STOCKS & COMMODITIES magazine. The Traders' Magazine

Article Archive For JUL1995

Letters to S&C

  • Logarithmic Point & Figure Charting by William G.S. Brown

    ARTICLE SYNOPSIS ...V.13:07 (288-291): Logarithmic Point & Figure Charting by William G.S. Brown Traditional point & figure charting is one of the oldest methods known in technical analysis. The technique is unique because it only records the direction and change in price while ignoring the passage of time. But it has certain disadvantages; for example, it is virtually impossible to adjust a point & figure plot for stock splits or dividends without replotting the whole chart. Making each box represent a fixed percentage change - a logarithmic scale - has several advantages. Here's what they are. Point & figur...

  • SIDEBAR: Cups and caps by Thom Hartle

    ARTICLE SYNOPSIS ...V.13:07 (311): SIDEBAR: Cups and caps by Thom Hartle Cup and cap patterns are technical formations used to signal short-term trades. The cup pattern is the basis for a sell signal when the instrument being traded is in an uptrend, while if the instrument is trading in a downtrend, then the cap pattern is the setup for a buy signal. First, the direction of the trend is identified, and then the cup and cap patterns are used for the trading signals. The trend is determined by using a pattern called the three-bar net line. Before discussing the cup and cap formations, let's look at how the three...

  • SIDEBAR: Filtering in Excel by Scott Barrie

    ARTICLE SYNOPSIS ...V.13:07 (286): SIDEBAR: Filtering in Excel by Scott Barrie Here are the Excel 4.0 formulas to perform individual market filters. For our example, we'll use the December 1994 Treasury bond futures market (sidebar Figures 1 and 2) with a 1% filter. The spreadsheet will use the following formulas in their respective cell locations: column A: contract symbol; column B: date (be sure to use trading days only); column C: opening price; column D: intraday high; column E: intraday low; column F: close or settlement. In column headings, I have used the_ to represent spaces between words so my macros ...

  • SIDEBAR: Projection bands and oscillators by Mel Widner

    ARTICLE SYNOPSIS ...V.13:07 (281): SIDEBAR: Projection bands and oscillators by Mel Widner Sidebar Figure 4 shows a Microsoft Excel 4.0 spreadsheet that is used for calculations; column A = trading day number that is used in the calculation of slopes and trends. For a lookback period of 14 days, the slope for the lows in cell F16 is =SLOPE(D3:D16,A3:A16) or =TREND(D3:D16,A3:A16,A16)- TREND(D3:D16,A3:A16,A15) for Excel 3.0 The slope for the highs in cell G16 is =SLOPE(C3:C16,A3:A16) ......

  • SIDEBAR: Trading bands by Bruce Faber

    ARTICLE SYNOPSIS ...V.13:07 (280): SIDEBAR: Trading bands by Bruce Faber Trading bands, or envelopes, are used as visible boundaries that contain the price movement of a security. A sell signal may be generated when the price hits the upper band and a buy signal may be generated when the lower band is touched. Originally, trading bands were drawn by hand, using smoothed waves that coincided with the highest highs and lowest highs for the upper band, and the highest lows and lowest lows for the lower band. Using these waves as a pattern, the bands could be projected to indicate where prices might go....

  • Signaling Change with Projection Bands by Mel Widner, Ph.D

    ARTICLE SYNOPSIS ...V.13:07 (275-281): Signaling Change with Projection Bands by Mel Widner, Ph.D Projection bands, a new method using trading bands, projects market data forward along the data trend with the maxima and minima of the projections defining the band. The method provides another means of signaling potential changes for market direction relative to the trend. Buy low and sell high"" is the trader's tenet, and as a result, indicators that determine when prices may be low or high are very popular. Trading bands, which are envelopes drawn about price histories, are one such set of indicators designed...

  • Teacher, Trader Still Teaching: Joseph Stowell by Thom Hartle

    ARTICLE SYNOPSIS ...V.13:07 (304-310): Teacher, Trader Still Teaching: Joseph Stowell by Thom Hartle Many STOCKS & COMMODITIES readers dream of trading for a living; they fantasize about giving up their humdrum day-to-day job and focusing on the opportunities in leveraged markets such as futures. But as everyone knows, dreams and realities are usually far apart. Can it be done? Can you be an overnight success? Meet Joseph Stowell, a former schoolteacher who patiently worked at trading for more than 20 years before realizing his dream of trading for a living. Stowell spoke to S&C Editor Thom Hartle on April 14, 1...

  • The Whole Brain Trader by Adrienne Laris Toghraie

    ARTICLE SYNOPSIS ...V.13:07 (313-314): The Whole Brain Trader by Adrienne Laris Toghraie Does the part of the brain that influences you the most affect how you trade? The founder of Trading on Target explains the importance of using skills that are built on both intuitive and deductive mental processes. Did you know that the side of your brain that is dominant will influence how you think and what kind of trader you will be? No matter which side is dominant, however, you can influence the outcome. How you use and combine information from each side of the brain will determine how successful you become. LEFT B...

  • Traders' Tips by Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...V13 (316-318): Traders' Tips by Technical Analysis, Inc. EQUIS METASTOCK FOR WINDOWS The projection bands and other indicators discussed in ""Signaling change with projection bands"" can easily be implemented in MetaStock for Windows. To create these indicators, enter the following custom indicators in the indicator builder: Slope of high (14 period regression line of High): ((14 * (Sum( Cum(1) * HIGH, 14))) - (Sum( Cum(1), 14) * ( Sum(HIGH, 14)))) / ((14 * Sum( Pwr( Cum(1), 2), 14)) - Pwr( Sum( Cum(1), 14), 2)) ......

  • Trading with the Cup-with-Handle by Gregory Kuhn

    ARTICLE SYNOPSIS ...V.13:07 (292-297): Trading with the Cup-with-Handle by Gregory Kuhn Here are some more nuances for trading stocks based on the charting pattern called the cup-with-handle pattern introduced by William O'Neil. How much would you pay for a trading system that accurately identified the buying trend of the smart money early enough to profit? Would you spend no more than the annual subscription to a chartbook service? The biggest problem in searching for chart formations is that if you look hard enough at a stock's one-year graph, you're bound to find any formation you want to conform to your b...

  • UDPrice Change Indicator by Dennis Meyers

    ARTICLE SYNOPSIS ...V.13:07 (298-303): UDPrice Change Indicator by Dennis Meyers This indicator expresses buy and sell signals based on user-defined percentage changes in a market. The UD% price change indicator is compared with a simple moving average crossover and two different channel breakout systems using the Standard & Poor's 500 index as an example. The percentage price change indicator, simple in concept and implementation, was one of the first indicators used to forecast the market. Its basis is simple enough. If the price moves up by a certain percent from the lowest low recorded while you are short...

  • Using Filtered Waves for Trend Analysis by Scott Barrie

    ARTICLE SYNOPSIS ...V.13:07 (282-287): Using Filtered Waves for Trend Analysis by Scott Barrie Filtering is simply processing price data to remove extraneous, noisy, information. What's left after filtering can be considered to be the more important and perhaps tradable information. Here's a method to filter price data for reliable patterns as well as some suggested trading plans. Technical analysts use past market behavior as a guidepost for future behavior. By studying the past, an analyst can glean patterns that can be used as the basis for trades. The challenge is determining which past behaviors are appr...







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