Contents For AUG2003

  • Books For Traders by Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...Books For Traders by Technical Analysis, Inc. ? The Candlestick Course ? Blind Faith: Our Misplaced Trust In The Stock Market And Smarter, Safer Ways To Invest ? Investment Guarantees: Modeling And Risk Management For Equity-Linked Life Insurance ? Investing In Hedge Funds: Strategies For The New Marketplace ? The Money-Making Guide To Bonds ? The Motley Fool -- What To Do With Your Money Now: Ten Steps To Staying Up In A Down Market ? Enterprise Risk Management: From Incentives To Controls...

  • Charting The Market by David Penn

    ARTICLE SYNOPSIS ...Charting The Market by David Penn ON-BALANCE VOLUME Interviewed by BusinessWeek magazine late in the spring of 2002, legendary market forecaster and technical analyst Joseph Granville was asked, "Does technical analysis still work?" The journalist further wondered whether technical analysis is superior to Wall Street analysis, and if so, whether Granville's personal technical methods would work "forever." Granville's response was both classic Granville and classic market technician: Of course. Truth is never out of date. There's only two things that can change the value of a stock -- supply...

  • Daytrading The E-Mini by Lawrence Chan

    ARTICLE SYNOPSIS ...Daytrading The E-Mini by Lawrence Chan Data Reduction - Daytrading The E-Mini See how reducing data can boost your trading system performance. I will show you how to preprocess raw data in such a way that even a simple trading system will perform with excellent results. There are many aspects of trading system design. Traders often focus on signal generation and money management, but ignore the most important and fundamental issue of all: the data. INTRODUCTION The Standard & Poor's e-mini› is the hottest index future traded at the Chicago Mercantile Exchange (CME). To trade a single S&P ...

  • Explore Your Options by Tom Gentile

    ARTICLE SYNOPSIS ...Explore Your Options by Tom Gentile FLEX OPTIONS What are FLEX options?--A.M. Flexible exchange (FLEX) options are totally customizable equity and index options that you can create under certain requirements. They allow traders complete flexibility to create option contracts at unorthodox strikes, expiration dates, and styles (American or European). These kinds of contracts have a minimum trade size of 250, so generally the small trader isn't partaking in the advantages these instruments offer....

  • Intermarket Review by David Penn

    ARTICLE SYNOPSIS ...Intermarket Review by David Penn GOLDMAN SACHS COMMODITIES INDEX The Goldman Sachs Commodities Index (GSCI) is a world production?weighted index of commodity prices based on the average quantity of production for the last five years of available data. In addition to being a benchmark against which commodity price performance can be judged, the subgroups of the GSCI are equally reliable measures of the price performance of the various commodities that make up the GSCI. The provided weekly charts of these subgroups include both the 20- and 50-period moving averages....

  • Interview: Chart Patterns, Trading, and Dan Zanger by Matt Blackman

    ARTICLE SYNOPSIS ...Interview: Chart Patterns, Trading, and Dan Zanger by Matt Blackman Trader Dan Zanger of Chartpattern.com first hit the media spotlight in December 2000 when he was featured in a Fortune article. The article, entitled "My Stocks Are Up 10,000%!" discussed how he had turned $11,000 into $18 million in 18 months (with a return of 164,000%), an unofficial world record for trading stocks (with the tax receipts to prove it). Not mentioned in the article was that in 23 months, the total grew to $42 million. Also not mentioned except in passing was much detail about Zanger's trading techniques, ind...

  • Letters To S&C by Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...Letters To S&C by Technical Analysis, Inc. MARKET PROFILE Editor, A letter from Matt Thomson in the May 2003 S&C asks, "How do you determine what the value area for the next day is?" You responded that the answer could be found in earlier articles on Market Profile. The correct answer is that Market Profile does not predict the next day's value area. A quote from my September 1987 article in STOCKS & COMMODITIES (S&C V.5:8, "Estimating The Market Profile Value Area For Intraday Trading") is explicit: "We really do not know where the market is going." The value area at the end of the curre...

  • Novice Trader's Notebook by EMS Flynn

    ARTICLE SYNOPSIS ...Novice Trader's Notebook by EMS Flynn One-Day Reversals One-day reversals occur when a tradable instrument in a trend sustains a sharp price spike and then reverses, ending in a marked rise or drop. This formation, which is considered to be a potential key reversal day, can be seen either at a top or a bottom. According to Thomas Bulkowski, many one-day reversals represent "nothing more than temporary pauses in the existing trend after which the trend resumes its course." The one-day reversal occurs at the end of the trend. This pattern can also be seen in a oneweek reversal....

Opening Position by Jayanthi Gopalakrishnan

  • Q&A by Don Bright

    ARTICLE SYNOPSIS ...Q&A by Don Bright TRADING NEWS There are a couple of news scenarios for which I would like your input. If a stock you play regularly has announced earnings since the last trading session, will you play it on the opening? If so, do you adjust the envelope for this symbol? What about earnings "guidance" and other significant news? Also, what about when there is no news on the symbol, but there is significant news or earnings on a stock in the same industry group or on the industry group itself? I understand that news is subjective and varies on a case-by-case basis. However, are there any rul...

Reduce Volatiltiy by Mark Wolfinger

  • Reverse Engineering RSI (ll) by Giorgos Siligardos, Ph.D.

    ARTICLE SYNOPSIS ...Reverse Engineering RSI (ll) by Giorgos Siligardos, Ph.D. The Revenge Of The Indicators - Reverse Engineering RSI (II) I Simplify price projection and get a clearer visual representation with these three indicators. In the June 2003 STOCKS & COMMODITIES, I introduced the RevEngRSI indicator and showed how it could be used to project support/resistance levels for the price. In that article, I also showed that the curve of this indicator is a transformation of a horizontal line from the relative strength index (RSI) graph to the price graph, which carries the support-resistance attributes of ...

  • Strategies For Daytrading by Jacob Singer

    ARTICLE SYNOPSIS ...Strategies For Daytrading by Jacob Singer These strategies could improve your daytrading. Trading strategies that fall under the definition of daytrading can be confusing, because there are really three types of daytrading: intraday trading, end-of-day trading, and daytrading. The three kinds are similar, but there are clear distinctions. 1. Intraday trading is when a trader makes a large number of trades in a single day, taking a one- or two-point profit and trading both short and long positions as the market changes direction during the day. The objective is to have all of these small tra...

  • The FX Daily Conundrum by Kristian Kerr

    ARTICLE SYNOPSIS ...The FX Daily Conundrum by Kristian Kerr Hours And Days - The FX Daily Conundrum In a 24-hour market, what is the best time frame to use when looking at charts? The rising popularity of foreign exchange trading over the past few years has been impressive. Equity traders fed up with trying to eke out profits in the brutal bear market environment have flocked to the fast-paced spot currency markets in record volumes. This rise in forex's popularity can mostly be attributed to the clear advantages that currency trading has over other markets. Unlike trading equities, foreign exchange offers tra...

  • The Goldman Roll by Scott Barrie and Kevin Warner

    ARTICLE SYNOPSIS ...The Goldman Roll by Scott Barrie and Kevin Warner Does it affect the commodities markets? The Goldman Sachs Commodity Index (GSCI) is a world production?weighted index that measures commodity market returns. The quantity of each commodity in the index is determined by the average quantity of production in the last five years. The GSCI is composed of commodities from all sectors. As you can see from Figure 1, energy, metals, and agriculture are all represented. The variety of commodities ensures the GSCI is well diversified, both across subsectors and within each subsector. The GSCI encompass...

  • Traders Resource: Brokerages For Traders by Techincal Analysis, Inc.

    ARTICLE SYNOPSIS ...Traders Resource: Brokerages For Traders by Techincal Analysis, Inc. Self-directed traders, as STOCKS & COMMODITIES readers usually are, have more choices than ever in their ongoing search for speed, pricing efficiency, and good accounting when it comes to brokerages. First, you have to find a brokerage that handles your tradable; full-service brokerages dealing with equities, options, futures, bonds, mutual funds, foreign exchange, and cash goods are usually full-priced as well. A little scouting, however, will get you a brokerage targeted on your market of interest. After that, your first ...

  • Traders Tips by Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...Traders Tips by Technical Analysis, Inc. ? TRADESTATION: REVERSE ENGINEERING RSI (II) Giorgos Siligardos' article "Reverse Engineering RSI (II)" in this issue describes a translation process to plot the "next bar" price required to produce three variations on the relative strength index (RSI). The first is an exponential moving average of the RSI. The second is a simple moving average of the RSI. The third is an RSI trendline. The EasyLanguage code for the last one, the RSI trendline, was presented in the June 2003 Traders' Tips. Here, we present the EasyLanguage code called "RevEngRSIEMA" ...

  • Websites For Traders: Pitnews.com by Jayanthi Gopalakrishnan

    ARTICLE SYNOPSIS ...Websites For Traders: Pitnews.com by Jayanthi Gopalakrishnan PITNEWS.COM Commodities traders need to be knowledgeable about the fundamentals behind their trading. For example, grain traders need to know the production cycle of specific crops: planting season, the ideal soil conditions for growth, weather conditions, harvesting season, and so forth. Cocoa traders need information on the crop seasons of the various cocoa-producing nations, as well as other factors such as common cocoa diseases. Such knowledge will enable traders to correlate price movements with fundamentals....

Working Money: Bear Market Rallies by David Penn