ARTICLE SYNOPSIS ...Handling Market Reactions by JOHN E. ROSENSTOCK All markets exhibiting prolonged price trends invariably have reactions against the trend. These reactions can be of short or long duration and can retrace small or large portions of the preceding swing. They can be very sharp reversals or have periods of congestion prior to the retracement. The question is: How are these reactions anticipated, measured, and taken advantage of? One very excellent method used in my computer analysis of market reactions is the momentum concept. This theory is based on market velocity and can be aptly described as ...
ARTICLE SYNOPSIS ...Integrated Systems Approach To Technical Commodity Analysis by JOHN E. ROSENSTOCK when I first became interested in commodity markets, it was my great fortune to read the works of and speak with several of the most lucid teachers of market science and strategy. Each of these teachers had methods which were profoundly logical in their approach. In the early stages of my learning curve (which in this business never seems to flatten out), I became aware of two trading tools which provided me with the idea of a structure that lead to my ""ultimate commodity trading tool."" One of these was the Si...
ARTICLE SYNOPSIS ...Risk Management by JOHN E. ROSENSTOCK The portfolio approach to commodity trading is a big selling point for commodity funds. (""Portfolio approach"" is diversifying and spreading risk through a completely mechanical trend analysis.) However, history has shown that the mechanical trend following systems that maintain positions in all commodities all the time tend to generate heavy commissions and sustain unnecessary losses when prices enter narrow trading ranges. Trend following by definition is a lagging indicator. In a trading range, prices move back and forth, violently changing direction ...