STOCKS & COMMODITIES magazine. The Traders' Magazine

Article Archive For JUN2001

  • Becoming A Professional Stock Trader by Don Bright

    ARTICLE SYNOPSIS ...Becoming A Professional Stock Trader by Don Bright Are you interested in taking the plunge? Here are some of the things that you should know. It's important to identify the differences between professional trading and retail trading, particularly the need for Series 7 licensing. A couple of years ago, the powers that be decided that to protect both the public and professional traders, a method of distinguishing between the two had to be put into place. After much ado, the Securities and Exchange Commission (SEC) determined that an industry-wide exam would be utilized for the distinction. Rec...

  • Broadening Bottoms and Complex Bottoms

    ARTICLE SYNOPSIS ...Novice Trader's Notebook: Broadening Bottoms and Complex Bottoms BROADENING BOTTOM The broadening bottom is virtually the same as the broadening top, except it is reversed. Like the broadening top, the broadening bottom forms a symmetrical triangle. Although the broadening top is a rare formation, the broadening bottom is even rarer. Figure 1 shows a typical broadening bottom with three successively lower lows and two successively higher highs that combine at the end of a downward move. This gives the impression of an erratic market, as the swings in both directions get wider each time. The ...

  • Elastic Moving Averages by Christian P. Fries, Ph.D.

    ARTICLE SYNOPSIS ...Elastic Moving Averages by Christian P. Fries, Ph.D. Approximating the average price paid per share can generate a very responsive moving average. What if the period of your average fluctuated with volume? You'd have an elastic volumeweighted moving average (eVWMA), a natural replacement for standard moving averages. It's even more natural than on first thought, since it can also be regarded as an approximation to the average price paid per share. eVWMA differs from the usual average in that: 1. It does not refer to an underlying averaging time period (for example, 20 days, 38 days, 200 da...

  • Interview: Carol Osler by John Sweeney

    ARTICLE SYNOPSIS ...Interview: Carol Osler by John Sweeney Hidden away in the Federal Reserve System are entire departments of economists researching nearly every aspect of US business. In late 2000, we picked up hints of an economist who had actually taken on the definition and measurement of the concepts of technical analysis. Some sleuthing brought up Carol Osler's name. Osler is a senior economist in the Capital Markets Research Function of the Federal Reserve Bank of New York. Her major interest is in explaining short-run exchange rate movements. In particular, she has focused on technical trading strategi...

  • Letters

    ARTICLE SYNOPSIS ...LETTERS TO S&C MARK D. COOK: SIMPLE WISDOM Editor, Your interview with Mark D. Cook in the March 2001 issue of STOCKS & COMMODITIES was excellent. It's refreshing to hear the views of a totally independent trader. Many so-called experts in the investment arena have some kind of hidden agenda. By far, Cook's greatest wisdom lies in his simplicity of approach: "Buy when everyone is selling and sell when everyone is buying." This solid investing principle would have warned you of a possible top at 5,000 in the Nasdaq (now about 2,000) and of a possible bottom on the Commodity Research Bureau ...

  • MetaTrends by R.G. Boomers

    ARTICLE SYNOPSIS ...MetaTrends by R.G. Boomers Many of the tools of technical analysis are based on an interval of time. The question that always gets asked concerning such tools is, "What is the best interval?" So Just when you thought you'd seen everything in charting, along comes a new idea. what is it? All intervals! That's right, use 'em all! At the same time! The technique is known as MetaTrends, and I'll show you how they are formed. THE TECHNIQUE First, plot an ordinary graph of stock prices. For my purposes here, I use the Dow Jones Industrial Average (DJIA) from 1924, but you could use any time perio...

Opening Position by John Sweeney

  • Q&A by Don Bright

    ARTICLE SYNOPSIS ...Q&A by Don Bright TARGET PRICES: ABSURD? How do analysts calculate the target price for a stock? -- Doanh Nguyen, via e-mail That is something the world would like to know. There was an interesting 60 Minutes segment called something like "How Did So Many Get It So Wrong?" that showed how ridiculous it is for analysts to pick price targets. The producers even interviewed Mark Haines of CNBC's Squawk Box, who went into detail about a few analysts and their absurd predictions....

  • The Folding Rule by Viktor Likhovidov

    ARTICLE SYNOPSIS ...The Folding Rule by Viktor Likhovidov How about a simple charting technique to ride the wave and get off in a timely manner? Here's a reversal pattern I frequently observe on hourly charts of currencies and sometimes use in trading. I call it the folding rule due to its resemblance to the carpenter's tool. This pattern appears on accelerating markets, as shown in the hourly chart of the yen for March 1999 (Figure 1). Here, trendline 1 (the first ray of the folding rule), drawn through two local minimums as a support line, determines the initial direction of the growing market. But then the ...

  • Traders' Resource: Publications

    ARTICLE SYNOPSIS ...Traders' Resource: Publications Where can traders turn for market insight, trade recommendations, and education about trading and investing? These days, financial information is put out in print, on TV, and over the Internet in various formats, but there's still nothing more readable, reliable, and researchable than a regularly published newsletter or magazine. This month in Traders' Resource, we present a listing of publications -- printed on paper, on the World Wide Web, or delivered straight to your e-mail inbox -- that may help you to improve your trading. As you can see, some publications...

  • Traders' Tips

    ARTICLE SYNOPSIS ...Traders' Tips This month's Traders' Tips contain TradeStation EasyLanguage, MetaStock for Windows, NeuroShell Trader, Trading Solution, Investor/RT, WealthLab, andTechnifilter Plus code for Christian Fries's elastic volume-weighted moving average (eVWMA), described in the article "Elastic Moving Averages." The formulas discussed by Gordon Gustafson in his article in this issue, "Which Volatility Measure?" are given for: MetaStock 6.52 or higher, NeuroShelll Trader, AIQ TradingExpert Pro, Trading Solutions , Technifilter Plus, Investor/RT, and WaveWi$e....

Tweaking The T3 Trading System by Steve Burns

  • Which Volatility Measure? by Gordon Gustafson

    ARTICLE SYNOPSIS ...Which Volatility Measure? by Gordon Gustafson Is it true? Is average true range, an approximation, superior to standard deviation, the most beloved of quants, as a measure of volatility? Many traders use some measure of volatility to generate signals in their trading. For instance, one common entry technique is to buy when the price breaks outside a certain range of the volatility of the recent price action, either to the upside for trend following or below for countertrend systems. Another common use for volatility is in the construction of trailing stops. An exit signal might be generated ...







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