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Article Archive For Jim Summers, Ph.D.

  • Computer spread analysis by Jim Summers, Ph.D.

    ARTICLE SYNOPSIS ...Computer spread analysis by Jim Summers, Ph.D. Many traders shy away from spread trading owing to the extra difficulties of calculating the spread and the analysis of the spread in both its legs. Data and software now available for IBM-PCs and clones can automate this analysis to a considerable degree. To analyze spreads I use Lotus 1-2-3, a charting program such as MetaStock Professional or Market Maker, System Writer Plus and contract-specific data from Technical Tools. One excellent source of information on the subject of spreads is the series of articles by Frank Taucher in Stocks & Com...

  • Completing the DMI rules by Jim Summers

    ARTICLE SYNOPSIS ...Completing the DMI rules by Jim Summers Finally, after these many months, the Lotus Command Language code to reproduce Wilder's Directional Movement Index system (DMI) reaches an end. In using Wilder's DMI to teach readers of Stocks & Commodities how to program Lotus, we've come a long way. Starting with the simplest of macros, we're now into programming at a fairly high level and have used a number of techniques, including debugging strategies. Recent comments by Dr. A.O.T. Fayiga (S&C, November 1988) show that different programming methods can reach the same goals, something affirmed by eve...

  • Finishing DMI calculations Part 9 by Jim Summers, Ph.D.

    ARTICLE SYNOPSIS ...Finishing DMI calculations Part 9 by Jim Summers, Ph.D. Having completed the lengthiest formulas that J. Welles Wilder developed in his Directional Movement Index (DMI) system, in this issue we'll complete the calculations for the basic DMI system. Future enhancements to the system will illustrate the customization power of Lotus 1-2-3. The formulas we've already developed calculate the daily true range and the amount of daily +/- directional movement. Wilder calculates a 14-day moving average for each--the choice of 14 represents his sense of an average half-cycle period for the contracts he...

  • Custom messages Part 10 by Jim Summers, Ph.D.

    ARTICLE SYNOPSIS ...Custom messages Part 10 by Jim Summers, Ph.D. Believe it or not, all the work we've done so far programming Lotus does not complete the Directional Movement Index system (DMI). We also must include message modules -- the only way some correct signals can come from your computer. For example, virtually every commentator says crossing DI14 lines is the trading signal. Actually, DMI developer J. Welles Wilder notes that this is only the first indication a trade should be considered. Before entering a trade, several other criteria must be met. The ADX line -- the one which indicates the existence ...

  • Programming for speed Part 5 by Jim Summers, Ph.D.

    ARTICLE SYNOPSIS ...Programming for speed Part 5 by Jim Summers, Ph.D. The past several columns discussed macros and led you through some elementary programming to show how to develop one of the indicators used in J. Welles Wilder's Directional Movement Index (DMI) system. The March column created range names for each row, moving down the rows while processing the price data. That technique is very slow and, for several months' worth of data, would tie up a machine for hours. To overcome this problem, this column introduces concepts which allow the program to operate with minimal cursor or range movement. As a ...

  • Introduction to macros Part 3 by Jim Summers, Ph.D.

    ARTICLE SYNOPSIS ...Introduction to macros Part 3 by Jim Summers, Ph.D. In the previous column, I discussed the advantages of using Lotus 1-2-3 in the management of an indicator as complex as the Directional Movement Index (DMI). In this column and hereafter, we shall move into the meat of our subject--learning how to use Lotus 1-2-3 to test indicators, refine them and incorporate them into your own trading system. The major building block is the macro, so let's begin with it. Macros In simple terms, a macro is nothing more than a means of automating keystrokes and cursor movement. This was basically what Lotus...

  • Debugging and the virtues of experimentation Part 6 by Jim Summers, Ph.D.

    ARTICLE SYNOPSIS ...Debugging and the virtues of experimentation Part 6 by Jim Summers, Ph.D. In last month's column we discussed the use of {Put} and @Index(...) menu commands in Lotus 1-2-3. These can increase significantly program speed by avoiding cursor movement and redundant range names during processing. We used these to update the formula which calculates the trading range (TR1) shown in Figure 1. The TR1 portion of J. Welles Wilder's DMI is a complex formula and very susceptible to typing errors. This month I'll show you how to debug complex formulas before we go on to develop the TR1 loop. Are you ch...

  • Loops: static and dynamic Part 7 by Jim Summers, Ph.D.

    ARTICLE SYNOPSIS ...Loops: static and dynamic Part 7 by Jim Summers, Ph.D. This month, we develop a loop to manage the calculation of the trading range (TR 1) used in J. Welles Wilder's Directional Movement Index (DMI) system. The previous columns developed the formula for line-by-line processing of this indicator using {Put} and @ Index(...) commands. Loops are an important topic; knowing how to use them with {Put} and @ Index(...) make up one of the strongest Lotus 1-2-3 tools for managing la rge amounts of data in technical anal ysis. We'll be using the data i n Figure 1, taken from Wilder's book , New Conce...

  • Making spreadsheets part of your trading system Part I by Jim Summers, Ph.D.

    ARTICLE SYNOPSIS ...Making spreadsheets part of your trading system Part I by Jim Summers, Ph.D. This column will be all about using Lotus 1-2-3, Release 2.0 as a trading tool. Given the number of programs written for technical analysis fundamental analysis, and portfolio management, why would anybody want to use Lotus 1-2-3 for this purpose? The answer is simple--most traders are not programmers, but they want the control and-the customization power that programming can provide. Lotus 1-2-3 gives both. Lotus 1-2-3 helped me develop a trading system and a historical testing system to evaluate indicators. What I w...

  • Wilder's Directional Movement Index System Part 2 by Jim Summers, Ph.D.

    ARTICLE SYNOPSIS ...Wilder's Directional Movement Index System Part 2 by Jim Summers, Ph.D. As I noted in the last issue, I need both a charting program and Lotus 1-2-3 to trade with discipline and confidence, along with maintaining my emotional health. My first major programming task for Lotus 1-2-3 came about when I recognized the limits of charting software. The first indicator we'll systemize is J. Welles Wilder Jr.'s Directional Movement Index (DMI). However, only when we understand what the indicator is supposed to do does it make sense to test it or incorporate it into our trading plans. Thus, actual Lot...

  • DMI trading rules by Jim Summers, Ph.D.

    ARTICLE SYNOPSIS ...DMI trading rules by Jim Summers, Ph.D. In this issue, we start programming into Lotus 1-2-3 the trading rules used in J. Welles Wilder's Directional Movement Index (DMI) system. In the previous columns, we programmed the various mathematical components of the system and now, with the tedious part behind us, the fun begins! Knowing the trading rules and testing the results--and programming forces you to know the rules--is what gives you an advantage over shoot-from-the-hip traders. If you can't specify your trading rules clearly enough to test them, then why delude yourself into thinking you t...

  • Defining directional movement Part 8 by Jim Summers, Ph.D.

    ARTICLE SYNOPSIS ...Defining directional movement Part 8 by Jim Summers, Ph.D. Given the old adage that ""the trend is your friend"" and that most trading systems follow trends, J. Welles Wilder's Directional Movement Index (DMI) lets you measure whether a trend is in effect and its strength. To develop DMI, we first measure the amount of daily directional movement (DM) within the true range (TR1) and record its direction (+ or -). As we found with the true range, exactness in definitions comes before programming. Directional movement is either up or down. Up days are those trading days in which the intraday hi...

  • Programming the true range in Wilder's DMI system Part 4 by Jim Summers, Ph.D.

    ARTICLE SYNOPSIS ...Programming the true range in Wilder's DMI system Part 4 by Jim Summers, Ph.D. The March column described the fundamentals of macros. The February column detailed some major points about Wilder's DMI and the system based on it. This time the action gets underway in earnest. While the material is still relatively elementary now, veteran Lotus programmers should at least skim this material. Some of the techniques appear in none of the five books I own on using Lotus. One of them is critical to successful processing of large amounts of data such as technical analysis requires. True Range Funda...

System Writer Plus by Jim Summers, Ph.D.






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