Article Archive For
APR2009
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A Flexible Strategy For Volatile Markets by John Manley
ARTICLE SYNOPSIS ...A Flexible Strategy For Volatile Markets by John Manley
Profit from option spreads on the S&P 500 by applying the same tactic as you would playing chess. Here's how.
Good chess players are always focusing on a couple of moves in advance of the current one being considered. They are peering out into the future of possible opponent maneuvers and thinking of ways to counter them. We can apply the same principle when we're looking at how to profit (up, down, and flat) with option spreads on the Standard & Poor's 500 (Spy) through the exchange traded fund (Etf). Here's a breakdown and analysis of...
AUTHOR: John ManleyDATE: APR2009SUBJECT: Options
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Andrew Lo And The Future of Technical Analysis by J. Gopalakrishnan & B. Faber
ARTICLE SYNOPSIS ...Andrew Lo And The Future of Technical Analysis by J. Gopalakrishnan & B. Faber
Andrew Lo, who is the Harris & Harris Group Professor of Finance at the Massachusetts Institute of Technology's (MIT) Sloan School of Management and director of MIT's Laboratory for Financial Engineering, and founder and chief scientific officer of the AlphaSimplex Group, a Cambridge, MA?based quantitative investment management company, is a radical of sorts, an academic who believes in technical analysis. In his latest work, The Heretics Of Finance (cowritten by Jasmina Hasanhodzic), more than a dozen notable tech...
AUTHOR: J. Gopalakrishnan and B. FaberDATE: APR2009SUBJECT: Interview
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At The Close by Wallace Wang
ARTICLE SYNOPSIS ...At The Close by Wallace Wang
It can be done, and here's how.
It's a fact of modern-day life
that no matter what kind of computer you use today, you're
going to have to replace it tomorrow.
Most traders these days are
probably using Windows XP, but
if you are using a computer with the
Vista operating system (OS), you
may find that some trading software
may not run the way it should.
That's because it will take time for all
trading software to make the transition.
In case of such an event, you may want to
consider keeping your current computer for
trading and get a second, more modern computer...
AUTHOR: Wallace WangDATE: APR2009SUBJECT: At The Close
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Books For Traders by Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Books For Traders by Technical Analysis, Inc.
* CDS Delivery Option:
Better Pricing Of
Credit Default Swaps
* Currency Trading
And Intermarket
Analysis
* Game Over: How You
Can Prosper In A Shattered
Economy
* Quantitative Trading:
How To Build
Your Own Algorithmic
Trading Business
* Show Me The Money:
Covered Calls & Naked
Puts For A
Monthly Cash Income
* Trading Without
Gambling: Develop
A Game Plan For
Ultimate Trading
Success...
AUTHOR: Technical Analysis, Inc.DATE: APR2009SUBJECT: Books For Traders
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Explore Your Options by Tom Gentile
ARTICLE SYNOPSIS ...Explore Your Options by Tom Gentile
LEAPING INTO CALENDAR SPREADS?
I see some Leap options are not that expensive given the amount of time they've got -- about two years. There are 23 months you can sell against it. That's got to be a good trade. Where am I wrong? I know there must be things that I haven't properly thought through.
For example, I'm looking at a calendar spread with 2011 leaps. The far month (January 2011) costs me about $4 to enter, and the near month (February 2009) brings in about 70 cents. Is this a bad idea? What are potential pitfalls?
Long-term Equity Anticipation Se...
AUTHOR: Tom GentileDATE: APR2009SUBJECT: Explore Your Options
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Fibonacci Tools by Alexander Sabodin
ARTICLE SYNOPSIS ...Fibonacci Tools by Alexander Sabondin
Here's a look at the numbers behind the Fibonacci sequence and how it can be applied to your charts.
The sequence of the Fibonacci numbers is considered to have been discovered by Leo-nardo of Pisa, better known as "Fibonacci," a 13th-century Italian mathematician. ("Fibonacci" is an abbreviation of filius Bonacci; filius is Latin for "son of.") In the early 1200s, after traveling through parts of the Middle East and studying with Arab mathematicians, Fibonacci published his book Liber Abaci, or "Book of Calculation," which introduced to the West somethi...
AUTHOR: Alexander SabodinDATE: APR2009SUBJECT: Charting
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Futures For You by Carley Garner
ARTICLE SYNOPSIS ...Futures For You by Carley Garner
COMMODITIES AND RECESSIONS
Is it safe to invest in commodities during
an economic recession?
Given the economic turmoil we are
experiencing, I have been asked this
question often. Before I answer, there
are a few points I would like to make.
I have yet to find a scenario in which
it is appropriate to use the word "safe"
when trading in options and futures.
There are strategies in which risk can be
relatively low, but in my opinion, "safe"
implies there is no risk, and that isn't the
case. My idea of a safe investment is the
purchase of Treasury bills, not sp...
AUTHOR: Carley GarnerDATE: APR2009SUBJECT: Futures For You
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Letters To S&C by Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Letters To S&C by Technical Analysis, Inc.
WEINSTEIN CONFUSION
Editor,
On page 46 of the February 2009 issue of Technical Analysis of Stocks & Commodities, in the article "Weinstein's Theory Of Relativity" by Larry Swing, Swing alludes to Stan Weinstein as the highest-percentage trader featured in Jack Schwager's book, The Market Wizards. Is it possible that he has Stan Weinstein confused with Mark Weinstein? There's no mention of a Stan Weinstein in Schwager's book.
Edward Chang
Yes, you are correct that he must have meant "Mark Weinstein." Thank you for writing.--Editor
LOGARITHMIC GRAPH...
AUTHOR: Technical Analysis, Inc.DATE: APR2009SUBJECT: Letters To S&C
Opening Position by Jayanthi Gopalakrishnan
AUTHOR: Jayanthi GopalakrishnanDATE: APR2009SUBJECT: Opening Position
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Profit With High Relative Strength Mutual Funds by Gerald Gardner
ARTICLE SYNOPSIS ...Profit With High Relative Strength Mutual Funds by Gerald Gardner
This timing method will maximize profit
and reduce drawdown.
Correlation of equity funds phenomena manifests itself in many stock data series. For this study, I explored the correlation of two mutual funds and methods of timing one fund to maximize profit and reduce drawdown. Backtesting a specific model indicates that a 10.82% return and a maximum drawdown of about 11% over the last six years is possible. Before looking at the model, a brief review of funds shows the qualitative nature of correlation and a visual depiction o...
AUTHOR: Gerald GardnerDATE: APR2009SUBJECT: Trading Systems
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Q&A by Don Bright
ARTICLE SYNOPSIS ...Q&A by Don Bright
THE SHAPE OF THINGS TO COME
I have been studying for my Series 7. So
I'm studying up and learning as much
as possible. What's your personal opinion
for, say, the next five years in regards
to the industry? Do you see any
major changes coming that would affect
the entire trading community? How
do you feel about the future for pair
strategies, open orders, and all that? I
am seriously dedicating my life and
future to this path, and I am curious
what someone of your knowledge thinks
will be happening in the next five to 10
years in the industry. Thanks. --Shane
Hi Shane, good ...
AUTHOR: Don BrightDATE: APR2009SUBJECT: Q&A
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Secular And Cyclical Cycles by Moses Sanchez
ARTICLE SYNOPSIS ...Secular And Cyclical Cycles by Moses Sanchez
Secular and cyclical cycles are common, but what do they really mean?
The terms secular and cyclical are tossed around by business news pundits on a daily basis. A search on either topic does give some explanations, but how can you apply these definitions to your trading strategy in order to make smart trades?
A secular market
First of all, you need to understand what a secular market means. In the financial markets, a secular cycle means a long-term boom or bust. This time frame has been debated as being anywhere between five and 20 years, but ...
AUTHOR: Moses SanchezDATE: APR2009SUBJECT: Cycles
Traders' Resource: Mutual Funds by Technical Analysis, Inc.
AUTHOR: Technical Analysis, Inc.DATE: APR2009SUBJECT: Traders' Resource
Traders' Resource: Mutual Funds by Technical Analysis, Inc.
AUTHOR: Technical Analysis, Inc.DATE: APR2009SUBJECT: Traders' Resource
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Traders' Tips by Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Traders' Tips by Technical Analysis, Inc.
This month's Traders'
Tips are based on Gerald
Gardner's article in
this issue, "Profit With
High Relative Strength
Mutual Funds."
Code for Wealth-Lab
is already provided in
Gardner's article elsewhere
in this issue. Additional code is presented here as
contributed by various software developers.
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 i...
AUTHOR: Technical Analysis, Inc.DATE: APR2009SUBJECT: Traders' Tips
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Volatility Is Dominant Theme In Stocks by Michael Carr, CMT
ARTICLE SYNOPSIS ...Volatility Is Dominant Theme In Stocks by Michael Carr, CMT
The market may be setting up for a period of consolidation.
From a technical perspective,
the biggest factor
in the markets is
volatility (Figure
1). Since the large down move in autumn
2008, price action has
settled into a consolidation pattern.
While some technical indicators
show signs of strength,
others indicate further weakness.
Bollinger bands, the technical
trading tool developed by
John Bollinger in the early
1980s, quantifies the observation
that volatility is dynamic, described by Bollinger as
meaning that periods of low ...
AUTHOR: Michael J. Carr, CMTDATE: APR2009SUBJECT: Volatility
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Websites For Traders: DailyMarkets.com by Jayanthi Gopalakrishnan
ARTICLE SYNOPSIS ...Websites For Traders: DailyMarkets.com by Jayanthi Gopalakrishnan
DAILYMARKETS.COM
Most traders start their day browsing
through market-relevant news headlines
to get an idea of what they can expect in
the trading day. Dailymarkets.com is
one site that offers this service. On the
home page (Figure 1) you have a live
newsfeed with the most recent news highlighted,
prominently displaying how
many minutes have elapsed since the
news headline was released. Each news
story has a small icon next to it, indicating
whether the particular story is forex
related, equity related, commodity related,
eco...
AUTHOR: Jayanthi GopalakrishnanDATE: APR2009SUBJECT: Websites For Traders
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Which Way For The Forex Carry Trade? by Brian Twomey
ARTICLE SYNOPSIS ...Which Way For The Forex Carry Trade? by Brian Twomey
Apply this very popular trading strategy to 2009 trades.
The foreign exchange carry trade has been a popular trading strategy for the past 10 years due to growing economies and rising interest rates. This period of world growth was precipitated by the last economic downturn in world economies (1998) that lasted approximately two years. Currently, with a credit crunch upon us and recession gripping world economies in late 2008 and forecast to last well into 2009, all nations are in the process of slashing interest rates. Where does that lea...
AUTHOR: Brian TwomeyDATE: APR2009SUBJECT: Forex Focus
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Winning Percentage Of A Trading System by Oscar G. Cagigas
ARTICLE SYNOPSIS ...Winning Percentage Of A Trading System by Oscar G. Cagigas
The winning percentage is a critical statistic that can influence the speed at which your capital grows. Find out how you can apply it to your trading system.
When developing a trading system, the tendency is to select a particular approach that suits your personality. With this in mind, you can develop a system with a high percentage of winning trades or one with a lower winning percentage, depending on what works best for you. A typical example is a trend-following approach. These systems usually have a winning percentage of 40?50%...
AUTHOR: Oscar G. CagigasDATE: APR2009SUBJECT: Money Management
Working Money: Trading Trendlines
AUTHOR: Danish KapurDATE: APR2009SUBJECT: Novice Traders' Notebook
Working Money: Where Do We Go From Here? by Thomas Maskell
AUTHOR: Thomas MaskellDATE: APR2009SUBJECT: Trader's Notebook