Contents For
JUL2004
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Books For Traders by Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Books For Traders by Technical Analysis, Inc.
? Trend Following: How Great Traders Make Millions In
Up Or Down Markets
? A Complete Guide To Technical
Trading Tactics
? Investments: 6th Edition
? Hedge Fund Of Funds Investing: An
Investor's Guide
? Fund Your Future: Winning
Strategies For Managing
Your Mutual Funds
And 401(K)...
BY: Technical Analysis, Inc.SUBJECT: Books For Traders
Charting The Market by David Penn
BY: David PennSUBJECT: Charting The Market
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Creating Your Own Trading System by Rene Koch, Ph.D.
ARTICLE SYNOPSIS ...Creating Your Own Trading System by Rene Koch, Ph.D.
It can be done -- and without the headache you
would expect.
IN technical analysis, when you
hear the word band it consists
of two boundaries: one
above and one below the
price series similar to what
you see in Figure 1. In that, the daily price chart for Nextel (NXTL), the
thick red line is the lower boundary of a
"constant" band. Whenever prices go below
the red line, a buy signal (blue circle) is
generated. One or two bars later, the position
is closed (red circle). The green background
identifies the profitable trades.
Usually, prices ...
BY: Rene Koch, Ph.D.SUBJECT: Trading Systems
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Elliott Wave Risk And Reward by Tony Beckwith
ARTICLE SYNOPSIS ...Elliott Wave Risk And Reward by Tony Beckwith
Establish your exit stop strategy before
placing your next trade.
Traders have no business
trading if risk/reward
analysis is not at the top of
their concerns. If a trader
has no idea of the potential
profit return on any given trade relative to the initial risk of taking the
trade at all, his long-term profitability is in
question.
Elliott wave (EW) analysis has come in
for its fair share of criticism over the
years, due at least in part to the inevitable
overcomplication by analysts and the fallibility
of some of their forecasting. However,
by...
BY: Tony BeckwithSUBJECT: Money Management
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Explore Your Options by Tom Gentile
ARTICLE SYNOPSIS ...Explore Your Options by Tom Gentile
BUYING VS. SELLING
What's the difference between buying
an option and selling one?
Buyers of options have rights, and
sellers have obligations. The buyer of a
call has the right to buy the underlying
security at an agreed-upon price (the
strike price). The seller of the very same
call has the obligation to the buyer to
deliver shares of the underlying security
if the buyer decides to exercise his rights.
The same is true of puts, but in reverse.
The buyer of a put has the right to
sell a stock at an agreed price (called the
strike price). The seller of tha...
BY: Tom GentileSUBJECT: Explore Your Options
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Intermarket Review by David Penn
ARTICLE SYNOPSIS ...Intermarket Review by David Penn
EURO
Originally poised to be both rival and
complement to the US dollar in the
world of foreign exchange, the euro's
miserable start in 1999 has become a
stunning bull market by 2004. The euro
is the currency of the 12 nations that
make up the European Union (Belgium,
Germany, Greece, Spain, France,
Ireland, Italy, Luxembourg, the Netherlands,
Austria, Portugal, and Finland).
AUSTRALIAN DOLLAR
Heavily influenced by the role that
commodity production and export play
in the Australian economy, the Australian
dollar (or "aussie," as forex
traders refer to it) ...
BY: David PennSUBJECT: Intermarket Review
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Interview: Daytrading With Toni Turner by Jayanthi Gopalakrishnan
ARTICLE SYNOPSIS ...Interview: Daytrading With Toni Turner by Jayanthi Gopalakrishnan
Toni Turner is the best-selling author of A Beginner's Guide To
Day Trading Online and A Beginner's Guide To Short-Term
Trading. An investor/trader with 14 years' experience, she is a
popular educator and speaker at financial conferences across
the country.
Turner has appeared on NBC, MSNBC, CNN, CNNfn, and
CNBC's "Power Lunch." She has also been interviewed on
dozens of radio programs and featured in CBS MarketWatch.com,
Fortune magazine, and Bloomberg Personal Finance. Currently,
she is writing her third book, to be publishe...
BY: Jayanthi GopalakrishnanSUBJECT: Interview
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Letters To S&C by Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Letters To S&C by Technical Analysis, Inc.
REVERSAL DATES
Editor,
I'm a regular reader of your
magazine and very much
look forward to it each
month. I rarely read the
Letters to S&C column, and I don't
think I've ever written a letter to any
editor, except for this one to you now.
In the May 2004 S&C, I happened to
read a letter to the editor wherein a
reader wrote disparagingly about the
article "Reversal Date Indicator: Predict,
Identify, And Trade Future Market
Swings" by John Crane (S&C, February
2004). I couldn't believe what I was
reading, as the writer was trashing the
article as ba...
BY: Technical Analysis, Inc.SUBJECT: Letters To S&C
Opening Position by Jayanthi Gopalakrishnan
BY: Jayanthi GopalakrishnanSUBJECT: Opening Position
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Overnight Trading by Anthony Trongone, Ph.D.
ARTICLE SYNOPSIS ...Overnight Trading by Anthony Trongone, Ph.D.
Trading that occurs after the regular trading
session can dictate future action. Here's how you
take advantage of this information.
Many readers wrote to me about
my article in the January 2004
STOCKS & COMMODITIES. Since
my findings were unsupportive
of the earlier writings of some other "authorities," they were curious as to why
such a phenomenon was unfolding. In this article,
I'll begin by discussing possible causes
responsible for or contributing to recent unorthodox
pricing patterns that appear to contradict
traditional expectations of techn...
BY: Anthony Trongone, Ph.D., CFP, CTASUBJECT: Trading Techniques
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Price Vs. Speed by Don Bright
ARTICLE SYNOPSIS ...Price Vs. Speed by Don Bright
Here's a look at the order handling of the New York Stock
Exchange versus over-the-counter equities.
Over the last few months, I've been following
the discussion, and even controversy, surrounding
the best way to handle equities
orders. In recent years we have seen the
evolution of customer-initiated order flow. The Internet has opened up the world of trading to Main Street, and the increase in activity has
spawned additional scrutiny into the way orders are handled.
THE SPECIALIST AND THE OTC
From a trader's perspective, I would like to discuss one of the
tw...
BY: Don BrightSUBJECT: Real World
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Q&A by Don Bright
ARTICLE SYNOPSIS ...Q&A by Don Bright
PENNY ENVELOPE
When enveloping intraday using the
New York open book, would it make
sense to place a bid (say, 200 shares) a
penny above a really big bidder (20,000-
plus shares) and offer a penny or so
below a really big offer, in hopes of
getting price improvement when (and
if) the specialist cleans up those big
blocks? Aren't the bigger blocks likely
to be completed as negotiated trades
(and therefore offer the opportunity for
price improvement)? Is this a good way
to place envelopes? Thanks -- Guy
Truicko...
BY: Don BrightSUBJECT: Q&A
BY: Markos KatsanosSUBJECT: Sidebar
BY: Rene Koch, Ph.D.SUBJECT: Sidebar
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Traders' Resource: Publications by Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Traders' Resource: Publications by Technical Analysis, Inc.
Where can traders turn for market
insight, trade recommendations, and
education about trading and investing?
Perhaps the question should be where
can't you? These days, financial
information is put out in print, on TV, on
your handheld, over the Internet in
various formats, but there's still nothing
more readable, reliable, or researchable than a regularly published newsletter or magazine.
In Traders' Resource this month, Technical Analysis of
STOCKS & COMMODITIES presents a short listing of
publications in a variety of methods and ...
BY: Technical Analysis, Inc.SUBJECT: Traders' Resource
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Traders' Tips by Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Traders' Tips by Technical Analysis, Inc.
? TRADESTATION: VFI PERFORMANCE
Markos Katsanos' article in this issue, "Volume Flow Indicator
Performance," provides four strategies for trading the
volume flow indicator (VFI). All four strategies are provided
here in TradeStation EasyLanguage. In addition, Katsanos
introduced a new indicator, the VFI-price divergence, which
is also coded here.
Most of the calculations are performed in the function
"VFISmoothed," which was given in the TradeStation tip in
the May 2004 Traders' Tips column.
When using these strategies, please remember to format
yo...
BY: Technical Analysis, Inc.SUBJECT: Traders' Tips
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Volume Flow Indicator Performance by Markos Katsanos
ARTICLE SYNOPSIS ...Volume Flow Indicator Performance by Markos Katsanos
Find out how well the volume flow indicator performs in this, the
second of a two-part series on the VFI.
Last month, I introduced a long-term money
flow indicator I call the volume flow indicator
(VFI). The VFI is based on the on-balance
volume? (OBV), but with three important
modifications:
? Positive readings indicate a bullish state and negative
readings a bearish state.
? The calculation is based on the day's median instead
of the closing price.
? A threshold was introduced to take into account
minimal price changes and another thr...
BY: Markos KatsanosSUBJECT: Indicators
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Websites For Traders: DayTradingCoach.com by David Penn
ARTICLE SYNOPSIS ...Websites For Traders: DayTradingCoach.com by David Penn
DAYTRADINGCOACH.COM
Which recommendation haunts fledgling
traders the most? Is it the notion of
having to raise tens of thousands of
dollars in starting capital? Is it the
thought of having to spend hundreds of
dollars on complicated computer hardware
and software in order to be competitive
with other dedicated, high-tech
traders? Maybe it's the invocation to
find a singular method and stick with it.
? Maybe it's learning to take small
losses early -- even if it means not
making a dime for months. ?
I suspect the answer is different for...
BY: David PennSUBJECT: Websites For Traders
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Websites For Traders: Portals.WallStreetTape.com by Jayanthi Gopalakrishnan
ARTICLE SYNOPSIS ...Stocks & Commodities V. 22:7 (90): Websites For Traders: Portals.WallStreetTape.com by Jayanthi Gopalakrishnan
Portals.WallStreetTape.com -- as you may have guessed -- is a portal, but something that financial market junkies will benefit from. It is not a site that
provides buy/sell signals, nor is it one that particularly focuses on technical analysis. As with many other portals, you can customize the financial content, creating as many as five custom pages. Registration is free and the site is easy to navigate. All you have to do is supply some information about yourself, submit a username an...
BY: Jayanthi GopalakrishnanSUBJECT: Websites For Traders
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Where Will The Markets Open? by Ihor Vysotskyy
ARTICLE SYNOPSIS ...Where Will The Markets Open? by Ihor Vysotskyy
Here's how you can use fair value to determine where the
market will open.
Turn on CNBC before the market opens and you
will see the S&P futures quotes. How important
are they? If you are an experienced trader,
you know that the Standard & Poor's 500
futures contract, which is based on the S&P
500 index, is a valuable forecasting tool. But what exactly is the connection between the S&P 500 index
and futures on this index, and how can this connection help
define where the market will open?
FUTURES VS. CASH
The S&P 500 is a capitalization-weight...
BY: Ihor VysotskyySUBJECT: Basic Techniques
Working Money: Bearish Confirmations by David Penn
BY: David PennSUBJECT: Working Money
Working Money: Do P/E Ratios Really Matter? by Matt Blackman
BY: Matt BlackmanSUBJECT: Working Money
Working Money: Market Indicators: Useful Tools by James A. Maccaro
BY: James A. MaccaroSUBJECT: Working Money
Working Money: The Politics Of Money Management by Mark Whistler
BY: Mark WhistlerSUBJECT: Working Money