STOCKS & COMMODITIES magazine. The Traders' Magazine

Article Archive For JAN2002

Bollinger Bands

  • Detecting Trend Direction And Strength by Barbara Star, Ph.D.

    ARTICLE SYNOPSIS ...Detecting Trend Direction And Strength by Barbara Star, Ph.D. Using an indicator by itself can reveal a portion of the entire picture. Combining it with another can reveal more. Traders use technical indicators to recognize market changes. They look to indicators for signs of price direction, momentum shifts, and market volatility. Among the most sought-after indicators are those that identify price trends. Traditionally, moving averages serve that purpose, but they suffer from whipsaw action during price consolidations. However, there is another approach. This article shows how to combine t...

  • Interview: What Is The Future Of Trading? by Jayanthi Gopalakrishnan

    ARTICLE SYNOPSIS ...What Is The Future Of Trading? by Jayanthi Gopalakrishnan At The Start Of Our 20th Year, We Ask: What Is The Future Of Trading? The trading exchanges have been going through various changes lately, shifting from member-sponsored entities to for-profit organizations. They are also introducing more products, giving us a greater array to choose from. What does this portend for the trading industry? To find out, STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan spoke with Bob Fitzsimmons of the Nasdaq LIFFE market, David Prosperi of the Chicago Board of Trade (CBOT), and William J. Rainer of...

  • Letters To S&C

    ARTICLE SYNOPSIS ...BALANCE OF MARKET POWER Editor, In "Balance Of Market Power" (S&C, August 2001), author Igor Livshin constructs an oscillator based on three types of rewards. But I think it lacks one more type of reward: today's open minus yesterday's close; that is, overnight action on digesting news by market participants. Without this, the oscillator may interpret the situation incorrectly. Suppose the Nasdaq opened down with a gap of 100 points, then rallied from the open 50 points, and closed at the high of the day. Say the situation repeated five days in a row. Calculating the oscillator's value base...

Opening Position by Jayanthi Gopalakrishnan

Point & Figure Charting by David Penn

  • Price Persistency by Gordon Gustafson

    ARTICLE SYNOPSIS ...Price Persistency by Gordon Gustafson Interested in measuring a short-term trend? Here's an indicator you can use. For years, academics have made the case that price movement is random: future price changes are unrelated to past price changes. Although they are random, runs occur in any series of data. Knowing something about these runs can add valuable information to any trading program. WHAT IS IT? Price persistency is the number of days that a market continues to close either up or down. It's another term for a market run. As an indicator, price persistency is a measure of a very short-...

  • Q&A by Don Bright

    ARTICLE SYNOPSIS ...Q&A by Don Bright MARKET MAKERS AND SYMBOLS First, I want to thank you for your efforts in educating new traders. I've reviewed some of the information available at the NYSE and Nasdaq websites. There's a ton of material to learn from, but I still haven't figured out where to find the symbols representing exchange members or how to trace their end-of-day trading activities. Second, I have to confess that I speak as a naive equity trader from home with a three- to five-day perspective. I am trying to figure out the rules and participants on the playing field(s). Who are these players, what a...

  • Relative Vigor Index by John F. Ehlers

    ARTICLE SYNOPSIS ...Relative Vigor Index by John F. Ehlers Here's an old concept brought to light using modern filters to make it a practical, useful indicator. Since the inception of STOCKS & COMMODITIES (happy 20th anniversary year!), there have been several developments in technical analysis that have merged old concepts with new technologies. Like the magazine itself, the indicator discussed here will also be merging the old and new. The relative vigor index (RVI) uses concepts dating back to the beginning of this magazine and also uses modern filter and digital signal processing theory to realize those con...

  • The Four Lines Trading System by Viktor Likhovidov

    ARTICLE SYNOPSIS ...The Four Lines Trading System by Viktor Likhovidov Here's a simple, reliable, universal system for trading the markets. The creation of a personal trading system requires a personal understanding of the nature of the markets and the peculiarities of market behavior. It's also critical for you to have a simple yet universal and reliable strategy from the beginning. One strategy I particularly like is based on a single indicator and includes simple but powerful statistical procedures for constructing reference lines that generate trading signals. THE FOUR LINES When you are using the relativ...

  • The Third Dimension Of Option Trading by Don A. Singletary

    ARTICLE SYNOPSIS ...The Third Dimension Of Option Trading by Don A. Singletary Here's how you can profit from trading volatility. Sometimes when you purchase an option, you might see the underlying futures contract move in your favor, perhaps enough to overcome the time decay of the value of the option, and then you might find yourself bewildered that a profit has yet to be realized. Other times you may be awaiting time-decay erosion, only to find it is a much slower decay than anticipated. More often than not, these situations are due to a change in volatility....

  • Traders' Resource: Books

    ARTICLE SYNOPSIS ...Books You can blunder around the Internet all you want for information, but for focused instruction on trading technique, the best information can still be found in paper pages. Here is just a sampling of all that is available out there in the way of books for traders and investors. No doubt, what the Internet is good for is browsing and searching. Using the Internet, you can quickly locate just about any book on trading these days through websites such as those of book resellers Ino.com (http://store.ino.com), Trader's Press (www.traderspressbookstore.com), and Trader's Library (www.traders...

  • Traders' Tips

    ARTICLE SYNOPSIS ...Traders' Tips TRADESTATION: RELATIVE VIGOR INDEX John Ehlers's article "Relative Vigor Index (RVI)" in this issue includes a version of EasyLanguage code for the indicator. That version includes hardcoded implementations of a symmetrically weighted moving average in three places, and also a hardcoded implementation of two summations. We provide an alternative version below that replaces these hardcoded implementations with function calls. This version produces identical results, except for minor initialization differences. The SWMA, also known as a triangular moving average, can be convenie...

  • Working Money: Buy American by David Penn

    ARTICLE SYNOPSIS ...Buy American? by David Penn What You Don't Know About Investing Overseas According to Kornitzer Capital Management's Tom Laming, some of the best international investments come from US companies. Confused? Read on. ""Over there ... over there ..."" Investors have long been encouraged to put at least part of their hard-earned dollars to work in the equities markets of other countries. Given the more predictable returns readily available from the US stock markets, convincing investors to invest in companies they may never have patronized, operating in countries they may have never visited, ca...

  • Working Money: The Engulfing Pattern by Sharon Yamanaka

    ARTICLE SYNOPSIS ...The Engulfing Pattern by Sharon Yamanaka This major reversal pattern is simple to use. You don't even need additional indicators. Find out how. Candlestick formations originated in 18th-century Japan, where the market action was explained in much the same way that we describe stock market sentiment today: as an ongoing battle between bulls and bears fighting for control. Compared to the bar chart, candlesticks use the same information (high, low, opening, and closing prices), but the opening and closing prices are emphasized by converting them into rectangular bodies, or candlesticks, that a...







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