Article Archive For
JAN2002
Bollinger Bands
AUTHOR: Amy WuDATE: JAN2002
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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...
AUTHOR: Barbara Star, Ph.D.DATE: JAN2002SUBJECT: Trading Basics
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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...
AUTHOR: Jayanthi GopalakrishnanDATE: JAN2002SUBJECT: Interview
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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...
AUTHOR: Technical Analysis, Inc.DATE: JAN2002SUBJECT: Letters To S&C
Opening Position by Jayanthi Gopalakrishnan
AUTHOR: Jayanthi GopalakrishnanDATE: JAN2002SUBJECT: Opening Position
Point & Figure Charting by David Penn
AUTHOR: David PennDATE: JAN2002SUBJECT: Classic Techniques
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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-...
AUTHOR: Gordon GustafsonDATE: JAN2002SUBJECT: Statistics
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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...
AUTHOR: Don BrightDATE: JAN2002SUBJECT: Q&A
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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...
AUTHOR: John F. EhlersDATE: JAN2002SUBJECT: Indicators
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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...
AUTHOR: Viktor LikhovidovDATE: JAN2002SUBJECT: Trading Systems
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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....
AUTHOR: Don A. SingletaryDATE: JAN2002SUBJECT: Options
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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...
AUTHOR: Technical Analysis, Inc.DATE: JAN2002SUBJECT: Traders' Resource
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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...
AUTHOR: Technical Analysis, Inc.DATE: JAN2002SUBJECT: Traders' Tips
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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...
AUTHOR: David PennDATE: JAN2002SUBJECT: Focus On. . .
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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...
AUTHOR: Sharon YamanakaDATE: JAN2002SUBJECT: Candlestick Corner