Technical Analysis of STOCKS & COMMODITIES
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Article Archive For Tushar S. Chande, Ph.D.
DownloadCharting Breakouts With Convertible Point & Figure Charts
ARTICLE SYNOPSIS ...Here, we introduce a charting technique that builds on the classic point & figure charting style and updates it to put the time dimension into play...
Buy & Sell Pressure And A Faster RSI
ARTICLE SYNOPSIS ...Most of you are familiar with the relative strength index (RSI), but are you taking full advantage of it? Here, we deconstruct the RSI to lead to a more intuitive and symmetrical gauge of buying and selling pressure and a more responsive indicator...
Align Your Analysis & Trading Persona
ARTICLE SYNOPSIS ...We are all different. As a result, we each have our comfort zones in which we tend to perform better. But how do you define that comfort zone? We take a look...
Estimating Future Drawdowns by Tushar S. Chande
The Time Price Oscillator by Tushar S. Chande
ARTICLE SYNOPSIS ...A Time Price Oscillator by Tushar S. Chande Technical indicators, and oscillators in particular, measure the behavior of price relative to time. For example, the rate of change oscillator calculates the percentage change in price over a set period. That said, now consider an indicator that reverses the roles of price to time and measures the passage of time relative to price. This article details such an indicator, presenting numerous applications. All major price trends evolve, both in price and time. A market trading in a sideways trend may begin to advance, turning into an upward trend,...
Identifying Powerful Breakouts Early by Tushar S. Chande
ARTICLE SYNOPSIS ...TRADING TECHNIQUES Identifying Powerful Breakouts Early by Tushar S. Chande High-powered breakouts occur with a strong surge of momentum in the direction of the price change. Such breakouts may be short-lived, however, occurring toward the latter stages of a long trend. Sometimes, such breakouts signal the end of one trend and the beginning of another. In either case, identifying such market action early is likely to be highly profitable. Here, Contributing Editor Tushar Chande shows how you can use his original indicators, VIDYA and the dynamic momentum index, to find big market moves. Ta...
A Market Bottom Pattern for S&P Futures by Tushar S. Chande
ARTICLE SYNOPSIS ...A Market Bottom Pattern for S&P Futures by Tushar S. Chande The S&P futures market is dominated by anti-trend traders. It's a fact: It's a tough market to trade using trend-following approaches. But if you can't beat 'em, why not join 'em? The trading action in the Standard & Poor's 500 futures pit can be fast and furious. It is an unusual market when one considers the daily high-low range. For example, though a $1,500 move in the Treasury bond contract commands headlines, a similar move in the S&P is simply ignored. This turbocharged market comes with a million-horsepower engine, can turn ...
Computer-Assisted Trading by Tushar S. Chande, Ph.D.
ARTICLE SYNOPSIS ...Computer-Assisted Trading by Tushar S. Chande, Ph.D. You can't be a good trader without being a good analyst. But the two are not synonymous: Just because you're a good analyst doesn't guarantee you'll be a good trader. To the accomplished analyst, trading is a mental game 80% of the time, but one for which he or she is poorly prepared. Here's how you can hasten the transition from analyst to trader. Trading is analysis in action. You have to convert all of your analysis into a simple, executable decision - buy so much of this, or sell some of that. Analysis is reactive, since you analyze pr...
Lattice Trees by Tushar S. Chande, Ph.D.
ARTICLE SYNOPSIS ...Lattice Trees by Tushar S. Chande, Ph.D. The lattice approach to option pricing is used to build a tree, so to speak, of futures prices. The price tree can be recomputed intraday to update the expected price range. These dynamic trees can be used for risk control via price simulations and can also be used for trading. Here, we apply the various uses of lattice (or dynamic) trees to estimate prices for the Standard & Poor's 500. Option prices can be calculated by any number of sophisticated mathematical models. All such models make certain assumptions about the underlying security's price beh...
Solving The Portfolio Puzzle by Tushar S. Chande
ARTICLE SYNOPSIS ...Solving The Portfolio Puzzle by Tushar S. Chande Stocks & Commodities Contributing Editor Tushar Chande presents guidelines for designing a stock portfolio. Here's my question to all those superb stock traders out there: How many stocks should you have in your portfolio? One? Ten? A hundred? A thousand? Further, what are the tradeoffs? The tradeoffs you make greatly influence overall portfolio performance. Stock timing may be summarized as: What should you own and when should you own it? A corollary to the stock trading is the portfolio puzzle: What should you own and how much? The answer ...
Product Review: NeuralWare Professional II/PLUS by Tushar Chande
Rating Trend Strength by Tushar S. Chande
ARTICLE SYNOPSIS ...Rating Trend Strength by Tushar S. Chande Here's a simple indicator of trend strength. It goes like this: A value of +10 signals an uptrend; a value of -10 signals a downtrend. Stocks & Commodities Contributing Editor Tushar Chande uses this simple rating system to help answer the eternal traders' question: Is the market trending? As you may have noticed, a number of rather complicated indicators are available to measure trend strength. None of these indicators, unfortunately, is perfect. You could use J. Welles Wilder's average directional index (ADX) as an indicator of trend strength, or ...
The Cumulative Market Thrust Line by Tushar S. Chande, Ph.D.
ARTICLE SYNOPSIS ...The Cumulative Market Thrust Line by Tushar S. Chande, PhD. STOCKS & COMMODITIES contributor Tushar Chande originally introduced the concept of market thrust in August 1992 as a method by which to overcome the limitations of the Arms index. Since then, variations have been suggested on the theme and here, Chande offers the variation of a cumulative market thrust line, in which market thrust is cumulated to calculate a volumetric advance-decline line by including the effect of up and down volume. Simply stated, the advance-decline (A-D) line, which is a broad-gauge measure of market activity,...
Stocks Yield To Bonds by Tushar S. Chande
ARTICLE SYNOPSIS ...Stocks Yield To Bonds by Tushar S. Chande A stock's price may be considered a mechanism to adjust its dividend yield. In the short run, the dollar amount of the dividend is fixed, and so stock prices change to accommodate changes in bond yields. Lags occur because it takes time to convince most participants that bond yields have changed meaningfully. Here's an example of quantitative intermarket analysis, analyzing the relationship of bond yields to stock dividends. The general relationship between stocks and bonds is widely recognized. Stock dividends and interest rates play an important r...
Forecasting Tomorrow's Trading Day by Tushar S. Chande, Ph.D.
ARTICLE SYNOPSIS ...Forecasting Tomorrow's Trading Day by Tushar S. Chande, Ph.D. Using linear regression as a crystal ball for forecasting the market? After all, if you were to be able to determine tomorrow's high, low and close for trend changes and placement of stop points, it would simplify your life immeasurably. Can it work? Tushar Chande explains how it can be done. Wouldn't you trade better It you could ""see"" the future? A simple linear regression can provide an objective forecast for the next day's high, low and close. These ingredients are essential for a trading game plan, which can help you trade ...
Adapting Moving Averages To Market Volatility by Tushar S. Chande, Ph.D.
ARTICLE SYNOPSIS ...Adapting Moving Averages To Market Volatility by Tushar S. Chande, Ph.D. If a market is active, it has volatility: that cannot be avoided. And because the market is continuously changing, an indicator that attempts to predict market activity must itself adapt and change. How? Tushar Chande presents a dynamic--not static--indicators: a variable-length moving average, which adapts to the volatility in question by exponentially smoothing data based on standard deviation. Technicians can be trend followers or contrarians. Trend followers use price-based indicators, such as moving averages, while c...
Smart Stops by Tushar S. Chande
ARTICLE SYNOPSIS ...Smart Stops by Tushar S. Chande Setting stops is a fine art, whether you trade one contract or a thousand. The challenge in setting stops is to participate in long moves without getting shaken out of the trade by market volatility. A variable-index dynamic average (Vidya) may be used to place trailing stops that adapt to market volatility, which combines enough sensitivity to price changes with flexibility to fit your trading needs. Using this combination, in fact, may well provide an extremely profitable stop for the intermediate-term trader. Once a trade has been initiated, most traders w...
Market Thrust by Tushar S. Chande
ARTICLE SYNOPSIS ...Market Thrust by Tushar S. Chande An abundance of articles and letters concerning the Arms index, or the trading index (TRIN), during the past year was one proof of its popularity. The articles were concerned with both the uses and limitations of the Arms index. The two major problems with the Arms index, as characterized in the articles and letters, arose in constructing a long-term Arms index and with using the index in mixed markets. STOCKS & COMMODITIES contributor Tushar Chande proposes a way to measure market thrust and overcome the limitations of the Arms index. Richard Arms invented ...
The Midpoint Oscillator by Tushar Chande, Ph.D.
ARTICLE SYNOPSIS ...Here's an indicator based on the concept used in %K and %R. The Midpoint Oscillator by Tushar Chande, Ph.D. I would like to share one of my own indicators based on the same underlying concept used in the popular stochastics (%K) and Williams' %R overbought/oversold indicators. To review, the formula for the stochastics %K is:...
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