DEC 1996 STOCKS & COMMODITIES Magazine

Article Archive For DEC1996

A Rule-Based Approach to Trading by Jeffrey Owen Katz, Ph.D.

ARTICLE SYNOPSIS ...A Rule-Based Approach to Trading by Jeffrey Owen Katz, Ph.D. Last month, Katz presented his experience developing a trading system using a neural network?based approach. This month, he delves into a rule-based approach to trading. Previously, I showed that attempts to model the markets by applying sophisticated technology such as neural networks in a simplistic manner does not work well. Present-day attempts to apply the neural-net novice approach fail because the market inefficiencies discovered by the simplistic application of sophisticated technologies have already been ""traded away"" b...

AUTHOR: Jeffrey Owen Katz, Ph.D.DATE: DEC1996SUBJECT: Real World

Author and Analyst John Murphy by Thom Hartle

ARTICLE SYNOPSIS ...Author and Analyst John Murpy by Thom Hartle John Murphy, a veteran of nearly 30 years in the equities and futures markets, is the technical analyst for CNBC television, publisher of the ""Futures Trends and Intermarket Analysis"" newsletter and author of such classics in the field as Technical Analysis of the Futures Market and Intermarket Technical Analysis, and his newest work, The Visual Investor, promises to be comparably memorable. Most recently, he's also cofounder of MurphyMorris Inc., a joint venture to develop multimedia software for investors interested in technical analysis. With ...

AUTHOR: Thom HartleDATE: DEC1996

Combined Trend and Oscillator Signals by Jeremy G. Konstenius

ARTICLE SYNOPSIS ...Combining Trend and Oscillator Signals by Jeremy G. Konsten Most trading systems fall into two categories. One, the most popular, is the trend-following method, where the signals are oriented toward putting the trader on board long-term trends. The profits acquired during the long-term trends will, hopefully, recover the monies lost during trendless activity. The other category takes advantage of trading ranges, and the trader makes the most money when the market's primary direction is sideways. Here's a trading system that incorporates both approaches to time entry and exit positions. Mark...

AUTHOR: Jeremy G. KonsteniusDATE: DEC1996SUBJECT: Trading Techniques

Float Analysis by Steve Woods and Jan Arps

ARTICLE SYNOPSIS ...Float Analysis by Steve Woods and Jan Arps Here's a close look at the turnover of a stock's float, based on an idea from the works of W.D. Gann, that reveals some dramatic patterns and expands the definition of a base or consolidation zone. The floating supply of shares - or simply, float - is all of the shares actually available for trading by the public that are not owned by the company's management. This number can be incorporated into an understanding of the direct relationship between the stock price and its volume of shares traded. This is easily seen when a backward cumulative count ...

AUTHOR: Steve Woods and Jan ArpsDATE: DEC1996SUBJECT: Indicators

Letters to S&C

ARTICLE SYNOPSIS ...Letters to S&C This month's letters discuss possible flaws in the May 1996 STOCKS & COMMODITIES article ""Presidential parties and the stock market,"" calculating chi-square and historical volatility....

AUTHOR: Technical Analysis, Inc.DATE: DEC1996SUBJECT: Letters To S&C

Proactive vs. Reactive Trading by Adrienne Laris Toghraie

ARTICLE SYNOPSIS ...Proactive Vs. Reactive Trading by Adrienne Laris Toghraie There are many different styles used by individual traders, some proactive, some reactive. Either can work and either can fail. Here's why. One of the reasons why so few traders succeed has to do with whether their approach to trading is proactive or reactive. Which is a better approach? Do successful traders plan for and anticipate everything, or do they jump in without a plan, react to whatever happens and go with the flow? The answer may appear to be self-evident, but in fact, the answer is far more complex than you may realize. ...

AUTHOR: Adrienne Laris ToghraieDATE: DEC1996SUBJECT: Trading Psychology

SIDEBAR: 2/20-Day EMA Breakout System by Jeremy G. Konstenius

ARTICLE SYNOPSIS ...Sidebar: 2/20-Day EMA Breakout System Defined Most trading systems fall into two categories. One, the most popular, is the trend-following method, where the signals are oriented toward putting the trader on board long-term trends. The profits acquired during the long-term trends will, hopefully, recover the monies lost during trendless activity. The other category takes advantage of trading ranges, and the trader makes the most money when the market's primary direction is sideways. Here's a trading system that incorporates both approaches to time entry and exit positions....

AUTHOR: Jeremy G. KonsteniusDATE: DEC1996

The 2/20-Day EMA Breakout System by David S. Landry

ARTICLE SYNOPSIS ...The 2/20-Day EMA Breakout System by David S. Landry Moving average systems seek to capture meaningful trends. Here's a modified exponential moving average system that uses pattern recognition as a filter for entry rules. Technical approaches to trading range in complexity from simple chart-based methods to complex neural network algorithms. As technicians, we are all guilty sooner or later of trying to reinvent the wheel with elaborate technical analysis. We'd all like to find the Holy Grail of an indicator that will make us rich. I have spent countless hours searching for such an indicator...

AUTHOR: David S. LandryDATE: DEC1996SUBJECT: Trading Technique

The Expanding Triangle by Kit Webster

ARTICLE SYNOPSIS ...The Expanding Triangle by Kit Webster Classic chart analysis and Elliott wave theory both consider the expanding or broadening triangle chart pattern to be a reversal of a long-term trend, and further, that such an event may be occurring in the Dow Jones Industrial Average. Here are the details. As technicians ply their trade, they look at myriad manifestations of price and volume such as stochastics, head and shoulder patterns, and advance-decline lines to attempt to divine the market's direction. Most often the scene we see is a variation on an old theme, played out in new ways. Every now...

AUTHOR: Kit WebsterDATE: DEC1996SUBJECT: Novice Traders' Notebook

Traders' Tips

ARTICLE SYNOPSIS ...Traders' Tips This month's selection of Traders' Tips include code in MetaStock, TradeStation, SmarTrader, TechniFilter Plus, and WAVEWI$E for the 2/20-day EMA breakout system as described by David Landry....

AUTHOR: Technical Analysis, Inc.DATE: DEC1996SUBJECT: Traders' Tips