ARTICLE SYNOPSIS ...In Shock by Adrienne Laris Toghraie Trading is unique in that the uncertainty of the markets brings to bear an unusual stress level. What should you do if your trading suddenly turns south, or worse, a tragic event occurs? Recently, I was in an automobile accident when a cab driver sped through a four-way stop sign as I was entering the intersection. For a spell, I felt lost in time. In that moment of unreality, I even thought that it was all a dream. I was in shock. What is shock? According to the dictionary, it can be a sudden, jarring impact or the result of a disturbance in your equilib...
BY: Adrienne Laris ToghraieSUBJECT: Trading Psychology
ARTICLE SYNOPSIS ...The Nature Of The Market Is Change: Bruce Kamich Technicians follow numerous markets, and some specialize in specific areas, such as equities or fixed income. With the Treasury bond yields recently hitting lows that were unthinkable by most only a few years ago, we thought that talking to a specialist in this area would be apropos. Meet Bruce Kamich, who is senior vice president for research, development and management of the electronic financial information service MoneyWatch for McCarthy, Crisanti & Maffei, and currently, he's on the board for the Market Technicians Educational Foundation. ...
BY: Thom HartleSUBJECT: Interview
ARTICLE SYNOPSIS ...Life Cycle Model Of Crowd Behavior by Henry O. Pruden, Ph.D. For a large part of the past 30 years, the discipline of finance has been under the aegis of the efficient market hypothesis. But in recent years, enough anomalies have piled up, cracking its dominance of the field. As a consequence, the arrival of new thinking to explain market behavior has warranted attention, and its name is behavioral finance. Behavioral finance proponents believe that markets reflect the thoughts, emotions, and actions of normal people as opposed to the idealized economic investor underlying the efficient mar...
BY: Henry O. Pruden, Ph.D.SUBJECT: Behavioral Finance
ARTICLE SYNOPSIS ...Multiple Time Frame Using Swing Robert Krausz, who was featured in Jack Schwager's New Market Wizards, follows up his previous article on the new Gann swing chartist with a detailed presentation on using channels for setting up trading opportunities. In my previous article on dy-namic multiple time frames, I introduced one of my own ap-proaches to trading: The con-cept of multiple time frame trad-ing. The essence of the strategy is easy: Use the higher time frame price activity to define the trad-able trend as well as potential support and resistance levels. For example, if you are trading th...
BY: Robert Krausz, MH, BCHESUBJECT: New Techniques
ARTICLE SYNOPSIS ...Seasonal Adjustment Of Time Series Data by George R. Arrington, Ph.D. While time series data is the heart of most technical trading systems, some have a tendency to reflect seasonal patterns; for example, agricultural commodities tend to follow harvest cycles. Here's how to adjust data to see nonseasonal patterns more clearly. Time series data, which is data such as most price and volume data collected sequentially over time and usually at fixed inter-vals, is the basic fuel for most technical trading systems. As new data becomes available, it is used to recalculate the value of technical ...
BY: George R. Arrington, Ph.D.SUBJECT: Statistics
ARTICLE SYNOPSIS ...Support And Resistance by Stuart Evens Support and resistance are basic tools used by traders to identify key reversal areas. Here's a look at the basics of support and resistance levels and how to determine which levels might be important in the future. One premise of technical analysis is that stock prices are affected by support and resistance. As those terms imply, support acts to keep a stock's price above a certain level, while resistance acts to keep a stock's price below a certain level. In fact, once it has been determined that a price has acted as important support or resistance i...
BY: Stuart EvensSUBJECT: Novice Traders' Notebook
ARTICLE SYNOPSIS ...The Tactical Trader by Walter T. Downs Trading can be compared to the game of chess -- a good player wins by implementing a tactical strategy that entails sacrifices when the sacrifice is justified. Here, a professional trader presents some tactical trading concepts. In chess, a good player is able to accurately assess his position on the board and gauge the psychological mettle of his opponent. Victory is gained by implementing a positional and/ or tactical strategy. Positional strategy is the accumulation of small advantages in terrain and the positioning of available forces in advantageou...
BY: Walter T. Downs, Ph.D.SUBJECT: System Design
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. Internet users will also find these and some previous Traders' Tips on our home page at http://www.traders.com. TRADESTATION / SUPERCHARTS Our focus this month in Traders' Tips is on the cup-with-handle chart pattern that Rick Martinelli and Barry Hyman explored in the October 1998 STOCKS & COMMODITIES in "Cup-with-handle and the computerized approach." When all the criteria fall ...
BY: Technical Analysis, Inc.SUBJECT: Traders' Tips
ARTICLE SYNOPSIS ...Triangles: Reversal Or Continuation by Stuart Evens Look at most any book on the subject of technical analysis, and you'll come across triangles. These formations are usually one of the first chart patterns that novice technicians study, and it deserves some examination. Triangles are classified as reversal patterns in some reference works, while they are described as continuation patterns in others. Robert Edwards and John Magee, in their Technical Analysis Of Stock Trends, have a chapter titled "Important Reversal Patterns -- The Triangles." John Murphy, on the other hand, in his Technical...
BY: Stuart EvensSUBJECT: Novice Traders' Notebook
ARTICLE SYNOPSIS ...LETTERS TO S&C The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Have you run across trading techniques, services or products that have proved useful? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine would not exist. Address your correspondence to: Editor, STOCKS & COMMODITIES, 4757 California Ave. SW, Seattle, WA 98116-4499, or E-mai...
BY: Technical Analysis, Inc.SUBJECT: Letters To S&C