ARTICLE SYNOPSIS ...Moving Averages On Steroids Buff Up Your Moving Averages by Buff Dormeier Want better results? Combine your moving averages with volume and see what happens. Why should technicians only consider open/high/low/close numbers and time in forming price averages? The averages I use enhance performance by modifying the simple moving average with volume information. Volume represents the number of participants willing to wager at various points of price and time. My price averages measure the commitment expressed through a close, weighted by that day's volume compared to the total volume during the...
BY: Buff DormeierSUBJECT: Trading Techniques
ARTICLE SYNOPSIS ...How To Get Into The Trade Double-Bottom Confirmation Strategy Here's a strategy using a tried-and-true pattern to achieve faster entry signals and improve the reward-to-risk ratio. by Arthur Hill The double bottom that emerged in the Dow Jones Industrial Average (DJIA) and many other securities in October 1998 is a memorable formation, a powerful reversal. With the power behind it in mind, I developed an entry strategy based on the double bottom, or the second test of a key support level. I call it the double-bottom confirmation strategy. DOUBLE BOTTOMS Double bottoms are considered to be ...
BY: Arthur HillSUBJECT: Trading Techniques
ARTICLE SYNOPSIS ...Trade The Future(s) Tom Rietz Of Iowa Electronic Markets Iowa Electronic Markets (IEM) are real-money futures markets in which students and professionals trade contracts of everything from US politics to Federal Reserve monetary policy to computer returns. These markets are operated by faculty at the University of Iowa Tippie College of Business as part of its research and teaching mission. Thomas Rietz, Associate Professor of Finance at the University of Iowa, is an Iowa Electronic Markets manager. Rietz uses a combination of theoretical, empirical, and experimental work to research two prim...
BY: John SweeneySUBJECT: Interview
ARTICLE SYNOPSIS ...PHASOR DISPLAYS Editor, I don't like to be negative, but I must admit that John Ehlers's article in the December 2000 S&C, "Phasor Displays," as usual, frustrates me. On a scale of one to 10, I'd grade him, brilliance: 9, clarity of exposition: 1. For example, a small puzzlement: In Figure 7, in quadrant II there's a note, "point 28." Isn't this point 23? There's a point 28 near the top of the chart, in quadrant I. In quadrant I, there's a note, "counter clockwise segment." Isn't the swing bar 21, 22, 23?41 a clockwise swing? It could have been helpful to include a chart showing typical trend...
BY: Technical Analysis, Inc.SUBJECT: Letters To S&C
ARTICLE SYNOPSIS ...Determining Market Health Market Breadth: Volume Of all the market breadth measures to determine the overall health of the market, volume is perhaps one of the most difficult to use. by Dennis D. Peterson It only takes a few stocks to push major indices such as the Dow Jones Industrial Average, the Standard & Poor's 500, and the Nasdaq Composite up, and that's especially true for the Nasdaq Composite, which is weighted by market capitalization. To gain insight into market momentum, traders turn to market breadth indicators. Breadth measures how much of the market is participating in an index...
BY: Dennis D. PetersonSUBJECT: Novice Traders' Notebook
ARTICLE SYNOPSIS ...Need to know how much to put on your next trade? You can figure it out with 95% reliability using this simulation technique. Consider this: Jane and Joe started trading the same Standard & Poor's 500 futures trading system at the same time. They each began with $100,000 and both followed the system exactly. But 12 months later, Joe's account was worth $200,000, while Jane's account was worth only $50,000. What was the difference in their trading? Position sizing. As his account equity increased, Joe increased the number of contracts in a near-optimal manner, resulting in a sharp runup in equi...
BY: Michael R. Bryant, Ph.D.SUBJECT: Trading Techniques
ARTICLE SYNOPSIS ...NASDAQ STOPS Are Nasdaq stops possible?My broker tells me that you can't protect yourself on the downside by putting in a stoploss sell order if your stock is listed on the Nasdaq. Is that true? -- Lana Huddleston Good question. Since there is no actual marketplace with a single entity in control of the pricing of the stock, as there is on the New York Stock Exchange (NYSE) and the American Stock Exchange (AMEX) (specialist system), then who would be holding your stop order? Since the Nasdaq is a fragmented market (using many market makers instead of a single specialist), there is no practical...
BY: Don BrightSUBJECT: Q&A
ARTICLE SYNOPSIS ...A Cautionary Tale The Chartist Charts don't lie, just in case you needed a reminder. by Edwin Polokoff I shall never forget George. When I first met him, he was a man in his late 50s, somewhat paunchy, of medium height, dark hair streaked with gray, silver-rimmed glasses shielding tired eyes -- George looked docile. A closer look betrayed his seemingly easygoing manner. His hands shook slightly but uncontrollably, especially when he ate or wrote. My conclusion was that he had been through too many stock market wars, and the wear and tear on his nerves, stress from his occupation, had created ...
BY: Edwin PolokoffSUBJECT: War Story
ARTICLE SYNOPSIS ...Trading Systems Trading systems can help take the subjective interpretation out of trading decisions by providing automated buy and sell signals based on preprogrammed rules. Trading systems are usually computer programs but can also be a realtime service, issuing signals or a set of published rules to follow. They can rely on one or more trading disciplines, such as artificial intelligence, Gann analysis, astrology, indicator sets, or custom rules. This month in Traders' Resource, we present a list of publicly available trading systems, most of which are sold as software packages for persona...
BY: Technical Analysis, Inc.SUBJECT: Trading Systems