STOCKS & COMMODITIES magazine. The Traders' Magazine

Article Archive For APR2003

Aftermath Of The Bubble by Phil Abel

  • Books For Traders by Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...Books For Traders by Technical Analysis, Inc. How The Bond Market Works, Third Edition Global Asset Allocation: New Methods And Applications NASDAQ: A History Of The Market That Changed The World Professional Electronic Trading Stocks For The Long Run, Third Edition Trading The Moves: Consistent Gains In All Markets Wall Street People, Vol. 2: True Stories Of The Great Barons Of Finance...

  • Bullish Chart Patterns by Thomas Bulkowski

    ARTICLE SYNOPSIS ...Bullish Chart Patterns by Thomas Bulkowski Can you recognize bullish patterns when they appear? Find out what they look like here. One day, the market will find a bottom and start building a base from which to launch another bull market. Will your market. Will your trading missiles be ready? How will you know when the time comes to turn the key and start buying again? One way is to look for bullish chart patterns and trade them, cautiously, when they appear. What should you look for? To answer that, let's look at some of the more common chart patterns. BROADENING BOTTOMS Figure 1 shows a g...

  • Detecting Breakouts by Markos Katsanos

    ARTICLE SYNOPSIS ...Detecting Breakouts by Markos Katsanos The finite volume elements (FVE) indicator is yet another money flow indicator -- but it takes into account both intra- and interday price action. Most technical analysts underestimate volume indicators in favor of pricebased indicators or price pattern recognition. Volume often leads price, and volume indicators can predict this price change by observing the delicate balance of supply and demand in the never-ending battle between buyers and sellers, bulls and bears. To help analyze crowd psychology and profit from subsequent price moves, I created the f...

  • Explore Your Options by Tom Gentile

    ARTICLE SYNOPSIS ...Explore Your Options by Tom Gentile BUTTERFLY SPREADS Would you be so kind to explain what exactly a butterfly spread is? Thanks -- Simon A butterfly spread is a sideways market strategy using all calls or puts, and is designed to profit from a stock trading in a specific range. They are often cheap to place, offer high rewards, and can be profitable within a few days to a few weeks; so they are ideal for shorterterm swing traders. The construction of the spread generally involves selling (shorting) two contracts in the middle of a stock range (the body) and buying two contracts (the wings) ...

  • Interview: Steve Nison by Jayanthi Gopalakrishnan

    ARTICLE SYNOPSIS ...Interview: Steve Nison by Jayanthi Gopalakrishnan Want to know something about candlestick charting? Steve Nison can tell you. He was the first to bring Japanese candlestick charting methods to Western trading nearly 20 years ago. He is a leading authority on candlesticks, the author of two foundational books on the subject, Japanese Candlestick Charting Techniques and Beyond Candlesticks, and gives seminars on the subject. Further, Nison was one of the first to be awarded the designation of Chartered Market Technician (CMT) from the Market Technicians Association (MTA); in addition, he is pr...

Letters To S&C

  • Neural Networks by Wolf von Rönik

    ARTICLE SYNOPSIS ...Neural Networks by Wolf von Rönik Think neural networks are too difficult a concept to learn? They're not. Take a look. In a broad sense, neural nets are computer models that attempt to mimic the "wetware" or actual physiological structure and functioning of the brain (which is outlined in the sidebar, "Neurons")....In the simple model displayed in Figure 1, I1, I2, and I3 represent inputs. Moving down, each input reaches a weight (synapse) labeled W1, W2, and W3 where input and corresponding weight are multiplied. This new information is conducted (dendrite) as input to the node (soma). Ins...

Opening Position by Jayanthi Gopalakrishnan

  • Q&A by Don Bright

    ARTICLE SYNOPSIS ...Q&A by Don Bright OPENING-ONLY ORDERS I've been following the opening-only orders strategy very closely, and I have a question. I'm a futures trader and somewhat unfamiliar with the practical aspects of trading listed. I watched around 13 opens this morning, and saw fills on three of them. One was LLY, which opened delayed? with news. The position would have been long in LLY at 56.50 to open. After a nice move to 56.80, I saw futures leveling off, possibly getting ready for more buying. But let's say a trader wanted to start unwinding a 2,000-share position at this point. Since the open, th...

  • Split Synthetic Stock Positions by Roger Ison, Ph.D.

    ARTICLE SYNOPSIS ...Split Synthetic Stock Positions by Roger Ison, Ph.D. Use this flexible but little-known strategy to buy stock inexpensively, deploy cash more effectively, and diversify your portfolio. Suppose that a stock you follow, Abcd Inc. [ABCD], has just taken a substantial price hit. It's really beaten down. Its sector has had some news that made investors nervous, and now there are some negative analyst comments about the company itself. But you know this company. You watch it, you understand its business, and in your judgment, these shares are now an excellent deal. On its merits, ABCD is a stock y...

Traders' Resource: Courses And Seminars

  • Traders' Tips by Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...Traders' Tips by Technical Analysis, Inc. ? TRADESTATION: FINITE VOLUME ELEMENTS (FVE) Markos Katsanos' article "Detecting Breakouts" describes the calculation and use of a price-volume indicator called the finite volume element (FVE). Katsanos provides a detailed Excel spreadsheet in the article, and I've used it to write the equivalent EasyLanguage code for the FVE. We named this indicator "FiniteVolumeElement." Katsanos spends much of the article discussing divergence between price and FVE trends. He defines these trends in terms of linear regression slopes. The following indicator, "FinV...

  • Websites For Traders: TurtleTrader.com by David Penn

    ARTICLE SYNOPSIS ...Websites For Traders: TurtleTrader.com by David Penn TURTLETRADER.COM If there is a Holy Grail of trading (a colossal "if" in the minds of many), then it most likely consists less of trading systems and more of a set of processes, procedures, and precepts: Ride your winners and cut your losers short. When you are trading well, bet biggest, and when you are trading poorly, pull back or stop trading altogether. And last but not least, don't fight the trend. While there are modifications and stylistic differences among traders as to the best way to execute this process -- from scalpers who cut ...

  • Working Money: Gold by David Penn

    ARTICLE SYNOPSIS ...Working Money: Gold by David Penn From gold bugs and gold standards to massive derivative speculation, the yellow metal is back. All that glitters is not gold, goes the saying. But as far as investors are concerned, gold seems to be the only asset class with any shine at all. Gold mutual funds -- as noted in Barron's "Mutual Funds" section for December 16, 2002 -- look poised to deliver returns to gold bugs that would make even the luckiest dotcom speculator salivate with envy. An exaggeration? Consider the Gabelli Gold Fund AAA, which is up 75.91% year to date, or perhaps the Rydex Precious ...

  • Working Money: Postitive Volume Index by Dennis D. Peterson

    ARTICLE SYNOPSIS ...Working Money: Postitive Volume Index by Dennis D. Peterson Is the primary market trend up or down? Writing about the positive volume index (PVI) takes me back to when I first started trying to understand the markets. I joined four stock clubs, searched the Internet extensively, and haunted the local library. I still belong to one of the clubs; its members use fundamentals. Even though they don't subscribe to anything as voodoo-like as technical analysis, they do plot data on semi-log charts and use them as part of the decision-making process. I was also able to learn quite a bit at the lib...

  • Working Money: Why Doesn't The Fat Lady Sing? by Bruce R. Faber

    ARTICLE SYNOPSIS ...Working Money: Why Doesn't The Fat Lady Sing? by Bruce R. Faber When the stage is obscured by smoke and mirrors, how can you know when the last act is finally over? Even though the bear market has been eating investors' lunch since early in 2000, there has been no sign of the capitulation that usually accompanies a market bottom. As I write this (December 30, 2002), the Nasdaq is down about 73% from its March 2000 high of 5048. The Standard & Poor's 500 index is down from 1527 to about 880. The Dow Jones Industrial Average (DJIA) has suffered the least, but it is still down about 29% from it...








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