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• Designing A Money Management Strategy by Ray Overholser,O.D.

  ARTICLE SYNOPSIS ...Designing A Money Management Strategy Using Volatility-Based Stops And The Kelly Criterion by Ray Overholser,O.D. Sorting out the criteria for a coherent money management plan is a complex, detailed job. Using a spreadsheet to keep track of the logic helps ensure nothing has been omitted. With a little planning, you can develop a logically sound money management system. Historically, too much emphasis has been placed on the development of profitable entry and exit rules, whereas the determination of the proper number of contracts or shares to trade has been treated as a distant afterthought...

AUTHOR: Ray Overholser,O.D.DATE: MAY2000SUBJECT: Money Management

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• Has Volatility Lost Its Edge? by Mark G. Levey

  ARTICLE SYNOPSIS ...Has Volatility Lost Its Edge? by Mark G.Levey Does volatility still offer the same advantage it once did in trading the Standard &PoorÕs 500 index? HereÕs a followup to previous STOCKS & COMMODITIES articles. From a statistical standpoint, assuming an even chance of loss or gain on an investment, low-volatility investments offer significantly higher returns than do high-volatility strategies. A low-volatility trading system beats a high-volatility system 70% to 80% of the time when given the same sequence of trading results. In winning systems, however, game theory shows that once the proba...

AUTHOR: Mark G. LeveyDATE: MAY2000

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• Interview: Matthew Andresen Of Island ECN by John Sweeney

  ARTICLE SYNOPSIS ...Faster, Cheaper, Better? Matthew Andresen Of Island ECN Matthew Andresen has been serving as president of Island ECN  , Inc., since 1998. Since then, Andresen has spearheaded IslandÕs explosive growth and overseen its role in shaping the new electronic marketplace. His strategic mission at Island is to provide all market participants with the ability to execute transactions on a level playing field. That has meant building Island into the first marketplace to provide a free, real-time display of all its orders through the Island BookViewer, software that allows orders received by Island for d...

AUTHOR: John SweeneyDATE: MAY2000SUBJECT: Interview

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• Letters to S&C

  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? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine would not exist. Editor, The letter to the Editor in your February 2000 issue titled ""Candlesticks Formulas"" and your response hit the nail on the head of what your magazine is all about - giving your readers trading ...

AUTHOR: Technical Analysis, Inc.DATE: MAY2000SUBJECT: Letters To S&C

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• Long-Term Commodity Trades by Andre Zupans

  ARTICLE SYNOPSIS ...Using Paper And Pencil, For Cotton Long-Term Commodity Trades by Andre Zupans Large commodity firms, commercial producers, and mature speculators know that capturing huge moves in commodity markets may take years. HereÕs that technique, demonstrated nicely. If you believe the news media, short-term traders and daytraders are everywhere. Certainly, their numbers have exploded due to the unprecedented bull market in stocks. Are they consistently successful? Doubtful. Transaction costs, overtrading, and small profits and large losses plague these short-term traders. Long-term trading eliminat...

AUTHOR: Andre ZupansDATE: MAY2000SUBJECT: Trading Techniques

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• Peaks And Troughs by Martin J.Pring

  ARTICLE SYNOPSIS ...Peaks And Troughs by Martin J.Pring The oldest ways of chart analysis had to work in the days before computers (B.C.).There Õs no reason they shouldnÕt work now. HereÕs a look at peaks and troughs, a classic form of chart analysis that worked B.C. and work now. I have always thought that, in general, the simplest techniques work the best. High up in this category, and perhaps the most underrated, is the concept of peak and trough analysis, a technique first brought to our attention as a tenet of Dow theory. While the theory itself has lost much of its luster in recent years, the peak and tr...

AUTHOR: Martin J. PringDATE: MAY2000SUBJECT: Classic Techniques

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• Should I Trade Today? by Adrienne Laris Toghraie

  ARTICLE SYNOPSIS ...Should I Trade Today? by Adrienne Laris Toghraie If youÕre not at your best when youÕre trading the markets, youÕre putting yourself at a disadvantage. Make sure youÕre up to the challenge. Should I trade today? If you answered this question honestly every day and traded only on your peak performance days, your annual gross income would probably exceed anything you have ever produced. This is, of course, assuming that you have and are following a good trading plan. The chances are that most of you do not want to ask this question of yourself because you will trade regardless of the answer....

AUTHOR: Adrienne Laris ToghraieDATE: MAY2000SUBJECT: Trading Psychology

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• Speed Resistance Lines by Jayanthi Gopalakrishnan

  ARTICLE SYNOPSIS ...Speed Resistance Lines by Jayanthi Gopalakrishnan Need to determine support and resistance? Try this. It is not unusual to come across situations in which you see a market trending and think it may be too late to get in. To check, you wait for a pullback to determine if that might be a good entry point. But is this pullback a correction or a trend reversal? Determining whether a trend is going to continue or reverse is critical to a trader. Speed resistance lines, which were developed by technician Edson Gould, can help determine whether the market is correcting itself or a trend will rev...

AUTHOR: Jayanthi GopalakrishnanDATE: MAY2000SUBJECT: Basic Techniques

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• Traders' Resources: Exchanges

  ARTICLE SYNOPSIS ...Exchanges With the explosion of exchanges around the world and the increasing poaching of products between exchanges, traders should be aware of all the places where trading opportunities occur. No longer bound by national borders or even physical locations, exchanges can be no more than a box in the corner of an office. Differentiation comes in the form of product, volume, speed, pricing, and investor protections. Look for an exchange with extensive trade documentation so that disputes can be resolved quickly and with quick reference to events. Since more and more alternatives are rapidly...

AUTHOR: Technical Analysis, Inc.DATE: MAY2000SUBJECT: Traders' Resource

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• Traders' Tips

  ARTICLE SYNOPSIS ...Traders' Tips Here is this month's selection of Traders' Tips, contributed by various developers of technical analysis software to help readers more easily implement some of the strategies presented. Internet users will find these and some previous Traders' Tips on our home page at http://www.Traders.com. METASTOCK Here is the code for use in MetaStock 6.52 or higher for the instantaneous trendline and sinewave indicator as described by John Ehlers in ""Adaptive Trends And Oscillators"" in this issue. To implement them, the following formulas must be created in MetaStock's Indicator Builder...

AUTHOR: Technical Analysis, Inc.DATE: MAY2000SUBJECT: Traders' Tips

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• dAaptive Trends And Oscillators by John F.Ehlers

  ARTICLE SYNOPSIS ...Adaptive Trends And Oscillators The Twain Meets Here by John F. Ehlers Can the market be modeled as a combination of a trend mode and a cycle mode? This longtime S&C contributor says yes. Here, he explores two indicators to trade each mode; one is the new, adaptive version of an indicator originally introduced in 1996, and it does well in trading ranges but steps aside in trends. With this new version, you can address both modes of the market without interfering with the other Ñand that Õs something that traders have been waiting for....

AUTHOR: John F. EhlersDATE: MAY2000SUBJECT: Trading Techniques