STOCKS & COMMODITIES magazine. The Traders' Magazine

Article Archive For AUG2007

Adjusting A Long Call With The Synthetic Straddle by Chris Tyler

  • At The Close: New Margin Rules (Part II) by J.L. Lord

    ARTICLE SYNOPSIS ...At The Close: New Margin Rules (Part II) by J.L. Lord New Margin Rules (Part II) AS I wrote in the June 2007 issue of STOCKS & COMMODITIES, while the new margin rules are a powerful addition to retail traders, they do not imply there is free money to be had. Interest is a key component of the new margin requirements. Under the old rules, the interest component was overshadowed largely by the excessive capital requirements that unnecessarily reduced your purchasing power. In the new world of risk-based margin, the interest component now stands out as a significant portion of the puzzle. WHY ...

  • Books For Traders by Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...Books For Traders by Technical Analysis, Inc. The 10 Essential Of Forex Trading 30 Days To Market Mastery Around The Horn: A Trader's Guide To Consistently Scoring In The Markets Charting The Major Forex Pairs The Handbook Of Portfolio Mathematics Option Volatility Trading Strategies Survival Guide To The Stock Market: How To Prosper In The Wall Street Jungle Extraordinary Comebacks...

  • Building A Trading Template by Girogos Siligardos

    ARTICLE SYNOPSIS ...Building A Trading Template by Girogos Siligardos A template makes things so much easier for so many things, trading included. What should you build into yours to manage your trading? roper trade management and money management are a must for all types of market participants. Even though there are many tradingrelated software packages, few, if any, provide a template for monitoring trades based on trade management (TM) and money management (MM) rules not related to mechanical trading methods. In this article I will discuss the main parts of such a template that can be implemented in Microsof...

  • Explore Your Options by Tom Gentile

    ARTICLE SYNOPSIS ...Explore Your Options by Tom Gentile SELLING TO BUY I've heard the term "selling to buy" when discussing put options. I am not sure what it means and when to apply it in my trading. If you are selling to buy, you are selling or writing options and are willing to buy the underlying security. The most common way of doing this is to sell puts on stocks you want to own. For example, if I want to buy a stock for $50 a share and the stock is currently trading at $50.50, I can sell put options with a strike price of 50. Depending on how much time is left until expiration, I might get a few hundred ...

  • Fixing The Flaws In Fixed-Fractional Position Sizing by Christian B. Smart, PhD

    ARTICLE SYNOPSIS ...Fixing The Flaws In Fixed-Fractional Position Sizing by Christian B. Smart, PhD Fixed-fractional position sizing is a time-tested method for money management, but in the long run, it will never achieve system expectancy. Here's how you can fix this flaw. Fixed-fractional position sizing is a popular and time-tested method for money management. In the strategy, a fixed percentage of equity is risked per trade. The formula is given here as: Amount risked per trade = Equity * f where f is the fixed percentage of equity risked per trade. Fixed-fractional money management is an intuitive method i...

  • Forex Focus by James Chen

    ARTICLE SYNOPSIS ...Forex Focus by James Chen Support & Resistance Precision In Forex Currency markets tend to follow support & resistance levels. Use those levels to identify entries and exits, and to apply risk management. Many foreign exchange traders rely on the accuracy of support & resistance levels so evident on currency price charts. Some of these traders will eschew the use of mathematically derived indicators or back-tested systems as primary trade decision tools, preferring instead to allow their manually drawn lines to dictate entries and exits. BACK TO BASICS There is much to be said for this back...

  • Futures For You by Dan O'Neil

    ARTICLE SYNOPSIS ...Futures For You by Dan O'Neil TECHNICALITIES It doesn't seem like you can trade commodities without at least some knowledge of technical analysis. What are some of the more popular technical indicators to incorporate into my research? There's no question charting and technical analysis play significant roles in the futures markets. Even traders who focus on the fundamentals tend to incorporate some technical analysis into their decision- making. Trading based at least in part on the established statistical movement of some markets can spare a trader not only from the emotional swings of tra...

  • Interview: Risky Positions With Keith Fitschen Of TradeSystem, Inc. by Jayanthi Gopalakrishnan

    ARTICLE SYNOPSIS ...Interview: Risky Positions With Keith Fitschen Of TradeSystem, Inc. by Jayanthi Gopalakrishnan Keith Fitschen has been developing technical trading systems for the futures markets for 20 years, actively trading his systems. His initial research was on the quantification of curve-fitting in system development and resulted in a methodology that relates the degree of overfitting to the number of trades in the development sample. With this method he developed the mechanical system Aberration. Developed in 1986, it was commercially released in 1993 and has been feted as one of the top 10 trading s...

  • Letters To S&C by Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...Letters To S&C by Technical Analysis, Inc. METASTOCK CODE FOR MOVING AVERAGE CROSSOVERS Editor, I am looking for the MetaStock code for Dimitris Tsokakis' article, "Anticipating Moving Average Crossovers" (February 2007 S&C). Your Traders' Tips section of that issue refers readers to your website for the rest of the MetaStock listing. Could you please advise where I may find the complete listing? KEN KOSCHEL Complete code from the February 2007 Traders' Tips section can be found here: http://www.traders.com/Documentation/ FEEDbk_docs/Archive/022007/ TradersTips/TradersTips.html Or, to n...

Opening Position by Jayanthi Gopalakrishnan

  • Q&A by Don Bright

    ARTICLE SYNOPSIS ...Q&A by Don Bright ON PIVOT POINTS AND DAYTRADING Is there any relationship between pivot points and daytrading? I believe there is, but I do not know what it is. Could you give me some help?--robinxing We use the pivot points of the futures in our entry/exit decisions during the day in this way: We consider the trading troughs between pivot and R1 or S1, S1 and S2, and so on, to be "mini" support/resistance levels. (We use resistance levels 1, 2, 3, and 4, and support levels 1, 2, 3, and 4.) They tend to be a self-fulfilling prophecy, since the large futures traders on the floor (and off) te...

  • Traders Tips' by Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...Traders Tips' by Technical Analysis, Inc. Editor's note: Most of this month's collection of Traders' Tips are based on Giorgos Siligardos' article in this issue, "Building A Trading Template." Other contributions are on a topic of the software developers' choosing. TRADESTATION: BUILDING A TRADING TEMPLATE Giorgos Siligardos' article in this issue, "Building A Trading Template," describes using an Excel spreadsheet for managing a portfolio of stocks. The trading rules are roughly based on the trading rules developed by a group of traders known as the Turtles. The rules allow for only long p...

Traders' Resource: Mutual Funds by Technical Analysis, Inc.

  • Trading Renko Charts by Suri Duddella

    ARTICLE SYNOPSIS ...Trading Renko Charts by Suri Duddella This charting technique can be used to display trends that may not be that obvious in a bar or candlestick chart. Renko charts were invented by Japanese traders hundreds of years ago and named for renga, a Japanese word for "brick." How are they different from bar or candlestick charts? First of all they are visually attractive, making it easy to filter noise and isolate trends. They show symmetry and are effective in determining the major trend and support & resistance areas. Renko charts are also efficient in signaling trend-reversal patterns. WHAT AR...

Working Money: Builders, Lenders: Next In The Falling Knife Saga by Matt Blackman

Working Money: Moving Average Trios by David Penn







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