STOCKS & COMMODITIES magazine. The Traders' Magazine

Article Archive For JAN2009

  • At The Close by Adrienne Toghraie

    ARTICLE SYNOPSIS ...At The Close by Adrienne Toghraie When is it too soon or too late? How much is too much or not enough? Some of the most important questions that a trader must address have to do with getting the timing and the amount just right. There is an art to finding the right balance in life between too early and too late, and between too little and too much. For a trader, finding the right point to enter and exit a trade is critical to making money and limiting loss. Exercising the right amount of risk is also critical. Too much risk brings the possibility of losing too much money to keep you in the g...

  • Books For Traders by Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...Books For Traders by Technical Analysis, Inc. Beat The Market: Invest By Knowing What Stocks To Buy And What To Sell China Fireworks: How To Make Dramatic Wealth From The Fastest-Growing Economy In The World DeMark Indicators ETFs For The Long Run The Stock Market Philosopher: Insights Of A Soviet-Born, New York?Bred Hedge Fund Trader Swing Trading For Dummies Stock Trader's Almanac 2009...

  • Explore Your Options by Tom Gentile

    ARTICLE SYNOPSIS ...Explore Your Options by Tom Gentile PUTS DON'T MAKE MONEY WHEN STOCK FALLS I am trying to understand why I did not make any money on a put option. I am hoping you can shed some light. On October 23, 2008, I bought an Xyz put option with the 15 strike price. I bought two contracts at $2.10, or $420 total. The stock dropped to near the strike price. I sold on November 11 for $1.95 and collected $390. I lost $30 even though the stock dropped the way I thought it would. How can this happen? In order to answer your question, it is important that you understand that several factors will influence...

  • Forex Focus: The RSI Miracle by Hadi Seyedinajad

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 27:01 (12-13): Forex Focus: The RSI Miracle by Hadi Seyedinajad If we had to choose just one indicator to tradethe financial markets, it would be J. Welles Wilder's RSI. It does everything you expect from an indicator. It's an overbought/oversold alert system, a convergence/divergence detector, and a momentum indicator, but it can do even more. The old saying amid radical technicians, that "the price chart has everything you need," is not just a slogan. The information that we can extract from price vs. time data is amazing and I am not sure what this reflects, human ...

  • Futures For You by Carley Garner

    ARTICLE SYNOPSIS ...Futures For You by Carley Garner FULL SERVICE OR SELF SERVICE? Should I use a full-service futures and option broker or trade for myself online? This is a decision that is often made with little research or thought but has the potential to have the biggest impact on the bottom line. I would argue that traders should put nearly as much effort into finding a broker and determining the service type that fits their needs and desires as they do researching the markets that they will be trading. Making a mistake in the choice of your service level can be costly. An inexperienced trader opting f...

  • Identifying And Timing With The Special K, Part 2 by Martin J. Pring

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 27:01 (28-35): Identifying And Timing With The Special K, Part 2 by Martin J. Pring In part 1, you were introduced to the Special K indicator and its application on the weekly and daily charts. In part 2, we will show you how Special K can be used to identify major trend reversals and for timing pro trend short-term moves. I mentioned in part 1, my favorite method of displaying the Special K uses a calculation (see sidebar) based on daily data and exclusively incorporating simple moving averages like that displayed in Figure 1. As you can see from this chart, the move...

  • Interview: Forecasting Simplified, With Cynthia Kase by J. Gopalakrishnan

    ARTICLE SYNOPSIS ...Interview: Forecasting Simplified, With Cynthia Kase by J. Gopalakrishnan Cynthia Kase, president of Kase and Co., Cta, is considered by many to be the energy market's premier technical analyst and hedging advisor. Educated as an engineer, she worked as a trader and risk manager for Chevron, Chemical Bank, and the Saudi Oil Ministry's consulting arm, Petronal, before launching her company in 1992, which primarily focuses on providing trading and hedging strategies, software and solutions to the energy market, but also offers a trading toolbox, StatWare, on a range of trading platforms. She ha...

  • Join The Band by Marco Alves

    ARTICLE SYNOPSIS ...Join The Band by Marco Alves Apply this method to moving average crossovers to get rid of the lag and the false signals. One of the first indicators that any technical analysis novice studies is the moving average crossover. Moving averages (MAs) smooth a price series by determining the average closing price for a determined period (the last n bars) and, as a result, are lagging indicators, more suited to trending markets rather than rangebound ones. If two MAs of different periods are used together, a simple trading system can be built around it easily. Every time the shorter (faster) movi...

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

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 27:01 (10-11, 97): Letters To S&C by Technical Analysis, Inc. Editor, John Ehlers presented a most interesting discussion of corona charts ("Corona Charts," November 2008, STOCKS & COMMODITIES) and I note that while the code for TradeStation and a few other programs appear in your Traders' Tips section of that issue and also on your website, a version suitable for MetaStock EOD is notably missing. Is this because the software is unsuitable for the task, or just not available? - TREVOR T. BESTOW Roleystone, Western Australia The Traders' Tips section contains code sub...

Opening Position

  • Q&A by Don Bright

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 27:01 (42): Q&A by Don Bright OTHER OPENING STRATEGIES? Are there similar strategies to the opening-only strategy for the close of the market each day? Anyone care to share the idea behind them or give me a place to research if you don't care to share? Thanks. --taclander First off, let's discuss market mechanics at the end of the trading day. All-day-long orders are submitted to the New York Stock Exchange (Nyse) marked as "market on close" (Moc). These orders will be given the last trade price of the day. These orders to buy or to sell are matched with each other u...

  • The MEGAN Ratio by Oscar Cagigas

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 27:01 (19-22): The MEGAN Ratio by Oscar Cagigas Which system will generate more return? Here's a metric that will help you answer that question. Many metrics can evaluate the performance of trading systems. These include net profit, recovery factor, Sharpe ratio, K-ratio, and risk-adjusted return. Even though you can use these metrics to select the best trading system for you, the criteria for selecting a system tend to be arbitrary. Metrics such as the Sharpe ratio or K-ratio give an indication about the slope and smoothness of the equity curve but don't indicate whi...

  • Three Rules, One Easy Way To Trade ETFs by Larry Conners and David Penn

    ARTICLE SYNOPSIS ...Three Rules, One Easy Way To Trade ETFs by Larry Conners and David Penn Here's a short-term trading strategy to trade exchange traded funds. A famous trader once remarked that he could publish the secrets to his winning trading strategy in the newspapers and no one would follow them. The key, this famous trader explained, was consistency and discipline. In our opinion, when it comes to trading and trading strategies, one of the things that makes consistency easier and discipline a bit less daunting is simplicity. With few exceptions, all the trading strategies we have developed over the yea...

Traders' Resource: Trading Systems

  • Traders' Tips by Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...Traders' Tips by Technical Analysis, Inc. This month's Traders' Tips are based on Oscar Cagigas's article in this issue, "The Megan Ratio." Code in AmiBroker Formula Language for the Megan ratio from Cagigas's article is included at the end of this document. Additional code is presented here as contributed by software developers. Readers will find our Traders' Tips section in its entirety 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 program. In addition, the code for each program is usu...

  • Walk-Forward Testing by Jack L. Weinberg

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 27:01 (48-53): Walk-Forward Testing by Jack L. Weinberg Here's how you can use walk-forward testing as a tool to compare trading systems and gain insight into comparing the future performance of systems. Recent advances in trading system software and powerful hardware capabilities have provided a valuable tool in evaluating the future viability of trading systems -- walk-forward testing. This technique allows the trading system developer to quickly assess if the system will survive (or even prosper) in the future. It does this by segmenting the past into in-sample and ...

  • Website Review: eMiniZ.com by Jayanthi Gopalakrishnan

    ARTICLE SYNOPSIS ...Website Review: eMiniZ.com by Jayanthi Gopalakrishnan eMINIZ.com Back in September 2006, we reviewed www.eminiz.com, a website developed by John F. Ehlers. Since then there have been several additions and enhancements that make it worth looking at again. When you visit the site, the first thing that will catch your eye are four gauges. For those of you who are familiar with John Ehlers's work on corona charts (an article on the subject was published in the November 2008 issue of S&C) will recognize the terms such as cycle period, cycle swing position, cycle S/N ratio, and the adaptive trend ...

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