STOCKS & COMMODITIES magazine. The Traders' Magazine

Article Archive For AUG1996

  • Beat the Market with Cyclicals by Paul and Carole Huebotter

    ARTICLE SYNOPSIS ...""The new Dow strategy"" outlined here is a method to pick a 10-stock portfolio to outperform both the Dow 30 and the well-known Dow dividend strategy. Take a look. by Paul and Carole Huebotter Economists maintain that the markets are too efficient for any trading system to regularly outperform, say, the 30 stocks that make up the Dow Jones Industrial Average (DJIA) or the Standard & Poor's 500 index. We disagree. Here's one that not only theoretically should, but does. The system, to which we refer as the new Dow strategy , is akin to the well-known Dow dividend strategy, which used to work ...

  • Historical Volatility And Pattern Recognition

    ARTICLE SYNOPSIS ...A market tends to move swiftly from periods of price consolidation to new levels. Here's how to recognize the setup before a market moves out of a short-term consolidation, from the authors of Street Smarts: High Probability Short-Term Trading Strategies. By Laurence A. Connors and Linda Bradford Raschke In Street Smarts , we introduced a trading strategy we use to pinpoint which markets are likely to move dramatically. In this article, we will share this strategy with you. Markets oscillate from periods of low volatility to high volatility and back. Our research indicates that after periods...

  • Letters to S&C - Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...MORE SYSTEM REVIEWS Editor, You have a great 'zine and I have been a subscriber for a long time. One suggestion: Review more systems that are advertised in S&C. The good ones need to have their horns blown, while some of the garbage out there needs to be shown for what it is. I am a system junkie and if there are any good, new systems out there that I'm missing, I would like to hear about them. Most traders are system players of some sort, so please add more system reviews to your already fine magazine. Thanks. ED HEXTER, Lauderhill, FL Thank you for your comments. To properly review a trad...

  • Novice Trader Notebook

    ARTICLE SYNOPSIS ...The Double Top. Consider a security or a futures contract that is in an uptrend. The price reaches a point at which all of the buyers' demand is met, and the sellers, whether traders taking profits or aggressive short sellers, enter the market and overwhelm the buyers. That price level will become known as major resistance, as the level establishes a point at which the supply is significantly greater than the demand (point A)....

  • On the Intuitive Trader: Robert Koppel by Thom Hartle

    ARTICLE SYNOPSIS ...Phenomenology and existentialism and trading? Oh, my! Nothing in Robert Koppel's background as a philosophy academic could have given the slightest clue that he would end up as a floor trader for 17 years before giving that up for yet another career using the insights of his previous two. Stocks & Commodities interviewed Koppel, who is now a proprietary trader with Innergame Partners, on topics such as how traders see their own versions of reality and the importance of developing a trading plan that is consistent with your personality. By Thom Hartle When did you first start trading? I began...

  • Pacific Stock Exchange Technology Index by Jerome M. Lederman, Eng.Sc.D.

    ARTICLE SYNOPSIS ...This professional options investor examines the performance of the Pacific Stock Exchange Technology Index compared with other market indices as a speculative and hedging tool. By Jerome M. Lederman, Eng.Sc.D. Introduced in 1982, the Pacific Stock Exchange (PSE) Technology Index is a price-weighted, broad-based index representing 100 listed and over-the-counter stocks. Essentially, the index is the cumulative value of one share of each of its 100 component stocks, with adjustments made for stock splits and stock dividends equal to or greater than 10% of issue value. The index can be duplicate...

  • SIDEBAR: Calculating Historical Volatility - Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...CALCULATING HISTORICAL VOLATILITY - Technical Analysis, Inc. Historical volatility is the annualized standard deviation of the one-day price changes of the security or futures contract. To perform this calculation in a Microsoft Excel spreadsheet (as can be seen in sidebar Figure 1), follow these steps. First, convert the price changes to percentage daily price basis....

  • SIDEBAR: Capturing the Edge - Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...Koppel and Abell's critical factors in capturing an edge in trading. - Technical Analysis, Inc....

  • SIDEBAR: MFI Indicators - Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...MFI INDICATORS - Techncial Analysis, Inc. TradeStation and SuperCharts users can use the following formulas in the PaintBar Study to color bars for each of the MFI indicators. Simply type the formula in the IF box of the PaintBar formula dialog box and choose your color for the bar to be painted....

  • SIDEBAR: Psychological Barriers to Trading - Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...Characterizations of certain psychological barriers to trading. - Technical Analysis, Inc....

  • SIDEBAR: The Exchanges and Indices - Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...Listing of Exchanges and indicators. - Technical Analysis, Inc. THE EXCHANGES AND INDICES New York Futures Exchange (NYFE) The New York Futures Exchange, a wholly owned subsidiary of the New York Cotton Exchange (NYCE), has approximately 359 members holding 435 seats; its members include many of the country's largest and most prestigious brokerage houses. Pacific Stock Exchange (PSE) The Pacific Stock Exchange, located in San Francisco and Los Angeles, lists 1,784 different equity issues and 297 equity options. During 1994, option volume surged to 20.9 million contracts. PSE Technology ...

  • SIDEBAR: Your Trading Performance - Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...YOUR TRADING PERFORMANCE - Technical Analysis, Inc. Koppel explains in The Intuitive Trader that trading performance is a direct reflection of how you, the trader, feel. When you feel good, therefore, you perform at high levels. Further, Koppel explains that trading performance at the highest levels occurs without conscious deliberation when the right internal climate for trading has been established....

  • The Market Facilitation Index by Thom Hartle

    ARTICLE SYNOPSIS ...Volume, one of the key elements in technical analysis, is used to analyze the power behind a trend. Heavy volume days may indicate a strong trend, while light volume days could indicate the lack of a trend. Here's a method to connect volume and price movement to quantify price activity. By Thom Hartle In Trading Chaos, Bill Williams describes a unique way to combine price action and volume. The technique offers a perspective of the current state of the market based on this relationship between price movement and volume. For example, heavy volume may be signaling a trend, but not always, as in...

  • The S&P 500 Seasonal Day Trade by William Brower, C.T.A.

    ARTICLE SYNOPSIS ...The S&P 500 Seasonal Day Trade by William Brower, C.T.A. Is there a particular day of the week within a month that offers the most opportunity? Here's a trading system based on the best days of the week for trading Standard & Poor's 500 futures. Much research has been done on seasonal trading. Originally, the concept derived from the theory that there had to be certain times of the year when it is better to buy and other times when it is better to sell. If you take a commodity and run a simulation in which you pair up all possible entry days with all possible exit days in a given year, you ...

  • Traders' Tips - Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...Traders Tips - Technical Analysis, Inc. TECHNIFILTER PLUS In ""Historical volatility and pattern recognition,"" Laurence Connors and Linda Bradford Raschke combine a historical volatility ratio with some short-term patterns to spot potential price moves. Here's a set of TechniFilter Plus formulas that will filter for these situations. Formula 1 is the historical price volatility ratio. It compares the five-day standard deviation of the logarithm of the one-day price change ratio to the 99-day version of the same calculation. Connors and Raschke suggest using six-day and 100-day periods, but...

  • Treasury Bond Yields and the S&P 500 by Mark Vakkur, M.D.

    ARTICLE SYNOPSIS ...Interest rates have long been tied to movement in the stock market. Here's how to test trading rules for the stock market based on a six-month moving average of the 30-year Treasury bond yield, showing us when it may and may not be profitable to invest in stocks. By Mark Vakkur, M.D. I nterest rates exert a powerful influence on equity prices. Since World War II, there has been a strong, inverse relationship between the movement in the stock market and prevailing interest rates, such as the yield on the 30-year Treasury bond. Here, I will explore the development of a simple trading system tha...







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