Contents For JUN2011

  • Advanced Oca Orders

    ARTICLE SYNOPSIS ...Every trade demands a stop-loss order. I cannot enter a position without a stop because the size of every trade is limited by the distance from entry to stop. Since my trading horizon is anywhere from several days to several weeks, I move stops in the direction of the trade once the price moves in my favor. Modern platforms provide the ability to use trailing stops, moving stops in the direction of your trade. When the price moves against you, that triggers a stop and you are out with only a small loss or even with a profit. This method is often used for profit-taking, espe...

  • Books For Traders

    ARTICLE SYNOPSIS ...The Big Investment Lie: What Your Financial Advisor Doesn't Want You to Know (298 pages, $24.95 h a r d c o v e r , 2 0 0 7 , ISBN 978-1-57675- 4 0 7 - 8 ) by M i c h a e l Edesess, published b y B e r r e t t - Ko e h l e r Pu bl i s h e r s. Th e i nvestment advice and management industry is built on fraud -- the idea that professional advisors can consistently help you get a better rate of return on your investments is a sham. Here, the truth is exposed that the success of nearly every investment professional is the ability to procure high fees from their ...

  • Classic Short Sell Setup

    ARTICLE SYNOPSIS ...Figure 1 is an example of a classic short setup for daytraders. This is a real bread & butter strategy used time and again. To set up this Monday morning trade, the premarket news was bearish with rumors of the country's credit rating likely to be downgraded. All the market averages were down. So the bears were growling and sentiment was weak. BroadComm (Br c m) is one of 20 or so stocks I follow daily and at the open it frequently puts in a nice red bar, as do most of the other stocks I watch. So this time I stalked it for an entry to the short side....

  • Conquering Your Trading Fears With Corey Rosenbloom

    ARTICLE SYNOPSIS ...Corey Rosenbloom, Cm t, is the founder of www.afraidtotrade.com, a website dedicated to helping traders overcome their trading fears through education, and is the author of The Complete Trading Course (John Wiley & Sons, 2011), which outlines how to combine foundational principles, analysis techniques, and trade setups into a broader perspective. He began investing using fundamental analysis in 1998 during the runup to the market top in 2000, and the ensuing bear market opened his awareness to the field of technical analysis as a way to enhance performance and manage risk more effe...

  • Daytrading Cup Breakouts

    ARTICLE SYNOPSIS ...Entering and exiting intraday trades using precision technical trading signals has been popular with both retail and institutional traders, since it limits overnight risk exposure. The primary elements of professional daytrading include scanning for volatile breakouts during the first hour of the trading day, setting specific technical entry signals to initiate new trades, and using careful risk management to scale in and out of positions once they're initiated. Daytrading stocks, eminis, forex, and exchange traded funds (Et fs) all require different entry and exit signals....

  • Elliott Wave And The Explosive Stock

    ARTICLE SYNOPSIS ...We all have one goal in mind in this trading game: We want to find winning investments that leave our accounts better off than where they started. Many traders seek to accomplish this goal by digging through financial statements, news articles, and trade magazines in search of companies with exploding earnings or industry-changing innovations in the works. No doubt, these things create a ton of potential in terms of a company's stock growth. But we have no way of knowing how the market will react to even the most promising headlines....

  • Entering The Price Zone

    ARTICLE SYNOPSIS ...In our last article, we introduced a new oscillator that provides better guidance to buying and selling levels for securities: the volume zone oscillator (Vz o). This time, we introduce a similar, complementary indicator: the price zone oscillator (Pz o). See sidebar, "Price Zone Oscillator," on page 29. The formula for Pz o depends on only one condition: If today's closing price is higher than yesterday's closing price, then the closing price will have a positive value (bullish); otherwise it will have a negative value (bearish)....

  • Explore Your Options

    ARTICLE SYNOPSIS ...Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C. Contributing analysis is by senior Optionetics strategist Chris Tyler....

  • Futures For You

    ARTICLE SYNOPSIS ...HEDGING PRICE RISK Is there a way to hedge price risk in the futures market without giving up potential for favorable price movement? The goal of a perfect hedge is to eliminate the price risk exposure in any particular market. In doing so, however, the end user also gives up any favorable price movement. Hedging is like any other form of insurance; consumers pay a premium to insurance companies to protect themselves from unfavorable events that will likely never occur. In other words, it isn't possible to enjoy the benefits of protection without giving something up. Bu...

  • Letters to S&C

    ARTICLE SYNOPSIS ...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? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine would not exist....

  • Opening Position

    ARTICLE SYNOPSIS ...The best thing to do in such a market is to take each day at a time. This is not the time to try to make any forecasts. Follow the masses while the going is good, but remember that in the financial markets, sooner or later all good things come to an end. We've seen it before and some of us have been hurt by it. This time it could be worse than what we saw in 2008 to early 2009. Make risk management your top priority by placing stops and managing your positions wisely. ...

  • Product Review: ONE44

    ARTICLE SYNOPSIS ...One44 is a commodities trading platform that gives buy and sell recommendations for four very active commodities: Standard & Poor's 500 and na s d a q minis, euro, and yen. After downloading, just log in each time you want to use On e44. Why just four commodities? That's because On e44 is predicting where price will turn, and some of that prediction requires trading experience. That experience comes from Nick Ehrenberg, a veteran of 30 years of analysis provided to a select few of the cm e floor traders. On e44 was created to let a broad spectrum of traders see the...

  • Product Review: The Wizard

    ARTICLE SYNOPSIS ...The Wizard offers self-directed investors an end-of-day investment decisionmaking and market timing system that provides specific buy and sell points for investments in four markets tracking over 9,000 stocks, 900 exchange traded funds (Et fs), 70 futures contracts, and 24 forex pairs. The entry and exit decisions are based on key support and resistance levels. The program also pinpoints highprobability trades in all these markets based on the simple concept of following the trend. Historical backtested and live data for the market calls for each investment vehicle provid...

  • Q&A by Don Bright

    ARTICLE SYNOPSIS ...END-OF-DAY CLOSE IMBALANCES Mr. Bright, I attended one of your classes last year and found it very helpful. One of the things you taught was how to read and respond to end-of-day market close imbalances. If I recall, you said these imbalances were put out twice during the last half hour of trading. Is that still the case? Have there been any changes to your thought process regarding how to treat them? --Edwin G. Don, I want to thank you for your column and your help on the various Internet boards. You had posted at some point that there had been major changes in the ...

  • Routing Your Orders

    ARTICLE SYNOPSIS ...Changes in structure cause changes in order routing. And with growth and mergers taking place among exchanges, traders need to be aware of how to route their orders....

  • Straightening The Curves

    ARTICLE SYNOPSIS ...Consistently making a small profit on one contract is the first step to becoming a successful trader. Here's a strategy that shows you how to do that using crude oil contracts as an example....

  • Top 10 Candles That Work

    ARTICLE SYNOPSIS ...In my last article, I described 13 candlesticks that worked best as reversal or continuation patterns. That means price closed above the top of the candle pattern or below the bottom of it, signaling a reversal or continuation not just once, but reliably in thousands of cases. However, just because a candle acts as a reversal 66% of the time doesn't mean that price moves far beyond the candlestick boundaries. This article discusses candles that perform best over time -- that trend furthest -- but they may not be good reversal or continuation candidates....

  • Traders' Resource by Data Services

    ARTICLE SYNOPSIS ...The advent of the Internet has made available data services of all kinds maintained by the vendor. This gives you, the buyer, a myriad of possibilities when it comes to data frequency, method, and delivery. It is now a key issue to sort out, of course, when you are investigating data services, with more details to ponder. On the one hand, all the data maintenance hassles are taken out of your hands, as opposed to earlier times, when data cleansing was a real issue; on the other, the vendor, in its maintenance, may be too casual for your tastes in how it maintains the data y...

  • Traders' Tips

    ARTICLE SYNOPSIS ...For this month's Traders' Tips, the focus is Walid Khalil and David Steckler's article in this issue, "The Price Zone Oscillator." Code for the price zone oscillator for MetaStock and TradeStation is already provided in Khalil and Steckler's article. Subscribers will also find the same code at the Subscriber Area of our website, www.Traders.com. Presented here is an overview of possible implementations for other software. Traders' Tips are provided to help the reader implement a selected technique from an article in this issue. The entries are contributed by various software deve...