ARTICLE SYNOPSIS ...Bonds, Price Momentum and Trends by Alex Saitta A market trends, and then consolidates, before either resuming the trend or reversing. Is there any way that a technical trader can get a hint about which outcome, the reversal or the continuation, is more likely? This market analyst offers his method for finding out. One of the first guidelines technical traders learn is The trend is your friend. Then you begin to realize the trend is your friend -- until it reverses. At that point, it becomes someone else's friend and your enemy. So, soon thereafter you find yourself asking, Are there signs t...
BY: Alex SaittaSUBJECT: Indicators
ARTICLE SYNOPSIS ...Interview: John Bollinger and Group Analysis by Thom Hartle John Bollinger, who is best known for his work on trading bands, also has other accomplishments to his credit as money manager, publisher and market analyst. Of late he's been looking at some new concepts: group analysis, which isn't a new concept at all, and fuzzy logic as applied to the markets, which is. To find out more, Stocks & Commodities Editor Thom Hartle decided to speak with Bollinger on January 23, 1997, via telephone, on topics ranging from group sector analysis to using fuzzy logic in market analysis. Q: John, you're a...
BY: Thom HartleSUBJECT: Interview
ARTICLE SYNOPSIS ...Seasonality and Trading by Jeffrey Owen Katz, Ph.D., with Donna L. McCormick This month, this trader and consultant looks at seasonality as the basis of a trading system. My search for successful systems began with the brute-force application of neural network technology. I wanted to see if I could get a profitable trading system by using neural networks to generate trading signals based simply on recent price changes. As I anticipated, I found that this simplistic approach does not work very well. I then moved to simple rule-based systems, initially working with rules rooted in theory (for...
BY: Jeffrey Owen Katz, Ph.D., and Donna L. McCormickSUBJECT: Trading Techniques
ARTICLE SYNOPSIS ...The Essence of Market Profits by Victor Sperandeo The key to making money in the markets is having the major trends at your back. This well-known money manager points to the importance of looking at the big picture. Popular beliefs about investment profits reflect a number of divergent points of view. These beliefs range from microfundamental analysis -- otherwise known as "stock picking" -- and technical analysis, both of which rely on the skill of the money manager, all the way to the random walk theory, which states that skill plays no part whatsoever in achieving attractive returns. The i...
BY: Victor SperandeoSUBJECT: Basic Techniques
ARTICLE SYNOPSIS ...The Failed Trade by Thomas Bulkowski Sometimes a trade doesn't work out the way you hoped it would, but you can always learn from your mistakes if you take the time to review your trades. Take a lesson from this failed trade. After I began trading in the stock market in earnest, I started a notebook with commentary about all my trades. In it, I discuss the reasons for buying a stock and note them shortly after purchase. When I sell a stock, I note reasons for the success or failure of the trade. The notebook is divided into investment styles: Trend channel trade, triangles, 1-2-3 trend chang...
BY: Thomas BulkowskiSUBJECT: Anatomy of a Trade
ARTICLE SYNOPSIS ...The Moving Average Convergence/Divergence by Mark Vakkur, M.D. Here's a novel way of using the moving average convergence/divergence (MACD) histogram to generate buy and sell signals for stock and mutual fund traders. Not only that, included is a simple means of analyzing risk-adjusted trading system performance. The moving average convergence/divergence indicator, developed by Gerald Appel, is constructed by taking the difference of two moving averages of the closing price -- one short, one long. This difference is smoothed with a moving average, and a comparison is made between the differe...
BY: Mark Vakkur, M.D.
ARTICLE SYNOPSIS ...The New Dow Strategy in 1996-97 by Paul and Carole Huebotter The Dow dividend strategy - or, more idiomatically, the ""dogs of the Dow"" - has garnered a lot of attention lately. It, or one of its variations, has been the subject of at least five full-length books in the 1990s as well as countless articles. An August 1996 Stocks & Commodities article covered just this subject and included a theoretical explanation for the success of the Dow dividend strategy and its progeny. Here's an update. Life is not always kind. When we compiled the 1996 record of the new Dow strategy, we knew that ano...
BY: Paul and Carole HuebotterSUBJECT: Real World
ARTICLE SYNOPSIS ...Traders' Tips Here is this month's selection of Traders' Tips, contributed by various developers of technical analysis software to help readers more easily implement some of the strategies presented. Code is provided for Alex Saitta's "Bonds, price momentum and trends" in TechniFilter Plus, SMARTrader, WAVEWI$E; and Tushar Chande's ""The cumulative market thrust line"" in TradeStation....
BY: Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Trading in the Moment by Adrienne Laris Toghraie You don't have choices regarding the past, but you do have choices regarding your future. Here are some ideas about how you can change your perception of the future. When a trader lets his imagination take hold instead of concentrating on what the market is actually doing, it can affect his trading decisions. Trading in the moment, without wishful wishing about where the markets may go or negative thinking, is the only way a trader can get the support that he needs to follow his own rules. You may be familiar with these mindsets, mindsets tha...
BY: Adrienne Laris ToghraieSUBJECT: Trading Psychology
ARTICLE SYNOPSIS ...Letters To S&C S&C readers voice their opinions on the historical volatility debate, the Futures Liquidity column, Mark Douglas' interview, and trading options futures....
BY: Technical Analysis, Inc.