ARTICLE SYNOPSIS ...Dow 1000 by Edwin Polokoff There are many ways to succeed in this world, and help can come from an unlikely source. A long time ago, I received a telephone call from a friend and teaching colleague. "Buy a copy of The Saturday Evening Post and read the story about Merrill Lynch," he said. "I think you should get a job there." In no great hurry, I eventually did get around to reading about the "thundering herd of Wall Street." My reaction was immediate. This was for me. So began my love affair with Merrill Lynch....
BY: Edwin PolokoffSUBJECT: Real World
ARTICLE SYNOPSIS ...Flexible Candlesticks by Viktor Likhovidov In the November 1999 STOCKS & COMMODITIES, Viktor Likhovidov introduced a method by which candlesticks, a subjective charting technique, could be used to develop objective, quantitative values -- values that could be used in software for trading. In this latest offering, Likhovidov adds flexibility to his basic method, known as CandleCodes, and in this way garners market sentiment results for different types of markets. CandleCodes, which I introduced in an article for STOCKS & COMMODITIES in 1999, are intended to make objective the popular but very ...
BY: Viktor LikhovidovSUBJECT: Trading Techniques
ARTICLE SYNOPSIS ...Interview: The Survivors by John Sweeney and Jayanthi Gopalakrishnan As goes the Nasdaq, so does the number of daytraders. Or so it seems. Those who continue to trade as if nothing changed are those who can call themselves, with confidence, traders. Former STOCKS & COMMODITIES Editor John Sweeney (JS) and current Editor Jayanthi Gopalakrishnan (JG) talked to three such market survivors -- Mark Pancak from Vancouver, BC, Canada, Aaron Schindler from Chicago, IL, and Ralph Kosche from Seattle, WA -- to find out how they held up during the bear market. All three are truly traders; tending to intro...
BY: John Sweeney and Jayanthi GopalakrishnanSUBJECT: Interview
ARTICLE SYNOPSIS ...Letters To S&C BALANCE OF MARKET POWER Editor, I read with interest the August 2001 article by Igor Livshin on the balance of market power (BMP) and decided to implement the indicator. After some observation, it turns out that all the formulas for this indicator turn out to be, after making all the summations: BMP := (C-O)/(H-L) That's it -- the balance of market power is simply the difference between the close and the open, divided by the daily range. What is most curious, because it was not apparent during my reading of the philosophy behind the indicator, is that BMP is the same for the...
BY: Technical Analysis, Inc.SUBJECT: Letters To S&C
ARTICLE SYNOPSIS ...Money Management Indicators by Michael R. Bryant, Ph.D. Keeping track of your system's performance will alert you to changes in market behavior. T raditional market indicators are typically based on price. Moving averages, for example, are calculated using a specific number of bars of price history. Traditional indicators can be useful for gauging price action in the market, but I wanted indicators to measure how my system was performing. So I tried out a combination of indicators based on the profit/loss stream of a trading system. These money management indicators are plotted on a price c...
BY: Michael R. Bryant, Ph.D.SUBJECT: Money Management
BY: Jayanthi GopalakrishnanSUBJECT: Opening Position
ARTICLE SYNOPSIS ...Position Trading The S&P by Clifton Mitchell, Ph.D. Use linear regression to predict short-term trend changes of the Standard & Poor's 500. Psychologically speaking, bar chart lows represent the lowest price that sellers are willing to take for a security or commodity. If sellers are not willing to go lower on their selling price, then buyers must pay more and, consequently, prices rise. This is why a series of higher lows has long been accepted as a general indicator of prices moving higher. Evidence of this is most commonly seen when trendlines indicating upward movement are drawn such tha...
BY: Clifton Mitchell, Ph.D.SUBJECT: Trading Techniques
ARTICLE SYNOPSIS ...Q&A by Don Bright TRADING IN FLAT MARKETS First off, I read your column every month in STOCKS & COMMODITIES, and I like how you answer questions directly without fluff. How do professional traders deal with a relatively flat market such as the one we have been experiencing for the last few months? In addition, I have noticed that the overall trading volume has been down for a while. Does that affect those who trade for a living?--Ben, Salt Lake City Thank you for the kind words! Good questions. I am asked the same thing almost daily, it seems. Those of us who trade for a living get used to a...
BY: Don BrightSUBJECT: Q&A
ARTICLE SYNOPSIS ...Traders' Resource: Consultants Consultants consult on just about every conceivable worry traders have. A quick perusal of our listing this issue shows that they have been called in to consult on everything from tax advice to weather reporting. Can all this help you? Maybe. The rules for checking out consultants are simple: check references, check references, and (did you guess?) check references. Nothing can be more vague than a consultant's initial proposal, but nothing is clearer than a client's opinion on the success of a consultant's engagement. Consultants without satisfied clients are...
BY: Technical Analysis, Inc.SUBJECT: Consultants
ARTICLE SYNOPSIS ...Traders' Tips In "Money Management Indicators" Michael Bryant describes the average trade P/L indicator. Traders' Tips gives the code for this indicator in: TradeStation EasyLanguage, NeuroShell Trader, Wealth-Lab, and WaveWi$e. Code is also supplied for M.H. Pee's Trend Detection Index in TradeStation EasyLanguage....
BY: Technical Analysis, Inc.SUBJECT: Traders' Tips
ARTICLE SYNOPSIS ...Trend Detection Index by M.H. Pee Can you tell when a trend's begun and when it's ended? You can with this. The trend detection index (TDI) is used to detect when a trend has begun and when it has come to an end. The TDI can be used as a stand-alone indicator or combined with others; it will perform well in detecting the beginning of trends. However, this does not mean its signals are totally accurate. Protective stops as well as trailing stops must be incorporated to produce a complete mechanical system. These stops are required to protect against large losses when the indicator generates a...
BY: M.H. PeeSUBJECT: Indicators
ARTICLE SYNOPSIS ...Tweak Those Spreads by Phillips Wiegand Jr. Is it possible to trade in any environment? Here are the basics of the calendar spread and how it can be used to trade the more volatile securities. It's no secret: Trying to gauge short-term market moves is a challenge. There have been too many times when it felt as though the major indices had hit a bottom. Nearly two dozen rallies since September 2000 have turned out to be bear traps. And each time traders have taken the bait, only to have the bottom fall out from under them as the broad market indices sliced through support levels. The glimmer ...
BY: Phillips Wiegand Jr.SUBJECT: Options
ARTICLE SYNOPSIS ...Working Money: Can Beta Help You Battle Volatility? by David Penn Of all the enemies of capital appreciation, stock price volatility is one of the most immediate. Can beta help you know when your stock or portfolio volatility is out of control? Traditionally, stock investors have looked at two different but related forms of risk: systematic (or market) and unsystematic (or company-specific). Systematic risk is the risk of investing in the stock market in the first place, as opposed to putting your money in a return guaranteed investment such as a money market fund or certificate of deposit. ...
BY: David PennSUBJECT: Investing
ARTICLE SYNOPSIS ...Working Money: Interview: William J. O'Neil by David Penn The name rings a bell, but you're not sure why. You may only be vaguely familiar with the name, but you've certainly heard of, if not actually read, the product for which he is perhaps best known. William O'Neil, the founder of Investor's Business Daily (originally Investor's Daily until 1988) and chairman of William O'Neil & Co., Inc., a leading institutional investment research and brokerage firm, is one of the most clear-eyed and perceptive observers of the stock market today. His CAN SLIM approach to finding winning stocks enabled ...
BY: David PennSUBJECT: Interview
ARTICLE SYNOPSIS ...Working Money: Little Steps = Big Returns by Paul Merriman Increase your profits by investing in specific sectors of the market. Don't put all your eggs in one basket" is frequently given advice. In the investment world, this adage is about the risk of investing exclusively in one kind of financial product. But it refers to more than just investing among different asset classes such as stocks, bonds, and cash. Two of the most common methods of slicing and dicing the market are based on the size of the company (small cap, mid cap, or large cap) and its popularity (growth means popular and pri...
BY: Paul MerrimanSUBJECT: Mutual Funds
ARTICLE SYNOPSIS ...Working Money: Volume Speaks Volumes by Dennis D. Peterson Sometimes the market roars and at other times it's quiet. Paying attention to these volume fluctuations can make a difference in your pocketbook. Suppose someone offered you something you wanted, for less than it cost two weeks ago. Would you turn it down? What if everyone in your neighborhood had heard about it and they all wanted it too? Would they turn it down? These same dynamics are at play in the stock market -- and volume is a tool that can help you decipher them. If a stock is perceived to be a bargain, then the whole neighbo...
BY: Dennis D. PetersonSUBJECT: Investing