Article Archive For
DEC1998
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Measuring Risk by Dick Stoken
ARTICLE SYNOPSIS ...There are two common ways to measure performance: the standard deviation of returns and the Sharpe ratio. Here's a third way.
How do we measure risk? In the
financial industry, the generally
accepted method is the standard
deviation of returns. A low standard
deviation indicates that
expected returns vary little from
average returns (suggesting less
risk), while a high standard deviation
suggests that expected
returns vary greatly from average returns (implying more
risk). The assumption is that stable past returns are less risky,
yet many practitioners are uneasy with this concept.
FACTORIN...
AUTHOR: Dick StokenDATE: DEC1998SUBJECT: Money Management
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Plotting Trendlines by Stuart Evens
ARTICLE SYNOPSIS ...Drawing trendlines may seem simple, but there is a right way and a wrong way to plotting trendlines.
With so many different indicators,
oscillators, and moving
averages making up the science
of technical analysis, it is easy
to forget about the basics. One
basic rule of most trading strategies
is to always trade with the
trend, and it follows that early
recognition of a change in trend
would be important. Therefore,
it is imperative that we apply
techniques to determine what
the initial trend is so that we can
either trade with it or be in a
position to recognize when it has, in fact, change...
AUTHOR: Stuart EvensDATE: DEC1998SUBJECT: Novice Traders' Notebook
Quick Scan: A W.D. Gann Treasure Discovered
AUTHOR: Technical Analysis, Inc.DATE: DEC1998SUBJECT: Quick-Scans
Quick Scan: Hit and Run Trading, The Short Term Traders' Bible
AUTHOR: Technical Analysis, Inc.DATE: DEC1998SUBJECT: Quick-Scans
Quick Scan: Indigo Blue Chip Investment Strategies
AUTHOR: Technical Analysis, Inc.DATE: DEC1998SUBJECT: Quick-Scans
Quick Scan: John Murphy Explains Market Analysis, Volume 1
AUTHOR: Technical Analysis, Inc.DATE: DEC1998SUBJECT: Quick-Scans
Quick Scan: Market Center Platinuim Edition
AUTHOR: Technical Analysis, Inc.DATE: DEC1998SUBJECT: Quick-Scans
Quick Scan: Martin Pring's Introduction to Technical Analysis on CD-ROM
AUTHOR: Technical Analysis, Inc.DATE: DEC1998SUBJECT: Quick-Scans
Quick Scan: Option Advisor
AUTHOR: Technical Analysis, Inc.DATE: DEC1998SUBJECT: Quick-Scans
Quick Scan: PowerAnalyzer from EZTrade
AUTHOR: Technical Analysis, Inc.DATE: DEC1998SUBJECT: Quick-Scans
Quick Scan: Sharpen Your Trading Skills video
AUTHOR: Technical Analysis, Inc.DATE: DEC1998SUBJECT: Quick-Scans
Quick Scan: Spec-Trader+ ver 1.0
AUTHOR: Technical Analysis, Inc.DATE: DEC1998SUBJECT: Quick-Scans
Quick Scan: The Art of Short Selling
AUTHOR: Technical Analysis, Inc.DATE: DEC1998SUBJECT: Quick-Scans
Quick Scan: The Essex Option Trading Seminar video
AUTHOR: Technical Analysis, Inc.DATE: DEC1998SUBJECT: Quick-Scans
Quick Scan: The Four Biggest Mistakes In Option Trading
AUTHOR: Technical Analysis, Inc.DATE: DEC1998SUBJECT: Quick-Scans
Quick Scan: The Ultimate Book on Stock Market Timing, Volume 1
AUTHOR: Technical Analysis, Inc.DATE: DEC1998SUBJECT: Quick-Scans
Quick Scan: Trading in the Zone
AUTHOR: Technical Analysis, Inc.DATE: DEC1998SUBJECT: Quick-Scans
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The Global Trend: Mark Boucher by Thom Hartle
ARTICLE SYNOPSIS ...When S&C first spoke to hedge fund manager Mark Boucher in 1996, he shared some of his techniques for analyzing the economy, picking stocks, and money management. See what he says this time.
Refresh our memories with
a bit of your history.
Sure. I started trading
stocks and commodities
when I was in high school. My father
died when I was nine, and he left me a
trust fund. The manager of my trust was
looking after my college fund. Unfortunately,
the stock market fell apart starting
in 1973 and the bank managing my
trust stayed 100% invested during the
bear market. My account lost about 90%
o...
AUTHOR: Thom HartleDATE: DEC1998SUBJECT: Interview
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The MACD Profit Alert by Barbara Star, Ph.D.
ARTICLE SYNOPSIS ...The moving average convergence/divergence (MACD) is a momentum indicator, and here, it's combined with pattern recognition to help you identify exit points for your system.
It takes more than a good entry
strategy to trade profitably.
Many traders have experienced
the exhilaration of being in a
winning trade. Some of those
same traders have also known
the disappointment of watch-ing
their profit turn into a loss
when prices change. Knowing
when to take profits is part of
good money management. The moving average convergence/
divergence (MACD) profit alert presented here is a
pattern that hel...
AUTHOR: Barbara Star, Ph.D.DATE: DEC1998SUBJECT: Indicators
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The Volatility Edge by John Sweeney
ARTICLE SYNOPSIS ...Designing a profitable trading system is key, but the way that profits and losses vary can have an impact on your long-term success.
In my previous article, I wrote
that, other things being equal, a
trading system with lower volatility
would triumph over a system
with higher volatility. To
prove my point, I gave examples
(and a small spreadsheet model)
wherein a system with half the
volatility of its competitor came
out ahead 70-80% of the time
when given the same sequence
of trading results.
Before we go any further, I should make a point of
definition: Volatility is the variance of return...
AUTHOR: John SweeneyDATE: DEC1998SUBJECT: Statistics
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The Yen, Recursed by Dennis Meyers, Ph.D.
ARTICLE SYNOPSIS ...Combine the exponential moving average with a trend estimate to identify changes in the direction of the market.
The Japanese yen (JY) is a major
currency traded worldwide by
corporations, institutions, banks,
commodity funds and futures
traders. The yen is traded 24
hours a day and most of the
world's largest banks make a
two-sided market in the yen and
its associated derivatives. Small
traders, however, are constrained to trade the yen
futures on the Chicago Mercantile Exchange (CME).
The JY futures are traded from 7:20 am to 2 pm on the
CME and from 2:30 pm to 7:05 am overnight Monday
thr...
AUTHOR: Dennis Meyers, Ph.D.DATE: DEC1998SUBJECT: New Techniques
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Trends And Moving Averages by Robert Nikifork
ARTICLE SYNOPSIS ...How do you choose which length and type of moving average to use for chart analysis? Take a look.
One commonly used technical
indicator is the moving average
(MA), which is plotted as a line
connecting the average of closing
prices over a lookback period.
Moving averages may be
used as trend indicators and to
identify support and resistance
levels and breakouts. The major
complaint concerning moving
averages is that they lag
changes in the trend and thus
lead to late signals.
Because of that flaw and their widespread use, many
articles have been written about moving averages. In most of
the...
AUTHOR: Robert NikiforkDATE: DEC1998SUBJECT: Novice Traders' Notebook
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Using Normal Distribution For Writing Options by Mark Vakkur, MD
ARTICLE SYNOPSIS ...How can you go about selecting the best strike price for writing an option?
Perhaps no branch of knowledge
has been as abused or misunderstood
as statistics. Yet, without
some grounding in basic
statistical concepts, our ability
to trade profitably is limited.
Trading does not require a doctorate
in mathematics, but mastering
some basic fundamentals
should help stack the odds
in our favor. This is particularly
helpful in developing an options trading strategy.
Many trading software packages automatically generate
statistics on any tradable or indicator; often included are
mean, median, and s...
AUTHOR: Mark Vakkur, M.D.DATE: DEC1998SUBJECT: Options
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V16:12: Letters
ARTICLE SYNOPSIS ...CUP WITH HANDLE
Editor,
The article "Cup-with-handle and the
computerized approach" in your October
1998 issue was great, but authors
Rick Martinelli and Barry Hyman certainly
leave us in the dark as to the
software that will enable us to use the
ideas expressed there. Producing a valid
system using the "Cup-with-handle"
article as a basis would take a high level
of programming knowledge.
ACEEBO, via E-mail, Chagrin Falls, OH
See Traders' Tips in this issue for software
code implementing the cup-with-handle
concept. Each month, Traders'
Tips features programming code contributed
by vendors ...
AUTHOR: Technical Analysis, Inc.DATE: DEC1998SUBJECT: Letters To S&C