Technical Analysis of STOCKS & COMMODITIES
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Article Archive For Jack K. Hutson
DownloadComparing wave predictions by Jack K. Hutson
ARTICLE SYNOPSIS ...Comparing wave predictions by Jack K. Hutson The challenge in Elliott Wave analysis is identifying and counting the correct waves. ......
Serving a trading apprenticeship The Wyckoff method of trading stocks part 13 by Jack K. Hutson
ARTICLE SYNOPSIS ...Serving a trading apprenticeship The Wyckoff method of trading stocks part 13 by Jack K. Hutson Anyone studying the stock market intends to remove themselves from the ranks of the public that dabbles with luck as their foremost rule of operation. A true student of the market doesn't graduate into actual trading before completing a self-imposed apprenticeship where experience becomes the teacher. Experience hones practical skills such as the timing of trades and also builds the mental attitude that allows a trader or investor to think clearly and follow an analysis to its conclusion. If you, ...
Developing a personal trading style The Wyckoff method of trading Part 14 by Jack K. Hutson
ARTICLE SYNOPSIS ...Developing a personal trading style The Wyckoff method of trading Part 14 by Jack K. Hutson Trading the stock market with the Wyckoff Method is as much a test of personality and personal perseverance as it is a test of analytic education. Wyckoff was strictly a loner when it came to studying and trading the stock market. He believed the best way, the only way, his students would become profitable technical analysts was to rely on their own intelligence and to develop an inner fortitude against inevitable mistakes. To his way of thinking, mastering the technical aspects of his method was only...
Refining chart analysis Wyckoff method of trading stocks part 10 by Jack K. Hutson
ARTICLE SYNOPSIS ...Refining chart analysis Wyckoff method of trading stocks part 10 by Jack K. Hutson At this point in our examination of Richard D. Wyckoff's methodology for stock market analysis, we have explored all of the major tenets of this classic technique--from basic charting to the more esoteric consideration of trendlines, position sheets and chart interaction. Now, we are ready to pursue the technical refinements which distinguish slapdash amateurs from proficient and effective traders and investors. If this is your beginning foray into technical analysis, you may be feeling a bit overwhelmed by all...
Maximizing profits with stop orders: The Wyckoff method of trading stocks part 11 by Jack K. Hutson
ARTICLE SYNOPSIS ...Maximizing profits with stop orders: The Wyckoff method of trading stocks part 11 by Jack K. Hutson No matter what technical system you use, the first rule of successful trading and investing is: Cut your losses short. No one believed more firmly in this sage advice than Richard D. Wyckoff. ""No one can trade or invest without losses,"" he said. ""Danger is present in every trade, whether it be for investment or speculation. In the stock market you must be constantly on your guard: Always be expecting something to happen."" Stop orders, in Wyckoff's view, are the mark of a professional attit...
Market strategy The Wyckoff method of trading: Part 15 by Jack K. Hutson
ARTICLE SYNOPSIS ...Market strategy The Wyckoff method of trading: Part 15 by Jack K. Hutson The reasoning behind Richard D. Wyckoff''s classic method of chart analysis is simple and straightforward: when demand for a stock exceeds supply, prices rise; when supply is greater than demand, prices decline. The goal of this method is to make the most efficient use of investment capital by selecting only issues that will move soonest, fastest and farthest in any market and by timing trades to capture those moves. The Wyckoff Method accomplishes this by working in harmony with the market's buying and selling waves, n...
Intraday swings with wave charts: The Wyckoff method of trading stocks part 12 by Jack K. Hutson
ARTICLE SYNOPSIS ...Intraday swings with wave charts: The Wyckoff method of trading stocks part 12 by Jack K. Hutson The serious follower of Wyckoff, a trader who embraces the entire scope and intricate details of this methodology, has not completed his or her analytic arsenal without the Wyckoff Wave, a price vs. time chart that tracks intraday swings much like a doctor taking a patient's pulse. Whether you trade by the hour or the year, it's the intraday swings, where bears and bulls test each other's strengths and weaknesses minute by minute, that grow and merge into the minor, intermediate and longest-term ...
Selecting the best individual stocks Wyckoff method of trading stocks part 9 by Jack K. Hutson
ARTICLE SYNOPSIS ...Selecting the best individual stocks Wyckoff method of trading stocks part 9 by Jack K. Hutson Our discussion of Wyckoff's analytical methods have so far concentrated on deductive reasoning to reach investment or trading conclusions. We first determined the position and trend of the general market, then the positions and trend of group averages, and finally selected individual stocks based on their ability to move in harmony with those larger trends. The opposite approach-inductive reasoning-offers the experienced Wyckoff analyst a valuable way to double check those conclusions. I emphasize ...
Part 5: Wyckoff method of trading stocks: Prelude to individual charting reading by Jack K. Hutson
ARTICLE SYNOPSIS ...Part 5: Wyckoff method of trading stocks: Prelude to individual charting reading by Jack K. Hutson Averages--both market and group averages--are essential to stock market analysis and your investment or trading strategy with the Richard D. Wyckoff Method. But the true test of analysis begins when we move from market and group averages into the third stage of chart interpretation--the charts of individual stocks. This is where a trader/investor absolutely must learn the fine points of market operation and technical indicators. There's no more ""averaging"" here, no margin for sloppy interpretati...
Wyckoff method of trading stocks part 6 Figure charts by Jack K Hutson
ARTICLE SYNOPSIS ...Wyckoff method of trading stocks part 6 Figure charts by Jack K Hutson Thus far in this series we've concentrated on the price volume information supplied by vertical charts, which are the mainstay of Richard D. Wyckoff's technical analysis. But as an adjunct to vertical charts, most Wyckoff analysts also employ figure charts, which record only price movement. Figure charting allows the analyst to quickly see where and how strongly supply or support is building and to actually calculate the distance a price should rise or fall. Therefore with a vertical chart pointing out direction, the figu...
Wyckoff Part 7: Coordinating vertical and figure charts for more effective forecasting by Jack K. Hutson
ARTICLE SYNOPSIS ...Wyckoff Part 7: Coordinating vertical and figure charts for more effective forecasting by Jack K. Hutson Vertical charts, alone, are a detailed source of information for the Richard D. Wyckoff analysis of individual stocks groups and the market. But when the analyst combines vertical charts with figure charts, even better results are possible. Vertical charts with their price-volume information point out where trends are headed, while the price information in figure charts shows just how far the trends should go. The vertical figure chart duo, therefore, makes for more complete diagnosis and...
Elements of charting Wyckoff method of trading stocks part 2 by Jack K. Hutson
ARTICLE SYNOPSIS ...Elements of charting Wyckoff method of trading stocks part 2 by Jack K. Hutson The second of a series which presents the Richard D. Wyckoff method of trading stocks. In this article, the different types of charts upon which the Wyckoff method is based are examined. Vertical line, figure and wave charts are all essential to the study of the market using Wyckoff's techniques. The two most desirable things to know about the stock market are when the final top of a bull market, an intermediate swing, or a minor move occur and when the final bottom of a bear market, an intermediate swing, or a m...
Wyckoff method of trading stocks part 4 Understanding group stock behavior by Jack K. Hutson
ARTICLE SYNOPSIS ...Wyckoff method of trading stocks part 4 Understanding group stock behavior by Jack K. Hutson The Richard D. Wyckoff method of trading brings the technical analyst a clean, logical way to understand stock market behavior and to anticipate the most opportune trading and investment moments. The Wyckoff analyst begins with charts of a broad composite market average, overlays charts of industry group averages and then, when that information is weighed, compares the trends and critical turning points to the charts of individual stocks within the industry group. Analyzing group averages is a vital ...
The Wyckoff method Trading and Investing in Stocks by Jack K. Hutson
ARTICLE SYNOPSIS ...The Wyckoff method Trading and Investing in Stocks by Jack K. Hutson The first in a series of articles which outline the Richard D. Wyckoff method of trading stocks. This method provides a foundation for analyzing the fundamental relationships between the market's primary forces. Through the use of such techniques as volume analysis and studies of vertical line, figure and wave charts, Wyckoff developed a trading method which is still applicable to today's markets. Richard Wyckoff's first instruction to students of his stock analysis method published in the 1930s was quite simple and specifi...
Wyckoff method of trading stocks part 8 Trendlines: Refinements in charting by Jack K. Hutson
ARTICLE SYNOPSIS ...Wyckoff method of trading stocks part 8 Trendlines: Refinements in charting by Jack K. Hutson Like any complex activity, chart interpretation includes some aids to the process. Trendlines are one of these aids that help Richard D. Wyckoff analysts visualize what is occurring in their Vertical and Figure charts. The rationale behind Trendlines is straightforward. When a stock is being accumulated, it is storing up the force of demand which is the power for an ensuing upward movement. The force of demand gives price a certain momentum to carry it higher until demand is diminished or a new forc...
Personal Computer Hardware IBM Micro computer by Jack K. Hutson
ARTICLE SYNOPSIS ...Personal Computer Hardware IBM Micro computer by Jack K. Hutson Personal computers have given stock, option, and commodity traders a new look at financial data. For the uninitiated, choosing a computer system can be an aggravating, time-consuming problem. One way of deciding the type of hardware to purchase is to find out what hardware your software requires. Several years ago, buying hardware to match the software was the only practical technique because there were so few software manufacturers for stock data analysis. Now things have changed. There are dozens, if not hundreds, of pieces of ...
Market trends in composite averages Wyckoff method of trading stocks part 3 by Jack K. Hutson.
ARTICLE SYNOPSIS ...Market trends in composite averages Wyckoff method of trading stocks part 3 by Jack K. Hutson. By looking at Vertical Line charts of composite averages using Wyckoff analysis, you can learn where the market is taking your individual and group stock picks. This third part of the Wyckoff Method series shows you clues to pinpointing future market actions. Now that you have an overview of the history and philosophy behind the Wyckoff Method and an outline of the procedures, let's start digging deeper into the actual techniques. Although we'll be concentrating on the stock market, these technique...
TRIX: Triple Exponential Smoothing Oscillator by Jack K. Hutson
ARTICLE SYNOPSIS ...TRIX: Triple Exponential Smoothing Oscillator by Jack K. Hutson Relating the use of Fourier spectrum analysis to stock or commodity data filter selection has been the subject of a number of articles in Technical Analysis. In particular, Warren uses Fourier, in ""Optimizing TRIX: Further Analysis of Triple Exponential Smoothing"" (September 1983 Technical Analysis), to select TRIX's filter coefficients. The problem with any exponential moving average type filter is to properly choose ""alpha"", the filtering constant. Warren's article was important because he was able to mathematically manipul...
FILTER PRICE DATA: Moving Averages vs. Exponential Moving Averages by Jack K. Hutson
ARTICLE SYNOPSIS ...FILTER PRICE DATA: Moving Averages vs. Exponential Moving Averages by Jack K. Hutson In the process of collecting stock or commodity time series data, such as daily closes, we lose a significant quantity of information. We are examining a single point (sampling) of price history and endeavoring to glean some market understanding based only on a single daily price sample. This price sampling of a trading market frequently distorts the actual price signal. Among the diverse sources of distortion may be simple record-keeping errors, emotional overflow from other stock issues or commodities, rumo...
Technical Analysis by JACK K. HUTSON
ARTICLE SYNOPSIS ...Technical Analysis by JACK K. HUTSON Thank you for your very kind and in some cases flattering response to the ""Reader Service Form"" published in Technical Analysis July 1983 issue. Feedback from you, our readers, helps guide both our growing staff and authors to what you would like to read about. In general, based on the forms received so far, our readers want to see more about trading technique application and theory presented in such a way that everyone can understand. It is probably apparent by now that some of our articles are not easy reading. In fact, to really get the most out of Te...
Anatomy of a Trade by JACK K. HUTSON
ARTICLE SYNOPSIS ...Anatomy of a Trade by JACK K. HUTSON All you have to do to be successful is follow the advice you give to others. -- The Scottish Rite Torch. WEEDING OUT THE TRASH During a daily course of market review we produce a number of computer studies to supplement our chart and fundamental rumor collection. These daily studies are augmented by a more thorough weekly look at the past price movement over a great length of time. From this weekly detail review of historical daily land weekly) price change we determine which markets are in an advantageous trading position. For example, in the commoditie...
The Logarithmic Scale. by JACK K. HUTSON
ARTICLE SYNOPSIS ...The Logarithmic Scale. by JACK K. HUTSON Semi-Logarithmic (ratio, proportion or percentage paper) graphic rulings are used when the analyst wants to compare percentage price changes rather than absolute price changes. By plotting the logarithm of price in lieu of price itself we are able to directly compare percentage change in price at the three dollar verses the thirty dollar level. Mathematically, if there is a fixed percentage change between two pairs of prices the difference between the logarithms of the price will be equal. When the logarithms of price rather than the actual price are ...
Good Trix by JACK K. HUTSON
ARTICLE SYNOPSIS ...Good Trix by JACK K. HUTSON A few years ago I decided to explore the possibility of using a small computer to take some of the drudgery out of trading. The endless hours of maintaining and experimenting with chart and numerical aids to transaction timing was infringing upon my trade decision process. I always felt that by taking just a little time, and cranking out just one more wonderful oscillator or average, that my chances for a profitable trade would be improved. In most cases all I did was reassure myself that I had examined most every ""system"" in my personal repertoire, but I had no ...
Using Fourier by JACK K. HUTSON
ARTICLE SYNOPSIS ...Using Fourier by JACK K. HUTSON Joseph Fourier (1768-1830) (pronounced ""fooryay'') was a French mathematician and inventor of Fourier analysis. His work helped show the way to expressing periodic curves or functions by a sum of sines and cosines. These simple functions are easy for our computer to evaluate and project into the future. Many natural physical phenomena are oscillatory, that is repeating over and over again, much like the Markets. The Markets are not a function in the mathematical sense, but do seem to go up and down over and over again. During the late 1960's a number of Fast ...
Technical Analysis Information. by JACK K. HUTSON, EDITOR
ARTICLE SYNOPSIS ...Technical Analysis Information. by JACK K. HUTSON, EDITOR INTRODUCTION We would like to take this opportunity to thank all of our subscribers for their encouragement and support, and Tim Slater, of COMPU TRAC, who made it all possible. The initial set up of a magazine has proven to be an interesting experience, one that I am sure any masochist would enjoy. The idea first came to mind almost two years ago shortly after the first COMPU TRAC seminar (Feb. '81) in New Orleans. I did not attend the seminar, but did have an opportunity to listen to tapes of the conference. One of the members at th...
To Trade of Not to Trade (or how I done it) by JACK K. HUTSON, EDITOR
ARTICLE SYNOPSIS ...To Trade or Not to Trade (or how I done it) by JACK K. HUTSON The format of sharing trading experiences is an easy way for Technical Analysis Group members, as well as others, to tell how they used chart work and technical analysis in the day to day trading of stocks or commodities. One of my approaches to trading is as follows: This story begins around the first of the year, 1982. Pork Bellies had just made one of its abrupt ninety degree reversals which started a spectacular Bull market. At that time I was attracted to the chart because the reversal was so sharp -- and the only side of the ...
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