ARTICLE SYNOPSIS ...A New Slant On Head And Shoulders by Charles E. Miller Here's a detrending technique that will help you visualize slanted head and shoulder top patterns more clearly. When the good old reliable head and shoulders (H&S) pattern emerges simultaneously in the Dow Jones Industrial Average (DJIA), the Nasdaq Composite (COMPX), and the S&P 500, it is not a good sign. The H&S indicates that a top has been reached, and that the market is due to head down. The display of the DJIA chart in Figure 1 is a near-perfect example of a classic head and shoulder pattern. H&S bottom formations are just as sign...
ARTICLE SYNOPSIS ...Pseudo Securities For Technical Analysts As you develop your analytical skills, you probably pick a favorite market to study. So depending on the market, you could come to different conclusions about the value of different techniques of analysis. With that in mind, what if you used artificial data with distinct properties as a basis for learning the attributes of technical methods? In this, the first of a threepart series, we explore the notion of using pseudo securities. The objective of technical analysis is to locate securities with the necessary volatility to make potentially profitable ro...
ARTICLE SYNOPSIS ...Pseudo Securities For Technical Analysts - Part 2 Last time, we examined the idea of using pseudo securities, based on artificial data with known properties, to map the characteristics of various indicators. We then applied this concept to the time domain of security analysis. In this, the second of a three-part series, we explore the actual technique used to generate pseudo security data. When working with pseudo securities, as with anything else new on the computer, it is generally common sense not to experiment within your working application. For ProTA, BeeSoft's technical analysis softw...
ARTICLE SYNOPSIS ...Pseudo Securities For Technical Analysts Part 3 The first two parts of this three-part series examined the theory, generation technique, and time series application of rectilinear pseudo securities. In this, the conclusion, the same theory is applied to the frequency domain of the market using sinusoidal pseudo securities to produce a method for their construction. Whereas the time domain was used to investigate the linear relationships between market data and time, the frequency domain will enable us to identify and study cyclical, nonlinear relationships in security price movement. Trendli...