STOCKS & COMMODITIES magazine. The Traders' Magazine

Article Archive For NOV1993

  • A New Exit Strategy by Adam White

    ARTICLE SYNOPSIS ...A New Exit Strategy by Adam White Most traders search for entry signals for trading systems and use a reversal of the entry signal for exits. Sounds simple enough, right? But what about developing exit strategies separate from your entry method? Here, technical analyst Adam White discusses an exit signal called the CHL/LLF based on two types of indicators for exiting trades. To be truly effective, a trading strategy requires that the trader in question hold his or her positions whenever the risk/reward outlook of the market appears to be sufficiently attractive to warrant it. Typically, this...

  • Comparing Three Indicators by J.R. Davis

    ARTICLE SYNOPSIS ...Comparing Three Indicators by J.R. Davis Three trend-following indicators swing charts, random walks and moving averages are compared as separate mechanical trading methods. Although the markets that we trade are (arguably) fractal in nature and so not subject to close approximation by linear systems, purely mechanical approaches do have advantages over more individual, human approaches. Mechanical systems never have a bad day due to a head cold, for example, nor do they wait for more evidence before entering or exiting a position. At the very least, mechanical systems should provide useful ...

  • Equivalent Option Strategies by Lawrence G. McMillan

    ARTICLE SYNOPSIS ...Equivalent Option Strategies by Lawrence G. McMillan Stock option traders and futures option traders may think they're already outsmarting stock and futures traders by trading options against their stock or futures positions, but Larry McMillan, author of Options As a Strategic Investment, suggests you take another look: Substituting options for a position in the underlying instrument may be the more efficient alternative. This article presents a simple way to compare alternative options strategies. See what you could be doing. One of the advantages of options is that they are versatile. Opt...

  • Letters To S&C by Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...Letters To S&C by Technical Analysis, Inc....

  • SIDEBAR: BUILDING A RANDOM WALK INDEX by Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...SIDEBAR: BUILDING A RANDOM WALK INDEX by Technical Analysis, Inc. Instructions on creating a random walk index....

  • SIDEBAR: Building swing charts by Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...SIDEBAR: Building swing charts by Technical Analysis, Inc. How to build a swing chart, with example....

  • SIDEBAR: RANDOM WALK INDEX SPREADSHEET by Thom Hartle, Editor

    ARTICLE SYNOPSIS ...SIDEBAR: RANDOM WALK INDEX SPREADSHEET by Thom Hartle, Editor Sidebar Figure 1 is a bar chart with 10 days of simulated data; today's current high and low are plotted as if the market is still trading. The random walk index of the lows can measure if today's low price indicates that the market is trending or just in a random trading range. Sidebar Figure 2 is an example of setting up an Excel spreadsheet for creating the random walk index for lows. This spreadsheet is set up with the most current day's data in the bottom row. Remember that the denominator for the index uses the average range ...

  • SIDEBAR: SIMPLE RISK CONTROL by Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...SIDEBAR: SIMPLE RISK CONTROL by Technical Analysis, Inc. Evaluating your tolerance for risk and determining the size of a purchase. Assume you have $200,000 for your trading portfolio and a trading strategy that generates buy and sell signals. You have a buy signal at $400 and a stop-loss price of $390. The following guidelines will determine the number of contracts......

  • SIDEBAR: THE CHL/LLF METHOD SPREADSHEET by Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...THE CHL/LLF METHOD SPREADSHEET by Technical Analysis, Inc. Recall that the ""concurrent highest low"" filter (CHL) is a condition set up for the ""largest low to low fall"" trigger (LLF) and that the two are true/false situations. Therefore, the CHL filter can be presented with either a 1 for true or a zero for false readings. The LLF indicator can be presented as a 2 for true and a zero for false. In this manner, both the CHL and the LLF can be plotted simultaneously as in sidebar Figure 1, December Treasury bonds, 5/13/93 to 9/13/93. The sell signal is used as an exit from a long position t...

  • The Parabolic Trading System by Thom Hartle

    ARTICLE SYNOPSIS ...The Parabolic Trading System by Thom Hartle Traders are always searching for methods with which to manage risk through the use of stop-loss orders. One method that has been proposed for determining stops is by using a mechanical formula based on the parabolic indicator, also known as the stop and reverse (SAR). How does it work? The parabolic time/price system was introduced by J. Welles Wilder in New Concepts in Technical Trading Systems. The trading concept itself is an automatic reversal system, in which the system always has a position that is either long the market or short the market....

  • The Traders' Psyche: Tom Basso by Thom Hartle

    ARTICLE SYNOPSIS ...The Traders' Psyche: Tom Basso by Thom Hartle Why do traders trade? Is it for the potential profit? Is for the love of the hunt? Or is it simply for the challenge? Jack Schwager, who interviewed Tom Basso, president of Trendstat, for his book The New Market Wizards, dubbed the trader ""Mr. Serenity"" for his approach to trading, managing to be profitable while maintaining peace of mind. Basso, who has $65 million under management, has a trading philosophy that more individuals should embrace: simply, enjoy what you do. Stocks & Commodities interviewed Basso on topics ranging from risk managem...

  • Traders' Tips by Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...Traders' Tips by Technical Analysis, Inc. - RELATIVE MOMENTUM INDEX This is the code in EasyLanguage for relative momentum index (RMI) by Roger Altman, from ""Relative momentum index: Modifying RSI,"" from STOCKS & COMMODITIES, February 1993. The RMI is a variation of the relative strength index. The relative strength index begins its calculation using the one-day difference in price. The RMI uses a user-selected difference between closing price periods -- for example, the difference between today's price and the closing price as of five days ago. Type this in as a user function and then plot ...

  • Training Neural Networks by Lou Mendelsohn

    ARTICLE SYNOPSIS ...Training Neural Networks by Lou Mendelsohn The application of neural networks to financial forecasting has quickly become a hot topic in today's globalized trading environment. With extensive technical, intermarket and fundamental data available for analysis, neural networks are well suited to pattern recognition and quantifying relationships between interrelated markets. However, neural networks are not easy to develop. Here, S&C contributor Lou Mendelsohn examines the best ways to train and test neural networks for maximum performance. Successfully developing neural networks to implement s...

  • Using Technical Performance Measures by Sidney I. Gravitz

    ARTICLE SYNOPSIS ...Using Technical Performance Measures by Sidney I. Gravitz Today's spreadsheets offer investors the ability to develop customized economic and investment monitors. Here's one take on the use of a spreadsheet for managing money. I f you invest, you may find that success comes about from committing funds in accord with favorable odds. I use widely available technical performance measurements (TPMS) to track the various phases of the economic and market cycles, along with moving averages to aid in specific buy and sell decisions. My approach is suitable for investment amateurs with a personal co...








S&C Subscription/Renewal




Request Information From Our Sponsors 

DEPARTMENTS: Advertising | Editorial | Circulation | Contact Us | BY PHONE: (206) 938-0570

PTSK — The Professional Traders' Starter Kit
Home — S&C Magazine | Working Money Magazine | Traders.com Advantage | Online Store | Traders’ Resource
Add a Product to Traders’ Resource | Message Boards | Subscribe/Renew | Free Trial Issue | Article Code | Search

Copyright © 1982–2018 Technical Analysis, Inc. All rights reserved. Read our disclaimer & privacy statement.