ARTICLE SYNOPSIS ...V. 22:9 (34-37): Buy Strong Groups Or Weak? by Jay Kaeppel Is it better to buy weak industry groups or strong ones? The best approach might be to utilize both strategies. Is it better to buy weak stocks or strong ones? The theory behind buying weak stocks is that you have the opportunity to buy low and (some time later) sell high. The theory behind buying strong stocks is one of momentum; the idea is that a stock in motion is most likely to continue in that least for a while. Most research suggests that direction, at least for a while. Most research suggests that when you buy individual stoc...
BY: Jay KaeppelSUBJECT: Market Timing
ARTICLE SYNOPSIS ...V. 22:9 (62-65): Emotionally Intelligent Trading by Eliot Brenner, Ph.D. Increase your trading profits by incorporating these strategies for emotional intelligence with a sound trading plan. A few months after I began daytrading equities, I learned a tough lesson that illustrates how emotionally intelligent traders can profit from the mistakes of others. I was trading at a firm with 50 other traders who sat shoulder-to-shoulder at computer terminals. The trader who sat next to me was considerably more experienced than I was. On one occasion, I was feeling quite pleased because I was long 400...
BY: Eliot Brenner, Ph.D.SUBJECT: Trading Psychology
ARTICLE SYNOPSIS ...V. 22:9 (76): Explore Your Options by Tom Gentile Got a question about options? 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. SPLIT STRIKE CONVERSION Q: I am interested in information on implementing a split strike conversion strategy to hedge/stabilize a...
BY: Tom GentileSUBJECT: Explore Your Options
ARTICLE SYNOPSIS ...V. 22:9 (122, 110): Intermarket Review by David Penn The Intermarket Review looks at the China Fund (CHN), Thai Fund (TTF), India Fund (IFN), and Malaysia Fund (MF). The China Fund (CHN) is a closed-end fund under the advisement of Asia Direct Capital Management. Traded on the New York Stock Exchange, the fund is geared toward providing investors with exposure to equities of companies based in or out of China. Founded in July 1992, the fund as of this writing had total net assets in excess of $271.30 million. Holdings in the China Fund include companies such as Chaoda Modern Agriculture (ind...
BY: David PennSUBJECT: Intermarket Review
ARTICLE SYNOPSIS ...Once in a while, we hear something coming out of the Federal Reserve we just don't expect. In this case, we heard about a technical analysis?receptive individual -- an economist, to boot! Christopher Neely is a research officer with the Federal Reserve Bank of St. Louis, where he has worked since receiving his doctorate from the University of Iowa in 1993. His research has been primarily in empirical international finance, but he has published papers on technical trading rules, foreign exchange intervention, and intertemporal asset pricing. In recent times, he has begun to research options mark...
BY: Jayanthi GopalakrishnanSUBJECT: Interview
ARTICLE SYNOPSIS ...V. 22:9 (10-13): Letters To S&C by Technical Analysis, Inc. MAXIMUM ENTROPY METHOD Editor, I am a 34-year-old Italian engineer. I am interested in the maximum entropy method as applied to the financial markets. I would implement this method in an Excel spreadsheet. Could you kindly suggest a list of articles I could buy from you in order to do that? GIUSEPPE BASSETTO, via email Publisher Jack K. Hutson replies: Over the years, we have published many articles on maximum entropy spectrum analysis (MESA). In Volume 2 (1984) of Technical Analysis of STOCKS & COMMODITIES, The Traders' Magazin...
BY: Technical Analysis, Inc.SUBJECT: Letters To S&C
ARTICLE SYNOPSIS ...V. 22:9 (14-20): Make The Trend Your Friend In Forex by Kenneth Agostino and Brian Dolan So you didn't see that last headline-grabbing market move coming? Here are some techniques you can use to make sure you'll be prepared next time. Of the many market sayings that traders throw around, none may be more overused and less understood than the adage "The trend is your friend." All too often, the phrase is used after a trader has taken a countertrend position and subsequently been stopped out at a loss. At this point, remorse sets in, and most traders kick themselves not only for having lost on...
BY: Kenneth Agostino and Brian DolanSUBJECT: Forex Market
BY: Jayanthi GopalakrishnanSUBJECT: Opening Position
ARTICLE SYNOPSIS ...V. 22:9 (57-58): Q&A by Don Bright SINCE YOU ASKED Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question 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. THETA DECAY I read that you were once an options market maker. I have a question about theta. Do you know when an option erodes due to theta decay? Is it continuous throughout the day...
BY: Don BrightSUBJECT: Q&A
ARTICLE SYNOPSIS ...V. 22:9 (46-56): Set Up Your Trades With The Swing Indicator by Teresa Lo Knowing when and where classic chart patterns tend to form is as important as identifying the patterns themselves. Here's how one trader uses a combination of indicators and simple geometry to set up trades. "The trend is your friend except at the ends, where it bends." -- Ed Seykota Investors and traders are no doubt familiar with Ed Seykota's oft-quoted saying, as it describes price action found in the capital markets. This idea has inspired traders to focus on finding stocks that are trending in order to enter on r...
BY: Teresa LoSUBJECT: Chart Patterns
ARTICLE SYNOPSIS ...V. 22:9 (50-52): Sidebar: The geometry of chart patterns by Teresa Lo Pattern recognition is made simple using the swing lines of the classic swing indicator. Together with PowerSwing bars (not shown), the indicators act as visual aids, and basic geometry helps identify the pattern in addition to support and resistance points. Traders can look for entries based on their style of trading, often in conjunction with other technical indicators. Sidebar Figures 1?4 are some examples of chart patterns that were identified as they formed in real time....
BY: Teresa LoSUBJECT: Sidebar
BY: Giorgos E. Siligardos, Ph.D.SUBJECT: Sidebar
ARTICLE SYNOPSIS ...V. 22:9 (92-95): The Call Me "Mini E" by Afshin Taghechian Well, actually, it's e-mini, and this article has nothing to do with Dr. Evil. You might find it informative anyway, especially if you're looking for a new instrument to trade. Since March 2000, when the stock market bubble burst, most equity traders have started to look into other trading and investment vehicles to profit from the market. Because the stock market rally lasted for so long -- 18 years! -- plenty of other market vehicles had been overlooked by investors and traders during that time. Now, these overlooked markets are attr...
BY: Adrienne Laris ToghraieSUBJECT: Trading Strategies
ARTICLE SYNOPSIS ...V. 22:9 (78-82): The Crude Mini Cometh by David Penn Minis? Energies? For the little guy, trading energy futures just got easier. What were you doing in the autumn of 1990? Well, if you were a futures trader, and it was sometime in late August or early September, then you were probably on the long side of crude oil, a ride that ended up taking fortunate traders to a high of more than $40 a barrel by October. Missed that one, did you? Well, how about the move down in 1993? Or even better, the collapse in 1998, when crude oil got dangerously near $10 a barrel? I bet the shorts made a killing ...
BY: David PennSUBJECT: Basic Techniques
ARTICLE SYNOPSIS ...V. 22:9 (22-29): The Decomposition Method by Giorgos Siligardos, Ph.D. You never know what you might find by studying high, low, and closing prices separately. In this article, I will introduce the decomposition method of price information, and show how the reverse engineering concept discussed in my previous articles can be expanded to complement this method. THE IDEA BEHIND DECOMPOSITION Price data for one day consists of the open, high, low, and close of that particular day. Though these four components are correlated, it can also be useful to study them independently. When the results ...
BY: Giorgos E. Siligardos, Ph.D.SUBJECT: New Techniques
ARTICLE SYNOPSIS ...V. 22:9 (116-119): Traders' Resource: Forex Brokerages by Technical Analysis, Inc. Foreign exchange traders have more choices than ever in their ongoing search for speed, pricing efficiency, and good accounting when it comes to forex brokerages. First, you must find a forex brokerage that handles your particular currency tradable; full-service brokerages dealing with equities, options, futures, bonds, mutual funds, and cash goods are usually full-priced as well. A little research, however, will get you a forex brokerage targeted on your currency of interest. After that, your first question m...
BY: Technical Analysis, Inc.SUBJECT: Traders' Resource
ARTICLE SYNOPSIS ...V. 22:9 (96-108): Traders' Tips by Technical Analysis, Inc. This month's Traders' Tips are for Giorgos Siligardos' article ""The Decomposition Method,"" which presents a procedure for using his reverse-engineered RSI of weekly lows to identify possible price supports. The code is supplied for the following programs: TradeStation, Wealth-Lab, AmiBroker, eSignal, Prophet.net, AIQ, NeuroShell Trader, Aspen Graphics, TradingSolutions, TechniFilter Plus, NeoTicker, SmarTrader, Financial Data Calculator, and BullCharts....
BY: Technical Analysis, Inc.SUBJECT: Traders' Tips
BY: John DevcicSUBJECT: Working Money
ARTICLE SYNOPSIS ...V. 22:9 (69): Websites For Traders: FXstreet.com by Jayanthi Gopalakrishnan FXSTREET.COM "Take the challenge: Test your forex knowledge" -- the headline was enough to tempt me to take a closer look at www.FXstreet.com. A click on that link took me to a 10-question test, which, although basic, really will test your knowledge. Fortunately for me, there were enough technical analysis questions to make the quiz a breeze. But it also prompted me to explore the site further. The content changes just about every day, and you'll find that you get a good overview of the forex market. You can find for...
BY: Jayanthi GopalakrishnanSUBJECT: Websites For Traders
ARTICLE SYNOPSIS ...V. 22:9 (84): Websites For Traders: WallStreetCity.com by David Penn WALLSTREETCITY.COM One of the blessings of being a market technician is listening to fundamental analysts fire off explanations for events that technicians had anticipated for days. Sure, it's an extra kicker when the fundamentalist finds him- or herself suddenly reversing a position that was fiercely argued only a few weeks before. But how many times has a technician been watching a financial news program or reading a mainstream financial periodical and said to himself -- in the midst of a blizzard of pundit rationalization...
BY: David PennSUBJECT: Websites For Traders
BY: Ashwani GujralSUBJECT: Working Money
BY: David PennSUBJECT: Working Money
BY: Michael J. Carr, CMTSUBJECT: Working Money