Article Archive For
APR2008
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Books For Traders by Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Books For Traders by Technical Analysis, Inc.
? 100 Minds That Made The Market
? A Lesson A Day For Traders
? Active Value Investing: Making Money In Range-Bound Markets
? Marber On Markets: How To Make Money From Charts
? Create Your Own ETF Hedge Fund: A Do-It-Yourself ETF Strategy For Private Wealth Management
? Mobs, Messiahs, And Markets: Surviving The Public
Spectacle In Finance And Politics
? Stocks For The Long Run, 4th Edition
? STOP And Make Money...
AUTHOR: Technical Analysis, Inc.DATE: APR2008SUBJECT: Books For Traders
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Did Dow Theory Fail? by Tim W. Wood, CPA
ARTICLE SYNOPSIS ...Did Dow Theory Fail? by Tim W. Wood, CPA
Here's a look at the chain of events that have
taken place since 2002 and what we can learn
from them.
AS the Dow Jones industrials topped out in
2000 and plunged nearly 38% into the 2002 low, every indication, according to Dow theory,
was that an extended secular bear market had begun.
In addition, because of Dow theory phasing along
with the normal bull and bear market relationships,
indications were that this was the rally separating
phase I from phase II of a much longer-term bear
market. So what went wrong? I will examine the
chain of events that...
AUTHOR: Tim W. Wood, CPADATE: APR2008SUBJECT: Cycles
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Explore Your Options by Tom Gentile
ARTICLE SYNOPSIS ...Explore Your Options by Tom Gentile
THE COLLAR VS. THE BULL CALL SPREAD
I know that owning shares of stock and
a put option are equivalent to simply
holding a call option. If so, then the
collar should represent the equivalent
of the bull call spread. Since collars
require so much more capital, why do
many investors prefer the collar over
the bull call spread? Wouldn't it be
better to use a bull call spread and then
get the interest from a money market
account?
Great question. You are absolutely
correct that buying shares and a put is
the synthetic equivalent of owning a
long call. If you b...
AUTHOR: Tom GentileDATE: APR2008SUBJECT: Explore Your Options
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Forex Focus: Making Sense Of Currency Movements by Grace Cheng
ARTICLE SYNOPSIS ...Forex Focus: Making Sense Of Currency Movements by Grace Cheng
With currency movements so randomized,
how could you possibly know
when to enter and exit trades?
One of the most frequently asked
questions among forex traders is certainly this: What on earth is [any
currency pair] doing? This question
tends to come up especially when you
have open positions in the forex market.
The nonstop fluctuations of a currency
pair's exchange rate may seem
totally random. Some traders will question
if it is possible to even trade accurately
in such a random market.
Making sense of currency price
movemen...
AUTHOR: Grace ChengDATE: APR2008SUBJECT: Focus Forex
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Futures For You by Carley Garner
ARTICLE SYNOPSIS ...Futures For You by Carley Garner
OPTIONS OR FUTURES?
Should I be trading commodity options
or commodity futures?
This is a difficult question to answer
because it is a decision that traders must
make based on their tolerance for risk,
their personality, and trading style. However,
it is my opinion that in general,
option trading is the optimal choice.
I am not referring to long option?only
strategies, although sometimes they are
appropriate. Instead, I believe that option
selling or option spread trades that
involve both long and short options are
preferential. We all agree that the key to...
AUTHOR: Carley GarnerDATE: APR2008SUBJECT: Futures For You
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Interview: Paul Hickey & Justin Walters of Bespoke by Jayanthi Gopalakrishnan
ARTICLE SYNOPSIS ...Interview: Paul Hickey & Justin Walters of Bespoke by Jayanthi Gopalakrishnan
It's a classic situation: Young bucks learn all they can from the
seasoned veteran, and once they have, it's time for them to
move on, to put their own stamp on the horizon. It's been true
all throughout time, and in this case, it's Wall Street instead
of the Wild West. Paul Hickey and Justin Walters spent time
at Birinyi Associates learning and absorbing all they could
from technician Laszlo Birinyi before going out on their own,
setting up Bespoke Investment Group in May 2007.
Paul Hickey's professional experienc...
AUTHOR: Jayanthi GopalakrishnanDATE: APR2008SUBJECT: Interview
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Letters To S&C by Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Letters To S&C by Technical Analysis, Inc.
ICHIMOKU CHARTS
Editor,
I am interested in using ichimoku charts.
Can you tell me of any charting services
that provide access to this type of chart?
KIRBY OWEN Yulee, FL
A check of our Traders' Resource database
of products and services at our
website (http://technical.traders.com/
Products/searchinfo.asp) for software
that lists ichimoku charts as a feature
comes up with PatternExplorer for
AmiBroker. You may wish to give that a
look at www.PatternExplorer.com.
In our September 2007 issue, we published
an article by Nicole Elliott titled
"Ichim...
AUTHOR: Technical Analysis, Inc.DATE: APR2008SUBJECT: Letters To S&C
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Missing The 10 Best Days by Richard Ahrens
ARTICLE SYNOPSIS ...Missing The 10 Best Days by Richard Ahrens
Would missing the 10 best days in the last 20 years have a
negative impact on your portfolio?
One of the standard arguments against attempting to
time the market says that if you missed the 10 best
days in the last 20 years, the long-term value of your
portfolio would be significantly less than if you had
just stayed the course. Using price data from the Standard & Poor's 500, I decided to find out if this argument
was really true. Rather than limiting the search to just the 10
biggest one-day gains in the last 10 or 20 years, I tracked down
the 20 ...
AUTHOR: Richard AhrensDATE: APR2008SUBJECT: Market Timing
Opening Position
AUTHOR: Jayanthi GopalakrishnanDATE: APR2008SUBJECT: Opening Position
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Q&A by Don Bright
ARTICLE SYNOPSIS ...Q&A by Don Bright
NOT SUPER-FANCY
Maybe Don or somebody else can tell
me how to calculate S&P futures. I
remember back in the early 1990s, one
guy at the quote terminal would calculate
it by having a Standard & Poor's
500 call and put option quote with the
S&P 500 indicator. Somehow, you
would subtract the price difference of
one or both contracts and come up with
a number (if it was less than 10, the
market was discount, and if it was
greater than 10, it was at premium) that
would indicate an imminent sell or buy.
It worked very well. Not only that, I
want to get a real-time tick.
I used t...
AUTHOR: Don BrightDATE: APR2008SUBJECT: Q&A
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RSI Bands by Francois Bertrand
ARTICLE SYNOPSIS ...RSI Bands by Francois Bertrand
In this twist on the traditional relative strength index, find out
how it can be used as a visual analytical tool and with other
technical indicators.
The relative strength index (RSI) is a popular
indicator to evaluate if a stock is overbought
or oversold. However, its values range from
zero to 100 and must be evaluated in a separate
window, making its correlation with price
and trends more difficult than other indicators
that are overlaid directly on price charts such as the
Bollinger bands.
In this article I present a way of calculating RSI bands,
which tra...
AUTHOR: Francois BertrandDATE: APR2008SUBJECT: Indicators
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Stocks & Commodities V. 26:4 (32-38) Bull Put Spreads by Jay Kaeppel
ARTICLE SYNOPSIS ...Bull Put Spreads by Jay Kaeppel
In part 4 of this series, you'll find
out more about the bull put spread
strategy.
AS discussed in the first
article in this series,
several key factors
should be considered in determining the best option trading
strategy to use at any given time
for a given security. In this installment
we will look at a specific
trading strategy -- the bull put
spread -- and how to use the
PROVEST criteria to identify trading
opportunities.
STRATEGY:
BULL PUT SPREADS
As I have stated in the past, one of
the most attractive features about
trading options is the ability to cre...
AUTHOR: Jay KaeppelDATE: APR2008SUBJECT: Options
Traders' Resource: Mutual Funds by Technical Analysis, Inc.
AUTHOR: Technical Analysis, Inc.DATE: APR2008SUBJECT: Traders' Resource
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Traders' Tips by Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Traders' Tips by Technical Analysis, Inc.
Editor's note: This month's Traders' Tips
are based on François Bertrand's article in
this issue, "RSI Bands." Code written in the
AmiBroker formula language is already provided
by Bertrand in the article's sidebars.
Additional code is presented here.
Readers will find our Traders' Tips section
in its entirety at the STOCKS & COMMODITIES
website at www.Traders.com in the Traders' Tips area,
from where the code can be copied and pasted into the
appropriate program. In addition, the code for each program
is usually available at the respective software ...
AUTHOR: Technical Analysis, Inc.DATE: APR2008SUBJECT: Traders' Tips
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True Price Value by Daryl Guppy and Chen Jing
ARTICLE SYNOPSIS ...True Price Value by Daryl Guppy and Chen Jing
What is more important in determining market behavior and
market pricing, fair value based on fundamentals or the
market value created by psychological trading behavior?
The classic economic and market models rest on
fair value and describe pricing activity in the
market as subject to "irrational exuberance." An
analysis of the China and Hong Kong markets with a parallel listing of China-based companies suggest that
psychological trading behavior has a much greater role to
play in correct market pricing. The study suggests that the
market price i...
AUTHOR: Daryl Guppy and Chen JingDATE: APR2008SUBJECT: Indicators
Working Money: Hi-Yo, Silver! A Wave! by Bruce R. Faber
AUTHOR: Bruce R. FaberDATE: APR2008SUBJECT: Gold & Metals
Working Money: Speculating With The 10-Bagger by Thomas Maskell
AUTHOR: Thomas MaskellDATE: APR2008SUBJECT: Novice Traders' Notebook
Working Money: When And Where To Take Profits by Larry Swing
AUTHOR: Larry SwingDATE: APR2008SUBJECT: Novice Traders' Notebook