AUG 1992 STOCKS & COMMODITIES Magazine

Article Archive For AUG1992

Avoiding Bull And Bear Traps by Nauzer J. Balsara, Ph.D.

ARTICLE SYNOPSIS ...Avoiding Bull And Bear Traps by Nauzer J. Balsara, Ph.D. Bull and bear traps are gap openings that are reversed the same day and that can cost a trader dearly. S&C contributor Nauzer Balsara presents his method of analyzing market history to calculate the proper placement of stops to avoid being caught in such traps. A bull or bear trap occurs when a market does an about- face after an extremely bullish or bearish opening, leaving a trader who entered a position at the opening price with a possible loss at the end of the day. Bullish expectations are reinforced by a sharply higher or ""gap-u...

AUTHOR: Nauzer J. Balsara, Ph.D.DATE: AUG1992

Detecting Seasonality by Lewis Carl Mokrasch, Ph.D.

ARTICLE SYNOPSIS ...Detecting Seasonality by Lewis Carl Mokrasch, Ph.D. Seasonal or cyclical patterns, whether real or only imagined, have been a popular topic among traders for years. Lewis Carl Mokrasch, continuing research published originally in his article in April 1991, presents this time a generalized method for detecting seasonal patterns. However, Mokrasch warns, there are certain caveats that the trader should be aware of, and he notes that the trader should take a good long look at the data involved for significant patterns before risking capital on so called seasonal trades. Here's how to figure it o...

AUTHOR: Lewis Carl Mokrasch, Ph.D.DATE: AUG1992

Ed Seykota Of Technical Tools by Thom Hartle

ARTICLE SYNOPSIS ...Ed Seykota Of Technical Tools by Thom Hartle Ed Seykota, whose thoughts and insights were chronicled in Jack Schwager's book Market Wizards, has been involved with trading commodities since the late 1960s. According to Market Wizards, Seykota's ""model account"" -- an actual customer account -- started with $5,000 in 1972 and to date has earned more than a 250,000% gain. Recently, in a new challenge, he purchased data and software vendor Technical Tools. S TOCKS & COMMODITIES Editor Thom Hartle interviewed Seykota in a series of written correspondence that took place over several months ending ...

AUTHOR: Thom HartleDATE: AUG1992SUBJECT: Interview

Filtering Trades With A Moving Average Slope by Adam White

ARTICLE SYNOPSIS ...Filtering Trades With A Moving Average Slope by Adam White Moving averages are attractive because they simply and reliably execute the ""cut your losses and let your profits run"" strategy. Moving averages also have drawbacks, however, in that they discard much of the information that the market offers. A simple moving average represents simple quantified information -- either prices are above it or below it. Can additional information, in this case the slope of the moving average, be put to use to improve trading performance? Adam White of the Technical Traders Bulletin shows you how. Despit...

AUTHOR: Adam WhiteDATE: AUG1992

Market Thrust by Tushar S. Chande

ARTICLE SYNOPSIS ...Market Thrust by Tushar S. Chande An abundance of articles and letters concerning the Arms index, or the trading index (TRIN), during the past year was one proof of its popularity. The articles were concerned with both the uses and limitations of the Arms index. The two major problems with the Arms index, as characterized in the articles and letters, arose in constructing a long-term Arms index and with using the index in mixed markets. STOCKS & COMMODITIES contributor Tushar Chande proposes a way to measure market thrust and overcome the limitations of the Arms index. Richard Arms invented ...

AUTHOR: Tushar S. Chande, Ph.D.DATE: AUG1992

Moving Average Crossovers by Arthur A. Merrill, CMT

ARTICLE SYNOPSIS ...Moving Average Crossovers by Arthur A. Merrill, CMT Are moving average crossovers more effective than other indicators? More specifically, how about moving average crossovers applied to the Dow Jones Industrial Average? S&C contributor Arthur Merrill decided to research the question using weekly data for the last 24 years, checking out crossovers with a four-week exponential moving average and with 13-, 26- and 52-week exponential averages. Here are his results. One of the earliest technical tools, as easy to figure with pens and paper as well as with computer later on, was a price chart and...

AUTHOR: Arthur A. Merrill, C.M.T.DATE: AUG1992

Rate of Change by Martin J. Pring

ARTICLE SYNOPSIS ...Rate of Change by Martin J. Pring Respected and well-known technician and author Martin Pring debuts as a STOCKS & COMMODITIES author, writing about the rate of change oscillator, a simple method of figuring advances or declines in a given period. The rate of change (ROC) is perhaps the simplest form of oscillator or momentum to understand and calculate. It measures the speed of an advance or decline over a specific time span and is calculated by dividing today's level by a level n periods ago and multiplying the result by 100. For example, an annualized (or 12-month) ROC is calculated by di...

AUTHOR: Martin J. PringDATE: AUG1992

SIDEBAR: DESCRIBING A SPREADSHEET PROGRAM

ARTICLE SYNOPSIS ...DESCRIBING A SPREADSHEET PROGRAM...