STOCKS & COMMODITIES magazine. The Traders' Magazine

Article Archive For AUG2002

  • Books For Traders

    ARTICLE SYNOPSIS ...Books For Traders Big Trends In Trading: Strategies To Master Major Market Moves (253 pages, $39.95 hardcover, 2002, ISBN 0471412694), by Price Headley, published by John Wiley & Sons. If you're the kind of savvy trader or investor who aggressively seeks profits in bull and bear markets, this book is for you. You'll learn the secret to success in any market by utilizing a trading plan that identifies prevailing conditions and then seeks situations with the highest reward-to-risk ratios. This book explores indicators that will help you gauge investor sentiment and guide you through specific ...

  • Chaneling With Elliott Waves Part III by Rudy Teseo

    ARTICLE SYNOPSIS ...Chaneling With Elliott Waves Part III by Rudy Teseo Project coming waves with this classic technique. Now that you are familiar with some of the many Elliott wave patterns (see parts I and II), I'll discuss a means of projecting the course of a wave in development: the channel. Channels are parallel lines that you draw on your stock charts using a trendline-drawing tool. If you are studying Elliott wave principles but don't have a charting program, you can also construct these channels on commercial stock charts, such as daily charts, or on graph paper. Be sure to use semi-log scales on your...

  • Developing A Trading System by Dennis D. Peterson

    ARTICLE SYNOPSIS ...Developing A Trading System by Dennis D. Peterson If you've ever tried it, you know that developing a trading system is no easy task. But you may find that following a series of steps could help you reduce the learning curve. Here's an example. There are three key features when it comes to developing a trading system: entry and exit signals, a plan for the type of stop, and a money management strategy. The first involves generating the signals, which can be purely visual, a result of technical indicators, or a combination of both. Most mechanical trading systems use indicators to encode visu...

  • Explore Your Options by Tom Gentile

    ARTICLE SYNOPSIS ...Explore Your Options by Tom Gentile COVERED CALLS FOR PROTECTION I am concerned about the markets going forward and want to know if there is any way of protecting my stock portfolio using options instead of liquidating my position. I have heard of covered calls -- do they work as a good protection strategy? Yes, you can protect your portfolio of stocks by using options. The first way a trader can help protect a stock from falling hard is to sell option premium against the shares. This is known as covering your stock position, or a covered call. In a covered call trade, you are buying the und...

  • Foreign Exchange As The Trader's Alternative by Mark Galant

    ARTICLE SYNOPSIS ...Foreign Exchange As The Trader's Alternative by Mark Galant Trading opportunities in the forex market deserve serious consideration as a diversification strategy for your portfolio. While online equities and futures trading have enjoyed exponential growth and widespread notoriety over the past few years, online foreign exchange trading is only now gaining popularity among seasoned active traders, commodity trading advisors (CTAs), and other professional money managers. Until recently, large international banks dominated the foreign exchange (FX or forex for short) market, only allowing acce...

  • Interview: Trading The Currency Market With Cornelius Luca by J. Gopalakrishnan

    ARTICLE SYNOPSIS ...Interview: Trading The Currency Market With Cornelius Luca by J. Gopalakrishnan Cornelius Luca is an author and international consultant in foreign exchange and technical analysis. Luca has spent his entire professional life in international finance, and since 1983, he has been a foreign currency trader in the major currencies. What's the currency market look like right now, considering the unrest in the other markets? To find out what Luca had to say, STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan called him on May 24, 2002. What got you interested in the currency markets? I have alwa...

  • Letters To S&C

    ARTICLE SYNOPSIS ...Letters To S&C Letters include comments and updates on the Trend Intensity Index, TRIX, the A/D Line, Elliott Waves and the center of gravity oscillator....

Opening Position by Jayanthi Gopalakrishnan

  • Q&A by Don Bright

    ARTICLE SYNOPSIS ...Q&A by Don Bright LEADING INDICATORS Every trader I have asked tells me to look at the leading indicators before trading. A friend told me he watches Intel [INTC] to see the direction of the overall market. Is this a good indicator? What do your traders use? -- edgetrader If you follow the money, as in many things, you will see a valuable leading indicator. Since there is more money changing hands in the Standard & Poor's futures pit (and e-minis) than the rest of the overall market, it only makes sense to follow the SPOOs (S&P 500). When there is premium to FV (fair value), the market will ...

Setting Stops And Taking Profits With Maximum Excurson by Sergei Dobrovolsky

  • Should Investing Increase Your Capital Or Protect It? by Omar Bassal

    ARTICLE SYNOPSIS ...Should Investing Increase Your Capital Or Protect It? by Omar Bassal Preserving capital in today's markets brings up questions you may not have considered. What is the most important goal of investing? This question is not as simple as it seems; more often than not, investors' initial responses to it highlight why so many fail to generate market-beating returns. The most common answer you're likely to receive to this question is: "Capital appreciation, of course! How difficult can that be to understand? You invest to earn a return on your money in excess of the risk-free rate, and if you're...

  • The Bounce Trade by Thomas Bulkowski

    ARTICLE SYNOPSIS ...The Bounce Trade by Thomas Bulkowski A double bounce following a long decline spells a trading opportunity. Find out why. I 'm not sure exactly how I happened upon this chart pattern. I noticed that after a long, perhaps straight-line decline, stocks often bounce -- not once but twice. Figure 1 displays an example of this. In the fall of 1997, National Semiconductor (NSM) peaked at $42.875, along with other stocks in the semiconductor industry. A year later, it reached a low of just $7.4375, an astounding decline of 83%. As can be expected, but rarely anticipated correctly, the stock bounced....

Traders' Resource: Data Services

  • Traders' Tips

    ARTICLE SYNOPSIS ...Traders' Tips Here is this month's selection of Traders' Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented. ZigZag Validity code in: TradeStation, Wealth-Lab, NeuroShell Trader, NeoTicker, Investor/RT, and Wave Wi$e. Center of gravity code in: eSIGNAL, Wealth-Lab, NeuroShell Trader, NeoTicker, AIQ, TechniFilter Plus, SmarTrader, and Wave Wi$e. RSI system code in: Wealth-Lab, NeuroShell Trader, NeoTicker, Investor/RT, TradingSolutions, and Wave Wi$e....

  • Trading In The 21st Century by Tom Busby

    ARTICLE SYNOPSIS ...Trading In The 21st Century by Tom Busby Equipment, education, and method -- three necessities for successful trading. It wasn't so long ago that it was very important to buy stocks with dividends and only sell on an annual basis. Then in the early 1980s, the Standard & Poor's contracts started trading in the Chicago futures pit, and things haven't been the same since. Introduced in the form of S&P futures was a vehicle that allowed traders to enter and exit the market multiple times per year to increase net worth. The ensuing shift in philosophy set the stage for a changing market and led to...

  • Waiting For The Fed by David Penn

    ARTICLE SYNOPSIS ...Waiting For The Fed by David Penn How are monetary-based stock market timing models holding up in the Age of the Bear Market? One of the most powerful tools for analyzing the financial markets is an understanding of the Austrian School of economics. Whether the Austrian in question is Ludwig von Mises, Murray Rothbard, or any number of others, as author and hedge fund manager Mark Boucher wrote: "Once you understand [the essentials of Austrian economics], you will find it hard to believe that anyone could invest without [them] ? it is one of the easiest and simplest methodologies for improv...

  • Websites For Traders: TradeStationWorld.com by Jayanthi Gopalakrishnan

    ARTICLE SYNOPSIS ...Websites For Traders: TradeStationWorld.com by Jayanthi Gopalakrishnan TradeStation has certainly made a name for itself in the world of technical analysis. To further enhance its presence, now the company has created an online community where users from all over the world can gather to discuss trading ideas, techniques, and strategies. An initial glance at the website reveals it is well-designed and easily navigable. The site's five major sections are immediately apparent: discussion boards, EasyLanguage library, articles, training, and third-party products....

  • Zigzag Validity by Spyros Raftopoulos

    ARTICLE SYNOPSIS ...Zigzag Validity by Spyros Raftopoulos Here's a supplement to the zigzag indicator that will help you determine whether a trend is confirmed. One of the most common tasks a technical analyst engages in is detecting and defining price trends. Among the numerous indicators and techniques that can be used for this purpose is the zigzag indicator. The zigzag filters out moves of minor importance (noise), making the main trend more obvious. Further, the zigzag presents the major moves with great clarity, since it connects peaks and troughs with straight lines that are easy to interpret. You can s...







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