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• Advanced Scale-In Strategies For Short-Term Traders by David Penn

  ARTICLE SYNOPSIS ...Advanced Scale-In Strategies For Short-Term Traders by David Penn How can short-term traders add an edge of as much as 10% to their per-trade win rate? High-probability exchange traded fund (Etf) trading is a quantified strategy of buying Etfs after they have pulled back and selling after they have recovered in price. More than 100 Etfs were tested since inception. The results of the testing showed that buying Etfs after they had pulled back and become oversold resulted in high-probability Etf trading strategies that were correct more than 75% of the time. These tests included all of the...

AUTHOR: David PennDATE: FEB2010

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• At The Close by John McKinnon

  ARTICLE SYNOPSIS ...At The Close by John McKinnon Do you know how you will react under specific circumstances? Do your emotions keep getting in the way? Sometimes, the market is described as a living organism with a personality all its own. In an effort to understand this elusive quality, many traders rely on technical indicators to monitor and predict the state of the market. Others utilize models for measuring the microfundamentals of individual stocks or the macroaspects of economic trends. Experienced traders usually develop their own customized mix of indicators and/or fundamentals that works for them. H...

AUTHOR: John McKinnonDATE: FEB2010SUBJECT: At The Close

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• Books for Traders by Technical Analysis, Inc.

  ARTICLE SYNOPSIS ...Books for Traders by Technical Analysis, Inc. ? The 100 Best Stocks You Can Buy 2010 ? A Practical Guide To Indicators: Including Turtle Trading ? For Crying Out Loud: From Open Outcry To The Electronic Screen ? Inside The Black Box ? The Small-Cap Investor: Secrets To Winning Big with Small-Cap Stocks ? Thackray's 2009 Investor's Guide...

AUTHOR: Technical Analysis, Inc.DATE: FEB2010SUBJECT: Books For Traders

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• Cross-Currency Coefficients by Brian Twomey

  ARTICLE SYNOPSIS ...Cross-Currency Coefficients by Brian Twomey How do currency pairs move in correlation to their US dollar counterparts? When we think about correlation coefficients between two currency pairs, we usually think about correlations among the major pairs against the US dollar such as the euro/US dollar (Eur/Usd), British pound/US dollar (Gbp/Usd), or their direct opposites, US dollar/Swiss franc (Usd/Chf) and US dollar/Japanese yen (Usd/Jpy). One topic not mentioned in the research was the correlation among currency crosses that directly correspond to their US dollar counterparts. How these pai...

AUTHOR: Brian TwomeyDATE: FEB2010SUBJECT: Charting

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• Explore Your Options by Tom Gentile

  ARTICLE SYNOPSIS ...Explore Your Options by Tom Gentile ""SPLITTING"" HEADACHE Can you please explain how a 3-for-2 stock split affects the pricing of options? I saw a split of this type and couldn't get my head around the math. Great question. Before we jump into this complicated kind of split, though, let's begin with the typical 2-for-1 so readers not familiar with the basic mechanics can get up to speed. The 2-for-1 split involves adjusting the old strike price and presplit option premium in half. Also critical, the amount of contracts held long or short will be doubled. This adjustment process allows t...

AUTHOR: Tom GentileDATE: FEB2010SUBJECT: Explore Your Options

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• Futures For You by Carley Garner

  ARTICLE SYNOPSIS ...Futures For You by Carley Garner SPREAD, SCENARIOS, AND STRATEGIES My broker seems to use the term "spread" to describe several scenarios and strategies, and sometimes it can be difficult to follow. Can you explain the different uses and definitions? Those unfamiliar with futures market slang can be misled by the use of some commonly used terms in the world of commodities. Early on, I too found myself confused. Accordingly, I devoted an entire chapter in my latest book, A Trader's First Book On Commodities, to deciphering futures market slang. "Spread" is used loosely among futures traders...

AUTHOR: Carley GarnerDATE: FEB2010SUBJECT: Futures For You

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

  ARTICLE SYNOPSIS ...Letters To S&C by Technical Analysis, Inc. TRADING FOREX Editor, I enjoyed Koos van der Merwe's article on forex in the December 2009 Stocks & Commodities ("Trading Forex"). I was curious if he had any suggestions as to where I can get a good foundation in the fundamental side of forex that he discussed in the article. There are clearly numerous relationships that need to be understood. Any suggestions? Bill Koos van der Merwe replies: Forex is about currencies -- that is, money used in everyday life. The only way to understand a currency from the fundamental side is to choose, say, two cu...

AUTHOR: Technical Analysis, Inc.DATE: FEB2010SUBJECT: Letters To S&C

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• Neural Network Pair Trading by Marge Sherald

  ARTICLE SYNOPSIS ...Neural Network Pair Trading by Marge Sherald Pair trading is a market-neutral trading strategy. But how do you find the right pair? Using neural networks, of course. Are you taking a second look at market-neutral trading systems in today's difficult markets? Pair trading is popular, but finding the right pair is more challenging. Neural networks offer an alternative to traditional pair-matching methods. The usual pair-trading strategies speculate on future convergence of a price spread between similar securities. Once a pair is identified, the customary rule is to buy one security and sel...

AUTHOR: Marge SheraldDATE: FEB2010SUBJECT: Neural Networks

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Opening Position by Jayanthi Gopalakrishnan

AUTHOR: Jayanthi GopalakrishnanDATE: FEB2010SUBJECT: Opening Position

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• Predicting Market Data Using The Kalman Filter, Pt 2 by R. Martinelli & N. Rhoads

  ARTICLE SYNOPSIS ...Predicting Market Data Using The Kalman Filter, Pt 2 by R. Martinelli & N. Rhoads Can the Kalman filter be used to predict future price movement? In this second part of this series we answer this question. Previously, we discussed the Kalman filter and the alpha indicator. This time, we study the accumulation of profit/loss through the fortune chart. We also backtest the filter and analyze the results. The profit/loss on day k may be written as: Pk = A Wk (yk/yk-1 ? 1) where the quantity in parentheses is the relative price-change, or return, on day k, A is the trade amount in dollars, an...

AUTHOR: R. Martinelli & N. RhoadsDATE: FEB2010

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• Q&A by Don Bright

  ARTICLE SYNOPSIS ...Q&A by Don Bright SHORTING A SPREAD/PAIR Don, could you explain what it means to short a spread/pair? If a spread X-Y (where X is the long position and Y is the short position) is determined to be overbought and due for a pullback, the spread could be "shorted" by selling X and buying Y. To me this means that you reduce the number of shares of X (sell) and you buy to cover Y (since you are short). If you do this, then one action would cancel the other out, so what would be the benefit? How should this be done properly? Thanks. --dvaneyl5 To short a spread pair is just a definition. If I shor...

AUTHOR: Don BrightDATE: FEB2010SUBJECT: Q&A

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Swingin' With The Trade With Toni Hansen by J. Gopalakrishnan & B. Faber

AUTHOR: J. Gopalakrishnan and B. FaberDATE: FEB2010SUBJECT: Interview

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• The 350 Swing Trade by Barbara Star, PhD.

  ARTICLE SYNOPSIS ...The 350 Swing Trade by Barbara Star, PhD. This indicator can help you identify the beginning and end of a price swing. When markets exhibit greater and greater volatility, traders move away from longer-term trading methods with their potentially devastating drawdowns and move toward more nimble strategies that catch shorter-term price moves. Among the many short-term trading methods, swing trading, with its emphasis on trades that last from a few days to a few weeks, offers a good middle ground that makes trading more manageable. Traders may use a variety of methods to identify the begin...

AUTHOR: Barbara Star, Ph.D.DATE: FEB2010SUBJECT: Trading Strategies

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Traders' Resource: Exchanges by Technical Analysis, Inc.

AUTHOR: Technical Analysis, Inc.DATE: FEB2010SUBJECT: Traders' Resource

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• Traders' Tips by Technical Analysis, Inc.

  ARTICLE SYNOPSIS ...Traders' Tips by Technical Analysis, Inc. This month's Traders' Tips are based on Barbara Star's article in this issue, "The 350 Swing Trade." Code for eSignal to implement Star's 350 swing indicator and related techniques can be found in the sidebars to Star's article elsewhere in this issue. Additional code is presented here and at Traders.com as contributed by various software developers. Readers will find these and more Traders' Tips at the Stocks & Commodities website at www.Traders.com in the Traders' Tips area, from where the code can be copied and pasted into the appropriate progr...

AUTHOR: Technical Analysis, Inc.DATE: FEB2010SUBJECT: Traders' Tips

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• Trading Chaos In Today's Market by J.Williams-Lara and Marcus Lara

  ARTICLE SYNOPSIS ...Trading Chaos In Today's Market by J.Williams-Lara and Marcus Lara Trading the volatility of today's markets has created a huge learning experience and a new way to navigate profitably through constant change. A holistic approach to trading may give you the edge you are looking for. IS this the trading opportunity of a lifetime or the end of the American way? Trading Chaos, Bill Williams' first book, theorizes that trading the volatility of today's markets has created both a huge learning experience and a new way to navigate profitably through constant change. The entire global financial sys...

AUTHOR: J.Williams-Lara and Marcus LaraDATE: FEB2010SUBJECT: Charting

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Working Money: Gold and Candlesticks by Gary S. Wagner

AUTHOR: Gary S. WagnerDATE: FEB2010SUBJECT: Candlestick Corner

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Working Money: Suspect Trends by L.A. Little

AUTHOR: L.A. LittleDATE: FEB2010SUBJECT: The Chartist