STOCKS & COMMODITIES magazine. The Traders' Magazine

Article Archive For APR2009

  • 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...

  • 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...

  • 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...

  • 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...

  • 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...

  • 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...

  • 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...

  • 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...

Opening Position by Jayanthi Gopalakrishnan

  • 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...

  • 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 ...

  • 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 ...

Traders' Resource: Mutual Funds by Technical Analysis, Inc.

Traders' Resource: Mutual Funds by Technical Analysis, Inc.

  • 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...

  • 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 ...

  • 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...

  • 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...

  • 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%...

Working Money: Trading Trendlines

Working Money: Where Do We Go From Here? by Thomas Maskell








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