AUG 1998 STOCKS & COMMODITIES Magazine

Article Archive For AUG1998

A Duration Proxy For Stock Portfolios by George R. Arrington, Ph.D.

ARTICLE SYNOPSIS ...Duration, used in fixed-income portfolios to measure risk associated with changes in interest rates, is applied here to measure the risk of a stock portfolio. The duration statistic has proved to be a valuable risk indicator for fixed-income portfolios. Duration gives an indication of how sensitive a portfolio is to changes in interest rates. A bond portfolio with a five-year duration would be expected to lose 5% of its value if interest rates rise by one percentage point, or gain 5% if interest rates fall by one percentage point. Dura-tion also provides a benchmark for comparing the relativ...

AUTHOR: George R. Arrington, Ph.D.DATE: AUG1998SUBJECT: Quantitative Analysis

Basic Options Techniques by Mark Vakkur, M.D.

ARTICLE SYNOPSIS ...Many stock traders and investors avoid options because they seem too complex or risky. Although it is very easy to lose large amounts of money in a very short time misusing options, investors and traders of all kinds should at least consider them as one of many tools to exploit market opportunities. Here's a primer on using options, with common terms and applications of options strategies. Although a thorough discussion of options is impossible in the space of a single article, it is important to introduce a few basics. There are, if nothing else, two outstanding but little-used options stra...

AUTHOR: Mark Vakkur, M.D.DATE: AUG1998SUBJECT: Novice Traders' Notebook

Building studies based on psychological matrices by Walter T. Downs

ARTICLE SYNOPSIS ...Here's how the psychological terms that technicians employ to describe the markets are transformed into technical tools. It is possible to transform psychology from a subjective interpretation into an objective tool. By creating a psychological matrix, we can define emotion so that you never think of fear and greed in quite the same way again. Accurate conceptualization and logical construction of the matrix allows a trader to develop a market edge. In addition, because the trader has a good understanding of each phase of the market as it unfolds, he or she is able to approach trading from a ...

AUTHOR: Walter T. Downs, Ph.D.DATE: AUG1998SUBJECT: System Design

Daytrading Stocks by Mark Conway

ARTICLE SYNOPSIS ...Many traders in the stock market are moving to short-term approaches and taking advantage of today's technology. Here's a walk through the basics. Welcome to the battlefield of electronic daytrading. The confluence of technology and trading has created a network of daytraders with access to real-time quotes, news and instantaneous executions. Of all markets that daytraders have access to, NASDAQ (the North American Stock Dealers Automated Quotation system) has emerged over the past several years as a primary trading arena. Each NASDAQ stock is represented by a group of market makers and elect...

AUTHOR: Mark ConwayDATE: AUG1998SUBJECT: New Techniques

On The Bull Market Of the Century: Louise Yamada by Thom Hartle

ARTICLE SYNOPSIS ...The bull market of the end of the 20th century has been going on for some time now. How did this happen, and how much longer is it going to last? To get some answers, we turned to Louise Yamada of Salomon Smith Barney, whose recent book, Market Magic: Riding The Greatest Bull Market Of The Century, shed some light on the situation. Yamada, who is senior technical analyst and director of research at Salomon Smith Barney, is responsible for sector analysis of the US and global markets. Stocks & Commodities Editor Thom Hartle talked to Yamada via phone on May 26, 1998, asking her what her long-te...

AUTHOR: Thom HartleDATE: AUG1998SUBJECT: Interview

Statistics And Trading Behavior by Ari Kiev and Ken Grant

ARTICLE SYNOPSIS ...Use statistics to profile patterns of trading behavior as part of an ongoing training program to help traders maximize their performance. Traders have habits and beliefs that have significant impact on their trading, whether they realize it or not. Introducing a trans-action- level database, though designed primarily for risk management, makes it possible to identify and examine specific and measurable patterns of trading behavior. The database, which we use in our weekly trading seminars, has enabled us to identify characteristics of those traders who are successful and those who are not. I...

AUTHOR: Ari Kiev and Ken GrantDATE: AUG1998SUBJECT: Trading Psychology

Stocks & Commodities V.16:8: Letter

ARTICLE SYNOPSIS ...DOW THEORY Editor, I especially enjoyed your interview in the June 1998 STOCKS & COMMODITIES ("Before and beyond technology: Michael Sheimo on Dow theory") because Sheimo comments on the Dow theory in light of the much larger volume and velocity of trades today as compared with the late 1800s, when Charles Dow developed his theory. Based on other articles that have been published in your magazine and based on my own research, I've concluded that Dow theory has not lost its relevance to market behavior in spite of massive changes in trading volume and velocity since the 1800s. Although electro...

AUTHOR: Technical Analysis, Inc.DATE: AUG1998SUBJECT: Letters To S&C

Subscribing to Lists Over the Internet

ARTICLE SYNOPSIS ...Readers often ask how they can get in touch with other traders to discuss trading ideas. In this age of electronic communication, one way to connect with other traders is through the Internet, by subscribing to E-mail-based ""lists."" The following information, provided by our Technical Editor and resident Inernet surfer, will get you started....

AUTHOR: Technical Analysis, Inc.DATE: AUG1998SUBJECT: Internet

AUTHOR: Technical Analysis, Inc.DATE: AUG1998SUBJECT: Traders' Tips