MAY 1999 STOCKS & COMMODITIES Magazine

Article Archive For MAY1999

Int.: How To Get Started In Electronic Day Trading: David Nassar by Thom Hartle

ARTICLE SYNOPSIS ...How To Get Started In Electronic Day Trading: David S. Nassar Each day, more and more traders are using computers for the direct buying and selling of stocks. Is there a difference among the myriad services available? We went to David Nassar, author of How To Get Started In Electronic Day Trading, to get the rundown on what is available for today's traders. STOCKS & COMMODITIES Editor Thom Hartle interviewed Nassar via phone on February 23, 1999, about the difference between online trading and electronic direct access trading, what to consider if you seriously want to daytrade, and more. Wit...

AUTHOR: Thom HartleDATE: MAY1999SUBJECT: Interview

Of Gold And Bonds, Gold Is The Leader by Alex Saitta

ARTICLE SYNOPSIS ...Of Gold And Bonds, Gold Is The Leader by Alex Saitta Does gold lead the bond market, or is it the other way around? Previously, we uncovered strong coincidental relationships between gold and the dollar, inflation, bonds and the CRB index. As bond traders, though, we are most interested in the relationship between gold and the bond market. Looking at the past 20 years of data (Figure 1), we noticed gold's reversals have led bond yield reversals. Looking beyond the peaks and valleys and considering all the data, does gold have a tendency to lead the bond market? To answer this question, we a...

AUTHOR: Alex SaittaDATE: MAY1999

On-Balance Volume by Stuart Evens

ARTICLE SYNOPSIS ...On-Balance Volume by Stuart Evens What do technicians look at in order to qualify the significance of a trend? One key element is volume, in that high volume in a trend indicates that large players may be involved. The theory goes that large traders are better informed, so the trend is likely to continue. How can you track volume? Does a volume-based indicator help the analyst and trader? Take a look. One of the better-known technical indicators to track volume is the on-balance volume (OBV). The OBV line is simply a running sum calculated by adding or subtracting the security's daily volume...

AUTHOR: Stuart EvensDATE: MAY1999SUBJECT: Indicators

Sizing A Futures Trading Account by Jay Kaeppel

ARTICLE SYNOPSIS ...Sizing A Futures Trading Account by Jay Kaeppel While most traders start out working on a trading system, they forget that the amount of starting capital is equally important. Here are some guidelines to consider. Novice traders focus their attention on developing a system for entering and exiting the markets. In fact, an entire industry has been spawned to facilitate trading system development. The age-old quest for the Holy Grail fuels the simplistic attitude among new traders that if their timing is good enough, everything will work out. Only after a trader has become seasoned and taken s...

AUTHOR: Jay KaeppelDATE: MAY1999SUBJECT: Money Management

Smart Money by Scott Brown

ARTICLE SYNOPSIS ...Smart Money by Scott Brown Should you develop a personal trading system, one that reflects your own personality? A belief persists among investors that a select group of traders have the inside edge. Some indicators, such as The Commitment Of Traders Report, try to track the activities of these traders. Some recent research may shed light on the composition of this group, as well as the techniques that the Market Wizards use to consistently beat the market. Once the market participant understands the areas that make a difference, he can use this knowledge to improve his trading performance. ...

AUTHOR: Scott Brown, Ph.D.DATE: MAY1999SUBJECT: Trading Psychology

The Endpoint Fast Fourier Transform System by Dennis Meyers, Ph.D.

ARTICLE SYNOPSIS ...The Endpoint Fast Fourier Transform System Last time, we explored the Fourier transform, a mathematical technique for analyzing data to determine cyclical component. This time, we use the fast Fourier transform as a trend determinant for a model for trading the Standard & Poor's 500. In my previous article, "The Discrete Fourier Transform Illusion," we demonstrated the misuses of the Fourier transform mathematical technique as applied to the Standard & Poor's 500 index. We showed how fitting the Fourier transform to the S&P 500 index data series produced a perfect curve-fit on past data, giv...

AUTHOR: Dennis Meyers, Ph.D.DATE: MAY1999SUBJECT: System Design

The Euro's True Colors by Walter Bressert and Doug Schaff

ARTICLE SYNOPSIS ...The Euro's True Colors by Walter Bressert and Doug Schaff How do you analyze the Euro, a currency that sprang to life with no price history? How do you analyze a full-fledged currency that came into being overnight? Despite its literal lack of price history, millions of foreign currency market participants -- importers, exporters, investors, risk managers, not to mention others -- instantly had exposures, long or short, the moment the Euro took its first breath. There is no doubt that fundamental factors will determine the Euro's value, as they have for the German mark, the French franc, and...

AUTHOR: Walter Bressert and Doug SchaffDATE: MAY1999SUBJECT: Market Timing

Using A Constant Investment Size For Stock Trading Systems by Jack Schwager

ARTICLE SYNOPSIS ...Using A Constant Investment Size For Stock Trading Systems by Jack Schwager The highest high to the lowest low in the price history of an individual stock can vary tremendously, especially when stock splits occur. This large range of price history can distort the returns of a trading system. This noted analyst explains the steps to adjusting stock data to avoid these distortions. At first glance, the issue of price data appears to be far more straightforward for stocks than it is for futures. The system developer in futures is faced with the significant problem that the life span of individu...

AUTHOR: Jack SchwagerDATE: MAY1999SUBJECT: New Techniques

V.17:5: Letters

ARTICLE SYNOPSIS ...LETTERS TO S&C The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Have you run across trading techniques, services or products that have proved useful? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine would not exist. Address your correspondence to: Editor, STOCKS & COMMODITIES, 4757 California Ave. SW, Seattle, WA 98116-4499, or E-mai...

AUTHOR: Technical Analysis, Inc.DATE: MAY1999SUBJECT: Letters To S&C