ARTICLE SYNOPSIS ...Breaking Out Of Price Channels by Gerald Marisch Here's a technique based on Tushar Chande's variable-length moving average. The indicator is more responsive to market price movements than a conventional simple or exponential moving average and can be used for position trading. Take a look. In areas of equity and commodity price analysis, it is accepted that prices can move in only three directions -- up, down or sideways. These directions are called trends. In the simplest of charting techniques, trends can be evaluated by the location of closing prices in relationship to a trend's moving a...
BY: Gerald MarischSUBJECT: Trading Techniques
ARTICLE SYNOPSIS ...Double Tops by Thomas Bulkowski It takes more than twin peaks to make a double top. Here's a refresher on the formation. Double tops aren't hard to identify. Novice investors with just a smattering of technical knowledge can identify any two peaks close together as a double top. But there's more to double tops than simple identification, and in my study of the formation and creating subroutines to recognize them, the selection criteria came into sharp focus. A good example of a double top is shown in Figure 1 and distinguishing characteristics are outlined in Figure 2. The twin peaks are t...
BY: Thomas BulkowskiSUBJECT: Novice Traders' Notebook
ARTICLE SYNOPSIS ...Dynamic Asset Allocation: Beyond Buy and Hold by Gary Harloff, Ph.D. Even during the strongest of bull markets, not every investment rises at the same rate. This range of performance among different investments has led to money managers developing strategies to dynamically allocate among a choice of investments. Here, a money manager explains his recent research into this subject. Individuals, professionals and institutions diversify their investments over several asset classes to seek a specific return versus risk objective. An example of a typical allocation might be 65% equities, 30% bon...
BY: Gary Harloff, Ph.D.SUBJECT: Money management
ARTICLE SYNOPSIS ...On Synergy and Strategy: Tom Bierovic Of Synergy Futures by Thom Hartle Thomas Bierovic is president of Synergy Futures, a research, trading, and education company. He also writes Synergy Fax, a daily advisory service for futures traders, and he wrote the well-regarded trading manual A Synergetic Approach to Profitable Trading. His specialty involves ""synergizing"" a variety of trend-following indicators, directional-movement indicators, momentum oscillators, Fibonacci retracements, and chart patterns to create low-risk/high-reward trading methods. Stocks & Commodities Editor Thom Hartle spo...
BY: Thom HartleSUBJECT: Interview
ARTICLE SYNOPSIS ...Pattern Recognition In Time Series by Rick Martinelli Here's how to use a spreadsheet as a pattern recognition tool. The spreadsheet can be used to identify the cup-and-handle formation on daily closing prices over a given number of days. Pattern recognition is a term that has been used to describe a variety of different, but related, phenomena. The ability of a camera and a computer to discern a particular image in a visually noisy environment is a classic example. For traders, pattern recognition has been used to study chart formations. Our interest here is with patterns that appear in m...
BY: Rick MartinelliSUBJECT: New Techniques
ARTICLE SYNOPSIS ...Profiting from the Z-Score by Mike DeAmicis-Roberts What is the Z-score? You can use it to identify the types of winning and losing streaks in a trading system. Once the nature of the streaks are determined, then you can use different money management approaches to maximize profitability. When traders analyze the results of their systems, they frequently look to the percentage of winners as proof of the system's reliability. In many cases, this is a good indication. However, looking at the percentage of winners and losers only tells part of the story. Sometimes winning trades come in streak...
BY: Mike DeAmicis-RobertsSUBJECT: Statistics
ARTICLE SYNOPSIS ...Smoothing Techniques For More Accurate Signals by Tim Tillson More sophisticated smoothing techniques can be used to determine market trend. Better trend recognition can lead to more accurate trading signals. Here's how. After studying his first stock chart, the novice technician is most likely to learn next about moving averages. This is a reasonable progression. First, moving averages are easy to understand. The simple moving average is just the average of a given number, which we will refer to as n, of previous closing prices, recalculated each day at the close. And second, technicians u...
BY: Tim TillsonSUBJECT: Indicators
ARTICLE SYNOPSIS ...The Happy Trader by Adrienne Laris Toghraie What does happiness have to do with being a successful trader? Nothing, it seems. In fact, for most traders, successful trading and happiness may actually be in perpetual conflict. Over the years, I have worked with many successful traders. Many of them were miserable, and only a handful of them were genuinely happy. Yet nearly all of the traders I have ever interviewed said they wanted happiness as their ultimate goal in life, while very few of them had actually achieved it. Why is it so unusual to find a trader who is both successful and happy? ...
BY: Adrienne Laris ToghraieSUBJECT: Trading Psychology
ARTICLE SYNOPSIS ...Letters To S&C Some of the letter received this month discuss Daniel Chesler's article in the September 1997 STOCKS & COMMODITIES, "Identifying significant chart formations," the McClellan oscillator, and an article by Dennis Meyers....
BY: Technical Analysis, Inc.SUBJECT: LETTERS