ARTICLE SYNOPSIS ...Curtis Faith is best known for getting his start as a member of the Turtles, the elite Chicago trading group. In his early 20s, Faith earned more than $30 million as a member of the renowned group that started as a bet between its founders, Richard Dennis and William Eckhardt. Drawing from his experience as an original Turtle, as well as a successful entrepreneur -- having founded several software and hightech startups -- Faith developed a "whole mind" approach that gives traders at all skill levels the tools to become a master trader. In Trading From Your Gut, his latest book, Faith ...
BY: J. Gopalakrishnan and B. FaberSUBJECT: Interview
ARTICLE SYNOPSIS ...Has this ever happened to you? You go long the market or a particular security and it immediately goes down; you go short and it immediately goes up. That is two back-to-back losses. Now extremely anxious, you ignore your trading rules and skip the next signal and of course that trade immediately becomes profitable. You hesitate whether you should take that last position this far after the trade signal. You continue monitoring the trade you failed to react to in the beginning, and now see a support and resistance trend developing. Every time the price pulls back to the s...
BY: Brandon H. VanLandinghamSUBJECT: At The Close
ARTICLE SYNOPSIS ...Trading Options In Tu r bu l e n t M a r k e t s (254 pages, $50 hardcover, 2010, ISBN 978-1-576-60360-4) by Larry Shover, published by Bloomberg Press. This work reveals how volatility in option trading relates to today's stormy marketplace and shows you how to manage risk and take advantage of market volatility. The author addresses how to use historical volatility to predict future volatility for a security or the implied volatility, and offers suggestions for dealing with that odd feature of option trading known as skew. Skew is uncertainty squared, and the ...
BY: Technical Analysis, Inc.SUBJECT: Books For Trader
ARTICLE SYNOPSIS ...A gap up in a stock's price is an exciting event. Usually, such moves will be covered by the financial media, creating hysteria and resulting in some people frantically buying the stock "before it's too late." Rarely do the pundits provide a reasoned and thorough explanation as to why the large jump in price will lead to any sort of substantial gains over the near future; they just report the awe-inspiring numbers without touching on their technical significance. Sometimes, armed with simply a headline, the uninformed will buy the stock and get lucky. Over the long term, howeve...
BY: Kenneth GillilanSUBJECT: Charting
ARTICLE SYNOPSIS ...Technical analysis is based on the theory that history will repeat itself. What is not so obvious, however, is that these historical repetitions may happen not just over a few months but over a few decades. This is where chart analogs can be of great value ...
BY: Sam WhitehillSUBJECT: Trading Techniques
ARTICLE SYNOPSIS ...Optimization and stop-losses can help you minimize risks and give you better returns. ou would like to be long in a market that's trending up, but what about when the trend turns down? Do you exit and just watch from the sidelines, or do you try to trade on the corrections in the downtrend? Here's a simple combination where you can trade long-term uptrends and short-term corrections, all in one chart. One of my previous strategies didn't allow me to enter a trade and stay there in a long and strong uptrend, since the strategy was designed to use the relative strength index (Rs...
BY: Peter KonneSUBJECT: Trading Systems
ARTICLE SYNOPSIS ...If I'm trying to manage option position risk to reduce my maximum loss exposure, is it better to tie a stop-loss to the market price of the options or the underlying stock? Managed stops can be a good tool as they act as an extra layer of portfolio protection beyond our initial and known risk assumption if we're dealing with a limited risk strategy. The question of exiting with a tighter managed loss based on the underlying share price versus the prevailing option market isn't as clear-cut. This is largely up to the individual trader and his or her risk acceptance, a...
BY: Tom GentileSUBJECT: Explore Your Options
ARTICLE SYNOPSIS ...Playing the US dollar versus the precious metals market dynamic is one of the highest-probability trading games around. This is especially significant at major trend reversals. Will the significant support area near 76.00 even hold, much less act as a reversal point ...
BY: Donald W. Pendergast, Jr.SUBJECT: Forex Focus
ARTICLE SYNOPSIS ...Daytrading seems to provide traders with less risk than position trading because there is no overnight exposure. How do you feel about the strategy?...
BY: Carley GarnerSUBJECT: Futures For You
ARTICLE SYNOPSIS ...Editor, I just finished reading L.A. Little's article "Price And Volume Disconnect" in the November 2010 issue of St o c kS & co mm o d i t i eS. I have a general question I was hoping he could answer for me. (I loved the article, by the way.) While I completely understand his reasoning behind identifying disconnects between price and volume as well as how to act when a suspect trend is spotted, I was hoping he could speak to why such situations sometimes arise in the first place. I know it's a loaded question and I don't expect a lengthy response, but I'm curi...
BY: Technical Analysis, Inc.SUBJECT: Letters To S&C
ARTICLE SYNOPSIS ...Can you determine how prices will move after looking at yesterday's price action? This analysis measures price movement on the S&P 500 Sp d r exchange traded fund for the next three days ...
BY: Anthony Trongone, Ph.D., CFP, CTASUBJECT: Trading Techniques
ARTICLE SYNOPSIS ...Once you have a trading system, you still need to evaluate it. You can apply optimization strategies to increase profitability, reduce drawdowns, and enhance the stability of your system ...
BY: Donald W. Pendergast, Jr.SUBJECT: Portfolio Optimization
ARTICLE SYNOPSIS ...The trading systems presented in Technical Analysis of Stocks & Commodities are tested ones, which you can easily implement into the trading software you use. Even if you choose to copy and paste the code via our Traders' Tips section (available at our website), I encourage you to understand the system and test it on the securities you wish to trade and the time frame you wish to trade. Only then will you be able to determine if the performance of the system is something you are comfortable with. Further, this is an excellent way to perform an out-of-sample test, since it gives you an o...
BY: Jayanthi GopalakrishnanSUBJECT: Opening Position
ARTICLE SYNOPSIS ...Most traders spend their time in front of a desktop computer with a high-speed Internet connection. But when you're traveling or just stepping away for lunch, you may not want to cut yourself off from the latest market news. Fortunately, with an iPad, a wifi or 3G cellular Internet connection, and this Bloomberg app, you can stay up to date with the market wherever you take your iPad ...
BY: Wallace WangSUBJECT: Product Review
ARTICLE SYNOPSIS ...The Pristine Pattern Method Scan plugin comes with screening filters, expert commentary, chart annotation, and templates to help find patterns that fit with the Pristine approach. The Pristine Method was covered in two earlier reviews in the February and April 2010 issues of St o c kS & co m m o d i t i eS. MetaStock refers to its screening filters as Explorations and its expert commentary and chart annotation as Expert Advisors. The CD comes with a 50-page manual that fits into the CD case. There are brief explanations of each of the pattern scans that you can use...
BY: Dennis D. PetersonSUBJECT: Product Review
ARTICLE SYNOPSIS ...Don, I have a question about order routing that perhaps you can help me with. I trade with a respectable brokerage that caters to active traders. I've noticed in the last few months that I have been charged fees referring to "routing," "rerouting," and electronic communications networks (Ecn) fees. I place my orders to go to the Nyse, as suggested by my peers. I am told that there may be fees for taking of liquidity, and also that I may be entitled to collect rebates for providing of liquidity. I'm not sure what any of this means, but now that I'm being charged fees, I would like ...
BY: Don BrightSUBJECT: Q&A
ARTICLE SYNOPSIS ...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 real-time 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 ...
BY: Technical Analysis, Inc.SUBJECT: Traders' Resource
ARTICLE SYNOPSIS ...For this month's Traders' Tips, the focus is Peter Konner's article in this issue, "Combining Rs i With Rs i." Code for the Scandinavian technical analysis program AvanzaVikingen is already provided in Konner's article elsewhere in this issue. (Subscribers will also find Konner's code at the Subscriber Area of our website, www. Traders.com.) Presented here is an overview of possible implementations for other software ...
BY: Technical Analysis, Inc.SUBJECT: Traders' Tips
ARTICLE SYNOPSIS ...Does this sound familiar? You spend countless hours analyzing a company's financial strength, market position, and industry potential. You decide that everything is on the up and up, and that the company deserves a place in your investment portfolio. You buy the stock, waiting for your payday -- and then watch in horror as the stock does the same thing that the stocks of its lesser competitors are doing. If you're like most traders, this is a common scenario. It's true that financially strong stocks in leading industries have the potential to be great investments. ...
BY: Ryan HenrySUBJECT: Traders' Notebook