STOCKS & COMMODITIES magazine. The Traders' Magazine

Article Archive For MAR2011

  • Books For Traders

    ARTICLE SYNOPSIS ...Behavioural Technical Analysis (201 p a g e s , 3 4 . 9 9 paperback, 2 0 1 0 , I S B N 978-1-905641- 41-3) by Paul V. Azzopardi, publ i s h e d b y H a rr i m a n H o u s e , Ltd. At its core, trading is a decision-making p r o c e s s b a s e d on the analysis of data and a judgment on risk and uncertainty. When humans make trading decisions their emotions, physiology, and the natural qualities of the brain automatically play a role. To better understand the financial markets we need to better understand the behavior of individual investors within...

  • Channels In The Forex Markets by Gareth Burgess

    ARTICLE SYNOPSIS ...The foreign exchange markets are an arena of competing forces constantly in conflict with each other. The markets are torn apart by worry, uncertainty, doubt, fear and greed, not to mention profit. As a consequence, many traders get shaken out of their positions by a short-term wave of opposing news. Even when a position is showing a profit, there is never a certainty that the market will continue in the anticipated direction and there is almost the same sense of relief when getting out of a good position as in liquidating a bad one. As a result, many traders tend to p...

  • Empowering Traders With The Russell 2000 by Gail Mercer

    ARTICLE SYNOPSIS ...Ever thought of trading the Russell 2000? Here's how retail traders could benefit from trading this index. New traders are drawn to the emini Standard & Poor's 500 like bees to honey. Go into any live trading room and chances are that the moderators are teaching traders to trade the emini S&P 500 because it has more liquidity than any other market. In Figure 1 the average annual volume is compared between the following emini indexes: emini S&P 500, Dow Jones Industrial Average (Dji a), Na sDa q 100, S&P MidCap 400, and the Russell 2000. It would be a logical assu...

  • Explore Your Options by Tom Gentile

    ARTICLE SYNOPSIS ...A smarter Call to sell? With a long call, what would be the best time to sell? I know that directionally, the higher a stock goes up the more the call stands to profit as it goes further in-themoney. But if a call went from out-of-the money toward being at-the-money, doesn't it put the option at more risk because of time decay?...

  • Futures For You by Carley Garner

    ARTICLE SYNOPSIS ...WHAT DO GAP TRADERS WANT? What exactly are gap traders looking for? For those unfamiliar with gap trading, a price gap occurs when there is a significant difference in the closing price of the previous session relative to the opening price of the following session. A gap is described by its direction; for instance, you might hear traders refer to a gap with an increase in price as a "gap up" or a "gap higher." A sharp decrease in price from the previous session close is known as a "gap down" or a "gap lower." Price gaps used to be common in commodities due to abbrev...

  • Letters To S&C

    ARTICLE SYNOPSIS ...The Clear meThod Editor, It was with great interest that I read Ron Black's article in the September 2010 issue of your magazine, "Getting Clear With Short-Term Swings." The concept is simple and signals are easy to follow (the best starting point for any indicator!). In the article, the author provided the EasyLanguage code for displaying the swing line. But since many readers want to implement indicators using a spreadsheet, I decided to translate the Clear method to Excel. I am providing a spreadsheet with the Clear method applied to the S&P 500 ("Clear Sp x...

  • Opening Position by Jayanthi Gopalakrishnan

    ARTICLE SYNOPSIS ...As Ken Calhoun says in the St o c kS & co m m o d i t i eS interview of the month (which starts on page 46), you have to be slow to get in but quick to get out. You will get an idea of how much time you need to commit to the markets if you really want to understand their behavior. But even if you understand the markets, you have to have the patience to wait for that right setup to appear on your charts before you hit that enter button. That price setup will have to be one where you expect your returns to be greater than the risk you take. Stephen Massel's article, "What Can You E...

  • Product Review: MarketGuage: Big View by Dennis D. Peterson

    ARTICLE SYNOPSIS ...Big View is part of an ensemble of trading information from MarketGauge, available as a standalone package for $49/month. The last review of MarketGauge covered the Swing Trading course and the follow-on Mastery Program. The Mastery Program has a menu item called Big View, but MarketGauge actually refers to that item as Little Big View. To sort this out, let's take a quick look at Little Big View and then spend the bulk of the discussion on Big View....

  • Product Review: NASDAQ OMX Portfolio Manager for the iPad by Wallace Wang

    ARTICLE SYNOPSIS ...Real-time data is crucial for accurate and timely trading, but in the past, to get real-time data you had to pay a monthly fee. Now, however, if you have either a wi-fi or 3G Internet connection and an iPad, you can retrieve real-time data using the Na s d a q Om x Portfolio Manager app. The initial Portfolio Manager app screen displays a list of stocks on the left side of the screen, which you can divide into three categories: a watchlist of stocks you want to track, a portfolio list of stocks you're currently trading, and a search list that lets you type in a stock...

  • Q&A by Don Bright

    ARTICLE SYNOPSIS ...LIQUIDITY, REST, AND ROUTING I see you have been posting about your firm's new approach to order routing that is saving or making your traders a lot of money. I remember you used to say "take liquidity on the NySe (or NaSd a q) and rest or leave your orders on ar c a." Could you explain the differences you see now? Could you start by explaining "take liquidity" and "rest" orders? Does any of this routing make that much of a difference? My broker advises me to use only market orders anyway, so how does this affect me? Wow, a lot of good and timely questions. First o...

  • Three-Bar Inside Bar Pattern by Johnan Prathap

    ARTICLE SYNOPSIS ...This trading strategy uses an inside bar as a three-bar pattern for long and short positions. Find out how it performed on gold, silver, and crude oil contracts. Whether you look at an intraday, daily, weekly, or monthly chart you will, without a doubt, see many inside bars. They appear in uptrends, downtrends, and sideways markets. Typically, most traders think of an inside bar as a two-bar pattern, but I have found successful trades using an inside bar pattern as a three-bar pattern for both long and short signals. An inside bar accompanied by higher closes indicates a s...

  • Traders' Tips

    ARTICLE SYNOPSIS ...For this month's Traders' Tips, the focus is Johnan Prathap's article in this issue, "ThreeBar Inside Bar Pattern." Code for TradeStation is already provided in Prathap's article. Subscribers will also find the same code at the Subscriber Area of our website, www.Traders.com. Presented here is an overview of possible implementations for other software. Traders' Tips are provided to help the reader implement a selected technique from an article in this issue. The entries are contributed by various software developers or programmers for software that is capable of cu...

  • Traders' Resource: Online Services

    ARTICLE SYNOPSIS ...You can find a wealth of information on the Internet for nearly any subject imaginable, including investing, trading, and the financial markets. You can even find a good amount on technical analysis. Each month in St o c kS & co m m o d it i eS' Traders' Resource, we present a listing for different categories of products and services related to trading, all to aid our readers in their pursuit of trading. This month, we focus on the topic of online trading services....

  • Trading Companies With Split Personalities by Anthony Trongone

    ARTICLE SYNOPSIS ...When the regular trading session gains momentum, is the market more likely to produce additional gains? Here's how the companies in the QQ Q Q perform during regular trading sessions versus overnight trading sessions. Although seven years have passed since then, the trades based on my two 2004 articles about the advantages of taking a long position in the overnight session are still delivering attractive profits. In these articles, I made a case for splitting the trading day into two separate sessions. By trading in the hours of darkness in the three years I investigated...

  • Trading Momentum With Ken Calhoun

    ARTICLE SYNOPSIS ...Ken Calhoun, president of Daytrading University and StockTradingSuccess.com, has provided online training to active traders from more than 32 countries since 1999. He is an internationally published trader who's earned industry awards for his professional trading systems and has trained more than 31,000 people in more than 147 companies worldwide. Calhoun trains traders on how to trade using one-minute candle charts, sector breakouts, gaps and market indexes using advanced tape reading, and real-time candlestick trading techniques by using live market examples. A former corpora...

  • What Can You Expect, Mathematically? by Stephen Massel

    ARTICLE SYNOPSIS ...Here's a look at how mathematical expectation allows for an apples-to-apples comparison of trading systems or strategies regardless of type or style, as well as allowing the tracking of your own trading record. A huge number of different trading systems and strategies are available in the market today, all with their own particular focus, style, time frame, and risk. The type of trading you engage in is a very personal matter and depends on many factors. The things that need to be considered include the market you are interested in; the amount of time you have to do th...

  • What You Don't Know About Candlesticks by Thomas N. Bulkowski

    ARTICLE SYNOPSIS ...In writing my latest book, Encyclopedia Of Candlestick Charts, I made some startling discoveries. I used more than 4.7 million candle lines (price bars) for the research with data going back as far as the 1980s in hundreds of stocks, but not all stocks covered the entire period. Re v eRs a l s w i n One famous technical analyst wrote that continuations perform better than reversals. That would make sense, since it is easier for price to swim with the tide than against it. There is just one problem: That's wrong. I tested this on thousands of chart patterns and candlesticks wi...







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