Article Archive For
AUG2003
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Books For Traders by Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Books For Traders by Technical Analysis, Inc.
? The Candlestick
Course
? Blind Faith: Our Misplaced
Trust In The Stock Market
And Smarter, Safer Ways
To Invest
? Investment Guarantees: Modeling And Risk Management
For Equity-Linked Life Insurance
? Investing In Hedge Funds:
Strategies For The New
Marketplace
? The Money-Making
Guide To Bonds
? The Motley Fool -- What
To Do With Your Money
Now: Ten Steps To Staying
Up In A Down Market
? Enterprise Risk Management:
From Incentives
To Controls...
AUTHOR: Technical Analysis, Inc.DATE: AUG2003SUBJECT: Books For Traders
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Charting The Market by David Penn
ARTICLE SYNOPSIS ...Charting The Market by David Penn
ON-BALANCE VOLUME
Interviewed by BusinessWeek magazine late in the spring of
2002, legendary market forecaster and technical analyst
Joseph Granville was asked, "Does technical analysis still
work?" The journalist further wondered whether technical
analysis is superior to Wall Street analysis, and if so, whether
Granville's personal technical methods would work "forever."
Granville's response was both classic Granville and
classic market technician:
Of course. Truth is never out of date. There's only two things that
can change the value of a stock -- supply...
AUTHOR: David PennDATE: AUG2003SUBJECT: Charting The Market
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Daytrading The E-Mini by Lawrence Chan
ARTICLE SYNOPSIS ...Daytrading The E-Mini by Lawrence Chan
Data Reduction - Daytrading The E-Mini
See how reducing data can boost your trading system
performance.
I will show you how to preprocess raw data in such
a way that even a simple trading system will perform
with excellent results.
There are many aspects of trading system
design. Traders often focus on
signal generation and money management,
but ignore the most important
and fundamental issue of all: the data.
INTRODUCTION
The Standard & Poor's e-miniŻ is the hottest index
future traded at the Chicago Mercantile Exchange
(CME). To trade a single S&P ...
AUTHOR: Lawrence ChanDATE: AUG2003SUBJECT: System Design
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Explore Your Options by Tom Gentile
ARTICLE SYNOPSIS ...Explore Your Options by Tom Gentile
FLEX OPTIONS
What are FLEX options?--A.M.
Flexible exchange (FLEX) options are
totally customizable equity and index
options that you can create under certain
requirements. They allow traders complete
flexibility to create option contracts
at unorthodox strikes, expiration
dates, and styles (American or European).
These kinds of contracts have a
minimum trade size of 250, so generally
the small trader isn't partaking in the
advantages these instruments offer....
AUTHOR: Tom GentileDATE: AUG2003SUBJECT: Explore Your Options
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Intermarket Review by David Penn
ARTICLE SYNOPSIS ...Intermarket Review by David Penn
GOLDMAN SACHS COMMODITIES INDEX
The Goldman Sachs Commodities Index (GSCI) is a world production?weighted index of commodity prices based on the
average quantity of production for the last five years of available data. In addition to being a benchmark against which
commodity price performance can be judged, the subgroups of the GSCI are equally reliable measures of the price
performance of the various commodities that make up the GSCI. The provided weekly charts of these subgroups include both
the 20- and 50-period moving averages....
AUTHOR: David PennDATE: AUG2003SUBJECT: Intermarket Review
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Interview: Chart Patterns, Trading, and Dan Zanger by Matt Blackman
ARTICLE SYNOPSIS ...Interview: Chart Patterns, Trading, and Dan Zanger by Matt Blackman
Trader Dan Zanger of Chartpattern.com first hit the media spotlight
in December 2000 when he was featured in a Fortune article. The
article, entitled "My Stocks Are Up 10,000%!" discussed how he had
turned $11,000 into $18 million in 18 months (with a return of
164,000%), an unofficial world record for trading stocks (with the tax
receipts to prove it). Not mentioned in the article was that in 23
months, the total grew to $42 million.
Also not mentioned except in passing was much detail about
Zanger's trading techniques, ind...
AUTHOR: Matt BlackmanDATE: AUG2003SUBJECT: Interview
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Letters To S&C by Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Letters To S&C by Technical Analysis, Inc.
MARKET PROFILE
Editor,
A letter from Matt Thomson
in the May 2003 S&C
asks, "How do you determine
what the value area
for the next day is?" You
responded that the answer could be found
in earlier articles on Market Profile.
The correct answer is that Market
Profile does not predict the next day's
value area. A quote from my September
1987 article in STOCKS & COMMODITIES
(S&C V.5:8, "Estimating The
Market Profile Value Area For Intraday
Trading") is explicit: "We really do
not know where the market is going."
The value area at the end of the curre...
AUTHOR: Technical Analysis, Inc.DATE: AUG2003SUBJECT: Letters To S&C
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Novice Trader's Notebook by EMS Flynn
ARTICLE SYNOPSIS ...Novice Trader's Notebook by EMS Flynn
One-Day Reversals
One-day reversals occur when a
tradable instrument in a trend
sustains a sharp price spike and
then reverses, ending in a marked
rise or drop. This formation,
which is considered to be a potential
key reversal day, can be
seen either at a top or a bottom.
According to Thomas
Bulkowski, many one-day reversals
represent "nothing more than
temporary pauses in the existing
trend after which the trend resumes
its course."
The one-day reversal occurs
at the end of the trend. This pattern
can also be seen in a oneweek
reversal....
AUTHOR: EMS FlynnDATE: AUG2003SUBJECT: Novice Traders' Notebook
Opening Position by Jayanthi Gopalakrishnan
AUTHOR: Jayanthi GopalakrishnanDATE: AUG2003SUBJECT: Opening Position
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Q&A by Don Bright
ARTICLE SYNOPSIS ...Q&A by Don Bright
TRADING NEWS
There are a couple of news scenarios
for which I would like your input. If a
stock you play regularly has announced
earnings since the last trading session,
will you play it on the opening? If so, do
you adjust the envelope for this symbol?
What about earnings "guidance" and
other significant news? Also, what about
when there is no news on the symbol,
but there is significant news or earnings
on a stock in the same industry group or
on the industry group itself?
I understand that news is subjective
and varies on a case-by-case basis.
However, are there any rul...
AUTHOR: Don BrightDATE: AUG2003SUBJECT: Q&A
Reduce Volatiltiy by Mark Wolfinger
AUTHOR: Mark WolfingerDATE: AUG2003SUBJECT: Novice Traders' Notebook
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Reverse Engineering RSI (ll) by Giorgos Siligardos, Ph.D.
ARTICLE SYNOPSIS ...Reverse Engineering RSI (ll) by Giorgos Siligardos, Ph.D.
The Revenge Of The Indicators - Reverse Engineering RSI (II)
I
Simplify price projection and get a clearer visual representation
with these three indicators.
In the June 2003 STOCKS & COMMODITIES, I
introduced the RevEngRSI indicator and
showed how it could be used to project
support/resistance levels for the price. In that
article, I also showed that the curve of this
indicator is a transformation of a horizontal
line from the relative strength index (RSI) graph to the price
graph, which carries the support-resistance attributes of ...
AUTHOR: Giorgos E. Siligardos, Ph.D.DATE: AUG2003SUBJECT: Indicators
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Strategies For Daytrading by Jacob Singer
ARTICLE SYNOPSIS ...Strategies For Daytrading by Jacob Singer
These strategies could improve your daytrading.
Trading strategies that fall under the definition
of daytrading can be confusing, because there
are really three types of daytrading: intraday
trading, end-of-day trading, and daytrading.
The three kinds are similar, but there are clear
distinctions.
1. Intraday trading is when a trader makes a large number
of trades in a single day, taking a one- or two-point profit
and trading both short and long positions as the market
changes direction during the day. The objective is to have
all of these small tra...
AUTHOR: Jacob SingerDATE: AUG2003SUBJECT: Intraday Trading
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The FX Daily Conundrum by Kristian Kerr
ARTICLE SYNOPSIS ...The FX Daily Conundrum by Kristian Kerr
Hours And Days - The FX Daily Conundrum
In a 24-hour market, what is the best time frame to use when
looking at charts?
The rising popularity of foreign exchange
trading over the past few years has been
impressive. Equity traders fed up with trying
to eke out profits in the brutal bear market
environment have flocked to the fast-paced
spot currency markets in record volumes.
This rise in forex's popularity can mostly be attributed to the
clear advantages that currency trading has over other markets. Unlike trading equities, foreign exchange offers tra...
AUTHOR: Kristian KerrDATE: AUG2003SUBJECT: Novice Traders' Notebook
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The Goldman Roll by Scott Barrie and Kevin Warner
ARTICLE SYNOPSIS ...The Goldman Roll by Scott Barrie and Kevin Warner
Does it affect the commodities markets?
The Goldman Sachs Commodity Index (GSCI)
is a world production?weighted index that
measures commodity market returns. The
quantity of each commodity in the index is
determined by the average quantity of production
in the last five years. The GSCI is composed of commodities from all sectors. As you can see
from Figure 1, energy, metals, and agriculture are all represented.
The variety of commodities ensures the GSCI is well
diversified, both across subsectors and within each subsector.
The GSCI encompass...
AUTHOR: Scott Barrie and Kevin WarnerDATE: AUG2003SUBJECT: Basic Techniques
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Traders Resource: Brokerages For Traders by Techincal Analysis, Inc.
ARTICLE SYNOPSIS ...Traders Resource: Brokerages For Traders by Techincal Analysis, Inc.
Self-directed traders, as STOCKS & COMMODITIES
readers usually are, have more
choices than ever in their ongoing search
for speed, pricing efficiency, and good
accounting when it comes to brokerages.
First, you have to find a brokerage
that handles your tradable; full-service
brokerages dealing with equities, options,
futures, bonds, mutual funds, foreign exchange, and
cash goods are usually full-priced as well. A little scouting,
however, will get you a brokerage targeted on your market of
interest.
After that, your first ...
AUTHOR: Technical Analysis, Inc.DATE: AUG2003SUBJECT: Traders' Resource
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Traders Tips by Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Traders Tips by Technical Analysis, Inc.
? TRADESTATION: REVERSE ENGINEERING RSI (II)
Giorgos Siligardos' article "Reverse Engineering RSI (II)" in
this issue describes a translation process to plot the "next bar"
price required to produce three variations on the relative
strength index (RSI).
The first is an exponential moving average of the RSI. The
second is a simple moving average of the RSI. The third is an
RSI trendline. The EasyLanguage code for the last one, the
RSI trendline, was presented in the June 2003 Traders' Tips.
Here, we present the EasyLanguage code called "RevEngRSIEMA"
...
AUTHOR: Technical Analysis, Inc.DATE: AUG2003SUBJECT: Traders' Tips
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Websites For Traders: Pitnews.com by Jayanthi Gopalakrishnan
ARTICLE SYNOPSIS ...Websites For Traders: Pitnews.com by Jayanthi Gopalakrishnan
PITNEWS.COM
Commodities traders need to be knowledgeable
about the fundamentals behind
their trading. For example, grain
traders need to know the production
cycle of specific crops: planting season,
the ideal soil conditions for growth,
weather conditions, harvesting season,
and so forth. Cocoa traders need information
on the crop seasons of the various
cocoa-producing nations, as well as
other factors such as common cocoa
diseases. Such knowledge will enable
traders to correlate price movements
with fundamentals....
AUTHOR: Jayanthi GopalakrishnanDATE: AUG2003SUBJECT: Websites For Traders
Working Money: Bear Market Rallies by David Penn
AUTHOR: David PennDATE: AUG2003SUBJECT: Focus On