Contents For NOV2002

  • A Master Systems And Pattern Tester by Leslie N. Masonson

    ARTICLE SYNOPSIS ...A Master Systems And Pattern Tester by Leslie N. Masonson Chris Manning has spent thousands of hours poring over published systems, models, and charting patterns. Now he is a widely recognized systems expert who regularly appears on the CNBC and the Bloomberg Channel cable networks, and speaks frequently at international investment seminars. Here Leslie Masonson, who featured an interview with Manning in his book Day Trading On The Edge, reveals this expert trader's approach. It wasn't until Chris Manning, who was a strategic consultant for a Big Five accounting firm, attended a popular inve...

  • Affine Geometry Of The Markets by Viktor Likhovidov

    ARTICLE SYNOPSIS ...Affine Geometry Of The Markets by Viktor Likhovidov Think the market doesn't have a memory? Think again. bout five years ago, I came across an interesting article concerning the channeling behavior of market charts. I don't remember much about the article anymore, except for a method using "magic" parallel lines that seemed promising. I decided to try to derive useful trading signals from the idea with some simple geometric transformations. PRICE CHANNELS AND MARKET MEMORY In a nutshell, the premise is based on the following recommendation: When you find a good channel on a price chart, do...

  • Books For Investors by Technical Analaysis

    ARTICLE SYNOPSIS ...Books For Investors by Technical Analaysis Essential Stock Picking Strategies (220 pages, $29.95 hardcover, 2002, ISBN 0471400637), by Daniel A. Strachman, published by John Wiley & Sons. ...and many more!...

  • Books For Traders by Technical Analysis

    ARTICLE SYNOPSIS ...Books For Traders by Technical Analysis Dynamic Trading Indicators: Winning With Value Charts And Price Action Profile (230 pages, $69.95 hardcover, 2002, ISBN 0471215570), by Mark W. Helweg and David C. Stendahl, published by John Wiley & Sons. ...and many more!...

  • Charting The Market by David Penn

    ARTICLE SYNOPSIS ...Charting The Market by David Penn Here's a new section showing some recent news events and accompanying market shifts. Coincidence? You decide....

  • Developing A Model With Auction Market Theory by Donald L. Jones

    ARTICLE SYNOPSIS ...Developing A Model With Auction Market Theory by Donald L. Jones Here's an intraday trading model that uses auction market theory. A tenet of auction market theory is the unpredictability of the markets. An auction market model is built from market knowledge without predicting the market's path. The auction market model requires input from both the market and the trader. It is dynamic, attuned to the market, theoretically sound, and universal. It is also unique to the trader who is exercising it. I will show you the logical steps for developing a trading model, using the auction market theor...

  • Eve & Eve Double Bottom by Thomas Bulkowski

    ARTICLE SYNOPSIS ...Eve & Eve Double Bottom by Thomas Bulkowski Here's a look at one of the four combinations of double bottoms. You may be familiar with double bottoms, but have you ever heard of an Eve & Eve double bottom? I hadn't heard of them myself until a few years ago, when I was researching my latest book, Trading Classic Chart Patterns. After discovering the Adam & Eve combinations of double bottoms on HARDRightEdge.com, I expanded their findings to include all four types: Eve & Eve, Adam & Adam, Eve & Adam, and Adam & Eve. I'll discuss the latter three types in future articles. This article will focu...

  • Explore Your Options by Tom Gentile

    ARTICLE SYNOPSIS ...Explore Your Options by Tom Gentile VOLATILITY INDEX Tom, I have heard of using the volatility index (VIX) as a way of predicting overall market movement. Can you explain this to me, along with some ideas on how to trade the VIX in the markets? -- Fred M. The VIX is a measure of nervousness among traders. The VIX is a chartable indicator, and when it drops to 20% or lower, it means that the markets are calm and have a positive outlook for the future....

  • How Do You Make A Trading Decision by Simon Vine

    ARTICLE SYNOPSIS ...How Do You Make A Trading Decision by Simon Vine What goes into making a decision about a trade? Whenever you make a trading decision, you base your choices on particular outlooks regarding market developments. Although a predicted scenario at a specific moment may seem very likely, events rarely occur in the way or at the time we expect. How does the passage of time transform your outlook? TIME FACTOR IN RISK EVALUATION Suppose you place a straight stick in a pool of water. Once submerged, the stick appears to be bent. The water acts as a prism through which you observe the familiar objec...

Intermarket Review by David Penn

  • Interview: Teresa Lo Of trendVue.com by Jayanthi Gopalakrishnan

    ARTICLE SYNOPSIS ...Interview: Teresa Lo Of trendVue.com by Jayanthi Gopalakrishnan Teresa Lo, founder and chief market strategist of the trendVUE.com educational financial website, worked in the stock brokerage business for more than a decade at Canada's largest independent investment dealer before she retired from the industry in 1998. She is a discretionary trader who uses classic technical trading methods and techniques. She has extensive experience in trading senior and junior equities, index/equity options, and futures. With a background in life sciences, Lo earned a bachelor's of arts degree in economics ...

  • Letters to S&C

    ARTICLE SYNOPSIS ...Letters by Technical Analysis WAITING FOR THE FED Editor, Can you clarify a point in the article "Waiting For The Fed" by David Penn, which was published in August 2002 issue of STOCKS & COMMODITIES? Does Mark Boucher's system keep out of stocks if the T-bill rate is lower than the prior year? I got confused in reading the description of the system and the commentary. GLENN BERGEVIN via e-mail David Penn replies: Thanks for writing. The monetary timing model I mentioned is a rate of change model. In other words, it doesn't matter if the percentage change is up or down. If the year-to-year...

  • Novice Traders' Notebook: The Eve & Eve Double Bottom Vs. The Double Bottom

    ARTICLE SYNOPSIS ...Novice Traders' Notebook: The Eve & Eve Double Bottom Vs. The Double Bottom There are different types of double bottoms, as Thomas Bulkowski's article "Eve & Eve Double Bottoms," will attest. The notable difference between the classic double bottom and the Eve & Eve double bottom is that in the latter, the two bottoms should be at least three weeks apart and volume is typically higher on the left bottom. The basic characteristics of the double bottom, however, do not change....

Opening Position by Jayanthi Gopalakrishnan

  • Q&A by Don Bright

    ARTICLE SYNOPSIS ...Q&A by Don Bright MONEY MANAGEMENT OF OPTION SPREADS What are some money management tips for credit and debit spreads? Specifically, when should I get out when a spread goes against me? -- Bob Maclaurin When you have a pure option spread in place, each option has a theoretical delta (percent equivalent to shares of stock; 100 delta = 100 shares of stock). So when a spread starts to go against you, you can do a few things. First, of course, you can get rid of it. Second, you can adjust your net delta position to near zero (plus or minus the amount of risk you want to take on the long or short...

  • Trade The Dow Minis by Jayanthi Gopalakrishnan

    ARTICLE SYNOPSIS ...Trade The Dow Minis by Jayanthi Gopalakrishnan Risky, yes. Worth a try? Definitely. or those who find comfort in trading equities, the thought of trading futures may be intimidating. And who wouldn't be nervous when competing against the pit traders, who come across as most aggressive? But the transition from trading stocks to futures doesn't have to be intimidating. Sure, you need more initial capital, and there's more risk involved. But in reality, trading futures is not so different from trading equities. The same analytical principles still apply. The real difference lies in the contract...

Traders' Resource: Hardware

  • Traders' Tips by Technical Analysis

    ARTICLE SYNOPSIS ...Traders' Tips by Technical Analysis TRADESTATION: AFFINE GEOMETRY In "Affine Geometry Of The Markets" in this issue, author Viktor Likhovidov describes how to calculate the projected affine price given the start and end points of a trendline. Here, we'll present the EasyLanguage code for an affine price indicator based on Likhovidov's ideas. The way the indicator is written, the start and end points of the trendlines are passed in as inputs to the indicator, and the actual input values used are shown in the chart. Note that each point is specified by a date, a time, and a price. (Another wa...

  • Using The Fisher Transform by John F. Ehlers

    ARTICLE SYNOPSIS ...Using The Fisher Transform by John F. Ehlers Looking for better trading results? This indicator shows you how to identify price reversals in a timely manner. he common assumption is that prices have a Gaussian, or normal, probability density function (PDF). A Gaussian PDF is the bell-shaped curve you are probably familiar with, where 68% of all samples fall within one standard deviation around the mean. Do prices follow such a curve? No, but many people think so, and that mistaken assumption is why many trading indicators fail....

  • Websites For Traders: 3DStockCharts.com by David Penn

    ARTICLE SYNOPSIS ...Websites For Traders: 3DStockCharts.com by David Penn 3DSTOCKCHARTS.COM At a time when the electronic communications networks› (or ECNs) industry seems to be in the midst of rapid consolidation, the arrival of 3DStockCharts.com makes perfect sense. 3DStockCharts.com provides both two- and three-dimensional charts and other market data in graphic form for the integrated order books of two recently consolidated ECNs: Island (which was acquired by Instinet) and ARCA (or Archipelago, which merged with the REDIBook ECN in 2001). If, as some have suggested, the consolidation of the ECN industry wa...

  • Websites For Traders: TheTechnicalTrader.com by Jayanthi Gopalakrishnan

    ARTICLE SYNOPSIS ...Websites For Traders: TheTechnicalTrader.com by Jayanthi Gopalakrishnan THETECHTRADER.COM The first question that may go through your head when you visit The Technical Trader homepage is, "Just who is Harry?" The name "Harry Boxer" will probably not ring a bell, but he has had more than 30 years' experience in technical analysis. Based on this foundation, Boxer has created a website where subscribers can watch him trade in real time for $5 a day after the 15-day trial period. You need to provide a credit card number to take advantage of the trial period. The focus of the site is Boxer's insi...

Working Money: Connors' Undeniables And Candlestick Clarity by David Penn

Working Money: How Reliable Are Candlesticks? by Giovanni Maiani

Working Money: The Early Chartists: Schabacker, Edwards, Magee by James Maccaro

Working Money: To Short Or Not To Short by Neil A. O'Hara