making money. Instead, it’s all about losing it.

    UNDERSTAND YOUR RISKS

    Why do so many traders leave the business after suffering massive losses? There are many reasons, and one of the major ones is that there is too much focus on potential profits. A beginning trader tries not to think about the risks, which is wrong. Understanding and taming risks may be the major component of trading forex and other financial markets."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-14-19-what-s-your-trading-price-by-alexander-sabodin-21.gif"",""height"":""621"",""width"":""438""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-14-19-what-s-your-trading-price-by-alexander-sabodin-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-14-19-what-s-your-trading-price-by-alexander-sabodin-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov282voin1,d,"{""minimum-quantity"":""1"",""path"":""faarfr203"",""ysw-page-title"":""Stocks & Commodities V. 28:1 (20-30): The Vortex Indicator by Etienne Botes and Douglas Siepman"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-20-30-the-vortex-indicator-by-etienne-botes-and-douglas-siepman-27.gif"",""height"":""180"",""width"":""129""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-20-30-the-vortex-indicator-by-etienne-botes-and-douglas-siepman-28.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-20-30-the-vortex-indicator-by-etienne-botes-and-douglas-siepman-29.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov282voin,d,"{""minimum-quantity"":""1"",""path"":""ch1j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:1 (20-30): The Vortex Indicator by Etienne Botes and Douglas Siepman"",""caption-linebreaks"":""The Vortex Indicator by Etienne Botes and Douglas Siepman

    The search for a reliable technical indicator for trading a change in market direction seems to be a never-ending quest. Ideally, such an indicator should be on time; neither lagging the market nor too sensitive. The Vortex Indicator was developed as a new directional movement indicator, drawing inspiration in part from J. Welles Wilder’s directional movement indicator. The result is a simple but effective indicator that can be used to develop intriguing trading ideas.

    After thoroughly researching technical tools, we concluded that the concept of the directional movement index (Dmi) offered the most accurate way to identify trend direction or significant price moves in the market. The concept of Dmi was best defined and described by J. Welles Wilder in his classic 1978 book New Concepts In Technical Trading Systems. The result of his work is the now-famous and highly effective indicator, which inspired the creation of our Vortex Indicator.

    To understand the Vortex Indicator better, we must describe directional movement. The idea is that the individual relationship between price bars provides clues to the direction of the trend or market. Wilder summed it up thus: “Directional movement is the largest part of today’s range that is outside yesterday’s range.”

    Positive directional movement is simply the portion of a price bar that is above the high of the previous bar. Negative directional movement is the portion of the price bar that is lower than the previous low. The smaller of these two values is assigned a zero value. The larger number is used to indicate if the market is moving up (positive) or down (negative). In the case of an inside bar (if neither the high nor the low is higher or lower than the previous bar), a zero value is assigned to both positive and negative direction.

    The result will be a string of seemingly random consecutive zeroes or positive numbers placed in two columns assigned for positive and negative directional movement. However, if these two strings of numbers are summed after 14, 21, or 55 periods, the larger value gives an indication of overall trend. If this process is continued, the result can be seen on a chart as two lines representing positive and negative directional movement. These will intersect and cross during a change of trend and diverge wider and wider as the strength of the trend increases. This is the basis of Wilder’s Dmi.

    INSPIRATION FROM NATURE

    The Vortex Indicator’s inspiration for another view on directional movement comes from an entirely different source. Viktor Schauberger (1885–1958), who is viewed as the father of “implosion technology,” was an Austrian forester, experimenter, and inventor. He sought to develop energy-producing machines that, through their shape, form, and motion, were able to mimic the power of nature’s processes. The foundation of his work came from studying nature and analyzing the fluidic vortexes of water in rivers and streams, and later in pipes and turbines."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-20-30-the-vortex-indicator-by-etienne-botes-and-douglas-siepman-24.gif"",""height"":""622"",""width"":""445""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-20-30-the-vortex-indicator-by-etienne-botes-and-douglas-siepman-30.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-20-30-the-vortex-indicator-by-etienne-botes-and-douglas-siepman-31.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283trfo,d,"{""minimum-quantity"":""1"",""path"":""ch1j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:1 (32-37): Trading Forex, Technically by Koos van der Merwe"",""caption-linebreaks"":""Trading Forex, Technically by Koos van der Merwe

    In this, the second part of the series, we look at how to apply pure technical analysis to trade the forex markets.

    IN my last article, I explained how important it was to keep abreast of the news when trading the forex market. I explained how closely currencies are tied to interest rates, inflation, and the excessive printing of money, which can lead to inflation. I also discussed how the words of a president, prime minister, governor of a reserve bank, or any chairman of the board of governors of the US Federal Reserve can move a currency even as the words leave their mouths. I also stated that there is no insider trading, and that trading volume is in trillions of units.

    I explained how important it was to choose a foreign exchange trading platform, not only one that suits your personality and style of trading, but one that is genuine in its pricing of currencies. I also suggested any robotic systems offered should be checked and rechecked in their ability to trade on your behalf. Remember, a robot trades not on gut feel or instinct, but on a technical analysis strategy that is the most successful.

    Once again I must stress how important it is to analyze the news and come to a constructive decision before taking a position on which currency you intend to trade by scalping, short term, medium term, or long term.

    APPLYING PURE TECHNICAL ANALYSIS

    Here, I will discuss pure technical analysis as a way to trade the forex market. Rather than use one of the many forex trading platforms advertised, I will analyze the currencies using the same programs I use to study the stocks I trade and invest in. I will also use end-of-day analysis rather than intraday analysis."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-32-37-trading-forex-technically-by-koos-van-der-merwe-21.gif"",""height"":""623"",""width"":""442""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-32-37-trading-forex-technically-by-koos-van-der-merwe-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-32-37-trading-forex-technically-by-koos-van-der-merwe-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283croi,d,"{""minimum-quantity"":""1"",""path"":""ch1j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:1 (38-43): Crude Oil And Candlesticks by Gary S. Wagner"",""caption-linebreaks"":""Crude Oil And Candlesticks by Gary S. Wagner

    The rise and fall of oil prices have a global effect on all aspects of the markets. Here we look at this historical price movement through the eyes of candle patterns.

    he underlying psychology of market sentiment is a complex structure. It is difficult to understand and more difficult to explain. Fundamental analysis can be best expressed through words, interpreting how new information might bring about change in market price, while technical analysis uses mathematics to explain price movement. All market analysts distill information from which they formulate their assumptions. The master market technicians will use a mixture of both for successful trading.\nWhat we call Japanese candlestick charts and patterns are the results of a trading system created hundreds of years ago and refined into its current form. The Japanese technician was one of the first to describe market sentiment as a battle between the bulls and bears. The outcome of the battle can be mathematically expressed as a single candlestick.

    TRADER'S ATTITUDE

    The candlestick technique teaches us to identify the trader’s attitude about the market. It is one of our earliest attempts to explain how traders believe a market will act. These patterns are the culmination of the original concept that over time were turned into identifiable patterns. By learning to identify these patterns, you can discover a systematic approach to recognizing both trends and reversals of the price of any stock or commodity."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-38-43-crude-oil-and-candlesticks-by-gary-s-wagner-21.gif"",""height"":""627"",""width"":""459""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-38-43-crude-oil-and-candlesticks-by-gary-s-wagner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-38-43-crude-oil-and-candlesticks-by-gary-s-wagner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov284prma,d,"{""minimum-quantity"":""1"",""path"":""ch1j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:1 (44-47): Predicting Market Data Using The Kalman Filter by R. Martinelli & N. Rhoads"",""caption-linebreaks"":""Predicting Market Data Using The Kalman Filter by R. Martinelli & N. Rhoads

    The Kalman filter is a two-stage algorithm that assumes there is a smooth trendline within the data that represents the true value of the market before being perturbed by market noise. Can this filter be used to forecast stock price movements?

    Figure 1 shows daily opens for one year (252 days) of Ford Motor Co. (F). According to modern financial engineering principles, market data such as this is considered to be Brownian motion, which means that the daily price changes form a white-noise process. White noise is a random process in which consecutive values are independent of each other, among other things, which means that each day, a price increase is just as likely as a decrease. In reality, it is not uncommon for a particular market item to have several consecutive down days or up days over a short time span. During such times, the prices are said to be correlated. The objective is to harness these correlations with a Kalman filter so you can forecast price movements.

    In a 2006 article for Stocks & Commodities, a simple linear extrapolation was employed to predict tomorrow’s price change. The prediction was then used to calculate the alpha statistic, which compares the predicted price change to a recent average of price changes. Relatively large, positive values of alpha indicate a long position, and relatively large negative values indicate a short one. This procedure was backtested on a random selection of stocks and indexes to test its effectiveness. The indicated positions were taken, closed out the next trading day, and all profits and losses were accumulated in a chart called the Fortune. Surprisingly, of the 28 items tested, 20 produced greater profits than a simple buy & hold position for the same time period.

    In this article, we will expand on the previous work, replacing the simple one-day predictor with a Kalman filter. The Kalman, as applied here, is a two-stage algorithm that assumes there is a smooth trendline within the data that represents the true value of the market item before being perturbed by market noise. In the first stage, a few previous trendline values are fit to a suitable model. It is then extrapolated to the next time value to generate a prediction and its error variance."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-44-47-predicting-market-data-using-the-kalman-filter-by-r-martinelli-n-rhoads-21.gif"",""height"":""630"",""width"":""435""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-44-47-predicting-market-data-using-the-kalman-filter-by-r-martinelli-n-rhoads-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-44-47-predicting-market-data-using-the-kalman-filter-by-r-martinelli-n-rhoads-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov284sefo,d,"{""minimum-quantity"":""1"",""path"":""ch1j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:1 (48-53): The Search For Your Trading Style by Donald Pendergast"",""caption-linebreaks"":""The Search For Your Trading Style by Donald Pendergast

    Here’s a simple trading method you can apply if you trade with a longer-term outlook.

    I hope my recent article, “Crash Course For Novice Traders,” caused you to reflect on the critical decisions that you’ll need to make before pursuing an aggressive program of trading or investing. If you haven’t read the article yet and you’re struggling to stay afloat as a trader and/or investor, consider taking a few minutes now and read that article, as it may help you locate significant areas of deficiency in your overall trading plan.

    A PLAN WITH A LONG-TERM OUTLOOK

    This time, I want to lay out the basics of a particular style of trading that may be suitable for investors and traders with a long-term outlook on the markets they follow. “Trend-following” is the term assigned to this mode of trading, a style that relies on mechanical system entry/exit triggers to open and close a trading position. Normally, the goal of a trend-follower is to stay in a trade as long as possible, relying on mechanical entries/exits to determine the holding period; normally, trend-followers don’t set price targets or scale out of winning trades, preferring to stay with their well-tested trend-following systems to make all of the decisions.

    Trend-following (TF) can be a very profitable way to trade, particularly when a TF entry signal results in a 100%, 200%, or even 500% gain on a low-priced stock or commodity, one that embarks on a multimonth (multiyear) trending move to astounding price levels. Conversely, for the trader/investor relying on such methods, TF systems can also be frustrating, even nerve-wracking at times, especially since many TF systems sport win ratios of only 30–45%, and periods of system drawdown (DD) can last for extended periods of time. Nevertheless, there are many examples of successful TF systems that make consistently good money over long periods of time."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-48-53-the-search-for-your-trading-style-by-donald-pendergast-24.gif"",""height"":""627"",""width"":""465""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-48-53-the-search-for-your-trading-style-by-donald-pendergast-30.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-48-53-the-search-for-your-trading-style-by-donald-pendergast-31.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov284sefo1,d,"{""minimum-quantity"":""1"",""path"":""faarfr203"",""ysw-page-title"":""Stocks & Commodities V. 28:1 (48-53): The Search For Your Trading Style by Donald Pendergast"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-48-53-the-search-for-your-trading-style-by-donald-pendergast-27.gif"",""height"":""180"",""width"":""133""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-48-53-the-search-for-your-trading-style-by-donald-pendergast-28.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-48-53-the-search-for-your-trading-style-by-donald-pendergast-29.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov285wefo,d,"{""minimum-quantity"":""1"",""path"":""ch1j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:1 (54): Websites For Traders: TheHighTowerReport.com by J. Gopalakrishnan"",""caption-linebreaks"":""Websites For Traders: TheHighTowerReport.com by J. Gopalakrishnan

    THEHIGHTOWERREPORT.COM

    The blog of parent site The Hightower Report (futures-research.com), an independent research firm, thehightowerreport.com is a comprehensive news site devoted to the commodity markets. Its editorial content is timely and well written, making it a great resource for anyone interested in the commodity markets.

    There is a diverse collection of featured stories, commentaries of different markets such as metals, energy, wheat, corn, soybeans, equities, bonds, and currencies. The content is a combination of technical and fundamental analysis, specific to the commodity markets. You won’t find too much on chart patterns or technical indicators. Some of the content is just an excerpt or sample. In order to read the full story, you will have to sign up for a subscription service at futures-research.com. Nonetheless, there is enough on this blog to give you an idea of what is happening in the commodities market."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-54-websites-for-traders-thehightowerreport-com-by-j-gopalakrishnan-21.gif"",""height"":""617"",""width"":""425""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-54-websites-for-traders-thehightowerreport-com-by-j-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-54-websites-for-traders-thehightowerreport-com-by-j-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov285cryo,d,"{""minimum-quantity"":""1"",""path"":""ch1j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:1 (56-60): Create Your Trading System With John Wang by J. Gopalakrishnan and B. Faber"",""caption-linebreaks"":""Create Your Trading System With John Wang by J. Gopalakrishnan and B. Faber

    John Wang received his bachelor’s degree in chemical physics from University of Sciences and Technologies of China (Ustc), his master’s degree in quantum chemistry from Zhongshan University (China), and his doctorate in physical chemistry from University of California, Santa Cruz. He was a senior scientist at a leading gas analyzer company in Silicon Valley for 10 years. He began trading futures in 1989 and remains an active trader today. A Commodity Trading Advisor (Cta) since 1995, Wang cofounded AbleSys in 1994, created the Spyglass trading system in 1992, AscTrend indicators in 1995, developed the eAscTrend trading system in 2000, and introduced AbleTrend in 2007. His extensive background in both trading and natural sciences uniquely qualify him to create and develop computerized trading systems. AbleTrend: Identifying And Analyzing Market Trends For Trading Success, the book written by Wang and his wife Grace, will be published by John Wiley & Sons in April 2010. You can contact John Wang at ablesys1@ablesys.com.

    Stocks & Commodities Editor Jayanthi Gopalakrishnan and Staff Writer Bruce Faber interviewed Wang on November 9, 2009, via telephone and email.

    John, how did you get interested in the financial markets and technical analysis?

    With a doctorate in physical chemistry, I was always most interested in discovering the hidden structure underlying life’s seemingly random events. So it may not have been an accident that led me to turn my analytical eye on one of the world’s most seemingly chaotic phenomena — the financial markets.

    It all started when I was working as a senior scientist at a leading gas analyzer company in Silicon Valley, CA. It was 1989, and a friend talked me into investing $10,000 in a Standard & Poor’s 500 futures trading pool. My friend told me it returned 10% a month, and he told me he had received returns of $3,000 in the previous three months. At that time, I knew nothing about trading, and that’s why a 10% return per month didn’t set off any alarms with me, indicating that it might be too good to be true. Two months later, the Cftc shut down the investment company, which was revealed to be a multimillion-dollar Ponzi scheme. I lost $7,000 of the $10,000.

    This incident turned out to be a good thing for me. It introduced me to a whole new world — the futures and commodity trading industry. And rather than scaring me off, it triggered my curiosity about trading.

    What decisions led you to create AbleTrend?

    We face these questions every day: Is market behavior random, or does it follow certain rules? Is the market completely chaotic, or is there a hidden order? Can markets be quantified or predicted using scientific methods? Most economists believe that markets are random and chaotic and cannot be predicted. A smart man once told me that if you could know just a bit about market law, the world would be yours. But most people don’t believe there is such a thing as market law.

    Up to that point, I had been steeped in the world of physics all my life. But thanks to my friend who introduced me to the world of investing, my interests broadened to include financial matters. But I was still a scientist, and the more I became interested in trading the markets, the more my scientific sensibilities were focusing that way. My work was driven by the dream that something better was possible."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-56-60-create-your-trading-system-with-john-wang-by-j-gopalakrishnan-and-b-faber-21.gif"",""height"":""633"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-56-60-create-your-trading-system-with-john-wang-by-j-gopalakrishnan-and-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-56-60-create-your-trading-system-with-john-wang-by-j-gopalakrishnan-and-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286prre,d,"{""minimum-quantity"":""1"",""path"":""ch1j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:1 (66-68): Product Reveiw MetaSwing by Dennis D. Peterson"",""caption-linebreaks"":""Product Reveiw MetaSwing by Dennis D. Peterson

    MetaSwing is the newest plug-in offered by MetaStock. MetaSwing can also be used for TradeStation, but for the purposes of this review I used the MetaStock version. MetaSwing is a set of templates, indicators, explorations and system tests all built around volatility measurement. They are easily identified because their names all start with “Msw.” A companion book, Volatility-Based Technical Analysis by Kirk Northington, the creator of MetaSwing, is available at most online bookstores and gives you insight into how Northington analyzes and trades the market. MetaSwing is designed for trading stocks, forex, and commodities. Northington’s background is in project management and control systems; thus, the product has a technical underpinning.

    OVERVIEW

    Not only is MetaSwing a set of indicators, it is also a set of eight trading systems. Many of MetaSwing’s systems use the same indicators and best practices to confirm a trade setup. It is one thing to offer a set of indicators to traders and then wish them good luck, but it is quite another to offer trading systems. Trading systems need an explanation on how to use them. I have never seen such a wealth of information on how to use a product as I have with MetaSwing. Besides four webinars that cover how to use the product, there are 15 videos, a user manual, and access to some code through www.tradingtheinvisible.com. And that’s not even including the book! Not only that, Northington actually trades his own money using this system exclusively."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-66-68-product-reveiw-metaswing-by-dennis-d-peterson-20.gif"",""height"":""627"",""width"":""459""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-66-68-product-reveiw-metaswing-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-66-68-product-reveiw-metaswing-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286fufo,d,"{""minimum-quantity"":""1"",""path"":""ch1j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:1 (69): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    WHAT SHOULD WE BE LOOKING FOR?

    The new year is the time in which many traders rethink their strategy and circumstances. What are some pointers on what we should be looking for in a futures and options broker?

    First, let me disclose that I have been a registered commodity broker for what will be six years in March 2010, so there is likely some bias to my opinion. Nonetheless, I have witnessed all aspects of the trading and brokerage business and believe I have some helpful comments to make in regards to this topic.

    Despite the fact that I make my living through commission, I acknowledge that transaction costs are baggage to trading results. All else being equal, the more that you pay in commission the less profit, or the more loss you will see in your bottom line. That said, for many traders, all else is not equal. I can sum up my overall premise in one rejoinder: “If you think that paying commission is expensive, try getting what you pay for.”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-69-futures-for-you-by-carley-garner-20.gif"",""height"":""615"",""width"":""421""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-69-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-69-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov287exyo,d,"{""minimum-quantity"":""1"",""path"":""ch1j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:1 (73): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    I’ve often heard traders and analysts make statements along the lines of such and such move is being priced into a stock in front of a key event with regards to its options. What is this and how is it calculated?

    Great question, but it’s not a “one size fits all” situation. What’s being expressed is how option traders’ collective actions can be fitted into a price estimate for the movement expected in the shares once the event driving the option premiums is announced.

    For instance, in front of Food and Drug Administration (Fda announcements, a typical scenario) is to see option premiums get bid well-above theoretical fair value based on the stock’s underlying movements. Traders doing the bidding are willing to pay the stiff prices in the calls and puts because the expectation is that the news will move shares dramatically enough to compensate for the added premium risk."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-73-explore-your-options-by-tom-gentile-20.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-73-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-73-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28796tr,d,"{""minimum-quantity"":""1"",""path"":""ch1j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:1 (74-85, 96): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    All of this month’s Traders’ Tips are based on Etienne Botes and Douglas Siepman’s article in this issue, “The Vortex Indicator.”

    Formulas in Microsoft Excel for implementing the Vortex Indicator are already provided in Botes’s and Siepman’s article and sidebar elsewhere in this issue and at the end of this document. Additional code is presented here as contributed by various software developers.

    Readers will find our Traders’ Tips section in its entirety at the Stocks & Commodities website at www.Traders.com in the Traders’ Tips area, from where the code can be copied and pasted into the appropriate program. In addition, the code for each program is usually available at the respective software company’s website. Thus, no retyping of code is required for Internet users.

    For Stocks & Commodities subscribers, the Excel formulas found in Botes’s and Siepman’s article can be copied and pasted into Excel from the Subscriber Area at www.Traders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-74-85-96-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""622"",""width"":""443""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-74-85-96-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-74-85-96-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov289bofo,d,"{""minimum-quantity"":""1"",""path"":""ch1j202"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:1 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    - The Art Of Contrarian Trading

    - The Definitive Guide To Momentum Indicators

    - Finding Alpha

    - The Magnet Method Of Investing

    - Options Theory And Trading

    - Super Trader"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-92-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""614"",""width"":""419""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-1-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281usdo,d,"{""minimum-quantity"":""1"",""path"":""ch10o206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:10 (10-12): The US Dollar Index For Spot Forex by Joseph James Gelet"",""caption-linebreaks"":""The US Dollar Index For Spot Forex by Joseph James Gelet

    The US Dollar Index is a tool that forex traders can use, but do you know its value?

    When traders hear about the “dollar index” in the news, it’s logical they assume it has something to do with currencies. However, the dollar index — that’s the “US Dollar Index” — is actually a basket of currencies that trades as a futures contract. This is a currency derivative, deliverable with physical currencies based on your position at contract expiry. The value of the futures contract is a weighted geometric mean of the US dollar against the euro, yen, British pound, Canadian dollar, Swedish krona, and Swiss franc. Before the creation of the euro, the dollar index included 10 currencies. No longer included in the mix are the Italian lira, the Dutch guilder, the Belgian franc, the French franc, and the Deutschemark.

    Currencies are often grouped with futures and this is often an inappropriate association, as futures contracts are vastly different from foreign exchange contracts. Primarily, forex is traded through banks and other counterparties, whereas futures contracts are traded on an exchange. There are other technical differences in how a contract is traded, such as standardized size, margins, availability, and regulation.

    In this article I’ll explain why the dollar index should be used by spot forex traders as an anchor indicator similar to gold, and I’ll also explain why spot forex traders should develop their own value of the dollar index based on spot forex prices, creating their own “forex synthetic.”

    TRADE-WEIGHTED DOLLAR INDEX

    There is another index called the “trade-weighted US dollar index,” also known as the “broad index.” It includes 27 currencies and it was created in 1998 by the Federal Reserve as a more accurate method of tracking the value of the dollar, and also because the euro would end the previous components of the dollar index."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-10-12-the-us-dollar-index-for-spot-forex-by-joseph-james-gelet-21.gif"",""height"":""630"",""width"":""476""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-10-12-the-us-dollar-index-for-spot-forex-by-joseph-james-gelet-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-10-12-the-us-dollar-index-for-spot-forex-by-joseph-james-gelet-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281foen,d,"{""minimum-quantity"":""1"",""path"":""ch10o206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:10 (14-20): Forex Entry by Gareth Burgess"",""caption-linebreaks"":""Forex Entry by Gareth Burgess

    In the foreign exchange markets, where moves can be fast and substantial, timing is everything. This market timing entry setup can increase your chances of success.

    \nAS a retail trader, I believe there is less than a 50% chance of making money from trading without a technique to signal your entry into the market. Even if you are 90% sure of the direction, as soon as you place a position in the market and it goes against you, your emotions will overwhelm you. A potentially good trade can quickly turn into a loss because you can’t trust your emotions.

    Chart trading, however, increases the odds if you work with some sort of technical setup — one that you feel comfortable with, one that you have backtested and are confident with. A good technique can increase the chances of your success by up to 80%.

    DETERMINE THE OPENING RANGE

    One method for timing your market entries requires finding the opening range and marking the high and low on the short-term chart. You cannot change the time frame just so the method, which needs to be used consistently, fits the current market price action. You must remain with the setup."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-14-20-forex-entry-by-gareth-burgess-21.gif"",""height"":""625"",""width"":""451""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-14-20-forex-entry-by-gareth-burgess-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-14-20-forex-entry-by-gareth-burgess-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov282usno,d,"{""minimum-quantity"":""1"",""path"":""ch10o206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:10 (22-29): Using Noise by Ron Black"",""caption-linebreaks"":""Using Noise by Ron Black

    Price can do one of three things: Move in the direction of the swing, not move, or reverse swing direction. When the price is not moving, we have noise. Here’s how you can use that noise to help decide when to enter and exit trades.

    IN my September 2010 article for Stocks & Commodities, I discussed the Clear method, a way to determine the direction of short-term price swings. The method identifies the direction of the current price swing and the precise day the swing direction changes. It requires no calculation and has no delay. It is applicable to all stocks, commodities, and indexes in any time frame.

    We saw how, unlike most technical indicators, the Clear method does not use the open or the close for its analysis. Instead, it uses the range of the daily price bar as the measure of price uncertainty. I looked at how price bars are simplified distributions. Since prices are distributed, we consider the price to be different only if the two distributions (price bars) do not overlap; the bars must be “clear” of one another.

    MOVEMENT OF THE PRICE BAR

    Figure 1 shows the Clear method in action, showing the up swings, down swings, and the “clears” that define the changes in direction. In this article, I will look at how the method defines the only three things price can do: move in the direction of the swing, not move, and reverse swing direction. When the price is not moving, there is noise. I will take a brief look at the noise percentage as a measure of continuous directionality. Finally, I will look at a way you can use noise to decide when to enter and exit trades."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-22-29-using-noise-by-ron-black-21.gif"",""height"":""621"",""width"":""441""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-22-29-using-noise-by-ron-black-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-22-29-using-noise-by-ron-black-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283fifr,d,"{""minimum-quantity"":""1"",""path"":""ch10o206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:10 (30-37): Fixed Fractional Forex Variants by Goncalo Moreira"",""caption-linebreaks"":""Fixed Fractional Forex Variants by Goncalo Moreira

    How many lots are you going to buy or sell? Here are some variations of the fixed fractional model, as applied to an intraday strategy that trades the British pound/US dollar.

    efore entering the market you must decide how many lots you plan to buy or sell. What goes into your process of determining the amount? This article will help you answer that question consciously instead of just pulling a number out of a hat. Too many traders invest inconsistent amounts in each trade, even though all they have to do is follow some simple techniques, variations of the fixed fractional model developed by analyst Ralph Vince.

    IMPORTANCE OF POSITION SIZING

    Money management is like a thermostat: It’s a control system for risk that keeps trading within the comfort zone. Position sizing is a key element in money management: It is about scaling your position size in such a way that you are always aiming to maximize a runup in equity and reduce the effects of a drawdown. If you take too small a size on each trade, the returns will be too low to overcome transaction costs. Conversely, by risking more, the returns will increase but so will the potential drawdown.\nTo illustrate the different variants of the fixed fractional model, I will be using the backtesting results from an intraday strategy on the British pound/US dollar (Gbp/Usd) between 2005 and 2009. Some of the techniques outlined here address growth potential while others address risk. Whichever technique you decide to adopt will depend on your trading style."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-30-37-fixed-fractional-forex-variants-by-goncalo-moreira-21.gif"",""height"":""620"",""width"":""432""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-30-37-fixed-fractional-forex-variants-by-goncalo-moreira-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-30-37-fixed-fractional-forex-variants-by-goncalo-moreira-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283smrs,d,"{""minimum-quantity"":""1"",""path"":""ch10o206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:10 (38-44): A Smoothed RSI Inverse Fisher Transform by Sylvain Vervoort"",""caption-linebreaks"":""A Smoothed RSI Inverse Fisher Transform by Sylvain Vervoort

    This indicator gives clear entry and exit signals, so your trading decisions are easier.

    The Fisher transform has been a familiar concept to Stocks & Commodities readers in recent years following its introduction in 2002 by frequent S&C contributor John Ehlers. Its creator, Ronald Fisher, was one of the leading scientists of the 20th century, making major contributions to statistics, evolutionary biology, and genetics. Ehlers’ 2004 followup applied an inverse Fisher transform to the relative strength index (Rsi), changing what was a good turning-point indicator to one that fine-tuned the timing of possible entry and exit points. Here is the inverse Fisher transform formula:

    y = (Exp(2 * x) - 1)/(Exp(2 * x) + 1)

    where x is the input value and y is the transformed value.

    Figure 1 shows a plot of the inverse Fisher transform. The transform creates boundaries to keep the output value in the range between ‑1 to +1. Input values larger than 2 generate a result close to 1, while input values less than ‑2 generate a result close to ‑1. This boundary characteristic is useful with any indicator moving between two fixed values, like the relative strength index (Rsi)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-38-44-a-smoothed-rsi-inverse-fisher-transform-by-sylvain-vervoort-24.gif"",""height"":""613"",""width"":""447""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-38-44-a-smoothed-rsi-inverse-fisher-transform-by-sylvain-vervoort-30.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-38-44-a-smoothed-rsi-inverse-fisher-transform-by-sylvain-vervoort-31.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283smrs1,d,"{""minimum-quantity"":""1"",""path"":""faarfr203"",""ysw-page-title"":""Stocks & Commodities V. 28:10 (38-44): A Smoothed RSI Inverse Fisher Transform by Sylvain Vervoort"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-38-44-a-smoothed-rsi-inverse-fisher-transform-by-sylvain-vervoort-27.gif"",""height"":""180"",""width"":""131""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-38-44-a-smoothed-rsi-inverse-fisher-transform-by-sylvain-vervoort-28.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-38-44-a-smoothed-rsi-inverse-fisher-transform-by-sylvain-vervoort-29.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28470fu,d,"{""minimum-quantity"":""1"",""path"":""ch10o206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:10 (45, 70): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    About the softs\nWhere can I find fundamental information on the softs futures markets?

    The soft commodities were made famous by the 1980s movie Trading Places, but many novice commodity traders find it difficult to find fundamental research about the complex. The challenge lies primarily in the fact that the softs are typically grown, cultivated, and harvested abroad, and thus, often there isn’t conveniently released data on production and demand statistics. This is unlike other commodities such as the grains and meats, in which the Usda reports weekly and monthly updates on such figures.

    If you aren’t familiar with the softs, they are the food and fiber complex consisting of cotton, cocoa, sugar, orange juice, and coffee. In addition to the dearth of statistical data available on this topic, the figures that are available may be less reliable because production primarily takes place in countries that are less technologically advanced and with looser regulation relative to the US. As a result, it isn’t uncommon for this group of futures contracts to experience extreme and sometimes unexplained moves."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-45-70-futures-for-you-by-carley-garner-21.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-45-70-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-45-70-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov285qaby,d,"{""minimum-quantity"":""1"",""path"":""ch10o206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:10 (51): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    SURROGATE SPECIALIST

    How many stocks do you typically tell a trader to focus on at one time? I’m talking about someone who’s not automated but basically a surrogate specialist in his stocks — would three or four stocks be about the right number?

    — ListedGuru

    Thanks for the question, and since we all must adjust our mindset in this ever-changing world of trading, very timely.

    We teach our new traders several ways of approaching the market, and one of them is the “surrogate specialist” approach. Going back to my days on the trading floor, we would have pits with three to five primary stocks to focus on, with a handful of secondary stocks. Even though we were classified as market makers, we certainly “specialized” in these stocks."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-51-q-a-by-don-bright-21.gif"",""height"":""616"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-51-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-51-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28565bo,d,"{""minimum-quantity"":""1"",""path"":""ch10o206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:10 (52-55, 65): Boost Your Forex Trading Results With John Forman by J. Gopalakrishnan & B. Faber"",""caption-linebreaks"":""Boost Your Forex Trading Results With John Forman by J. Gopalakrishnan & B. Faber

    John Forman is a senior forex analyst for Thomson Reuters Ifr Markets, where he provides real-time intraday and longer-term market analyses from both a technical and fundamental perspective. Forman, who has more than 20 years of trading experience and has been a contributor to Stocks & Commodities, focuses on the foreign exchange and equity markets, but also follows interest rates and commodities. An active educator, Forman’s first book, The Essentials Of Trading, came out of his experience teaching trading and financial markets in the university classroom. His latest book in progress, New Trader Faqs, takes a collection of the most common new-trader questions and has them answered by a collection of experienced traders and market professionals. John Forman’s thoughts on trading can be found on his blog at www.TheEssentialsOfTrading.com.

    S&C Editor Jayanthi Gopalakrishnan and Staff Writer Bruce Faber interviewed John Forman via phone on August 6, 2010.

    John, why don’t we start by having you tell us how you got into trading.

    The Wall Street crash in 1987 was the thing that got me interested. I was only 17 when that happened and it really spiked my interest. It was shortly thereafter, probably early 1988 or so, that I opened my first stock trading account.

    Was that because you were intrigued by how much of a change could happen in one day, or at least in a short period of time?

    Well, it was two things. It was certainly the volatility and what that represented, but it was also looking at things like Ibm losing half of its value in a single day. I realized there had to be an opportunity there. If I had had money available, I could have made a profit as the stock rebounded. There was an opportunity there that I couldn’t take advantage of, because I wasn’t in the market. That’s when I decided that as soon as I was 18 and I could open my own account, I was going to do it.

    Did you start by trading your own account, or did you work for an organization?

    I was trading my own account and learning along the way.

    Did you start with equities?

    Yes. We are talking 1988 and I did not have a lot of funds, so commodities and futures were beyond me at that point. The stock market was pretty much the only game. I dabbled in corporate bonds and things like that, but that was not my focus. It was definitely equities."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-52-55-65-boost-your-forex-trading-results-with-john-forman-by-j-gopalakrishnan-b-faber-21.gif"",""height"":""626"",""width"":""456""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-52-55-65-boost-your-forex-trading-results-with-john-forman-by-j-gopalakrishnan-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-52-55-65-boost-your-forex-trading-results-with-john-forman-by-j-gopalakrishnan-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov285goan,d,"{""minimum-quantity"":""1"",""path"":""ch10o206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:10 (56-61): Gold And The Corrective Phase by Gary S. Wagner"",""caption-linebreaks"":""Gold And The Corrective Phase by Gary S. Wagner

    Part 1 of this series discussed using Elliott wave, Fibonacci retracement, and candlestick patterns for analyzing the gold market. Part 2 examines the corrective phase that gold has now entered in this bullish gold run.

    rading the gold market might look easy when you consider that it has gone up $242 in one year. One year! However, anyone involved in gold trading, whether it is through Comex, forex, or exchange traded funds (Etfs), will tell you differently. Follow me as I track the final impulse wave into the current (as of July 21, 2010) corrective phase. Gold was nearing the top of wave 3 about mid-May 2010. Since then, we have completed that wave, ending with a new high of $1,248, only to end up as a footnote as a new all-time high of $1,265 ended wave 5.

    ELLIOTT WAVES

    Fundamentally bullish on gold, I think that gold by the first or second quarter of 2011 will take out the new historical high of $1,265 and possibly test $1,300. But before we get there, the yellow metal will need to go through a corrective phase.

    As outlined in Elliott wave theory, this correction would consist of three waves — A, B, and C: waves A and C the corrective (bearish) waves and the B wave a predominantly bullish wave.

    Figure 1 is a daily chart of forex gold. Starting on the far left, you can see the first correction after gold hit a historical high of $1,221 in December 2009. According to Elliott wave theory, a market trend follows a cycle. That cycle is made up of eight waves. This eight-wave sequence will repeat until the trend is exhausted. This trend structure is composed of eight waves, divided into two phases: the impulse (motive) phase and the corrective phase. The corrective phase is composed of A, B, and C waves. They will move opposite to the primary trend. Waves A and C will be corrective waves, while the B wave will move in the direction of the primary trend. Here we see the corrective phase, wave C, which took gold to a low of $1,045 in February 2010."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-56-61-gold-and-the-corrective-phase-by-gary-s-wagner-21.gif"",""height"":""620"",""width"":""435""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-56-61-gold-and-the-corrective-phase-by-gary-s-wagner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-56-61-gold-and-the-corrective-phase-by-gary-s-wagner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286prre9,d,"{""minimum-quantity"":""1"",""path"":""ch10o206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:10 (62-65): Product Review: Edge by Dennis D Peterson"",""caption-linebreaks"":""Product Review: Edge by Dennis D Peterson

    Edge, part of the Bollinger on Bollinger product available at www.BollingerBands.com, was created by technician John Bollinger to provide unique analytical data for predicting the next day’s move. There are four categories of data: day of the week, end of the month, sequences, and holidays. Because Edge uses historical data, you can specify the date range to calculate the statistics, and of course, you can choose the tradable to be analyzed.

    OVERVIEW

    As traders, most of us know that the market behaves differently depending on the time of year. Triple witching occurs four times a year (third Friday of March, June, September, and December) when contracts for stock options, stock index options, and stock index futures expire. Those Fridays are volatile — or has program trading changed that dynamic? Holidays, too, are unpredictable, but is it the same for all equities? What’s going on with the end of the month? For that matter, what about the day of the week? Do Mondays behave differently than Fridays?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-62-65-product-review-edge-by-dennis-d-peterson-21.gif"",""height"":""627"",""width"":""462""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-62-65-product-review-edge-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-62-65-product-review-edge-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286wefo1,d,"{""minimum-quantity"":""1"",""path"":""ch10o206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:10 (66-67): Websites For Traders: DailyFX by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Websites For Traders: DailyFX by Jayanthi Gopalakrishnan

    DailyFX.com, a part of Fxcm.com, provides news and analysis of the foreign exchange markets, updated during the trading day. A quick glance at the tabs toward the top of the home page gives you a good idea of the features available on the website.

    Recently, Fxcm launched the DailyFX Trading Course, designed to educate forex traders via video-based tutorials. This course is available free to all Fxcm clients. The course can be accessed via the DailyFX website. You do need a username and password to gain access to the course as well as some other features, to be discussed here.

    TRADING SIGNALS

    Once you are logged in, the trading signals page, which is under the forex trading signals tab, will open up by default (Figure 1). The trading signals page displays alerts, trade details, and strategy performance information. You have the option of filtering alerts based on strategies, currency pairs, and time frames. The strategies include breakout, range, and momentum. There are various currency pairs you can select using the dropdown menu, and your choices for time frames are short, medium, and long term."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-66-67-websites-for-traders-dailyfx-by-jayanthi-gopalakrishnan-21.gif"",""height"":""616"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-66-67-websites-for-traders-dailyfx-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-66-67-websites-for-traders-dailyfx-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286exyo,d,"{""minimum-quantity"":""1"",""path"":""ch10o206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:10 (68-69): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    DECAY RISK

    I often hear traders discuss time decay as being a greater risk the closer to expiration that an option is. But if an option costs more with greater time remaining, wouldn’t that call or put carry increased risk, relatively speaking?

    What you’ve heard discussed or read about is the nonlinear nature of theta with an emphasis on at-the-money (Atm) options. Theta is a greek factor that measures the daily rate at which a call or put will lose value, all else being equal from one trading day to the next.

    During an option’s last month or so prior to expiration, this greek builds its role to reduce extrinsic or time value down to zero on a daily basis. Atm options are the most sensitive to this phenomenon, as they’re made up almost entirely of time value."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-68-69-explore-your-options-by-tom-gentile-21.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-68-69-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-68-69-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov287trti5,d,"{""minimum-quantity"":""1"",""path"":""ch10o206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:10 (72-84): Traders' Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders' Tips by Technical Analysis, Inc.

    All of this month’s Traders’ Tips are based on Sylvain Vervoort’s article in this issue, “A Smoothed RSI Inverse Fisher Transform.”

    Code for MetaStock to implement the transform is already provided in Vervoort’s article elsewhere in this issue. Additional code is presented here as contributed by various software developers.

    Readers will find our Traders’ Tips section in its entirety at the Stocks & Commodities website at www.Traders.com in the Traders’ Tips area, from where the code can be copied and pasted into the appropriate program. In addition, the code for each program is usually available at the respective software company’s website. Thus, no retyping of code is required for Internet users.

    For Stocks & Commodities subscribers, the MetaStock code found in Vervoort’s article can be copied and pasted into MetaStock from the Subscriber Area at www.Traders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-72-84-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""619"",""width"":""434""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-72-84-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-72-84-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov288leto4,d,"{""minimum-quantity"":""1"",""path"":""ch10o206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:10 (8-9): Letters to S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters to S&C by Technical Analysis, Inc.

    CUSTOM PROGRAMMING SERVICES

    Editor,

    The article “Measuring The Markets With Pivots” by Austin Passamonte in the July 2010 issue and the June 2010 article about forex trading combining chess logic and mathematics (“The Forex Gambit” by Walter T. Downs) both contain interesting ideas.

    Since I am not a programmer, do you know how one could contact a programmer that would be interested in compiling programs based on these ideas? (Programs compiled in EasyLanguage for TradeStation apparently work with the system I use, which is DealBook 360.)

    P. Scott

    You can look for custom programming services in the classified advertising section of our magazine or in the Traders’ Resource area of our website, http://technical.traders.com/Products/home.asp, where you can search on the term “programming” in the Consultants category.

    You could also check with the technical support department for the software you are using to see if custom solutions are offered, and also try checking with online user groups for customized solutions.\nGood luck.—Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-8-9-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""618"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-8-9-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-8-9-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov289bofo7,d,"{""minimum-quantity"":""1"",""path"":""ch10o206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:10 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    Buy — Don’t Hold

    Charts Don’t Lie, People Do!

    Financial Derivatives: Pricing And Risk Management

    The Fearful Rise Of Markets

    The Great Reflation

    Hit The Spot: How To Tame The Currency Market"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""612"",""width"":""412""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28996at3,d,"{""minimum-quantity"":""1"",""path"":""ch10o206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:10 (98, 96): At The Close by Donald Pendergast"",""caption-linebreaks"":""At The Close by Donald Pendergast

    The US dollar tends to trend reliably across time frames, but is this new daily chart rally just a minor retracement of an emerging downtrend or is the bull run that began in December 2009 reasserting itself?

    The US Dollar Index (DX) has taken quite a tumble since making an enduring swing high in June 2010, but powerful support levels (made during the recent February–March 2010 consolidation) near $80 appear to have had a major effect with the DX reversing sharply higher over the last six trading sessions. But can the rally last? That’s the big question.

    Figure 1 is the daily chart for DX; using the TradeStation paint bar feature, I’ve plotted the Barry Taylor ProAm paint bar study. The blue bars represent professional (smart money) activity; when they occur near major support levels, they are a very reliable indication that an emerging reversal and/or trend may have some room left to run. Conversely, when the blue bars manifest at significant resistance levels, a pullback or selloff may be approaching. Like any single technical tool, for best results they need to be used in conjunction with other noncorrelated indicators, but they seem to work very nicely all by themselves as long as you can identify the key support/resistance (S/R) levels on a given chart. The fact that the most recent blue ProAm (short for “professional/amateur”) bar had such wide range lends extra credibility to the bullish reversal."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-98-96-at-the-close-by-donald-pendergast-21.gif"",""height"":""623"",""width"":""449""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-98-96-at-the-close-by-donald-pendergast-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-10-98-96-at-the-close-by-donald-pendergast-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281fotr,d,"{""minimum-quantity"":""1"",""path"":""ch11n207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:11 (10-13): Forex Trends And Pairs by James Chen"",""caption-linebreaks"":""Forex Trends And Pairs by James Chen

    Combine currency trading with the trend and take advantage of the pairing requirement in the forex markets.

    IN order to trade forex effectively from a trend-following perspective, a trader should accept two arguments: First, that the concept of trend, or price momentum, exists. Second, that fundamental price strength can be paired with fundamental price weakness. I will explain both premises in detail, along with a method for applying them to trading the forex market.

    TREND STRENGTH

    Trend is essentially price momentum. Trend theory mirrors that of physical inertia, which states that an object in motion tends to stay in motion. Price that has a clear and significant direction continues that way until such time that something happens and the direction changes. The concept of trend provides a sound basis for Dow theory and the discipline of technical analysis as a whole.

    Traders who follow the prevailing trend are simply attempting to profit from taking the path of least resistance. Price momentum is assumed to be in the direction of the established trend. Of course, this does not always hold true (for example, when a trend ends), but it is the most reasonable assumption given the relatively limited information of past price action.

    PAIRING STRENGTH AND WEAKNESS

    Once the premise of trend is accepted by the forex trader, the second premise of strength/weakness pairing can be addressed. The forex market is unique in many ways, not least of which is that all currencies are traded in pairs. Currencies cannot be traded individually as single financial instruments, only as pairs of relatively priced instruments."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-10-13-forex-trends-and-pairs-by-james-chen-21.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-10-13-forex-trends-and-pairs-by-james-chen-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-10-13-forex-trends-and-pairs-by-james-chen-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281wiba,d,"{""minimum-quantity"":""1"",""path"":""ch11n207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:11 (14-18): Winning The Battle of The Grains by Jay Kaeppel"",""caption-linebreaks"":""Winning The Battle of The Grains by Jay Kaeppel

    Is there a way to exploit the seasonal tendencies of these two markets?

    NO this contest is not going to involve any kind of a taste test. Nor will this competition offer the wit and humor of Mad magazine’s “Spy vs. Spy” serial cartoon. Still, to traders looking for a tempting trading idea to snack on, the interplay between corn and wheat can be, well, quite tasty. As everyone knows, corn and wheat are both essential grains that are planted, grown, and harvested and then used to create myriad food products. While corn can be eaten whole or milled, wheat typically is milled in order to make it useful for creating other food products.

    But there is another key difference between these two grains, and that is the time frame in which they are primarily grown. While both grains are grown in various locations around the globe, in the United States the bulk of the corn and wheat is grown in the Midwest. Given the vagaries of weather in that region, there is the potential for great uncertainty from year to year regarding the size of a given year’s crop for either or both of these grains.

    But the real key to playing the game of corn versus wheat is in understanding the difference between the planting cycles of these two grains and the psychology of supply concerns.

    A TIME TO REAP, A TIME TO SOW

    The greatest period of doubt for a given grain is during that time when no seeds are in the ground. At that point, no conclusions can be drawn about the size of the next impending crop. As a result, that is when a given grain is most likely — although by no means certain — to rise in price. Likewise, once the growing season is reaching its end, the outcome of the impending harvest is pretty well known, for better or for worse, and prices will tend to lose any “fear” premium that might have been built in earlier in the growing cycle.

    As it turns out, corn and wheat have very different growing seasons, so in theory the price should rise and fall at different times. And as it turns out, this tends to be the reality."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-14-18-winning-the-battle-of-the-grains-by-jay-kaeppel-21.gif"",""height"":""628"",""width"":""467""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-14-18-winning-the-battle-of-the-grains-by-jay-kaeppel-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-14-18-winning-the-battle-of-the-grains-by-jay-kaeppel-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283zela1,d,"{""minimum-quantity"":""1"",""path"":""faarfr203"",""ysw-page-title"":""Stocks & Commodities V. 28:11 (30-35): Zero Lag (Well, Almost) by John Ehlers and Ric Way"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-30-35-zero-lag-well-almost-by-john-ehlers-and-ric-way-27.gif"",""height"":""180"",""width"":""138""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-30-35-zero-lag-well-almost-by-john-ehlers-and-ric-way-28.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-30-35-zero-lag-well-almost-by-john-ehlers-and-ric-way-29.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283zela,d,"{""minimum-quantity"":""1"",""path"":""ch11n207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:11 (30-35): Zero Lag (Well, Almost) by John Ehlers and Ric Way"",""caption-linebreaks"":""Zero Lag (Well, Almost) by John Ehlers and Ric Way

    A little lag is a good thing. Here’s how you can remove a selected amount from an exponential moving average and use the filter in an effective trading strategy.

    ALL smoothing filters and moving averages have lag. The lag is necessary because the smoothing is done using past data. Therefore, the averaging includes the effects of the data as of several bars ago. In this article we show you how to remove a selected amount of lag from an exponential moving average (EMA). Removing all the lag is not necessarily a good thing, because with no lag, the indicator would just track out the price you were filtering; the amount of lag removed is a tradeoff with the amount of smoothing you are willing to forgo. We show you the effects of lag removal in an indicator and then use the filter in an effective trading strategy.

    THE EMA

    An exponential moving average (Ema) is computed by taking a fraction of the current price and adding to it the quantity (1 – fraction) times the previously computed value of the Ema. That fraction is called the “smoothing factor” and is commonly called α (alpha), and alpha is always less than 1. The equation for an Ema can be written as:

    EMA = α * Price + (1 – α) * EMA[1];

    where EMA[1] is the value of the EMA one bar ago.

    Engineers often describe filters in terms of their impulse response. An impulse is where the data has a finite value at one sample and a zero value at all other samples. Suppose an impulse of data has a value of 1/α. When the Ema is applied to this impulse, the filter output at the end of the first sample is just 1 because there is no previous value in the filter. On the next sample, the input value is zero, and the previous value of 1 is multiplied by (1 – α), so the output is (1 – α). On the third sample, there again is no new input and the previous value of (1 – α) is multiplied by (1 – α), so the output is (1 – α)2."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-30-35-zero-lag-well-almost-by-john-ehlers-and-ric-way-24.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-30-35-zero-lag-well-almost-by-john-ehlers-and-ric-way-30.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-30-35-zero-lag-well-almost-by-john-ehlers-and-ric-way-31.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283pofi,d,"{""minimum-quantity"":""1"",""path"":""ch11n207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:11 (36-38): Point & Figure Box Sizes by Thomas McGraw"",""caption-linebreaks"":""Point & Figure Box Sizes by Thomas McGraw

    Even after all these years, will point & figure charts tell you when to get in and out of the market?

    After the early 1970s stock market debacle, I spent years yearning for a simple tool that could tell me when to get in and out of the market. Then one day I wondered if point & figure (Pnf) charts would do the trick, using chart reversals as indicators.

    I worked with Pnf as a momentum indicator, and then exclusively for single stocks in cycles and trends. I used Yahoo! Finance data to manipulate Pnf box sizes and record profits from momentum reversals. I found that box size could make a world of difference in charting the data, rather than using a traditional box size of $1 for all stocks priced between $20 and $100. That’s a big price range for just one box size, even for pattern recognition purposes.

    Using Pnf box (or block) sizes, and calculating chart reversal profits for each, I discovered there were “sweet spots” in size that produced good profits from chart reversals. Moreover, these box sizes continued to work for at least a short period over any other size. It occurred to me that stock trends fall outside “fair coin” tosses as written about by John Paulos in his book on mathematical literacy, Innumeracy."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-36-38-point-figure-box-sizes-by-thomas-mcgraw-21.gif"",""height"":""636"",""width"":""459""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-36-38-point-figure-box-sizes-by-thomas-mcgraw-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-36-38-point-figure-box-sizes-by-thomas-mcgraw-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov284useu,d,"{""minimum-quantity"":""1"",""path"":""ch11n207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:11 (44-48): Using The Euro To Trade Gold by Anthony Trongone"",""caption-linebreaks"":""Using The Euro To Trade Gold by Anthony Trongone

    Reaching a critical price in one commodity often triggers an emotional response by investors in other commodities. Here’s a look at the relationship between a leading variable and a lagging one.

    Reaching a critical price in one commodity often triggers an emotional response by investors in other commodities. Market participants quickly react to these price disruptions, and their response eventually trickles down to less-active momentum players. Once enough market participants begin jumping aboard, this pattern — with its basis in market sentiment — establishes a foothold.

    This article focuses on the intraday activity of two commodity contracts: the leading variable and lagging variable, the first of which drives the price of the second. In order to demonstrate how these two variables function, I will use the euro, the official currency of the European Union (EU), as the contributory (leading) variable, and the gold futures contract as the response (lagging) variable.

    The euro (EC) trades on the Globex, using the US dollar as its currency. It has a multiplier of 125,000 with increments of 0.0001 ($12.50), whereas the gold futures contract (GC) trades on the Nymex and has a contract size of $100 per troy ounce with a multiplier of 10. I ran this analysis by downloading the numbers for the continuous contracts [6E #F/GC #F] directly from Interactive Data."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-44-48-using-the-euro-to-trade-gold-by-anthony-trongone-21.gif"",""height"":""626"",""width"":""457""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-44-48-using-the-euro-to-trade-gold-by-anthony-trongone-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-44-48-using-the-euro-to-trade-gold-by-anthony-trongone-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov285mabe,d,"{""minimum-quantity"":""1"",""path"":""ch11n207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:11 (50-54): Martin Bedick and Andrew Abraham by J. Gopalakrishnan and B. Faber"",""caption-linebreaks"":""Martin Bedick and Andrew Abraham by J. Gopalakrishnan and B. Faber

    Martin Bedick, who is a principal and managing partner of Angus Jackson Inc., has been working in the financial industry for more than 25 years. From 1980 to 1990, Bedick worked as a financial consultant with individual clients at major US financial institutions, including Smith Barney and Paine Webber. In 1992 he became a principal of Angus Jackson of Florida, an Introducing Brokerage firm. His duties include working with clients to implement low-risk strategies designed to take advantage of potential opportunities in the futures and commodity markets. He has worked with a number of trading system developers and has been involved in designing trading programs with a major emphasis on risk control.

    Andrew Abraham is the marketing manager for Angus Jackson Inc. Abraham has been managing his investments since 1994 with a concentration on alternative investments. He joined Angus Jackson Inc. as an associated person in 1998. He has been investing in managed futures, hedge funds, and real estate since 1994.

    Editor Jayanthi Gopalakrishnan and Staff Writer Bruce Faber interviewed Martin Bedick and Andrew Abraham on September 1, 2010, via telephone. Martin Bedick is identified by “MB” and Andrew Abraham is identified by “AA.”

    How did you get interested in trading? Martin?

    MB: I was always interested in the markets. What intrigued me was the question of “How do you trade profitably? How do you consistently make money?” Then I learned that the brokerage business per se had nothing to do with that. Then my interest quickly became “How does someone trade successfully? How do you do it consistently?” Then I really got interested in the late 1980s, around when the original Market Wizards book by Jack Schwager came out. I attended a couple of seminars with Van Tharp, with Ed Seykota, people who were successful traders. In the early 1990s I came to Angus Jackson as an associate and ended up buying the firm with a partner in 1992 or 1993, and began to work with individual clients.

    How about you, Andy?

    AA: I had a business, grew it, and sold it in 1994, and I asked my accountant, who was also Martin’s, what I should do with the money. He put me in touch with various people, and one of them was Martin. That relationship developed and seeing how difficult trading was, I wanted to understand how I could get better at it. I saw that Martin was successful and I wanted to learn from him. I had to do a tremendous amount of learning on my own to figure out what it takes to be a successful, long-term investor. I compounded that nest egg into wealth. There is no secret. It takes a lot of discipline, and patience, with a thought-out plan that is heavy on risk management.

    Did you just start trading in commodities, or did you start with something less risky, like equities?

    AA: It is all the same. What it comes down to is trend-following. What I saw were the mistakes, and Martin enlightened me about the mistakes that traders and investors make. What I look at are the risk management ideas. It is the risk per trade, the risk per sector, and then the open-trade risk. A lot of investors/traders don’t think of it this way.

    One example I saw is where, let’s say, we get a signal in the bonds. We’ll buy every bond imaginable and be overweight in the bonds. But then you wake up one morning and all those trades have gone against you. When they work they work very nicely, but when they don’t, you can get your head handed to you. That is what we look to avoid. We try to make it as smooth as possible and minimize some of that aggravation.

    You mentioned trend-following. Do you just trade markets that are trending as opposed to being in a trading range?

    MB: We try to deal with people who are looking for long-term returns. Trend following is logical. This is going to sound silly, but when I got into the business, I called it the “four possibilities.” I used to tell people that when they put a trade on, four things could happen: You can make a little bit of money, you can lose a little bit of money, you can make a lot of money, and you can lose a lot of money. It occurred to me that if we could eliminate big losses, we would be left with the three other possibilities, and we should be able to become successful investors."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-50-54-martin-bedick-and-andrew-abraham-by-j-gopalakrishnan-and-b-faber-21.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-50-54-martin-bedick-and-andrew-abraham-by-j-gopalakrishnan-and-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-50-54-martin-bedick-and-andrew-abraham-by-j-gopalakrishnan-and-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov285nica,d,"{""minimum-quantity"":""1"",""path"":""ch11n207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:11 (56-59): Nison Candle Scanner by Barbara Star, PhD"",""caption-linebreaks"":""Nison Candle Scanner by Barbara Star, PhD

    Mention the name “Steve Nison” to a trader, and chances are the first thing that pops into his or her mind is Japanese candlestick charting. The two seem joined at the hip. And so popular have candlestick charts become, they are standard in all major financial charting software programs.

    Some charting programs also offer the ability to scan for certain candle patterns. But according to Steve Nison, many do not identify them accurately. To correct that problem he developed the Nison Candle Scanner, an add-on available for NinjaTrader, TradeStation, Trade Navigator, and MetaTrader 4 charting platforms. The Nison Candle Scanner searches for 28 candle patterns and is offered at different subscription levels with free program updates. And it scans everything — stocks, indexes, commodities, futures, and forex. I even used it on weekly mutual fund data. And lest I forget, it also works in all time frames.

    Rather than flip through chart after chart searching for candle patterns, the Nison Candle Scanner (Ncs) makes quick work of narrowing down a long field of trading contenders to find those that are potential candidates requiring your immediate attention."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-56-59-nison-candle-scanner-by-barbara-star-phd-21.gif"",""height"":""623"",""width"":""446""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-56-59-nison-candle-scanner-by-barbara-star-phd-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-56-59-nison-candle-scanner-by-barbara-star-phd-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28664qa,d,"{""minimum-quantity"":""1"",""path"":""ch11n207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:11 (60, 64): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    FOUR DAYS OF THE CURRICULM

    Don, I understand that you and your firm have been teaching trading since the early 1990s. I know trading overall has changed considerably over the years as well. I am interested in what you guys are teaching these days. Is there a chance you could share what you’re doing in some of your programs? — equtyspec2

    Actually, your timing is pretty good for this question. My brother Bob, me, and our top trader/mentors have just redone our entire curriculum. For 2011 we will have a four-day schedule, with a “flexible Friday” for those who would like a private meetup, see how we set up for the boot camps, or just to summarize the four days of training. I will pass along the fundamental concepts and topics, since I don’t believe I have ever gone into this here at Stocks & Commodities."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-60-64-q-a-by-don-bright-21.gif"",""height"":""619"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-60-64-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-60-64-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28664ex,d,"{""minimum-quantity"":""1"",""path"":""ch11n207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:11 (61, 64): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    GETTING EVEN FOR FREE?

    Can any option strategies help with an unrealized loss on a stock position without putting additional capital at risk?

    Yes, there is. In this type of situation, a trader can apply a buy-write strategy where a call is sold one-for-one against the existing shares held. An offshoot of this strategy and perhaps a bit more clever is to execute a ratio front-spread in order to ratchet down the breakeven even further.

    The combined position, which consists of +1 call x ‑2 higher strike calls against an existing position of +100 shares, works like owning two buy-writes at the sold strike if shares reverse course and rally higher. But if the stock continues to move lower, the trader maintains the risk associated with the originally held long stock as the spread will go out worthless at expiration.

    Remember, due to the construction of our combined position, the trader owns one buy-write and one limited risk bull vertical spread. When the front-spread is executed for even money or a credit, the trader avoids the cost associated with averaging down with either stock or a long call."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-61-64-explore-your-options-by-tom-gentile-21.gif"",""height"":""617"",""width"":""424""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-61-64-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-61-64-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28662fu,d,"{""minimum-quantity"":""1"",""path"":""ch11n207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:11 (62, 62): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    ABOUT GRAIN PRICES

    What are some of the key fundamental forces behind grain prices?

    Before we look at the details, it is important to be aware of the big picture: Grain futures react to macro global economic conditions along with micro growing environments in the primary growing regions of the US, South America, China, and India. This makes sense because grain futures traded on Cme Group are based primarily on crops grown in the regions but sold to overseas buyers.

    Price pressures in the grain complex, similar to any other market, come from a nearly unlimited number of factors. However, to avoid analysis paralysis, traders will likely be better off narrowing their focus of research or, better yet, knowing where to go for reliable information:

    US DOLLAR

    The value of the dollar plays a role in grain valuation. This is because a stronger dollar creates an environment in which dollar-priced assets (including grains) seem expensive to foreign buyers. Accordingly, the demand for these “expensive” assets drops and often so does the price of grain. Conversely, a weak US currency enables domestic growers to market their inventory at more competitive prices, increasing demand for the products and eventually promoting higher grain prices."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-62-62-futures-for-you-by-carley-garner-21.gif"",""height"":""618"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-62-62-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-62-62-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286sppr,d,"{""minimum-quantity"":""1"",""path"":""ch11n207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:11 (67-68): Spotting Price Reversals With The VIX by John Zachary"",""caption-linebreaks"":""Spotting Price Reversals With The VIX by John Zachary

    Crowds are often wrong, particularly in the market. Use the\nCBOE Volatility Index to be on the right side.

    \nThe stock market can move in waves where its price action can trade into extreme price levels, resulting in waves of traders that enter or exit the market. However, it is exactly at these extreme levels that traders need to be cautious and consider short-term reversals, but crowd psychology takes over as one trader follows the next in fear of missing out on a potential move or taking a loss.

    Studying market psychology is really about the study of human nature, as the market’s price action reveals to the intelligent speculator what the market is reflecting about the market participants. For example, when markets are trending upward, it reflects that they are optimistic about the future of an investment and begin accumulating it, which causes it to rise. Conversely, if the markets are reversing, then it reveals that the mass crowd of traders participating in the markets have a negative view of current prices and/or the future prospects of the market, which causes distribution, or selling, resulting in a downtrend.

    At times, though, the market has moved too far, too fast in a given direction and reverses course. When large numbers of traders begin to enter the market and are driven by either fear or greed, taking the market to extremes, it sets the stage for a quick price reversal. These short-term reversals serve as both a warning and an opportunity to a trader who can spot the staging ground of such a move to occur."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-67-68-spotting-price-reversals-with-the-vix-by-john-zachary-21.gif"",""height"":""619"",""width"":""430""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-67-68-spotting-price-reversals-with-the-vix-by-john-zachary-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-67-68-spotting-price-reversals-with-the-vix-by-john-zachary-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286trti3,d,"{""minimum-quantity"":""1"",""path"":""ch11n207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:11 (69-80): Traders' Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders' Tips by Technical Analysis, Inc.

    Most of this month’s Traders’ Tips are based on John Ehlers and Ric Way's article in this issue, “Zero Lag (Well, Almost).”

    EasyLanguage code to implement the indicator is provided in Ehlers and Way's article in this issue, and at the end of this document. Additional code is presented here as contributed by various software developers."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-69-80-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""618"",""width"":""421""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-69-80-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-69-80-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28887le,d,"{""minimum-quantity"":""1"",""path"":""ch11n207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:11 (8-9, 87): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    GANN AND THE TIME FACTOR

    Editor,

    I am writing from Mumbai, India, and am a subscriber to S&C magazine. I trade index futures, options, and equities. I have been following the technicals for three years and am a keen student of them.

    I liked Koos van der Merwe’s article in the August 2010 S&C, “Gann And The Time Factor,” and the way he highlights the importance of the x-axis on a chart (which is mostly overlooked by analysts all over). Most of the studies I have found are on the y-axis (price).

    I personally follow Elliott wave analysis along with time (that is, number of bars) taken to form a particular wave in any degree. I compare it to the previous wave of the same degree and I examine its Fibonacci relationship while confirming the time taken. I have read some books on Gann and have tried to implement the technique using our Nifty index.

    I also liked van der Merwe’s previous articles on Elliott wave analysis published in earlier issues of S&C.

    The Gann squares I applied to our index have worked well and have shown good results on daily charts using an important low or high. I look forward to more articles of this sort from van der Merwe in S&C. I would also like to know generally if we should apply the Gann box on a weekly chart from a particular important pivot low or high. How would that be helpful while analyzing the same chart in a lower time frame — that is, daily or hourly?

    Nilesh"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-8-9-87-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-8-9-87-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-8-9-87-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov289bofo9,d,"{""minimum-quantity"":""1"",""path"":""ch11n207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:11 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    The Exchange-Traded Funds Manual, 2nd Ed.

    Mastering The Currency Market

    Success In Commodities…The Congestion Phase System: Revised Ed.

    The 21st Century Economy: A Beginner’s Guide

    Trading 101: Trading Strategies For High And Low-Volatility Markets

    The Ultimate Trading Robot"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""613"",""width"":""412""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28996po,d,"{""minimum-quantity"":""1"",""path"":""ch11n207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:11 (98, 96): Points of Force in Price and Time by Olesksandr Salivon"",""caption-linebreaks"":""Points of Force in Price and Time by Olesksandr Salivon

    Here’s a trading strategy based on the works of W.D. Gann. Would it work for you?

    Traders are often told to “keep it simple.” But even if you do so, your trading can still suffer losses. Years of experience have shown me that to be precise, especially in short-term trading, you cannot afford to use a trading system with just three buttons: “Buy,” “Sell,” and “Panic.” If you are not lucky by nature you need to work, study the market, and learn constantly in order to succeed.

    Here is a short-term aspect of my trading strategy, based on the writings of W.D. Gann. I follow daily and weekly trends, use Gann’s Master Charts, mathematics, and astrology. I also use a combination of tools to identify short-term trends in order to enter the market precisely before the daily trend unfolds. I will show you how to use price tools (swings, scale, angles, vectors, Fibonacci levels, square of 144, square of 9), time tools (fixed, variable and natural time levels, circle of 360), and astronomy factors. And finally, I will focus on price swings, natural and Fibonacci price levels, and market inertia using the May soybeans futures contract hourly chart from its low at 911 on February 4, 2010, as an example. However, you can apply these tools to any market."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-98-96-points-of-force-in-price-and-time-by-olesksandr-salivon-21.gif"",""height"":""621"",""width"":""438""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-98-96-points-of-force-in-price-and-time-by-olesksandr-salivon-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-98-96-points-of-force-in-price-and-time-by-olesksandr-salivon-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov282trru,d,"{""minimum-quantity"":""1"",""path"":""ch11n207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:11(20-24): Trading The Russell 2000 Emini by Austin Passamonte"",""caption-linebreaks"":""Trading The Russell 2000 Emini by Austin Passamonte

    The Russell 2000 emini futures is a highly tradable instrument. Here’s a look at some of its advantages\nand disadvantages.

    The Standard & Poor’s 500 futures contract (ES) is the king of emini index futures markets. More traders trade that instrument than all other index futures combined. But popularity as measured by volume does not always mean that particular tradable is more profitable than others.

    The S&P 500 futures contracts are the most liquid, most popular, and even most churned by black-box computer programs. The ES spends more time going sideways in consolidation patterns and/or pulling back inside directional periods than any of the other eminis, due to professional-level players working big orders that have nothing to do with accumulation or distribution patterns. Hedging to offset blocks of stock, Spy shares, Spx option positions, and intermarket positions such as ES/NQ (Nasdaq 100) spreads are all part of the intraday influence on S&P 500 futures.

    In addition, numerous black-box programs exist solely for scalping sideways profit potential from ES markets versus something else. This could be the arbitrage spread between ES and Spy, ES and Spx options, or ES emini futures versus SP00S pit-traded futures and their mismatched bid/ask spreads — in other words, a lot of big-money positions trade inside the ES with no regard to direction. These program types work to keep price action sideways by arbitraging price discrepancies between different tradables.

    It is that constant pressure on ES that creates sideways price behavior. Some retail traders develop strategies to take advantage of that predictability. Overall, it is the most congested emini instrument with the least amount of straight-line price movement."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-20-24-trading-the-russell-2000-emini-by-austin-passamonte-21.gif"",""height"":""629"",""width"":""471""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-20-24-trading-the-russell-2000-emini-by-austin-passamonte-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-11-20-24-trading-the-russell-2000-emini-by-austin-passamonte-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28169le,d,"{""minimum-quantity"":""1"",""path"":""ch12d206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:12 (10-16, 69): Less Stress With The JM Internal Band by Koos van der Merwe"",""caption-linebreaks"":""Less Stress With The JM Internal Band by Koos van der Merwe

    Here’s a trading strategy that helps you sleep soundly and prepares you for the market the following morning.

    Throughout my investing career, I have always believed in simplicity. I have studied Elliott wave theory and used it to give me an idea of which way the market is heading. I have used and still use WD Gann to get an idea of when a major or minor reversal will occur — timing the market. Knowing when the market will turn up or down is a major advantage to my investing strategy, since the first lesson of investing is Never go against the overall trend. To be a buyer in a collapsing market is playing with fire, and selling short in a rising market is just as bad, unless you have information that no one else has.

    RUN WITH THE TREND

    Knowing what stock to buy or sell short is definitely an advantage, especially when you have identified a market bottom. But you must ask yourself: Do you want to be a bottom picker? Do you want to look at a chart with a band, whether Bollinger, Donchian or, for that matter, any other band, and place a buy order at the bottom of the band as long as it coincides with your favorite indicator’s buy signal? Or if you like placing shorts, would you place a sell short signal if you thought that the share was overbought as it reached the upper band, with your favorite indicator suggesting a sell signal?

    This has always worried me. Do you buy into a falling market and sell short into a rising market, or do you wait for the market to turn and go with the trend? The standard advice has always been “Run with the trend,” a favorite with analysts. The problem that regularly surfaces for a novice investor is, “When do you close a position?”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-10-16-69-less-stress-with-the-jm-internal-band-by-koos-van-der-merwe-21.gif"",""height"":""627"",""width"":""466""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-10-16-69-less-stress-with-the-jm-internal-band-by-koos-van-der-merwe-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-10-16-69-less-stress-with-the-jm-internal-band-by-koos-van-der-merwe-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281trin,d,"{""minimum-quantity"":""1"",""path"":""ch12d206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:12 (18-23): Trading Indexes With The Hull Moving Average by Max Gardner"",""caption-linebreaks"":""Trading Indexes With The Hull Moving Average by Max Gardner

    Moving averages smooth data and make it easier to analyze price movements, but they tend to lag. Here’s a market timing system that removes the lag and forecasts future data.

    Buy & hold works well as the market goes up, but the strategy falls apart when the market tanks. We need a timing model to preserve capital in down markets and identify opportunities in up markets. Is it possible?

    Moving averages are often the best way to eliminate data spikes, and those of relatively long lengths smooth data as well. However, moving averages have a major flaw, in that their long lookback periods introduce lag. The solution is to modify the moving average formula and remove the lag. Doing so minimizes the possibility of the moving average overshooting the raw data when predicting the next interval’s activity and thus introducing errors. Here’s how it can be done.

    REMOVE THE LAG

    A new type of moving average developed by trader Alan Hull attempts to solve this problem. In this variation, a simple moving average (Sma) is the summation of data samples divided by the number of samples (N). The Hull moving average (Hma) accomplishes the smoothing by using the weighted moving average (Wma) and a square root of N. The calculation is thus:

    HMA(N) = WMA(2*WMA(N/2) – WMA(N)),sqrt(N))

    To step through this formula: Take the Wma of the last N/2 data and multiply it by 2. Then subtract the Wma of the last N data. Now take that value and use the square root of N. Then find the Wma of those two values (that is, the WMA [sqrt of N] of the remembered value). Since the square root truncates values, the calculation should choose an N that is a perfect square such as 4, 9, 16, 25, 49, or 81."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-18-23-trading-indexes-with-the-hull-moving-average-by-max-gardner-21.gif"",""height"":""626"",""width"":""456""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-18-23-trading-indexes-with-the-hull-moving-average-by-max-gardner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-18-23-trading-indexes-with-the-hull-moving-average-by-max-gardner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov282maan,d,"{""minimum-quantity"":""1"",""path"":""ch12d206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:12 (24-26): MACD and Trendlines by Danish Kapur"",""caption-linebreaks"":""MACD and Trendlines by Danish Kapur

    Using the moving average convergence/divergence together with trendlines helps to filter out false signals.

    The moving average convergence/divergence (Macd) (12, 26, 9) is powerful when it comes to indicating buy and sell signals. After having applied it to my trading for quite a while, I realized that the major problem with Macd was that often, the signals turn out to be false. For example, in Figure 1, the Indian rupee/US dollar (Inr/Usd), the Macd gave a signal to buy the dollar against the rupee in the second quarter of 2007 (May 2007) when the Inr was trading at Inr/Usd 40.50/1.00. But the signal turned out to be a false one and Inr actually strengthened to Inr/Usd 39.00/1.00. Also noteworthy is how even after one year (May 2008), Inr/Usd was trading at the same level.

    The same thing happened in the second quarter of 2009 when the Macd gave a signal to buy the US dollar against rupee (Inr/Usd 46.5/1), but that too turned out to be a short-term bounce and the rupee started strengthening after initial weakness to Inr/Usd 49.00/1.00. As you can see, it is now trading at Inr/Usd 44.5/1.

    DIVERGENCE 1

    I prefer to use the MACD to look for divergences, as MACD together with trendlines really helps in filtering out false signals. In Figure 1, you can see that in second-quarter 2007, the Indian rupee kept making lower lows and lower highs, but Macd was moving in the opposite direction, making higher lows and higher highs (displayed as “divergence 1”). This is considered to be a bullish divergence, and you should think of it as a warning for a trend change. I would not take any action on just this divergence but wait for price to cross the downsloping trendline (shown as “trendline 1”) to reverse my position (that is, sell the rupee to buy the dollar)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-24-26-macd-and-trendlines-by-danish-kapur-24.gif"",""height"":""621"",""width"":""441""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-24-26-macd-and-trendlines-by-danish-kapur-27.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-24-26-macd-and-trendlines-by-danish-kapur-28.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov282maan1,d,"{""minimum-quantity"":""1"",""path"":""faarfr203"",""ysw-page-title"":""Stocks & Commodities V. 28:12 (24-26): MACD and Trendlines by Danish Kapur"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-24-26-macd-and-trendlines-by-danish-kapur-29.gif"",""height"":""180"",""width"":""128""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-24-26-macd-and-trendlines-by-danish-kapur-30.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-24-26-macd-and-trendlines-by-danish-kapur-31.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov282qaby1,d,"{""minimum-quantity"":""1"",""path"":""ch12d206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:12 (27): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    TIMING YOUR TRADES

    Don, I’ve tried everywhere, but I can’t find an answer to this question and I think you’d know. If I place a limit order after 9:30 am on Pfizer (Pfe) to the Nyse, and Pfe hasn’t opened yet on the Nyse, is that order eligible to participate on the opening cross? —Bottle4411

    The Nyse accepts orders after 9:30 for the opening-only print, and of course for day orders as well. You have a slight risk in your timing in that if the order is not in for a few seconds, you may be locked out of the trade."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-27-q-a-by-don-bright-21.gif"",""height"":""616"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-27-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-27-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283vixa,d,"{""minimum-quantity"":""1"",""path"":""ch12d206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:12 (34-36): VIX and the Lemming Effect by John Zachary"",""caption-linebreaks"":""VIX and the Lemming Effect by John Zachary

    Investors are prone to buy when they should sell and to sell when they should buy. How can we prevent ourselves from making these mistakes?

    Lemmings, small rodents best known for an instinct to charge off jagged cliffs to their deaths en masse, have immortalized the term “lemming effect.” A lemming effect signifies an event where the collective actions compel the herd to stay within the group, only to meet with tragic results in the end.

    This is also an effective metaphor for the stock market, where millions of investors will follow the crowd at both ends of the extreme: up or down, bullish or bearish, with tragic results as they overplay their position. While otherwise intelligent, these people can’t seem to help themselves when the trends sputter to an end yet they continue in that direction, and then compound the problem by failing to confront the fact that their ride is over.

    Where you might see tragedy for millions of investors who give in to this compulsion, there also lies the opportunity for a skilled investor to profit as well. When markets reach these points, the savvy speculator has the opportunity to ride out the uptrends with caution as the market takes share prices to overvalued heights before selling out at a windfall profit. By the same token, when share prices fall to extremely undervalued levels during a downtrend, once again, skilled investors like Warren Buffett step in to buy stocks at below wholesale prices.

    So if investors are prone to buy when they should sell and to sell when they should buy, how do you tell when that is likely to happen?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-34-36-vix-and-the-lemming-effect-by-john-zachary-21.gif"",""height"":""621"",""width"":""439""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-34-36-vix-and-the-lemming-effect-by-john-zachary-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-34-36-vix-and-the-lemming-effect-by-john-zachary-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28365fu,d,"{""minimum-quantity"":""1"",""path"":""ch12d206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:12 (37, 65): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    ENERGY BASICS

    If I want to get into trading energy futures, where can I go for fundamental information?

    There is a saying: “Nobody has ever fought a war over ethanol.” Nobody ever has done so because there is no reason to. Ethanol is created with renewable resources; unfortunately, more popular forms of energy, such as crude oil, are not renewable. Due to oil’s finite supply, interruptions in extraction, transportation, or distillation can create volatile price movements. Nothing tells the story of this better than a chart.

    The price of crude oil futures peaked near $150 per barrel in mid-2008 (if you recall, many pundits were calling for $200 oil in short order) and retreated to around $30 by the end of the same year. This equals about $120,000 per contract. This is one of the most treacherous commodity markets to participate in but remains popular due to the potential rewards.

    Supply/demand factors

    For production and usage figures, energy traders look to the Energy Information Administration (Eia), which is a section of the Department of Energy (Doe). The government entity issues periodic energy statistics and even market predictions."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-37-65-futures-for-you-by-carley-garner-21.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-37-65-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-37-65-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283gowa,d,"{""minimum-quantity"":""1"",""path"":""ch12d206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:12 (38-44): Goodman Wave Theory by Michael Duane Archer"",""caption-linebreaks"":""Goodman Wave Theory by Michael Duane Archer

    Logical and easy to apply, this wave theory can complement\nyour own approach to technical trading.

    Charles B. Goodman devised two trading theories, the Goodman wave (GWT) and market environments (ME), and used them effectively in trading equities and commodity futures. I have further developed his work, codifying much of it. Even though I have written complex computer trading programs, GWT and ME are still my “go-to” trading methods. I have used them successfully in equities as a registered investment advisor, in futures as a commodities trading advisor (CTA), and in forex as a private trader.

    Here, I will discuss the three principles of the GWT: propagation, intersection, and 3-C. These will also show how Goodman differs from other wave and swing theories. Finally, I provide a useful trade setup, the propagation trade setup (PTS), derived from Gwt principles.

    THE 50% RETRACEMENT AND MEASURED MOVE

    The Goodman wave theory begins with the 50% return and measured move rules and constructs a complete trading approach from the ideal 1-2-3 wave.

    The 50% rule, an old but very sound one, states that prices will find support or resistance at the 50% retracement of a price swing (Figure 1). The logic is easy enough to understand. At the 50% point all the buyers and sellers in the swing are basically even. Half of the buyers and half of the sellers have profits; half of the buyers and half of the sellers have losses. Goodman taught me the importance of being able to detect the underlying logic in any chart formation or indicator tool. The relative strength index (Rsi) is, after all, a flavor of the slope-intercept equation from high school algebra:

    y = mx + b

    In GWT, a swing is a price trend without more than a 25% retracement. In Figure 2 the dotted lines in A and B are swings. When these buyers and sellers unwind, it will create a measured move at which price point, assuming all else is constant, either all buyers have profits and all sellers have losses (up swing) or all sellers have profits and all buyers have losses (down swing).

    This 1-2-3 measured move is the ideal building block and a matrix composed of three swings: two primary (first primary swing [Fps] and second primary swing [Sps]) and one secondary (secondary swing [SS]). The diagram in Figure 3 displays an up matrix and a down matrix. A matrix need not conform to the ideal measurements as long as the SS is a swing.

    "",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-38-44-goodman-wave-theory-by-michael-duane-archer-21.gif"",""height"":""622"",""width"":""441""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-38-44-goodman-wave-theory-by-michael-duane-archer-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-38-44-goodman-wave-theory-by-michael-duane-archer-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov284inbr,d,"{""minimum-quantity"":""1"",""path"":""ch12d206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:12 (46-51): Interview: Brandon Wendell and Trading Around The World by J. Gopalakrishnan and B.Faber"",""caption-linebreaks"":""Interview: Brandon Wendell and Trading Around The World by J. Gopalakrishnan and B.Faber

    Brandon Wendell, a senior instructor for Online Trading Academy, teaches courses for active investors, option traders, professional stock traders, forex traders — market participants of all kinds. Wendell is a former stockbroker, brokerage trader, and hedge fund trader and brings a variety of market insights to his trading classes and lectures. He has appeared as a guest on Bloomberg TV and Cnbc Asia’s Cash Flow and conducted special seminars for Cnbc staff on technical analysis of the financial markets. He has been an industry expert speaker at the Asia Traders and Investors Conference as well as Invest Fair. He is a member of the Market Technicians Association and holds the Chartered Market Technician designation and also the Series 7 and 63 licenses. An Online Trading Academy graduate himself, he trades equities, options, forex, and futures for his own account. Stocks & Commodities Editor Jayanthi Gopalakrishnan and Staff Writer Bruce Faber interviewed Brandon Wendell via telephone on September 29, 2010.

    Brandon, how did you get interested in trading?

    It was a fluke. Back in 1996 or 1997 I liquidated a private security company and I took some time off. After that, I needed a job so I became a broker. I was a retail stockbroker on the sell side and I decided I wanted to do more than just sales. I was fortunate enough to get an entry-level job as a trader at a small private hedge fund, and they paid for me to get my education at Online Trading Academy. So I am now teaching at the place I started out.

    Do you still trade with the hedge fund or do you trade full-time for yourself?

    I just trade for myself now. I trade in every asset class. I do a lot of intermarket analysis so I am always finding different opportunities, but I primarily trade equity futures and currencies. I also trade single equities and options, but most of my trading is done in forex and futures.

    How has intermarket analysis helped you in trading these various assets?

    Understanding the relationships between those asset classes can give you leads about where turning points might occur and also confirm changes in market direction. It makes a difference between seeing a small correction and an actual trend reversal. Obviously, if I am looking at multiple things I see multiple opportunities as well.

    What are some examples of markets you can apply intermarket analysis to?

    One that stands out in particular is copper. The copper futures and even some of the copper mining stocks have an 80% to 85% positive correlation with the equity markets. So I watch those charts. As the copper hits resistance or support, it usually gives me some lead time to move before the equity markets turn."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-46-51-interview-brandon-wendell-and-trading-around-the-world-by-j-gopalakrishnan-and-b-faber-21.gif"",""height"":""633"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-46-51-interview-brandon-wendell-and-trading-around-the-world-by-j-gopalakrishnan-and-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-46-51-interview-brandon-wendell-and-trading-around-the-world-by-j-gopalakrishnan-and-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov285main,d,"{""minimum-quantity"":""1"",""path"":""ch12d206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:12 (52-57): The Market Instrument Function by A. Ershov and A. Gerasimov"",""caption-linebreaks"":""The Market Instrument Function by A. Ershov and A. Gerasimov

    Can you really determine future price movement? This unique method tries to do just that by analyzing collective patterns that form in a market.

    Financial market analysts often attempt to predict the behavior of a specific financial asset and provide recommendations for investors. But for practical reasons, the prediction horizon is frequently limited to several months, if at all. As a result, although the current price levels may be well understood, how that financial asset achieves a level may never be mentioned.

    In forecasts prepared by analysts, oftentimes the data on the price chart corresponding to the last trading day is missing. We offer an approach that allows you to calculate this missing data with a prediction horizon that varies from three to nine years, depending on the security.

    Modern technical analysis may only be able to advise you on what should be done at a specific point for a given day or hour, but it doesn’t say much about the general future behavior of an asset. Accordingly, trading systems are intrinsically probabilistic, based upon similar principles. This allows us to analyze the trading systems instead of a financial market, which does not help us to establish collective patterns of future behavior for prices.

    MAIN TASKS

    Consider one of the possible models of a marketplace based on these criteria:\n• At any given time, any market asset is characterized by its price level and the way this level has been reached. The asset can be described by a graph showing all the price changes.

    • The set of laws affecting price formation can be separated into an isolated unit. Graphically, this can be represented by a device that generates its current price using its own inner laws."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-52-57-the-market-instrument-function-by-a-ershov-and-a-gerasimov-21.gif"",""height"":""620"",""width"":""438""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-52-57-the-market-instrument-function-by-a-ershov-and-a-gerasimov-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-52-57-the-market-instrument-function-by-a-ershov-and-a-gerasimov-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286prre10,d,"{""minimum-quantity"":""1"",""path"":""ch12d206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:12 (60-63): Product Review: Stockspotter.com by Dennis Peterson"",""caption-linebreaks"":""Product Review: Stockspotter.com by Dennis Peterson

    StockSpotter is a website that provides buy and sell recommendations for stocks. The ticker symbols for the stocks are posted at 5:00 pm Pacific time for the next trading day. Sometimes there might be three or four recommended symbols, while other times there might be as many as a dozen or more.

    What’s different and remarkable about the site is their openness about their performance. As you will see, equity curves and Monte Carlo simulations demonstrate how successful StockSpotter is in recommending trades. You can expect an average profit of 3.34% per trade using the highest-rated recommended trades. The maximum time of a position is 10 trading days. Alerts to exit a position may come earlier.

    HOW DO THEY DO IT?

    It’s not simple, but it’s all coded up and therefore the same algorithms are applied every day. At the heart of this system, the code wants to find trend retracements and locate the point where price will start to move with the trend again."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-60-63-product-review-stockspotter-com-by-dennis-peterson-21.gif"",""height"":""633"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-60-63-product-review-stockspotter-com-by-dennis-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-60-63-product-review-stockspotter-com-by-dennis-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286exyo1,d,"{""minimum-quantity"":""1"",""path"":""ch12d206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:12 (64-65): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    COLLAR VARIATION

    If I own shares for a growth stock that still looks to have upside potential but I am also concerned about protecting existing gains from corrective action, what can I do in regards to positioning?

    If the stock has relatively liquid options listed, you have at least a couple good ones to consider. The simplest means to protect gains while still allowing for further upside in the stock is to purchase a put one-for-one against shares owned. This is called a married put strategy or long synthetic call.

    Depending on which strike the trader chooses will determine how much protection is in place and how much the purchased put will eat into potential profit should the stock increase in value. The closer the chosen put is to shares, the more protection the trader has in place to guard against downside exposure."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-64-65-explore-your-options-by-tom-gentile-21.gif"",""height"":""616"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-64-65-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-64-65-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov287trti6,d,"{""minimum-quantity"":""1"",""path"":""ch12d206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:12 (70-82): Traders' Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders' Tips by Technical Analysis, Inc.

    This month's Traders’ Tips are based on Max Gardner’s article in this issue, “Trading Indexes With The Hull Moving Average.”

    Code for Wealth-Lab to implement the Hull moving average system is provided in Gardner’s article elsewhere in this issue and at the end of this document. Additional code is presented here as contributed by various software developers. 

    Readers will find our Traders’ Tips section in its entirety at the Stocks & Commodities website at www.Traders.com in the Traders’ Tips area, from where the code can be copied and pasted into the appropriate program. In addition, the code for each program is usually available at the respective software company's website. Thus, no retyping of code is required for Internet users."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-70-82-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""615"",""width"":""415""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-70-82-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-70-82-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28887le1,d,"{""minimum-quantity"":""1"",""path"":""ch12d206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:12 (8-9, 87): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    BARRY TAYLOR PAINT BAR STUDY

    Editor,

    I recently read the article “Can The US Dollar Rally Last?” by Donald Pendergast Jr. in the October 2010 S&C, and I am interested in the Barry Taylor ProAm paint bar study for TradeStation that he referenced in the article.

    I have been unable to find this study in the TradeStation EasyLanguage library. Could Mr. Pendergast either shed more light on this study, supply the EasyLanguage code, or provide any suggestions on how to access this study through TradeStation?

    DB

    The Barry Taylor ProAm is available for TradeStation, which you can purchase directly from the developer at http://emini-watch.com/. You will see it listed under “Products.”—Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-8-9-87-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""618"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-8-9-87-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-8-9-87-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov289bofo10,d,"{""minimum-quantity"":""1"",""path"":""ch12d206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:12 (92): Books for Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books for Traders by Technical Analysis, Inc.

    The Blank Swan: The End Of Probability

    Chart Your Way To Profits, 2nd Edition

    Guide To Financial Markets, 5th Edition

    How To Take Money From The Markets: Creating Profitable StrategieS

    Iron Condor: Neutral Strategy For Uncommon Profit"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""616"",""width"":""420""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28958go,d,"{""minimum-quantity"":""1"",""path"":""ch12d206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:12 (98, 58): Gold Hiccup or Reversal? by Donald W. Pendergast Jr."",""caption-linebreaks"":""Gold Hiccup or Reversal? by Donald W. Pendergast Jr.

    Here’s an inside look at the reversal now under way in the gold futures market, through the eyes of a system trader.

    I'VE written several articles regarding what I saw as the impending reversal in both the gold and silver markets and in the US Dollar Index as well. October 7, 2010’s intraday reversal in all three of these inextricably linked markets was significant enough to suggest that this may indeed be the start of a notable (and tradable) corrective move lower to major support levels (resistance levels in the case of the dollar index). Here’s a closer look at the intraday reversal in gold, as seen by my Goldbugger futures trading system.

    Similar in concept to the Agent Argent silver futures system, Goldbugger strives to latch on to every significant intraday surge in the full-sized Comex gold futures contract. Each full point on this contract is worth $100, so you can imagine the profits garnered as the system caught the “last train north” prior to Thursday’s reversal. The trade netted $3,060 before commissions and slippage and finally exited the trade only $11 shy of the swing move’s high point. Not every trade goes this well, of course, and the system only wins about 40% of the time, but with winners gaining more than three times the amount that losing trades suffer."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-98-58-gold-hiccup-or-reversal-by-donald-w-pendergast-jr-21.gif"",""height"":""621"",""width"":""439""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-98-58-gold-hiccup-or-reversal-by-donald-w-pendergast-jr-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-12-98-58-gold-hiccup-or-reversal-by-donald-w-pendergast-jr-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov2814inr,d,"{""minimum-quantity"":""1"",""path"":""ch13bis20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:13 (12-17): The 4% Indicator Revisited by Michael J. Collins061"",""caption-linebreaks"":""The 4% Indicator Revisited by Michael J. Collins061

    This simple time-tested indicator allows investors to trade with the trend to achieve above-average returns.

    As trend-following traders, we understand that success depends on identifying and trading with the price trend of the markets. We have come to appreciate the saying that “the trend is your friend.” More than 20 years ago, Martin Zweig, in his book Winning On Wall Street, featured a simple indicator designed to help an investor follow the price trend of the markets. Zweig called this the 4% indicator. In his book he illustrated that for the 22-year period ended late 1988, if an investor followed this indicator, a modest $10,000 investment would have grown to more than $233,000! This is an approximate 15% compounded annual rate of return — a remarkable return that significantly exceeded market returns.

    But that was then. Due to changing market dynamics, many indicators appear to work for a certain time and as conditions change, the indicator loses its effectiveness despite what backtesting results have shown.

    This article revisits the 4% model and explores its effectiveness in current market conditions. Is this indicator still relevant 20 years later? To find out, I developed a trading model.

    THE 4% INDICATOR

    Often, the simpler the indicator, the easier the model is to execute. It doesn’t get much simpler! As Zweig shows in his book, the 4% indicator uses the Value Line Composite Index to generate the buy and sell signals. The Value Line Composite is a collection of 1,700 companies that are equally weighted and covered in the Value Line Investment Survey, a popular investment service. This index consists primarily of mid-cap stocks and is therefore more representative of underlying market movements."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-13-12-17-the-4-indicator-revisited-by-michael-j-collins061-21.gif"",""height"":""620"",""width"":""439""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-13-12-17-the-4-indicator-revisited-by-michael-j-collins061-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-13-12-17-the-4-indicator-revisited-by-michael-j-collins061-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281smri,d,"{""minimum-quantity"":""1"",""path"":""ch13bis20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:13 (18-21): Smoothing The Ride With Moving Averages by Edward Donie"",""caption-linebreaks"":""Smoothing The Ride With Moving Averages by Edward Donie

    There are many ways to smooth out fluctuations in the movement of prices. So what’s the best?

    Because of the daily volatility of prices, investors use many methods to smooth out these fluctuations to analyze longer time frame trends in price movements. Two common methods are the simple moving average (Sma or MA) and the exponential moving average (Ema). Both are calculated for a variety of time frames. They can also be combined to create other indicators and signals. Which is better? We will examine two frequently used time frames, 20 days and 50 days.

    SIMPLE MOVING AVERAGE

    The simple moving average for a particular number of days is the sum of most recent closes for that number of days divided by those days. After the close of trading, it is updated to include today’s data and the data of the oldest day is dropped. This figure is plotted on charts to provide a smoother interpretation of the direction of prices. In the case of the 20-day simple moving average, it is calculated by adding the closing prices of the last 20 days and dividing that total by 20. The 50-day Sma is calculated by adding the closing prices of the last 50 days and dividing that total by 50.

    EXPONENTIAL MOVING AVERAGE

    The calculation of the exponential moving average is less intuitive. It is calculated by taking a percentage of yesterday’s exponential moving average and adding a percentage of today’s close. The two fractions must total 100%. The fractions for any number of days can be found in many references. Fortunately, most charting packages include the Ema in their sets of charting tools, so all you have to do is specify the number of days or parameters you prefer. The percentages for 20- and 50-day Emas are shown in Figure 1."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-13-18-21-smoothing-the-ride-with-moving-averages-by-edward-donie-21.gif"",""height"":""631"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-13-18-21-smoothing-the-ride-with-moving-averages-by-edward-donie-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-13-18-21-smoothing-the-ride-with-moving-averages-by-edward-donie-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov282rech,d,"{""minimum-quantity"":""1"",""path"":""ch13bis20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:13 (22-37): Readers’ Choice Awards 2010 by Technical Analysis, Inc."",""caption-linebreaks"":""Readers’ Choice Awards 2010 by Technical Analysis, Inc.

    We are pleased to present the Technical Analysis of Stocks & Commodities magazine 2010 Readers’ Choice Awards (Rca). Each year, we put before our readers a ballot of products and services related to technical analysis and trading. The following pages present the products and services you and your peers chose this year as your favorites.

    The Readers’ Choice Awards begins each year with a list of products gathered by the editors of Stocks & Commodities, with space for write-in votes (given that our list doesn’t claim to be complete). Then, to find out what our readers find to be the most useful for their trading, we ask them to choose their favorite products or the ones they find most useful from various categories by going to our website, Traders.com, and filling out the survey there. After that, we compile the results, just in time for the Bonus Issue you hold in your hands.

    Products are categorized by their primary purpose. Just because a service or product is not listed does not necessarily mean that the product does not have features germane to the category. In addition, some categories are divided by cost so that the comparisons can be made on a more level playing field.

    The winners in the Readers’ Choice Awards are almost always the dominant players in their niche, and rightfully so. You may have special needs for your trading, however, so you should keep in mind those products that are not the big names in the category of your interest before you make your final decision. The Rca is designed to be an aid for you when you are deciding on which of the numerous products and services currently available to use for your trading and investing. With that in mind, we think you’ll find the Readers’ Choices a terrific guide to products and services that you’ll be interested in."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-13-22-37-readers-choice-awards-2010-by-technical-analysis-inc-21.gif"",""height"":""627"",""width"":""466""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-13-22-37-readers-choice-awards-2010-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-13-22-37-readers-choice-awards-2010-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283diof,d,"{""minimum-quantity"":""1"",""path"":""ch13bis20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:13 (38-43): Diary Of A Strangle by Charles Steiner"",""caption-linebreaks"":""Diary Of A Strangle by Charles Steiner

    Here’s how you can apply this low-risk option strategy.

    Option strategies can be created to accomplish almost any speculative objective. One low-risk option strategy is the short strangle. Simply stated, a strangle is a combination of an out-of-the-money put and an out-of-the-money call with the same expiration date. The obvious advantage of this combination is that there is an expectation of a 50% or greater probability of success because only one of the two options could be in-the-money at expiration. Therefore, in setting up a strangle you must determine where the option probably will not go rather than where it might go.

    There must be an exit or hedging plan in the event that one side of the strangle ends up in-the-money. Another advantage of the short strangle is that it is margin-efficient. Being out-of-the-money, the margin requirement is reduced and only the side closest to being in-the-money is used to compute margin. An additional advantage is that this strategy lends itself to delta-neutral trading by allowing dynamic hedging, which is the addition or subtraction of short or long positions in the underlying security or additional option positions.

    Delta-neutral refers to the strategy of balancing the positive deltas of the short calls against the negative deltas of the short puts to reduce the risk of the position in order to allow the time decay of the premiums collected to work its magic. Delta is the relationship between the change in the price of the underlying asset to the change in price of the corresponding option. The delta of a short 100 call would be +0.50 when the underlying was valued at 100. Thus, the option price would decrease about 0.50 if the underlying fell to 99, all other factors remaining the same. At 101 the call option would be expected to increase 0.50 under the same circumstances. The delta of an at-the-money short put would be ‑0.50 and the option would increase in value as the price of the underlying dropped and the put option would decrease in value when the price of the underlying increased.

    The delta of a long asset position would be ‑1.00 and the delta of a short asset position would be +1.00. A mini futures contract or fewer than 100 shares of a stock would have a delta, a fraction of a full-sized contract. In addition, delta is an approximation of the probability of an option closing in-the-money."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-13-38-43-diary-of-a-strangle-by-charles-steiner-21.gif"",""height"":""628"",""width"":""466""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-13-38-43-diary-of-a-strangle-by-charles-steiner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-13-38-43-diary-of-a-strangle-by-charles-steiner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov284enfi,d,"{""minimum-quantity"":""1"",""path"":""ch13bis20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:13 (44-49): Entering The Fibonacci Zone With Carolyn Boroden by J. Gopalakrishnan and B. Faber"",""caption-linebreaks"":""Entering The Fibonacci Zone With Carolyn Boroden by J. Gopalakrishnan and B. Faber

    Carolyn Boroden is a Commodity Trading Advisor and technical analyst specializing in Fibonacci analysis. Her unique form of price and time analysis is quickly proving to be one of the most promising trading techniques using Fibonacci available today, leading to her nickname as the “Fibonacci Queen.” Boroden’s first book, Fibonacci Trading: How To Master The Time And Price Advantage, was published by McGraw-Hill in 2008. Boroden’s background includes working on the major trading floors including the Chicago Mercantile Exchange, the Chicago Board of Trade, Nyfe, and Comex. She taught a segment of the Chicago Commodity Boot Camp seminars for four years on advanced trading techniques using Fibonacci ratios on both the time and price axes of the market. Boroden has been a featured speaker on Fibonacci analysis for such venues as the Market Technicians Association, the Online Trading Expo, TradingMarkets, and Cornerstone Investments Group. Currently, she runs a daytrading chatroom featured on www.fibonacciqueen.com.

    Technical Analysis of Stocks & Commodities Editor Jayanthi Gopalakrishnan and Staff Writer Bruce Faber interviewed Carolyn Boroden via telephone on January 20, 2010.

    Carolyn, how did you get interested in trading?

    I had no interest whatsoever in the markets until I started working for a living at a very young age. My cousin invited me to interview on Wall Street because she knew I was working a couple of jobs on Long Island, and she thought that Wall Street would be a better fit for me. So I interviewed and got my first job with Donaldson Lufkin Jenrette as a secretary/gofer to the government bond trading room at Dlj. After I was there for a year and a half, one of the traders asked me to help him with some futures tickets. The next thing I knew, there was a job opening on the Chicago Mercantile Exchange (Cme), and they shipped me out there when I was 20. That’s how I got involved with the markets. It was a fluke, and now they can’t get rid of me.

    After I got to Chicago and worked on the trading floor there, I got interested in the basic technical analysis course offered by Ken Shaleen and I read John Magee and Robert Edwards’ Technical Analysis Of Stock Trends, the technical analysis bible.

    You are considered to be an expert in the application of Fibonacci levels. What got you interested in those particular numbers series?

    I had a broker friend who referred to Fibonacci ratios. I had no idea what he was talking about, but he made it sound interesting. So I went to a seminar and saw a presentation by Robert Miner, who talked about applying Fibonacci on both the price and time axes of the market. It was then that a lightbulb switched on for me. I was especially fascinated with the timing analysis part of it. I met him after his presentation and he invited me to his seminar the next day, and that was the beginning of my Fibonacci education.

    Robert Miner actually wrote for us quite a while ago and I was also very interested in his price and time projections as a forecasting tool. Do you use a lot of clusters in your chart analysis?

    I like to see the clustering effect of the ratios from different swings on a chart. I have three specific setups that I work on every day. Those setups are in my book, Fibonacci Trading. I do Fibonacci price cluster setups, which is the coincidence of at least three or more Fibonacci price relationships that come together within a relatively tight range. I also run two-step pattern setups, which also might be called a zigzag pattern in Elliott wave terms, or Gartley patterns. I also use symmetry setups, which use measured moves in the direction of the trend to get involved in the market in the direction of the trend."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-13-44-49-entering-the-fibonacci-zone-with-carolyn-boroden-by-j-gopalakrishnan-and-b-faber-21.gif"",""height"":""633"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-13-44-49-entering-the-fibonacci-zone-with-carolyn-boroden-by-j-gopalakrishnan-and-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-13-44-49-entering-the-fibonacci-zone-with-carolyn-boroden-by-j-gopalakrishnan-and-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov285trtr,d,"{""minimum-quantity"":""1"",""path"":""ch13bis20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:13 (54-58): Trading Tradeoffs With Risk Vs. Reward by Norman J. Brown"",""caption-linebreaks"":""Trading Tradeoffs With Risk Vs. Reward by Norman J. Brown

    Three variations of risk measures can be applied to evaluate the trading of mutual funds, equities, and commodities.

    There’s a well-known principle in trading that it is essential to have an edge, or expectancy (E), that is positive in order to create a winning strategy where your trading equity is increasing over time. The expectancy formula, as explained in the sidebar “Calculating Standard Deviation,” is:

    E = Bet [RW - (1-W)] = Bet [W(1 + R) - 1]

    In trading, if you have a positive edge even though you have a low winning ratio (W), you can succeed as long as it is compensated with a high winning ratio (R). As an example, E = 0.20 can be obtained with two widely differing parameters: (1) R = 5, W = 0.20 or (2) R = 0.5, W = 0.80. If you set E = 0, you get this simple formula:

    W = 1/(1 + R)

    It clearly indicates the level of W required for a given R-value in order to achieve a winning level of trading. For example, R = 1.5 requires W > 0.40, whereas R = 4 only requires W > 0.20 to achieve a positive equity return.

    There is far more to trading than expectancy, of course. In particular, you must be aware of your risks. There are two measures of risk that are widely used: volatility as measured by standard deviation (Std) and maximum drawdown (Mdd). I have not seen an expression for standard deviation using the trading expectancy I use here, so I derived an equation for it (equation 3 in the sidebar, “Calculating Standard Deviation”). The data shows its influence on risk. A parameter that reflects trading risk is Mdd (which measures the maximum drawdown of equity, in percent, over the trading interval) with data that clearly indicates that trading with low values of W results in high values of Mdd. This is one of the most interesting conclusions resulting from the study."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-13-54-58-trading-tradeoffs-with-risk-vs-reward-by-norman-j-brown-21.gif"",""height"":""622"",""width"":""439""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-13-54-58-trading-tradeoffs-with-risk-vs-reward-by-norman-j-brown-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-13-54-58-trading-tradeoffs-with-risk-vs-reward-by-norman-j-brown-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov288fofo,d,"{""minimum-quantity"":""1"",""path"":""ch13bis20"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:13 (8-11): Forex Focus: Currency Congestions by Brian Twomey"",""caption-linebreaks"":""Forex Focus: Currency Congestions by Brian Twomey

    This little-known chart setup can be applied effectively on currency charts.

    Some market participants believe that currency markets are trending all the time and picking that one indicator that signals the buy or sell will make you profitable instantly because of the fast nature of these markets. But currency markets are actually more ranging than they are trending. What happens to that one trend that falls prey to a range trade? Did that currency pair fail to break out at the top or bottom of its range? Were you prepared for the failure? A little-known chart setup called congestion, or currency congestion counts, may be just what you need.

    CURRENCY CONGESTION COUNTS

    Currency congestion can easily be defined as the location on a chart where the currency pair gets stuck in a place where defined ranges become smaller and smaller. It is a place where opening and closing prices are almost the same, where up candles are preceded by down candles and down candles are preceded by up candles. Congestion can last for days and even weeks at a time, causing traders frustration, time, and uncertainty when it comes to direction. Moreover, as time means money gained or lost, you are left wondering where the next move will be, if you will be profitable, and how long it will take.

    To determine if a currency pair is in the congestion zone — better known as the fulcrum — count your daily candles and determine where highs and lows are the same price or almost the same. The number of candles within the small range is your currency congestion count or chart count. This is known as the congestion zone. On the daily chart of the euro/US dollar (Eur/Usd) in Figure 1, you can see a congestion take place in the four candlesticks from December 20 to December 24, 2009.

    Congestion occurs in two areas. One is after a trend, or a long advance or decline. This is normally a period of consolidation, but uncertainty further hinders the next direction. Yet consolidation and congestion are quite different. Consolidation is nothing more than a short rest for a pair as it gains steam for the next leg up or down. A congestion, on the other hand, doesn’t have a leg. It is just stuck."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-13-8-11-forex-focus-currency-congestions-by-brian-twomey-21.gif"",""height"":""623"",""width"":""444""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-13-8-11-forex-focus-currency-congestions-by-brian-twomey-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-13-8-11-forex-focus-currency-congestions-by-brian-twomey-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281adsc,d,"{""minimum-quantity"":""1"",""path"":""ch2f205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:2 (10-12): Advanced Scale-In Strategies For Short-Term Traders by David Penn"",""caption-linebreaks"":""Advanced Scale-In Strategies For Short-Term Traders by David Penn

    How can short-term traders add an edge of as much\nas 10% to their per-trade win rate?

    High-probability exchange traded fund (Etf) trading is a quantified strategy of buying Etfs after they have pulled back and selling after they have recovered in price. More than 100 Etfs were tested since inception. The results of the testing showed that buying Etfs after they had pulled back and become oversold resulted in high-probability Etf trading strategies that were correct more than 75% of the time.

    These tests included all of the most widely traded Etfs from the Standard & Poor’s 500 Spdrs Etf (Spy) to country Etfs like the iShares Ftse/Xinhua China 25 Etf (Fxi) to sector Etfs like the Financial Select Sector Spdrs Etf (Xlf) since inception. In the case of Spy, this meant including data going back to 1993.

    Figure 1 consists of the performance results for the Spy since inception through December 31, 2008, in three of the seven high-probability Etf trading strategies that are part of the seven trading strategies recently published in Larry Connors’ book, High Probability Etf Trading (see sidebar “Etf Trading Strategies”). These results with the Spy were consistent with those from the other Etfs tested. I use the Spy here for simplicity’s sake and because the Spy has the most extensive data from which to draw.

    Figure 2 involves the exact same strategies, but with a twist. That twist is an edge: scaling in."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-10-12-advanced-scale-in-strategies-for-short-term-traders-by-david-penn-20.gif"",""height"":""632"",""width"":""481""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-10-12-advanced-scale-in-strategies-for-short-term-traders-by-david-penn-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-10-12-advanced-scale-in-strategies-for-short-term-traders-by-david-penn-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281350s,d,"{""minimum-quantity"":""1"",""path"":""ch2f205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:2 (14-23): The 350 Swing Trade by Barbara Star, PhD."",""caption-linebreaks"":""The 350 Swing Trade by Barbara Star, PhD.

    This indicator can help you identify\nthe beginning and end of a price swing.

    \nWhen markets exhibit greater and greater volatility, traders move away from longer-term trading methods with their potentially devastating drawdowns and move toward more nimble strategies that catch shorter-term price moves. Among the many short-term trading methods, swing trading, with its emphasis on trades that last from a few days to a few weeks, offers a good middle ground that makes trading more manageable.

    Traders may use a variety of methods to identify the beginnings and endings of a price swing. They include patterns formed by price bars or candlesticks, support/resistance zones, pullbacks in an existing trend, Fibonacci levels, or momentum indicators. The approach used in this article is based on the relative strength index (RSI), a momentum indicator developed by J. Welles Wilder.

    THE 350 SWING INDICATOR

    The RSI identifies potentially overbought and oversold levels at which price may reverse direction. However, its default lookback period of 14 does not work well to identify short-term price swings. It tends to remain in a type of no-man’s land between its 30 and 70 levels for long periods, catching fairly large drawdowns before reaching overbought or oversold levels.

    Decreasing the lookback period increases the indicators’ sensitivity to smaller price moves — sometimes too much. That was the case when I changed the 14-period RSI to a three-period RSI (see sidebar “RSI 3”). The result was numerous false signals."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-14-23-the-350-swing-trade-by-barbara-star-phd-23.gif"",""height"":""623"",""width"":""451""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-14-23-the-350-swing-trade-by-barbara-star-phd-30.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-14-23-the-350-swing-trade-by-barbara-star-phd-31.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281350s1,d,"{""minimum-quantity"":""1"",""path"":""faarfr203"",""ysw-page-title"":""Stocks & Commodities V. 28:2 (14-23): The 350 Swing Trade by Barbara Star, PhD."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-14-23-the-350-swing-trade-by-barbara-star-phd-27.gif"",""height"":""180"",""width"":""130""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-14-23-the-350-swing-trade-by-barbara-star-phd-28.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-14-23-the-350-swing-trade-by-barbara-star-phd-29.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283trch,d,"{""minimum-quantity"":""1"",""path"":""ch2f205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:2 (30-32): Trading Chaos In Today’s Market by J.Williams-Lara and Marcus Lara"",""caption-linebreaks"":""Trading Chaos In Today’s Market by J.Williams-Lara and Marcus Lara

    Trading the volatility of today’s markets has created a huge learning experience and a new way to navigate profitably through constant change. A holistic approach to trading may give you the edge you are looking for.

    IS this the trading opportunity of a lifetime or the end of the American way? Trading Chaos, Bill Williams’ first book, theorizes that trading the volatility of today’s markets has created both a huge learning experience and a new way to navigate profitably through constant change. The entire global financial system is built on the presence of chaos in the markets. When there is stability in the world there is no change in price, no fear of war, we do not fret about the future, everyone has enough to eat, and people do not kill one another. However, in the world presented by the news media, there is massive political unrest, terrorism, boycotts, price controls, farm subsidies, lack of food, dwindling water supplies and energy sources, and the constant threat of war, all creating the feeling of unease about the future. Besides natural disasters, such fears and worries are what create most of the price fluctuations in the financial markets as well as the massive increase in volatility that has risen over the past several years.

    When Bill Williams, my father, founded the Profitunity Trading Group in 1984, independent traders had to call their brokers to place an order, printed statements were mailed ut monthly, and there were only a few charting systems and even fewer trading systems. The most information a trader could get was the price data, as you could not get statistics like volume, nor could you go look at a company’s income statement online. Further, a floor trader could go on vacation for a week and soybeans might have only moved a nickel, if that, during his absence."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-30-32-trading-chaos-in-today-s-market-by-j-williams-lara-and-marcus-lara-20.gif"",""height"":""633"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-30-32-trading-chaos-in-today-s-market-by-j-williams-lara-and-marcus-lara-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-30-32-trading-chaos-in-today-s-market-by-j-williams-lara-and-marcus-lara-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283exyo,d,"{""minimum-quantity"":""1"",""path"":""ch2f205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:2 (34): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    \""SPLITTING\"" HEADACHE

    Can you please explain how a 3-for-2 stock split affects the pricing of options? I saw a split of this type and couldn’t get my head around the math.

    Great question. Before we jump into this complicated kind of split, though, let’s begin with the typical 2-for-1 so readers not familiar with the basic mechanics can get up to speed. The 2-for-1 split involves adjusting the old strike price and presplit option premium in half. Also critical, the amount of contracts held long or short will be doubled.

    This adjustment process allows the aggregate market value or cost basis of the position to be maintained relative to the value of the position prior to the split. We need to multiply the adjusted contracts by the new premium, which has been reduced by 50% (with shares flat) to compare and confirm the risk and cost basis of the pre- and postsplit positions are the same.

    In dealing with a 3-for-2 split or any split where “1” isn’t the denominator, traders need to approach the option differently in order to confirm the cost basis is still the same. In these situations, we need to use a nonstandard “hidden” multiplier other than the typical $1.00 per contract = $100."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-34-explore-your-options-by-tom-gentile-21.gif"",""height"":""616"",""width"":""422""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-34-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-34-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283crco,d,"{""minimum-quantity"":""1"",""path"":""ch2f205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:2 (34-39): Cross-Currency Coefficients by Brian Twomey"",""caption-linebreaks"":""Cross-Currency Coefficients by Brian Twomey

    How do currency pairs move in correlation\nto their US dollar counterparts?

    When we think about correlation coefficients between two currency pairs, we usually think about correlations among the major pairs against the US dollar such as the euro/US dollar (Eur/Usd), British pound/US dollar (Gbp/Usd), or their direct opposites, US dollar/Swiss franc (Usd/Chf) and US dollar/Japanese yen (Usd/Jpy). One topic not mentioned in the research was the correlation among currency crosses that directly correspond to their US dollar counterparts. How these pairs move in relation to their Usd counterparts will be the subject of this article as well as the Pearson product moment coefficient to determine how to factor various correlation coefficients.

    CORRELATION OF CURRENCY PAIRS

    When we measure correlation, we are measuring strength and direction of a linear relationship between two random variables, in this instance two currency pairs. Pearson’s product moment coefficient is the most popular factor because it measures an absolute value from ‑1 to +1 of a pair by dividing the covariance of two variables by the product of its standard deviation. Absolute value in this case refers to the measurement of distance as measured on a number line, and hence negative and positive values. In one instance, we are measuring X and Y slopes in terms of the absolute values. Knowing absolute values of a currency pair will almost answer the question of how far a pair will move in relation to its counterpart based on an X,Y slope.

    To specifically determine an exact location of the X and Y plot where prices are located at any time, use the correlation of determination. An absolute value of +1 says a pair has a direct correlation, and an absolute value of ‑1 implies a negative correlation. But currency correlations rarely reflect a perfect relationship. A correlation coefficient that is in the high 80s or low 90s can be considered to be near perfect when the relationship is positive and a coefficient in the 20s to 30s can be considered to be negatively correlated."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-34-39-cross-currency-coefficients-by-brian-twomey-20.gif"",""height"":""633"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-34-39-cross-currency-coefficients-by-brian-twomey-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-34-39-cross-currency-coefficients-by-brian-twomey-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov284prma1,d,"{""minimum-quantity"":""1"",""path"":""ch2f205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:2 (46-51): Predicting Market Data Using The Kalman Filter, Pt 2 by R. Martinelli & N. Rhoads"",""caption-linebreaks"":""Predicting Market Data Using The Kalman Filter, Pt 2 by R. Martinelli & N. Rhoads

    Can the Kalman filter be used to predict future price movement? In this second part of this series we answer this question.

    Previously, we discussed the Kalman filter and the alpha indicator. This time, we study the accumulation of profit/loss through the fortune chart. We also backtest the filter and analyze the results. The profit/loss on day k may be written as:

    Pk = A Wk (yk/yk-1 – 1)

    where the quantity in parentheses is the relative price-change, or return, on day k, A is the trade amount in dollars, and Wk = 1 if αk > C, Wk = -1 if αk < -C and Wk = zero otherwise (W for wager). Note that Wk = 0 corresponds to no trade on day k and so Pk = zero as well. Further, note that A is the same for every trade. For the Ford data, C was found to be 0.38, and Figure 1 shows its Pk values, where the trade amount A was set to $1.00 (zero values are not shown). The red point at November 28, 2008, represents the trade having the largest profit. The reason for the large profit can be seen in Figure 2, Part 1, where the red point in Figure 1 corresponds to point 8 in Figure 2. The prediction of 1.84 was nowhere near the actual at 2.47, but it was in the correct direction, up from 1.72, resulting in a 0.436 profit."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-46-51-predicting-market-data-using-the-kalman-filter-pt-2-by-r-martinelli-n-rhoads-20.gif"",""height"":""625"",""width"":""460""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-46-51-predicting-market-data-using-the-kalman-filter-pt-2-by-r-martinelli-n-rhoads-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-46-51-predicting-market-data-using-the-kalman-filter-pt-2-by-r-martinelli-n-rhoads-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov285swwi,d,"{""minimum-quantity"":""1"",""path"":""ch2f205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:2 (52-58): Swingin’ With The Trade With Toni Hansen by J. Gopalakrishnan & B. Faber"",""caption-linebreaks"":""Swingin’ With The Trade With Toni Hansen by J. Gopalakrishnan & B. Faber

    Toni Hansen is one of the most respected technical analysts and traders in the industry with a reputation for accuracy in both bull and bear markets. She began her trading career as an equity swing trader and has since expanded into many other sectors of the market. Her style of trading and market analysis makes it attractive to investors and traders of stocks, futures, options, exchange traded funds (Etfs), and even the forex market.

    This adaptability allows her to be active even in the slowest periods in the overall market as well as successful during both bull and bearish market moves.

    Stocks & Commodities Editor Jayanthi Gopalakrishnan and Staff Writer Bruce R. Faber spoke to Hansen via telephone on December 3, 2009.

    Toni, how did you get interested in trading?

    I went to school to become an archaeologist. That is what I had always been interested in. So I worked for an archaeologist in Iowa for almost five years, which was basically my way through college. Then the last couple of years during that period, an associate of mine started trading online. He was really into it, and I was getting bored working at the lab all day. I wanted to become a field archaeologist because I enjoyed discovering new things. Instead, I was stuck entering data and cataloguing things all day, and that wasn’t challenging at all.

    So in the evening I started scanning stocks and getting my feet wet in the markets. I didn’t know anything about market analysis or trading, because it wasn’t anything I had ever studied in school. I ended up focusing on swing trading because I only had a couple of hours a day that I could devote to studying the markets. So that was where my introduction to the markets came from.

    How long have you been involved with the markets?

    It’s been almost 13 years now.

    Going back to the days of swing trading, because you could only spend a few hours a day at it, what kind of analysis did you do? What type of securities did you trade?

    I heard people talk about things like buying three- to five-bar pullbacks on a daily time frame into a 20-period simple moving average. When the previous day’s highs broke after hitting that support level, I would buy the stock. At the time I was focused on the Standard & Poor’s 100 and the Nasdaq 100 and waited for these setups to occur. What I found, of course, was that over time this did not prove to be a viable system.

    I started keeping a journal focusing on these indexes and where I thought each of the securities within them was going to go the next day, whether it was that three- to five-bar pullback, or something else. I was guessing. Was it going to go up? Was it going down?

    Within the securities that did work the way I had predicted, I started to discover that many of them had a lot of similar traits. This became even clearer when I began incorporating intraday time frames in my scanning. I began to focus on securities that had these traits when taking new positions."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-52-58-swingin-with-the-trade-with-toni-hansen-by-j-gopalakrishnan-b-faber-20.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-52-58-swingin-with-the-trade-with-toni-hansen-by-j-gopalakrishnan-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-52-58-swingin-with-the-trade-with-toni-hansen-by-j-gopalakrishnan-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov285fufo,d,"{""minimum-quantity"":""1"",""path"":""ch2f205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:2 (59): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    SPREAD, SCENARIOS, AND STRATEGIES

    My broker seems to use the term “spread” to describe several scenarios and strategies, and sometimes it can be difficult to follow. Can you explain the different uses and definitions?

    Those unfamiliar with futures market slang can be misled by the use of some commonly used terms in the world of commodities. Early on, I too found myself confused. Accordingly, I devoted an entire chapter in my latest book, A Trader’s First Book On Commodities, to deciphering futures market slang.

    “Spread” is used loosely among futures traders but is primarily associated with three different situations. It is up to the listener to identify what is being discussed. Before we examine each use, let’s remind ourselves that the definition of spread in its simplest form is difference.

    • Bid/Ask Spread

    Any asset, whether it be futures, options, or baseball cards (from a dealer) has two prices: one that you can buy and one that you can sell. Unfortunately for us, retail traders pay the higher price to buy and must sell at the lower price. The difference between these two prices typically goes to the middleman and is referred to as the bid/ask spread, or simply the spread."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-59-futures-for-you-by-carley-garner-20.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-59-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-59-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286nene,d,"{""minimum-quantity"":""1"",""path"":""ch2f205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:2 (60-63): Neural Network Pair Trading by Marge Sherald"",""caption-linebreaks"":""Neural Network Pair Trading by Marge Sherald

    Pair trading is a market-neutral trading strategy. But how do you find the right pair? Using neural networks, of course.

    Are you taking a second look at market-neutral trading systems in today’s difficult markets? Pair trading is popular, but finding the right pair is more challenging. Neural networks offer an alternative to traditional pair-matching methods.

    The usual pair-trading strategies speculate on future convergence of a price spread between similar securities. Once a pair is identified, the customary rule is to buy one security and sell the other short in an attempt to create a market-neutral trading system. The trades are initiated when the two normalized securities prices diverge a specified amount, often by two standard deviations. The trades are exited when the prices once again converge.

    Instead of crossing normalized prices, neural nets use one stock to predict another. Trading signals are generated based on the spread between the actual and predicted values. The optimized neural net can even select the security used to make the prediction from a basket of securities; the neural net can be a matchmaker of sorts.

    Once the neural net has found the pair, another artificial intelligence technique — a genetic algorithm optimizer — can customize buy/sell decisions for a particular pair rather than using static rules such as buy when the pair diverges by two standard deviations. In Figure 1, you see three energy stocks that could be candidates for a pair-trading system.

    BUILDING ALTERNATIVE PAIR MODELS

    We’re going to build our pair-trading system in two steps:

    1. Build a neural network prediction for the price of one stock based on another stock in the same sector.

    2. Use the spread between the actual and predicted values of the stock to generate simultaneous buy/sell hedging signals for the stock used as the basis for the prediction and the predicted stock."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-60-63-neural-network-pair-trading-by-marge-sherald-20.gif"",""height"":""618"",""width"":""430""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-60-63-neural-network-pair-trading-by-marge-sherald-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-60-63-neural-network-pair-trading-by-marge-sherald-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286qaby,d,"{""minimum-quantity"":""1"",""path"":""ch2f205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:2 (64): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    SHORTING A SPREAD/PAIR

    Don, could you explain what it means to short a spread/pair? If a spread X-Y (where X is the long position and Y is the short position) is determined to be overbought and due for a pullback, the spread could be “shorted” by selling X and buying Y. To me this means that you reduce the number of shares of X (sell) and you buy to cover Y (since you are short). If you do this, then one action would cancel the other out, so what would be the benefit? How should this be done properly? Thanks. —dvaneyl5

    To short a spread pair is just a definition. If I short a $32 stock and buy a $30, I have effectively shorted the spread pair for $2.00. Some consider it as buying for a ($2.00) — depends on whether you’re an old option spread trader like me. Obviously, if you buy the $32 stock and short the $30 stock, you have “bought” the spread.

    Now let’s get back to the basics of spread/pairs trading. We track hundreds of correlated pairs on a daily basis. We keep track of many variables, one of the most important of which is the six-month trading range. For example, let’s use that $32/$30 pair of X and Y. Now, by using a simple six-month price graph, we see that the pair has crossed the $2.00 line several times. It has a high differential of $6.00 and a low differential of $1.00 during this time frame. We look at all the fundamentals as well. We tend to run various time frames, determining how much the spread moves on a daily basis (so we know how much to expect from our intraday/intraweek trades)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-64-q-a-by-don-bright-21.gif"",""height"":""617"",""width"":""422""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-64-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-64-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286prre1,d,"{""minimum-quantity"":""1"",""path"":""ch2f205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:2 (66-68): Product Review: Trading The Pristine Method Course by Dennis D. Peterson"",""caption-linebreaks"":""Product Review: Trading The Pristine Method Course by Dennis D. Peterson

    This home study course teaches traders, beginner to experienced, how to trade using the Pristine method. There is also an introductory course for $1,495, but this review covers the Trading the Pristine Method (Tpm) Course, Part 1, which covers more details using 300 pages of material, whereas the introductory course has 200 pages of material.

    The courses are set up with online material, which is well organized accompanied by a three-ring binder with tabs to mark the various sections. While taking the course you can take advantage of counselors to help explain areas that you may not understand or if you just have questions. In fact, you can send up to three charts a day to ask if the price patterns have the type of setup that Pristine wants to see.

    PRESENTATION AND NAVIGATION

    All of the course charts are narrated. When you sign into the website to work on the course, you’ll be presented with a high-level flow diagram of boxes with section names where you can click on a box to go to a particular section. The course will prompt you with a message asking if you want to continue where you left off last if you are continuing from before. You can also utilize some forward and back arrows once you have picked a section so as to navigate forward and backward through the sections as well as use the flow diagram."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-66-68-product-review-trading-the-pristine-method-course-by-dennis-d-peterson-21.gif"",""height"":""626"",""width"":""459""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-66-68-product-review-trading-the-pristine-method-course-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-66-68-product-review-trading-the-pristine-method-course-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov287prre,d,"{""minimum-quantity"":""1"",""path"":""ch2f205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:2 (70-72): Product Review: FreeStockCharts.com by Bruce R. Faber"",""caption-linebreaks"":""Product Review: FreeStockCharts.com by Bruce R. Faber

    I have a disclaimer right off the bat: I have been using Worden Brothers products since I started trading in the early 1990s. I have used other charting programs over the years and always come back. Now, Worden’s put FreeStockCharts (Fsc) — a real-time charting program — on the web for free. Are they nuts? Maybe, maybe not. You do have to pay for the full version. In all honesty, this is an enjoyable and productive website. This is fantastic charting software, on top of the fact that it is free (see Figure 1).

    HOW TO USE IT

    Now, we will get down to brass tacks. How do you find out how to use it? Well, there are helpful videos that show you all the ins and outs of the program, but there is no link from the Fsc program to the Fsc training videos. In case that still has not been corrected by the time you read this review and go to the site (and you will), here is how to get to the movies that show you how to use the program. Up in the address bar, highlight the “www.” and then type “videos” and hit Enter. And that’s it. You will find four videos on how to use the basic (free) version and one video on how to use the scanning feature of the premium (Gold) version. Did I mention that if you are already paying for the end-of-day, TC2007 Gold version, then you’ll get the Gold Real-Time Fsc at no additional cost? Considering that most real-time charting program subscriptions cost about $100 a month, this is a great way to get real-time charting at end-of-day prices. By giving you free real-time charts, Worden might get you to sign up for their end-of-day (Eod) program."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-70-72-product-review-freestockcharts-com-by-bruce-r-faber-21.gif"",""height"":""626"",""width"":""458""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-70-72-product-review-freestockcharts-com-by-bruce-r-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-70-72-product-review-freestockcharts-com-by-bruce-r-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov287bofo,d,"{""minimum-quantity"":""1"",""path"":""ch2f205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:2 (73-85): Books for Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books for Traders by Technical Analysis, Inc.

    • The 100 Best Stocks You Can Buy 2010

    • A Practical Guide To Indicators: Including Turtle Trading

    • For Crying Out Loud: From Open Outcry To The Electronic Screen

    • Inside The Black Box

    • The Small-Cap Investor: Secrets To Winning Big with Small-Cap Stocks

    • Thackray’s 2009 Investor’s Guide"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-73-85-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""616"",""width"":""418""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-73-85-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-73-85-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov287trti,d,"{""minimum-quantity"":""1"",""path"":""ch2f205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:2 (73-85): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    This month’s Traders’ Tips are based on Barbara Star’s article in this issue, “The 350 Swing Trade.”

    Code for eSignal to implement Star’s 350 swing indicator and related techniques can be found in the sidebars to Star’s article elsewhere in this issue. Additional code is presented here and at Traders.com as contributed by various software developers.

    Readers will find these and more Traders’ Tips at the Stocks & Commodities website at www.Traders.com in the Traders’ Tips area, from where the code can be copied and pasted into the appropriate program. In addition, the code for each program is usually available at the respective software company’s website. Thus, no retyping of code is required for Internet users.

    For Stocks & Commodities subscribers, the code for eSignal found in Star’s article can be copied and pasted into eSignal from the Subscriber Area at www.Traders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-73-85-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""625"",""width"":""453""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-73-85-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-73-85-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov288leto,d,"{""minimum-quantity"":""1"",""path"":""ch2f205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:2 (8-9): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    TRADING FOREX

    Editor,

    I enjoyed Koos van der Merwe’s article on forex in the December 2009 Stocks & Commodities (“Trading Forex”). I was curious if he had any suggestions as to where I can get a good foundation in the fundamental side of forex that he discussed in the article. There are clearly numerous relationships that need to be understood. Any suggestions?

    Bill

    Koos van der Merwe replies:\nForex is about currencies — that is, money used in everyday life. The only way to understand a currency from the fundamental side is to choose, say, two currencies that you are interested in, and then read as much as you can about the central banks that control those two currencies. Try to understand the thinking and tactics used by the governors of those central banks in managing the currencies."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-8-9-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""618"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-8-9-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-8-9-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28996cl,d,"{""minimum-quantity"":""1"",""path"":""ch2f205"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:2 (98, 96-97):At The Close by John McKinnon"",""caption-linebreaks"":""At The Close by John McKinnon

    Do you know how you will react under specific circumstances? Do your emotions keep getting in the way?

    Sometimes, the market is described as a living organism with a personality all its own. In an effort to understand this elusive quality, many traders rely on technical indicators to monitor and predict the state of the market. Others utilize models for measuring the microfundamentals of individual stocks or the macroaspects of economic trends. Experienced traders usually develop their own customized mix of indicators and/or fundamentals that works for them.

    However, these same traders will often tell you that the indicators don’t always do what they’re supposed to do; that is, they don’t always cooperate.

    MARKET ACTIVITY

    Despite our best efforts in calculating complex patterns, we still refer to market activity mainly in emotional terms:

    • Abc stock soared on new product sales: Euphoria

    • Investors stampeded for the exits on Xyz’s dismal earnings projection: Panic

    • PQR hit it out of the park with its new executive appointment: Cheering crowds; power; a winner!

    • The hedge funds that shorted were crushed and shredded when the stock unexpectedly reversed: Annihilation, uncertainty, fear

    The news media makes an attempt to put a brave face on the market’s behavior — a reason behind it. To hedge their bets, some Internet sites actually have two stories ready for print, one if it’s an up day, the other if it’s down. More often than not, the behavior is inexplicable."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-98-96-97-at-the-close-by-john-mckinnon-20.gif"",""height"":""621"",""width"":""443""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-98-96-97-at-the-close-by-john-mckinnon-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-2-98-96-97-at-the-close-by-john-mckinnon-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281unmy,d,"{""minimum-quantity"":""1"",""path"":""ch3m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:3 (10-16): Unraveling The Mystery Of Stock Prices by Boris G. Zinchenko"",""caption-linebreaks"":""Unraveling The Mystery Of Stock Prices by Boris G. Zinchenko

    Here’s a simple method you can apply to interpret financial charts. It uses classical statistics as well as a number of simple chart indicators, which may help you better understand classical charts from the viewpoint of random processes.

    Every trader is familiar with stock charts. To most traders the chart is just a common tool, like a hammer is to the carpenter. The exception is the new trader reading charts for the first time or the advanced trader who begins to question the value of the charts he or she watches.

    Financial charting is specific. There are many exotic charts common to most modern trading platforms. You may begin with the classical bar charts or candlesticks and continue on to Equivolume, kagi, renko, and others. Add to that numerous technical indicators and strategy signals, and you have something packed full with useful information.

    You want to concentrate as much useful information as possible into the chart so you can make timely trading decisions. To the newbie trader, this may appear to be confusing and artificial. To the seasoned professional, trying to determine what information is truly valuable for profitable trading is a vital concern.

    Although financial charts can be vivid and attractive, they do tend to have contradictions with modern statistics. The charts can introduce dubious and unstable measures, which in turn become the basis of popular trading strategies. This could increase the risk of your trading operations."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-10-16-unraveling-the-mystery-of-stock-prices-by-boris-g-zinchenko-21.gif"",""height"":""628"",""width"":""465""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-10-16-unraveling-the-mystery-of-stock-prices-by-boris-g-zinchenko-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-10-16-unraveling-the-mystery-of-stock-prices-by-boris-g-zinchenko-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281emmo,d,"{""minimum-quantity"":""1"",""path"":""ch3m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:3 (18-24): Empirical Mode Decomposition by John F. Ehlers and Ric Way"",""caption-linebreaks"":""Empirical Mode Decomposition by John F. Ehlers and Ric Way

    Is the market trending or is it in a cycle mode? Identify the mode of the market and trade accordingly.

    Even the most casual chart reader will be able to spot the times when the market is cycling and other times when longer-term trends are in play. Cycling markets are ideal for swing trading. However, attempting to trade the swing in a trending market can be a recipe for disaster. Similarly, applying trend trading techniques during a cycling market can equally wreak havoc in your account. Cycle or trend modes can be identified in hindsight. But it would be useful to have an objective scientific approach to guide you to the current market mode.

    A number of tools are already available to differentiate between cycle and trend modes; measuring the trend slope over the cycle period to the amplitude of the cyclic swing is one possibility. However, this article describes a unique approach to determining the market mode.

    CYCLE MODE

    We begin by thinking of cycle mode in terms of frequency or its inverse, periodicity. The markets are fractal, so daily, weekly, and intraday charts are indistinguishable when time scales are removed. Thus, it is useful to think of the cycle period in terms of its bar count. For example, a 20-bar cycle using daily data corresponds to a cycle period of approximately one month."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-18-24-empirical-mode-decomposition-by-john-f-ehlers-and-ric-way-20.gif"",""height"":""621"",""width"":""439""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-18-24-empirical-mode-decomposition-by-john-f-ehlers-and-ric-way-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-18-24-empirical-mode-decomposition-by-john-f-ehlers-and-ric-way-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283mcdy,d,"{""minimum-quantity"":""1"",""path"":""ch3m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:3 (30-37): The McGinley Dynamic by Brian Twomey"",""caption-linebreaks"":""The McGinley Dynamic by Brian Twomey

    Apply this market tool devised by a master technician to analyze the forex markets.

    The McGinley dynamic is a market tool invented by veteran trader/market technician John McGinley. Information about this tool was first published in the Market Technicians Association’s Journal Of Technical Analysis as an outline in 1991 and published there as a full-blown study in 1997. I have attempted here to capture the thought processes of the mind of a master technician as he worked through the process of invention to perfection of this tool.

    But before that, we must become reacquainted with some staples of technical analysis.

    MOVING AVERAGES

    A moving average is the study of the history of time series analysis. Early practitioners used various algorithms to smooth data and flatten various-shaped curves, yet this early work was quite primitive. Graduation methods were used later, like a fitting line using a least-squares rule for plotting and construction purposes. Fitting lines using the least-squares rule was later adopted by technical analysis in the family of moving averages. This began the process of interpolating data using probability theories and analysis.

    In the Journal Of The Royal Statistical Society in 1909, G.U. Yule described instantaneous averages that R.H. Hooker had calculated in 1901 as moving averages. Yule identified properties of the variate difference correlation method. The term moving averages apparently entered the lexicon shortly after in 1912 through W.I. King’s publication of Elements Of Statistical Methods.

    Later adopting Yule’s studies, Harold Wold described moving averages in a 1938 study called Analysis Of Time Series. Others attribute exponential smoothing to R.G. Brown’s and Charles Holt’s individual works on inventory control in the 1950s."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-30-37-the-mcginley-dynamic-by-brian-twomey-20.gif"",""height"":""623"",""width"":""444""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-30-37-the-mcginley-dynamic-by-brian-twomey-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-30-37-the-mcginley-dynamic-by-brian-twomey-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283insh,d,"{""minimum-quantity"":""1"",""path"":""ch3m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:3 (38-43): Intraday Short-Term Trading Tactics by Ron Walker"",""caption-linebreaks"":""Intraday Short-Term Trading Tactics by Ron Walker

    Enter and exit trades the right way based\non familiar chart patterns.

    wing trading prospects occur when price patterns form. Even though traders might be familiar with many chart patterns, they may not know how to enter and exit trades correctly based on those price patterns. Our purpose here is to discover short-term trading strategies that will help fine-tune entry and exit points while properly assessing stops. I’ll illustrate some attractive setups using the hourly chart of the ProShares UltraShort for the Standard & Poor’s 500 (Sds).\nThe ProShares Ultra Short for the S&P 500 (Sds) is one way to short the S&P 500 using leverage. It moves twice the inverse of the S&P 500. If you wanted to short the S&P 500, you would go long Sds.\nIdeally, you want to be long Sds (short the S&P 500) when the S&P 500 is below its 20-day simple moving average in the daily time frame, as is in Figure 1. Doing so will increase your odds for a successful trade.

    STEPS TO TAKE BEFORE TRADING

    So let’s review the hourly chart to see what the prospects are before deciding to take a trade. Figure 2 shows that in mid-June the hourly chart of Sds had been in a rising channel for almost two weeks when a bearish descending triangle pattern appeared on June 23. A bearish divergence loomed over the hourly, increasing its negative influence over the descending triangle pattern. The following session, prices gapped lower, collapsing through the triangle as they tested the lower boundary of the rising channel. This move was accompanied by a bearish crossover of the moving average convergence/divergence (Macd) (12, 26,9)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-38-43-intraday-short-term-trading-tactics-by-ron-walker-20.gif"",""height"":""625"",""width"":""456""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-38-43-intraday-short-term-trading-tactics-by-ron-walker-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-38-43-intraday-short-term-trading-tactics-by-ron-walker-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov284mytr,d,"{""minimum-quantity"":""1"",""path"":""ch3m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:3 (44-49): My Trading Strategy, Revised by Leonardo Jafet"",""caption-linebreaks"":""My Trading Strategy, Revised by Leonardo Jafet

    Here’s a methodology for developing and testing a rules-based system, improved from the original.

    Since my article in the June 2009 issue of Stocks & Commodities, I have worked on some improvements for my strategy. This time, I outline a rough methodology that I will use going forward in my development and testing of rules-based systems. I have not created anything new here. I have simply pulled together bits and pieces of good ideas and techniques that are already out there and, I hope, summarized them in an organized and clear way. To remind readers, the starting point is to have selected what securities to trade (in my case, Spy, Ief, Iwm, and Ewz, to cite a few), what periodicity (daily), and what system (trading rules and range of parameters).\nGiven that, the system-testing methodology involves the following steps:

    1. Selecting the testing periods and determining the split between in- and out-of-sample data.

    2. Optimizing system on in-sample data and selecting the “best” combination of parameters.

    3. Building an out-of-sample equity curve (“walkforward” backtesting).

    4. Assessing probable equity curve scenarios six months forward via Monte Carlo simulation on out-of-sample equity curve.

    5. Repeating steps 2 through 4 in six months.

    My guiding principles are: use data in the most representative way possible, keep trading rules as simple as possible, combat curve-fitting, and estimate future system performance (with a high degree of confidence).\nBefore we move forward, let’s check on the performance of the J2L System with long-term trend filter and dynamic position sizing as described in my June 2009 article."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-44-49-my-trading-strategy-revised-by-leonardo-jafet-21.gif"",""height"":""633"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-44-49-my-trading-strategy-revised-by-leonardo-jafet-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-44-49-my-trading-strategy-revised-by-leonardo-jafet-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov285mati,d,"{""minimum-quantity"":""1"",""path"":""ch3m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:3 (50-55): Market Ticker’s Karl Denninger by J. Gopalakrishnan and B. Faber"",""caption-linebreaks"":""Market Ticker’s Karl Denninger by J. Gopalakrishnan and B. Faber

    Karl Denninger tells you like it is. He is the former Ceo of McsNet, a regional Chicago-area networking and Internet company that operated from 1987 to 1998. McsNet offered several “firsts” in the Internet Service space, including integral customer-specified spam filtering for customers and the first virtual web server available to the public. Denninger’s other accomplishments include the design and construction of regional and national IP-based networks and development of electronic conferencing software reaching back to the 1980s.

    He has been a full-time trader since 1998, author of The Market Ticker (http://market-ticker.org), a daily market commentary, and operator of TickerForum, an online trading community, both since 2007.

    Denninger received the 2008 Reed Irvine Accuracy In Media Award for Grassroots Journalism for his coverage of the 2008 market meltdown.

    Stocks & Commodities Editor Jayanthi Gopalakrishnan and Staff Writer Bruce R. Faber spoke with Karl Denninger via telephone on January 6, 2010.

    Carl, how did you get interested in the markets?

    I ran an Internet company in the 1990s in Chicago. I traded in the technology space because that was what I knew at the time. I sold the business in 1998 to Windstar Communications. They were one of the high-flying explosions during the tech wreck, but their check was good. My shareholders and I decided to take the money and run because it was the wise thing to do. It turned out to be a propitious call — about a year early, but better early than late.

    The early 2007 blowup started over in Asia. At that point I came out of the passive investing mode I had been in over the previous three years. I started digging into why the blowup occurred, because those things don’t happen without a reason.

    What did you discover?

    The same kind of fraud that went on in the technology sector had transplanted itself into the financials and the housing market. That’s when I decided it was time for me to not only get active with my investing, because I needed to preserve the capital that I have, but I was also not going to allow this to happen a second time without people knowing about it.

    Based on what I have read on your blog and heard from your presentations, it seems to me you give a lot of importance to chart analysis. Is that correct?

    Yes and no. Technical analysis is a windsock. It is a useful tool, but the most important thing that people need to look at in the market is whether the fundamentals of the economy and the backdrop from a capital market perspective match what is going on with price. If they do, it is safe for you to be invested in the market, whichever direction it is moving. When they don’t align, as is the case now and has been since last spring, the only thing you can do is sit it out.

    Why is that?

    If you can trade actively, there are opportunities to make money. There are also opportunities to lose money. If you cannot trade actively for whatever reason — say you have to hold a regular job — moves tend to revert to the mean at ferocious rates, and you are not able to get out or protect yourself. This is how you lose all your money instead of just a little of it.

    What’s the first rule over long periods of time?

    Don’t lose money. That’s my goal, because I am in a semiretired position where I trade for a living. If I lose everything, I’ll have to hand out cards at Wal-Mart. So my goal is to be able to continue to perform over 10-year periods. In my situation, I am taking money out to live on. Most traders cannot do this.

    The ugly truth is that most traders will have a couple of very good years and some of them will have exemplary years, but if you look at their actual record over a 10-year period, most of them will lose their shirts. That is because they go against the foundational rule; you only gamble with money you can afford to lose. The rest should be invested, not gambled with.

    So they lack proper money management?

    Yes. It is a risk management problem. What frequently ends up happening, especially with people who trade actively, is if you have a bad start, you get discouraged, and you leave.

    But the worst thing is to have a good start. Some of these people during the crash took $100,000 and turned it into $5 million. Then over the last year they gave it all back. What they didn’t do was take $4.5 of the $5 million and put it away, and gamble with the other $500,000. If they had done that they would still be rich, even though they lost $400,000 or $500,000."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-50-55-market-ticker-s-karl-denninger-by-j-gopalakrishnan-and-b-faber-21.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-50-55-market-ticker-s-karl-denninger-by-j-gopalakrishnan-and-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-50-55-market-ticker-s-karl-denninger-by-j-gopalakrishnan-and-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov285prre,d,"{""minimum-quantity"":""1"",""path"":""ch3m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:3 (56-59): Product Review: MetaStock 2 by Dennis D. Peterson"",""caption-linebreaks"":""Product Review: MetaStock 2 by Dennis D. Peterson

    The latest version of MetaStock has several new features. First of all, you can order MetaStock Pro and use a Reuters or eSignal datafeed. For this review, I used Reuters’ QuoteCenter datafeed, since it also provided fundamental data. Besides providing fundamental data such as earnings and revenue, there are new indicators, expert systems, and trading strategies. Along with a disk (or download), you can access the short Mastering MetaStock manual, which explains the new features. So what does the fundamental data look like?

    FUNDAMENTAL DATA

    Click on an icon at the bottom of the MetaStock screen, one that looks like a histogram, and your fundamental data screen will be presented as a separate screen using your default browser (Figure 1). A series of tabs across the top provide the categories: fundamental, revenue, performance, estimates, fundamental scanner, and help. Fundamental data gives you a snapshot using 24 different calculations and revenue charts with the percentage of net income to revenues going back eight quarters in one chart and four years in a second. If you are not familiar with some of the terms used in the 24 calculations, you can find an explanation under the Help tab."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-56-59-product-review-metastock-2-by-dennis-d-peterson-21.gif"",""height"":""625"",""width"":""458""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-56-59-product-review-metastock-2-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-56-59-product-review-metastock-2-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28666ex,d,"{""minimum-quantity"":""1"",""path"":""ch3m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:3 (60, 66): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    GAMMA SCALPING A VERTICAL?

    What do you think about hedging directional risk of a vertical spread with stock?

    That’s an interesting question, but one without a “one size fits all” answer. Hedging delta risk and possibly taking advantage of this position type’s potential long gamma rests with the trader’s objective, risk tolerance, and whether he or she maintains account restrictions regarding this type of hedge and net positioning.

    When a trader has some type of vertical on, the position is already hedged to a large extent by the other short or long contract. Depending on how close the position is to the underlying, time remaining, strike distance, and volatility, the hedge may be more or less effective than it had been prior to when the position was established. Nonetheless, the vertical spread does afford the trader a net contract–neutral position."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-60-66-explore-your-options-by-tom-gentile-20.gif"",""height"":""620"",""width"":""435""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-60-66-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-60-66-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286prre2,d,"{""minimum-quantity"":""1"",""path"":""ch3m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:3 (61-62): Product Review: Level 3 Data by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Product Review: Level 3 Data by Jayanthi Gopalakrishnan

    We’re all familiar with the open, high, low, and closing prices typically displayed in a price bar. But does that give us an idea of what is really going on inside the price bar? Do we know how much of a price bar represents buying and how much represents selling? Thanks to Level 3 Data, we can now gain an insight into this information. These days, with algorithmic trading gaining popularity on Wall Street, this piece of information may just be what you need to become profitable in your trading.

    FEATURES

    For this review, I will focus on the features available to the individual trader. To get started, I looked at the top five stocks that are ready to move or are showing more buyers than sellers. Mind you, if you are a gold-level member, you can access the screening list, which shows all stocks that are ready to move. This list was generated from the three-dimensional algorithm created by Level 3 Data founder Don Soubolsky. You can find an explanation of the algorithm on the website."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-61-62-product-review-level-3-data-by-jayanthi-gopalakrishnan-20.gif"",""height"":""625"",""width"":""458""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-61-62-product-review-level-3-data-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-61-62-product-review-level-3-data-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286fufo1,d,"{""minimum-quantity"":""1"",""path"":""ch3m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:3 (63): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    CONTANGO!

    In futures industry language, what does “contango” mean?

    Commentators often use contango in reference to the commodity markets because it sounds exciting. The true meaning of the word is less than thrilling; in fact, it is downright normal. Contango is a scenario in which spot (current delivery) commodity prices are trading at a discount to prices displayed in the futures markets (future delivery).

    To fully understand the word’s meaning, you must recognize what causes such a price relationship. There are essentially two separate, yet related, markets in which commodities are traded: the cash market and the futures market. The cash market refers to buying and selling of the physical commodities; the price and the product exchange occurs in the present. On the other hand, the futures market deals with buying or selling of future obligations to make or take delivery of a commodity. In general, speculators find the futures market a more efficient means of facilitating trades. A futures trader can speculate on the price of corn (not an artificially indexed tradable, like an exchange traded fund) without transporting, storing, or even seeing the underlying commodity."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-63-futures-for-you-by-carley-garner-20.gif"",""height"":""616"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-63-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-63-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28666qa,d,"{""minimum-quantity"":""1"",""path"":""ch3m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:3 (64, 66): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    DIRECT NOT SO DIRECT?

    I’ve heard that my direct-access broker actually routes my trades through the firm. Can that be right? How is that direct access? — TCmac

    I get this question a lot. Your order needs to go through the brokerage firm to verify that you have enough funds to cover the transaction, check for “pattern daytrader” compliance, and so forth. To get true direct access, the market participant must join an exchange or a proprietary trading firm. That way, your orders are covered by the broker–dealer directly, not your individual account. Hope this helps.

    SUBPENNYING AND MORE

    Don, you’ve been pretty quiet on some very disconcerting topics within our industry. I would like to hear your opinions on subpennying, transaction tax proposals, and flash trades.

    I’ll address the transaction tax first. Imagine a trader who risks his capital while providing liquidity for the public and others. This trader may buy and sell 50,000 shares per day. If the average stock price was $50, then he would be selling $2.5 million worth of equities. A quarter of 1% “tax” would amount to $6,250. This is a total disaster, of course; the trader may be making or losing a few hundred dollars during that day, so this is a total deal breaker. I just don’t see this happening. Perhaps a minor per trade charge or something would work."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-64-66-q-a-by-don-bright-21.gif"",""height"":""616"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-64-66-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-64-66-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286trti,d,"{""minimum-quantity"":""1"",""path"":""ch3m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:3 (67-80): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    Most of this month’s Traders’ Tips are based on John Ehlers and Ric Way’s article in this issue, “Empirical Mode Decomposition.” Others may be on a topic of the contributor’s choosing.

    EasyLanguage code to implement their techniques can be found in the sidebars to their article elsewhere in this issue, and at the end of this document. Additional code is presented here and at Traders.com as contributed by various software developers.

    Readers will find these and more Traders’ Tips at the Stocks & Commodities website at www.Traders.com in the Traders’ Tips area, from where the code can be copied and pasted into the appropriate program. In addition, the code for each program is usually available at the respective software company’s website. Thus, no retyping of code is required for Internet users.

    For Stocks & Commodities subscribers, the Easylanguage code found in the article by Ehlers and Way can be copied from the Subscriber Area at www.Traders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-67-80-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""621"",""width"":""438""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-67-80-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-67-80-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28866le,d,"{""minimum-quantity"":""1"",""path"":""ch3m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:3 (8-9, 66): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    VALUABLE INFORMATION

    Editor,

    I just wanted to send you a note regarding S&C. I have been a subscriber for a while but haven’t done a lot of reading of your magazine. However, while spending the holidays at my son’s house, I completely went through the December 2009 issue. I discovered that virtually every page has valuable information, and it was a very educational experience.\nI will be reading further issues of S&C from cover to cover.\nJohn J. Dueweke

    Thank you for writing. Our goal is always to provide ideas and information in every issue to help readers trade better, and we appreciate feedback from our readers.\n—Editor

    POINT & FIGURE CHARTING SOFTWARE

    Editor,

    I have a question regarding point & figure charting. I mostly use Meta­Stock and AmiBroker for technical analysis. They are both excellent in what they do, but I am looking for charting software that is dedicated to point & figure.\nWhat is some of the charting software that S&C has reviewed? What about Bull’s-Eye Broker (www.pointandfigure.com/)?\nRajiv Vyas\nBaltimore, MD"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-8-9-66-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-8-9-66-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-8-9-66-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov289bofo1,d,"{""minimum-quantity"":""1"",""path"":""ch3m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:3 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    • Commodity Trader’s Almanac 2010

    • Stock Trader’s Almanac 2010

    • Far From Random: Using Investor Behavior And Trend Analysis To Forecast Market Movement

    • Futures Markets: 200 Questions & Answers

    • Market Indicators: The Best-Kept Secret To More Effective Trading And Investing

    • Capturing Profit With Technical Analysis: Hands-On Rules For Exploiting Candlestick, Indicator, & Money Management Techniques

    • Practical Trading Applications Of Market Profile"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-92-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""611"",""width"":""411""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28996at,d,"{""minimum-quantity"":""1"",""path"":""ch3m203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:3 (98, 96-97): At The Close by Wayne Whaley"",""caption-linebreaks"":""At The Close by Wayne Whaley

    Can a simple and popular strategy such as the 200-day moving average crossover outperform a buy & hold strategy?

    The trend is your friend” is one of the first rules in trading. Given the big moves in commodities in 2009, I wouldn’t be surprised to discover that a lot of trend-following systems had a good year. One trend-following strategy that is followed by many technicians is the 200-day moving average crossover strategy. That is when you would go long when the tradable in question is above its n-day moving average and either move to cash or go short when it is below the average. Given that hardly a day goes by without an analyst mentioning the market’s position relative to its 200-day moving average, I thought it would be worth the effort to restudy the significance, or lack thereof, for not only the 200-day moving average, but other moving average trend-following system lengths as well.

    TEST APPROACH

    I evaluated the 50‑, 100‑, 150‑, 200‑, 250‑, 300‑, and 350‑day moving average crossover strategies (prices crossing the MA) for the following Standard & Poor’s 500 strategy: (CONTINUDED)"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-98-96-97-at-the-close-by-wayne-whaley-20.gif"",""height"":""635"",""width"":""450""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-98-96-97-at-the-close-by-wayne-whaley-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-3-98-96-97-at-the-close-by-wayne-whaley-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281trau,d,"{""minimum-quantity"":""1"",""path"":""ch4a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:4 (10-12): Trading Automated Spot Forex Systems by Joseph James Gelet"",""caption-linebreaks"":""Trading Automated Spot Forex Systems by Joseph James Gelet

    Want to trade spot forex? With proper risk controls, this method can be used like options to take a position in the market.

    Options offer traders a unique way to take a position in the market not offered by traditional markets. Options have certain features such as static cost of the option, which quantitative analysts and portfolio managers appreciate greatly. Options are considered sophisticated, and in many ways they are. Although it is easy for anyone to open an option account and trade, strategies involving options can quickly become complex.

    Some exotic options are customized to meet the demands of traders who want to take specific views of the markets. One is the double no-touch, which pays off if the market does not touch the two outlying prices. This is betting that the market will stay within a range. During short periods of time, this can be highly successful, such as during a week where the market is waiting for news announcements and lacks volatility and volume. However, it is sometimes difficult to find liquidity for such short-term options, where an automated spot system would be valuable. It is more difficult to win using this strategy over a longer period of time, such as months. However, there are many reasons that the market will be in a defined trading range, so you should explore all possibilities.

    GRID TRADING SYSTEM

    A grid trading system, as it is referred to by foreign exchange traders, places orders above and below the market every specific number of pips (the number of pips can be adjusted according to the pair of currencies traded). You sell above the market and buy below. As long as the market is in a trading range, the strategy will never lose. Once the pair starts trending in either direction, the strategy will begin to open more and more losing positions until the total drawdown of the system becomes unmanageable or wipes out the account balances. Horror stories about accounts being wiped out and other personal experiences have allowed traders to brush off these systems as useless."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-10-12-trading-automated-spot-forex-systems-by-joseph-james-gelet-20.gif"",""height"":""625"",""width"":""458""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-10-12-trading-automated-spot-forex-systems-by-joseph-james-gelet-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-10-12-trading-automated-spot-forex-systems-by-joseph-james-gelet-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281kowa,d,"{""minimum-quantity"":""1"",""path"":""ch4a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:4 (14-20): Kondratieff Wave Comeback by Koos van der Merwe"",""caption-linebreaks"":""Kondratieff Wave Comeback by Koos van der Merwe

    Will 2010 mark the end of the current recession? Use the Kondratieff wave to find out.

    \nIN my November 2008 Stocks & Commodities article, I concluded that “the US and world economies are headed for recessionary times,” with relief only after four years looking more and more likely with each passing week. Elliottician Robert Prechter, known for having predicted the stock market crash of 1987, has said in recent interviews that the sharp rebound in equities from 12-year lows hit in March 2009 has been only a near-time rally within a longer-term bear market. “The average investor who is not a trader should remain in the safest possible cash equivalents,” he said in his classic Elliott Wave Principle, cowritten with A.J. Frost.

    I have always had a great respect for Prechter. Elliott Wave Principle was my tutor in Elliott wave theory, and when I was a South African resident, years ago, as a subscriber to his newsletter, I would often write him and ask for a further explanation of his wave count, which he always provided, mailed back to me, handwritten on a copy of his newsletter.

    These days, however, I lean more toward Kondratieff theory. The reason for this can be provided with a look at the monthly chart of the Standard & Poor’s 500 (Figure 1).

    Figure 1 suggests that the S&P 500 is currently in a Wave I up. This is confirmed by the relative strength index (Rsi). The chart shows that the last time the Rsi gave a buy signal was in October 1974, which was the start of a bull trend that lasted 26 years. Now, we all know that a Wave 1 up is followed by a Wave 2 down, which can be either a simple or complicated wave. By this I mean a quick, fast retracement, or a long, drawn-out retracement. In Elliott Wave Principle, Frost and Prechter wrote: “Second waves often retrace so much of wave one that most of the profits gained up to that time are eroded away by the time it ends.”

    Yes, there is a lot of negativity to come, and you can take profits and “remain in the safest possible cash equivalents” as Robert Prechter suggests, but you should not forget that the “bear” in a wave 2 is a correction in a major bull trend."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-14-20-kondratieff-wave-comeback-by-koos-van-der-merwe-21.gif"",""height"":""622"",""width"":""442""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-14-20-kondratieff-wave-comeback-by-koos-van-der-merwe-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-14-20-kondratieff-wave-comeback-by-koos-van-der-merwe-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov282movo,d,"{""minimum-quantity"":""1"",""path"":""ch4a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:4 (22-28): Modified Volume-Price Trend Indicator by David G. Hawkins"",""caption-linebreaks"":""Modified Volume-Price Trend Indicator by David G. Hawkins

    Looking for an edge? Use this indicator to detect what the insiders are doing while they are doing it.

    Using only price and volume data, technicians try to discern what the “smart money” is doing in a stock. Several technical analysis indicators are designed for this. Accumulation/distribution (AD) is one such, and in turn, AD is split into two different indicators, interday and intraday. Interday compares the closes and opens of different days, while intraday compares the close of each day to the open of the same day. In this article, we are dealing only with the interday form. In particular, there is one kind of behavior we’re seeking to model.

    Here’s the scenario: A major player in a stock wants to buy a large stake or liquidate one. So as not to disrupt the price, the broker builds into (or plays out of) the position slowly. When acquiring a stake, the broker makes many small buys over a few days. Then as the price starts to move up, the broker lays off, allowing the price to drift down. Then the broker buys some more, then lays off again, keeping this up for weeks or months until the desired stake has been acquired. If done well, this can be accomplished during an overall downtrend. Similarly, if the player wants to liquidate a stake, the broker sells, then pauses, then sells and pauses some more until the whole stake is gone. This can happen during an uptrend. Acquiring a position this way is accumulation, while selling it is distribution.

    There are many reasons for making such moves. For example, a group may be planning a takeover of a company and needs to build a 5% ownership position in the first part of its campaign. Or a major stakeholder, because of its other business activities, may know the company’s business outlook so well that it’s expecting a negative future for the company and wants out of its stake. These players, of course, don’t want to publicize what they’re doing. But if technicians could detect what they’re doing, while they’re doing it, this would be a strong leading indicator for the stock. And that’s our goal for interday accumulation/distribution analysis."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-22-28-modified-volume-price-trend-indicator-by-david-g-hawkins-20.gif"",""height"":""631"",""width"":""483""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-22-28-modified-volume-price-trend-indicator-by-david-g-hawkins-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-22-28-modified-volume-price-trend-indicator-by-david-g-hawkins-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283bema,d,"{""minimum-quantity"":""1"",""path"":""ch4a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:4 (30-32 ): Bear Market Survival Kit by Anthony Trongone, PhD, CFP, CTA"",""caption-linebreaks"":""Bear Market Survival Kit by Anthony Trongone, PhD, CFP, CTA

    Any system can produce stellar results when it suggests taking a position in the same direction of a trending market. But what do you do when the market quickly changes direction?

    Few if any trading systems work across all economic environments. As you know, any system can produce superlative results when it suggests taking a position in the same direction of a trending market. However, the performance of these same systems is rendered ineffective as soon as the market changes direction. This article shows how you can capture profits when taking a long position in a downtrending market. Going back to the 340 days of the previous bear market, I ran the numbers to see if a late upside rally contributed to additional buying or if it reinforced more selling when we are in such a nasty trading environment.

    GOING AGAINST THE GRAIN

    When we are in the grips of a bear market, should we try to magnify profits by joining a late price run once it is in motion? Viewed another way, when the market is experiencing a strong rally from 3:00 to 3:30 pm, should we take a long position at 3:30 and hold this position until the ringing of the closing bell (4:00 pm)?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-30-32-bear-market-survival-kit-by-anthony-trongone-phd-cfp-cta-21.gif"",""height"":""619"",""width"":""430""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-30-32-bear-market-survival-kit-by-anthony-trongone-phd-cfp-cta-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-30-32-bear-market-survival-kit-by-anthony-trongone-phd-cfp-cta-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283qaby,d,"{""minimum-quantity"":""1"",""path"":""ch4a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:4 (33): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    SUBPENNIES AND HIGH-FREQUENCY TRADING

    Don, I read your recent column about subpennies and high-frequency trading (S&C, March 2010). How have you and your traders adapted your order routing in the last few months?

    Good question. For the longest time we would advise our traders to “park” on an electronic communications network (Ecn) to collect rebates when they were waiting to be hit on a bid or offer. We would advise them to hit bids or take out offers on the primary exchange (Nyse, for example), since it was cheaper overall. Currently, we feel that it makes sense to do the latter most of the time since we are finding that when we park, we are getting fewer fills due to the high-frequency trading (Hft) orders getting placed in front of our orders. Hopefully, the regulators will work with liquidity providers to fix some of this."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-33-q-a-by-don-bright-21.gif"",""height"":""616"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-33-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-33-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283rsit,d,"{""minimum-quantity"":""1"",""path"":""ch4a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:4 (38-40): RSI Trends by Cory Mitchell"",""caption-linebreaks"":""RSI Trends by Cory Mitchell

    What does the behavior of the relative strength index within a trend\ntell you about the strength of the trend?

    While one common method uses divergence between the relative strength index (Rsi) and price, we can go beyond that and find out if a trend is likely to continue. We can do so by looking at certain Rsi levels contained in a trend; this provides us with valuable information for making trades within the current trend. Watching for breakouts of these Rsi levels can also provide us with confirmation for what is happening with price.

    SUPPORT AND RESISTANCE LEVELS

    Just as price will show respect for support and resistance levels, Rsi levels do as well. This can be an extremely valuable tool for confirming trends and possible reversals. In a bull market, the Rsi (in this case, I will use the 14-day) will often be seen moving between 30–40 lows and 80–90 highs. In a bear market, it will move between 20–30 and 60–70. These key levels seem to hold in all markets regardless of the time frame. Each market seems to find its own support or resistance within the levels outlined.

    In Figure 1 we see the Dow Jones Industrial Average (Djia) in a downtrend. The Rsi at the bottom of the chart shows that the indicator only gets as high as 67 during the entire downtrend (the middle line marks the 50 level). The Rsi has respected that resistance level throughout its downtrend. Near the bottom of the Rsi, we see that the Rsi has bottomed around the 30 level with extreme lows at 22. This is valuable information, as these levels can provide us with confirmation that this trend will continue, or the level on the Rsi where it is likely to reverse.

    In Figure 2 is another example, this time with an uptrend and a downtrend. During the uptrend (orange lines on Rsi), the Rsi moves between 37 (each stock or market will have its own levels within a few points of the bear/bull levels specified) and 80. As the price accelerated upward from January through June 2008 the 40 level on the Rsi was not approached, as the Rsi stayed in the 50–70 range most of the time. As the price began to break down in July 2008, the Rsi broke through that 37 support level and established a new range (red lines on Rsi), this time at the lower levels of 27–60."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-38-40-rsi-trends-by-cory-mitchell-20.gif"",""height"":""662"",""width"":""467""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-38-40-rsi-trends-by-cory-mitchell-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-38-40-rsi-trends-by-cory-mitchell-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov284sipr,d,"{""minimum-quantity"":""1"",""path"":""ch4a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:4 (42-49): Signal Processing Basics by Glenn Barlis"",""caption-linebreaks"":""Signal Processing Basics by Glenn Barlis

    This is the first of a series of articles that examine stock price analysis using the mathematical methods of signal processing. These concepts will enable you to better understand popular indicators and incorporate them into your trading strategy.

    The mathematical methods of communication and control theory are the basis for many common technical trading methods and indicators. This series of articles will focus on the mathematical basics needed to understand indicators and will not discuss trading strategies except to illustrate the use or misuse of indicators. Throughout this series, I will refer to stocks as the trading vehicle with the understanding that the mathematical principles explained here apply to any market.

    This, the first article, presents a simple model to describe price action and one of its elements — cycles. Part 2 will discuss trends and smoothing methods. Part 3 will conclude the series with momentum, oscillators, and a brief discussion of the implications of the model. The math presented will be just detailed enough to give you an understanding of the concepts that can be further explored in the references provided.

    Many trading strategies are based on the action and interaction of technical indicators. In evaluating these strategies, it is important to know whether the indicators are mathematically sound. The articles will provide the basis for that understanding and point out the limitations of this approach. The reader can then critically evaluate the theoretical basis of technical indicators for their own trading strategies.

    A STOCK PRICING MODEL

    Figure 1 shows a typical bar chart of price versus time for a stock. I would like to build a mathematical model of this price series that lets me use the techniques of signal processing to understand the historical action shown in the chart and identify trading opportunities. The approach used in this article presents technical indicators as derived from a process as a deterministic signal. This is not the only approach that can be used — statistical time series analysis forecasting, pattern (feature) analysis, and artificial intelligence based methods are also used — but signal processing techniques are intuitive and have been used to develop many technical indicators and methods."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-42-49-signal-processing-basics-by-glenn-barlis-21.gif"",""height"":""620"",""width"":""432""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-42-49-signal-processing-basics-by-glenn-barlis-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-42-49-signal-processing-basics-by-glenn-barlis-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov285judy,d,"{""minimum-quantity"":""1"",""path"":""ch4a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:4 (50-58): Juggling Dynamite With Danielle Park by J. Gopalakrishnan and B. Faber"",""caption-linebreaks"":""Juggling Dynamite With Danielle Park by J. Gopalakrishnan and B. Faber

    With more than 18 years of professional consulting experience, Danielle Park is an attorney as well as a Chartered Financial Analyst (Cfa) and finance author. Park is a regular guest on North American news media and a popular keynote speaker about investment markets and money. She is the author of the best-selling book Juggling Dynamite and a popular financial blog, www.jugglingdynamite.com. She is a member of the internationally recognized Cfa Institute, the Toronto Society of Financial Analysts (Tsfa), and she continues to be a member of the Law Society of Upper Canada. Stocks & Commodities Editor Jayanthi Gopalakrishnan and Staff Writer Bruce Faber interviewed her on February 8, 2010, via telephone.

    Danielle, how did you get interested in the markets?

    I was an attorney for a number of years before I was recruited by a sell-side securities firm in the mid-1990s. I became a portfolio manager, finished my Cfa, and cofounded our current company, Venable-Park Investment Counsel, with my partner and market technician, Cory Venable, in 2003.

    Doing historical research in the late 1990s, we came to see that the 1980s and 1990s were the best and smoothest secular bull in stocks ever in human history.

    We also saw that the “easy gain buy & hold” period was not likely to continue, and we were likely headed into a much more challenging environment within 15 to 20 years, of almost the opposite conditions that the world had known in the 1980s and 1990s.

    We came to this realization because I am a macro-market analyst and my partner is a Chartered Market Technician (Cmt), and we both have a passion for market history and cycles in human behavior, so between our training and studies from other periods in history, like the 1920s, 1930s, 1940s, and 1950s, we put two and two together and said, “Oh, no, look what market conditions may be coming our way!” Then we asked, “What kind of an investment strategy will people need if they are going to retain their capital and get some growth in this difficult period?”

    So what did you think would be a good strategy?

    We came to the conclusion that the passive buy & hold, the passive allocations to equities that individuals, mutual funds, and pensions were using in the 1980s and 1990s, were going to be a disaster in this coming period.

    This was, of course, all supposition on our part, or educated guessing; no one knows the future until it actually arrives, after all. But we reasoned that probabilities favored that we were going into a long or “secular” bear period like we had seen in the 1960s and 1970s, and the 1920s to the 1940s, and that a fundamentally different asset allocation approach was required. We came to a number of basic principles."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-50-58-juggling-dynamite-with-danielle-park-by-j-gopalakrishnan-and-b-faber-20.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-50-58-juggling-dynamite-with-danielle-park-by-j-gopalakrishnan-and-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-50-58-juggling-dynamite-with-danielle-park-by-j-gopalakrishnan-and-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov285exyo,d,"{""minimum-quantity"":""1"",""path"":""ch4a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:4 (59): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    RSVP FOR A CHEAPER STRADDLE?

    I like the idea of positioning with long straddles, but when it comes to pulling the trigger, I’m having problems executing. More often than not, the spreads that look the most attractive overwhelm me with the actual cost to initiate the strategy and/or the associated time decay. Can you offer any insight that might help me get over this barrier to entry?

    That’s a very good question to a situation many investors battle with in developing a trading plan. Your central dilemma seems to involve time and its impact on both shorter- and longer-term straddle pricing. This impact boils down to heightened concerns regarding increased decay risk when dealing with a near-term straddle versus a larger capital outlay and larger dollar exposure of the longer-term straddle if left unmanaged during the life of the contract.

    For instance, if it’s January and shares of Abc are at $35, the April 35 straddle might trade for about $3.50, while the February 35 straddle with one month until expiration is priced at $2.00. Over the next month, if shares sit or go nowhere, theta will eat up the entire value of the February straddle or $200 per spread."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-59-explore-your-options-by-tom-gentile-20.gif"",""height"":""616"",""width"":""421""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-59-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-59-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286prre3,d,"{""minimum-quantity"":""1"",""path"":""ch4a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:4 (60-63): Product Review: Trading The Pristine Method Course by D. D. Peterson"",""caption-linebreaks"":""Product Review: Trading The Pristine Method Course by D. D. Peterson

    This is the second of a two-part home study series on how to trade using the Pristine method. Part 2 (Tpm 2) gives more insight into the approach taken by Part 1 (Tpm 1). In Part 1, setup patterns lead to trade entry. In fact, you are given a point system to quantify how successful a trade might be. Part 2 drills deeper and analyzes what technical analysts really try to do: Understand what emotions and expectations are in play with price and volume patterns. Pristine trading has little reliance on indicators. It is about understanding what price patterns tell you about emotions and expectations.

    This course has 16 modules. While Part 1 was rich with example price patterns, Part 2 emphasizes explanation with text. The presentation quality you saw in Part 1 has been carried over to Part 2: a map that allows you to pick any module of interest or revisit ones you’ve already studied, mouse-controllable sliders to advance or repeat the dialog for one slide chart, advance and reverse buttons to move back and forth between slides in a module, and a table of contents allowing you to select any topic in a module with a mouse-click. It is also clear that like Part 1, the words on the slide charts in Part 2 have been chosen with care. Let’s take a look as some of the modules.

    CANDLESTICK ANALYSIS MODULE

    A helpful aspect of this course is charts that summarize. Several examples can be seen in one of the first topic areas, “Candlestick analysis.” The Pristine Trading Method (Tpm) uses candlesticks because it wants the Pristine trained trader (Ptt) to observe the size of the body, its relationship to the upper and lower tails, the color, and candlesticks that have preceded the current ones. The course explains that while there are numerous names for candlesticks such as doji, hangman, and engulfing bar, what matters to the Ptt are just six Tpm names such as Wrb (wide range bar) and Cog (changing of the guard). See Figure 1."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-60-63-product-review-trading-the-pristine-method-course-by-d-d-peterson-20.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-60-63-product-review-trading-the-pristine-method-course-by-d-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-60-63-product-review-trading-the-pristine-method-course-by-d-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286fufo2,d,"{""minimum-quantity"":""1"",""path"":""ch4a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:4 (64-65): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    FUTURES VS. FOREX\nWhat are the advantages of trading currency futures as opposed to forex?\nThe popularity of foreign exchange (spot currency) trading has exploded, thanks to low margins, seemingly low transaction costs, and flashy trading platforms. However, there are a few things that you should consider before choosing forex over currency futures like those traded on the Chicago Mercantile Exchange (Cme):

    • Government regulation: The National Futures Association (Nfa), the Commodity Futures Trading Commission (Cftc), and the futures exchanges themselves all work together to create and enforce rules and regulations over industry participants. More specifically, each of these entities attempt to produce an environment in which solicitors such as brokerage firms, brokers, and commodity trading advisors are conducting business in an honest and candid manner.\nThe forex market, on the other hand, is global in nature and due to the lack of a physical trading floor or headquarters, regulation of operations doesn’t fall within any single jurisdiction. Although the Nfa and the Cftc have made strides in the right direction when it comes to enforcing compliance rules for those soliciting forex in the US, there are still operations abroad (and in some cases domestic) doing business without the necessary restrictions.\nAs a retail trader, I find it important to realize that forex clearing firms located in the US are currently required to register with the Nfa, leaving them subject to government regulation. However, Nfa registration, and thus regulation, is not necessarily required of those soliciting trading accounts, trading systems or signals, and software. Further, many forex salespeople are comfortable in exercising what they consider to be their right to freedom of speech, regardless of the credibility of the claims that they make. Of course, not all forex affiliates are in the business of misleading the public and not all futures industry participants are noble, but there is relatively more opportunity for wrongdoing in the world of forex than in others."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-64-65-futures-for-you-by-carley-garner-20.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-64-65-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-64-65-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286trti1,d,"{""minimum-quantity"":""1"",""path"":""ch4a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:4 (67-76): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    This month’s Traders’ Tips are based on David Hawkins’ article in this issue, “Modified Volume-Price Trend Indicator.”

    Code for MetaStock is already provided in the article’s sidebar to help readers implement the indicator. Code for other programs is presented here as contributed by various software developers.

    In addition to the code for technical analysis programs, this month, readers will also find a formula to implement Hawkins’ indicator in Microsoft Excel spreadsheet application.

    Readers will find these and more Traders’ Tips at the Stocks & Commodities website at www.Traders.com in the Traders’ Tips area, from where the code can be copied and pasted into the appropriate program. In addition, the code for each program is usually available at the respective software company’s website. Thus, no retyping of code is required for Internet users.

    For Stocks & Commodities subscribers, the MetaStock code found in Hawkins’ article can be copied and pasted into MetaStock from the Subscriber Area at www.Traders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-67-76-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""619"",""width"":""434""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-67-76-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-67-76-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28876le,d,"{""minimum-quantity"":""1"",""path"":""ch4a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:4 (8-9, 76-77): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    SOFTWARE ISSUE

    Editor,

    Can you tell me when your special issue comes out with the analyses on technical analysis software?

    Louis Witte\nNetherlands

    Our 2010 Bonus Issue, which includes the 2010 Readers’ Choice Awards for products and services voted most useful by our readers, was mailed to all current subscribers in late February. If you are not currently subscribing, you can contact our subscription department at Circ@Traders.com for a subscription or trial subscription. The issue is also available on some newsstands domestically in the US. The Bonus Issue also contains a software listing in the Traders’ Resource section. It is not a ranking or rating of software, but it is an extensive list of software used in our industry.

    As for analyses of software, we publish in-depth reviews of software or websites related to technical analysis in every issue.—Editor

    COMPUTRAC SOFTWARE?

    Editor,

    I was wondering if you could help with this question. Back in 1994, Telerate sold the rights to the CompuTrac software to Stratagem Software. But Telerate retained the source code to the product. Stratagem renamed the product as Smartrader. Stratagem stopped operating back in 2006. I have been able to keep my copy (Smartrader) going, but now, with computer and Windows updates, it will no longer work. Can you help find the source code so that I can update my copy? I have had great joy working with this software, and with the source code, I would be able to continue my joy.

    David Coulter

    Stratagem Software was the last software developer we knew of who was still supporting that software. We do not know of any sources for the actual source code. Perhaps someone reading this will know something or will write in with a suggestion.—Editor

    DAYTRADE STRATEGIES

    Editor,

    I am very pleased to see the articles on the “how-to” daytrade strategies. Keep up these great articles.

    Garth Maynard\nLawrenceville, GA"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-8-9-76-77-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""619"",""width"":""429""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-8-9-76-77-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-8-9-76-77-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov289bofo2,d,"{""minimum-quantity"":""1"",""path"":""ch4a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:4 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    • Buy And Hold Is Dead: How To Make Money And Control Risk In Any Market

    • ChartPatterns

    • The Economic Storm: Understand It, Survive It, Make Money When It Passes

    • Financial Derivatives: Pricing And Risk Management

    • Forex Analysis And Trading: Effective Top-Down Strategies Combining Fundamental, Position, And Technical Analyses

    • The Quants: How A New Breed Of Math Whizzes Conquered Wall Street And Nearly Destroyed It"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-92-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""615"",""width"":""412""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28997at,d,"{""minimum-quantity"":""1"",""path"":""ch4a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:4 (98, 97): At The Close by Brian Twomey"",""caption-linebreaks"":""At The Close by Brian Twomey

    This indicator can be used with great reliability to catch moves in the currency markets.

    Doug Schaff, president and founder of FX Strategy, created the Schaff trend cycle indicator in the 1990s. It is the product of more than 20 years of experience in technical analysis, trading the markets with an expertise in currencies and a masterful understanding of technical analysis and price functions in the markets. Who better to give this generation of traders an interesting, comprehensive, accurate, and brilliant indicator? Schaff divulged the details of his indicator back in 2008, so the public is only now becoming familiar with its functions and uses. In my limited time using this indicator, I’ve found it to be hugely intriguing, a fascination I hope to impart to other traders.

    FASCINATION

    What makes this indicator interesting is that it is a combination of moving average convergence/divergence (Macd) and fast stochastics with a cycle component and a smoother to capture market prices more comprehensively. It is a combination of leading and lagging indicators. The Macd is considered to be a leading indicator because it serves as an early warning to where prices will go. It follows prices with its 12- and 26-period exponential moving average (Ema) components and nine-day Ema signal line. In this capacity, it is a trend indicator. Yet it is a lagging indicator because it doesn’t always lead prices, is prone to false signals especially in fast-moving markets such as currencies, and also prone to whipsaw price action. So you have to adjust the settings to satisfy your price and market objectives."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-98-97-at-the-close-by-brian-twomey-20.gif"",""height"":""626"",""width"":""459""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-98-97-at-the-close-by-brian-twomey-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-4-98-97-at-the-close-by-brian-twomey-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281deor,d,"{""minimum-quantity"":""1"",""path"":""ch5m206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:5 (12-24): Debit or Credit? by Giorgos E. Siligardos"",""caption-linebreaks"":""Debit or Credit? by Giorgos E. Siligardos

    That is the question. If you are confused about which vertical spread to use, find out here.

    \nAre vertical credit spreads better than their counterpart debit spreads? In this article I will discuss their main and subtle differences (and similarities) with an emphasis on the income-generating strategies. Now that trading direct derivatives is open to retail traders, both experienced professionals and novices engage in complex option positions like spreads, butterflies, condors, and so on. Among these advanced positions, the vertical spreads (referred to as verticals) are the most popular because of their relative simplicity, their definition of clear profit & loss levels, and their use as income-generating strategies. I will first give a short but solid overview of the basics of verticals and the problems they intend to solve. In the sequence I will contrast the debit verticals with the credit ones and attempt to offer a complete answer to the “debits or credits?” question.

    BASIC DEFINITIONS

    Let’s start with two basic definitions:

    - A vertical with calls is a composite position that consists of a long position in a call with strike price X and a short position in a (cheaper) call of the same series with higher strike price Y.

    - A vertical with puts is a composite position that consists of a short position in a put with strike price X and a long position in a (more expensive) put of the same series with higher strike price Y.

    When you buy the vertical with calls (long position in the vertical with calls), you buy the low strike call and sell the high strike call. When you sell the vertical with calls (short position in the vertical with calls), you do the opposite: you sell the low strike call and buy the high strike call. By the same token, when you buy the vertical with puts (long position in the vertical with puts), you sell the low strike put and buy the high strike put and when you sell the vertical with puts (short position in the vertical with puts), you buy the low strike put and sell the high strike put.

    You may wonder about how appropriate the terms “buy” and “sell” are, since each vertical is a composition of a long position and a short position, but these terms can be used because eventually a position in a vertical (just like the basic positions in calls and puts) is built either by giving money (hence the term “buy” or “long”) or by getting money (hence the term “sell” or “short”).

    These terms may be seem confusing, but many things will become clear through figures, so don’t get discouraged if you don’t have prior knowledge about the verticals."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-12-24-debit-or-credit-by-giorgos-e-siligardos-21.gif"",""height"":""636"",""width"":""463""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-12-24-debit-or-credit-by-giorgos-e-siligardos-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-12-24-debit-or-credit-by-giorgos-e-siligardos-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov282loat,d,"{""minimum-quantity"":""1"",""path"":""ch5m206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:5 (26-30): Looking At Other Markets by Gail Mercer"",""caption-linebreaks"":""Looking At Other Markets by Gail Mercer

    Most new traders gravitate to the S&P mini because of its average price range. But here’s a look at daily price movement in the currency futures vs. that of the S&P 500. Which one has larger price movements?

    any new traders begin their trading experience on the mini indexes, with a primary focus on the mini Standard & Poor’s 500, as either a scalping trader or an intraday trader. Their daily profit target is normally between three to five points (at $50 per point). Sounds reasonable, right? Wrong!\nFor an experienced scalping trader, this could be done, but not very likely for a new trader. To understand why, we need to look at the daily movement of the mini S&P. For October 2009, the mini S&P moved 19.27 points per day on average. Therefore, if the objective is to capture five points a day, a new trader is trying to capture 26% of the daily movement, which is quite hard for someone new to trading. Now, let’s take this a step further and look at the individual daily movement.

    MEASURING DAILY

    movement\nAs you can see from Figure 1, in October, out of 22 days, there were only two days in which the S&P moved more than 30 points and 12 days that the mini S&P moved less than 20 points, making it even harder to capture the daily profit goal of five points. (When the mini S&P moves more than 30 points, the five-point daily goal is only 16% of the daily range, making it easier to capture the daily goal, provided the movement is after 9:30 am ET.)"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-26-30-looking-at-other-markets-by-gail-mercer-21.gif"",""height"":""629"",""width"":""469""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-26-30-looking-at-other-markets-by-gail-mercer-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-26-30-looking-at-other-markets-by-gail-mercer-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283qaby1,d,"{""minimum-quantity"":""1"",""path"":""ch5m206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:5 (31): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    WHEN DO YOU ADD TO A POSITION?

    I’m an intraday stock trader. I’ve never had a problem cutting my losses, but I could use a little guidance when it comes to taking more advantage from my winners. I know one option is to add on dips. Do you ever add to a position if it starts working right after you buy it? — JKlar

    Trading decisions are based on all the variables involved, not just the stock’s price movement. One variable, of course, is the time frame the trader is accustomed to. If you are a short-term, high-frequency trader, then you may choose to take small profits, or losses, several times per day. If you look at multiday time frames, then you should set price targets, for profits and losses both.

    In either case, you should look at overall market conditions. Assume you bought 500 shares of Xyz at 28.40 with the premium to the day’s fair value for futures is a plus $0.50, for example. Now the stock price is $28.60 and premium has turned to a discount of $0.50, you should consider selling the long position. We also look at ticks (the net of upticks vs. downticks, pivot points, peer pricing, and the value of the most correlated pair). All of these indicators should be right at hand to help you with your entries and exits."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-31-q-a-by-don-bright-21.gif"",""height"":""617"",""width"":""422""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-31-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-31-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283sipr,d,"{""minimum-quantity"":""1"",""path"":""ch5m206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:5 (32-39): Signal Processing Basics by Glenn A. Barlis"",""caption-linebreaks"":""Signal Processing Basics by Glenn A. Barlis

    This is the second of a series of articles that examine stock price analysis using the mathematical methods of signal processing. Here you will learn about tools for detecting trends and smoothing them.

    In the first part of this series, I proposed a model for price time series that could be analyzed using signal processing techniques:

    Equation 1-1a:\nP = Constant + trend + cyclical components + noise

    or\nEquation 1-1b:

    P = c + f(t)trend + Sum[f(t)cycles ] + f(t)noise

    One way to view this model of price action is to think in terms of the frequency of price changes. From a frequency perspective, this model can be restated in terms of:\n1 Low-frequency components c + f(t)trend + f(t)cycles where cycles terms have very long periods compared to the trading horizon\n2 f(t)cycles terms where the cycle period is on the same order of magnitude of the trading horizon\n3 f(t)cycles + noise where the high-frequency and noise terms result in price variations that are much shorter than our trading horizon.\nIn the first article of the series, I described the cyclical components along with analysis tools such as the fast Fourier transform (Fft). In this second article, I will discuss the trend and low-frequency components and introduce tools for trend detection and low-pass filtering (smoothing)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-32-39-signal-processing-basics-by-glenn-a-barlis-21.gif"",""height"":""617"",""width"":""429""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-32-39-signal-processing-basics-by-glenn-a-barlis-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-32-39-signal-processing-basics-by-glenn-a-barlis-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov284smbo2,d,"{""minimum-quantity"":""1"",""path"":""faarfr203"",""ysw-page-title"":""Stocks & Commodities V. 28:5 (40-44): Smoothing The Bollinger %b by Sylvain Vervoort"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-40-44-smoothing-the-bollinger-b-by-sylvain-vervoort-29.gif"",""height"":""180"",""width"":""132""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-40-44-smoothing-the-bollinger-b-by-sylvain-vervoort-30.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-40-44-smoothing-the-bollinger-b-by-sylvain-vervoort-31.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov284smbo,d,"{""minimum-quantity"":""1"",""path"":""ch5m206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:5 (40-44): Smoothing The Bollinger %b by Sylvain Vervoort"",""caption-linebreaks"":""Smoothing The Bollinger %b by Sylvain Vervoort

    This variation of the popular Bollinger %b indicator gives clear turning points that will help traders identify entry and exit points while prices are moving between the Bollinger bands.

    By now, everybody in the business knows that Bollinger bands were developed by John Bollinger. What they actually are is probably equally known. The Bollinger bands in Figure 1 consist of a set of three curves drawn in relation to price data. The middle band is usually a simple 20-bar moving average that serves as the base for the upper and lower bands.

    Upper band = Middle band + 2 x 20-period closing prices standard deviation\nLower band = Middle band – 2 x 20-period closing prices standard deviation

    \nMost technical analysis programs have a built-in function for displaying Bollinger bands. Here is the MetaStock formula for Bollinger bands using basic functions:

    {The middle band}\nMov(Close,20,Simple);\n{The upper band}\n2*Stdev(Close,20 ) + Mov(Close,20,Simple);\n{The lower band}\nMov(Close,20,Simple)-2*Stdev(Close,20)

    In a normal distribution, most prices of a set of data are close to the average, with relatively few prices moving in one extreme or the other. If you were to look at a normally distributed data on a graph, it would look like a bell curve. Not all price data will reflect a perfect curve, of course. The standard deviation of the 20-period closing prices is a statistic that tells you how tight the price data are clustered around the mean."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-40-44-smoothing-the-bollinger-b-by-sylvain-vervoort-24.gif"",""height"":""762"",""width"":""557""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-40-44-smoothing-the-bollinger-b-by-sylvain-vervoort-27.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-40-44-smoothing-the-bollinger-b-by-sylvain-vervoort-28.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28499ex,d,"{""minimum-quantity"":""1"",""path"":""ch5m206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:5 (45, 99): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    PORTFOLIO PROTECTION

    I have a longer-term portfolio of stocks that I’d like to protect against any repeat performances of 2008 into March 2009. How can this be done with options?

    That’s a good question, but the answer doesn’t lend itself to one size fits all. Depending on how many stocks are in your portfolio, call and put liquidity within those individual issues, your risk and reward preferences, and how much time you’re willing to allocate to managing positions will lead to very different courses of action in the option market.

    An investor with long-term holdings in a handful of stocks with liquidly traded options might consider actively managing each situation separately from his or her other holdings. The time required to maintain a portfolio hedged with options shouldn’t be prohibitive, even if that person works full time and can’t commit to monitoring the market throughout the day.

    In this situation, many investors look at establishing either buy-writes or collars on their stocks. The former, the most popular strategy with investors, takes in premium by selling a call one-to-one against the amount of shares held in the underlying and has the effect of reducing the cost basis of the position."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-45-99-explore-your-options-by-tom-gentile-20.gif"",""height"":""617"",""width"":""424""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-45-99-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-45-99-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov284inmo,d,"{""minimum-quantity"":""1"",""path"":""ch5m206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:5 (46-49): Introducing The Modidor Spread by Jay Kaeppel"",""caption-linebreaks"":""Introducing The Modidor Spread by Jay Kaeppel

    Here’s a strategy that involves modifications to the standard iron condor spread.

    The world of option trading is an ever-evolving one. While the basic strategies have been around for a long time, the search for useful adjustments and enhancements to these fundamental strategies is an ongoing process. The more closely traders look at traditional strategies, the more opportunities they are likely to find. This article details a strategy that involves modifications to the standard iron condor spread, dubbed the modidor spread.

    THE GENESIS OF THE MODIDOR

    One of the unique uses of options is the ability to generate income from a portfolio. Very often, investors will sell covered calls against an existing stock position. If the stock price is below the strike price of the call at the time the option expires, then the investor gets to keep his stock position as well as the premium he received when he wrote the option. Another distinctive use of options is the ability to make money even if the underlying security is going nowhere.

    There are several strategies that a trader can use to attempt to achieve this objective, and among them is a strategy referred to as the condor. Specifically, we will look at a version of this strategy known as the iron condor. Essentially, the purpose of entering into an iron condor spread is to establish profitability a certain distance above and below the current price of the underlying security. Then as long as the underlying security remains within this price range, the position can earn a profit."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-46-49-introducing-the-modidor-spread-by-jay-kaeppel-20.gif"",""height"":""632"",""width"":""482""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-46-49-introducing-the-modidor-spread-by-jay-kaeppel-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-46-49-introducing-the-modidor-spread-by-jay-kaeppel-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov285fufo1,d,"{""minimum-quantity"":""1"",""path"":""ch5m206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:5 (53): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    CURRENCY FUTURES VS FOREX

    What are the advantages of trading currency futures as opposed to foreign exchange?

    If you recall from the April 2010 column, we discussed the implications of government regulation, dealing desks, and counterparty risk when it comes to deciding between currency speculation in the futures or forex markets. However, there are a few other things to keep in mind, such as the true costs, liquidity, margin, and access to options.

    Transaction costs: The forex industry has done a great job at marketing commission-free trading. Accordingly, speculators have flocked to forex brokerage firms that are structured as dealing desks. These firms make money on the fixed-pip spread rather than a transparent commission charge. On the surface, this seems to be an advantage over trading futures, which involve commission and exchange fees. Nevertheless, the typical forex pip spread of three to five pips provides the brokerage firm with a handsome reward and although it isn’t obvious, the retail trader is paying sizable transaction costs to participate in such a market."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-53-futures-for-you-by-carley-garner-20.gif"",""height"":""617"",""width"":""422""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-53-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-53-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov285jawo,d,"{""minimum-quantity"":""1"",""path"":""ch5m206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:5 (54-59): Jared Woodard of Condor Options by J. Gopalakrishnan and B. Faber"",""caption-linebreaks"":""Jared Woodard of Condor Options by J. Gopalakrishnan and B. Faber

    Knowing how the market moves isn’t particularly important, Jared Woodard, our interview subject of the month, explains. Woodard, the principal of Condor Options, has more than a decade of experience trading options, equities, and futures. He publishes the Condor Options newsletter (specializing in iron condors) and the accompanying blog. Woodard has been quoted in various media outlets including The Wall Street Journal, Bloomberg News, Financial Times Alphaville, and The Chicago Sun-Times, and in 2008 he was profiled as a top option mentor in Sfo magazine. He is also an associate member of the National Futures Association and registered principal of Clinamen Financial Group, a Commodity Trading Advisor.

    Stocks & Commodities Editor Jayanthi Gopalakrishnan and Staff Writer Bruce Faber interviewed Jared Woodard via telephone on March 10, 2010.

    Jared, how did you get interested in trading options?

    It was the ability to define your risks versus the techniques available for stocks or futures. Options give you more opportunity for risk management and control over your capital. A lot of traders come to options more for the leverage than anything else. They see that with the same stock or commodity that they just got a 5% return on, they could have had a larger return on a similar option trade. I can see the attraction there, but it is also a bit dangerous. The risk management features of options are most important.

    Did you start out trading on your own, or did you trade with a firm before that?

    I started out on my own. I traded on my own for a while, then I started the Condor Options newsletter, back in 2007. And since 2009 I have been a registered Commodity Trading Advisor (Cta).

    So when did you start trading on your own?

    I was in high school or college, around 1997. Like most people, I got interested in stocks first. Then curiosity took me to options pretty quickly.

    Besides the ability to define risk, are there any other advantages that trading options offer versus, say, trading equities or futures?

    Sure. If you are trading a future or equity long or short, it is about price. But I like to use the metaphor of different languages. If you are trading just directional price changes, then it’s a relatively rudimentary language. You can only express a couple of different views. Options are — to extend the metaphor — a more complex, more nuanced language because you can express views about price and volatility and time. So you have significantly more different views on an asset that you can express. That makes options a lot more interesting.

    You also have a blog called “Condor Options.” Is that because you prefer to trade the condor strategies over others?

    Yes. The newsletter attached to the blog teaches subscribers how to trade iron condors and market-neutral spreads. So that is where the blog’s name comes from. But I do like market-neutral strategies in general. They are my strategy of preference just because I think there is more opportunity there. A lot of people follow price trends, and even though predicting prices is difficult, there is definitely money following those trends. I have nothing against trend-following strategies at all, but there are a lot of opportunities in market-neutral strategies and especially in volatility trading strategies. That is what I really focus on."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-54-59-jared-woodard-of-condor-options-by-j-gopalakrishnan-and-b-faber-20.gif"",""height"":""633"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-54-59-jared-woodard-of-condor-options-by-j-gopalakrishnan-and-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-54-59-jared-woodard-of-condor-options-by-j-gopalakrishnan-and-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286prre4,d,"{""minimum-quantity"":""1"",""path"":""ch5m206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:5 (60-62): Product Review: MarketGauge Opening Range Success Formula by D. D Peterson"",""caption-linebreaks"":""Product Review: MarketGauge Opening Range Success Formula by D. D Peterson

    Opening Range Success Formula, MarketGauge’s new product, is a trading course and mastery program, with multiple strategies for daytrading equities and commodities. Opening Range Success Formula is based on pattern-based trading strategies. There are two parts to Opening Range Success Formula: the OR Blueprint and OR Mastery. Let’s take a look at each.

    OR BLUEPRINT

    This is where you learn what MarketGauge calls its opening range trading strategies. There are nine modules about six hours in length. The Introduction module is basically a synopsis of the trading backgrounds of MarketGauge cofounders Keith Schneider and Geoff Bysshe. The second module, Basic Opening Range Theory, gives you the overall approach. The next six modules give you specific trading pattern setups, such as momentum swing trade with three-day pivots (Figure 1), gapping bulls and bears, and reversal trade. The ninth module is the conclusion.

    One of the charts in the theory module provides some interesting statistics. In general, the first 30 minutes of each day establishes the high or low of the day 35% of the time, and in periods of expanded volatility, this percentage tends to rise. Just prior to attending a Las Vegas conference, Bysshe demonstrated this with a brief period, showing that the high and low were established 68% of the time, as annotated on the chart with up and down arrows (Figure 2)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-60-62-product-review-marketgauge-opening-range-success-formula-by-d-d-peterson-20.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-60-62-product-review-marketgauge-opening-range-success-formula-by-d-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-60-62-product-review-marketgauge-opening-range-success-formula-by-d-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286prre5,d,"{""minimum-quantity"":""1"",""path"":""ch5m206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:5 (64-67): Product Review: OmniTrader 2010 by Sean M. Moore"",""caption-linebreaks"":""Product Review: OmniTrader 2010 by Sean M. Moore

    WE first reviewed OmniTrader 2.1 in 1996. Since then, Nirvana Systems has continued to add features and functionality to the program. The latest version, OmniTrader 2010, is a powerful trading platform with a vast array of customizable options. With OmniTrader, you can scan for prospective trades, view charts with indicators and automated chart pattern recognition, implement trading strategies with automated signals, utilize built-in money management, and even place trades through an integrated brokerage account. For those who like to do their own system programming, OmniTrader is completely customizable with OmniLanguage, a language based on Visual Basic.net. But the beauty of OmniTrader is that the team at Nirvana Systems has done a lot of programming, so you can take advantage of the many robust features with just a few clicks.

    SETUP

    Installing OmniTrader is pretty straightforward. After installing from the CD and going to the website for the latest updates, you are ready to connect to your data source. For this review I used Nirvana Systems’ own data source. Pricing for OmniData is $19.95 per month for end-of-day (Eod) stocks, $59 per month for real-time stocks, and $79 per month for real-time futures. OmniTrader is also compatible with several third-party data sources. OmniTrader does a lot of analyzing and computing, so the more powerful your computer, the better. I installed the software on a Windows XP machine with an Intel Core2Quad 2.33GHz processor and 2.00 GB of Ram, and the OmniTrader software ran smoothly with this setup."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-64-67-product-review-omnitrader-2010-by-sean-m-moore-20.gif"",""height"":""633"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-64-67-product-review-omnitrader-2010-by-sean-m-moore-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-64-67-product-review-omnitrader-2010-by-sean-m-moore-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286trti2,d,"{""minimum-quantity"":""1"",""path"":""ch5m206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:5 (68-80): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    This month’s Traders’ Tips are based on Sylvain Vervoort’s article in this issue, “Smoothing The Bollinger %b.”

    Code for MetaStock is already provided in the article’s sidebar to help readers implement the indicator, and at the end of this document. Code for other programs is presented here as contributed by various software developers.

    Readers will find these and more Traders’ Tips at the Stocks & Commodities website at www.Traders.com in the Traders’ Tips area, from where the code can be copied and pasted into the appropriate program. In addition, the code for each program is usually available at the respective software company’s website. Thus, no retyping of code is required for Internet users.

    For Stocks & Commodities subscribers, the MetaStock code found in Vervoort’s article can be copied and pasted into MetaStock from the Subscriber Area at www.Traders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-68-80-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""616"",""width"":""419""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-68-80-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-68-80-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28862le,d,"{""minimum-quantity"":""1"",""path"":""ch5m206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:5 (8-10, 62): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    SAMPLE INDICATOR VALUES

    Editor,

    I have a request. Would it be possible to include a set of sample data and expected indicator values when you provide the code for indicators? Perhaps you could post it at your website for download.

    I just read “Empirical Mode Decomposition” by John Ehlers in the March 2010 issue. It’s a great article, and it’s very helpful that he has included the programming code. I have coded it into my backtesting software, and the indicator looks similar to the example figures in the article. But if I had a set of expected values, it would help a lot to verify that my code is working as expected. Without it, the code could be generating close or totally incorrect values and I would never know. Bugs like this could come from anywhere, such as incorrect coding or more often a simple typo. It would not have to be a lot of values, perhaps 500–1,000 bars.

    David

    Thank you for your feedback. We will keep your request in mind and encourage our authors to supply this if possible.\n—Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-8-10-62-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""616"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-8-10-62-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-8-10-62-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov289bofo3,d,"{""minimum-quantity"":""1"",""path"":""ch5m206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:5 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    • 7 Charting Tools For Spread Betting

    • The Active Asset Allocator: How Etfs Can Supercharge Your Portfolio

    • Bonds Now! Making Money In The New Fixed Income Landscape

    • High-Frequency Trading: A Practical Guide To Algorithmic Strategies And Trading Systems

    • The Myth Of The Rational Market: A History Of Risk, Reward, And Delusion On Wall Street

    • Winning Edge Trading: Successful And Profitable Short- And Long-Term Systems And Strategies"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-92-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""613"",""width"":""408""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28996at1,d,"{""minimum-quantity"":""1"",""path"":""ch5m206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:5 (98, 96-97): At The Close by John A. Sarkett"",""caption-linebreaks"":""At The Close by John A. Sarkett

    Here’s a turbocharged option strategy.

    Francisco Antonio Urrutia, a former banker with a penchant for a single index option and risk management, has been generating stupendous returns for the past three years. In this niche of option exotica — several thousand individuals exclusively trading the Russell 2000 (Rut) condor — where 100 condors per month is deemed large and carries a $100,000 theoretical risk, he does five or 10 times that size on a monthly basis, and profitably. Spread across 10 different accounts, he has averaged 10% to 15% monthly returns against reg-T margins in fewer than four years. How did he get interested in the rare topic?

    TURNING POINTS

    “We were living in Celebration [FL], exploring market opportunities, [and] I happened to see an ad on television about an option mentoring seminar,” Urrutia explained. He met Dan Sheridan, founder of Sheridan Options Mentoring (Som). After nearly 25 years as a Mercury Trading market maker specialist in the Cboe pits, Sheridan founded his company in 2007. Now, Som serves an average of 150 students daily via webinar.

    Urrutia said that he and his wife started the mentoring program with Sheridan, studying income strategies. They stuck with Sheridan’s rules and followed his advice to stay with one-contract trades. The “rules” include stringent risk management, including predetermined entry points, predetermined max loss, predetermined adjustment points — and nothing by the seat of the pants.

    After paper-trading in 2006, Urrutia scaled up, again per the Sheridan method. He moved from paper-trading to trading one contract, and then, after time, 10 contracts. At the end of 2006 he moved to 20s. He stayed with 20s for the first six months of 2007, then moved to 50s. In the third year, he moved up to 100s, eventually to his current 500-contract size. How did he fare in the terrifying markets of 2008? “I was forced to better apply the golden rules, and then I profited more,” he said, adding that when the Dow Jones Industrial Average swings big in a day, there are more profit opportunities, not fewer."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-98-96-97-at-the-close-by-john-a-sarkett-21.gif"",""height"":""620"",""width"":""440""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-98-96-97-at-the-close-by-john-a-sarkett-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-5-98-96-97-at-the-close-by-john-a-sarkett-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281dawi,d,"{""minimum-quantity"":""1"",""path"":""ch6j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:6 (10-14): Daytrading With Volatility by Mark Hodge"",""caption-linebreaks"":""Daytrading With Volatility by Mark Hodge

    This trading strategy lets you take advantage of volatility to establish your profit targets and stop-losses.

    The term “volatility” is typically associated with losses. It’s easy for media and money managers to blame losses on volatile market conditions, but is that really the case? Higher volatility can mean greater risk, but greater risk is a direct result of greater price fluctuations in the market. Greater price fluctuations might be a concern for investors, but active traders need markets to move, and these price fluctuations are a necessary component for successful daytrading. So is volatility really that bad? Could you accommodate periods of greater volatility and lower volatility, and actually use volatility to your advantage with the markets you trade? Yes, you can!

    DEFINING VOLATILITY

    Simply, volatility is the degree of uncertainty, and it is the potential for price changes in a given market. It can be defined in various ways, but the Cboe Volatility Index (Vix) is a great gauge of volatility in the US markets. Vix measures volatility on the Standard & Poor’s 500, based on 30-day option premium. When option premiums are high, traders expect future volatility to be high, and Vix rises."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-10-14-daytrading-with-volatility-by-mark-hodge-21.gif"",""height"":""622"",""width"":""439""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-10-14-daytrading-with-volatility-by-mark-hodge-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-10-14-daytrading-with-volatility-by-mark-hodge-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281frdi,d,"{""minimum-quantity"":""1"",""path"":""ch6j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:6 (16-20): Fractal Dimension As A Market Mode Sensor by John F. Ehlers and Ric Way"",""caption-linebreaks"":""Fractal Dimension As A Market Mode Sensor by John F. Ehlers and Ric Way

    You can use the fractal dimension as a natural way to sense whether the market is in a cycle mode or trend mode.

    IS the market trending or cycling? What intuitively seems like an easy question to answer is perhaps one of the most vexing in all technical analysis. If a trader knows the market mode, then a straightforward approach could be taken to adapt a trading strategy to that mode. We would apply a swing trading technique such as an overbought/oversold oscillator in cycle mode and a trend-following technique such as a moving average crossing in trend mode. In this article, we address the cycle/trend problem using the fractal dimension.\nA number of tools have been developed to differentiate between cycle and trend modes. For example, we can compare the trend slope over a full cycle period to the amplitude swing of the cycle and use the ratio. More recently, we developed empirical mode decomposition to separate the market into cycle and trend mode components. In this article, we will consider the fractal dimension as a natural way to determine whether the market is in a cycle mode or trend mode.

    FRACTAL DIMENSION

    There is no argument that market prices are fractal. Price charts look similar regardless of time frame. If you remove the labels from a five-minute chart, a daily chart, and a weekly chart, you would have difficulty telling them apart. Fractal shapes are self-similar because they have the same roughness and sparseness regardless of time interval. This self-similarity can be defined by the fractal dimension that describes sparseness at all magnification levels."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-16-20-fractal-dimension-as-a-market-mode-sensor-by-john-f-ehlers-and-ric-way-21.gif"",""height"":""624"",""width"":""451""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-16-20-fractal-dimension-as-a-market-mode-sensor-by-john-f-ehlers-and-ric-way-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-16-20-fractal-dimension-as-a-market-mode-sensor-by-john-f-ehlers-and-ric-way-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov282foga,d,"{""minimum-quantity"":""1"",""path"":""ch6j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:6 (22-27): The Forex Gambit by Walter T. Downs"",""caption-linebreaks"":""The Forex Gambit by Walter T. Downs

    This trading strategy uses logic and analysis from math and chess. It’s bold, it’s aggressive, and you don’t lose sight of risk.

    I am an advanced chess player, and I have an advanced education in esoteric mathematics. Together, these two disciplines embody powerful logic and methods of analysis. I have created a system based on the idea of the gambit, a term borrowed from chess. In its essence, it is the sacrifice of material in order to launch a bold attack. The gambit is everything a trading system should be: audacious, dynamic, and fluid. When it is successful, it reaps great rewards.

    Here, when I am referring to logic and analytical technique from chess and math, I will refer to chess as “C,” and to math as “M”:

    C and M both favor economy of time and effort in relation to what is achieved.

    In this regard, a daily time frame is the best choice. C and M both state that the optimal strategy is composed of the most prolific factors within the general theory and body of knowledge that governs the system. The general theory of technical analysis is:

    • Market action discounts everything.

    • Prices move in trends.

    • History will repeat itself.

    \nWithin the body of knowledge, the most prolific factor that governs trend is the simple moving average (Sma). The most prolific price used is the closing price. The period used for the Sma is determined by M and is a value that has statistical significance. Therefore, the value used is 30."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-22-27-the-forex-gambit-by-walter-t-downs-21.gif"",""height"":""624"",""width"":""446""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-22-27-the-forex-gambit-by-walter-t-downs-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-22-27-the-forex-gambit-by-walter-t-downs-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283sipr1,d,"{""minimum-quantity"":""1"",""path"":""ch6j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:6 (32-38): Signal Processing Basics, Part 3 by Glenn A. Barlis"",""caption-linebreaks"":""Signal Processing Basics, Part 3 by Glenn A. Barlis

    Part 1 of this series described a price model for stocks and discussed cycle analysis methods. Part 2 covered trends and smoothing methods with an emphasis on moving averages — one of the core tools of technical analysis. The third part of this series addresses momentum and oscillators and describes how the tools may be applied to trading systems.

    Tools such as the fast Fourier transform (Fft) can be used to determine the cycles present in historical data. While not useful as a reliable predictor of stock prices, this knowledge can be used to tune other indicators and suggest the appropriate trading strategy. Trends and smoothing methods enable the trader to further determine market direction and establish a trading strategy. The missing piece provided here is the toolkit to time the best entry and exit points consistent with the chosen strategy.

    TURNING POINTS

    Much as we would like to look at a chart and go back to the previous low to make a buy, we have to make buy/sell decisions in real time. Trend-based systems using indicators such as moving average crossovers, which by definition are lagging indicators, can sacrifice profit potential at both ends of the trade and even produce losses in certain types of markets. What the trader needs is a method to identify turning price points with a good probability of being profitable."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-32-38-signal-processing-basics-part-3-by-glenn-a-barlis-21.gif"",""height"":""623"",""width"":""445""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-32-38-signal-processing-basics-part-3-by-glenn-a-barlis-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-32-38-signal-processing-basics-part-3-by-glenn-a-barlis-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283qaby2,d,"{""minimum-quantity"":""1"",""path"":""ch6j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:6 (39): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    SURVIVAL OF THE FITTEST

    Don, I read your article about the subpennies and high-frequency trading. I have also read that these new demons might very well kill each other off in the near future. What steps are you and your traders taking currently to help offset these challenges?

    Good question, I’ll try to give you a few ideas. The idea of “parking” on a limit price in hopes of collecting 0.002 or so in liquidity rebates seems sort of silly nowadays since these subpenny orders can flash in front you at the rate of thousands per second. What happens when you have 1,000 shares offered at 42.30, for example, is that these flash orders will go in offered at 42.2999 or similar and take the order from you. The only time you’ll be filled is when there is a large-enough order or a higher limit, allowing the price to go a few pennies against you. This can cost a lot of money. The other alternative is for you to basically lose a penny and hit the prevailing bid price. Either way, you’re losing money."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-39-q-a-by-don-bright-21.gif"",""height"":""618"",""width"":""428""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-39-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-39-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov284fufo,d,"{""minimum-quantity"":""1"",""path"":""ch6j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:6 (43): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    LOOKING FOR SUMMER PATTERNS

    What are some seasonal patterns we should be looking at for summer commodity trading?

    Seasonal patterns are evident in commodity markets throughout the entire year, but some of the best opportunities occur in summer. That said, the seasonal tendency of a market is just that — an inclination to behave in a certain way, but it is not a guarantee. For seasonal traders, it is important not to become complacent in a speculation simply because it happens most years. Counterseasonal moves can be fierce and have been known to cause severe monetary damage to those caught unawares.

    The grain markets often see a significant amount of spring and summer volatility as the markets contemplate planted acreage, growing conditions, and other factors. Prices are susceptible to bouts of weather spikes as traders react to news of conditions that are inevitably “too wet” or “too dry.” However, even during the most trying of growing conditions, early summer rallies have failed to maintain themselves in the long run."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-43-futures-for-you-by-carley-garner-21.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-43-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-43-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov284trwi,d,"{""minimum-quantity"":""1"",""path"":""ch6j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:6 (44-46): Trading With Volume Profile by Sam Whitehill"",""caption-linebreaks"":""Trading With Volume Profile by Sam Whitehill

    Daytrading stocks is largely a game of knowing critical support and resistance price levels. Here’s a valuable tool that identifies these levels quickly so you can make sound trading decisions.

    Typically, you need to scan through a substantial number of intraday stock charts in order to identify these critical support and resistance levels within any individual stock. This is a time-consuming and tedious process. Moreover, historical chart data is not always available for a time period extending beyond six months, as some charting packages stop showing data more than six months in the past.

    VOLUME PROFILE

    Volume profile is a valuable trading tool that can save time and allow you to more easily see significant price levels that occurred in the more distant past. Volume profile is sometimes referred to as “price by volume.” It is somewhat similar to the price activity chart in that it displays cumulative volume by price. It is also similar to Market Profile, but it does not include the time component and is considered a separate tool. Essentially, volume profile is a chart showing the amount of volume (number of shares traded) at each price level over some length of time. Instead of scanning through many intraday charts of a stock to find key support and resistance price levels, you can simply generate a volume profile chart in a fraction of the time. In addition, you can more easily see support and resistance levels from longer periods in the past."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-44-46-trading-with-volume-profile-by-sam-whitehill-21.gif"",""height"":""622"",""width"":""442""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-44-46-trading-with-volume-profile-by-sam-whitehill-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-44-46-trading-with-volume-profile-by-sam-whitehill-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov284exyo,d,"{""minimum-quantity"":""1"",""path"":""ch6j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:6 (47): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    BUY LOW, SELL HIGH?

    I’ve seen more than a few situations where longer-dated options trade at a significantly lower implied volatility relative to the shorter-term contracts. If a trader bought the cheaper contract and sold the more expensive one, like with a calendar spread, it seems to me as though there should be some type of profit opportunity. Could you please shed some light on this topic?

    Great question. You’re correct in treating what seems like one of Wall Street’s proverbial free lunches with some care. The reality? If all that was required to turn a profit on a calendar spread was the simple lining up of “buying low” and “selling high” implied volatility (IV), there’d be no one to take the other side of the position. That’s not the case here, though."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-47-explore-your-options-by-tom-gentile-21.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-47-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-47-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov284smbo1,d,"{""minimum-quantity"":""1"",""path"":""ch6j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:6 (48-53): Smoothing The Bollinger %b by Sylvain Vervoort"",""caption-linebreaks"":""Smoothing The Bollinger %b by Sylvain Vervoort

    In the second part of this series, you will find out how to use the author’s version of the Bollinger %b indicator as a trigger to buy and sell a stock. To succeed, you’ll have to pull a few tricks out of the technical analysis toolkit.

    Often, the Sve_BB%b is a leading indicator making smooth moves with clear turning points. Normal and hidden divergent moves make it an ideal tool to help find entry and exit points while watching price moving between the Bollinger bands. In my last article, I looked at how this indicator could help traders identify entry and exit points while prices are moving between the bands. This time, I will introduce a good trading system using the Sve_BB%b and include some ideas together with other technical analysis tools. There are some tricks that could help traders get started:

    1. Use a candlestick chart when applying the Sve_BB%b. This is because candlesticks tell you more. You will look for candlestick reversal patterns to get a confirmation of a possible turnaround.

    2. Use the most basic tools like support, resistance, and trendlines. Knowing that the Sve_BB%b is a leading indicator, you will just use the turning points of the indicator above and below the active standard deviation reference levels as a signal to start drawing a trendline and not as a signal for a direct buy or sell.

    3. Keep a close eye on convergent and divergent moves between price and indicator. Ideally, you would open or close a position after a standard positive or negative divergent move. The bottoms or tops of this divergence are preferably spaced closer together than the price move before the divergence because price correction waves are generally moving faster than price trend waves. Look for hidden divergences and interpret them as a possible continuation of the previous up- or downtrend.

    4. Use 20-, 50-, and 200-day simple moving averages. Use the 20-day simple moving average as an aid to draw trendlines with the short-term price move. Use the 50- and 200-day simple moving averages as dynamic support and resistance levels.

    5. Use a fast-responding trailing stop to get in and out of a trade. A good example would be one like my Tr&nds trailing stop introduced in the July 2009 issue of Stocks & Commodities. Use this stop as a warning signal. Look closely at the evolution of price at that moment in time. This trailing stop is considered broken only if crossed by the high price.

    6. Always take care of the risk-to-reward ratio before entering a trade."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-48-53-smoothing-the-bollinger-b-by-sylvain-vervoort-20.gif"",""height"":""620"",""width"":""432""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-48-53-smoothing-the-bollinger-b-by-sylvain-vervoort-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-48-53-smoothing-the-bollinger-b-by-sylvain-vervoort-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov285jodi,d,"{""minimum-quantity"":""1"",""path"":""ch6j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:6 (54-61): Josh DiPietro and The Reality Of Daytrading by J. Gopalakrishnan & B. Faber"",""caption-linebreaks"":""Josh DiPietro and The Reality Of Daytrading by J. Gopalakrishnan & B. Faber

    For every would-be trader who’s wanted to succeed instantly, there’s someone like Josh DiPietro. DiPietro, who is the author of The Truth About Day Trading Stocks, has been daytrading stocks for 12 years. DiPietro also operates a website, www.daytraderjosh.com, and provides training programs for aspiring daytraders. His strategy is succeeding little by little, day after day — do you have the patience? To find out, Stocks & Commodities Editor Jayanthi Gopalakrishnan and Staff Writer Bruce Faber spoke with Josh DiPietro of DayTraderJosh.com via telephone on April 7, 2010.

    Josh, how did you get interested in trading?

    Back in my first semester in college, I took an accounting class and we did a small portfolio management project. It hit me then that you could actually buy a company, own a part of it — and not have to be a billionaire to do it. Then about four years after that, I opened my first online daytrading account. That was when the lightbulb went off. I realized I could sit in my shorts in sunny San Diego and buy a stock and make money on it without leaving my house. That was when everything started. I was one of the first to open up an account online and start buying and selling independently. I believe the term was independent online daytrader.

    But it boiled down to when, in 1998, I figured out I had the capability to buy and sell stocks. That’s what grabbed me. That’s when I realized you could make a living this way.

    You were pretty young in 1998.

    I was definitely young. Basically, anyone who got online and was interested in the market pretty much had an E*Trade account back then.

    What motivated you to do something like that, considering it’s risky and requires capital?

    When I first started, I thought I knew everything. I was one of the idiots who would take all the money they had and just throw it out there. Why not? I made a couple of good trades. The first time I opened my account with E*Trade it was with the minimum of $1,000. It wasn’t like a lot of money. But I did make some good money off of that. I got lucky, because remember, the market was skyrocketing. You could have thrown a dart blindfolded anywhere at the Nasdaq and made money. I got caught up in that hype and then everything came crashing down on me. I got lucky. That was the recipe for becoming a daytrader, when you were an amateur back in 1998.

    What are some memorable experiences you’ve had in your trading career?

    I’ve got three good examples. The first would be the first trade I ever made, which was Microsoft. It was 200 shares. It went up $0.50 in just under an hour, so I made a quick $100. But after commissions I netted only $80. I couldn’t believe I actually made $100 just sitting there and in not even an hour!

    One of my bad experiences and it’s the biggest experience to date was with Enron in 2001. I was one of many who when Enron hit $1.00, even though the books were saying it was worth $8, I bought. I had $80,000 and bought the stock with every egg in my basket, and lo and behold, that day it almost went down to $0.20. I held it overnight and the next day it went down to be worth less than a penny. So within one day I lost $80,000. That was my wakeup call, that I needed to learn more. I didn’t know anything about daytrading!"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-54-61-josh-dipietro-and-the-reality-of-daytrading-by-j-gopalakrishnan-b-faber-20.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-54-61-josh-dipietro-and-the-reality-of-daytrading-by-j-gopalakrishnan-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-54-61-josh-dipietro-and-the-reality-of-daytrading-by-j-gopalakrishnan-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286prre6,d,"{""minimum-quantity"":""1"",""path"":""ch6j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:6 (62-68): Product Review: Wave59 by Dennis D. Peterson"",""caption-linebreaks"":""Product Review: Wave59 by Dennis D. Peterson

    Wave59 is easily one of the most sophisticated technical analysis tools you’ll find on the market. It does many things, does them well, and does many things that no other product does. All of the software is written by Ceo Earik Beann and includes indicators and other tools created by Beann. His background includes trading commodities as well as bonds on the Chicago Board of Trade (Cbot). The graphical user interface (Gui) is superb and gives you the sense that something really good is coming. What prompted Beann to write this software? He was a solution provider to TradeStation, but there wasn’t a way to square a chart in a way that mimicked W.D. Gann’s use so he could overlay drawing objects and see how they might predict market turning points. Beann thought it would take him six months, but instead it took him three years, and this is the result.

    GENERAL

    The first screen you see after logging on is a blank area surrounded by movable menu groups. Example menu groups are “Chart” with items like “Format,” “Drawing,” “Systems,” and so on, or “Measuring” with icons to display various measurements such as the bar count between bars on a chart. You can move the menus to any location you want and they will actually shrink if you put them in a location where some of the menu items can’t be displayed.

    What’s available in the menus depends on the version of Wave59 you are using as well as the datafeed. If you are using the Pro version of Wave59, it includes a real-time datafeed, and if you are using the end-of-day version, you can use free Yahoo! data (if you check the bottom of the main Yahoo! Finance page, you’ll see that the data comes from Csi), MetaStock, or Ascii-formatted data. The real-time datafeed is proprietary, and you’ll need to input futures, stocks, and so on with a prefix. For example, Boeing is S.BA and the emini is F.EPH0. There’s a symbol lookup to help you."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-62-68-product-review-wave59-by-dennis-d-peterson-20.gif"",""height"":""633"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-62-68-product-review-wave59-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-62-68-product-review-wave59-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov287trti1,d,"{""minimum-quantity"":""1"",""path"":""ch6j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:6 (70-80): Traders' Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders' Tips by Technical Analysis, Inc.

    This month’s Traders’ Tips are based on John Ehlers’ and Ric Way’s article in this issue, “Fractal Dimension As A Market Mode Sensor.”\nEasyLanguage code isprovided in the article’s sidebar to help readers implement the indicator, and also at the end of this document. Code for other programs is presented here as contributed by various software developers.\nReaders will find these and more Traders’ Tips at the Stocks & Commodities website at www.Traders.com in the Traders’ Tips area, from where the code can be copied and pasted into the appropriate program. In addition, the code for each program is usually available at the respective software company’s website. Thus, no retyping of code is required for Internet users."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-70-80-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""616"",""width"":""420""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-70-80-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-70-80-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov288leto1,d,"{""minimum-quantity"":""1"",""path"":""ch6j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:6 (8-9): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    SCHAFF TREND CYCLE INDICATOR

    Editor,

    In his interesting article in the April 2010 S&C (At The Close: “The Schaff Trend Cycle”), Brian Twomey looked at the Schaff trend cycle indicator (Stc), which applies market cycles to the Macd, resulting in an efficient banded indicator.

    While I’ve used Stc since Doug Schaff released the code in 2008, a simple change seems to increase the reliability of the indicator. If the Macd signal line is replaced by the Trix (triple exponential smoothing oscillator), while the indicator looks similar, it signals trends earlier and sticks with a trend longer. To distinguish between the two, I call this indicator the Trix trend cycle (Ttc).

    To retain the rest of the TradeStation code from page 96 of the April issue (sidebar, “Schaff trend cycle EasyLanguage code”), the change is to replace the lines:

    {Calculate a MACD Line}\nXMAC=MACD(c,MA1,MA2);

    with:

    {Calculate Trix}\nXMAC=Trix((h+l+c)/3, MA1);

    MA2 is not used. Note also the suggested use of the typical price rather than the close, since, other than on weekly and longer charts, the close of a bar has no real significance in forex.

    David Gianelly\nVictoria, Australia"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-8-9-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-8-9-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-8-9-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov289bofo4,d,"{""minimum-quantity"":""1"",""path"":""ch6j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:6 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    • A Trader’s First Book On Commodities

    • The Financial Spread Betting Handbook: A Guide To Making Money Trading Spread Bets

    • Reminiscences Of A Stock Operator With New Commentary And Insights On The Life And Times Of Jesse Livermore

    • Rich Dad’s Conspiracy Of The Rich: The 8 New Rules Of Money

    • The Stock Market Cycles

    • Stock Options: Work ½ Hour A Day"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-92-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""615"",""width"":""417""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov2899693,d,"{""minimum-quantity"":""1"",""path"":""ch6j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:6 (98, 96-97, 93): At The Close by Koos van der Merwe"",""caption-linebreaks"":""At The Close by Koos van der Merwe

    Here are the basics of a traditional charting technique that can still be implemented in the modern financial markets.

    WD Gann, who was born in 1878, developed market forecasting methods based on geometry, astrology, and classic mathematics. Gann extensively used angles in the stock market in his work. A Gann angle is a derivative of a specific line on a chart. Each geometrical angle (which is a line extended into space) divides time and price into proportionate parts. The most important angle, which Gann called the 1x1 or the 45-degree angle, represented one unit of price for one unit of time. If you draw a perfect square and then draw a diagonal line from one corner of the square to the other, you have illustrated the concept of the 1x1 angle, which moves up one point per day.

    But what system did Gann use to trade the market? It was reported that he became a billionaire trading the market using his various strategies, but is that true? Were his theories truly what made him a billionaire, or was it all a piece of fiction? A friend of mine told me that in 1955 when Gann died, Gann’s widow put the contents of his study up for sale to the highest bidder. My friend went to look, intending to place a bid, but after spending a few hours looking through all the papers and studies, he could not find the secret to Gann’s success. He did not place his bid and left as confused as when he entered.

    W.D. Gann was 31 when, in October 1909, in the presence of witnesses, in 25 market days he made 286 transactions in various stocks on both the long and short side of the market. Of these transactions, 264 resulted in profits and 22 in losses. No one is sure which of the many trading techniques Gann developed to achieve what he did, long before computers were devised, but it seems to be a universal truth that the secret to Gann’s success was hard work and the confidence to put the knowledge that he gained into action."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-98-96-97-93-at-the-close-by-koos-van-der-merwe-20.gif"",""height"":""628"",""width"":""466""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-98-96-97-93-at-the-close-by-koos-van-der-merwe-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-6-98-96-97-93-at-the-close-by-koos-van-der-merwe-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281evfo,d,"{""minimum-quantity"":""1"",""path"":""ch7j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:7 (10-14): Evaluating Forex Trades by Brian Twomey"",""caption-linebreaks"":""Evaluating Forex Trades by Brian Twomey

    Will the currency pair you are trading reach your target? Here’s how to determine uptrends, downtrends, or range trades.

    any traders evaluate a currency pair and make a trading decision based on their observation of what the indicators say about that pair. In many instances, these indicators are short-term tools and can provide little knowledge of whether that pair will reach its destination or your objective. Analyzing charts in multiple time frames is an excellent approach in order to evaluate pairs, but again the question arises: Will that pair reach its intended destination?\nSince markets are so closely aligned together, there are other methods that traders should be aware of to examine an uptrend, downtrend, or range trade. This article will evaluate trading decisions through a multitude of currency pairs using currency cross-rates, dollar-opposite trades, dollar-similarity trades, and the use of other markets such as gold, oil, US Treasury bonds, and US stock markets.

    Using the dollar index\nAny trade should first be evaluated based on the US dollar index, since that index is the most powerful determinant of direction for all other major currency pairs. In Figure 1, note that the index has been in an uptrend since September 2008. If you apply the Fibonacci indicator, you can determine that the dollar index on a daily chart is also trading and has been trading just above the 0.618 level. Does the index retrace or hit its upper extensions? The answer may mean the difference between a good or bad trade with many pips of profits or losses. There are a number of ways to evaluate this situation."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-10-14-evaluating-forex-trades-by-brian-twomey-20.gif"",""height"":""623"",""width"":""448""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-10-14-evaluating-forex-trades-by-brian-twomey-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-10-14-evaluating-forex-trades-by-brian-twomey-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28155an,d,"{""minimum-quantity"":""1"",""path"":""ch7j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:7 (16-23, 55): An Anchored VWAP Channel For Congested Markets by Andrew Coles, PhD"",""caption-linebreaks"":""An Anchored VWAP Channel For Congested Markets by Andrew Coles, PhD

    This indicator combines channel and envelope methodologies to accurately identify price reversals.

    Physicist Paul Levine based his Midas (market interpretation/data analysis system) approach to technical analysis on a mathematical modification of the volume weighted average price (Vwap). Behind this modification is a well-thought-out philosophy of what drives market prices. This philosophy can be reduced to five basic tenets:

    1. The underlying order of price behavior is a fractal hierarchy of support and resistance levels.

    2. This interplay between support and resistance is a coaction between accumulation and distribution.

    3. This coaction, when considered quantitatively from raw price and volume data, reveals a mathematical symmetry between support and resistance.

    4. This mathematical symmetry can be used to predict market tops and bottoms in advance.

    5. Price and volume data — the volume weighted average price — subsequent to a reversal in trend, and thus to a major change in market (trader) sentiment, is key to this process of chart prediction.

    THE PROBLEM

    While there is no obvious flaw in the logic that binds these five principles, there is one weakness in the final tenet involving what follows the end of a trend and a significant change in market sentiment. In his lectures, Levine repeatedly identified the ends of trends with significant trend reversals. Yet this need not be the case; the end of a trend will more likely herald a resting phase in market activity.

    Technicians describe resting phases as sideways moving (congested) markets defined by horizontal support and resistance boundaries. These phases are subdefined in terms of various patterns, the most common being flags, pennants, triangles, and rectangles. According to most observers, markets trend only 25% of the time. Consequently, the ends of trends — and the attendant change in trader sentiment — only lead to a genuine trend reversal in perhaps one in four chart patterns."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-16-23-55-an-anchored-vwap-channel-for-congested-markets-by-andrew-coles-phd-20.gif"",""height"":""620"",""width"":""440""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-16-23-55-an-anchored-vwap-channel-for-congested-markets-by-andrew-coles-phd-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-16-23-55-an-anchored-vwap-channel-for-congested-markets-by-andrew-coles-phd-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov282laof,d,"{""minimum-quantity"":""1"",""path"":""ch7j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:7 (24-26): The Language of Money by Walter T. Downs, PhD"",""caption-linebreaks"":""The Language of Money by Walter T. Downs, PhD

    Here is a formula for calculating risk of ruin that can be used to make intriguing mathematical projections of the forex gambit.

    IN my previous article, I presented the forex gambit. I made some suggestions for systems and analysis and presented some results that were intriguing. But is that all that can be said about the subject? Hardly! In this article, I will discuss risk, the essential language of money. Here’s a possible formula for calculating risk of ruin, and then I’m going to use that formula to make some mathematical projections for the forex gambit.

    I will start by defining risk of ruin (Ror). In its simplest form, Ror is the probability of an account going to zero given various variables.

    In his 1992 Stocks & Commodities article “Appreciating The Risk Of Ruin,” Nauzer J. Balsara suggested that the variables for calculating Ror should be:\np = Probability of success\nk = Percentage of capital\nexposed to trading\nW = Payoff ratio

    \nNauzer then ran several simul- ations and produced some tables listing the various probabilities of Ror, given the input variables mentioned."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-24-26-the-language-of-money-by-walter-t-downs-phd-20.gif"",""height"":""626"",""width"":""458""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-24-26-the-language-of-money-by-walter-t-downs-phd-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-24-26-the-language-of-money-by-walter-t-downs-phd-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov282fufo,d,"{""minimum-quantity"":""1"",""path"":""ch7j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:7 (27,70): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    TRADE GUARANTEES

    How can a futures exchange afford to guarantee every trade that is executed?

    Futures exchanges guarantee each transaction that they clear, but unfortunately, the guarantee isn’t that you will make money. Instead, it assures that if you do speculate, you will be compensated in the amount deserved based on entry and exit price. This seems to be a given, but it isn’t. Those speculating in forex, as opposed to futures, aren’t necessarily afforded the same luxury.

    Forex traders are subject to counterparty risk. Assuming a profitable trade based on entry and exit price, forex traders rely on the party on the other side of their transaction to pay up. However, although it is a real risk, the incidence of default is rare. Just because it hasn’t been a common issue in the past doesn’t mean that it can’t or won’t in the future.

    Futures exchanges stipulate and enforce margin requirements for each commodity market. Margin is a risk-based good faith deposit levied on traders with risk exposure. Simply, it is the amount of money that traders must have on deposit to buy or sell a particular futures contract or execute a short option."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-27-70-futures-for-you-by-carley-garner-21.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-27-70-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-27-70-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov282prpr,d,"{""minimum-quantity"":""1"",""path"":""ch7j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:7 (28-32): Projecting Price And Time With Gann Fans And Angles by Koos van der Merwe"",""caption-linebreaks"":""Projecting Price And Time With Gann Fans And Angles by Koos van der Merwe

    Is it new? No, but Gann theory can still be implemented\nin the modern financial markets.

    According to W.D. Gann, past time and price cycles will influence future price and time cycles and tell us the time and price at which future cycles are most likely to terminate. This theory sounds complicated, but it led the famous trader to the Gann fan, the angle of which could be used to project future price and time terminations. Here’s how.

    GEOMETRIC ANGLES

    Geometric angles are used to measure the relationship between time, price, and space. The angles divide price and time into proportional parts. Gann angle lines are drawn from specific important points on any of the short-, medium-, or long-term charts. They are drawn at a specific angle that represents the relationship of time and price. In effect, the geometric angle is a moving average line that moves up and down a chart at a uniform rate of change. The difference between a standard moving average and a Gann geometric angle is that Gann angle lines may be used to project future time/price relationships."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-28-32-projecting-price-and-time-with-gann-fans-and-angles-by-koos-van-der-merwe-21.gif"",""height"":""619"",""width"":""434""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-28-32-projecting-price-and-time-with-gann-fans-and-angles-by-koos-van-der-merwe-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-28-32-projecting-price-and-time-with-gann-fans-and-angles-by-koos-van-der-merwe-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283mema,d,"{""minimum-quantity"":""1"",""path"":""ch7j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:7 (34-38): Measuring The Markets With Pivots by Austin Passamonte"",""caption-linebreaks"":""Measuring The Markets With Pivots by Austin Passamonte

    Price action across all financial markets adheres to repeated patterns and reacts to evolving price levels through any given period of time. Using dynamic pivots is one way to measure price action in any market.

    A critical piece of the trading puzzle is determining which way price trend will go. Stating the obvious? Well, yes and no. Trend is a highly relevant term, pertaining to the timeline of a trade’s expected hold time on a clock and/or distance on a chart. Do we intend to exit quickly or intraday for relatively small to modest gains? Hold through market noise for bigger gains? Overnight or beyond several sessions for trend trade gains? By definition, an uptrend for one relative time frame can be a downtrend for smaller or larger time frames.

    You can measure price action in many different ways. Moving averages, trendlines, and basic floor trader pivots are some of many popular chart tools for determining price direction or trend. Floor trader pivots are calculated based on the average of the high, low, and close of the previous trading day. They tend to be static."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-34-38-measuring-the-markets-with-pivots-by-austin-passamonte-21.gif"",""height"":""621"",""width"":""437""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-34-38-measuring-the-markets-with-pivots-by-austin-passamonte-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-34-38-measuring-the-markets-with-pivots-by-austin-passamonte-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283exyo1,d,"{""minimum-quantity"":""1"",""path"":""ch7j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:7 (39,70): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    \""SPYING\"" A BETTER OPTION?

    After the “flash crash” market price jolt in early May and thinking there’s got to be a safer way to position, I came across the ProShares Ultra S&P 500 (Sso) instrument, which looks to make twice the returns of the Standard & Poor’s 500. At less than one-third the price of the S&P 500 exchange traded fund (Etf) (Spy) and twice the punch, it seems to be a long straddle strategy in which you get more bang for your buck and a stronger way to position. What are the pros and cons?

    The reality of this type of product as it relates to option strategies is that the prices are essentially baked in. There are slight nuances with the “Ultras” over time that can affect actual performance in the underlying. But in order to keep things to the point, let’s compare recent front-month and at-the-money (Atm) straddles."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-39-70-explore-your-options-by-tom-gentile-21.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-39-70-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-39-70-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov284vofo,d,"{""minimum-quantity"":""1"",""path"":""ch7j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:7 (40-45): Volume, The Forgotten Oscillator by Martha Stokes, CMT"",""caption-linebreaks"":""Volume, The Forgotten Oscillator by Martha Stokes, CMT

    This oscillator can expose the amount of energy behind a price move.

    Most traders know the popular price oscillators: stochastic, the relative strength index (Rsi), Williams’ %R, price rate of change, and so forth. Price oscillators are second only to the moving average convergence/divergence (Macd) in popularity and use by retail traders. But few traders know about or use volume oscillators, a far more important category. While price oscillators are used mostly to reveal overbought and oversold price conditions with a high and low percentage range, volume oscillators can help identify the energy behind the move.

    VOLUME OSCILLATORS

    Volume oscillators can expose market energy of all kinds as well as reveal the shift of energy from up to down and vice versa. Being able to identify an increase in volume (which indicates increasing energy for the stock) or a shift in direction can help the short-term trader determine the duration and sustainability of the current price action. This can help screen out weaker stock picks and ascertain when to exit a trade.

    In today’s institutional activity–based market, the volume oscillator can reveal buying and selling patterns before price begins a major move. This is because many of the large institutions are careful not to disturb price as they buy incrementally.

    On the daily chart of Kirklands, Inc. (Kirk), as price moves up during the October–December period, the volume oscillator pattern forms lower highs, indicating a weakening of upside energy (Figure 1). However, a spike exhaustion pattern during the correction in January forewarns of an exhaustion pattern to the downtrend as high-frequency traders sell short for one day and then move on. The February volume oscillator cycle fails to bottom and the upside price action resumes. By studying these patterns carefully, the retail trader can anticipate and prepare for reversals and retracements prior to price actually changing."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-40-45-volume-the-forgotten-oscillator-by-martha-stokes-cmt-21.gif"",""height"":""628"",""width"":""470""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-40-45-volume-the-forgotten-oscillator-by-martha-stokes-cmt-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-40-45-volume-the-forgotten-oscillator-by-martha-stokes-cmt-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov285doca,d,"{""minimum-quantity"":""1"",""path"":""ch7j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:7 (50-55): The Double Calendar Spread by Jay Kaeppel"",""caption-linebreaks"":""The Double Calendar Spread by Jay Kaeppel

    Markets not going anywhere? Then take advantage of this neutral option strategy that you can use in stocks, indexes, and futures contracts.

    Option trading offers investors and traders a variety of unique opportunities that are simply not available to those who trade only the underlying stocks, futures, or indexes. Those who trade only the underlying securities see their prospects reduced to a simple formula. If you buy a given stock or futures contract, that stock or commodity must see its price increase in order for you to make money. Conversely, if you sell short a given stock or a futures contract, that stock or commodity’s price must decline in order for you to profit. There are no other possibilities.

    This is not the case when trading options.

    Over the years, traders have developed and refined a number of strategies designed to help them make money when a given security is going nowhere. One such strategy is known as the calendar spread. Traders have long used calendar spreads as a neutral play on numerous stocks, indexes, and futures contracts. But intrepid traders also never stop looking for ways to improve their odds of success and put their probabilities as far in their favor as possible.

    This article will discuss an option trading strategy that offers that very possibility. The strategy is most commonly known as the double calendar spread, which, as you might guess, involves establishing multiple positions in an effort to increase the probability of a profitable trade. Before delving into this topic, however, let us begin by first reviewing a basic option calendar spread."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-50-55-the-double-calendar-spread-by-jay-kaeppel-21.gif"",""height"":""621"",""width"":""439""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-50-55-the-double-calendar-spread-by-jay-kaeppel-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-50-55-the-double-calendar-spread-by-jay-kaeppel-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov285tomm,d,"{""minimum-quantity"":""1"",""path"":""ch7j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:7 (56-62): Tom McClellan And The Oscillators by J. Gopalakrishnan and B. Faber"",""caption-linebreaks"":""Tom McClellan And The Oscillators by J. Gopalakrishnan and B. Faber

    Tom McClellan, the son of technicians Sherman and Marian McClellan, has done extensive analytical spreadsheet development for the stock and commodities markets on his own over the years, including the synthesis of the four-year Presidential cycle pattern. He has fine-tuned the rules for interrelationships between financial markets to provide leading indications for critical market and economic data.

    Tom studied aerospace engineering at the US Military Academy at West Point and served as a helicopter pilot for 11 years. He began his own study of market technical analysis while still in the service, when he discovered ways to expand the use of his parents’ indicators to forecast future market turning points. He views the movements of prices in the financial market through the eyes of an engineer, which allows him to focus on what the data really says rather than interpreting events according to the conventional wisdom used by other analysts. In 1993, he left the Army to join his father in pursuing a new career using this type of analysis.

    In 1995 they launched their newsletter, the McClellan Market Report, covering the stock, bond, and gold markets. They utilize the indicators they have developed to present their view of the market’s structure as well as their forecasts for future trend direction and the timing of turning points. Their Daily Edition was introduced in 1998 to give subscribers updates on their indicators and also provide market position indications for stocks, bonds, and gold. Their subscribers range from individual investors to professional fund managers. Tom serves as editor of both publications and runs the newsletter business from Lakewood, WA, and can be reached at www.mcoscillator.com.

    Stocks & Commodities Editor Jayanthi Gopalakrishnan and Staff Writer Bruce Faber interviewed Tom McClellan via telephone on May 3, 2010.

    Tom, the McClellan name is famous among technical analysts. Tell us how influential your parents have been in your interest in the financial markets.

    You have to think back to the 1960s. My parents, Sherman and Marian, started doing this work in 1969. This was before anyone had a personal computer or handheld calculator. Computers lived in giant rooms with reel-to-reel tape machines and teletype terminals. Data entry consisted of punching holes in Ibm cards and feeding them into a hopper.

    But my father got interested in the financial markets long before that, in the 1950s. He went to what’s now called Claremont McKenna College to study business and economics. By the early 1960s he was managing a family farm in Illinois, and the chief management decision was to figure out when to sell the corn grown there. He learned that if you sold the corn in October, when everybody else was trying to sell corn, prices were really low. The secret was in drying the corn and then storing it until May to July of the following year when all the hog producers were running low and needed to buy more corn. He figured out that was when he could get a higher price.

    He had never spent much time on a farm before then, so to understand how corn prices worked, he got some charts to look at the history of corn prices. That was how he got interested in the financial markets. At the time there was a television station, Kwhy, in Los Angeles, where my parents lived. It was a Uhf station that broadcast business news long before there was Cnbc or Fox Business News. This station pioneered a lot of the standard financial reporting we see today, including the ticker at the bottom of the screen and saying, “Let’s go to the boards” to look at the prices. The station had an end-of-day charting program that my parents watched. That was revolutionary information in the 1960s, when fundamentals were everything and anybody caught with a chartbook at work risked getting fired for practicing voodoo. This was the kind of environment my parents were in when they started out."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-56-62-tom-mcclellan-and-the-oscillators-by-j-gopalakrishnan-and-b-faber-21.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-56-62-tom-mcclellan-and-the-oscillators-by-j-gopalakrishnan-and-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-56-62-tom-mcclellan-and-the-oscillators-by-j-gopalakrishnan-and-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286qaby1,d,"{""minimum-quantity"":""1"",""path"":""ch7j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:7 (63): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    MONITORING RISK

    First off, I want to say that I have been reading your Stocks & Commodities column and blogs for years. With all the bad information and negativity out there, I applaud you for your willingness to share, your frankness, and especially keeping your cool under fire at times.

    Now, I have a couple questions about risk management, both from a trader’s perspective and a trading firm’s perspective. First, as a retail trader with a $50,000 account and sometimes using Pdt margin of four times equity, I have written a program that places stop-loss orders at 1% of my equity for all my trades. But I seem to get hit too often and then see the market reverse over the next time frame. How would you handle this situation?

    Second, I’m thinking about joining a prop trading firm, but I am concerned about possible losses due to using leverage. How does your firm monitor risk on all your traders? Do many of your traders blow up accounts when things happen like the May 6th 1,000-plus point move in the market? I realize that day was extreme, but any light you can shed would really be appreciated.— Optimizer"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-63-q-a-by-don-bright-21.gif"",""height"":""618"",""width"":""425""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-63-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-63-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286prre7,d,"{""minimum-quantity"":""1"",""path"":""ch7j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:7 (64-67): Product Review: MultiCharts by Technical Analysis, Inc."",""caption-linebreaks"":""Product Review: MultiCharts by Technical Analysis, Inc.

    MultiCharts is highly flexible software designed to let you have choices. The most obvious area of flexibility is the number of datafeeds it supports as well as data formats. It supports 18 datafeeds such as Dtn/IQ, TradeStation, eSignal, and Interactive Brokers, along with data formats such as MetaStock and Ascii. Free quotes (Figure 1) from Yahoo! Finance, Google Finance, and Msn Money Central are also available. Add it all together and there are 23 data sources.

    CHARTING

    MultiCharts (MC) has four applications. The primary application, MultiCharts, lets you access the other three through the file menu: Portfolio Backtester, Power Language Editor, and Quote Manager. In Figure 1, the MC application is being used. The layout of the screen is similar to many other applications so it’s familiar territory. You have a menu across the top, icons underneath, screen area in the middle, and more icons on the bottom, along with tabs identifying workspaces."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-64-67-product-review-multicharts-by-technical-analysis-inc-20.gif"",""height"":""633"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-64-67-product-review-multicharts-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-64-67-product-review-multicharts-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286wefo,d,"{""minimum-quantity"":""1"",""path"":""ch7j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:7 (68-69): Websites For Traders: TidalWaveTrader.com by Technical Analysis, Inc."",""caption-linebreaks"":""Websites For Traders: TidalWaveTrader.com by Technical Analysis, Inc.

    TIDALWAVETRADER.COM

    Those who are just starting out in technical analysis or don’t consider themselves yet to be able to call themselves intermediate-level technical analysts are often faced with a lot of uncertainties. TidalwaveTrader.com provides traders with a road map so they know where and when to channel their efforts.

    One of the biggest hurdles that traders face is identifying which stocks to trade. TidalwaveTrader makes it easy for you by generating trade alerts, telling you when to buy it, sell it, the maximum amount you should pay for it, and the profit results. Each alert is accompanied by a video usually with founder Brett Grendahl when he explains why that alert was selected."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-68-69-websites-for-traders-tidalwavetrader-com-by-technical-analysis-inc-20.gif"",""height"":""616"",""width"":""421""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-68-69-websites-for-traders-tidalwavetrader-com-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-68-69-websites-for-traders-tidalwavetrader-com-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov287trti2,d,"{""minimum-quantity"":""1"",""path"":""ch7j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:7 (74-84): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    This month’s Traders’ Tips are based on Andrew Coles’ article in this issue, “An Anchored Vwap Channel For Congested Markets.”

    Code for MetaStock is provided in the article’s sidebar, and at the end of this document, to help readers implement the indicator. Code for other programs is presented here as contributed by various software developers.

    Readers will find these and more Traders’ Tips at the Stocks & Commodities website at www.Traders.com in the Traders’ Tips area, from where the code can be copied and pasted into the appropriate program. In addition, the code for each program is usually available at the respective software company’s website. Thus, no retyping of code is required for Internet users.

    For Stocks & Commodities subscribers, the MetaStock code found in Coles’ article can be copied from the Subscriber Area at www.Traders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-74-84-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""616"",""width"":""420""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-74-84-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-74-84-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov288leto2,d,"{""minimum-quantity"":""1"",""path"":""ch7j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:7 (8-9,71): Letters to S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters to S&C by Technical Analysis, Inc.

    GOOD ISSUE

    Editor,

    I have taken Stocks & Commodities for many years now, and I usually find the articles of some interest. The April 2010 issue was outstanding, particularly the interview beginning on page 50, as well as the article on K-waves, which is written in a very nice, friendly style.

    Please renew my subscription for another year.\nPercy Lamb

    MODIDOR SPREAD AND IRON CONDORS COMMENTARY

    Editor,

    The May 2010 S&C was one of your best issues, and I’ve been a subscriber since I don’t know when. Two comments:

    1) On page 47 of the May 2010 issue, in Figure 1 of Jay Kaeppel’s article, “Introducing The Modidor Spread,” 51.29 is the upside breakeven on this condor, not a downside breakeven as was stated in the article; (CONTINUDED)"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-8-9-71-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-8-9-71-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-8-9-71-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov289bofo8,d,"{""minimum-quantity"":""1"",""path"":""ch7j207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:7 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    Hedge Hunters: 2009 Edition

    The Mutual Funds Book: How To Invest In Mutual Funds & Earn High Rates Of Return Safely

    Dynamic Asset Allocation: Modern Portfolio Theory Updated For the Smart Investor

    Put Option Strategies For Smarter Trading

    The Wealth Code: How The Rich Stay Rich In Good Times And Bad

    Winning Spread Betting Strategies"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-92-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""615"",""width"":""418""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-7-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281goan,d,"{""minimum-quantity"":""1"",""path"":""ch8a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:8 (12-17): Gold And The New Technical Triad by Gary S. Wagner"",""caption-linebreaks"":""Gold And The New Technical Triad by Gary S. Wagner

    Forecast gold prices by combining Elliott wave, Fibonacci, and candlesticks.

    Most market analysts will agree that supply and demand economics are a major influence on the current price of a commodity. It is, however, market sentiment that determines the perceived future price. If you can understand and quantify market psychology or market sentiment, you can more effectively forecast price. This has been the underlying assumption of Elliott wave and Fibonacci retracement theories.

    ELLIOTT, FIBONACCI AND CANDLESTICKS

    To the market technician, Elliott wave and Fibonacci retracement theories go together like peas and carrots. Elliott wave incorporates many aspects of the Fibonacci sequence and retracement theory. It uses different retracement levels as benchmarks that certain waves should use. When R.N. Elliott devised his wave concept, he was not familiar with Fibonacci theory and only made this correlation later on.

    Then there’s a third ingredient that could be added to the mix: candlestick patterns. Adding this technique in combination with both wave and retracement theories can deliver greater market insight.

    These techniques are all based on the assumption that market behavior is based upon the laws of nature and market psychology. These natural cycles can be identified and quantified to use in market forecasting. All three techniques, although different, have identified a specific and mathematically definable set of rules and guidelines."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-12-17-gold-and-the-new-technical-triad-by-gary-s-wagner-20.gif"",""height"":""626"",""width"":""455""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-12-17-gold-and-the-new-technical-triad-by-gary-s-wagner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-12-17-gold-and-the-new-technical-triad-by-gary-s-wagner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281siri,d,"{""minimum-quantity"":""1"",""path"":""ch8a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:8 (18-22): Sidestepping Risk In Gold Futures by Anthony Trongone, PhD"",""caption-linebreaks"":""Sidestepping Risk In Gold Futures by Anthony Trongone, PhD

    Want to trade the gold market but reduce your\nexposure to its sharp downturns?

    The brightest trading commodity is still the yellow metal. With its uncanny ability to achieve historic pricing records, gold’s demand remains strong. After decades of selling, central banks, most notably in Asia, are diversifying their foreign reserves by purchasing millions of tons of gold once more. If the fundamentals driving this investment remain attractive, the prospect of rising prices would increase; nevertheless, despite waves of explosive buying, many investors seem to be reluctant to take a position in the precious metal because they do not want to get caught in one of its unpredictable and ruinous meltdowns.

    Can you buy gold but still remain relatively risk-free? This article is for those market participants who want to do it all, who want to trade the gold futures contract (GC) but reduce their exposure to one of its painful downturns. How often do these corrections occur? Despite this contract’s uplifting performance going back 513 trading days, the probability of experiencing a loss of $10 or more per contract in a single day was about three in every 13 trading days.

    Not having a position at all when there is a $10-plus correction is best, but that’s not realistic. A more attainable objective is to gain a better understanding of what causes these steep losses.

    SETTING THE STAGE

    Let’s examine the impact that a $10-plus daily loss has on the trading days immediately after a large loss. With a 100 multiplier, a $20 loss would result in a $2,000 setback for each contract.

    This study begins after the $17.40 decline on March 4, 2008, and runs until March 17, 2010. During these 513 trading days, the continuous GC contract, which uses the nearby expiration date, had an increase of $157.90. (The historical daily pricing for this continuous contract [GC #F] comes from downloading the numbers at esignal.com.)

    As of March 4, 2008, the GC contract stood at $966.30. Since then, it had a brief run to $1,000 but sank to $681 (October 24, 2008). A few weeks after the equities market began its bullish run, this contract took the spotlight as the price of the yellow metal made its way to an intraday price of $1,227.50 (December 3, 2009), finally sliding to a closing price of $1,124.20 on the last day of this study."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-18-22-sidestepping-risk-in-gold-futures-by-anthony-trongone-phd-20.gif"",""height"":""627"",""width"":""459""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-18-22-sidestepping-risk-in-gold-futures-by-anthony-trongone-phd-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-18-22-sidestepping-risk-in-gold-futures-by-anthony-trongone-phd-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov282shga,d,"{""minimum-quantity"":""1"",""path"":""ch8a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:8 (24-26): Short-Term Gap Trading by Jay Kaeppel"",""caption-linebreaks"":""Short-Term Gap Trading by Jay Kaeppel

    Using one of the most widely recognized market events, this simple technique provides a useful framework for any trader looking to develop a short-term method.

    Every trader looks for an edge in the markets. Sometimes that edge might involve a complex set of mathematical calculations, while at other times it might involve a gut feel for a situation that the trader has experienced before. For others still, it might involve:

    a) A simple technique that is

    b) Combined with the recognition that the technique will not always be correct, and

    c) Understanding that risk controls and money management methods must be included in order to

    d) Maximize profits when things go as planned and

    e) Cut losses when they do not.

    To illustrate this concept, let’s talk about one such technique using one of the simplest market events, commonly known as the gap."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-24-26-short-term-gap-trading-by-jay-kaeppel-21.gif"",""height"":""635"",""width"":""458""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-24-26-short-term-gap-trading-by-jay-kaeppel-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-24-26-short-term-gap-trading-by-jay-kaeppel-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov282qaby,d,"{""minimum-quantity"":""1"",""path"":""ch8a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:8 (27): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    A CHANGING MINDSET

    I have read a lot of what you have written over the years about trading styles and strategies. Recently, you wrote in Technical Analysis of Stocks & Commodities about your concerns regarding subpennies and flash trading. You offered some suggestions as to what your traders are doing to offset these losses, but could you elaborate on what traders are doing to continue making profits in today’s marketplace? I’m looking for some direction. Thanks in advance. — TraderPatDC

    I did address these issues briefly in the June 2010 Stocks & Commodities. Noting then that my traders have pretty much stopped “parking” orders on electronic communication networks (Ecns) (to collect rebate money), opting to hit bids and take out offers versus being taken advantage of by high-frequency trading (Hft) and subpennies, this time I’m going to offer something slightly different. Here’s an overview of a longer article I’ll be putting together for my upcoming trading classes, with the working title of “A Trading Philosophy For 2010 And Beyond: A Changing Mindset — No More Daytraders — No More Scalpers — No More Momentum.”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-27-q-a-by-don-bright-21.gif"",""height"":""618"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-27-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-27-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov282novo,d,"{""minimum-quantity"":""1"",""path"":""ch8a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:8 (28-31): Normalized Volatility Indicator by Rajesh Kayakkal"",""caption-linebreaks"":""Normalized Volatility Indicator by Rajesh Kayakkal

    Early bear phase signals can help you get out of the market before it turns down. This indicator tells you how.

    There are many ways to identify the trend of a financial market, the most common being the 200-day exponential moving average (Ema). When price is trending down below the 200-day Ema, the market is believed to be in a bear phase. If the market is trending up above the 200-day Ema, it is considered to be in a bull phase.

    Since every indicator fails at times, I wanted to find other indicators to confirm a trend. In my quest for another indicator to determine the trend for the financial markets, I found the Cboe Volatility Index (Vix) to be a good indicator of the market direction. The Vix is calculated from the weighted average of the implied volatilities of various options on the Standard & Poor’s 500 index futures.

    J. Welles Wilder’s average true range can also give an indication of the financial market trends; that is, when the market is in a bull phase, the average true range narrows, and when it is in a bear phase, the average true range expands. The normalized volatility indicator (Nvi) is based on this behavior.

    NORMALIZED VOLATILITY INDICATOR (NVI)

    Average true range (Atr) varies depending on time. But how do we determine the phase of the financial market with Atr? Perhaps some type of ratio could give us a clue. A ratio presents a relationship of a quantity with respect to another. I did some research based on a ratio of the 64-day average true range and the end-of-day value of equity indexes such as the Standard & Poor’s 500 (Spx). I selected the 64-day period since it is close to the average number of trading days in a quarter. The ratio of the 64-day average true range and closing price does discount seasonal variations in the average true range and gives a single number that can be used to compare volatility of an instrument across many decades. I call this ratio the normalized volatility indicator."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-28-31-normalized-volatility-indicator-by-rajesh-kayakkal-21.gif"",""height"":""628"",""width"":""468""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-28-31-normalized-volatility-indicator-by-rajesh-kayakkal-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-28-31-normalized-volatility-indicator-by-rajesh-kayakkal-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283mare,d,"{""minimum-quantity"":""1"",""path"":""ch8a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:8 (32-37): Market Reactivity by Al Gietzen"",""caption-linebreaks"":""Market Reactivity by Al Gietzen

    Interpret what the market is saying by using some sound techniques.

    The market reactivity system, which can be applied to both stocks and commodity futures, is automated to provide computer-generated trade signals, largely eliminating trader judgment and the associated psychological pitfalls.

    My research on trading the futures markets started 25 years ago, when I delved into technical analysis to develop a trading strategy based on the underlying formation of market behavior. The result was an indicator that took a broader measure of the market, combining price data, trading range, and trading volume, and tying the result to an underlying cyclical market structure. By taking all this into account and applying the indicator to three or more different cycle lengths, it proved to be an effective system. Further, the indicator proved to be robust in that it could adapt to changing market conditions."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-32-37-market-reactivity-by-al-gietzen-38.gif"",""height"":""629"",""width"":""469""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-32-37-market-reactivity-by-al-gietzen-45.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-32-37-market-reactivity-by-al-gietzen-46.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283gaan,d,"{""minimum-quantity"":""1"",""path"":""ch8a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:8 (38-42): Gann And The Time Factor by Koos van der Merwe"",""caption-linebreaks"":""Gann And The Time Factor by Koos van der Merwe

    Time is the most important factor when it comes to making trading decisions, so incorporate the time factor into your trading.

    by Koos van der Merwe

    Gann said he believed that time was the most important factor in forecasting market movement. He felt that time would overbalance space and volume but arrest momentum. “The future is a repetition of the past,” he opined, “and each market movement is working out time in relation” to a previous time cycle.

    Gann wrote that in a rally cycle, when a price declines under an angle, price will often dip down to the next angle before finding support. In reality, this does not necessarily occur. Quite often, a price may come back to test an angle before continuing a trend. These support and resistance angle lines should never be confused with support and resistance trendlines because the angle lines can be used to indicate time.

    Looking back over history, you must establish the Gann square with angles. Once you have identified the Gann angles, the Gann fan can be projected from future highs and lows. Time is the most important factor in market trading analysis. If you are able to enter and exit a trade at the right time, you will be able to take all the profit available in the market. This can be demonstrated in Figures 1 through 6.

    In Figure 1, I have established a Gann square. Note the Gann square Abcd on the chart. The 2x1 angle is the angle that has connected the low to the high, so it is this Gann fan that we now watch to determine time."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-38-42-gann-and-the-time-factor-by-koos-van-der-merwe-21.gif"",""height"":""621"",""width"":""433""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-38-42-gann-and-the-time-factor-by-koos-van-der-merwe-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-38-42-gann-and-the-time-factor-by-koos-van-der-merwe-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov284fufo1,d,"{""minimum-quantity"":""1"",""path"":""ch8a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:8 (43): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    MARGIN CALLS

    What do I do if I get a margin call?

    Ideally, margin call avoidance is the best policy. However, even the most responsible traders will encounter the predicament sooner or later. Rather than liquidating positions or adding funds to what might become a money pit, there are unlimited ways to influence the exchange-required margin in your favor via risk reduction, or at least the perception of such. Naturally, lower risk equals lower margin and in most cases lower profit potential, but for those who find themselves in a dire margin situation, beggars can’t be choosers."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-43-futures-for-you-by-carley-garner-21.gif"",""height"":""616"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-43-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-43-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283mare1,d,"{""minimum-quantity"":""1"",""path"":""ch8a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:8 (46–51): Controlling Your Losses With Dr. Doug by Jayanthi Gopalakrishnan & Bruce Faber"",""caption-linebreaks"":""Controlling Your Losses With Dr. Doug by Jayanthi Gopalakrishnan & Bruce Faber

    A former athlete and floor trader, Doug Hirschhorn, better known as trading psychologist and coach “Dr. Doug,” followed a circuitous path to the “Peak Performance” coaching for which he is best known. After playing Division I baseball in college, he spent a few years working on the trading floors in Chicago before deciding to earn the advanced degrees necessary to become a baseball coach. It was during graduate school he realized that if the psychological principles he was learning could be applied to athletes, why not try them out on traders — a similarly competitive breed? The idea worked. Less than five years later, Dr. Doug is an in-demand public speaker, counting Wall Streeters, hedge funds, and the largest banks in the world among his clients. Hirschhorn is currently the chief executive officer of DrDoug.com, a consulting firm. He is a regular contributor for CNBC, where he currently hosts a weekly video blog. He may be reached at www.DrDoug.com.

    Stocks & Commodities Editor Jayanthi Gopalakrishnan and Staff Writer Bruce Faber interviewed Dr. Doug via telephone on June 4, 2010.

    Doug, how did you get started in your line of work?
    \nAfter college I worked in the euro options pit. Then I traded at the Chicago Board of Trade (CBOT) in the fed funds pit and the bonds pit. Then, after about two and half years, I reinjured a herniated disk in my lower back that I originally hurt playing baseball my senior year in college and I had to quit the trading floor — I couldn’t stand for long periods. I went to electronic trading. I did that for six to eight months and decided that wasn’t what I wanted to do for a living. So I left trading altogether and went back to school to get the degrees to become a baseball coach. Then, as I was working with athletes and studying sports psychology, I realized that this was the same stuff I dealt with as a trader emotionally and psychologically, and I could apply the same strategies to help traders improve their performance. So I wrote my first book called The Trading Athlete, which was published by John Wiley. I took sports psychology and applied it to the trading world to improve performance..."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-32-37-market-reactivity-by-al-gietzen-41.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-46-51-controlling-your-losses-with-dr-doug-by-jayanthi-gopalakrishnan-bruce-faber-3.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-46-51-controlling-your-losses-with-dr-doug-by-jayanthi-gopalakrishnan-bruce-faber-4.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov285prre1,d,"{""minimum-quantity"":""1"",""path"":""ch8a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:8 (52-55): Product Review: thinkorswim by Dennis D. Peterson"",""caption-linebreaks"":""Product Review: thinkorswim by Dennis D. Peterson

    Thinkorswim (Tos) by TD Ameritrade is software (downloadable or web-based) you can use with a number of handheld devices such as an iPhone, BlackBerry, or an Android, as well as a personal computer to trade stocks, stock options, futures, currency, spread orders, or futures options. You can trade these via a number of order types, such as trailing stops, one cancels other (Oco), and one triggers all. It covers a broad spectrum of trading activities. It is also free if you use delayed quotes; all you have to do is go to the website, fill out a brief registration form, and download the software.

    In addition to this trading capability, you can have a paper trading account, which is the approach used for this review. Learning all of the features is daunting, only because there are so many. The main screen (Figure 1) is loaded with tabs and buttons. They recommend a 1024x768 resolution, but you can get by with 800x600. For the tutorials, however, I recommend a 24-inch diagonal screen monitor.

    The main screen is basically broken into two pieces, the left-hand side one-third with account information and what are referred to as “gadgets,” and the right-hand side two-thirds with tabs for viewing and analyzing stocks, options, futures, and currency. Gadgets include the ability to watch Cnbc and view market depth (similar to Level 2), watchlists, and live news (Reuters) — 14 items in all."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-52-55-product-review-thinkorswim-by-dennis-d-peterson-21.gif"",""height"":""663"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-52-55-product-review-thinkorswim-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-52-55-product-review-thinkorswim-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov285prre2,d,"{""minimum-quantity"":""1"",""path"":""ch8a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:8 (52-60): Product Review: Stockcharts.com by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Product Review: Stockcharts.com by Jayanthi Gopalakrishnan

    StockCharts.com has long been a popular technical analysis website among chartists. It has been a while since we last reviewed stockcharts.com. Since then, several new features have been added that deserve attention, but before we get into that, I think an overview of the site is necessary.\nWhat chartist doesn’t want to view charts, get a quick summary of market activity, learn about charting, keep up to date with relevant market information, and find stocks that meet their technical criteria? StockCharts.com is a useful one-stop site where you can find just about everything about financial market charts.

    HOME PAGE

    The home page (Figure 1) gives you an overview of the current market. There’s an updated chart of the daily activity of the major indexes. You also see a list of the current popular charts at StockCharts.com as well as those that are consistently popular. You also have links to market summary and breadth charts. The market summary gives you an updated daily view of major indexes, sectors, bonds, commodities, and currencies. Clicking “breadth charts” displays a CandleGlance display of some of the market breadth indicators. CandleGlance charts display several small charts in one page so you can see various charts at one time."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-52-60-product-review-stockcharts-com-by-jayanthi-gopalakrishnan-20.gif"",""height"":""627"",""width"":""459""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-52-60-product-review-stockcharts-com-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-52-60-product-review-stockcharts-com-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28560ex,d,"{""minimum-quantity"":""1"",""path"":""ch8a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:8 (56, 60): Explore Your Options by Tome Gentile"",""caption-linebreaks"":""Explore Your Options by Tome Gentile

    EXERCISE FOR FINANCIAL HEALTH?

    When is it a good time to exercise a long put?

    That’s a good question, but kind of a broad subject. In theory, traders look to exercise a put when the carrying cost to hold a combined long stock/long put (that is, a long synthetic call) is greater than the value of the actual listed call market.

    This decision to exercise typically occurs when the put is deep enough in the money and the matching strike call maintains little or no extrinsic value. For instance, let’s say an out-of-the money call has a quoted market of $0.00 bid/$0.05 ask. At the same time, if the cost of carrying the synthetic call or married put amounts to $0.10 if held until expiration, there’s a negative benefit to holding that position versus simply purchasing the long call."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-56-60-explore-your-options-by-tome-gentile-20.gif"",""height"":""615"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-56-60-explore-your-options-by-tome-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-56-60-explore-your-options-by-tome-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286womo,d,"{""minimum-quantity"":""1"",""path"":""ch8a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:8 (62-64): Working Money: With Trading Systems, Patience Pays Off by D. W. Pendergast Jr."",""caption-linebreaks"":""Working Money: With Trading Systems, Patience Pays Off by D. W. Pendergast Jr.

    It’s been said that most traders will abandon an otherwise sound mechanical trading system after only three consecutive losing trades. Those who subscribe to such faulty reasoning usually miss out on the large gains available once the system finally begins to pull out of ordinary drawdown periods.

    You’ve finally done it. The trading system you’ve purchased or leased (or subscribed to) is ready to be deployed in your trading account. You already know all the key statistics in the system’s backtested and/or historical trade results, including maximum peak-to-valley drawdown, profit factor, average profit per trade, and number of consecutive winning and losing trades, among others. Your futures margin account has more than three times the cash value of the maximum historical peak-to-valley intratrade drawdown, and you feel very comfortable working toward the goal of successful trading with such a system. Even better, you’ve already traded the system’s signals in a real-time simulator and were able to tough it out through a series of minor drawdowns.

    As you place your first live trade with the system, you smile and say out loud, “What could possibly go wrong? I’ve considered all of the possible contingencies, haven’t I?”

    FAMOUS LAST WORDS

    The first trade goes okay; you make a few hundred dollars with only a minor intratrade drawdown between initial entry and final stopout. Another trade breaks even. Then a third signal — and another winner. At the end of the trading day you’re up by $275 and are feeling pretty darn proud of yourself. You look at the equity curve of the past year’s backtested results and note that it’s been more than a month since this intraday emini stock index trading system has had more than a $500 closed equity drawdown, but you don’t fret much about that. After all, you say, “The system is in a really good groove and things should continue as they are for some time to come, shouldn’t they?”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-62-64-working-money-with-trading-systems-patience-pays-off-by-d-w-pendergast-jr-20.gif"",""height"":""628"",""width"":""464""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-62-64-working-money-with-trading-systems-patience-pays-off-by-d-w-pendergast-jr-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-62-64-working-money-with-trading-systems-patience-pays-off-by-d-w-pendergast-jr-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov287quco,d,"{""minimum-quantity"":""1"",""path"":""ch8a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:8 (71-72): Quick-Scan: Complete Idiot’s Guide To Technical Analysis by B. Faber"",""caption-linebreaks"":""Quick-Scan: Complete Idiot’s Guide To Technical Analysis by B. Faber

    Sometimes, a book comes along whose title leaves us no choice but to do a review in more depth than the mention given in the “Books For Traders” column in Technical Analysis of Stocks & Commodities. There’s no way we could overlook a book with a title like The Complete Idiot’s Guide To Technical Analysis. Though it contains a lot of information that long-term technical analysis traders might not be familiar with and on other indicators they might want to take a refresher course on, the book’s main purpose is to initiate the novice. For that purpose it does a great job. The book’s four parts break down the challenge of becoming a technical analysis trader/investor into well-managed compartments.

    PART 1

    Even before getting into the first chapter, “Information is power,” the foreword and introduction contain a good look at the foundation of technical analysis and the objectives of the book. The explanations presented for each aspect of technical analysis are detailed enough to take a good look into each facet of the business. In the beginning, there are enough references to fundamental analysis to contrast the differences between fundamental and technical analyses’ trading and investing styles. There is also a clear and helpful differential made between traders and investors."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-71-72-quick-scan-complete-idiot-s-guide-to-technical-analysis-by-b-faber-20.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-71-72-quick-scan-complete-idiot-s-guide-to-technical-analysis-by-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-71-72-quick-scan-complete-idiot-s-guide-to-technical-analysis-by-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov287trti3,d,"{""minimum-quantity"":""1"",""path"":""ch8a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:8 (75-85): Traders' Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders' Tips by Technical Analysis, Inc.

    This month’s Traders’ Tips are based on Rajesh Kayakkal’s article in this issue, “Normalized Volatility Indicator.”\nProRealTime code is provided in the article’s sidebar, and at the end of this document, to help readers implement the indicator. Code for other programs is presented here as contributed by various software developers.

    Readers will find these and more Traders’ Tips at the Stocks & Commodities website at www.Traders.com in the Traders’ Tips area, from where the code can be copied and pasted into the appropriate program. In addition, the code for each program is usually available at the respective software company’s website. Thus, no retyping of code is required for Internet users.

    For Stocks & Commodities subscribers, the ProRealTime code found in Kayakkal’s article can be copied from the Subscriber Area at www.Traders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-75-85-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""618"",""width"":""426""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-75-85-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-75-85-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov288leto3,d,"{""minimum-quantity"":""1"",""path"":""ch8a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:8 (8-10): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    Distrust of ETFs\nEditor,\nI have read all of Alexander Elder’s books and have found his insights both coherent and useful for me as a trader. Elder has mentioned that he does not like/trust investing in exchange traded funds (Etfs). I would like to know if he could explain what his hesitancy is specifically. What exactly is his worry with the use of an Etf as a trading tool?

    In addition, I have put together some very interesting information and the math behind the real hidden problem with leveraged Etfs (including graphs of real price movements compared to the underlying index), which I’d be happy to share with Elder if that would be something of interest.\nDean Anthon

    Alexander Elder replies:

    Thank you for your kind comments.

    I think you have answered your own question: Etfs do not track the underlying well over a period of time. This nukes their value as trading vehicles for me. Of course I would enjoy looking at your research. I always pay attention to serious research."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-8-10-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-8-10-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-8-10-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov289bofo5,d,"{""minimum-quantity"":""1"",""path"":""ch8a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:8 (92): Book For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Book For Traders by Technical Analysis, Inc.

    • AbleTrend: Identifying And Analyzing Market Trends For Trading Success

    • Commodity Fundamentals: How To Trade The Precious Metals, Energy, Grain, And Tropical Commod-ity Markets

    • The Complete Idiot’s Guide To Technical Analysis

    • The Little Book Of Behavioral Investing: How Not To Be Your Own Worst Enemy

    • The Quarters Theory: The Revolutionary New Foreign Currencies Trading Method

    • Trading From Your Gut: How\nTo Use Right Brain Instinct\n& Left Brain Smarts To Become A Master Trader"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-92-book-for-traders-by-technical-analysis-inc-20.gif"",""height"":""614"",""width"":""414""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-92-book-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-92-book-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov289atcl,d,"{""minimum-quantity"":""1"",""path"":""ch8a206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:8 (98): At The Close by Austin Passamonte"",""caption-linebreaks"":""At The Close by Austin Passamonte

    Here’s a market outlook for the crude oil futures index.

    Crude oil has the unique distinction of being a consumable commodity product and a quasicurrency market in close to equal balance. The effects on crude oil pricing are part supply/demand and part US dollar value offsets.

    That being said, crude oil futures have generally rolled through a sideways range from roughly $74 to $86 per barrel since October 2009 with brief blips outside either extreme (Figure 1). The recent power dive that sent crude prices $13 bbl lower inside of five trading sessions spanned the entire range. We can see where the 74+ mark served as low zone supports in December 2009 and February 2010 before popping to subsequent highs each time. We’ll see how this trip resolves itself, accordingly or otherwise.

    Dialing out to the weekly chart view (Figure 2), the same sideways channel shows clear persistence dating back more than a year. Meanwhile, vertical trendlines of support can be seen from bottom lows to higher-swing lows along the way. Both levels were broken on a weekly close basis and now appear to be overhead resistance until proven otherwise.

    Back inside the daily chart for CL (Figure 3), we see a bearish head & shoulders formation with crown to neckline roughly $7 in width from 89 to 82 levels. That projects $7 down from crown to low objective or about the $75 mark extended. Bottom of the channel dating back for a year is the bottom of the H&S pattern projection. There is a sticky magnet near the $75 zone. If CL continues to trend lower from here, look for that clustered magnet zone of prior support to then become equally strong resistance."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-98-at-the-close-by-austin-passamonte-20.gif"",""height"":""623"",""width"":""447""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-98-at-the-close-by-austin-passamonte-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-8-98-at-the-close-by-austin-passamonte-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281trfo,d,"{""minimum-quantity"":""1"",""path"":""ch9s206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:9 (10-14): Trading Forex Gold And Silver by Gary S. Wagner"",""caption-linebreaks"":""Trading Forex Gold And Silver by Gary S. Wagner

    Daytrade and position trade forex gold and silver using intraday candlestick patterns.

    There is a fundamental difference in the way market technicians using candlesticks look at price data and movement compared to their line- and bar-charting counterparts. Line- and bar-charting traders emphasize a close-to-close relationship of market price. When they say that the Dow Jones Industrial Average (Djia) closed up or down 100 points, they are comparing the closing price over the last two sessions. When those traders describe price movement, they are speaking of the change from session to session. They view that price change as a critical factor for gaining insight.

    One type of chart that uses closing prices only is the line chart, which is created by connecting a series of datapoints with a line. The points we use are the closing prices. From this the trader moves to a bar chart, which plots the open, low, high, and close as a single line. The candlestick chart uses the same four price points but plots the information differently.

    For the technician using candlesticks, the most important factor is the relationship between the opening and closing price of a session: Price change is most highly valued for market insight. When looking at market sentiment, it is the outcome of the battle between the buyers and sellers, those who think the price is overvalued and those who think the price is undervalued. This factor is the basis behind candlestick charts and their patterns. That is why there are so many types of single candles, each one telling a different aspect of the battle just waged."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-10-14-trading-forex-gold-and-silver-by-gary-s-wagner-21.gif"",""height"":""626"",""width"":""463""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-10-14-trading-forex-gold-and-silver-by-gary-s-wagner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-10-14-trading-forex-gold-and-silver-by-gary-s-wagner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281gecl,d,"{""minimum-quantity"":""1"",""path"":""ch9s206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:9 (16-21): Getting Clear With Short-Term Swings by Ron Black"",""caption-linebreaks"":""Getting Clear With Short-Term Swings by Ron Black

    Does an indicator that works on all time frames, requires no calculation, and has no delay sound too good to be true? It’s not.

    The technician’s unending task is to find a signal in a sea of data. Price patterns can be choppy, chaotic, and wiggly. Sometimes the technician tries to smooth the upward and downward surges in price action in order to make the price movement easier to interpret. But this smoothing can reduce his or her indicators’ sensitivity to the immediate direction of the price.

    The Clear method, a new technique for identifying the direction of short-term price swings, identifies the direction of the current price swing and the precise day when price direction changes. It works on all time frames, requires no calculation, and has no delay. It is applicable to all stocks, commodities, and indexes. The Clear method is unique because, unlike most technical indicators, it does not use the opening price or the closing price. Instead, it uses the range (length) of the price bar. It is effective because it borrows from a basic statistical concept: if two distributions do not overlap, they can be considered different.

    (A note to our statistician friends: this paper is not intended to examine the subtleties of sampling errors, sample size, covariance, confidence intervals, or any other statistical description. I am merely adapting a statistical concept for the purpose of analyzing price action.)

    DISTRIBUTIONS

    Let’s begin with a short description of distributions. What if someone asked you, “How fast do cars go on the freeway?” You are analytical. You want to find the answer. You rent a radar gun and a tripod, set the equipment up on an overpass, and record the speed of every vehicle that passes beneath the overpass for the next hour. Obviously, you would get many different values for the speeds of the different vehicles that traveled under the overpass."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-16-21-getting-clear-with-short-term-swings-by-ron-black-24.gif"",""height"":""625"",""width"":""456""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-16-21-getting-clear-with-short-term-swings-by-ron-black-30.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-16-21-getting-clear-with-short-term-swings-by-ron-black-31.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov281gecl1,d,"{""minimum-quantity"":""1"",""path"":""faarfr203"",""ysw-page-title"":""Stocks & Commodities V. 28:9 (16-21): Getting Clear With Short-Term Swings by Ron Black"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-16-21-getting-clear-with-short-term-swings-by-ron-black-27.gif"",""height"":""180"",""width"":""131""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-16-21-getting-clear-with-short-term-swings-by-ron-black-28.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-16-21-getting-clear-with-short-term-swings-by-ron-black-29.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov282clby,d,"{""minimum-quantity"":""1"",""path"":""ch9s206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:9 (22-26): Cloudbanks by Thomas N Bulkowski"",""caption-linebreaks"":""Cloudbanks by Thomas N Bulkowski

    Want to double your money? Invest in cloudbank chart patterns and you just might.

    \nDuring the 30 years I have spent investing in or trading the markets, I have discovered many chart patterns, including pipes, horns, and barrs. Here’s another, which I call the cloudbank pattern. Investing in cloudbanks gives you the opportunity to make a lot of money if you are patient and price rises back into the clouds.

    IDENTIFICATION GUIDELINES

    Figure 1 shows an idealized example of a cloudbank chart pattern. It begins with price moving horizontally for several years, but the duration can vary from pattern to pattern. The shortest length in my study was five months and the longest was almost 17 years, with the average duration being 2.75 years. The cloudbank is nothing more than a ceiling of overhead resistance.

    The bottom of the cloudbank should have a horizontal base, but often it’s irregularly shaped. By “irregularly,” I mean it is uneven with several valleys approaching the same price separated by large distances. Sometimes, price pokes through the base, but that’s fine. Ignore cloud tops because they aren’t important.

    After the cloudbank comes a swift decline to the lowest low that averages 56% for those patterns in which price returned to the cloudbank. Following a V-shaped bottom, price rises, and it takes about a year to return to the cloudbank.

    EXAMPLES

    Often, a bear market causes the drop out of the clouds, but not always. Let’s look at some examples to watch the pattern take shape."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-22-26-cloudbanks-by-thomas-n-bulkowski-21.gif"",""height"":""627"",""width"":""460""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-22-26-cloudbanks-by-thomas-n-bulkowski-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-22-26-cloudbanks-by-thomas-n-bulkowski-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283trti,d,"{""minimum-quantity"":""1"",""path"":""ch9s206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:9 (32-35): Trading, Time Frames, And Trends by B.C. Low"",""caption-linebreaks"":""Trading, Time Frames, And Trends by B.C. Low

    Understand time frames and you will begin to understand the nature of the market and how to improve your forecasts.

    Technical analysis is used to forecast future price trends. Many technical tools focus on the task of defining a trend. Not addressed adequately, however, is the issue of what kind of trend is being defined. Is it long term, medium term, or short term? Time frames are important for traders. After you establish the trend of the time frame you trade in, the next step is to relate that to the trend of the next larger time frame. For example, if you established the direction of the trend on a daily chart, you would look at a weekly one to confirm the direction of the trend. Understanding time frames will make sense of trends between two time frames, especially when there are opposing trends. When that is achieved, you can improve your market forecasts.

    TIME FRAME APPROACH DEFINED

    It is a common practice for traders to look at markets in a single time frame. Traders typically focus only on the time frame they trade in, be it the hourly or daily charts. With the benefit of modern technology, charts are now available on time frames ranging from tick charts to five-minute ones to hourly, daily, weekly, monthly, and beyond.

    The time frame approach is a technique where you analyze a market over two or more time frames. If you normally analyze a five-minute chart, you should analyze the hourly one as well. If you are a daily chart trader, you should analyze the weekly or even the monthly for comparison. This will help you better forecast the market and trade more effectively."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-32-35-trading-time-frames-and-trends-by-b-c-low-20.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-32-35-trading-time-frames-and-trends-by-b-c-low-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-32-35-trading-time-frames-and-trends-by-b-c-low-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov283outo,d,"{""minimum-quantity"":""1"",""path"":""ch9s206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:9 (36-41): The Out Of The Money Butterfly Spread by Jay Kaeppel"",""caption-linebreaks"":""The Out Of The Money Butterfly Spread by Jay Kaeppel

    \nThis option trading strategy gives you a favorable reward-to-risk ratio and a wide profit range.

    The primary reason investors and traders are drawn to option trading is the ability to enter into unique positions to take advantage of unusual opportunities that they would otherwise not be able to, simply by trading the underlying security. If you buy 100 shares of a given stock, you make $100 for each point it rises in price and you lose $100 for each point it declines in price. There are no exceptions to this rule.

    On the other hand, using options makes it possible to craft a position that will profit based on a specific expected scenario. You can create a position that will make money if the stock goes up, another if the stock goes down, yet another if the stock goes up or down a lot, and another still that will profit if the stock simply stays within a narrow range. And there are more possibilities. Thus, it is not surprising that interest in option trading continues to grow. The key to achieving long-term success in options is to know what opportunities exist and acquire the knowledge necessary to be able to exploit them.

    Here, I will detail an option trading strategy that most traders have never considered — the out-of-the-money (Otm) butterfly spread. This strategy can offer the trader a limited-risk method to enter into a trade with an extremely favorable reward-to-risk ratio while offering a wide range of profitability. Still, before attempting to grasp the concept of the Otm butterfly spread, you should have an understanding of a standard at-the-money butterfly spread. So that’s where we’ll start."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-36-41-the-out-of-the-money-butterfly-spread-by-jay-kaeppel-20.gif"",""height"":""625"",""width"":""458""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-36-41-the-out-of-the-money-butterfly-spread-by-jay-kaeppel-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-36-41-the-out-of-the-money-butterfly-spread-by-jay-kaeppel-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov284qaby,d,"{""minimum-quantity"":""1"",""path"":""ch9s206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:9 (49): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    EXIT STRATEGIES

    Could you shed some light on the subject of exit strategies? I’m not concerned about whether the entry or the exit is the most important; I’m more concerned about how to determine a good exit point. I seem to be able to get into a trade at a good price, but my exits tend to plague me, either too soon or way too late. Any suggestions? — TMstock

    Thanks for not asking me to respond to which is more important, the entry or the exit — we all know both are equally important.

    Basically, entries and exits are determined the same way — only in reverse."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-49-q-a-by-don-bright-21.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-49-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-49-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov285fiin,d,"{""minimum-quantity"":""1"",""path"":""ch9s206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:9 (50-54): Fibonacci In Time And Price by David Knox Barker"",""caption-linebreaks"":""Fibonacci In Time And Price by David Knox Barker

    You can apply this technical tool of cycle analysis to smaller market cycles, which are more useful to traders than the larger ones.

    IN Business Cycles, the seminal work on the title subject, economist Joseph A. Schumpeter presented a framework for business cycle analysis that included the Kondratieff economic long wave as his essential tool for understanding and describing the capitalist process. His work goes a long way to explain the cyclical expansion and contraction of international free market capitalism and related global financial market activity, including the current global financial crisis and impending debt collapse.

    DIVIDING CYCLES

    Schumpeter also presented a framework for smaller cycles that included 18 regular trade cycles, or Kitchin cycles, in every long wave. I accepted this concept when I read Schumpeter’s work in the 1980s, but then in the early 1990s I discovered another system for understanding the long wave family of cycles in the work of the late market technician “PQ” Wall. Years of extended research on the technical implications of Wall’s cycle work led me down a path of technical analysis that I refer to as “theory 144 analytics.”

    Central to Wall’s approach is what he theorized as the inherent “threeness” and “fourness” of cycle relationships. His conclusions were derived from his knowledge of world history and his unorthodox approach to markets and philosophy. “PQ,” his nickname, was short for “philosophy quotient,” and his philosophy played a major role in his distilling cycles and their interrelationships into a novel system of divisibility — that is, threeness and fourness.

    Wall divided a long wave by four into spring, summer, autumn, and winter and further divided the long wave seasons by four into the regular trade cycles (Kitchin cycles). Wall’s method gives you 16 regular trade cycles in a long wave instead of Schumpeter’s 18. This may not appear to be a major distinction, but it is an important contribution to cycle research and technical analysis, due to the downstream implications for the smaller cycles and the clarity his discovery provides."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-50-54-fibonacci-in-time-and-price-by-david-knox-barker-21.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-50-54-fibonacci-in-time-and-price-by-david-knox-barker-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-50-54-fibonacci-in-time-and-price-by-david-knox-barker-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov285fufo2,d,"{""minimum-quantity"":""1"",""path"":""ch9s206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:9 (55): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    WHAT DO I DO IF I GET A MARGIN CALL? (PART 2)

    Last time, we discussed the mechanics of a margin call, about how they are triggered and how position delta can be used to manipulate margin. This time, we’ll focus on the margin process and a hands-on example of making adjustments to margin and risk.

    Margining short options: Before we can consider margin adjustment, we need to understand the basics of short option margining. What many people don’t realize is selling an option immediately increases the cash in a trading account in the amount of premium collected minus transaction costs.

    Although the short option itself is a liability, the cash collected enhances the equity that the margin is measured against. Accordingly, each dollar collected in premium increases the marginable funds. That said, option selling isn’t a risk-free printing press for money; short option premium acts as a cushion toward losses at expiration but also leaves the trader open for theoretically unlimited risk of loss."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-55-futures-for-you-by-carley-garner-21.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-55-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-55-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov285canp,d,"{""minimum-quantity"":""1"",""path"":""ch9s206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:9 (56-59): Can Price Patterns Be Objective Tools? Recognia’s Kathryn St. John Tells You by J. Gopalakrishnan and B. Faber"",""caption-linebreaks"":""Can Price Patterns Be Objective Tools? Recognia’s Kathryn St. John Tells You by J. Gopalakrishnan and B. Faber

    For the past eight years, Kathryn St. John has been building products and tools to help self-directed investors understand, utilize, and leverage technical analysis and chart pattern recognition to make better investment decisions. Her appreciation of technical analysis has helped Recognia build actionable investment research products that offer dynamic and action-oriented trading ideas for all types of traders. St. John continues to lead product management initiatives for Recognia and has seen the products deployed around the globe in the world’s largest brokerage firms, banks, and institutions.

    Technical Analysis of Stocks & Commodities Editor Jayanthi Gopalakrishnan and Staff Writer Bruce Faber interviewed Kathryn St. John via telephone on July 8, 2010.

    Kathryn, how did you get interested in chart patterns, specifically?

    It came about naturally. I have a computer science background, and I minored in business. I started working with Recognia long before the company had its first customer. We had this interesting technical analysis software, specifically a chart pattern recognition product. Since then, of course, we’ve ventured into other areas with more typical mathematical indicators and value analysis. But at the time we had this great chart pattern recognition technology. We developed it because the founder of the company was doing some trading on his own when he discovered chart patterns. He thought that there had to be a better way of using the technique than looking at a chart and trying to find these patterns one chart at a time.

    I joined the company to help build our first user interface with the product. Originally, we were just going to sell the data, but then we realized that we needed to build a way for people to see the research that we were generating. Since I’ve been with Recognia, I’ve explored a number of different areas related to chart patterns and technical analysis. I’ve built up my own knowledge base and moved from looking at the analytics itself to how we can build products that will help people with their trading and bring technical analysis and chart patterns to a wider audience.

    During your time at the company, have you noticed any difference in the attitudes of the public in terms of accepting technical analysis?

    I certainly have. We like to think we have been a part of that, because our approach has been a bit different from some other technical analysis products. When I first started, I found that the retail, self-directed audience of investors and traders, unless you were really into technical analysis, used terms like “voodoo” and “looking at the stars” to describe technical analysis. They would question how looking for shapes on a chart would ever help them to trade.

    Why do you think they were so against technical analysis?

    A lot of that attitude came from not understanding that we look for those shapes because of what it tells us about the underlying behavior of the people trading those stocks. We are not looking for a triangle on a chart because it is this nice symmetrical shape, and it looks pretty. We look for it because it represents tightening trading action between the buyers and sellers, after which we finally see a breakout."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-56-59-can-price-patterns-be-objective-tools-recognia-s-kathryn-st-john-tells-you-by-j-gopalakrishnan-and-b-faber-20.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-56-59-can-price-patterns-be-objective-tools-recognia-s-kathryn-st-john-tells-you-by-j-gopalakrishnan-and-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-56-59-can-price-patterns-be-objective-tools-recognia-s-kathryn-st-john-tells-you-by-j-gopalakrishnan-and-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov286prre8,d,"{""minimum-quantity"":""1"",""path"":""ch9s206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:9 (60-63): Product Review: AmiBroker 5.30 by Dennis Peterson"",""caption-linebreaks"":""Product Review: AmiBroker 5.30 by Dennis Peterson

    AmiBroker (AB) 5.30 is a charting and analysis software that interfaces with a number of datafeeds such as eSignal, Interactive Brokers, and IQ Feed. AmiQuote (AQ) is a separate executable program that will interface with free datafeeds such as Yahoo! Finance and Msn Money Central. In addition, there is a feature that allows you to import MetaStock data from your hard drive.

    GENERAL

    AB has a large number of features, but it also relies heavily on its use of AmiBroker Formula Language (Afl). The language is rich with functionality. The user manual is 900 pages long and the reference portion for function descriptions goes from pages 371 to 844. The language is easy to understand. But even if you are formula challenged, a separate executable program called Afl Code Wizard lets you use plain English to construct formulas.

    Several windows are available for accomplishing tasks, such as formula creation and downloading quotes. Let’s start with charting."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-60-63-product-review-amibroker-5-30-by-dennis-peterson-20.gif"",""height"":""626"",""width"":""459""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-60-63-product-review-amibroker-5-30-by-dennis-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-60-63-product-review-amibroker-5-30-by-dennis-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28666ex1,d,"{""minimum-quantity"":""1"",""path"":""ch9s206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:9 (64, 66): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    WHO'S GETTING FILLED?

    Why do my option orders get filled easily at times when placed between the bid and offer, but other times the market makers change the quote to reflect my bid or offer?

    Getting a fill on a placed bid or offer versus your order remaining unfilled is generally due to a couple of key factors.

    The first dynamic involves sizing up the liquidity in the product you’re attempting to get a position in. Liquidity provision should take trading volume into account. The more the merrier, as they say. Second, if a stock or index doesn’t average thousands of contracts daily, it’s a good idea to look at a few days’ worth of contract volume and the individual prints representing that activity."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-64-66-explore-your-options-by-tom-gentile-20.gif"",""height"":""626"",""width"":""459""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-64-66-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-64-66-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov287trti4,d,"{""minimum-quantity"":""1"",""path"":""ch9s206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:9 (71-83): Traders' Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders' Tips by Technical Analysis, Inc.

    Most of this month’s Traders’ Tips are based on Ron Black’s article in this issue, “Getting Clear With Short-Term Swings.”

    Code for TradeStation to implement the swing­line indicator is already provided in Black’s article elsewhere in this issue. Additional code is presented here as contributed by various software developers.

    Readers will find our Traders’ Tips section in its entirety at the Stocks & Commodities website at www.Traders.com in the Traders’ Tips area, from where the code can be copied and pasted into the appropriate program. In addition, the code for each program is usually available at the respective software company’s website. Thus, no retyping of code is required for Internet users.

    For Stocks & Commodities subscribers, the EasyLanguage code found in Black’s article can be copied and pasted into TradeStation from the Subscriber Area at www.Traders.com. Login is required."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-71-83-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""621"",""width"":""436""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-71-83-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-71-83-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28867le,d,"{""minimum-quantity"":""1"",""path"":""ch9s206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:9 (8-9, 67): Letters To S&C by Technical Analysis, Inc"",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc

    Editor,

    Perhaps in a sequel to “The Double Calendar Spread” (Stocks & Commodities, July 2010), author Jay Kaeppel might compare the double calendar to the iron condor. I’ve had limited success predicting the outcome of calendar spreads, primarily because their risk curves do not accurately reflect the spread’s value as the near-term option approaches expiration. With their “sag in the middle,” the risk curves for the double calendar seem to be far more uncertain than the “plateau-like” risk curves of the iron condor, whose risk/reward is comparable to the double calendar.\nIncidentally, Kaeppel’s book, The Option Trader’s Guide To Probability, Volatility, And Timing, has an excellent chapter on calendar spreads.

    Chris Pflum\nLas Vegas, NV"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-8-9-67-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-8-9-67-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-8-9-67-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov289bofo6,d,"{""minimum-quantity"":""1"",""path"":""ch9s206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:9 (92): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    • Chalk Talks For Traders: Easy Xs And Os From A Proven Pro

    • Dictionary Of Finance And Investment Terms: 8th Edition

    • Cloud Charts: Trading Success With The Ichimoku Technique

    • The Invisible Hands: Hedge Funds Off The Record — Rethinking Real Money

    • The Complete Idiot’s Guide To Technical Analysis

    • Malcolm Pryor On Short Term Spread Betting — DVD: Winning Strategies For Active Traders"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-92-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""612"",""width"":""412""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-92-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-92-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov28996at2,d,"{""minimum-quantity"":""1"",""path"":""ch9s206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 28:9 (98, 96): At The Close by Donald W. Pendergast Jr"",""caption-linebreaks"":""At The Close by Donald W. Pendergast Jr

    Shares of Anadarko Petroleum are leading the S&P 500 lower, but this beleaguered stock might find an area of support near $31, possibly setting up some put sale opportunities.

    IT didn’t take very long for the BP oil catastrophe to spill over, affecting not only the share prices of BP but for virtually all of those companies involved in oil exploration — including shares of Anadarko Petroleum Corp. (Apc), one of the key energy-related components in the Standard & Poor’s 500. One look at the weekly chart (Figure 1) immediately lets you know that this is a stock under great bearish pressure.

    Cut in half in only nine weeks, shares of Apc at this point look more like the proverbial “falling knife” than that of a stock preparing to make a graceful landing. Charts like these sometimes remind me of the wiseacre who reputedly said, in the wake of the major stock market crash of 1973–74, when the S&P 500 lost 48% of its value in about 19 months: “I’m putting my money into the S&P these days.”

    His surprised friends thought he’d lost his mind until he clarified his reasoning: “Sealy and Posturepedic, that is. I’m stuffing the money into my mattress. No more stock market for me.”

    Whether or not if this is a true story, it does a good job of depicting how most burned investors feel after suffering major (and usually unexpected) losses in the market. Unfortunately for “Mr. Sealy & Posturepedic,” he probably also missed out on the big relief rally that commenced in August 1974, one that lasted well into early 1975. He wouldn’t have made all of his losses back in one shot, but it could have helped ease his pain (as well as making his bed a bit more comfortable to sleep on).

    There are plenty of people with similar outlooks on the market right about now, but if they’d just step back and get a bigger picture, they might observe that there are some major support areas residing below the current prices of the major indexes and that there may be at least a temporary relief rally due sometime in the next few weeks."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-98-96-at-the-close-by-donald-w-pendergast-jr-20.gif"",""height"":""623"",""width"":""449""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-98-96-at-the-close-by-donald-w-pendergast-jr-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-28-9-98-96-at-the-close-by-donald-w-pendergast-jr-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov291lofo,d,"{""minimum-quantity"":""1"",""path"":""ch1j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:1 (10-15): Looking Forward With Yesterday’s Action by Anthony Trongone, PhD, CTA, CFP"",""caption-linebreaks"":""Looking Forward With Yesterday’s Action by Anthony Trongone, PhD, CTA, CFP

    Can you determine how prices will move after looking at yesterday’s price action? This analysis measures price movement on the S&P 500 Spdr exchange traded fund for the next three days.

    matter how you finish the trading day, knowing how the market will perform over the next few trading days can provide you with a competitive advantage. How can you do it? You can run an analysis that measures the results of the next three days after the Standard & Poor’s 500 depositary receipt (Spdr) exchange traded fund (Spy) experiences a price movement.\nFor instance, after the Spy produces a trading day advance of 2.5%, how does it perform one, two, or three days after this upside rally? Are these results comparable over the next three days? Does a 1.5% run to the upside respond differently, or is it more profitable to purchase the Spy after it experiences less of an upside move? Are these results likely to hold for a large, moderate, or small downside loss?\nSuccess comes from playing the percentages; by making an assessment of the existing trading environment; performing your analysis; and formulating your trading decisions without emotional distractions. Nevertheless, it is difficult to put the percentages on your side without knowing how the equities market performs after a range of moves.\nGetting this information and using it effectively can separate an unexceptional performance from an excellent one.

    THE SPIDERS

    The Spy (also known as the “spiders”), with an average daily trading volume of 242 million shares, outpace the market in the Etfs category. As the most active instrument, the spiders offer the best representation of investor psychology. With extremely active pre- and aftermarket trading volume, the spiders are an attractive trading choice, since it normally has just a penny difference between the bid and the ask prices. This liquidity is an important feature because few instruments offer the investor a reasonable bidding price to buy or asking price to sell outside of the regular trading session."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-10-15-looking-forward-with-yesterday-s-action-by-anthony-trongone-phd-cta-cfp-21.gif"",""height"":""623"",""width"":""441""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-10-15-looking-forward-with-yesterday-s-action-by-anthony-trongone-phd-cta-cfp-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-10-15-looking-forward-with-yesterday-s-action-by-anthony-trongone-phd-cta-cfp-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov291cors1,d,"{""minimum-quantity"":""1"",""path"":""faarfr202"",""ysw-page-title"":""Stocks & Commodities V. 29:1 (16-21): Combining RSI with RSI by Peter Konner"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-16-21-combining-rsi-with-rsi-by-peter-konner-29.gif"",""height"":""180"",""width"":""129""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-16-21-combining-rsi-with-rsi-by-peter-konner-30.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-16-21-combining-rsi-with-rsi-by-peter-konner-31.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov291cors,d,"{""minimum-quantity"":""1"",""path"":""ch1j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:1 (16-21): Combining RSI with RSI by Peter Konner"",""caption-linebreaks"":""Combining RSI with RSI by Peter Konner

    Optimization and stop-losses can help you minimize risks and give you better returns.

    \nYou would like to be long in a market that’s trending up, but what about when the trend turns down? Do you exit and just watch from the sidelines, or do you try to trade on the corrections in the downtrend? Here’s a simple combination where you can trade long-term uptrends and short-term corrections, all in one chart.

    One of my previous strategies didn’t allow me to enter a trade and stay there in a long and strong uptrend, since the strategy was designed to use the relative strength index (RSI) on a daily basis. The total return from my Rsi strategy was fair, but there were many trades with little return, especially in volatile markets.

    I decided to build a new strategy with these requirements:

    1. The strategy should be based on a single model or indicator to keep it as simple and transparent as possible.

    2. It should be designed for weekly trading. I have a full-time job and can only spend time analyzing stocks on the weekends.

    3. The need for subjective analysis of charts and formations — such as support lines, channels, and so forth — should be kept to a minimum.

    4. The strategy should be designed to stay long in an uptrend but also trade on the corrections in a downtrend.

    5. Its implementation should be fairly simple.

    Technician Martin Pring’s Kst (“know sure thing”) indicator comes in three different setups — short term, intermediate term, and long term — and is designed for weekly data. The three setups try to model the market waves of three different periods where short term is between three and six weeks, intermediate term is between six weeks and nine months, and the long-term trend is between six months and three years. Figure 1 shows a bar chart of the Standard & Poor’s 500 and the three KST indicators."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-16-21-combining-rsi-with-rsi-by-peter-konner-24.gif"",""height"":""625"",""width"":""449""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-16-21-combining-rsi-with-rsi-by-peter-konner-27.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-16-21-combining-rsi-with-rsi-by-peter-konner-28.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov29234br1,d,"{""minimum-quantity"":""1"",""path"":""faarfr202"",""ysw-page-title"":""Stocks & Commodities V. 29:1 (22-23, 34): Breakaway Gaps by Kenneth Gilliland"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-22-23-34-breakaway-gaps-by-kenneth-gilliland-29.gif"",""height"":""180"",""width"":""133""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-22-23-34-breakaway-gaps-by-kenneth-gilliland-30.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-22-23-34-breakaway-gaps-by-kenneth-gilliland-31.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov29234br,d,"{""minimum-quantity"":""1"",""path"":""ch1j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:1 (22-23, 34): Breakaway Gaps by Kenneth Gilliland"",""caption-linebreaks"":""Breakaway Gaps by Kenneth Gilliland

    There are many different types of gaps, but this one provides the best risk–reward ratio.

    A gap up in a stock’s price is an exciting event. Usually, such moves will be covered by the financial media, creating hysteria and resulting in some people frantically buying the stock “before it’s too late.” Rarely do the pundits provide a reasoned and thorough explanation as to why the large jump in price will lead to any sort of substantial gains over the near future; they just report the awe-inspiring numbers without touching on their technical significance. Sometimes, armed with simply a headline, the uninformed will buy the stock and get lucky. Over the long term, however, this strategy is bound to fail, as a large gap up in price does not necessarily mean the stock will continue to rise. It is possible to trade these large price moves and jump on a profit-making trend, provided you learn to recognize the patterns that are more likely to succeed.

    There are various types of gaps including common, runaway, and exhaustion gaps. For our purposes, however, the one we will concern ourselves with is the breakaway. From a trading perspective, it provides the best risk–reward ratio when compared to other price gaps.

    WHY BREAKAWAY GAPS OCCUR

    Just like gasoline, beachfront property, shoes, or any other commodity, the price of a stock is affected by the forces of supply and demand. If demand is greater than supply, the price of an item will rise. Conversely, if supply is greater than demand, the price of the item will fall. If you are a trend-follower, you may be of the opinion that stock prices generally move up or down in a uniform fashion. However, if a situation has dramatically changed, it may cause the demand to rise or fall, resulting in a stock price gapping up (or down). Some examples of when a breakaway gap may form are an earnings surprise, award of a new government contract, or the possibility of a buyout. Will the stock continue to rise? We can never know for sure, but the charts give us some clues as to whether it might be worth entering a trade and riding the trend.

    PRICE MOVES OUT OF TRADING RANGE

    A breakout of a trading range is the main distinction that separates breakaway gaps from other types of price gaps (Figure 1). A quick look at a chart can tell you whether this has occurred. If a stock has been trading between $20 and $25 for three months and suddenly gaps up and moves out of that range, you may have a candidate for a breakaway gap. There is no set period of time, but the longer a stock remains in a trading range, the more significant the movement out of that range. Gaps that occur within a trading range are deemed common gaps. They are questionable and should not be traded, as the stock has yet to prove that it can move to the next level beyond the current range; those that occur at the end of a downtrend are also suspect. While this may forecast the possibility of a trend reversal, this is not the sort of price move we are discussing."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-22-23-34-breakaway-gaps-by-kenneth-gilliland-24.gif"",""height"":""628"",""width"":""465""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-22-23-34-breakaway-gaps-by-kenneth-gilliland-27.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-22-23-34-breakaway-gaps-by-kenneth-gilliland-28.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov292mago1,d,"{""minimum-quantity"":""1"",""path"":""faarfr202"",""ysw-page-title"":""Stocks & Commodities V. 29:1 (24-30): Making A Good System Great by Donald W. Pendergast Jr."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-24-30-making-a-good-system-great-by-donald-w-pendergast-jr-27.gif"",""height"":""180"",""width"":""138""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-24-30-making-a-good-system-great-by-donald-w-pendergast-jr-28.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-24-30-making-a-good-system-great-by-donald-w-pendergast-jr-29.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov292mago,d,"{""minimum-quantity"":""1"",""path"":""ch1j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:1 (24-30): Making A Good System Great by Donald W. Pendergast Jr."",""caption-linebreaks"":""Making A Good System Great by Donald W. Pendergast Jr.

    Once you have a trading system, you still need to evaluate it. You can apply optimization strategies to increase profitability, reduce drawdowns, and enhance the stability of your system.

    Despite opinions to the contrary, building a successful daily trading system for stocks isn’t all that difficult, especially if you have the right tools, tons of patience, and a sound understanding of why markets behave the way they do. Of course, 95% of all traders and investors probably are deficient in one or more of those three critical areas of market savvy, and as such they are most likely destined to trash their trading accounts within a given period of time unless they seek the guide of a market mentor or professional trading system developer. For the sake of argument, let’s say you do have all of these foundational tools and skills at your disposal and you have been able to piece together a reliable and profitable equity trading system for trading the market from the long side, one that you can use on individual stocks in both your cash and retirement (Ira or Roth Ira, for example) accounts.

    Of course, now that you’ve gone as far as you can in fine-tuning your system to work well in a range of market environments, what else can you do to boost its profitability and reliability?

    This article may offer at least a few answers to that question by showing how to use portfolio optimization strategies in order to increase profitability, reduce drawdowns, and enhance system stability.

    A SIMPLE, YET STURDY SYSTEM

    First, let’s look at a simple trading system, one designed to enter a long stock position on a pullback in the five-period money flow index (Mfi) (5) with the goal of exiting with a profit on an anticipated snap back higher, using a five-period relative strength index (Rsi)(5) to exit with a profit or using a fixed stop-loss to exit with a loss. This system is very short term in nature, meaning that the use of a broad market timing filter doesn’t appreciably change the performance (profitability and drawdown being the two metrics that carry the most weight) of it as much as you may have expected, although it might still be worth pursuing for hard-core system developers intent on deriving the last available penny from this strategy. I used these 100 large-cap stocks:"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-24-30-making-a-good-system-great-by-donald-w-pendergast-jr-22.gif"",""height"":""633"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-24-30-making-a-good-system-great-by-donald-w-pendergast-jr-30.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-24-30-making-a-good-system-great-by-donald-w-pendergast-jr-31.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov293qaby,d,"{""minimum-quantity"":""1"",""path"":""ch1j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:1 (31): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    ROUTING AND REROUTING FEES?

    Don, I have a question about order routing that perhaps you can help me with. I trade with a respectable brokerage that caters to active traders. I’ve noticed in the last few months that I have been charged fees referring to “routing,” “rerouting,” and electronic communications networks (Ecn) fees. I place my orders to go to the Nyse, as suggested by my peers. I am told that there may be fees for taking of liquidity, and also that I may be entitled to collect rebates for providing of liquidity. I’m not sure what any of this means, but now that I’m being charged fees, I would like to understand it better. When I called the broker, they were very vague about it all, as if they weren’t sure either, but assured me that they were pass-through fees, not add-ons. Can you help? — oldtimeguy

    Excellent questions, very timely. Although I can’t speak directly as to how your brokerage handles such electronic orders, I can explain how things work. If you submit a limit order to the Nyse (as you say) to buy Xyz for $20.10, and the Nyse’s best offer is $20.11, but the overall best market (Nbbo, or “national best bid and offer”) is $20.10 on an Ecn “market center” like Arca. The Nms (that is, the National Market System) requires that the Nyse “ship” the order to the better-priced market. That’s great, except the Nyse will likely charge you a fee for “shipping” the order out. These fees are usually about three-tenths of a penny per share, which can add up quickly."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-31-q-a-by-don-bright-20.gif"",""height"":""615"",""width"":""421""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-31-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-31-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov293fufo,d,"{""minimum-quantity"":""1"",""path"":""ch1j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:1 (35): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    DAYTRADING FOR YOU?

    Daytrading seems to provide traders with less risk than position trading because there is no overnight exposure. How do you feel about the strategy?

    Traders are often drawn to daytrading because it provides them with low barriers to entry, it lacks the overnight risk position that traders endure and, let’s face it, it is exciting. The idea of speeding up your trading results is appealing; after all, you will likely use the same technical indicators and oscillators for daytrading as you would for position trading, so why wait weeks for the outcome? Instead, you can determine whether you have what it takes to make money within a single trading day."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-35-futures-for-you-by-carley-garner-20.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-35-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-35-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov293chan,d,"{""minimum-quantity"":""1"",""path"":""ch1j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:1 (36-39): Chart Analong Scenarios by Sam Whitehill"",""caption-linebreaks"":""Chart Analong Scenarios by Sam Whitehill

    Technical analysis is based on the theory that history will repeat itself. What is not so obvious, however, is that these historical repetitions may happen not just over a few months but over a few decades. This is where chart analogs can be of great value.

    \nhart analogs compare a market’s price action over two different periods of time to discern similar technical patterns that may repeat. Analogs, which are easy to create, have been significantly useful with comparisons such as the 1929 versus 1987 stock market crashes.

    DEFINING CHART ANALOGS

    As noted in Edwin LeFèvre’s Reminiscences Of A Stock Operator, “Nowhere does history indulge in repetitions so often or so uniformly as in Wall Street.” Indeed, many stock chart patterns spanning significant time periods repeat throughout history. The most famous example of this is the 1987 US stock market crash having had so many similarities to the market crash of 1929. The correlation of the price action between these two crashes is remarkably high.

    Such comparisons are referred to as chart analogs, as they compare a current market’s price action (or one period in time) to a different past period of price action that is significantly correlated. The main purpose of chart analogs is to forecast future prices based on history repeating itself. These forecasts are of particular interest near market tops and bottoms.

    Chart analogs do not get as much credit or coverage as they deserve. This is especially true given how easy and quick they are to use. Similar to all technical tools, however, chart analogs are fallible and can break down. Nevertheless, they are a valuable tool in building future market scenarios.

    CLASSIC CHART ANALOGS

    First, consider the classic analog between the 1929 and 1987 US stock market crashes (Figure 1). The price action between these two periods is very highly correlated (that is, greater than 90%). You may remember the interview with trader Paul Tudor Jones in the book The Market Wizards in which he explained how he used just such a chart analog to help forecast the crash of 1987."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-36-39-chart-analong-scenarios-by-sam-whitehill-20.gif"",""height"":""631"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-36-39-chart-analong-scenarios-by-sam-whitehill-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-36-39-chart-analong-scenarios-by-sam-whitehill-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294exyo,d,"{""minimum-quantity"":""1"",""path"":""ch1j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:1 (40): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    MANAGED RISK

    If I’m trying to manage option position risk to reduce my maximum loss exposure, is it better to tie a stop-loss to the market price of the options or the underlying stock?

    Managed stops can be a good tool as they act as an extra layer of portfolio protection beyond our initial and known risk assumption if we’re dealing with a limited risk strategy. The question of exiting with a tighter managed loss based on the underlying share price versus the prevailing option market isn’t as clear-cut. This is largely up to the individual trader and his or her risk acceptance, as well as the strategy being employed.

    To illustrate with a simple situation that many traders can appreciate, say you’re bullish on shares technically and initiate an at-the-money long call strategy with less than 30 days until the contract’s expiration. In this position type, you have clearly defined risk based on the number of contracts purchased multiplied by the purchase price."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-40-explore-your-options-by-tom-gentile-20.gif"",""height"":""616"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-40-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-40-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294cufa,d,"{""minimum-quantity"":""1"",""path"":""ch1j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:1 (42-47): Curtis Faith And Trading From Your Gut by J. Gopalakrishnan & B. Faber"",""caption-linebreaks"":""Curtis Faith And Trading From Your Gut by J. Gopalakrishnan & B. Faber

    Curtis Faith is best known for getting his start as a member of the Turtles, the elite Chicago trading group. In his early 20s, Faith earned more than $30 million as a member of the renowned group that started as a bet between its founders, Richard Dennis and William Eckhardt. Drawing from his experience as an original Turtle, as well as a successful entrepreneur — having founded several software and high-tech startups — Faith developed a “whole mind” approach that gives traders at all skill levels the tools to become a master trader.

    In Trading From Your Gut, his latest book, Faith talks about a method that is more art than science and gives traders the tools to use all of the weapons at their disposal: instinct and analysis.

    Stocks & Commodities Editor Jayanthi Gopalakrishnan and Staff Writer Bruce Faber interviewed Curtis Faith via telephone on November 8, 2010.

    Curtis, you were one of the original Turtles. How did you become one?

    I answered the ad like everybody else, but at the time I was a computer programmer working at a small software company in Massachusetts. I was a sophomore in college, and I had decided to drop out of college and trade commodities full time. I applied to the Richard Dennis program and was one of the 40 people they interviewed and one of the 12 people they chose for the program for the first year. Probably the main reason I was picked was my background in programming trading systems and eventually analyzing them. This was 1983, which was way before most people were doing that sort of thing.

    When you were trading with the Turtles, were you using a system they designed, or did you help them design a system as well?

    They gave us a couple of systems they had designed and gave us the opportunity to trade them. We could change them slightly to our own taste, but they had done all the research for it. It was more or less consistent with some of the stuff I had been researching. It was not like it was some particularly unusual strategy they used.

    How long did you do this?

    I traded with them for four and a half years, which was essentially as long as the program lasted. The program was disbanded when Rich got into some legal troubles with some stuff he was doing separate from the Turtles. His lawyers advised him to discontinue trading.

    Did you continue trading after that?

    I gave it up for a while and started some software companies. I did not get back into trading again until 2001, when I joined a hedge fund in the US Virgin Islands. At that point, I took a lot of the commodity strategies that we had used in the Dennis program and started to look into doing the same sorts of things with stocks. I have been trading on and off since then.

    Are you still trading?

    I go in spurts. I’ll trade for a while and then not for a while. It depends on what else is going on in my life. I like learning new things. I like challenges. So I tend to have two or three new ventures going at any given point, but I plan on getting back into trading again in a big way over the next few months.

    You have written some books that are very popular among traders. Your most recent book is Trading From Your Gut. What I found interesting is that you’re somebody who’s been in system trading, and you’ve developed systems for trading, but you decide to write a book about trading by instinct. It sounds like a completely different approach to trading. Why did you incorporate discretionary trading into your methodology?

    I did that because a lot of people trade that way. I have known people who are successful doing both, but even for pure system traders, intuition plays an important role. If you think about it, the decisions you make about trading not based on raw information are based on your instincts. Even when you are building a system you have to decide what is important, what measures make sense, and what measures don’t. The process of building a new system from scratch often involves making judgments about what might be important. It is a process of discovery. Trading instinctively is not really saying you should be a discretionary trader and shoot from the hip. It’s the difference between intuition that is sharpened through trading and intuition that is sort of guessing. An expert has honed intuition and is able to make decisions very quickly."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-42-47-curtis-faith-and-trading-from-your-gut-by-j-gopalakrishnan-b-faber-20.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-42-47-curtis-faith-and-trading-from-your-gut-by-j-gopalakrishnan-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-42-47-curtis-faith-and-trading-from-your-gut-by-j-gopalakrishnan-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294prre,d,"{""minimum-quantity"":""1"",""path"":""ch1j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:1 (48-51): Product Review Bloomberg For The iPad by Wallace Wang"",""caption-linebreaks"":""Product Review Bloomberg For The iPad by Wallace Wang

    Most traders spend their time in front of a desktop computer with a high-speed Internet connection. But when you’re traveling or just stepping away for lunch, you may not want to cut yourself off from the latest market news. Fortunately, with an iPad, a wifi or 3G cellular Internet connection, and this Bloomberg app, you can stay up to date with the market wherever you take your iPad.

    MARKET SUMMARY

    When you first start the Bloomberg app, it displays a summary screen that lists the major news stories of the day, equity indexes such as the Dow Jones Industrial Average (DJIA) or Standard & Poor’s 500, a list of stocks that you’re currently watching or holding, and a currency list that shows the value of the US dollar compared to other major currencies (Figure 1).

    To check the status of the market at a glance, the Bloomberg app’s initial screen provides an overall view of the market, but if you want more detailed information, you can tap one of the icons displayed at the bottom of the screen:\n• News\n• Equity indexes\n• Custom list of stocks\n• Currencies\n• Commodities\n• Equity index futures\n• Bonds\n• Podcasts

    READING MARKET NEWS

    Any last-minute news can greatly influence prices, so it is important to stay current with headline stories that may affect your portfolio. Just tap any of the top news stories from the opening screen and the entire article appears for you to read. One nice touch is that you can adjust the font size to make text smaller (so you can read more of it on the screen) or larger (so you can read the text easily). For particularly interesting articles, you can even send a copy to a friend through any email account you’ve set up on your iPad.

    If you want to scan the headlines of more than just the top news stories of the day, tap the news icon at the bottom of the opening screen and you’ll get access to Bloomberg headlines for stories about other categories such as insurance or health care (Figure 2)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-48-51-product-review-bloomberg-for-the-ipad-by-wallace-wang-20.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-48-51-product-review-bloomberg-for-the-ipad-by-wallace-wang-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-48-51-product-review-bloomberg-for-the-ipad-by-wallace-wang-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov295prre,d,"{""minimum-quantity"":""1"",""path"":""ch1j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:1 (52-54) Product Review: Pristine Pattern Method Scan by Dennis D. Peterson"",""caption-linebreaks"":""Stocks & Commodities V. 29:1 (52-54) Product Review: Pristine Pattern Method Scan by Dennis D. Peterson

    The Pristine Pattern Method Scan plugin comes with screening filters, expert commentary, chart annotation, and templates to help find patterns that fit with the Pristine approach. The Pristine Method was covered in two earlier reviews in the February and April 2010 issues of Stocks & Commodities.

    MetaStock refers to its screening filters as Explorations and its expert commentary and chart annotation as Expert Advisors. The CD comes with a 50-page manual that fits into the CD case. There are brief explanations of each of the pattern scans that you can use with the Explorer or Expert Advisor. There are 17 different explorations. Both courses are helpful, but the first course is more aligned with this plugin. Let’s look at an example.

    Using the pattern scan called the “Bullish Changing of the Guard” resulted in about 16 tickers being selected (Figure 1) when I was scanning the Standard & Poor’s 500 on August 24, 2010. One of the columns in the Exploration report is “Setup,” which displays 1.000 or 0.000. The zero represents false and “1” represents true. The first row displays Anadarko Petroleum Co. (Apc).

    “Bullish Changing of the Guard” is a phrase that Pristine uses to identify an up day bar following a three-bar pattern of lower highs or, in the case of candlesticks, three solid red bars. For MetaStock, implementation of candlesticks’ solid red bars versus red-outlined bars is an important qualification since MetaStock will outline a candlestick in red if its close is less than the previous day’s close, whether it’s an up day or down day. If it’s a down day, then the body of the candlestick is filled in, making it a solid red candlestick, but if it’s an up day, then the outline of the body is red but not filled in.

    With 17 different scans or explorations available, you might ask, “Are they all independent?” and the answer would be yes. MetaStock allows you to pick a set of symbols such as the S&P 500, and using the control key, select all 17. This generates 17 independent reports. MetaStock also allows you to feed the results of one scan into another because it creates a file of the tickers from the most recent scan, and you can point the Exploration to the file of those tickers that came from a past scan. Feeding the results of one scan into another is done one exploration at a time."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-52-54-product-review-pristine-pattern-method-scan-by-dennis-d-peterson-20.gif"",""height"":""633"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-52-54-product-review-pristine-pattern-method-scan-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-52-54-product-review-pristine-pattern-method-scan-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov295fofo,d,"{""minimum-quantity"":""1"",""path"":""ch1j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:1 (56-59): Forex Focus: The US Dollar And Precious Metals by Donald W. Pendergast Jr."",""caption-linebreaks"":""Forex Focus: The US Dollar And Precious Metals by Donald W. Pendergast Jr.

    Playing the US dollar versus the precious metals market dynamic is one of the highest-probability trading games around. This is especially significant at major trend reversals. Will the significant support area near 76.00 even hold, much less act as a reversal point?

    October 8, 2010

    You’ve gotta love currencies, whether you trade them by way of the futures or forex markets. These markets really like to trend, and across all time frames to boot. The US Dollar Index (DX), one of the heavies in the currency world, is no exception, and it is well enmeshed in a substantial intermediate-term downtrend of its own. Let’s take a look at this key market’s daily chart and see if we can’t decipher some of its technical warning bells that are currently seeking to capture the attention of savvy, opportunistic traders (Figure 1).

    Swing analysis is a time-honored technique among many traders, and nowhere is the task easier than in markets that make nice, clean price swings over sustained periods of time. In the case of DX, the AB swing covered 8.63 points, finally making a minor reversal in the area of a Keltner band (point B). Not surprisingly, swing BC terminated at the next higher Keltner band (yes, these things really do identify key areas of support and resistance; these Keltners are plotted 4.2 and 7.5 standard deviations away from a 45-period exponential moving average [Ema], respectively).

    Once swing CD got rolling (with point D yet to be determined), sharp traders would have already been doing some basic math in order to calculate a possible termination area for CD, multiplying the length of swing AB (8.63 points) by 0.618 and then subtracting it from the value of point C (83.635). That calculation yielded a price value of 78.30, which also happened to coincide with Keltner band 3 (with “1” being at the top and “4” at the bottom). Keltner 3 was violated and the DX has continued to drop, which means that traders will now grab their calculators and run the same calculation again, only this time plugging in a Fibonacci ratio of 0.786 into the equation instead of 0.618. Guess what? This calculation comes up with a value of 76.85, which is just 79 (oh no, another Fibonacci number!) cents above Keltner band 4 at 76.05."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-56-59-forex-focus-the-us-dollar-and-precious-metals-by-donald-w-pendergast-jr-20.gif"",""height"":""622"",""width"":""444""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-56-59-forex-focus-the-us-dollar-and-precious-metals-by-donald-w-pendergast-jr-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-56-59-forex-focus-the-us-dollar-and-precious-metals-by-donald-w-pendergast-jr-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov296trti,d,"{""minimum-quantity"":""1"",""path"":""ch1j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:1 (64-71): Traders' Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders' Tips by Technical Analysis, Inc.

    For this month’s Traders’ Tips, the focus is Peter Konner’s article in this issue, “Combining Rsi With Rsi.” Code for the Scandinavian technical analysis program AvanzaVikingen is already provided in Konner’s article elsewhere in this issue. (Subscribers will also find Konner’s code at the Subscriber Area of our website, www.Traders.com.) Presented here is an overview of possible implementations for other software."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-64-71-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""774"",""width"":""585""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-64-71-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-64-71-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov297bofo,d,"{""minimum-quantity"":""1"",""path"":""ch1j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:1 (76): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    • Trading Options In Turbulent Markets

    • Dear Mr. Buffett: What An Investor Learns 1,269 Miles From Wall Street

    • High-Performance Managed Futures: The New Way To Diversify Your Portfolio

    • Strategic Stock Trading

    • Three Paths To Profitable Investing

    • Commodity Trader’s Almanac 2011: 5th Edition

    • Stock Trader’s Almanac: 44th Edition"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-76-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""613"",""width"":""414""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-76-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-76-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov298leto,d,"{""minimum-quantity"":""1"",""path"":""ch1j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:1 (8-9): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    SUSPECT TRENDS

    Editor,

    I just finished reading L.A. Little’s article “Price And Volume Disconnect” in the November 2010 issue of Stocks & Commodities. I have a general question I was hoping he could answer for me. (I loved the article, by the way.)

    While I completely understand his reasoning behind identifying disconnects between price and volume as well as how to act when a suspect trend is spotted, I was hoping he could speak to why such situations sometimes arise in the first place. I know it’s a loaded question and I don’t expect a lengthy response, but I’m curious as to what might trigger a suspect trend. I would be happy to do further reading if he had any recommendations.

    Dave

    L.A. Little replies:

    Suspect trends are a natural occurrence, in my opinion. They are part of the natural ebb and flow of the market. In the current market environment, there is less overall interest in stocks as a result of the lingering worries about the future that are predicated on the 2008 financial debacle. Those concerns do not disappear quickly, and despite a rise in the market of tremendous percentages, the concern remains for a subsequent fall along the lines of 2000 and 2008."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-8-9-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-8-9-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-8-9-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov29880at,d,"{""minimum-quantity"":""1"",""path"":""ch1j203"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:1 (82, 80): At The Close by Brandon H. VanLandingham"",""caption-linebreaks"":""At The Close by Brandon H. VanLandingham

    So what can be done to help minimize emotion within our trading?\nThe answer is in our trading process.

    Has this ever happened to you? You go long the market or a particular security and it immediately goes down; you go short and it immediately goes up. That is two back-to-back losses. Now extremely anxious, you ignore your trading rules and skip the next signal and of course that trade immediately becomes profitable. You hesitate whether you should take that last position this far after the trade signal. You continue monitoring the trade you failed to react to in the beginning, and now see a support and resistance trend developing. Every time the price pulls back to the support level, it rallies off this bottom. Your trading rules are telling you to sell the position (which in this situation means not to enter a long position), but you know better and place your trade anyway, ignoring your trading rule.

    Just as you enter the trade, the support you previously noticed is violated and the price of the security is now below this level. Another losing trade has begun and you just can’t sell out of the position, even though your experience tells you to cut your losses. Now you are desperate and begin looking at a conglomerate of other trading rules and technical indicators to justify your decision to hold a losing trade.

    This may seem a little exaggerated, but chances are an experienced trader has lived through a few trading cycles identical to the one described. Emotional decisions are a trader’s worst fears come true.

    HOW DO YOU ELIMINATE EMOTIONS?

    Some traders believe that by subscribing to a particular trading system or by interpreting several technical indicators, they are eliminating emotion from their trading decisions. In some situations they minimize emotional decisions, whereas in others they only mask them. I have noticed that after a losing trade I concentrate on recapturing the loss. I take on more risk by bending my trading rules in order to enter a trade earlier or hold a trade longer than I otherwise would, letting the emotion of recapturing a loss take over."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-82-80-at-the-close-by-brandon-h-vanlandingham-20.gif"",""height"":""621"",""width"":""438""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-82-80-at-the-close-by-brandon-h-vanlandingham-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-1-82-80-at-the-close-by-brandon-h-vanlandingham-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov291jkhi,d,"{""minimum-quantity"":""1"",""path"":""ch10o207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:10 (12-18): The JK HiLo Index by Jay Kaeppel"",""caption-linebreaks"":""The JK HiLo Index by Jay Kaeppel

    No single indicator will accurately forecast or coincide with every market top or bottom. Here, two indicators have been combined to form one indicator that can increase your chances of identifying buy or sell points.

    AS a student of the market, I have crunched a few numbers over the years. At the same time I have tried, and cautioned others also, to avoid the temptation to divide one number by another or multiply one number by another simply because we can.

    Not every calculation involving market indicators enjoys any real purpose. In addition, many indicators react in a manner similar to other indicators. Almost all overbought/oversold indicators tend to get more oversold as the market declines and more overbought as the market rallies. So stringing together more than a handful of similar indicators does not necessarily provide any additional benefit.

    Still, when paired together, even similar indicators can be different enough in their construction and interpretation to be useful sometimes. This article details an indicator I have dubbed the “JK HiLo” index (or Jkhl for short)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-12-18-the-jk-hilo-index-by-jay-kaeppel-21.gif"",""height"":""617"",""width"":""439""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-12-18-the-jk-hilo-index-by-jay-kaeppel-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-12-18-the-jk-hilo-index-by-jay-kaeppel-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov292nete,d,"{""minimum-quantity"":""1"",""path"":""ch10o207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:10 (20-33): Net Effective Market Activity by Frank Suler"",""caption-linebreaks"":""Net Effective Market Activity by Frank Suler

    The desire to learn more about the relationships amid price, volume, and open interest has led to a new concept in evaluating futures contracts. Will it work for you?

    Much of the information on futures trading available in the 1980s mentioned the relationship amid price, volume (V), and open interest (OI). Generally speaking, price breakouts from a trading range are more bullish under high volume. Further, an increase in OI with increased price meant that new long position buying must have been the dominant trading activity. Traders have pointed out that if the price increase occurred with a decrease in open interest, then most of the price increase had to be due to short-covering.\nTo better understand these relationships, refer to the list of meaningful combinations of price, V, and OI changes and the corresponding dominant trading activity in Figure 1.

    SIGNIFICANCE OF CHANGES

    There were 16 such change sets found. The changes refer to daily changes — that is, price change today equals close price today minus close price yesterday. The futures contract with the most volume activity and the highest open interest is referred to as the lead contract. For consistency, the price changes and V and OI changes must only be for the lead contract as opposed to the total V and OI for all open contracts.

    (Other studies have stated that the total V and OI for all open contracts should be used instead of the lead contract values. Since many consider this an important issue, further clarification is warranted. See sidebar “Using Lead Contract Values Of Volume And Open Interest” on page 22.)

    Figure 1 lists the 16 dominant trading activities for the daily changes in price, OI, and V. For the changes, an increase is denoted by a “3,” a decrease by a “1,” and no significant change by a “2.” Increased or decreased buying is indicated by ±B. Increased or decreased selling is indicated by ±S."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-20-33-net-effective-market-activity-by-frank-suler-21.gif"",""height"":""622"",""width"":""458""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-20-33-net-effective-market-activity-by-frank-suler-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-20-33-net-effective-market-activity-by-frank-suler-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov293wean,d,"{""minimum-quantity"":""1"",""path"":""ch10o207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:10 (34-39): Weekly And Monthly Seasonal Cycles by Krista and Konrad Sherinian"",""caption-linebreaks"":""Weekly And Monthly Seasonal Cycles by Krista and Konrad Sherinian

    These two short-term seasonal cycles can give traders an edge.

    recent years, making use of the seasonal cycles of various stocks and commodities have become a popular trading technique. For example, “Sell in May and go away” is a popular saying among equity traders, reflecting the tendency of the Standard & Poor’s 500 to experience weakness during the summer months. The “Santa Claus rally” is another example of the yearly seasonal cycle of stocks, reflecting how traders can make use of the year-end market activity.\nHowever, the yearly seasonal cycle is only one of a few that are anchored on dates, and which make up the broader category of seasonals. Here are two short-term seasonal cycles that can provide an edge to traders, using the weekly and monthly seasonal cycles in the S&P 500.

    ON THE EDGE

    A good starting point to measure the seasonal edge of a particular trading day is to test the average move of any day during a period. Figure 1 shows the average move in the S&P 500 for every day in the period from February 1, 2001, to February 1, 2011. These are the figures against which all other day-to-day moves should be measured against. Only if a day is up more than 53.4% of the time or offers a better than 1.01 reward-risk ratio can it be said to provide an edge for long trades.

    Figure 2 shows the magnitude of day-to-day moves in the S&P 500, measured close-to-close from February 1, 2001 to February 1, 2011. During this exceptionally volatile 10-year period, every day of the week had a better than even chance of being an up day. In particular, Wednesday not only had the highest likelihood of being an up day, it also had the best reward-risk ratio at 1.15. In addition, Mondays and Fridays are the only days with unfavorable reward-risk ratios for long trades, although neither Tuesday nor Thursday is exceptionally favorable."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-34-39-weekly-and-monthly-seasonal-cycles-by-krista-and-konrad-sherinian-20.gif"",""height"":""616"",""width"":""438""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-34-39-weekly-and-monthly-seasonal-cycles-by-krista-and-konrad-sherinian-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-34-39-weekly-and-monthly-seasonal-cycles-by-krista-and-konrad-sherinian-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294pura,d,"{""minimum-quantity"":""1"",""path"":""ch10o207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:10 (40-44): The Put/Call Ratio And Price Cycles by Sylvain Vervoort"",""caption-linebreaks"":""The Put/Call Ratio And Price Cycles by Sylvain Vervoort

    The put/call ratio and open interest can be used as a leading indicator to predict the next index move. In this, the first part of a three-part series, the put/call ratio is defined and the cyclical phases this indicator goes through.

    I started writing my first book near the end of the previous century. That sounds like such a long time ago! It was only published in Flemish, my native language. A small part was about fundamental analysis, the main part was about technical analysis, and there was an introduction to option strategies. In the part about option strategies, based on the put/call ratio and the open interest, I wrote about my idea of how these two parameters could be used as a leading indicator to predict the next index move.

    For a couple of years afterward, I published followup commentary and accompanying data from the European Options Exchange (Eoe). Unfortunately, at some point this data stopped being offered anywhere I looked for it and I had to abandon that project, much to my regret.

    Then in early 2010, I noticed that the put/call ratio of all the Cboe equity options is available at the Cboe website (http://www.cboe.com/data/PutCallRatio.aspx). There, you can find the Cboe equity put/call ratio data from October 21, 2003. That made me think about my earlier work.

    An indicator that uses the put/call ratio has an advantage in that it is not based on the usual price or volume data, and as such, it can be an interesting extra piece of independent price information. Looking at Figure 1, however, where you see a chart of the Standard & Poor’s 500 at the top with the raw put/call ratio data at the bottom, it is evident that we will need some tricks to create a usable indicator.

    PUT/CALL RATIO DEFINITION

    You get the daily put/call ratio by dividing the sum of all put options by all call options traded on all individual Cboe equity option contracts. Important: Do not use the put/call ratio of the index itself; this will not give you a meaningful indicator."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-40-44-the-put-call-ratio-and-price-cycles-by-sylvain-vervoort-22.gif"",""height"":""616"",""width"":""436""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-40-44-the-put-call-ratio-and-price-cycles-by-sylvain-vervoort-30.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-40-44-the-put-call-ratio-and-price-cycles-by-sylvain-vervoort-31.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294pura1,d,"{""minimum-quantity"":""1"",""path"":""faarfr202"",""ysw-page-title"":""Stocks & Commodities V. 29:10 (40-44): The Put/Call Ratio And Price Cycles by Sylvain Vervoort"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-40-44-the-put-call-ratio-and-price-cycles-by-sylvain-vervoort-27.gif"",""height"":""180"",""width"":""127""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-40-44-the-put-call-ratio-and-price-cycles-by-sylvain-vervoort-28.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-40-44-the-put-call-ratio-and-price-cycles-by-sylvain-vervoort-29.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294qaby2,d,"{""minimum-quantity"":""1"",""path"":""ch10o207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:10 (45): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    SCALING OUT OF POSITIONS

    I have been following a conversation on a message board on the topic of scaling out. The originator of the post is making a statement about trading psychology and has posted many scenarios trying to prove or disprove a theory about this behavior. For example:

    Original poster:\n• Four ES contracts 50% win ratio all in/all out versus\n• Four ES contracts 50% win ratio scaling out at half target\n• Nine-point target three-point initial stop-loss

    First example with 20 trades:\n• 10 winners for 9 x (four contracts) = 360 points ($18,000)\n• 10 losers for 3 x (four contracts) = 120 points (-$6,000)\n• Net profit $12,000

    Second example with 20 trades:\n• 10 winners for 9 x (two contracts) = 180 points ($9,000)\n• 10 winners for 4.5 x (two contracts) = 90 points ($4,500)\n• 10 losers for 3 x (four contracts) = 120 points (‑$6,000)\n• Net profit $7,500

    Money can be made scaling out, but it represents “inferior” behavior."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-45-q-a-by-don-bright-20.gif"",""height"":""613"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-45-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-45-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294hitr,d,"{""minimum-quantity"":""1"",""path"":""ch10o207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:10 (46-51): High-Frequency Trading With Sang Lee by J. Gopalakrishnan and B. Faber"",""caption-linebreaks"":""High-Frequency Trading With Sang Lee by J. Gopalakrishnan and B. Faber

    Sang Lee is a cofounder of Aite Group and serves as managing partner. Lee, whose expertise lies in the securities and investments vertical growth, has advised global financial institutions, software/hardware vendors, and professional services firms in sellside and buyside electronic trading technology and market structure.\nPrior to establishing Aite Group, Lee was a founding member of Celent Communications and served as the manager of the securities and investments group as well as the operations group. At Celent, Lee played a pivotal role in creating and growing one of the leading securities and investments practices in the financial services research industry.\nLee received his bachelor’s degree from the University of Michigan and his master’s degree from Columbia University. He is fluent in English and Korean.

    Stocks & Commodities Editor Jayanthi Gopalakrishnan and Staff Writer Bruce Faber spoke to Sang Lee on August 3, 2011."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-46-51-high-frequency-trading-with-sang-lee-by-j-gopalakrishnan-and-b-faber-20.gif"",""height"":""628"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-46-51-high-frequency-trading-with-sang-lee-by-j-gopalakrishnan-and-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-46-51-high-frequency-trading-with-sang-lee-by-j-gopalakrishnan-and-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov295quva,d,"{""minimum-quantity"":""1"",""path"":""ch10o207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:10 (52-53): QUICKSCAN: VantagePoint 8.6 by Sunny Harris"",""caption-linebreaks"":""QUICKSCAN: VantagePoint 8.6 by Sunny Harris

    I love to try out new software, especially trading software. I like to open the box and start pushing all the buttons to see what happens. If the software designers are really good, the program will be intuitive and not even need documentation (aside from help files, which I use in an emergency). The new version of VantagePoint qualifies. It’s easy, pretty, and it works.

    In Figure 1 you see the opening screen of the software. It displays the symbol for the emini S&P. I got there easily by navigating through the menu on the left of the screen. Under “Futures,” I went straight to the emini. I double-clicked the symbol, and the chart popped right up.

    In a huge departure from other technical analysis software, VantagePoint plots tomorrow’s prices! Look to the hard right edge of the chart in Figure 1. There is a bar that is not colored and for which there is no candle body. That is the prediction for tomorrow. Because this software is unique in its focus, I am going to continue this review tomorrow, at the end of the day, when I can see what actually happened. Then I will copy that chart for you and compare what happened to what was predicted."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-52-53-quickscan-vantagepoint-8-6-by-sunny-harris-21.gif"",""height"":""612"",""width"":""420""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-52-53-quickscan-vantagepoint-8-6-by-sunny-harris-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-52-53-quickscan-vantagepoint-8-6-by-sunny-harris-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov295prre11,d,"{""minimum-quantity"":""1"",""path"":""ch10o207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:10 (54-57): PRODUCT REVIEW: Market Cycle Dynamics by Dennis D Peterson"",""caption-linebreaks"":""PRODUCT REVIEW: Market Cycle Dynamics by Dennis D Peterson

    Market Cycle Dynamics software for MetaStock (Mcd) is the creation of David Knox Barker and is based on years of cycle research. Barker studied cyclist P.Q. Wall’s methods and discussed cycles with him for many years, but has gone beyond Wall for finding price targets. Wall would have developed price targets by dividing a prior price range into equidistant thirds. Barker makes extensive use of Fibonacci ratios to find pricing targets. Mcd is basically a standalone product but uses MetaStock 11 for quotes. It’s not the typical plug-in product because there’s some explanation needed for installation, but let’s get to the good stuff.

    Mcd uses a three-pronged approach to analyze market behavior. It attempts to predict price (Fibonacci based) and time targets (based on Kondratieff, Kitchin, and Wall cycles) along with generating buy/sell signals. The buy/sell signals come from Barker’s choice for sentiment: the stochastic oscillator. Compared to price and time prediction, the use of the stochastic oscillator for sentiment is straightforward. The preferred choice for daily %K periods is a Fibonacci number, such as 8, 13, or 21. Price and time targets need some explanation, and it should also be said that Barker has found that large-cap, high-volume equities work best. The other two approaches need more explanation, so let’s start with pricing targets."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-54-57-product-review-market-cycle-dynamics-by-dennis-d-peterson-21.gif"",""height"":""628"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-54-57-product-review-market-cycle-dynamics-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-54-57-product-review-market-cycle-dynamics-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov295prre12,d,"{""minimum-quantity"":""1"",""path"":""ch10o207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:10 (58-61): Product Review: TBO Advanced Chart Pattern Recognition by Donald W Pendergast Jr"",""caption-linebreaks"":""Product Review: TBO Advanced Chart Pattern Recognition by Donald W Pendergast Jr

    Discretionary trading is still the preferred manner of attempting to extract profits from the financial markets for many traders, despite the ever-growing popularity of systems, high-frequency, and algorithmic trading methods. One of the most useful skills for the serious discretionary trader is the ability to accurately scan the markets for technical chart patterns that are close to completion, thus offering the opportunity to include other confirmation tools and/or system signals that can provide a trader with a much higher degree of confidence when trading today’s volatile and highly fragile markets (stop and consider last year’s flash crash, if you doubt that the markets can be extremely fragile). TimBukOne offers a unique and multifaceted standalone software product called Tbo Advanced Chart Recognition Pattern (Tbo Acpe) software that runs on MetaStock or AmiBroker (along with several other data providers) end-of-day (Eod) data, and that is the subject of this review."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-58-61-product-review-tbo-advanced-chart-pattern-recognition-by-donald-w-pendergast-jr-21.gif"",""height"":""623"",""width"":""459""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-58-61-product-review-tbo-advanced-chart-pattern-recognition-by-donald-w-pendergast-jr-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-58-61-product-review-tbo-advanced-chart-pattern-recognition-by-donald-w-pendergast-jr-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov296fufo4,d,"{""minimum-quantity"":""1"",""path"":""ch10o207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:10 (62): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    Is there a strategic advantage to trading currency options in the futures markets as opposed to foreign exchange?

    The options traded in forex are vastly more diverse than the instruments traded in the futures markets or even stocks, for that matter. The primary difference between forex options and options written on currency futures is the fact that forex traders aren’t necessarily trading standardized contracts. Instead, they can negotiate specific terms with their broker such as expiration date and perhaps even the time of day. However, for simplicity’s sake, brokerage trading platforms often provide traders with a default expiration date and time.

    Because forex options are not standardized and can be individually negotiated, they are not traded on a formal exchange. Instead, forex option trades are executed on a synthetic market created by the brokerage firm you are trading with. Simply put, the house is taking the other side of client transactions and acting as the market makers. Obviously, this eliminates the benefits of an exchange such as tight regulations, transparency, and exchange guarantees (no counterparty risk)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-62-futures-for-you-by-carley-garner-20.gif"",""height"":""614"",""width"":""422""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-62-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-62-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov296trti6,d,"{""minimum-quantity"":""1"",""path"":""ch10o207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:10 (63-70,79): Traders' Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders' Tips by Technical Analysis, Inc.

    For this month’s Traders’ Tips, the focus is\nJay Kaeppel’s article in this issue, “The JK\nHiLo Index.” Additional Traders’ Tips presented\nhere are based on topics of the contributors’\nchoosing.\nSpreadsheet formulas are already provided\nin Kaeppel’s article. Subscribers will also\nfind the same formulas at the Subscriber’s\nArea of our website, www.Traders.com. Presented here\nis an overview of possible implementations for other software.\nTraders’ Tips are provided to help the reader implement\na selected technique from an article in this issue.\nThe entries are contributed by various software developers\nor programmers for software that is capable of customization.\nReaders will find all the code listings that accompany\nthe following Traders’ Tips at our website, Traders.com.\nTo locate Traders’ Tips at our website, use our site’s\nsearch engine, or click on the Traders’ Tips link from our\nhome page. For past Traders’ Tips, click on the “Stocks\n& Commodities” link from our home page in the red box\non the left, then click on the “Article Abstracts” link in the\nred box on the left, then click on the issue of interest, then\non “Traders’ Tips.”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-63-70-79-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""613"",""width"":""424""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-63-70-79-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-63-70-79-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov297exyo1,d,"{""minimum-quantity"":""1"",""path"":""ch10o207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:10 (72): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    A \""BETTER\"" FLY POSITION

    What can be done to make the long butterfly strategy more consistently profitable? The chances of a stock landing at the middle sold strike at expiration is not a high-probability outcome, so what might be considered during the life of the spread?

    Great question. It’s important to be working with a range-bound stock or one that’s moving toward the positioned middle strike of the spread. Lower statistical volatility stocks might also provide a more consistent opportunity with the long butterfly.

    Lower volatility is a good characteristic because the two embedded verticals making up the butterfly should react more favorably than a high-volatility situation. All else being equal, the in-the-money vertical position expands toward its maximum profit potential and the out-of-money loses its extrinsic value quicker than if volatility is elevated. Once a butterfly position shows some profit, various adjustments can be considered to increase one’s odds of more consistent results."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-72-explore-your-options-by-tom-gentile-20.gif"",""height"":""613"",""width"":""420""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-72-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-72-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov297bofo9,d,"{""minimum-quantity"":""1"",""path"":""ch10o207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:10 (77): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    Finding #1 Stocks: Screening, Backtesting, And Time-Proven Strategies

    Free Capital: How 12 Private Investors Made Millions In The Stock Market

    The High-Frequency Game Changer: How Automated Trading Strategies Have Revolutionized The Markets

    Out Of The Box And Onto Wall Street: Unorthodox Insights On Investments And The Economy

    The StockTwits Edge: 40 Actionable Trade Setups From Real Market Pros

    Your Options Handbook: The Practical Reference And Strategy Guide To Trading Options"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-77-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""610"",""width"":""410""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-77-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-77-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov298leto5,d,"{""minimum-quantity"":""1"",""path"":""ch10o207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:10 (8-10): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    Editor,

    I am looking for more information on the market instrument function, which was described in an article by the same name in your December 2010 issue. Is this forecasting tool built into any trading software? How can authors A. Ershov and A. Gerasimov be contacted for updates and additional information?

    Walter Schramm

    Please see the February 2011 and April 2011 issue Letters To S&C columns for some follow-up information on the market instrument function and a correction on one of the figures. If you don’t have these back issues, you will find those Letters To S&C columns at our website, www.Traders.com.\nYou can contact authors Aleksey Gerasimov (avgerasimov@umail.ru) and Alexander Ershov (amershov@umail.ru) by email.—Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-8-10-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""191"",""width"":""144""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-8-10-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-8-10-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov29880at3,d,"{""minimum-quantity"":""1"",""path"":""ch10o207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:10 (82, 80-81): At The Close by H. Jack Bouroudjian"",""caption-linebreaks"":""At The Close by H. Jack Bouroudjian

    When Worlds Collide…

    …We all get smashed. Here’s how exchange traded funds caused the fallout in commodities.

    IN early May 2011, when commodity prices fell sharply after a long parabolic ascent, the trading world wagged its finger at the futures exchanges — the Chicago Mercantile Exchange (Cme) and Nymex, and so forth. Many of the investors who took losses in the pullback of silver, gold, and crude oil claimed that margin increases were to blame for the selloff. Nothing could be farther from the truth! The real cause of that dramatic drop in commodity prices happened back in 2004, when the first exchange traded fund (Etf) on a commodity was introduced.

    Etfs are a hybrid financial product that tracks an underlying securitized commodity, whether it’s crude oil, natural gas, silver, or gold. Part equity and part commodity contract, these products were designed as a convenient, low-cost way for traders to exploit the advantages of commodity markets without ever having to fully understand them. (For the sake of full disclosure, I sat on the board of the Cme from 1996 to 2002, a period during which many of these products were created.) Etfs have exploded in popularity in the last few years and are traded widely by people interested in commodities but accustomed to stocks. In fact, if you ask someone if he has a commodity in his portfolio and he says yes, chances are he really has an Etf that tracks that commodity.

    I’ve been trading one market that Etfs track, commodities futures, for nearly 29 years. I’m also a licensed futures broker. When I open an account with a client, the National Futures Association requires me to plainly spell out the risks involved in trading futures. I, for one, think this is a very good thing. It’s real money that people are investing, and they should have an understanding of the consequences in either direction. We never talk about exposing ourselves to the market without talking about exposing ourselves to downside protection.

    This is not so with commodity Etfs. Although their composition is primarily futures contracts, Etfs are sold as equities. Risk, leverage, liquidity, tax advantages, and other nuances of the futures markets are rarely presented to people investing in Etfs. Often, the Series 7 broker who sells an investor these products may not even understand everything that goes into and affects these products."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-82-80-81-at-the-close-by-h-jack-bouroudjian-21.gif"",""height"":""624"",""width"":""467""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-82-80-81-at-the-close-by-h-jack-bouroudjian-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-10-82-80-81-at-the-close-by-h-jack-bouroudjian-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov291idst1,d,"{""minimum-quantity"":""1"",""path"":""faarfr202"",""ysw-page-title"":""Stocks & Commodities V. 29:11 (10-14): Identifying Stops And Targets by Jeffrey Kaprelian"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-10-14-identifying-stops-and-targets-by-jeffrey-kaprelian-27.gif"",""height"":""180"",""width"":""139""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-10-14-identifying-stops-and-targets-by-jeffrey-kaprelian-28.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-10-14-identifying-stops-and-targets-by-jeffrey-kaprelian-29.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov291idst,d,"{""minimum-quantity"":""1"",""path"":""ch11n208"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:11 (10-14): Identifying Stops And Targets by Jeffrey Kaprelian"",""caption-linebreaks"":""Identifying Stops And Targets by Jeffrey Kaprelian

    How do you figure out where to place stops and targets? Try using support and resistance levels together with the average true range.

    AS a broker, I am often asked how to figure out where to place stops and targets. There are, of course, many different methods, ranging from not using them at all to using volatility-based figures. One of the most reliable is the use of support and resistance coupled with the average true range (Atr). I will demonstrate this principle using multiple time frames with two unrelated markets to show how truly universal it can be.

    First of all, we must define support and resistance. The most basic understanding of support is a level where prices fail to make new lows. The opposite — the failure to make new highs — is true for resistance. They can be thought of as floors and ceilings.

    SUPPORT AS STOP-LOSS

    Figure 1 is a weekly coffee chart. Once the market makes a double low (points 1 and 2), we can use that as a temporary level of support. Observe how the market retraces at points 3, 4, 5, and 6 before it moves away for good. Often, the exact level (56.234) at which the dotted line is drawn is inconsequential relative to any major price points — in this case, 56.000 — when setting a stop-loss.

    There is no guarantee that stop orders will be filled at the trader’s preferred price. Once the stop order has been triggered, it turns into a market order, which is then filled at the best possible price. The fill price may be higher or lower than the price specified by the stop order."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-10-14-identifying-stops-and-targets-by-jeffrey-kaprelian-22.gif"",""height"":""630"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-10-14-identifying-stops-and-targets-by-jeffrey-kaprelian-30.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-10-14-identifying-stops-and-targets-by-jeffrey-kaprelian-31.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov291fufo,d,"{""minimum-quantity"":""1"",""path"":""ch11n208"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:11 (15): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    PROFIT FROM INTERVENTION?

    Now more than ever, currency traders have been affected by government intervention. Is there a way to profit?\nThe term “intervention” is used to describe a scenario in which a person or entity interferes with a situation in an attempt to alter or hinder the natural development of circumstances. As far as some central banks are concerned, currency traders are not unlike some types of addicts; they find a substance or action that provides short-term gratification without regard to the big picture or the long-term effects of their actions."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-15-futures-for-you-by-carley-garner-21.gif"",""height"":""613"",""width"":""421""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-15-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-15-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov291thpe,d,"{""minimum-quantity"":""1"",""path"":""ch11n208"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:11 (16-22): Three Peaks And A Domed House by Ed Carlson, CMT"",""caption-linebreaks"":""Three Peaks And A Domed House by Ed Carlson, CMT

    Predicting and timing the tops of bull markets — both cyclical and secular — can be accomplished using this well-known pattern developed by George Lindsay.

    \nDespite 25 years of newsletters, the methods of George Lindsay have always been a bit of a mystery. Appearances on the television program Wall $treet Week With Louis Rukeyser in the 1980s, numerous references in The New York Times during the 1960s and 1970s, and 10 years of performance tracking by Stock Trader’s Almanac have not been enough to offset Lindsay’s failure to write a book describing his unique but prescient methodologies. Everything we know about his work is from the scattered collection of the remaining newsletters we were able to recover.

    THE PATTERN

    Probably the best-known concept Lindsay developed is the three peaks and a domed house (3PDh). A fairly simple yet powerful geometric pattern, the 3PDh formation has an admirable track record for both predicting and timing the tops of bull markets — both cyclical and secular. Many traders and analysts use this pattern in isolation, as it is often effective as a standalone forecasting tool.

    George Lindsay, however, saw this model as a tool to be integrated with his other, less-known models. We saw in April 2011 how using the 3PDh pattern in isolation caused some grief among traders when many using the pattern saw it pointing to a final top to the March 2009 bull market. If those traders had been aware of how the 3PDh formation fit into Lindsay’s other models, they would not have made that mistake, as any April target date they had derived from the model had clearly been eliminated by those other models."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-16-22-three-peaks-and-a-domed-house-by-ed-carlson-cmt-20.gif"",""height"":""615"",""width"":""446""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-16-22-three-peaks-and-a-domed-house-by-ed-carlson-cmt-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-16-22-three-peaks-and-a-domed-house-by-ed-carlson-cmt-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov292eibe1,d,"{""minimum-quantity"":""1"",""path"":""faarfr202"",""ysw-page-title"":""Stocks & Commodities V. 29:11 (24-26): The Eight Best-Performing Candles By Thomas N. Bulkowski"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-24-26-the-eight-best-performing-candles-by-thomas-n-bulkowski-29.gif"",""height"":""180"",""width"":""133""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-24-26-the-eight-best-performing-candles-by-thomas-n-bulkowski-30.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-24-26-the-eight-best-performing-candles-by-thomas-n-bulkowski-31.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov292eibe,d,"{""minimum-quantity"":""1"",""path"":""ch11n208"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:11 (24-26): The Eight Best-Performing Candles By Thomas N. Bulkowski"",""caption-linebreaks"":""The Eight Best-Performing Candles By Thomas N. Bulkowski

    After removing rare candlesticks and combining reversal or continuation rates with performance after 10 days, surprising winners emerge.

    Those of you well versed in candlesticks will find this article surprising. It describes how single-line candles can lead to the best performance. In an earlier article, I discussed investment-grade candles, those that performed best as reversal or continuation patterns. In another article, I discussed candles that led to strong moves 10 days later. This article combines those two qualities and adds a third filter that removes rare candles to uncover the eight best-performing candles overall.

    DEFINITIONS AND METHODOLOGY

    Describing my testing methodology is necessary so everyone understands my measurement technique. I looked at more than 4.7 million price bars (candle lines) to identify and track 103 candle patterns. A close above the top of a candle represents an upward breakout. Similarly, a close below the bottom of the candle pattern is a downward breakout. That’s true of most candle patterns except for unusually tall ones, such as eight or 13 new price lines, where I used the last price bar upon which to conduct the up or down breakout test.

    If price entered the candlestick from the bottom but exited out the top, it acted as a continuation. Similarly, if it exited in the same direction that it entered (entering from above and exiting upward, for example), the candle acted as a reversal.

    To exclude rare candles, I ranked the frequency of each candle found in the same database (500 stocks of 10 years’ duration). I split the frequency rank in half and threw out the rare ones (the rare half).

    To find which candles had the best overall performance, I started with the plentiful candles, measured and ranked the reversal or continuation rates, added a rank for the price move after 10 days, and ranked the result. The idea was to find candles that performed best as reversal or continuation patterns, trended far enough in the breakout direction to make money, and appeared often enough to be identified. Here, I describe the top two candles in each category.



    "",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-24-26-the-eight-best-performing-candles-by-thomas-n-bulkowski-23.gif"",""height"":""616"",""width"":""454""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-24-26-the-eight-best-performing-candles-by-thomas-n-bulkowski-27.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-24-26-the-eight-best-performing-candles-by-thomas-n-bulkowski-28.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov292spmo,d,"{""minimum-quantity"":""1"",""path"":""ch11n208"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:11 (28-32): Spotting Momentum Reversals And Deriving Price Forecasts"",""caption-linebreaks"":""Spotting Momentum Reversals And Deriving Price Forecasts

    Spotting a reversal in the current momentum of the market and forecasting its price movement is every trader’s objective. Here’s a look at the X-sequentials X7 pattern, a technique that has been applied to the Dax futures, Nasdaq 100, and mini–crude oil contracts.

    Daily financial market transactions based on news, fundamental data, and emotional decisions are reflected in prices as momentum. Momentum has direction and magnitude and can be seen on a chart in the form of uptrends, downtrends, countermoves, and trading ranges. The nice thing is that when you can identify a reversal in the current momentum of the market, there is a method with which you can derive price forecasts. Here’s how you can spot a reversal in the current momentum of the market and derive a forecast by applying the X-sequentials X7 pattern, forecasts based upon measured momentum reversals.

    THE X-SEQUENTIALS X7 PATTERN

    To apply the X-sequentials analysis, you need to use a bar chart with swing lows and swing highs identified. These swing highs and lows will enable you to draw the two lines necessary to apply the X7 pattern. These two lines are the base line and price line.

    To locate an X-sequentials X7 pattern, first you have to sum up seven market moves. This will allow you to draw the base line. The base line is mandatory to locate the primary characteristic of this pattern: the momentum reversal. The diagram in Figure 1 describes the principle of a bearish X-sequentials momentum reversal."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-28-32-spotting-momentum-reversals-and-deriving-price-forecasts-21.gif"",""height"":""624"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-28-32-spotting-momentum-reversals-and-deriving-price-forecasts-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-28-32-spotting-momentum-reversals-and-deriving-price-forecasts-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov293exyo1,d,"{""minimum-quantity"":""1"",""path"":""ch11n208"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:11 (33): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    INTRINSICALLY BETTER?

    Which is considered better to own, intrinsic or extrinsic premium?

    That’s a broad question with no absolute answer, though some may suggest that traders refrain from owning extrinsic premium. As option traders, we should recognize that all extrinsic or time value eventually drops to zero. At expiration, all that’s left is real intrinsic value or the option has no worth whatsoever.

    More important, having contract value left in the form of intrinsic premium at expiration isn’t the same as making a guaranteed profit. The reality is, you can buy 100% intrinsic value of, say, $5.00 in a deep call or put contract and end up with intrinsic value of $1.00 at expiration, or maybe nothing at all if the contract goes completely out-of-the money."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-33-explore-your-options-by-tom-gentile-20.gif"",""height"":""613"",""width"":""419""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-33-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-33-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov293copu,d,"{""minimum-quantity"":""1"",""path"":""ch11n208"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:11 (34-40): Constructing The Put/Call Ratio Indicator by Sylvain Vervoort"",""caption-linebreaks"":""Constructing The Put/Call Ratio Indicator by Sylvain Vervoort

    In this, the second part of the series, we will build a put/call ratio indicator that can help you recognize the six phases of a price cycle discussed in part 1.

    Can the put/call ratio and open interest be used to build a leading indicator to predict the next index move? I think it can. In the first part of this series, I defined the put/call ratio and delineated the cyclical phases that this indicator goes through. This time, starting from the raw put/call ratio data I used in Figure 1, I will construct a put/call ratio indicator (Pcri) that will help you recognize the six phases of a price cycle I wrote about in part 1. I will first create a fast indicator, and then I will create a slow one that can be projected over the fast one. That way, there will be a short-term view and a medium-term view that could change the way you see things.

    FAST PCRI

    To begin with, I must collect the data from the Cboe website and paste it into a new tradable that I will call “Pceq,” referring to the put/call ratio of equities. Make a particular note of the name of the folder this new equity is located.

    From part 1, you may remember that if the put/call ratio varies from 10% calls and 100% puts and vice versa, there is a scaling problem using a linear scale. However, looking at the real put/call ratio data, you will see that this information stays within a value of 0.45 to 0.9 about 99% of the time. So this does not cause much of a problem. However, to avoid those few extremes that could influence the end result, I limit the put/call ratio value from 0.45 up to 0.90 with the following MetaStock statement after reading in the “Pceq” put/call ratio data:

    PCratio:=Security(“C:\\equis\\data\\specials\\PCEQ”,C);\nPC:=If(PCratio>.9,.9,If(PCratio<.45,.45,PCratio));

    You will need to adapt the “PCratio” programming line with your drive, folder, and name settings used in your system.\nThe first smoothing with almost no delay that I apply is with a short-term triple exponential moving average (Tema). I use a five-day average as the default.

    temav:=Input(“TEMA average on PC ratio”, 1,100,5);\nPCtema:=Tema(PC,temav);"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-34-40-constructing-the-put-call-ratio-indicator-by-sylvain-vervoort-21.gif"",""height"":""616"",""width"":""432""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-34-40-constructing-the-put-call-ratio-indicator-by-sylvain-vervoort-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-34-40-constructing-the-put-call-ratio-indicator-by-sylvain-vervoort-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294qaby3,d,"{""minimum-quantity"":""1"",""path"":""ch11n208"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:11 (41): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    HARD TO BORROW?

    I have been trading for about six years. I just now have been able to short stocks, and don’t understand a couple of things. Sometimes when I try to sell short by placing the order at the bid price, I get an error message that says “Hard to borrow” or “Contact order desk.” It is my understanding there are no longer short-sale rules, something like uptick rules. Why would I care about something being “hard to borrow”? What does that even mean? Thank you for your years of giving advice at Stocks & Commodities, I really appreciate it. — gatortrader

    Thanks for the kind words! First, for decades we had the uptick rule to consider when selling shares we don’t already own (selling short). This means that we must sell the stock at the offer, or at the last price increase versus hitting bids, thus risking running the stock price down."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-41-q-a-by-don-bright-20.gif"",""height"":""613"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-41-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-41-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294lawi,d,"{""minimum-quantity"":""1"",""path"":""ch11n208"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:11 (42-47): Larry Williams And The Art Of Short-Term Trading by J. Gopalakrishnan and B. Faber"",""caption-linebreaks"":""Larry Williams And The Art Of Short-Term Trading by J. Gopalakrishnan and B. Faber

    Larry Williams has taught thousands to trade the markets, won many trading championships, and has been the only futures trader in the world to repeatedly trade $1 million of his own money live at seminars around the globe.

    Williams began following the markets in 1962 when the market suffered a severe fall. He discovered that if you had been short the market right at that point, you could have made millions. He also found out that he could make $100 a day trading the markets, whether the market was going up or down, and with that, he was smitten. To a 20-year-old college kid, $100 bought a lot of beer and pizza! By 1965 Williams was actively trading the markets and began writing newsletters as well. It wasn’t long before he began producing ground-breaking market research. In 1966 he developed his famous timing tool, the Williams’ %R, a tool that is still published in major financial newspapers and that is a standard indicator provided on trading websites from Msn’s Money Central to Yahoo.

    In 1970 Williams’s first investment book, The Secret Of Selecting Stocks, was published, followed up with the first book ever on the seasonality of stocks and futures, Sure Thing Commodity Trading: How Seasonal Factors Influence Commodity Prices.

    He spoke with Stocks & Commodities Editor Jayanthi Gopalakrishnan and Staff Writer Bruce Faber on August 22, 2011, via a telephone interview.

    Larry, how did you get interested in trading?

    It all began in 1962. What captured my attention was that the stock market crashed, just like it did recently. President Kennedy had lowered steel prices in 1962 and maybe that was the reason. It was the worst decline in years. Of course, it was on the front page of all the newspapers.

    I was in college at the time and did not know anything about stocks, so I asked what that meant. I was told, basically, that I could have made a lot of money in one day if I had known about the crash beforehand. The idea of making a lot of money in one day really appealed to me.

    What happened between then and when you were trading futures in a big way? How did you go from “that sounds like a good thing” to being a big trader? What was the progression?

    (Laughing) Oh yeah, I traded one day and then I made millions.

    Yeah, that’s what we thought.

    Not quite. I started following the markets, asking, “What is this?” I have a degree in journalism. I started as an art major in college. I was totally clueless about this stuff. But my art background was great because I could see all these patterns and relationships. I could look at charts and see things that others would not. The first book I ever read about the markets was by Joe Granville, whom I think of as such a hero. I don’t agree with him on a lot of things, but he made some major contributions. He taught us so much about so many things. After reading his book I started trading stocks.

    I didn’t know anything about futures. That was the farthest thing from my mind. By 1966 I was trading stocks and had a bit of luck. A broker said to me, “You are doing great at this. Why don’t you trade commodities?” I said, “Isn’t that risky?” He explained that pork bellies don’t have as large a percentage move as, say, utilities do. The problem is that to buy a utilities stock you have to put up 60% of margin, but to buy pork bellies you have to put up about 5%. So it is how much money you put up that makes it risky. Most commodity traders want to put up the bare minimum. That means they get knocked off the horse all the time because they are not capitalized for this. So he told me if I capitalized the trade correctly, with my trading skills, I should be okay.

    And back then, the big thing was to make a $5,000 trade in stocks. Your commission would be maybe $650–700, and a similar trade in commodities was about $40. Commissions were really high in stocks, so I thought I would give commodities a try. I did, and the rest is history."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-42-47-larry-williams-and-the-art-of-short-term-trading-by-j-gopalakrishnan-and-b-faber-23.gif"",""height"":""624"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-42-47-larry-williams-and-the-art-of-short-term-trading-by-j-gopalakrishnan-and-b-faber-27.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-42-47-larry-williams-and-the-art-of-short-term-trading-by-j-gopalakrishnan-and-b-faber-28.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294lawi1,d,"{""minimum-quantity"":""1"",""path"":""faarfr202"",""ysw-page-title"":""Stocks & Commodities V. 29:11 (42-47): Larry Williams And The Art Of Short-Term Trading by J. Gopalakrishnan and B. Faber"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-42-47-larry-williams-and-the-art-of-short-term-trading-by-j-gopalakrishnan-and-b-faber-29.gif"",""height"":""180"",""width"":""140""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-42-47-larry-williams-and-the-art-of-short-term-trading-by-j-gopalakrishnan-and-b-faber-30.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-42-47-larry-williams-and-the-art-of-short-term-trading-by-j-gopalakrishnan-and-b-faber-31.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294prre1,d,"{""minimum-quantity"":""1"",""path"":""ch11n208"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:11 (48-51): Product Review: Japanese Candle Pattern Recognition by Dennis D. Peterson"",""caption-linebreaks"":""Product Review: Japanese Candle Pattern Recognition by Dennis D. Peterson

    Japanese Candle Pattern Recognition (Jcpr) is a MetaStock plug-in developed under the guidance of technician Greg Morris. I first encountered Morris’s work when I started reading his book Candlestick Charting Explained. It had all the usual images of candlestick patterns, but it also had tables that gave statistics on reliability and frequency of occurrence for each of the patterns. It also held some surprising facts: you shouldn’t expect the predictive capability of a pattern to be more than a week. In other words, candlestick patterns are relatively short-lived. The book stood out as an extremely insightful narrative. But that was his first book, and it was superseded by later editions, the third published in 2006, and it is this later work that has data more relevant to this plug-in.

    If you listen to Morris’s webinar for this plug-in, you will be struck by his thoroughness about the topic. What impressed me was his diligence in tracking down the patterns to create statistics. He is the chief technical analyst and chairman of the investment committee for Stadion Money Management and manages $7 billion in assets. Greg Morris is someone you want to listen to, and this product incorporates many of his principles. It was in development for a year and half.

    OVERVIEW

    Morris provides some background information in his webinar, which is repeated to some extent in the manual that comes with the CD. When referring to periods here, my review will almost always use days, and while it can be argued that the software allows a full range of periods, Greg Morris makes a convincing argument that candlestick pattern analysis is based on days."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-48-51-product-review-japanese-candle-pattern-recognition-by-dennis-d-peterson-20.gif"",""height"":""624"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-48-51-product-review-japanese-candle-pattern-recognition-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-48-51-product-review-japanese-candle-pattern-recognition-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov295prre13,d,"{""minimum-quantity"":""1"",""path"":""ch11n208"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:11 (52-55): Product Review: Adaptrade Builder 1.2 by Donald W. Pendegast Jr."",""caption-linebreaks"":""Product Review: Adaptrade Builder 1.2 by Donald W. Pendegast Jr.

    IF you’ve been using TradeStation as a trading system development platform for a while and found yourself wondering how to expand your EasyLanguage (EL) skill sets in order to begin coding your own custom EL scripts, then you’ve probably considered using the services of an experienced EL programmer. While this can be a great way to have a trading system built for you in a short length of time, if the trading idea upon which the system is built is based on a flawed concept, then you’ve wasted your time and money in what amounts to a hit-or-miss approach to finding and profiting from a well-designed trading system.

    However, there is another, less grueling pathway that aspiring developers can choose to travel, and that is Adaptrade’s Builder, a standalone product for writing EasyLanguage. Builder assists with virtually every phase of crafting, testing, and then deploying trading models for Trade­Station and MultiCharts, automatically writing the complete EL code for your desired strategy, no matter which market you may trade. In this review, we’ll examine the key features of Builder and then take it a step farther by creating a viable trading strategy that can be tweaked by readers who wish to do additional research and development work.

    \nOVERVIEW

    Once you pay for and download the software from the Adaptrade website (there is also a free 14-day trial period), you’ll have access to a full array of training resources and user guides, all of which are written in simple, clearly defined terms that even a budding system developer can grasp."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-52-55-product-review-adaptrade-builder-1-2-by-donald-w-pendegast-jr-20.gif"",""height"":""624"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-52-55-product-review-adaptrade-builder-1-2-by-donald-w-pendegast-jr-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-52-55-product-review-adaptrade-builder-1-2-by-donald-w-pendegast-jr-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov29679tr,d,"{""minimum-quantity"":""1"",""path"":""ch11n208"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:11 (62-70, 79): Traders' Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders' Tips by Technical Analysis, Inc.

    For this month’s Traders’ Tips, the focus is mainly Sylvain Vervoort’s article in this issue, “Constructing The Put/Call Ratio Indicator.”

    Code for MetaStock for the put/call ratio indicators is already provided in Vervoort’s article. Subscribers will also find the same code at the Subscriber’s Area of our website, www.Traders.com. Presented here is an overview of possible implementations for other software.

    Traders’ Tips are provided to help the reader implement a selected technique from an article in this issue. The entries are contributed by various software developers or programmers for software that is capable of customization.

    Provided here is some discussion of the technique’s implementation by the Traders’ Tips contributors as well as some example charts. Readers will find all the code listings that accompany the following Traders’ Tips at our website, Traders.com.

    To locate Traders’ Tips at our website, click on the Traders’ Tips link from our home page at Traders.com. For past Traders’ Tips, scroll down for earlier contributions, or click on “Article archive,” or use our site’s search engine."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-62-70-79-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""613"",""width"":""426""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-62-70-79-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-62-70-79-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov297bofo10,d,"{""minimum-quantity"":""1"",""path"":""ch11n208"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:11 (77): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    • The Big Secret For The Small Investor: A New Route To Long-Term Investment Success

    • George Lindsay And The Art Of Technical Analysis: Trading Systems Of A Market Master

    • Guppy Trading: Essential Methods For Modern Trading

    • The Little Green Book On The Stock Market: Turning Market Noise Into Financial Music

    • Mind Power: Thought Techniques For High-Powered Trading

    • The Trading Book: A Complete Solution To Mastering Technical Systems And Trading Psychology"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-77-books-for-traders-by-technical-analysis-inc-21.gif"",""height"":""604"",""width"":""408""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-77-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-77-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov298leto6,d,"{""minimum-quantity"":""1"",""path"":""ch11n208"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:11 (8): Letters to S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters to S&C by Technical Analysis, Inc.

    THEISS ARTICLES

    Editor,

    Thank you for Jamie Theiss’ articles in the May 2011 and August 2011 issues of Stocks & Commodities (“Gap Fill And Go” and “The V-Bottom Buy Setup”). I have put the ideas from both articles to good use since May of this year.\nI’ve been trading Sds (Proshares Ultra Short S&P 500 Etf) as the market has declined (gap fill). I recently flipped to Sso (Proshares Ultra S&P 500 Etf) (V-bottom).

    I was recently rereading Theiss’ V-bottom article and found solace in his words: “So man up and take the stop if necessary and get ready for the second setup, which will come at a much lower price.”

    I look forward to reading future articles by Jamie Theiss in S&C.

    Craig

    MULTIYEAR SUBSCRIPTIONS\nEditor,\nI am very happy to find that you now offer a complete digital package. My subscription is valid until the April 2012 issue; however, to avail myself of your current subscription offer, I plan to renew before January 1, 2012. I would be delighted to get a multiple-year subscription if you can offer that. Previously, I had a five-year subscription.\nRajat

    Up until December 31, 2011, readers can subscribe at our current rate for as many years as they choose. After January 1, 2012, subscription rates will go up to $89.95 per year, since subscriptions now include access to an impressive 29-year article archive. Subscribers will be getting much more for their money.—Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-8-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""612"",""width"":""438""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-8-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-8-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov29880co,d,"{""minimum-quantity"":""1"",""path"":""ch11n208"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:11 (82, 80-81): Coach Yourself To Trading Success by Jamie Theiss"",""caption-linebreaks"":""Coach Yourself To Trading Success by Jamie Theiss

    Be your own trading coach!

    I never quite understood the concept of a trading coach. For one thing, I could never afford a top-of-the-line one, so I just bought their products and had to be satisfied with that. And I’ve been hesitant to hire a lesser-known one ever since I overheard one say at a forex conference that they had recently blown out their personal trading account and was looking to pick up some coaching clients so they could replenish their trading funds.

    At the other end of the spectrum are those accomplished traders who generously give their time and insights to help newbies become better traders. They may be trading room moderators or other senior traders who want to give back but have no desire to become full-time trading coaches. They wouldn’t want to take the pay cut!

    YOUR TRADING PLAN

    So using the guidance of accomplished traders, what I’ve tried to develop is a method to coach yourself using your own written trading plan as your guiding force. You do have a written trading plan, don’t you? Unfortunately, most traders do not. And if they do have something written down, it is probably nothing much, meaning someone else couldn’t take the plan and execute a trade according to the author’s desires. Or maybe the plan sits in a drawer unused. Most traders have heard they need to have a written trading plan, so they will write something down, maybe some market theories and generalities, and call it a trading plan so they can say they have one if asked."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-82-80-81-coach-yourself-to-trading-success-by-jamie-theiss-21.gif"",""height"":""616"",""width"":""449""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-82-80-81-coach-yourself-to-trading-success-by-jamie-theiss-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-11-82-80-81-coach-yourself-to-trading-success-by-jamie-theiss-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov291rawa,d,"{""minimum-quantity"":""1"",""path"":""ch12d207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:12 (10-16): The Random Walk Revealed by Ron Davis"",""caption-linebreaks"":""The Random Walk Revealed by Ron Davis

    Most indicators are correlated to the cyclical movements of the market. Here is an indicator that can identify trends without considering where in the cycle the market is located.

    Nearly all technical indicators depend upon the ever-changing cyclic content of the market to generate information. When the indicator is synchronized with the current market cycle, the signals are timely. If the indicator is misaligned, however, the signals will be out of phase and thus useless. When it was first proposed, the random walk index was an attempt to generate cycle-free trend identification. Here’s a look at what the random walk really is, how it fits with other indicators, and an expanded trading diary to show how it works.

    BACKGROUND

    In the early 1990s, E. Michael Poulos wrote a series of articles for Stocks & Commodities in which he introduced the random walk index. The concept was borrowed from the probability theorist and teacher William Feller, wherein it was referred to as a “drunkard’s walk.” In his honor, I will refer to my material thus.

    Feller posed the question, “If a drunk leaves the lamp post he is leaning against, how far would he have gone, on average, after n steps?” The answer is he would have gone the square root of n multiplied by the average length of his stride:

    √n * Average length of stride

    Using this solution, Poulos constructed his random walk index by creating an up walk and a down walk, then comparing them against each other and with a random walk.

    The up walk is constructed by subtracting the lowest price of the last n periods from the current high. Let’s call that “up distance.” Count the number of periods from that low point to now. Call that k."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-10-16-the-random-walk-revealed-by-ron-davis-20.gif"",""height"":""610"",""width"":""428""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-10-16-the-random-walk-revealed-by-ron-davis-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-10-16-the-random-walk-revealed-by-ron-davis-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov291cast,d,"{""minimum-quantity"":""1"",""path"":""ch12d207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:12 (18-25): Categorizing Stocks By Price And Volume Action by John Boik"",""caption-linebreaks"":""Categorizing Stocks By Price And Volume Action by John Boik

    By analyzing certain strengths and weaknesses, you can get a better handle on how stocks trade.

    Cause equals effect, therefore volume equals price. The concept seems simple enough in context. But trying to make headway of all the price movements of stocks can become a daunting task. One way to get a better grip on your watchlists and holdings is to categorize them based on simple price and volume action coupled with support and resistance areas. Stocks throughout market history have acted in similar ways due to the human element involved. Thus, a time-tested solution to get a better handle on how stocks trade is to analyze certain strength and weakness areas.

    MOVING AVERAGES

    Many traders and technical analysts use simple moving averages, which smooth out a stock’s price over a specified period of time. These act as either support (during rising prices) or resistance (during declining prices). Two of the most common are the 50-day and 200-day moving average (MA) lines. Other short-term lines that are often used are the 21-day and 10-day lines. Since the 50-day and 200-day lines are so frequently used, action around those areas can prompt some traders to decipher possible future price action (though, of course, nothing is certain in the markets).

    During bullish or uptrending markets, the 50-day MA line has historically acted as a support area for the best price performers. The shorter-term 21-day line has been a support area for the real stock price performers, as they seem to use that time frame (a month of trading activity) as a floor while prices keep rising. Just the opposite tends to occur in downtrending markets. The 50-day line can turn into resistance as a stock’s price keeps falling.

    The 200-day MA line also has history on its side as far as repetitive behavior is concerned. Many times, when a stock breaks below the 200-day line and/or the 50-day line crosses under the 200-day line (forming what is referred to as a “black cross”), prices generally continue to decline, especially if the overall trend of the market is down. In addition, many of the best price leaders throughout history have used the 200-day line as a bottom as they go on to build constructive basing patterns.

    "",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-18-25-categorizing-stocks-by-price-and-volume-action-by-john-boik-20.gif"",""height"":""615"",""width"":""448""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-18-25-categorizing-stocks-by-price-and-volume-action-by-john-boik-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-18-25-categorizing-stocks-by-price-and-volume-action-by-john-boik-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov292adz,d,"{""minimum-quantity"":""1"",""path"":""ch12d207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:12 (26-32): The Adjustable-Bands Z-Test"",""caption-linebreaks"":""The Adjustable-Bands Z-Test

    Markets generally trend or move in a range. If you apply a trending algorithm to a ranging market, you will end up with whipsaws that yield losses. This indicator can help you avoid some of those false entry whipsaws and capture a new trend early.

    Some traders depend entirely on technical analysis and mechanical technical trading systems, mainly because algorithmic technical trading systems can be backtested and examined to see if they have a statistical edge. Here’s a look at quantitative technical analysis on the historical prices of Malaysian futures markets, namely the Kuala Lumpur Composite Index Futures (Fkli) and crude palm oil futures (Fcpo), using popular technical indicators like moving averages, adaptive moving averages, and z-test statistics.

    This article follows my March 2006 Stocks & Commodities article titled “Trading Trends With The Bollinger Bands Z-Test.” The idea of the z-test is derived, in turn, from a 2002 Working-Money.com article by Veronique Valcu. The Bollinger Bands z-test (Bbz) uses the concept of z-test statistics to determine where the current price is in relation to the moving average and standard deviation. The formula is:

    Z-test statistic =

    If the z-test statistic is above 1, the current price is above the upper one standard deviation band. Bbz issues a buy long signal. If the z-test is below ‑1, then the current price is below the lower standard deviation band, at which point Bbz issues a sell short signal. The area enclosed by the bands is deemed to be range trading, which is a no-trade zone for Bbz. This is to avoid some of the range-trading whipsaws. Bbz uses the conventional 21-day moving average and standard deviation."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-26-32-the-adjustable-bands-z-test-20.gif"",""height"":""616"",""width"":""439""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-26-32-the-adjustable-bands-z-test-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-26-32-the-adjustable-bands-z-test-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov293datr,d,"{""minimum-quantity"":""1"",""path"":""ch12d207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:12 (34-39): Data-Driven Trading by Steve Palmquist"",""caption-linebreaks"":""Data-Driven Trading by Steve Palmquist

    There are three keys to long-term trading success: knowing what to trade, knowing when to trade, and the ability to vary trading style with market conditions. Here’s how you can select the most appropriate tools for trading the markets.

    hile speaking at a recent trading conference, I asked the audience two questions. The first was, “How many of you think the market will be up or down by the end of the year?” About half the attendees thought the market would be up by the end of the year, and about a quarter thought the market would be down. The second question was, “How many of you do not care whether the market is up or down by the end of the year?” In the entire room only about three people raised their hands. I knew these were likely to be the successful traders in the room.

    ADAPTING TO THE MARKET

    Successful traders have a toolbox of well-tested techniques for use in bullish, bearish, and trading range markets. Based on previous testing and analysis of each of their tools, they know which ones to be using in the current market environment. Whether the market is going up or down does not matter to them; they have learned to adapt to the market because they understand the market will not adapt to them. This is why successful traders have different tools for different market conditions and switch among them based on what the market is doing. If the market direction is important, it is usually a signal that the trader is using the “hold & hope” approach rather than adapting to the market.

    Hope is not a trading strategy. Failing to adapt to the market as it alternates between bullish and bearish modes will give traders practice at exercising stops."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-34-39-data-driven-trading-by-steve-palmquist-20.gif"",""height"":""624"",""width"":""458""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-34-39-data-driven-trading-by-steve-palmquist-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-34-39-data-driven-trading-by-steve-palmquist-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294appu,d,"{""minimum-quantity"":""1"",""path"":""ch12d207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:12 (40-46): Applying The Put/Call Ratio Indicator"",""caption-linebreaks"":""Applying The Put/Call Ratio Indicator

    In this third part of the series, you will find a trading method based on using the three put/call ratio indicators introduced in part 2.

    Can the put/call ratio and open interest be used to build a leading indicator? Yes, it can. In part 1, I defined the put/call ratio. In the second part of this three-part series, I discussed how you can create the put/call ratio indicator (Pcri). Now, here’s how you can apply the three put/call ratio indicators.

    Figure 1 shows my charting template for trading based on the put/call ratio indicators. The window at the top holds the Standard & Poor’s 500 daily data with three simple moving averages: 50 days (blue), 100 days (red dashed), and 200 days (red). These are typical averages useful as dynamic support and resistance levels. For the shorter-term dynamic support and resistance, I am using standard 20-period Bollinger Bands. Finally, I will be using support and resistance levels and trendlines in this window to look for line breaks.

    The second and third windows display the fast and slow put/call ratio indicator and the inverse Fisher transform of the slow Pcri. These were discussed in the first and second parts of this series. In the fourth window, I use a standard stochastic 30-period oscillator with a five-day slowdown. In the same window you can see a smoothed inverse Fisher transform stochastic. This will help you stay in a trade or ultimately get you out of one if other signals fail.

    THE SMOOTHED INVERSE FISHER TRANSFORM STOCHASTIC OSCILLATOR

    You can find out all about the put/call ratio indicators in the second article of this series. But before starting on the trading examples, I have to discuss the inverse Fisher transform stochastic oscillator (SVE_Stoch_IFT) used in the lower window of the template. Basic information about the inverse Fisher transform can be found in my article about the relative strength index (Rsi) inverse Fisher transform published in the October 2010 issue of Stocks & Commodities."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-40-46-applying-the-put-call-ratio-indicator-22.gif"",""height"":""611"",""width"":""431""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-40-46-applying-the-put-call-ratio-indicator-27.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-40-46-applying-the-put-call-ratio-indicator-28.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294appu1,d,"{""minimum-quantity"":""1"",""path"":""faarfr202"",""ysw-page-title"":""Stocks & Commodities V. 29:12 (40-46): Applying The Put/Call Ratio Indicator"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-40-46-applying-the-put-call-ratio-indicator-29.gif"",""height"":""180"",""width"":""127""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-40-46-applying-the-put-call-ratio-indicator-30.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-40-46-applying-the-put-call-ratio-indicator-31.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294fufo1,d,"{""minimum-quantity"":""1"",""path"":""ch12d207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:12 (47): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    READING THE COT REPORT

    How do I read the CFTC’s Cot report and should I be following the commercial or speculator groups?

    You should be following the manner in which equity traders refer to Sec filings to determine the outlook of corporate officers in relation to their company stock. Commodity traders look to the Commitments of Traders (Cot) report for insight into who is buying and selling futures and options. The Cot report, which is released by the Commodity Futures Trading Commission (Cftc) at the end of each week, is a potentially valuable tool in determining market sentiment. Not only will this report reveal the level of bullishness or bearishness, but unlike other sentiment readings, it depicts traders actually putting their money where their mouths are!"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-47-futures-for-you-by-carley-garner-20.gif"",""height"":""608"",""width"":""422""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-47-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-47-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294intr1,d,"{""minimum-quantity"":""1"",""path"":""ch12d207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:12 (48-53): Interview: Trade Smart With Anne-Marie Baiynd by J. Gopalkrishnan and B. Faber"",""caption-linebreaks"":""Trade Smart With Anne-Marie Baiynd by J. Gopalkrishnan and B. Faber

    Anne-Marie Baiynd, who is author of The Trading Book and president and Ceo of TheTradingBook.com, focuses her successful trading system around the use of the Fibonacci and pattern recognition sequences in the market. Her rigorous trading systems combine the use of Bollinger Bands, the moving average convergence/divergence (Macd), and moving averages to create a simple, yet highly effective model, with greater than 78% accuracy, even in volatile markets.

    Baiynd has been a neuroscience researcher, corporate speaker, as well as trainer, VP of sales, and Ceo of a recruiting firm. She was introduced to technical trading in 2005, and began trading full time soon after. Currently, she divides her time between actively trading and guiding and mentoring individual traders. She advises proprietary traders, assists in individual and group behavioral reengineering, and runs a blog for day and swing traders through TheTradingBook.com.

    Baiynd’s book, The Trading Book, is on a solution to cementing the path to technical trading success. She has a bachelor’s degree in applied mathematics, and her master’s degree work includes statistics, biostatistics, and behavioral studies. She teaches her trading system online for Tradesmart University in the Tick by Tick program. She can be reached at annemarietrades@thetradingbook.com.

    S&C Editor Jayanthi Gopalakrishnan and Staff Writer Bruce Faber interviewed Anne-Marie Baiynd on October 5, 2011.

    Anne-Marie, how did you get interested in trading?\nI went to a Success magazine convention and while I was there I started talking to a guy about technical trading. I had been working in recruiting for close to 14 years, and I was burned out. I was fortunate enough to be in a financial state where I could afford to make a change, and that is how I was introduced to the markets. I liked the concept of technical trading because it is very mechanical and if you keep yourself focused — and by that I mean you’ve got to keep your mind on lockdown — and work within a rigid set of rules, you know you are going to be okay. The market is still going to slap you around a bit, but overall you are going to do okay.

    When I began trading I had a very tough time because I knew nothing about the markets. I made the mistake of beginning to trade with real money instead of paper trading. So after about 18 months of dismal failure I said to myself, “Hey, you are just going to have to figure this out, or you are going to be out of the game!” So I stopped live trading and began to paper trade, and started teaching myself about market rhythms.

    The only folks I learned anything from, really, were Brian Shannon and Peter Reznicek. From Shannon I learned about multiple time frames, and from Reznicek I learned about market internals, such as tick, breadth ratios, advancers and decliners, that sort of thing. Everything else I picked up on my own.

    My background in academics is mathematical, so I have a strong understanding of pattern recognition. Because I am self-taught, I see all these candlestick formations, and I’ll say, “Oh yeah, that’s a reversal.” Except it has a specific name, which I don’t know. My students end up telling me, “No, that is a breakaway gap.” I still have trouble with some of the names. I just look at the formations and say, “Okay, that looks familiar.”

    I’ve been trading almost seven years, and the time has flown by. I really love it. If you don’t love this business, it can beat you up so badly that you never want to go back. I meet a lot of retail traders who were in my shoes, in that they knew absolutely nothing about trading but really wanted to learn."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-48-53-interview-trade-smart-with-anne-marie-baiynd-by-j-gopalkrishnan-and-b-faber-20.gif"",""height"":""624"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-48-53-interview-trade-smart-with-anne-marie-baiynd-by-j-gopalkrishnan-and-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-48-53-interview-trade-smart-with-anne-marie-baiynd-by-j-gopalkrishnan-and-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov295exyo3,d,"{""minimum-quantity"":""1"",""path"":""ch12d207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:12 (54): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    PAYING THAT PAYOUT?

    If I purchase a protective put against a stock that’s set to pay a dividend, am I obliged to cover the dividend? What do I need to do in order to make sure I collect the payout?\nThe good news is that a holder of long stock protected by a long put doesn’t need to do anything in front of the ex-dividend date in order to receive the shareholder payout. The dividend is actually priced into the put in front of the event. If this weren’t the case, there would be the proverbial but unlikely free lunch on Wall Street available.

    Directionally speaking, as long as you like this position — which is called either a synthetic long call or married put and maintains long deltas — you’ll want to hold it through the ex-date, or forfeit the dividend and/or give up the position’s protection afforded by the put. To illustrate, we’ll use a dividend scenario with a stock called Xyz that trades for $100 and is set to go ex-dividend the next day with a quarterly payout of $5.00 per share."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-54-explore-your-options-by-tom-gentile-20.gif"",""height"":""613"",""width"":""420""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-54-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-54-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov295prre14,d,"{""minimum-quantity"":""1"",""path"":""ch12d207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:12 (56-59) Product Review: TradeStation 9 Walk Forward Optimizer by Donald W Pendergast Jr."",""caption-linebreaks"":""Product Review: TradeStation 9 Walk Forward Optimizer by Donald W Pendergast Jr.

    TradeStation is a company with instant name recognition in the world of system trading and development, real-time scanning, and market analysis. The company was one of the first system development/charting/scanning platform vendors to transform itself into an online stock, bond, option, and commodities broker, able to put the purchasing power of brokerage clients into direct integration with the array of system development, charting, and scanning powers in this flagship trading product.

    Given that there are an overwhelming number of tools, processes, and features available in TradeStation 9, this particular review is going to concentrate on one of the newest and most potent features in TradeStation — the Walk Forward Optimizer (Wfo), which analyzes how profitable and robust a given trading system is. I’ll begin by using one of my silver futures swing trading systems as the guinea pig for the testing, taking you through the process of taking a trading idea, and then optimizing it with the Wfo, on data it has not yet been exposed to. After we complete that task, we’ll take a look at the Wfo performance summary statistics for the system.

    FOUNDATION OF TRADING

    The basis for all the testing and analysis here is a silver swing system, sometimes holding a position from as little as a few minutes to as much as four days. The version of the system used in this review is meant to show how an already proven system can be fine-tuned and evaluated to help ensure that it remains profitable in the months and years to come."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-56-59-product-review-tradestation-9-walk-forward-optimizer-by-donald-w-pendergast-jr-20.gif"",""height"":""624"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-56-59-product-review-tradestation-9-walk-forward-optimizer-by-donald-w-pendergast-jr-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-56-59-product-review-tradestation-9-walk-forward-optimizer-by-donald-w-pendergast-jr-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov296prre4,d,"{""minimum-quantity"":""1"",""path"":""ch12d207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:12 (60-65): Product Review: ETFreplay.com by Leslie N. Masonson"",""caption-linebreaks"":""Product Review: ETFreplay.com by Leslie N. Masonson

    Etfreplay.com is an exceptional website that provides the analytical tools and backtesting capability for developing profitable exchange traded fund (Etf) trading and investing strategies. Currently, in the US there are more than 1,000 Etfs in existence with total assets exceeding $1 trillion. This website covers approximately 600 of the most active Etfs representing greater than 98% of the US daily trading volume. The bottom 600 Etfs in asset size constitute only 2% of all Etf assets.

    This site is independently owned and has no affiliation with any Etf family or brokerage firm. I’ve been using this website since December 2010 and I’ve been impressed with its capabilities, as well as the enhancements added since then. In addition, I used this website to develop two profitable Etf investing strategies that are the basis of my recently published ebook, Profiting From Etf Rotation Strategies In Turbulent Times.

    The website is well-suited for self-directed investors and traders who want to build and manage Etf portfolios for short-term trading and long-term investing for their regular brokerage and/or retirement accounts. The Etf data for the backtesting applications is updated nightly, usually by 5:15 PM Eastern time, providing sufficient time to assess the market situation for any potential portfolio changes before the next day’s market open. At the outset, it is useful to take a look at the overview and “About us” tabs to learn about the philosophy of the website and the rationale for using Etfs in an active investing mode. After that, the user should view the introductory video on the home page.

    The home page (Figure 1) lays out the website’s Etf focus using 11 tabs across the top of the page. In addition, there is a listing of the 10 most recent blog posts, as well as the year-to-date returns of the 10 top and bottom Etf performers."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-60-65-product-review-etfreplay-com-by-leslie-n-masonson-20.gif"",""height"":""604"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-60-65-product-review-etfreplay-com-by-leslie-n-masonson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-60-65-product-review-etfreplay-com-by-leslie-n-masonson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov296qaby2,d,"{""minimum-quantity"":""1"",""path"":""ch12d207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:12 (66): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    STOP ORDERS: A CONVERSATION

    Who are the “they” who can see stop orders? I read a lot of comments about how “they” run your stops. I’ve always been curious about the dynamics behind this belief. I understand there are certain key price levels at which a large collection of stop orders are likely to be sitting (stop-loss orders for countertrend traders and orders to initiate or add to positions for trend-followers), and a party desiring to execute a large order to sell into strength or buy into weakness would do well to take advantage of the liquidity offered by all those stop orders turning into market orders.— NoDoji

    DB: I suppose “they” would apply to the New York specialists for some of these orders. I say “some” because there are various ways to input stop orders. For hard stops on the Nyse, specialists are responsible, since they are subject to tight guidelines on how they execute and cannot summarily execute them at their own discretion."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-66-q-a-by-don-bright-20.gif"",""height"":""613"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-66-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-66-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov296quch,d,"{""minimum-quantity"":""1"",""path"":""ch12d207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:12 (67): Quick-Scan Chartcon 2011 by Summer Davis"",""caption-linebreaks"":""Quick-Scan Chartcon 2011 by Summer Davis

    ChartCon 2011 was the first-ever conference dedicated to StockCharts.com users. This three-day investment conference in late August offered in-depth training from StockCharts experts and created a sense of community with its 365 users in attendance. The attendees were primarily from the US but about 25% were from Canada, with ages ranging from 20-somethings on up to their 90s.

    The conference was divided into two parts: the basic two-day ChartCon conference, preceded by “StockCharts University,” an optional one-day technical analysis refresher course. StockCharts University focused on covering the basics of technical analysis including topics such as the different types of charts, chart patterns, trends, chart analysis techniques, line studies, and different indicators. Throughout the conference, company president and founder Chip Anderson and technicians John Murphy and Arthur Hill showed StockCharts users how the website worked and went into detail about how each of the tools could help users make better investing decisions."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-67-quick-scan-chartcon-2011-by-summer-davis-20.gif"",""height"":""609"",""width"":""419""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-67-quick-scan-chartcon-2011-by-summer-davis-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-67-quick-scan-chartcon-2011-by-summer-davis-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov29677tr,d,"{""minimum-quantity"":""1"",""path"":""ch12d207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:12 (68-71, 77): Traders' Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders' Tips by Technical Analysis, Inc.

    For this month’s Traders’ Tips, the focus is Sylvain Vervoort’s article in this issue, “Applying The Put/Call Ratio Indicator,” which is the final article in his three-part series.\nCode for MetaStock for the inverse Fisher transform stochastic oscillator is already provided by Vervoort in the sidebar to his article. Subscribers will also find the same code at the Subscriber Area of our website, www.Traders.com. Presented here is an overview of possible implementations for other software.

    Traders’ Tips are provided to help the reader implement a selected technique from an article in this issue. The entries are contributed by various software developers or programmers for software that is capable of customization.

    Readers will find all the code listings that accompany the following Traders’ Tips at our website, Traders.com. Provided here is some discussion of the technique’s implementation by the Traders’ Tips contributors as well as some example charts.

    To locate Traders’ Tips at our website, use our site’s search engine, or click on the Traders’ Tips link from our home page. For past Traders’ Tips, click on the “Archive” button in the S&C Magazine box in the middle of our home page, then click on a Traders’ Tips topic of interest, or click on a different year to see more choices."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-68-71-77-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""617"",""width"":""440""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-68-71-77-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-68-71-77-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov298leto7,d,"{""minimum-quantity"":""1"",""path"":""ch12d207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:12 (8): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    PROREALTIME.COM?

    Editor,

    In your Traders’ Tips section, you feature many providers, including eSig­nal, Ninja­Trader, Meta­Stock, and so on, and sometimes Micro­soft Excel as well. But you never mention ProRealTime, a provider of free end-of-day data that doesn’t need software installation (since the platform runs on Java). It gives users the ability to see their own charts on almost any computer connected to Internet.

    Succi Marcello\nNovellara, Italy

    Code in our Traders’ Tips section is supplied by industry software developers and vendors of the software featured. We could try contacting ProRealTime.com to see whether they would be interested in contributing to the Traders’ Tips section of this magazine. Thank you for your input.—Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-8-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""607"",""width"":""419""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-8-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-8-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov29881at1,d,"{""minimum-quantity"":""1"",""path"":""ch12d207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:12 (82, 81): At The Close: When Not To Trade by Danish Kapur"",""caption-linebreaks"":""At The Close: When Not To Trade by Danish Kapur

    Is waiting on the sidelines the ideal way to make a profit?

    There are so many different ways to analyze markets: technical, fundamental, and quantitative. But the essence of these methods is the underlying psychology of the market participants. The markets move more because of what investors think of various economic developments than what those developments actually are, and so it is worth understanding the behavior of price movements in order to make better investing decisions.

    MARKET NOISE

    Self-control is necessary in order to use any technical indicator. Markets are repetitive in nature, and patience and discipline are the qualities that most differentiate one investor from another.

    Sometimes we force ourselves to invest even when we’re not comfortable doing so because everyone else is doing it. The result often is a short-term satisfaction: We may be uneasy about investing, but we try to find comfort by thinking that our investments will grow over time. But often over the long term, we get caught on the wrong side of the market and end up feeling more pain than satisfaction. History tells us that it is always better to go through a small pain for a short period of time than get into a situation where the pain turns into a long-term, never-healing wound."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-82-81-at-the-close-when-not-to-trade-by-danish-kapur-20.gif"",""height"":""636"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-82-81-at-the-close-when-not-to-trade-by-danish-kapur-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-12-82-81-at-the-close-when-not-to-trade-by-danish-kapur-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov291ansu,d,"{""minimum-quantity"":""1"",""path"":""ch13bis201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:13 (12-16): Anchoring Support And Resistance by L.A. Little"",""caption-linebreaks"":""Anchoring Support And Resistance by L.A. Little

    Here’s how you can use support/resistance lines, swing points, and volume to anchor support and resistance zones.

    What does a horizontal support or resistance line mean to you? What gives it significance? Traditionally, the thought is that the number of highs or lows that happen to reside on the line is what gives the line strength. Coupled with that is the length of the line, so the longer the better.

    HOW STRONG ARE THE LINES?

    Figure 1 is a chart of the Semiconductor Holdrs Trust (SMH) for a one-year period. I’ve penciled in two lines, the higher of which is resistance. That line has six “touches,” but that depends on the thickness of your pencil lead. That is a lot of touches, and the length of the line is respectable, for it’s been in place for five months. But given these two measures, how can you assign a measure to the strength of the resistance line and have confidence in it? What if it were one year in length with double the touches? Does that make it twice as strong?

    Unlike the resistance line, the value of the annotated support line is unclear. It looked like support for the first four months of its existence with four or five touches, but in late August, prices took a serious dip below the line, rendering it essentially useless. Using the same valuation measures, if you didn’t know that the line would be violated in late August, wouldn’t the support line have been almost as strong as the resistance line above? It existed for almost the same duration and contained almost as many touches.

    What’s even worse is that the support line did turn out to be support in the end. Yes, prices dipped below the line, but they subsequently turned and traveled higher in a beeline fashion."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-13-12-16-anchoring-support-and-resistance-by-l-a-little-20.gif"",""height"":""637"",""width"":""466""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-13-12-16-anchoring-support-and-resistance-by-l-a-little-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-13-12-16-anchoring-support-and-resistance-by-l-a-little-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov291rech,d,"{""minimum-quantity"":""1"",""path"":""ch13bis201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:13 (18-32): Readers’ Choice Awards 2011 by Technical Analysis, Inc."",""caption-linebreaks"":""Readers’ Choice Awards 2011 by Technical Analysis, Inc.

    We are pleased to present the Technical Analysis of Stocks & Commodities magazine 2011 Readers’ Choice Awards (Rca). Each year, we put before our readers a ballot of products and services related to technical analysis and trading. The following pages present the products and services you and your peers chose this year as your favorites.

    The Readers’ Choice Awards begins each year with a list of products gathered by the editors of Stocks & Commodities, with space for write-in votes (given that our list doesn’t claim to be complete). Then, to find out what our readers find to be the most useful for their trading, we ask them to choose their favorite products or the ones they find most useful from various categories by going to our website, Traders.com, and filling out the survey there. After that, we compile the results, just in time for the Bonus Issue you hold in your hands.

    Products are categorized by their primary purpose. Just because a service or product is not listed does not necessarily mean that the product does not have features germane to the category. In addition, some categories are divided by cost so that the comparisons can be made on a more level playing field.

    The winners in the Readers’ Choice Awards are almost always the dominant players in their niche, and rightfully so. You may have special needs for your trading, however, so you should keep in mind those products that are not the big names in the category of your interest before you make your final decision. The Rca is designed to be an aid for you when you are deciding on which of the numerous products and services currently available to use for your trading and investing. With that in mind, we think you’ll find the Readers’ Choices a terrific guide to products and services that you’ll be interested in."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-13-18-32-readers-choice-awards-2011-by-technical-analysis-inc-20.gif"",""height"":""628"",""width"":""467""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-13-18-32-readers-choice-awards-2011-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-13-18-32-readers-choice-awards-2011-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov293resu,d,"{""minimum-quantity"":""1"",""path"":""ch13bis201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:13 (34-38): Reducing The Subjectivity Of Elliott Waves by Ian Copsey"",""caption-linebreaks"":""Reducing The Subjectivity Of Elliott Waves by Ian Copsey

    Is the identification of Elliott waves too subjective? This method can reduce the subjectivity and improve your ability to forecast.

    The Elliott wave theory appeals to some and not to others, that goes without saying. Some adhere to it strictly, while others play it by ear, not staying too close to the rules and just keeping an eye out for five-wave moves. If you have wondered if there’s something just a little bit off about the strategy, you may be right. It may be Ralph Elliott made a misjudgment in the impulsive wave structure.

    Through some work I was doing with the theory, I became aware of a “special wave A” move that Elliottician Robert Prechter noted in 1986 (Figure 1). A diagonal triangle wave development, which is normally associated with an extended wave 5, was occasionally seen in a wave A position. What I was facing, however, was a five-wave move that developed in a similar manner to a diagonal triangle, in which waves (i), (iii), and (v) all developed in three waves, not five. From this we could infer that any individual five-wave move could only develop in a wave A position or a wave C position. In the next higher degree, this Abc sequence formed one section of a larger five-wave sequence all constructed of three-waves.

    What I found was that everything fell flat if I applied a Fibonacci relationship to the standard count that would treat these as an example of an extending wave. When I used the three-wave structure for waves (i), (iii), and (v), however, the wave relationships turned out to be perfect. Adjusting the structure this way, I found projections and retracements began to be consistently accurate."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-13-34-38-reducing-the-subjectivity-of-elliott-waves-by-ian-copsey-20.gif"",""height"":""618"",""width"":""428""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-13-34-38-reducing-the-subjectivity-of-elliott-waves-by-ian-copsey-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-13-34-38-reducing-the-subjectivity-of-elliott-waves-by-ian-copsey-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294trco,d,"{""minimum-quantity"":""1"",""path"":""ch13bis201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:13 (40-43): Trading Commodities With Candlesticks by Stephen W. Bigalow"",""caption-linebreaks"":""Trading Commodities With Candlesticks by Stephen W. Bigalow

    Here’s a trading setup that will stop you from being shaken out of your positions, especially on longer-term time frames.

    by Stephen W. Bigalow

    The volatility of price movement in the commodities markets frightens off investors. Horror stories about accounts being wiped out in a flash are enough to make them think twice about venturing into unfamiliar territory. For those who do not want to take a lot of time and effort to learn how to invest in commodities correctly, the best advice is probably to stay away from them. But for the investor who is willing to take the time and effort to assemble the ideal trading program for themselves, commodity trading can be lucrative. Unfortunately, the road to successful commodity trading can involve gut-wrenching, emotionally debilitating learning processes. Few investors immediately have the knack to invest in commodities without suffering painful losses.

    FIRST, HAVE A SYSTEM

    Before you start trading, you must have a trading platform that has proven to be successful. Without an investment method that provides you with an advantage, you will just be shooting from the hip. There must be a reason for anticipating the price of a stock/commodity/currency to go up or down. Many investors start committing their funds to market exposure well before they have researched a trading program.

    Fortunately, candlestick analysis provides a trading method that works. It has proved to be a viable trading format over three centuries. The information incorporated into each individual signal has powerful implications. Analyzing a series of signals and establishing a pattern creates higher probabilities of being in the proper trades at the correct time.

    A major benefit of candlestick analysis provides a common-sense element for analyzing what is occurring between the bullish and bearish sentiments. The legendary Japanese rice traders who devised this technique incorporated elements of common human nature reactions into their analysis: panic selling at the bottom and exuberant buying at the top. Once you have learned how to utilize that information successfully, your trading abilities will improve, no matter what investment entity or time frame you trade. Candlestick signals work well in isolation, but adding confirming indicators make them work even better."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-13-40-43-trading-commodities-with-candlesticks-by-stephen-w-bigalow-20.gif"",""height"":""621"",""width"":""436""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-13-40-43-trading-commodities-with-candlesticks-by-stephen-w-bigalow-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-13-40-43-trading-commodities-with-candlesticks-by-stephen-w-bigalow-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov298trin,d,"{""minimum-quantity"":""1"",""path"":""ch13bis201"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:13 (8-11): Trend-Spotting In The Markets by Rick Martinelli"",""caption-linebreaks"":""Trend-Spotting In The Markets by Rick Martinelli

    Identifying the beginning and end of trends is a challenge that many traders face. This technique will help you determine when a trend begins and when it ends.

    Most stock market data can be thought of as combinations of trends of various lengths and directions, and cycles of various frequencies and durations. As a result, many techniques have been developed to discern when a particular stock is trending or cycling. Let me describe a simple approach to trend-spotting that is based on the idea that correlations in price differences translate into trends in prices.

    TRENDS AND CYCLES

    Consider exactly what constitutes a trend at the smallest level. If we assume the minimum number of consecutive prices required to spot a trend is three, there are four possible arrangements of three prices, as shown in Figure 1. In case A, prices show two successive increases and are in a short uptrend, a microtrend upward. Case B shows two successive decreases, so it is a downward microtrend. Cases C and D show no trend, but instead are interpreted as small portions of cycles, or microcycles.

    If values P1, P2, and P3 are assigned to the three consecutive prices, then in the first case, P2 > P1 and P3 > P2, while in the third case P2 > P1 but P3 < P2.\nSimilarly, the other two cases may be characterized by their corresponding price inequalities. But all of this information may be summarized instead by considering the price increments D1 = P2–P1 and D2 = P3–P2. Then for the first two trend cases, we see the product as D1*D2 > 0, while for the cycle cases D1*D2 < 0 — that is, the product of increments is positive for a trend! In addition, the value of the product gives a rough indication of the amount of price movement in the three points, the intensity of the microtrend.

    TRENDS AND CORRELATIONS

    Now consider a series of daily stock prices represented by x(k) for k = 1 to N, where N is the total number of days. Its series of price changes, known as its increment series, is

    z(k) = x(k) – x(k-1)

    Next, define a new series a(k) as the product of consecutive increments — that is,

    a(k) = z(k) z(k-1)"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-13-8-11-trend-spotting-in-the-markets-by-rick-martinelli-20.gif"",""height"":""628"",""width"":""466""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-13-8-11-trend-spotting-in-the-markets-by-rick-martinelli-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-13-8-11-trend-spotting-in-the-markets-by-rick-martinelli-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov291leto,d,"{""minimum-quantity"":""1"",""path"":""ch2f206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:2 (10-11,53): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    GOODMAN WAVE THEORY

    Editor,

    I read Duane Archer’s article in the December 2010 issue of Stocks & Commodities (“Goodman Wave Theory”) and couldn’t help but notice the similarities between the Goodman wave (Gwt) and AB=CD or Abc pattern. What are the significant differences between them and the advantages of one over the other? I recognize that the Gwt has a number of additional rules whereas the AB=CD pattern boils down to about three or four. I guess I’m wondering why I would go for a more complicated system unless it offers significant trading advantages over one I already use. Could you ask the author for his thoughts?

    L.A. Little

    Author Duane Archer replies:

    GWT is both a refinement and expansion of the old 50% measured move [AB=CD] rule.\nThe propagation principle is an expansion allowing the creation of several templates for forecasting. The intersection and 3-C rules are refinements for delimiting possibilities and zeroing in on legitimate trade candidates.\nThese are the three primary principles of Goodman wave theory, but there are quite a few more principles and rules. My article in the December 2010 issue was simply meant as an introduction.

    ERRATA: December 2010

    Traders’ Tips (MICROSOFT EXCEL)

    Editor,

    I was recently contacted by a reader who had been playing with the settings on the “TradingIndexesWithHullMA” spreadsheet that I contributed to the December 2010 Traders’ Tips column. The reader noticed there were buy and sell plot anomalies when he used settings that caused more frequent trades.

    I have found and fixed a problem in the formula controlling the active position (column AE). This necessitated changes to rebalance formulas in other columns in the “One Symbol Trading Model” area of the spreadsheet.

    Ron McAllister\nrpmac_xltt@sprynet.com

    The revised spreadsheet can be downloaded from the December 2010 Traders’ Tips area at Traders.com. —Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-10-11-53-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""621"",""width"":""436""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-10-11-53-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-10-11-53-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov291invs,d,"{""minimum-quantity"":""1"",""path"":""ch2f206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:2 (12-20): Investment VS Trading In Covered Call Writing by Jay Kaeppel"",""caption-linebreaks"":""Investment VS Trading In Covered Call Writing by Jay Kaeppel

    With the investment approach, shares of stock are viewed as rental property and calls are written to generate additional income from what is expected to be a longer-term stock investment. The trading approach involves executing buy/writes based on the possibility of generating a high annualized rate of return on a given stock/option combination. Which is better?

    \nIT can be argued that covered call writing is the second-most commonly used option trading strategy, trailing only straight call and put buying. This is not surprising, since many investors assert that covered call writing is tantamount to collecting free money. While this is not actually true, in order to understand why this belief persists, let’s first look at what constitutes a covered call.

    A covered call position simply involves buying and/or holding shares of stock and selling a call option against that stock position. For example, an investor might buy 100 shares of Ciena Corp. (Cien) for $14.04 a share and then sell a call option with a strike price of $14. When he sells the call option, the option seller is paid a premium by the option buyer. In return, the option seller agrees to sell his shares of stock to the option buyer at the strike price of $14 a share if called upon to do so. In this example, the option seller received a price of $0.78 for the option, or a premium of $78 (each stock option is for 100 shares of the underlying security). The amount of premium received will vary based on several factors, including:

    • The amount of time left until the option expires\n• The volatility of the underlying stock\n• The distance between the strike price and the current price of the stock."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-12-20-investment-vs-trading-in-covered-call-writing-by-jay-kaeppel-20.gif"",""height"":""620"",""width"":""435""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-12-20-investment-vs-trading-in-covered-call-writing-by-jay-kaeppel-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-12-20-investment-vs-trading-in-covered-call-writing-by-jay-kaeppel-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov292dogo,d,"{""minimum-quantity"":""1"",""path"":""ch2f206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:2 (22-26,67): Does Gold Still Have Room To Run? by Teresa Fernandez"",""caption-linebreaks"":""Does Gold Still Have Room To Run? by Teresa Fernandez

    The futures volume open interest indicator will tell you.

    Many investors are hesitant about investing in gold. Memories of the stratospheric and unexplained rise to the unchartered territory of the high $800s in January 1980, followed by several limit-down days, still haunt baby boomers, many of whom had never before witnessed such action in their entire investing lives. In three short months, gold plunged from its all-time high of $873 on January 21, 1980, to $453 on March 27, 1980, or a drop of 51.9%. But it didn’t stay there; the precious metal inched back up, reaching $729 on September 23, 1980, an encouraging gain of 60.9%.

    Eventually, the rally petered out and gold dropped once again, touching $297.50 on June 21, 1982, or a loss of 59.2% in 21 months. By this time the luster of gold had worn off and investors had had it with the metal. But the question remained: Would gold ever go back up to its old highs?

    A DETAILED LOOK AT GOLD

    Someone made money during that rise in gold throughout the 1970s. Who? The heavy hitters with millions to play with, who are in touch with the supply and demand situation of gold on a daily basis — these traders generate enough trading volume to affect the open interest in gold futures, which then allows ordinary investors to keep track of them, albeit from a distance.

    Volume is an easy concept to understand. It is the number of contracts traded during a particular period, be it daily, weekly, monthly, or annually. Price will move more on heavy volume than on light volume. When it comes to stocks, heavy volume on the buy side usually leads to higher prices in the future, and conversely, heavy volume on the sell side leads to lower prices. This is not the case with futures.

    Stocks can be held for many years, perhaps even decades, because the ownership in businesses that stocks represent does not expire. Investors buy and sell stocks at their discretion at a time of their choosing.

    On the other hand, futures contracts expire. Trading in December 2010 gold, for example, ends on the third to the last business day of December 2010. Those who are still long as of close of business on that day are obligated to buy 100 ounces of gold for every contract they hold. And those who are short are obligated to deliver 100 ounces of gold for every contract they are short, which Comex then delivers to those who are long the contract on the close of the last trading day.

    Most traders do not really intend to buy or sell physical gold covered by the Comex gold contracts. To avoid unwanted transactions, all traders who hold positions in December 2010 gold should close their positions on or before the last trading day. This brings us to the term “open interest.”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-22-26-67-does-gold-still-have-room-to-run-by-teresa-fernandez-20.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-22-26-67-does-gold-still-have-room-to-run-by-teresa-fernandez-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-22-26-67-does-gold-still-have-room-to-run-by-teresa-fernandez-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov292cotr,d,"{""minimum-quantity"":""1"",""path"":""ch2f206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:2 (28-32): Comparative Trading Volume by Anthony Trongone"",""caption-linebreaks"":""Comparative Trading Volume by Anthony Trongone

    The first part of this series looked at how price action can be used to anticipate future price movement in the S&P 500 Spdr exchange traded fund. This time, we add trading volume to the mix, but not in the typical way.

    technicians, we depend primarily on two variables to augment our predictive ability: price and volume. In my previous article, the emphasis was on using yesterday’s action to determine the price movement of the Standard & Poor’s 500 depositary receipt (Spdr) exchange traded fund (Spy), also known as spiders, over the next three days. This time, I combine two independent variables: a price change in the spiders together with trading volume, but using volume in a less conventional way.\nMost market participants assess trading volume by comparing today’s activity against a 20- or 50-day moving average, but they aggregate trading days without making allowances for the strength or weakness of price movements. In this article, I measure yesterday’s trading activity in conjunction with a percentage movement in the price of spiders.

    TRADING VOLUME

    In the 474 trading days under investigation, the average trading volume for the spiders was 234 million shares; therefore, a positive trading day with activity above this score is seen as bullish, but we are not accounting for yesterday’s price change. On those 37 days with a strong advance (a percentage gain at or above 2%), the average trading volume was 306 million shares; the watermark for those 37 days is 306 million shares, not 234 million. This article provides a way to correct this oversight by assessing those days with similar movements in price within each of the six pricing categories.

    In order to perform this analysis, the price of the spiders is broken down into the same six categories as my previous article, but once I construct the percentage daily price change I delve deeper by separating each pricing category into above-average and below-average volume.\nAlways consider the performance of an instrument under analysis before accepting the results of any trading system. In these 474 days, the spiders had a $27 profit. With this upward bias, they were capable of turning in a profit after an advancing or declining session. A decline, however, brought a return of $21.15 the following day, leaving less of a return after a profitable session.

    "",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-28-32-comparative-trading-volume-by-anthony-trongone-20.gif"",""height"":""619"",""width"":""430""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-28-32-comparative-trading-volume-by-anthony-trongone-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-28-32-comparative-trading-volume-by-anthony-trongone-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov293spin,d,"{""minimum-quantity"":""1"",""path"":""ch2f206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:2 (34-41): The Spearman Indicator For Technical Analysis by Dan Valcu"",""caption-linebreaks"":""The Spearman Indicator For Technical Analysis by Dan Valcu

    This indicator is a very old statistical tool that even to this day helps determine trend strength and turning points. Here’s how to apply it to your trading.

    echnical analysis can be considered both a science and an art; patterns and chart reading represent the artistic component, while technical indicators help us analytically understand trend strength, buy/sell pressure, and divergences. There are perhaps thousands of technical indicators, but few seem to deliver real analytical power and differentiation in this increasingly crowded landscape, especially since many can be perceived simply as intellectual exercises that produce little bottom-line impact.\nTo narrow down this set of tools, statistics offer a great source of established knowledge for those who want to focus on more tangible and useful indicators. For instance, the tried-and-tested Z-score has become a classic in both statistics and technical analysis.\nIn this article we will discuss an established concept in statistics originally proposed in 1904, with potential for use in technical analysis: the Spearman’s rank correlation coefficient, also known as the Spearman indicator.

    SPEARMAN'S RANK CORRELATION COEFFICIENTS

    Charles Spearman was a late 19th-century and early 20th-century British psychologist and mathematician with major contributions to factor analysis, theories of intelligence, and mental test theory. In 1904, he developed a statistical measure for the strength of association between two variables. It later became the foundation of the rank correlation coefficient bearing his name. Spearman’s rank correlation coefficient computes the degree of correlation between the ranks of the elements in two data groups of equal size."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-34-41-the-spearman-indicator-for-technical-analysis-by-dan-valcu-20.gif"",""height"":""622"",""width"":""443""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-34-41-the-spearman-indicator-for-technical-analysis-by-dan-valcu-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-34-41-the-spearman-indicator-for-technical-analysis-by-dan-valcu-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294howg,d,"{""minimum-quantity"":""1"",""path"":""ch2f206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:2 (42-47): How Good Is Your Data? by Sunny Harris"",""caption-linebreaks"":""How Good Is Your Data? by Sunny Harris

    All data is equal — at least that’s what we think.

    IS all data equal? If truth be told, I never gave it much thought. I have been using one vendor nearly exclusively for about 20 years. My fills are good enough. My closing prices seem to match what I see on television or find online. As long as the profits roll in, there has been no reason to question the data.\nBut then I was told by another vendor that my vendor’s data is off by just enough to generate a side income, through the slippage from actual price to the price I am presented. My curiosity was piqued, and so I decided to investigate. First, I set up a spreadsheet and compared the two vendors. To keep it simple, I considered only the past five years of data. My data experiment ran from June 30, 2005, to June 29, 2010.

    Running experiments\nI began by exporting the data for a single symbol from each software application to a comma-separated value (Csv) text file. The instrument I chose was the Russell 2000 index, which has different symbols in different software, like Rut, $Rut, and RU2000. I selected the Russell 2000 because of its high liquidity, ease of use, and it is something little guys like us can trade.\nFigure 1 shows the beginning of the spreadsheet, with the data of the two vendors (T and M) in the columns. At first glance it appeared that everything was in order, with small discrepancies here and there. The differences in the data, where there is one, seem to be out in the hundredths place, like 600.01 vs. 600.02. That wouldn’t make much difference over time, with some errors to the positive and the negative. It seems like it should be a wash.\nNext, I put columns in the spreadsheet to calculate the differences between the open, high, low, and close (Ohlc) of each vendor. Part of that spreadsheet is shown in Figure 2. At the top of each column, in the first row of data, is the result of calculating the sum of all the differences between the two vendors’ Ohlc data. I wouldn’t have been surprised if each component had been consistently lower or higher than the other. But these summation numbers show that the data is all over the map. The closes are 52 points lower, the opens are 40 points higher, the highs are 65 points lower, and the lows are 48 points higher. The spread between the numbers is alternating positive and negative. Could it be — as one vendor suggested — that there is enough of a spread in there for vendor T to cash in on the spread alone?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-42-47-how-good-is-your-data-by-sunny-harris-22.gif"",""height"":""623"",""width"":""445""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-42-47-how-good-is-your-data-by-sunny-harris-27.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-42-47-how-good-is-your-data-by-sunny-harris-28.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294howg1,d,"{""minimum-quantity"":""1"",""path"":""faarfr202"",""ysw-page-title"":""Stocks & Commodities V. 29:2 (42-47): How Good Is Your Data? by Sunny Harris"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-42-47-how-good-is-your-data-by-sunny-harris-29.gif"",""height"":""180"",""width"":""129""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-42-47-how-good-is-your-data-by-sunny-harris-30.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-42-47-how-good-is-your-data-by-sunny-harris-31.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294extr,d,"{""minimum-quantity"":""1"",""path"":""ch2f206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:2 (48-50): The Expiration Trade by Joe Luisi"",""caption-linebreaks"":""The Expiration Trade by Joe Luisi

    In this world of algorithmic trading, how can an independent trader stand a chance? Here’s one way you can trade options to get an edge in the markets.

    WE have all heard that 70% to 80% of all options expire worthless. Many of us have purchased options, only to watch the market move in the direction we anticipate and still lose money as the option we bought drops to zero. I’m not sure whether the percentage of options that expire worthless is correct and there have been articles published about that statement in general, but the one thing I do know is that all out-of-the-money options expire worthless. The key is to determine where that “out of the money” is.

    SO WHAT'S YOUR EDGE?

    The exciting thing about selling options is that you can stack the odds in your favor to get an edge in the markets. But edges are hard to find, even more now with so many supercomputers looking at patterns and algorithms trading in fractions of a second. In such an environment, is it even possible for an independent part-time trader to get a leg up in the market?

    Successful option selling requires determining where the market won’t go. Can you sell an option with only one week till expiration and make money? How about limiting your risks?"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-48-50-the-expiration-trade-by-joe-luisi-20.gif"",""height"":""621"",""width"":""441""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-48-50-the-expiration-trade-by-joe-luisi-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-48-50-the-expiration-trade-by-joe-luisi-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov295prre15,d,"{""minimum-quantity"":""1"",""path"":""ch2f206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:2 (51-53): Product Review: Forex Smart Tools by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Product Review: ForexSmartTools.com by Jayanthi Gopalakrishnan

    FOREX SMART TOOLS

    Internet: www.forexsmarttools.com

    Product: Performance tracking and money management tool for forex traders

    Requirements: Windows XP/Vista/7, web browser

    Price: $149 for Lite; $297 for Standard; $389 for Pro

    Any discussion of a trading plan would be incomplete without a mention of money management, but it is often the least-implemented task among traders. Most traders tend to lean toward mental money management, mostly because the task of sitting down and planning each trade, writing notes on each trade, and identifying entry and exit points all seems too tedious. The same goes for tracking all your trades and analyzing each of them. How often do you take the time to analyze all your trades to see why you had a losing or winning trade? Not often enough."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-51-53-product-review-forex-smart-tools-by-jayanthi-gopalakrishnan-25.gif"",""height"":""296"",""width"":""224""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-51-53-product-review-forex-smart-tools-by-jayanthi-gopalakrishnan-29.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-51-53-product-review-forex-smart-tools-by-jayanthi-gopalakrishnan-30.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov295exyo,d,"{""minimum-quantity"":""1"",""path"":""ch2f206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:2 (54-55): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    A CALL ON VOLATILITY

    I’m new to options and having some difficulty. Despite the broader market having more or less trended higher since September 2010, I’ve found my purchased calls, which I make sure aren’t expensive in their relative historical and implied pricing, are nonetheless resulting in net losses. Any insight into what I might be doing wrong would be appreciated.

    First of all, I’m pleased to see you’re learning about the mechanics of option pricing with regards to the influences of volatility. The bad news is when you’re buying an option cheap with no other hedge, that trading edge can be quick to disintegrate as the purchased option’s greeks begin to influence the pricing.

    For instance, let’s say you bought 10 at-the-money calls two months out for $1.70 per contract. When comparing the price to historical and implied volatility values, you estimate your edge as $0.30 with the call fairly priced at $2.00. The problem with buying the calls on this supposition? You aren’t trading volatility at that point. Your “cheap” purchase is inherently flawed almost immediately because you’ve left yourself open to delta or directional risk and, over the course of time, theta or time decay as well."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-54-55-explore-your-options-by-tom-gentile-20.gif"",""height"":""619"",""width"":""430""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-54-55-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-54-55-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov296oppo,d,"{""minimum-quantity"":""1"",""path"":""ch2f206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:2 (6): Opening Position by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Opening Position by Jayanthi Gopalakrishnan

    ROY, how did you get interested in trading and in options in particular?

    I was first exposed to options about 20 years ago when I read an options book titled Sure-Thing Option Trading by George Angell. At the time, I did not understand everything the author was trying to explain; however, it was clear to me that options were very powerful trading tools, and I became interested in learning about them. Then about 10 years ago, while securing my Mba, I actively started learning how to trade them. I started taking option trading classes, reading books about options, and trading options. That is how it all started.

    Sounds like you are well versed in the topic. So why should somebody trade options?

    Actually, there are many reasons. First of all, options give you the ability to manage your portfolio downside risk. Meaning it allows you to limit risk in the underlying position, while potentially receiving option premium credit at the same time. Second, a trader can trade options as a surrogate for trading the underlying asset. For example, you could trade option positions in lieu of buying the actual underlying stock.

    When it comes to trading options, you can pretty much figure out what your return could be before you place your trade. But many people tend to lose a lot of money on options. Why is that?

    Let me preface my answer by stating that trading options can be very risky if not properly understood and managed, and they are not suitable for all investors. However, in my opinion, traders can lose money trading any instrument. You can find more information about the risks of trading options by reading the options disclosure document, which can be downloaded from the Options Clearing Corp.’s website, located at www.theocc.com.

    Now to answer your question, trading options is akin to playing a game of chess, and to play chess successfully, you need some education. Once a trader understands the mechanics of options, options will no longer seem as risky but will be viewed as a useful tool in a trader’s arsenal.

    Why would somebody trade the option as opposed to the underlying? How would that benefit them?

    The first thing that comes to mind is the actual capital outlay. You can trade option spreads at a lower cost than you would have if you were to purchase the underlying asset. For example, if you want to purchase shares of Apple, Inc. (Aapl), currently trading around $320, it will require a capital outlay of $32,000 for 100 shares. To many people, this is a significant portion of their trading portfolio. Alternately, a trader could use a small portion of that capital and trade options and still capitalize on a move in AAPL."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-6-opening-position-by-jayanthi-gopalakrishnan-20.gif"",""height"":""633"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-6-opening-position-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-6-opening-position-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov296qaby,d,"{""minimum-quantity"":""1"",""path"":""ch2f206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:2 (61): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    MIDPOINT TRADING WITH PENNIES

    Hey, Don, I had a quick question for you about midpoint trading. Not sure if you know the exact answer, but figured was worth a shot asking you.

    I have a buddy who trades Citigroup actively — he just trades to make the spread. For example, C is bid offer 4.16/4.17.

    He works both sides looking to make the penny. So if he gets hit on his 16 bid, he looks to sell 17s. I told him his life would be much easier if he could sell the 16.5s (as there is always a ton of volume trading in between the spread). I told him it makes sense to work both sides (or maybe only one side if there is a huge bid or the stock is sitting on support), but then to enter a trade trying to get out for that half-cent profit, since most of the volume seems to be trading at that half cent. He told me recently that he was scratching most of his trades and the electronic communication network (Ecn)/dark pool fees were eating him alive."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-61-q-a-by-don-bright-20.gif"",""height"":""618"",""width"":""424""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-61-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-61-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov296prre,d,"{""minimum-quantity"":""1"",""path"":""ch2f206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:2 (62-67): Product Review: MarketGauge The Complete Swing Trading System"",""caption-linebreaks"":""Product Review: MarketGauge The Complete Swing Trading System

    MarketGauge is a robust trading enterprise. In an earlier Stocks & Commodities review, I examined Market Gauge’s Opening Range Success Formula trading system. The Opening Range course focuses on strategies for daytrading, while the Swing Trading system focuses on trades that last from a half day to a week or more. When you go to the website you’ll see a number of products offered for sale, including the Swing Trading course for $1,297. But you also get a number of other items for that $1,297, so let’s spend a minute on the other items.

    The Complete Swing Trading System has a number of component parts. A set of videos trains you in a system called the Swing Trading Blue Print as well as an ongoing set of activities called the Swing Trading Mastery Program, which you get free for a month when you take the course; you can sign up for the Mastery Program at $147 a month afterward. The Mastery Program gets you all the components and pieces except Big View (to be covered separately in a future review). You’ll see the words “Big View” on the menu line when you access the Swing Trading Blue Print, but it is more accurately referred to as “Little Big View” since “Little Big View” is a summary, while “Big View” has more than a dozen market breadth indicators. You can also elect to just get one of the pieces.

    The pieces are broken into three components. Mish’s Market Minute, for $124.99 a month, contains everything except HotScans and Big View, but includes one hour a month of live coaching. The other two components cost $75 a month if you buy them separately, and they are HotScans or the Nuggets List and Etf Monitor. As a separate item you can get Big View for $49 a month. Again, the $1,297 package includes the Swing Trading Mastery Program for one month, as well as providing the training for the MarketGauge Swing Trading System. The Mastery Program contains everything except Big View, which in terms of components has both Mish’s Market Minute and HotScans. Now let’s look at all of the parts."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-62-67-product-review-marketgauge-the-complete-swing-trading-system-20.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-62-67-product-review-marketgauge-the-complete-swing-trading-system-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-62-67-product-review-marketgauge-the-complete-swing-trading-system-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov296fufo,d,"{""minimum-quantity"":""1"",""path"":""ch2f206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:2 (69): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    TOOLS, TOOLS, TOOLS

    What are your thoughts on some of the geometrical technical analysis tools such as Fibonacci rulers, Elliott wave theory, and Gann fans?

    Geometric charting tools, sometimes referred to as advanced charting tools, require active decision making by the user. This ambiguity creates an environment in which analysts can draw dramatically different conclusions despite using the same tools. More than with less interactive tools, such as computer-generated oscillators, these advanced charting tools are only as good as the trader using them.

    In my opinion, these advanced tools are better at explaining what has already happened than predicting what might happen. But that’s true of all speculative tools."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-69-futures-for-you-by-carley-garner-20.gif"",""height"":""617"",""width"":""422""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-69-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-69-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov29781tr,d,"{""minimum-quantity"":""1"",""path"":""ch2f206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:2 (70-73, 81-82): Traders' Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders' Tips by Technical Analysis, Inc.

    For this month’s Traders’ Tips, the focus is Dan Valcu’s article in this issue, “The Spearman Indicator For Technical Analysis.”

    Code for AmiBroker is already provided in Valcu’s article. Subscribers will also find Valcu’s AmiBroker code at the Subscriber Area of our website, www.Traders.com. Presented here is an overview of possible implementations for other software.

    Traders’ Tips are provided to help the reader implement a selected technique from an article in this issue. The entries are contributed by various software developers or programmers for software that is capable of customization.

    Readers will find all the code listings that accompany the following Traders’ Tips at our website, Traders.com. Provided here is some discussion of the technique's implementation by the Traders’ Tips contributors as well as some example charts.

    To locate Traders’ Tips at our website, use our site’s search engine, or click on the Traders’ Tips link from our home page. For past Traders’ Tips, click on the “Stocks & Commodities” link from our home page in the red box on the left, then click on the “Article Abstracts” link in the red box on the left, then click on the issue of interest, then on “Traders' Tips.”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-70-73-81-82-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""618"",""width"":""425""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-70-73-81-82-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-70-73-81-82-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov297bofo1,d,"{""minimum-quantity"":""1"",""path"":""ch2f206"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:2 (76): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    • The Evolution Of Technical Analysis

    • How To Make Money In Stocks: 4th Ed.

    • Increasing Alpha With Options

    • The Quant Investor’s Almanac 2011

    • Tradestream Your Way To Profit

    • Zero-Sum Game"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-76-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""616"",""width"":""416""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-76-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-2-76-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov291chin,d,"{""minimum-quantity"":""1"",""path"":""ch3m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:3 (10-14): Channels In The Forex Markets by Gareth Burgess"",""caption-linebreaks"":""Channels In The Forex Markets by Gareth Burgess

    This trading setup will stop you from being shaken out of your positions in any time frame.

    The foreign exchange markets are an arena of competing forces constantly in conflict with each other. The markets are torn apart by worry, uncertainty, doubt, fear and greed, not to mention profit. As a consequence, many traders get shaken out of their positions by a short-term wave of opposing news. Even when a position is showing a profit, there is never a certainty that the market will continue in the anticipated direction and there is almost the same sense of relief when getting out of a good position as in liquidating a bad one. As a result, many traders tend to play a zero-sum game. When they see a profit, they take it. When they see a loss, they run it.

    A successful trader must trade from a known plan — one that not only supports the direction of the position in the market but also helps to remain confident in the original decision. In this article I’ll demonstrate that if used properly, technical chart analysis can be accurate and profitable, especially in a trending market.

    A TRENDING MARKET

    A trending market is where the best percentage trades are to be found, but catching the trend is easier said than done. Many traders will spend their time looking for a reversal instead of remaining with the trend by simply working from one side of the market — that is, the buy side in a bull trend or the sell side in a bear trend until the trend is over."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-10-14-channels-in-the-forex-markets-by-gareth-burgess-20.gif"",""height"":""622"",""width"":""441""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-10-14-channels-in-the-forex-markets-by-gareth-burgess-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-10-14-channels-in-the-forex-markets-by-gareth-burgess-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov29128tr,d,"{""minimum-quantity"":""1"",""path"":""ch3m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:3 (16-22, 28): Trading Companies With Split Personalities by Anthony Trongone"",""caption-linebreaks"":""Trading Companies With Split Personalities by Anthony Trongone

    When the regular trading session gains momentum, is the market more likely to produce additional gains? Here’s how the companies in the Qqqq perform during regular trading sessions versus overnight trading sessions.

    Although seven years have passed since then, the trades based on my two 2004 articles about the advantages of taking a long position in the overnight session are still delivering attractive profits. In these articles, I made a case for splitting the trading day into two separate sessions. By trading in the hours of darkness in the three years I investigated (2001–03), shares of the Nasdaq 100 Trust exchange traded fund (Qqqq), also known as the cues, made $1.69 in aftermarket activity but fell $23.61 in the regular trading session.

    Since then, the cues, which were at $36.46 on December 31, 2003, ran up to a closing price of $54.46 by December 31, 2010. Despite this $18.00 advance in 1,763 trading days, the regular session (subtract the day’s closing price from its opening price) had a decline of $9.86; however, the overnight session (compute the price change in the overnight session by subtracting opening price of the next trading day from today’s closing price) was able to advance $27.86.

    This article explores the possibilities of the cues making a turnaround in the regular trading session (Rts) by showing how to monitor the running performance of each trading session.

    With a 62.5% weighting in the information technology sector, the cues have no exposure to the financial industry. Since they have an average trading volume of more than 100 million shares, they offer some outstanding advantages. With such vibrant activity, they normally trade with just a penny difference between the bid/ask price. This liquidity is an important feature because very few instruments offer the investor a reasonable bidding price to buy or asking price to sell outside of the regular trading session. In addition, this exchange traded fund (Etf) allows investors to participate in the collective intraday performance of the 100 companies that compose the Nasdaq 100; however, it trades with the precision of a single security.

    Because the cues track the prices of the companies in this index, they have an almost perfect correlation with the NQ futures. This allows you to actively trade this futures contact as a replacement for the cues during the day or throughout the night. This contract trades internationally, around the clock, at a dazzling speed with small differences between the bid/ask price."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-16-22-28-trading-companies-with-split-personalities-by-anthony-trongone-20.gif"",""height"":""637"",""width"":""464""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-16-22-28-trading-companies-with-split-personalities-by-anthony-trongone-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-16-22-28-trading-companies-with-split-personalities-by-anthony-trongone-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov292emtr,d,"{""minimum-quantity"":""1"",""path"":""ch3m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:3 (24-28): Empowering Traders With The Russell 2000 by Gail Mercer"",""caption-linebreaks"":""Empowering Traders With The Russell 2000 by Gail Mercer

    Ever thought of trading the Russell 2000? Here’s how retail traders could benefit from trading this index.

    New traders are drawn to the emini Standard & Poor’s 500 like bees to honey. Go into any live trading room and chances are that the moderators are teaching traders to trade the emini S&P 500 because it has more liquidity than any other market. In Figure 1 the average annual volume is compared between the following emini indexes: emini S&P 500, Dow Jones Industrial Average (Djia), Nasdaq 100, S&P MidCap 400, and the Russell 2000. It would be a logical assumption that the emini S&P 500 moves more than any other market. After all, volume fuels the markets, and the emini S&P 500 has more volume than any of the other indexes. However, let us look closer to see if the emini S&P 500 leads in tick movement or dollar movement.

    Figure 2 compares the average annual tick movement between the following emini indexes: S&P 500, Djia, Nasdaq 100, S&P MidCap 400, and the Russell 2000. As you can see, the emini S&P 500 is no longer the leader. In fact, during the eight-year analysis, although the emini S&P 500 had the highest volume, it was the lowest in tick movement when compared to the other markets.

    If volume fuels the markets and the emini S&P 500 has the most volume, why is it consistently lower in tick movement than any of the other markets? Since each market has different tick values, perhaps we need to compare the average dollar movement to find the answers."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-24-28-empowering-traders-with-the-russell-2000-by-gail-mercer-20.gif"",""height"":""620"",""width"":""437""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-24-28-empowering-traders-with-the-russell-2000-by-gail-mercer-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-24-28-empowering-traders-with-the-russell-2000-by-gail-mercer-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov293thin1,d,"{""minimum-quantity"":""1"",""path"":""faarfr202"",""ysw-page-title"":""Stocks & Commodities V. 29:3 (30-35): Three-Bar Inside Bar Pattern by Johnan Prathap"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-30-35-three-bar-inside-bar-pattern-by-johnan-prathap-29.gif"",""height"":""180"",""width"":""130""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-30-35-three-bar-inside-bar-pattern-by-johnan-prathap-30.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-30-35-three-bar-inside-bar-pattern-by-johnan-prathap-31.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov293thin,d,"{""minimum-quantity"":""1"",""path"":""ch3m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:3 (30-35): Three-Bar Inside Bar Pattern by Johnan Prathap"",""caption-linebreaks"":""Three-Bar Inside Bar Pattern by Johnan Prathap

    This trading strategy uses an inside bar as a three-bar pattern for long and short positions. Find out how it performed on gold, silver, and crude oil contracts.

    Whether you look at an intraday, daily, weekly, or monthly chart you will, without a doubt, see many inside bars. They appear in uptrends, downtrends, and sideways markets. Typically, most traders think of an inside bar as a two-bar pattern, but I have found successful trades using an inside bar pattern as a three-bar pattern for both long and short signals. An inside bar accompanied by higher closes indicates a short-term uptrend, and an inside bar accompanied by lower closes indicates a short-term downtrend.

    I tested this setup on daily data from May 2001 to August 2010 on three major commodities: gold (GC), silver (SI), and crude oil (CL). The results are worth some consideration.

    THE INSIDE BAR

    The typical inside bar two-bar view indicates minimal activity in a market. It is defined as a bar (or series of bars) that is completely within the range of the preceding bar; that is, it has a higher low and lower high than the bar immediately before it.

    Some traders consider a bar an inside bar if the high and low are equal to the previous bar or where there are several consecutive bars within the range of a previous bar. The “Inside Bar Show Me” study in TradeStation will not mark bars that meet either of these conditions.

    Many analysts tend to view inside bars as an indication of declining market activity, or possibly a prelude to a large movement in either direction."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-30-35-three-bar-inside-bar-pattern-by-johnan-prathap-22.gif"",""height"":""636"",""width"":""459""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-30-35-three-bar-inside-bar-pattern-by-johnan-prathap-27.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-30-35-three-bar-inside-bar-pattern-by-johnan-prathap-28.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov293whyo1,d,"{""minimum-quantity"":""1"",""path"":""faarfr202"",""ysw-page-title"":""Stocks & Commodities V. 29:3 (36-40): What You Don’t Know About Candlesticks by Thomas N. Bulkowski"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-36-40-what-you-don-t-know-about-candlesticks-by-thomas-n-bulkowski-27.gif"",""height"":""180"",""width"":""128""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-36-40-what-you-don-t-know-about-candlesticks-by-thomas-n-bulkowski-28.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-36-40-what-you-don-t-know-about-candlesticks-by-thomas-n-bulkowski-29.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov293whyo,d,"{""minimum-quantity"":""1"",""path"":""ch3m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:3 (36-40): What You Don’t Know About Candlesticks by Thomas N. Bulkowski"",""caption-linebreaks"":""What You Don’t Know About Candlesticks by Thomas N. Bulkowski

    Researching candlesticks yields some surprises.

    IN writing my latest book, Encyclopedia Of Candlestick Charts, I made some startling discoveries. I used more than 4.7 million candle lines (price bars) for the research with data going back as far as the 1980s in hundreds of stocks, but not all stocks covered the entire period.

    REVERSALS WIN

    One famous technical analyst wrote that continuations perform better than reversals. That would make sense, since it is easier for price to swim with the tide than against it. There is just one problem: That’s wrong. I tested this on thousands of chart patterns and candlesticks with similar results for each. Reversal candlestick patterns outperform continuations 59% to 41% of the time.

    One explanation is that the price trend in a candlestick continuation is tired and doesn’t move far. After a reversal, however, traders are excited and power the stock in the new direction, leading to an extended move. Those caught on the wrong side of the trade exit their positions and then jump on the new trend, powering it even more.

    I don’t know if that explanation is correct, but I do know that reversals beat continuations.

    TRADE WITH THE TREND

    If you’re a serious candlestick player, then you’ll want to know when candles work best. Since we know that reversals work better than continuations, make sure that the breakout direction agrees with the primary trend."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-36-40-what-you-don-t-know-about-candlesticks-by-thomas-n-bulkowski-22.gif"",""height"":""622"",""width"":""441""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-36-40-what-you-don-t-know-about-candlesticks-by-thomas-n-bulkowski-30.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-36-40-what-you-don-t-know-about-candlesticks-by-thomas-n-bulkowski-31.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294whca,d,"{""minimum-quantity"":""1"",""path"":""ch3m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:3 (42-44): What Can You Expect, Mathematically? by Stephen Massel"",""caption-linebreaks"":""What Can You Expect, Mathematically? by Stephen Massel

    Here’s a look at how mathematical expectation allows for an apples-to-apples comparison of trading systems or strategies regardless of type or style, as well as allowing the tracking of your own trading record.

    A huge number of different trading systems and strategies are available in the market today, all with their own particular focus, style, time frame, and risk. The type of trading you engage in is a very personal matter and depends on many factors. The things that need to be considered include the market you are interested in; the amount of time you have to do the required research and to execute and maintain your trades; your preferred time frame (which could be from seconds to months); the style of trading whether technical, fundamental, news driven, or purely discretionary; and of course, the size of your trading capital, leverage, and risk tolerance.

    Some of these questions are easy to answer and some require more thought. Whether you are new to trading and are still deciding on your preferred style and considering different strategies or systems, or you are an experienced trader looking to analyze your own trading results or new systems, mathematical expectation should prove to be a very useful tool to have in your statistical toolbox.

    This article will define mathematical expectation and show how it allows for an apples-to-apples comparison of trading systems or strategies regardless of type or style, as well as allowing the tracking of your own trading record."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-42-44-what-can-you-expect-mathematically-by-stephen-massel-20.gif"",""height"":""622"",""width"":""444""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-42-44-what-can-you-expect-mathematically-by-stephen-massel-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-42-44-what-can-you-expect-mathematically-by-stephen-massel-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294exyo1,d,"{""minimum-quantity"":""1"",""path"":""ch3m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:3 (45): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    A SMARTER CALL TO SELL?

    With a long call, what would be the best time to sell? I know that directionally, the higher a stock goes up the more the call stands to profit as it goes further in-the-money. But if a call went from out-of-the money toward being at-the-money, doesn’t it put the option at more risk because of time decay?

    Knowing when the best time to sell is something all option traders strive for. Unfortunately, there is no one universal rule that we can work as simply as a light switch in order to capture the best guaranteed results. Traders look to understand the greeks of a position and work with them as effectively as they can while taking unique risk tolerance levels into consideration.

    In holding a long call, the trader is working with the risks (and rewards) associated with a long delta, negative theta, positive vega, long gamma, and then a distant rho factor. Where an option is in its life cycle will influence your concern with potential time decay — that is, the negative theta component of the position. The closer you are to expiration while holding an at-the-money contract, the greater the exposure to this risk. The longer out we go, concern regarding time decay will be a distant third to delta and vega risks."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-45-explore-your-options-by-tom-gentile-20.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-45-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-45-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294trmo,d,"{""minimum-quantity"":""1"",""path"":""ch3m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:3 (46-52): Trading Momentum With Ken Calhoun by J. Gopalakrishnan & B. Faber"",""caption-linebreaks"":""Trading Momentum With Ken Calhoun by J. Gopalakrishnan & B. Faber

    Ken Calhoun, president of Daytrading University and StockTradingSuccess.com, has provided online training to active traders from more than 32 countries since 1999. He is an internationally published trader who’s earned industry awards for his professional trading systems and has trained more than 31,000 people in more than 147 companies worldwide. Calhoun trains traders on how to trade using one-minute candle charts, sector breakouts, gaps and market indexes using advanced tape reading, and real-time candlestick trading techniques by using live market examples.

    A former corporate statistician and quality engineer, Calhoun has been featured in a variety of leading trade publications and events and brings a wealth of analytical experience to the markets using real-time chart patterns to help his 8,100 traders spot entries and exits.

    Technical Analysis of Stocks & Commodities Editor Jayanthi Gopalakrishnan and Staff Writer Bruce Faber interviewed Ken Calhoun via telephone on January 10, 2011.

    KEN, how did you get interested in trading, especially technical analysis?

    I first got started with short-term momentum trading back in the late 1990s during the Nasdaq tech bubble. I was interested in how fast you could make money when a stock ran three to five points in less than an hour. Technical analysis was, and continues to be, absolutely critical to my success, using micro-indicators like cup patterns, volume breakouts, tape reading, sector divergence, using the Trin and Vix, and tape reading.

    During the tech bubble, you would hear about the markets all the time. It was in the news, it was all over the place, and there were all these commercials of people buying islands — that kind of thing. Those got my attention because I realized that there was a lot more to it than what was visible.

    So you got started at a bullish time in the markets. Were you trading mostly equities?

    Yes, I was only trading stocks back in the late 1990s. I had traded longer term, with Sep Iras and mutual funds for many years before that, but I had never done tick-by-tick momentum trading until 1999.

    What type of markets do you prefer to trade?

    I’ve made the most money in my stock trading, so that’s why I like trading equities the most. I still prefer stock day and swing trading as my primary trading style, because there are gaps and other high-percentage technical trading patterns that only exist in stock charts. Although I’m primarily an equities daytrader, I also trade the emini, the ES and currency pairs. Recently, I have been trading the dollar–yen.

    You seem to like momentum trading. How do you actually identify markets that have momentum?

    That is a good question. You’re right in that I prefer momentum day and swing trading because I like instant technical feedback in my trades. I don’t want to wait weeks or months to see a trade work out.

    The top technical signal I use is the premarket spiders (Spy) and Qqqqs, and premarket futures, both the Nasdaq futures (Naz) and the S&P futures (Spoos) to see if there’s a wide gap or trading range before the opening bell. So the two primary things I look for are directional moves in the Naz premarket futures and the direction of the gap in the Spy starting at 7:30 or 8:00 am with premarket charts."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-46-52-trading-momentum-with-ken-calhoun-by-j-gopalakrishnan-b-faber-20.gif"",""height"":""634"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-46-52-trading-momentum-with-ken-calhoun-by-j-gopalakrishnan-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-46-52-trading-momentum-with-ken-calhoun-by-j-gopalakrishnan-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov29571qa,d,"{""minimum-quantity"":""1"",""path"":""ch3m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:3 (53, 71): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    LIQUIDITY, REST, AND ROUTING

    I see you have been posting about your firm’s new approach to order routing that is saving or making your traders a lot of money. I remember you used to say “take liquidity on the Nyse (or Nasdaq) and rest or leave your orders on Arca.” Could you explain the differences you see now? Could you start by explaining “take liquidity” and “rest” orders? Does any of this routing make that much of a difference? My broker advises me to use only market orders anyway, so how does this affect me?

    Wow, a lot of good and timely questions. First off, thanks for reading my posts, and be sure to keep reading S&C, since I plan on doing an article on the many industry changes in this regard — about the consolidation of exchanges, the new crop of electronic communications networks (Ecns), and their competition. I arranged to interview the top people at several market centers.\nNow to your questions. When we hit a bid or take out an offer immediately, that is called “taking liquidity.” In the past, we always had to pay extra to do so.

    However, we would also be paid to leave our orders “resting” at various market centers (like Arca). So we would take where we paid the lowest price (with good liquidity) and rest where we got paid the most. This is called “providing liquidity.” It was pretty simple."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-53-71-q-a-by-don-bright-20.gif"",""height"":""617"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-53-71-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-53-71-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov295prre1,d,"{""minimum-quantity"":""1"",""path"":""ch3m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:3 (54-57): Product Review: MarketGuage: Big View by Dennis D. Peterson"",""caption-linebreaks"":""Product Review: MarketGuage: Big View by Dennis D. Peterson

    Big View is part of an ensemble of trading information from MarketGauge, available as a standalone package for $49/month. The last review of MarketGauge covered the Swing Trading course and the follow-on Mastery Program. The Mastery Program has a menu item called Big View, but MarketGauge actually refers to that item as Little Big View. To sort this out, let’s take a quick look at Little Big View and then spend the bulk of the discussion on Big View.

    LITTLE BIG VIEW

    Little Big View is more of a summary, especially when you look at the Market Outlook Screen (Figure 1). The purpose is to give the trader an idea of what direction the market might be moving. Sometimes it takes a moment to digest it all. For example, in the lower section of Figure 1,“Today’s Gauges By Category,” contrary opinion is only slightly bearish which, combined with all of the gauges of this screen, is pointing to a market that we would expect to be bullish.

    When I first started trading in 1999, these MarketGauge indicators are the ones I used to trade marketwide items like the Qqqqs or the Standard & Poor’s 500. Using market breadth indicators to trade marketwide tradables has only gotten better with the introduction of such items as Qid, which is the inverse of the Qqqqs, but it moves twice as fast. Trading it is not for the faint of heart, especially if you are looking at five-minute bars. The saying “You should only trade what you can only afford to lose” comes to mind because if you get emotionally attached to your money, you can easily lose even more."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-54-57-product-review-marketguage-big-view-by-dennis-d-peterson-20.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-54-57-product-review-marketguage-big-view-by-dennis-d-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-54-57-product-review-marketguage-big-view-by-dennis-d-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov295prre2,d,"{""minimum-quantity"":""1"",""path"":""ch3m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:3 (58-62): Product Review: NASDAQ OMX Portfolio Manager for the iPad by Wallace Wang"",""caption-linebreaks"":""Product Review: NASDAQ OMX Portfolio Manager for the iPad by Wallace Wang

    Real-time data is crucial for accurate and timely trading, but in the past, to get real-time data you had to pay a monthly fee. Now, however, if you have either a wi-fi or 3G Internet connection and an iPad, you can retrieve real-time data using the Nasdaq Omx Portfolio Manager app. The initial Portfolio Manager app screen displays a list of stocks on the left side of the screen, which you can divide into three categories: a watchlist of stocks you want to track, a portfolio list of stocks you’re currently trading, and a search list that lets you type in a stock symbol and view that particular stock’s real-time performance (Figure 1).

    You can change the time frame of each stock chart from as long as five years to as short as intraday (with automated real-time updates). Slide your finger on the chart and a vertical line appears along with a big white dot, which identifies the stock’s exact price and volume at that particular moment in time (Figure 2).

    Besides customizing a stock chart by selecting a different time frame, you can also overlay a chart with simple moving averages (Smas) to help you better understand the fluctuations of a stock price (Figure 3).

    While the Portfolio Manager displays stock prices in US dollars, you can easily choose a variety of other currencies such as euros instead (Figure 4)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-58-62-product-review-nasdaq-omx-portfolio-manager-for-the-ipad-by-wallace-wang-20.gif"",""height"":""633"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-58-62-product-review-nasdaq-omx-portfolio-manager-for-the-ipad-by-wallace-wang-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-58-62-product-review-nasdaq-omx-portfolio-manager-for-the-ipad-by-wallace-wang-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov296fufo1,d,"{""minimum-quantity"":""1"",""path"":""ch3m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:3 (63): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    WHAT DO GAP TRADERS WANT?

    What exactly are gap traders looking for?

    For those unfamiliar with gap trading, a price gap occurs when there is a significant difference in the closing price of the previous session relative to the opening price of the following session. A gap is described by its direction; for instance, you might hear traders refer to a gap with an increase in price as a “gap up” or a “gap higher.” A sharp decrease in price from the previous session close is known as a “gap down” or a “gap lower.”

    Price gaps used to be common in commodities due to abbreviated trading sessions relative to equities, and the potential volatility exposure overnight and on weekends. Although this type of price action still occurs in the futures markets today, it is much less common than it once was.

    The scarcity of large price gaps can be attributed to the fact that most futures contracts trade virtually 24 hours per day during the week these days. Accordingly, in most cases, there simply isn’t enough time between trading sessions to justify a large price move."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-63-futures-for-you-by-carley-garner-20.gif"",""height"":""616"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-63-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-63-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov296trti1,d,"{""minimum-quantity"":""1"",""path"":""ch3m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:3 (64-70): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    For this month’s Traders’ Tips, the focus is Johnan Prathap’s article in this issue, “Three-Bar Inside Bar Pattern.”

    Code for TradeStation is already provided in Prathap’s article. Subscribers will also find the same code at the Subscriber Area of our website, www.Traders.com. Presented here is an overview of possible implementations for other software.

    Traders’ Tips are provided to help the reader implement a selected technique from an article in this issue. The entries are contributed by various software developers or programmers for software that is capable of customization.

    Readers will find all the code listings that accompany the following Traders’ Tips at our website, Traders.com. Provided here is some discussion of the technique's implementation by the Traders’ Tips contributors as well as some example charts.

    To locate Traders’ Tips at our website, use our site’s search engine, or click on the Traders’ Tips link from our home page. For past Traders’ Tips, click on the “Stocks & Commodities” link from our home page in the red box on the left, then click on the “Article Abstracts” link in the red box on the left, then click on the issue of interest, then on “Traders' Tips.”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-64-70-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""623"",""width"":""446""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-64-70-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-64-70-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov297bofo2,d,"{""minimum-quantity"":""1"",""path"":""ch3m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:3 (76): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc.

    Behavioural Technical Analysis

    Better Good Than Lucky

    Just A Trade A Day

    The Little Book Of Sideways Markets

    Trade Like An O’Neil Disciple

    What Investors Really Want"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-76-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""614"",""width"":""413""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-76-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-76-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov29871le,d,"{""minimum-quantity"":""1"",""path"":""ch3m204"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:3 (8-9, 71): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    THE CLEAR METHOD

    Editor,

    It was with great interest that I read Ron Black’s article in the September 2010 issue of your magazine, “Getting Clear With Short-Term Swings.†The concept is simple and signals are easy to follow (the best starting point for any indicator!).

    In the article, the author provided the EasyLanguage code for displaying the swing line. But since many readers want to implement indicators using a spreadsheet, I decided to translate the Clear method to Excel.

    I am providing a spreadsheet with the Clear method applied to the S&P 500 (“Clear Spx.xlsâ€) as well as a Word document explaining how to enter formulas in Excel. I have contacted the author, Ron Black, as a check, and he has now also contributed a macro code listing (SwingLine.xls) for those who may want to use it.

    I hope this helps those readers who rely on Excel to exercise technical analysis.

    Marco Alves

    Thank you for providing this Excel spreadsheet translation to share with other readers.

    Readers will find these Excel files (Clear Spx.xls and SwingLine.xls) and Word file (“Implementing the Clear Method_Excel(R).docâ€) available at our website at www.Traders.com in the Subscriber Area. Login requires your subscriber number and last name.

    —Editor"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-8-9-71-letters-to-s-c-by-technical-analysis-inc-20.gif"",""height"":""618"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-8-9-71-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-3-8-9-71-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov291emtr,d,"{""minimum-quantity"":""1"",""path"":""ch4a207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:4 (12-14): Empowering Traders To Trade Commodities by Gail Mercer"",""caption-linebreaks"":""Empowering Traders To Trade Commodities by Gail Mercer

    With more and more products being added to the marketplace, how do you decide what to trade? Here’s a look at what you should consider before trading the commodities.

    New traders are often overwhelmed at the number of different instruments they could trade. Should they trade stocks, indexes, exchange traded funds (Etfs), spot forex, or currencies? What are the market hours? What are the tick values? What is the slippage for any given instrument? What is a good profit target for the market they choose? What stop should they use? So many questions to ask and so many new things to learn!

    Often, instead of researching what’s available, novice traders simply choose a market that others may have recommended. With little or no knowledge about how a market moves, the trader is forced to guess what their stops should be, as well as how to take profits.

    Getting enough information is the solution for the new trader’s dilemma, obviously. Let’s shine some light on four commodity markets: crude light, silver, gold, and platinum.

    HIGH VOLUME

    One of the first things a novice trader should look at when considering a new instrument is volume. In order to enter and exit a market, there must be sufficient buyers and sellers. Over the course of the last few years, the commodity markets have undergone a dramatic change in volume. Figure 1 shows that the average yearly volume for crude light, gold, platinum, and silver markets has more than quadrupled, with crude light being the leader, jumping from 50,000 contracts in 2006 to almost 350,000 now."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-12-14-empowering-traders-to-trade-commodities-by-gail-mercer-20.gif"",""height"":""619"",""width"":""434""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-12-14-empowering-traders-to-trade-commodities-by-gail-mercer-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-12-14-empowering-traders-to-trade-commodities-by-gail-mercer-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov292hucy,d,"{""minimum-quantity"":""1"",""path"":""ch4a207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:4 (24-28): Hurst’s Cyclic Analysis by David Hickson"",""caption-linebreaks"":""Hurst’s Cyclic Analysis by David Hickson

    This crash course on an almost-forgotten theory could shed some light on how you can trade consistently and profitably.

    IN the 1970s, an American engineer named J.M. Hurst published a thesis about why financial markets move the way they do. His expounded theory was the result of many years of research, and it became known as Hurst’s cyclic theory. Hurst claimed a 90% success rate trading on the basis of his theory, and yet his work has remained largely undiscovered and often misunderstood.

    AN ALMOST-FORGOTTEN THEORY

    Hurst published two seminal works: The Profit Magic Of Stock Transaction Timing, followed a few years later by a workshop-style course that was called the Cyclitec Cycles Course (now available as JM Hurst’s Cycles Course).

    A number of enthusiastic advocates, prominent traders, and writers proclaim Hurst as the “father of cyclic analysis” and confirm the efficacy of the theory (including the late Brian Millard, who wrote several books about Hurst’s theory), but why isn’t it better known and more widely used by technical analysts? There are two possible reasons:

    - First, Hurst’s cyclic theory is not easy. While it is beautiful and elegant in its essence, it is not a simple theory to understand or apply. The Cycles Course is more than 1,500 pages long, and most people take several months to work through it.

    - Second, although the theory presented in both the Profit Magic book and the Cycles Course is the same, there is a vitally important distinction between the analysis processes presented in them. Hurst claimed his success on the basis of the process presented in the Cycles Course, whereas many people read the Profit Magic book and go no further, with the consequence they never discover the more effective process presented in the Cycles Course.

    "",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-24-28-hurst-s-cyclic-analysis-by-david-hickson-22.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-24-28-hurst-s-cyclic-analysis-by-david-hickson-30.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-24-28-hurst-s-cyclic-analysis-by-david-hickson-31.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov292hucy1,d,"{""minimum-quantity"":""1"",""path"":""faarfr202"",""ysw-page-title"":""Stocks & Commodities V. 29:4 (24-28): Hurst’s Cyclic Analysis by David Hickson"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-24-28-hurst-s-cyclic-analysis-by-david-hickson-27.gif"",""height"":""180"",""width"":""138""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-24-28-hurst-s-cyclic-analysis-by-david-hickson-28.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-24-28-hurst-s-cyclic-analysis-by-david-hickson-29.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov293enlo,d,"{""minimum-quantity"":""1"",""path"":""ch4a207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:4 (30-36): Engineering Look At Cycles by Arthur Zernov"",""caption-linebreaks"":""Engineering Look At Cycles by Arthur Zernov

    Do cycles exist in markets? Here’s a look at the markets from a different angle — one that will help you realize that there is a harmony among cycles, events, and market behavior.

    THE existence of cycles in stocks and commodities prices is considered to be an acceptable and rarely debated topic. While preparing for the Chartered Market Technician (Cmt) tests, I became interested in this subject and decided not to take their existence for granted but to investigate it myself. In this article I will attempt to answer the ultimate question: Do cycles exist?\nTechnical analysts determine cycles in time series using the following major methods:\nn Descriptive statistics\nn Visual analysis of charts\nn Trigonometric methods (centered simple moving average and future lines of demarcation (Fld) developed by J.M. Hurst, the focal point method by Jim Tillman, and so forth)\nn Traditional indicators such as the moving average convergence/divergence (Macd), stochastic oscillator, the slope, and so on.

    By no means are these the only methods used, but they are the most common. Different analysts found different durations for market cycles, as can be seen from Figure 1."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-30-36-engineering-look-at-cycles-by-arthur-zernov-21.gif"",""height"":""633"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-30-36-engineering-look-at-cycles-by-arthur-zernov-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-30-36-engineering-look-at-cycles-by-arthur-zernov-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov293fufo1,d,"{""minimum-quantity"":""1"",""path"":""ch4a207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:4 (37): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    SPECULATING IN SILVER

    I want to speculate in silver, but I don’t have the margin or the risk tolerance for futures. Is there a better way?

    Speculation in silver is challenging in many ways, and recent volatility has magnified the risks. There are essentially four ways to speculate in silver prices: exchange traded funds (Etfs), foreign exchange, futures (including options on futures), and bullion. However, there are few I would feel comfortable recommending to most retail traders, simply because they have certain drawbacks. Nonetheless, I’d like to provide a quick overview of the realities and allow you to decide for yourself which might be best for you. One thing is for sure: there is no such thing as easy money when it comes to trading silver.

    Silver Etfs: The popularity of Etfs is soaring, and along with it has come the advent of specialized Etfs aimed at hot commodity markets such as gold and silver. Some silver Etfs are made up of silver mining companies rather than the shiny metal itself and subject to price changes tied to company, industry, or market-specific risks. Thus, they aren’t a pure speculation on silver prices. So unless your interest lies with the miners themselves, this seems like a relatively unappealing option for a silver trader.

    But there are silver Etfs based solely on the price of the metal, such as the popular Slv; Slv shares are backed by 10 ounces of silver. Buy & hold investors might find this to be a viable vehicle, but those looking to speculate on the short side should look elsewhere."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-37-futures-for-you-by-carley-garner-21.gif"",""height"":""617"",""width"":""424""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-37-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-37-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov293idcu,d,"{""minimum-quantity"":""1"",""path"":""ch4a207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:4 (38-45): Identifying Cup Formations Early by Giorgos Siligardos"",""caption-linebreaks"":""Identifying Cup Formations Early by Giorgos Siligardos

    Here’s a simple mechanical recognition method for identifying possible emerging cup formations.

    my article “Identifying The Cup (With Or Without The Handle),” which appeared in the February 2006 Stocks & Commodities, I introduced a simple mechanical algorithmic method for identifying cup formations (also known as rounding bottoms) in their late phase. The core part of the algorithm was based on the idea of using a virtual grid on the chart. Since then, I have been asked by technical analysts to provide an algorithm for identifying possible cup formations in their early phase. This time I will show you how you can easily use the grid technique for spotting possible cup formations during their development.

    THE CUP FORMATION

    In Figure 1 you can see a typical cup formation. I will not elaborate on the technical details of the cup formation (see “Related reading”). I will say that the identification method I introduced in my previous article on the subject was able to spot cup formations in their late phase (to the right after point C in Figure 1). The goal of the algorithm I will describe is to identify the development of such a formation before or near point C. “But are you sure a cup is being formed at point C?” you might ask. No, we are not. We can’t be sure that a specific formation is going to take place. However, if the price is about to form a cup, it has to form a half-cup before integrating the formation in its entirety. You might want to be informed that the price shows such intentions.

    THE SEMI-CUP FORMATION

    Since we seek early identification of a possible cup (and particularly for the bottom phase of a possible cup), we essentially seek a pattern I will refer to as a “semi-cup.” The typical semi-cup formation is like a completed cup cut in half. This formation has a distinct advantage over an integrated cup: The price is relatively low and there is room for a prosperous upward movement (even when the overall long-term trend is bearish). In addition, most of the time, it is easy to set a profit objective (price target) and a stop-loss level when trading the formation."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-38-45-identifying-cup-formations-early-by-giorgos-siligardos-21.gif"",""height"":""629"",""width"":""469""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-38-45-identifying-cup-formations-early-by-giorgos-siligardos-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-38-45-identifying-cup-formations-early-by-giorgos-siligardos-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294tean,d,"{""minimum-quantity"":""1"",""path"":""ch4a207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:4 (46-48): Technical Analysis Adapts and Thrives by M. Carr and A. Hestla"",""caption-linebreaks"":""Technical Analysis Adapts and Thrives by M. Carr and A. Hestla

    Professions are built on a body of knowledge and an underlying rationale that explains the reasons behind the knowledge. Technical analysis is a professional undertaking, but little has been written about its foundational principles.

    TO begin thinking about the philosophy of technical analysis, first of all, we must consider why traders believe it works. The major textbooks in the field acknowledge that technical analysis rests on three basic precepts:\n1 Market action discounts everything.\n2 Prices move in trends.\n3 History repeats itself.

    These core beliefs date back at least into the 1800s and are a part of Dow theory. Some would argue that technical analysis can trace its roots to 18th-century Japan and the use of candlestick charts on rice futures contracts. There may be even earlier instances of technical analysis, but these three precepts lie at the core of any study of charts.

    IT'S ALL IN THE CHARTS

    Relying on candlestick patterns meant that the trader believed everything he needed to know was in the price chart. This meant that traders were considering the impact of weather on the crop, the possibility of disruptions in supply related to war or epidemics, and any other possible input to supply or demand. Economists quantified this belief into the efficient market hypothesis, and the first precept of technical analysis — “Market action discounts everything” — was recognized as an idea worthy of a Nobel prize."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-46-48-technical-analysis-adapts-and-thrives-by-m-carr-and-a-hestla-21.gif"",""height"":""621"",""width"":""438""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-46-48-technical-analysis-adapts-and-thrives-by-m-carr-and-a-hestla-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-46-48-technical-analysis-adapts-and-thrives-by-m-carr-and-a-hestla-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294qaby,d,"{""minimum-quantity"":""1"",""path"":""ch4a207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:4 (49): Q&A by Don Bright"",""caption-linebreaks"":""Q&A by Don Bright

    LATE ON THE TRENDS

    I have a bad habit of getting into trends too late. I try to keep an eye on stocks with strong correlation to the Standard & Poor’s 500 with no outstanding news on them about earnings and so on. The indicators I mainly use are the S&P 500 and the futures tick chart. I also refer to the duck list frequently and look for at least five of the seven ducks to line up in addition to the other indicators.\nI also try to watch for resistance, but I still seem to take a position right before the stock changes direction. What am I doing wrong? —Jordan

    I gather you’ve already been to our classes, so let me explain to the readers what a “duck list” is. Basically, a duck list is getting several indicators in the same place at the same time — for example, premium or discount to (futures) fair value intraday, strong stock in a strong group and so on (for immediate directional plays). In addition, be sure the engine of the day is in alignment with your chosen directional entry."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-49-q-a-by-don-bright-20.gif"",""height"":""616"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-49-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-49-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov295than,d,"{""minimum-quantity"":""1"",""path"":""ch4a207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:4 (50-55): Then and Now with Tim Slater by J. Gopalakrishnan & B. Faber"",""caption-linebreaks"":""Then and Now with Tim Slater by J. Gopalakrishnan & B. Faber

    Before there was TradeStation, before there was MetaStock and eSignal, there was CompuTrac, one of the first technical analysis software programs ever written for a personal computer. The software could process technical analysis on stocks, futures, and fixed-income products. Tim Slater, the founder of CompuTrac Inc., wanted to chart his stocks, but discovered he didn’t have the patience. He found someone who did — and even he was surprised at what happened after that. In 1979 CompuTrac the company built the first set of software to do technical analysis online, real-time, presaging the coming era of the individual trader.

    In addition, Slater founded a series of conferences that were among the earliest to focus on trading and technical analysis and ground-breaking in its time, eventually holding them around the world, teaching traders the use of the CompuTrac software. Eventually, the company and its software were sold to Telerate, ushering in the era of computer technical analysis.

    Stocks & Commodities Editor Jayanthi Gopalakrishnan and Staff Writer Bruce R. Faber spoke with Tim Slater, now retired and living in New Orleans, on January 24, 2011, via telephone.

    Tim, how did you get interested in technical analysis?

    It had to have been back when I was in graduate school. I had inherited a portfolio of securities, and I started tracking them. Because I am visually inclined, I began graphing them also. I started doing some technical analysis then, and began using the computer at school at night to grind up some figures. Along the way, I found out a Merrill Lynch analyst was working on technical analysis on the company’s mainframe at night when he could get to the computer. I was intrigued by that. That was my first impression of what computers could do.

    That would have been when computers were bigger than the size of a Starbucks coffee shop these days.

    About this time there was a programmable calculator called a TI-59, which had a little tiny card that you could put your formulas in. I was intrigued so I bought one, and I spent about a year working with it, and it wasn’t long before I was keeping about 100 charts to track my stocks. It would take three hours a night to post all of them. It was sort of hard to keep up.

    The TI-59 wasn’t sophisticated enough for what you had in mind. So what did you do?

    A friend called me out of the blue and said, “Tim, we are going to buy you a computer.” I said, “What for?” He said, “My wife won’t let me have one, and I know you’ll let me play with yours.” So I bought an Apple II. My rationale was that I was going to use it to keep my charts.

    Is that what happened?

    I tried to do some programming, but I didn’t enjoy it. I didn’t have a knack for it. So I went back to the computer store, and I was asking the owner some questions, one of which was, “Is there any way to map the cursor to know what the value of a point beneath that cursor was?” He told me no, that the Apple didn’t have enough horsepower to do that.

    There was a kid standing behind me from Loyola University who overheard us, and he told me that he had a professor who had developed something he called a “Super Chip” that he used for character generation, and it probably had enough power to do what I wanted."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-50-55-then-and-now-with-tim-slater-by-j-gopalakrishnan-b-faber-20.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-50-55-then-and-now-with-tim-slater-by-j-gopalakrishnan-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-50-55-then-and-now-with-tim-slater-by-j-gopalakrishnan-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov295prre3,d,"{""minimum-quantity"":""1"",""path"":""ch4a207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:4 (56-58): Product Review: WSJ iPad App by Wallace Wang"",""caption-linebreaks"":""Product Review: WSJ iPad App by Wallace Wang

    For many Wall Streeters, reading The Wall Street Journal has always been important for keeping track of the latest financial news. In an age where real-time stock quotes are available over the Internet and financial news stories change every few minutes, however, the idea of relying on a physical newspaper feels more and more antiquated every day. Fortunately, you can avoid the drawbacks of carrying around a physical newspaper and still enjoy the editorial content of the Journal through the company’s free iPad app.

    The Wall Street Journal iPad app is free but limits access to roughly half of all available stories. Paid subscribers to the print version of the Journal can get full access to the iPad version for a limited time. If you want complete access to the iPad version, you’ll have to pay $3.99 a week. (The print version of the Journal costs $6.99 a week, while the online version costs $2.99 a week.)

    Besides allowing you access to all content, paying for the iPad version also lets you view the last seven days. So you can not only read the full content of today’s edition, but all the content of the past week’s editions as well (Figure 1).

    READING THE STOREIS

    If you’re already familiar with the print version of the Journal, you’ll find the iPad form mimics it, making adjusting to the iPad simple.

    Instead of turning physical pages, the iPad version has you swipe your finger toward the left or the right to read the previous or next page. To jump to a different section of the newspaper, you use a variety of swiping, tapping, or pinching motions (Figure 2)."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-56-58-product-review-wsj-ipad-app-by-wallace-wang-21.gif"",""height"":""762"",""width"":""585""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-56-58-product-review-wsj-ipad-app-by-wallace-wang-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-56-58-product-review-wsj-ipad-app-by-wallace-wang-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov295exyo1,d,"{""minimum-quantity"":""1"",""path"":""ch4a207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:4 (59): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    Does 1 + 1 = 2 or 1?

    Can I adjust a profitable long butterfly prior to expiration and if so, how? Would it amount to being a smart approach for this type of spread?

    Good question. When dealing with open profits, it’s always important to consider fresh alternative positioning through the adjustment process. As far as executing goes, the simplest and a perfectly reasonable adjustment would be to lock in your profits by exiting the long butterfly in full or partially.

    A return on investment of 50% to 100% prior to expiration isn’t uncommon for a long butterfly. That’s impressive in some ways, but the same profits will be a good deal less than the idealized maximum. That can be annoying. But remember the old saying: “Don’t get mad, get even.” Coupled with an appreciation for another old saying, “You get what you pay for,” traders can redirect their focus and take profits along the way rather than hold on for no good reason.

    This makes a good deal of sense as opposed to simply holding onto a paper profit. Not only are butterflies generally slow to expand toward their maximum profit potential due to the razor-like precision required of shares, it’s also an unlikely outcome. Worse, those paper gains could be quick to come undone altogether. And while we may have “only” paid $0.40 or $0.50 to initiate the butterfly, lots of small losses can hurt you over the long run."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-59-explore-your-options-by-tom-gentile-21.gif"",""height"":""617"",""width"":""426""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-59-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-59-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov296toka,d,"{""minimum-quantity"":""1"",""path"":""ch4a207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:4 (6): Today’s K-Wave and Beyond by Koos van der Merwe, CFP"",""caption-linebreaks"":""Today’s K-Wave and Beyond by Koos van der Merwe, CFP

    Trying to make sense of the markets is always a challenge. Here’s an updated look at the Kondratieff wave after 2010.

    When Nikolai Kondratieff developed his wave theory, he had never heard of technical analysis. He had also never met Ralph Elliott of Elliott wave theory fame, a man who lived in the same generation that he did, a man who expressed in a book he had written about Latin America: “There is a reason for everything and it is one’s duty to discover it.”

    In 1946, Ralph Elliott published Nature’s Law: The Secret Of The Universe, and sold the first 1,000 copies quickly to financial analysts. I have often wondered whether he had read about Nicolai Kondratieff and his cyclical theory, which came to international attention in Kondratieff’s 1925 book, The Major Economic Cycles (also translated as Long Wave Cycle). Tragically, Kondratieff’s conclusions were seen as a criticism of Josef Stalin’s intentions for the Soviet economy, causing him to be sentenced to the Soviet gulag and ultimately executed in 1938.

    Joseph Schumpeter in his 1939 book Business Cycles was the first to use the term “Kondratieff waves,” which means that Ralph Elliott could have been aware of them. However, there is no evidence that he ever tied his wave counts to the K-wave.

    USING WAVES

    But in all my long-term analyses, I do tie the K-wave and the Elliott wave counts together, because I believe that the K-wave identifies major lows and highs in any Elliott wave count. In my November 2008 Stocks & Commodities article on the K-wave, I explained the theory, and I have repeated the K-wave chart here in Figure 1 for you to study."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-6-today-s-k-wave-and-beyond-by-koos-van-der-merwe-cfp-20.gif"",""height"":""622"",""width"":""439""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-6-today-s-k-wave-and-beyond-by-koos-van-der-merwe-cfp-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-6-today-s-k-wave-and-beyond-by-koos-van-der-merwe-cfp-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov296prre1,d,"{""minimum-quantity"":""1"",""path"":""ch4a207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:4 (60-62): Product Review: MetaSwing 4 by Dennis Peterson"",""caption-linebreaks"":""Product Review: MetaSwing 4 by Dennis Peterson

    MetaSwing is available as a set of TradeStation EasyLanguage and workspace files or as a MetaStock plug-in. MetaSwing uses historical price volatility as the basis for building indicators. The previous review of MetaSwing was for version 3.5, while this review covers version 4.

    On the surface of it, not much has changed. Out of sight are the calculations used to create two mechanical trading systems. An attempt has been made to codify trading — that is, create a piece of software reflecting the choices you make as a trader when using MetaSwing indicators. The beauty of doing this is that you can now trade this system over various time frames, then collect and analyze the outcome.

    Before we examine the results, let us first look at some of the MetaSwing indicators.

    METASWING TEMPLATES AND INDICATORS

    Using the Msw4Daily template in MetaStock, you get a number of indicators on the price chart and four more in subcharts (Figure 1). Three additional templates have been added for MetaSwing 4, bringing the total up to eight. What is new on the price portion of this chart are the words “buy” and “sell.” They are generated by one of the two mechanical trading systems telling you it is time to enter and exit a trade. What is also new are revised and improved trend calculations used for the green and red trend bands shown below the price band.

    MetaSwing, as the name implies, is about swings and following a trend. But of course what you want is an entry point at the beginning of the swing or trend. The approach followed by MetaSwing is to use historical price volatility to find high and low price extremes. The precedents for this approach can be found in option pricing, and for equities, the ability of Bollinger bands to predict price change."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-60-62-product-review-metaswing-4-by-dennis-peterson-21.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-60-62-product-review-metaswing-4-by-dennis-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-60-62-product-review-metaswing-4-by-dennis-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov296prre2,d,"{""minimum-quantity"":""1"",""path"":""ch4a207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:4 (64-65): Product Review: NinjaTrader 7 Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Product Review: NinjaTrader 7 Jayanthi Gopalakrishnan

    When it comes to trading, there are only a few things you can control. These include the size of your positions, your entry, and your exit. When you are trying to trade in a fast-moving market, you must make decisions about your position size, entry, and exit very quickly. To prepare yourself to do that, you need to come up with various scenarios to tackle different market conditions.

    Judging by the features available in NinjaTrader 7 (NT7), I assume the developers created this product with trade management as its focus. The product has a very rich set of features aimed at making trading for scalpers, swing traders, futures traders, currency traders, and equity traders more efficient.

    INSTALLATION AND DATA

    Installation only took a few minutes. You need to enter a product license key. NinjaTrader has partnered with several datafeeds and brokerages. A complete list is available on the company’s website. You can also use their preferred data provider Kinetick (www.kinetick.com), which starts at $50 per month for real-time service and is a free end-of-day datafeed."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-64-65-product-review-ninjatrader-7-jayanthi-gopalakrishnan-20.gif"",""height"":""632"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-64-65-product-review-ninjatrader-7-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-64-65-product-review-ninjatrader-7-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov29682tr,d,"{""minimum-quantity"":""1"",""path"":""ch4a207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:4 (66-71, 82): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    For this month’s Traders’ Tips, the focus is Giorgos Siligardos’ article in this issue, “Identifying Cup Formations Early.” One additional Traders’ Tip is contributed for Peter Konner’s article in the January 2011 issue of S&C, “Combining Rsi with Rsi.”

    Code for MetaStock is already provided in Siligardos’ article. Subscribers will also find the same code at the Subscriber Area of our website, www.Traders.com. Presented here is an overview of possible implementations for other software.

    Traders’ Tips are provided to help the reader implement a selected technique from an article in this issue. The entries are contributed by various software developers or programmers for software that is capable of customization.

    Readers will find all the code listings that accompany the following Traders’ Tips at our website, Traders.com. Provided here is some discussion of the technique's implementation by the Traders’ Tips contributors as well as some example charts.

    To locate Traders’ Tips at our website, use our site’s search engine, or click on the Traders’ Tips link from our home page. For past Traders’ Tips, click on the “Stocks & Commodities” link from our home page in the red box on the left, then click on the “Article Abstracts” link in the red box on the left, then click on the issue of interest, then on “Traders' Tips.”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-66-71-82-traders-tips-by-technical-analysis-inc-20.gif"",""height"":""762"",""width"":""534""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-66-71-82-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-66-71-82-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov297bofo3,d,"{""minimum-quantity"":""1"",""path"":""ch4a207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:4 (76): Books For Traders by Technical Analysis, Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis, Inc."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-76-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""613"",""width"":""412""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-76-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-76-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov298leto1,d,"{""minimum-quantity"":""1"",""path"":""ch4a207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:4 (8-11): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    Editor,

    Where can I find the results of your Readers’ Choice Awards, which I saw a reference to at your website?\nAhmet

    The 2011 Readers’ Choice Awards can be found in our 2011 Bonus Issue, which was mailed in February to all subscribers, and which will continue to be mailed out throughout the year to new subscribers. The Readers’ Choice Awards are based on the results of an online poll asking subscribers to vote for their favorite products and services.—Editor

    KONDRATIEFF WAVE

    Editor,

    I was reading “Kondratieff Wave Comeback” by Koos van der Merwe in the April 2010 S&C. I am new to the K-wave theory but I am fascinated by it. It is also my goal to achieve a better knowledge of Elliott wave theory.\nI was wondering if the author could explain his approach to counting waves. I can count simple and straightforward waves, but when it comes to patterns like an inside day or three falling/rising candlestick pattern, I get stuck. I have been counting using pivot points (such as explained by Thomas DeMark), but I run into confusion when the waves get more complicated, as with extensions. This is especially true when it comes to corrective waves ABC.\nHgs"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-8-11-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""618"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-8-11-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-4-8-11-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov29136ga,d,"{""minimum-quantity"":""1"",""path"":""ch5m207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:5 (14-15, 36): Gap Fill And Go by Jamie Theiss"",""caption-linebreaks"":""Gap Fill And Go by Jamie Theiss

    Here’s a look at two trades using a strategy you can use almost every day.

    I'M going to show you two trades using a bread & butter strategy you can use almost every day to capture profits from the stock market. As you can see from Figures 1 and 2, I use candlesticks and moving averages on a five-minute time frame. I use the eight- and 21-period simple moving averages (SMA), which are displayed in green and blue, respectively, along with the 200-period SMA (red). Of course, eight and 21 are Fibonacci numbers. In addition, the 200-day SMA is watched by so many that it has practically become self-fulfilling. I call the technique the “gap fill and go.”

    THE SETUP

    To set up these trades, please observe that the eight- and 21-period Smas are in an uptrend on the five-minute chart. While not shown, the Smas are also in an uptrend on the higher time frame charts, such as the 15-minute and 60-minute charts.

    Next, we have a bullish gap up on the opening bell. Now the hardest part of the trade is sitting on your hands for the first 30 minutes of trading. You want to just sit and observe. Then, you may begin to notice the gaps are starting to fill. This is just a version of the well-tested slogan, “Buy the dips and sell the rallies.” You are just waiting for the dip to occur in the predetermined uptrend."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-14-15-36-gap-fill-and-go-by-jamie-theiss-23.gif"",""height"":""637"",""width"":""464""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-14-15-36-gap-fill-and-go-by-jamie-theiss-30.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-14-15-36-gap-fill-and-go-by-jamie-theiss-31.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov29136ga1,d,"{""minimum-quantity"":""1"",""path"":""faarfr202"",""ysw-page-title"":""Stocks & Commodities V. 29:5 (14-15, 36): Gap Fill And Go by Jamie Theiss"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-14-15-36-gap-fill-and-go-by-jamie-theiss-27.gif"",""height"":""180"",""width"":""131""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-14-15-36-gap-fill-and-go-by-jamie-theiss-28.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-14-15-36-gap-fill-and-go-by-jamie-theiss-29.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov29128in1,d,"{""minimum-quantity"":""1"",""path"":""faarfr202"",""ysw-page-title"":""Stocks & Commodities V. 29:5 (16-23, 28): In The Volume Zone by Walid Khalil and David Steckler"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-16-23-28-in-the-volume-zone-by-walid-khalil-and-david-steckler-29.gif"",""height"":""180"",""width"":""124""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-16-23-28-in-the-volume-zone-by-walid-khalil-and-david-steckler-30.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-16-23-28-in-the-volume-zone-by-walid-khalil-and-david-steckler-31.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov29128in,d,"{""minimum-quantity"":""1"",""path"":""ch5m207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:5 (16-23, 28): In The Volume Zone by Walid Khalil and David Steckler"",""caption-linebreaks"":""In The Volume Zone by Walid Khalil and David Steckler

    Here’s a look at the volume zone oscillator, which can be applied to trending and nontrending markets. Find out how it can be used to trade the Djia, Spy, and gold.

    AN axiom of technical analysis states that with few exceptions, all technical indicators can be classified as either trending or oscillating (nontrending) in their design. This new indicator, the volume zone oscillator (VZO), addresses both.

    In his book Technical Analysis Of The Financial Markets, John J. Murphy explains that using oscillators provides three benefits:

    • Overbought and oversold conditions warn that price trend is overextended and vulnerable.

    • Divergence between oscillator and price action shows hidden strength or weakness in the market, which is not apparent in the price action.

    • The crossing of the zero line can give an important trading signal.

    \nThe formula depends on only one condition: If today’s closing price is higher than yesterday’s, then the volume will have a positive value (bullish). Otherwise, it will have a negative value (bearish).

    So:\nVolume zone oscillator = 100 x (VP/TV)

    where:\nVP (Volume position) = X-days Ema (± volume)

    and\nTV (Total volume) = X-days Ema (volume)

    THE VOLUME ZONE OSCILLATOR

    Volume is simply the number of shares or contracts that have been traded throughout the day, so the higher the volume, the more active the security. Volume is always treated as a secondary indicator, despite its importance in confirming trends and chart patterns.

    Volume analysis is a key component of analyzing and predicting the future direction of an asset. Joe Granville introduced the on-balance volume (Obv) indicator in his Granville’s New Key To Stock Market Profits. This was one of the first and most popular indicators to measure positive and negative volume flow. The concept behind Obv is that volume precedes price. Obv adds a period’s volume when the close is up and subtracts the period’s volume when the close is down."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-16-23-28-in-the-volume-zone-by-walid-khalil-and-david-steckler-23.gif"",""height"":""619"",""width"":""428""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-16-23-28-in-the-volume-zone-by-walid-khalil-and-david-steckler-27.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-16-23-28-in-the-volume-zone-by-walid-khalil-and-david-steckler-28.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov292inca,d,"{""minimum-quantity"":""1"",""path"":""ch5m207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:5 (24-28): Investment Candles by Thomas N. Bulkowski"",""caption-linebreaks"":""Investment Candles by Thomas N. Bulkowski

    Which candlesticks work best as reversal or continuation patterns? Find out here.

    Investment-grade candlesticks work as reversal or continuation patterns at least two-thirds of the time (66%), and they are plentiful. By “plentiful,” I mean that I sorted a list of 103 candlestick patterns by how often they appeared in the Standard & Poor’s 500 from August 1996 to August 2006. I split the list and discarded the rare ones. That left just 13 candle types, which I describe here.

    CONFIGURATION AND DEFINITION

    Before I discuss the performers, let’s review the configuration. Figure 1 shows two candlesticks, one black and the other white. The price bar’s high is at the top of the candle, and the low is at the bottom. Between those two extremes are the opening and closing prices, the order of which determines the candle body’s shade. The thin bars at either end are the shadows or wicks, with a body sandwiched in between. A candle need not have a shadow, and the body can be a flat line as in a four-price doji. In those situations, all four prices are the same."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-24-28-investment-candles-by-thomas-n-bulkowski-21.gif"",""height"":""618"",""width"":""428""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-24-28-investment-candles-by-thomas-n-bulkowski-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-24-28-investment-candles-by-thomas-n-bulkowski-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov293pust,d,"{""minimum-quantity"":""1"",""path"":""ch5m207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:5 (30-32): Putting A Stop To It by David Garrard"",""caption-linebreaks"":""Putting A Stop To It by David Garrard

    A greater focus on your exit strategy and less on your entry may make a big difference in your overall trading results.

    nvestors and traders alike devote a considerable amount of time focusing on what investments to make and what tools to use to make these investments. Novices often spend very little time planning the exit strategy. This is the key difference between seasoned traders and novices. In fact, a greater focus on the exit and less on the entry might make the real difference in your overall trading effectiveness.

    WHY USE STOPS?

    When a loss is posted, we always measure it relative to our original holdings. A similar measure is calculated when a profit is posted. It is important to understand the asymmetry built into a loss/win cycle. Figure 1 shows that if you post a loss of 10%, it will take a percentage gain of 11.1% to recover. Okay, you can live with that as a recovery target. So what happens if you post a loss of 30%? It requires a recovery of 43% above your present net holdings to get back to your original account value. What happens if you lose 80% of your holdings? Well, that will require a 400% price move to recover your losses — not much chance of that in today’s markets. The lesson here is to cut your losses early. That is where the proficient use of stop alerts comes in.

    Consistently deploying stops can be painful, but it will allow you to know the maximum limit of your loss in advance, moving you away from later stage fear–based decision-making that can occur when a trade goes against you. It’s already been decided in your trading plan; you exit with a controlled loss. In fact, if you develop good exit techniques based on trailing stops, you can also control the greed that often sets in when trades go in your direction. You can often end up with more profit due to systematic usage of stops.

    There are all sorts of complicated mechanisms, but as is common in most investing situations, simple is best. We’ll review some of these."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-30-32-putting-a-stop-to-it-by-david-garrard-21.gif"",""height"":""633"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-30-32-putting-a-stop-to-it-by-david-garrard-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-30-32-putting-a-stop-to-it-by-david-garrard-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov293qusc,d,"{""minimum-quantity"":""1"",""path"":""ch5m207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:5 (34-35): Quick Scans: The Machine Lite by Jayanthi Gopalakrishnan"",""caption-linebreaks"":""Quick Scans: The Machine Lite by Jayanthi Gopalakrishnan

    In addition to selecting an equity, exchange traded fund (Etf), index, option, currency pair, futures contract, and so on to trade at any given time, at times you may want to select a portfolio of tradables that give you the desired results. Markets perform differently during different market conditions, which is why we are always told to diversify our holdings. But there is not much point in diversifying if everything you own goes up or down together. Creating an optimal portfolio, one that lets you keep your losses to a minimum, can be challenging and time consuming.

    To help you accomplish this, The Connors Group has come up with The Machine, and its less-powerful version is referred to as The Machine Lite. Both products are designed to eliminate the guesswork from creating a portfolio and reduce the learning curve. For this review I tested The Machine Lite. The major difference between the two: Lite doesn’t give you access to all available strategies."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-34-35-quick-scans-the-machine-lite-by-jayanthi-gopalakrishnan-21.gif"",""height"":""617"",""width"":""426""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-34-35-quick-scans-the-machine-lite-by-jayanthi-gopalakrishnan-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-34-35-quick-scans-the-machine-lite-by-jayanthi-gopalakrishnan-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov293cois,d,"{""minimum-quantity"":""1"",""path"":""ch5m207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:5 (38-44): Context Is Everything by Gil Morales and Chris Kacher"",""caption-linebreaks"":""Context Is Everything by Gil Morales and Chris Kacher

    This is how you use stock and index charts to determine market context.

    You do not have to be a Chartered Market Technician to understand how market context can influence the price behavior of stocks. No stock is an island, and how a stock behaves is often a function of the market at large, which in turn is a function of underlying conditions — the context within which any particular market environment is developing.

    In the simplest of terms, we know that in a bull market, most stocks go up, and in a bear market, most stocks go down, so this basic idea that market context can provide meaningful clues when studying stock charts is already something we are familiar with when we speak of bull and bear market environments.

    IT'S THE CONTEXT

    While the use of stock charts can be very complex, often the exercise of comparing the price behavior of a stock to a chart of the market as represented by, for example, a major market index such as the Nasdaq Composite Index or the Standard & Poor’s 500 can help you understand a stock’s potential strength. You are also able to better understand why certain price movements are evident in a stock’s overall price chart. When it comes to understanding the price/volume behavior of stocks, context is everything.

    THE PATTERNS DON'T HAVE TO BE PERFECT

    In autumn 1998 the stock market was experiencing a very sharp selloff in a very short period of time: a sort of “instant bear market” that lasted not quite three months but saw the Nasdaq fall 33% from peak to trough in that time. In Figure 1 we see the Nasdaq Composite Index daily chart from that period stacked on top of a daily chart of Charles Schwab, Inc. (Schw), one of the early leaders that emerged from the market bottom of October 1998. In this example, the Nasdaq came down in a series of three very sharp waves, the first ending in early August, the second in early September, and the third in early October."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-38-44-context-is-everything-by-gil-morales-and-chris-kacher-21.gif"",""height"":""637"",""width"":""465""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-38-44-context-is-everything-by-gil-morales-and-chris-kacher-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-38-44-context-is-everything-by-gil-morales-and-chris-kacher-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294qaby1,d,"{""minimum-quantity"":""1"",""path"":""ch5m207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:5 (45): Q&A by Don Bright"",""caption-linebreaks"":""Stocks & Commodities V. 29:5 (45): Q&A by Don Bright

    MARK TO MARKET ACCOUNTING

    You have written about the tax advantages of being a professional trader versus a retail trader. You also mentioned something about mark to market accounting. Could you expand on these points? —JBelliott

    Sure, glad to shed some light on this. If you were to buy 1,000 shares of GE at $20, yet it is now trading at $21, you have a mark to market profit of $1,000, even though you haven’t sold the shares yet. In my mind, this gives a better and truer reflection of where you really stand. On the other end, if you bought 1,000 shares of Google [Goog] a few months back at $640, and it’s now trading at $575, you have a mark to market loss, but not a capital gain loss. Some retail traders tend to almost kid themselves by saying, “I haven’t really lost any money because I haven’t sold the stock yet.” Well, as cute as that sounds, you really have lost money, no doubt about it."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-45-q-a-by-don-bright-21.gif"",""height"":""616"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-45-q-a-by-don-bright-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-45-q-a-by-don-bright-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov294insh,d,"{""minimum-quantity"":""1"",""path"":""ch5m207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:5 (46-52): Interview: Short Swings In Futures With Markus Heitkoetter by J. Gopalakrishnan and B. Faber"",""caption-linebreaks"":""Interview: Short Swings In Futures With Markus Heitkoetter by J. Gopalakrishnan and B. Faber

    As founder and Ceo of Rockwell Trading, Markus Heitkoetter has shared his trading methods and ideas with more than 300,000 traders in over 196 countries. Heitkoetter started trading stocks 19 years ago, using point & figure charts from numbers published in the morning newspaper. In 1996, he began developing a number of trading systems, and in 2002, he decided to leave his job as a director at Ibm to become a professional trader. Throughout his career, Heitkoetter has traded virtually everything from stocks, options, futures, commodities, and spreads, all the way to forex and interest rates. In addition, he is the author of the bestselling book The Complete Guide To Day Trading and is a regular speaker at Trading Expo and Cme Group–sponsored events. His articles and videos are published on MoneyShow.com, in major publications, and on thousands of websites around the world. Heitkoetter lives with his family in Austin, TX.

    Stocks & Commodities Editor Jayanthi Gopalakrishnan and Staff Writer Bruce Faber interviewed Markus Heitkoetter via telephone on March 7, 2011.

    Markus, can you tell us about yourself and how you got started in trading?

    I am originally from Germany, but I live in Texas right now. I did my first trade when I was in high school. I was 18, which is when I was legally allowed to trade in Germany. At that point I bought one share of VW, which is a share in the German Dax. I bought it for around 50 Deutschmarks. I was so excited. I could only afford one share. Talk about disposable income in money you can afford to lose!

    After I bought that share I would, twice a day, go to a pay phone in my school and call my broker. I would ask him things like, “How are we doing? How much money did I make?” This went on until the third day when my broker said, “You know, Markus, how much money would you like to make on this trade?” I said to myself, “If I could make 10 Deutschmarks, that would be awesome.” So I told him, “Ten Deutschmarks. That is the profit I want to make.” He said, “Done. Stop by my office tomorrow morning. I will give you the 10 Deutschmarks, but stop calling me every single day.”

    This was my first trade, and it turned out to be a profitable one, which of course encouraged me. But I noted that with the little money I had at that time I could not really be a trader. So I saved some more and then started trading options. I did some straddles and strangles, and I had the quotes from the morning newspapers, and some hand-drawn point & figure charts. This is how I identified stocks in the Dax 30 that were poised for a breakout. That is how I started building my account.

    From then I started trading stocks. I tried everything that everyone knows these days. I tried fundamental analysis. I tried the Canslim method. I did all of this until finally in 1995, when computers became more powerful, I went into chart analysis. I was fascinated by it. I bought my first software, which was SuperCharts by Omega Research, now TradeStation. This is where I first started reading about indicators. I have a German book about 600 pages long, The Big Book Of Indicators, with 167 indicators. I think I plotted 163 of them on my screen. I just thought that the more indicators I used, the better. Little did I realize that half of the indicators were screaming “Buy!” and the other half were screaming “Sell!” I was sitting there with analysis paralysis, not knowing what to do.

    So what did you do?

    Like every trader, I went through the phase of automating trading systems, so I thought, “I am smarter than everybody else.” Having a programming background, I thought I could develop the perfect trading system. I read a lot of books about it. At that time I had not discovered the Internet yet, so all of my quotes came from dial-up. I wasted two years of my life trying to automate a trading system when it finally dawned on me: I needed to simplify my trading. I had to keep it easy so I could know, at any given time, when to enter and when to exit."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-46-52-interview-short-swings-in-futures-with-markus-heitkoetter-by-j-gopalakrishnan-and-b-faber-21.gif"",""height"":""633"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-46-52-interview-short-swings-in-futures-with-markus-heitkoetter-by-j-gopalakrishnan-and-b-faber-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-46-52-interview-short-swings-in-futures-with-markus-heitkoetter-by-j-gopalakrishnan-and-b-faber-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov295fufo,d,"{""minimum-quantity"":""1"",""path"":""ch5m207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:5 (54): Futures For You by Carley Garner"",""caption-linebreaks"":""Futures For You by Carley Garner

    DISTINCTIVELY DIFFERENT DELIVERY

    Why are there dramatic differences in the way the yen is quoted in the futures market relative to the foreign exchange market?

    There are distinct differences between the futures and the forex markets that create dramatically different pricing for the yen, yet in both markets the currency’s inherent value will always be similar. For starters, yen futures and the dollar/yen currency pair in forex are each quoted in different terms; second, forex contracts represent immediate delivery and futures represent “future” delivery, which causes some variation in pricing.

    Although speculators are essentially betting on the same underlying assets when trading currencies in either the forex or futures market, very different standards are set in each trading arena. For instance (ignoring the relatively new currency pair futures introduced by the Cme Group and Ice), the traditional Cme Group currency futures are all paired against the US dollar. Specifically, all are quoted and traded in terms in which the dollar is the quote currency. The price you are buying or selling a currency futures contract at is quoted in terms of the US dollar. For instance, if the euro is trading at 1.3345, it takes exactly $1.3345 to purchase a single euro."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-54-futures-for-you-by-carley-garner-21.gif"",""height"":""616"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-54-futures-for-you-by-carley-garner-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-54-futures-for-you-by-carley-garner-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov295prre4,d,"{""minimum-quantity"":""1"",""path"":""ch5m207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:5 (56-59): Product Review: Mesa 9 by Dennis Peterson"",""caption-linebreaks"":""Product Review: Mesa 9 by Dennis Peterson

    esa9 is a set of studies for TradeStation, MultiCharts, and NeuroShell Trader that employs the latest evolution of John Ehlers’s analysis techniques. The indicators are a set of tools, and without a doubt, one of the most powerful approaches that try to predict price behavior.\nThe premise of Ehlers’s approach is unassailable. A price series is nothing more than a time series and therefore subject to signal analysis techniques. The overall approach is to find what Ehlers refers to as the dominant cycle. If price were to move up and down following a perfect sine wave, prediction would be a snap, and of course, the dominant cycle would be that sine wave. But alas, the real world is more complicated.\nIn a perfect world, it’s not difficult to imagine taking the normal up and down price movements and converting them to a sine wave. Borrowing a picture from Ehlers’s user manual, a sine wave superimposed on a straight line (see Figure 1) begins to look like price in a trend. If only it were so easy. A trend following a straight line is, especially if it’s daily data, a highly unlikely event, if not impossible.

    DOMINANT CYCLE

    The temptation here is to use a Fourier series. Or at least explain what the analysis is doing in terms of a Fourier series. A Fourier series, invented by the French mathematician and physicist Joseph Fourier (1768–1830), employs the linear sum of sine and cosine waves. Amazingly, you can replicate a repeating square waveform with a series of sine and cosine waves in the limiting case. But the answer you get is not one that is tradable, and Ehlers makes that point in his user manual. He employs filtering techniques using a feedforward design to measure the dominant cycle, as opposed to the feedback design he had with Mesa8. When Ehlers talks about a spectrum of frequencies, he is really talking about a set of cycles for which he has calculated their amplitude, and the cycle with the greatest amplitude is the dominant cycle."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-56-59-product-review-mesa-9-by-dennis-peterson-21.gif"",""height"":""633"",""width"":""485""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-56-59-product-review-mesa-9-by-dennis-peterson-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-56-59-product-review-mesa-9-by-dennis-peterson-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov296exyo,d,"{""minimum-quantity"":""1"",""path"":""ch5m207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:5 (60): Explore Your Options by Tom Gentile"",""caption-linebreaks"":""Explore Your Options by Tom Gentile

    A STRONGER CALL POSITION

    I’ve noticed many stocks see their strongest or weakest price levels in afterhours or premarket trade immediately following an earnings release. With the stock’s listed options not open during those sessions, it seems an investor with a long call, if the move is up, could be missing out on exiting at more opportune levels. Why is this and do you see any changes in the future?

    Whether listed equity options will trade in the afterhours or premarket sessions and afford option strategists the same type of access as stock traders have to their shares is, in the end, a political thing. I haven’t heard of any pending reform to do so.

    One real deterrent to extending trading hours for options is liquidity. Remember, calls and puts are derivatives of the underlying, which we can assume will have less liquidity during these trading sessions. Thus, even if you are holding a typically well-traded front month option, closing or adjusting into an attractive spread would likely prove challenging at best.

    An argument to extend trading hours for a security’s options might be following an earnings announcement. For the most highly capitalized companies that also sport strong institutional liquidity during the regular trading session, this could make sense. For companies such as Apple (Aapl), Google (Goog), Bank of America (Bac), and the like, we might expect there to be sufficient interest to make a special session worthwhile."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-60-explore-your-options-by-tom-gentile-21.gif"",""height"":""616"",""width"":""422""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-60-explore-your-options-by-tom-gentile-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-60-explore-your-options-by-tom-gentile-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov296trti2,d,"{""minimum-quantity"":""1"",""path"":""ch5m207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:5 (61-69): Traders’ Tips by Technical Analysis, Inc."",""caption-linebreaks"":""Traders’ Tips by Technical Analysis, Inc.

    For this month’s Traders’ Tips, the focus is Walid Khalil and David Steckler’s article in this issue, “In The Volume Zone.” One additional Traders’ Tip is contributed for Koos van der Merwe’s article in the December 2010 issue of S&C, “Less Stress With The JM Internal Band.”

    Code for the volume zone oscillator for MetaStock and TradeStation is already provided in Khalil and Steckler’s article. Subscribers will also find the same code at the Subscriber Area of our website, www.Traders.com. Presented here is an overview of possible implementations for other software.

    Traders’ Tips are provided to help the reader implement a selected technique from an article in this issue. The entries are contributed by various software developers or programmers for software that is capable of customization.

    Readers will find all the code listings that accompany the following Traders’ Tips at our website, Traders.com. Provided here is some discussion of the technique's implementation by the Traders’ Tips contributors as well as some example charts.

    To locate Traders’ Tips at our website, use our site’s search engine, or click on the Traders’ Tips link from our home page. For past Traders’ Tips, click on the “Stocks & Commodities” link from our home page in the red box on the left, then click on the “Article Abstracts” link in the red box on the left, then click on the issue of interest, then on “Traders' Tips.”"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-61-69-traders-tips-by-technical-analysis-inc-21.gif"",""height"":""618"",""width"":""427""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-61-69-traders-tips-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-61-69-traders-tips-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov297bofo4,d,"{""minimum-quantity"":""1"",""path"":""ch5m207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:5 (76): Books For Traders by Technical Analysis Inc."",""caption-linebreaks"":""Books For Traders by Technical Analysis Inc.

    • Death Of The American Investor: The Emergence Of A New Global eShareholder

    • Exchange Traded Profits: Cashing In On New ETF Trading Methods

    • Lehman Brothers’ Dance With Delusion: Wrestling Wall Street

    • Safety Net: The Strategy For De-Risking Your Investments In A Time of Turbulence

    • Technical Analysis For Dummies, 2nd ed.

    • Trading In The Footsteps Of Sherlock Holmes: Balancing Probabilities For Successful Investing"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-76-books-for-traders-by-technical-analysis-inc-20.gif"",""height"":""614"",""width"":""414""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-76-books-for-traders-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-76-books-for-traders-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov298leto2,d,"{""minimum-quantity"":""1"",""path"":""ch5m207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:5 (8-12): Letters To S&C by Technical Analysis, Inc."",""caption-linebreaks"":""Letters To S&C by Technical Analysis, Inc.

    Editor,

    I have been a follower of your magazine for quite some time, and usually read it from cover to cover as soon as it arrives in the mail. For some time I have been using an evaluation methodology similar to what Stephen Massel describes in his article, “What Can You Expect, Mathematically?” in the March 2011 issue of S&C.

    I was pleasantly surprised to see the methodology I use in evaluating my trading systems described in such a good fashion, and can’t help but ask the author about the single discrepancy I have with the one described in the article. Massel describes the calculation for the reward/risk ratio as the average profit per trade/average loss per trade in dollars as an appropriate measure. I moved away from using such a measure some time ago, as it is very dependent on the price of the instrument being traded (and thus on the position size) — as the author properly states in his “Application To Your Own Trading” section. Instead, I prefer to use the payoff ratio, which is calculated as (average percentage profit per trade)/(average percentage loss per trade). Conceptually, they should be equivalent, as both of them are dividing an average profit per trade by an average loss per trade (one expressed in dollars and the other one expressed as a percentage). However, in practice, I have found that there are slight differences in the result between each approach. In some cases, the percentage calculation for the expectancy is higher and in others the absolute amount calculation is higher, as can be seen in the attached spreadsheet [not shown—Ed.] with a set of tests runs.

    Conceptually, I think there should be a preference for the expectancy calculated as a percentage, since it offers the advantage of independence to the price level of the traded instrument. Can the author offer any further insight on this?

    On a side note, the article mentions that the author works in Wealth-Lab. Does he have any performance visualizer for the Wealth-Lab platform that incorporates the measures he mentions in his article?

    Thanks and keep up the good work.\nJorge Dardón P.\nDoral, FL"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-8-12-letters-to-s-c-by-technical-analysis-inc-21.gif"",""height"":""618"",""width"":""423""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-8-12-letters-to-s-c-by-technical-analysis-inc-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-8-12-letters-to-s-c-by-technical-analysis-inc-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov29880at1,d,"{""minimum-quantity"":""1"",""path"":""ch5m207"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:5 (82, 80): At The Close by Donald W. Pendergast Jr."",""caption-linebreaks"":""At The Close by Donald W. Pendergast Jr.

    Never before has the typical futures market participant had so many trading opportunities available — and all under one roof.

    IN late 2009, Nyse Liffe US began offering futures contracts based on the Morgan Stanley Capital International (Msci) indexes, one of the most widely followed group of market index benchmarks in the world. While I can’t even begin to scratch the surface as to how big the implications are, especially for US-based traders, here are some of the major advantages of moving at least a portion of your trading activities to any or all of these Msci index–linked futures market products.

    Currently, there are two main classes of Msci indexes licensed by Nyse Liffe US for futures trading: those focused on developed markets and those that deal solely in emerging markets. Between these two classes of indexes, six specific regions are covered, which essentially covers the entire international trading and investing arena:

    DEVELOPED MARKETS

    - Msci Usa (styles, sectors)\n- Msci Europe (large cap, styles, sectors)\n- Msci Emu (large cap, styles, sectors)\n- Msci Eafe"",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-82-80-at-the-close-by-donald-w-pendergast-jr-20.gif"",""height"":""627"",""width"":""459""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-82-80-at-the-close-by-donald-w-pendergast-jr-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-5-82-80-at-the-close-by-donald-w-pendergast-jr-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}" stcov291stcu,d,"{""minimum-quantity"":""1"",""path"":""ch6j208"",""leaf"":""1"",""template"":""storetemplate."",""ysw-page-title"":""Stocks & Commodities V. 29:6 (12-14): Straightening The Curves by Austin Passamonte"",""caption-linebreaks"":""Straightening The Curves by Austin Passamonte

    Consistently making a small profit on one contract is the first step to becoming a successful trader. Here’s a strategy that shows you how to do that using crude oil contracts as an example.

    Axioms and clichés have made their way around the trading world for eons. They are now commonly accepted as gospel, and a lot of them are true. But others such as “Trade every signal, take every trade without exception, trade well and profits will follow” are common beliefs that are only partially true at best. The world of swing or trend trading, where entry signals and actual price movements are scattered or limited, is an entirely different world from short-term or intraday trading. Working between the bells of the pit or the Globex sessions of the electronic markets offers numerous potential price swings inside each period of operation.

    That said, it is not like anyone can expect to trade every minute of every day with real opportunity all the way. Financial markets only offer limited profit potential inside any given period of operation.

    Long-term cumulative results can be broken down into bell-curve distributions of data. One end of the curve represents low-volatility, limited-range sessions, while the opposite end represents high-volatility, wide-range sessions. That leaves the fat part in the middle, which represents a majority of sessions where price ranges, volume, and volatility levels fall inside some degree of assigned historical norm."",""imageFields"":{""image"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-6-12-14-straightening-the-curves-by-austin-passamonte-20.gif"",""height"":""619"",""width"":""430""},""image-amp-main"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-6-12-14-straightening-the-curves-by-austin-passamonte-24.gif"",""height"":""200"",""width"":""360"",""type"":""amp-main""},""image-amp-inset"":{""url"":""https://s.turbifycdn.com/aah/traderscom/stocks-commodities-v-29-6-12-14-straightening-the-curves-by-austin-passamonte-25.gif"",""height"":""100"",""width"":""100"",""type"":""amp-inset""}},""relations"":[]}"