Article Archive For
NOV2003
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Books For Traders by Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Books For Traders by Technical Analysis, Inc.
? An Introduction To Technical Analysis
? Candlesticks, Fibonacci, And Chart Pattern
Trading Tools
? Hidden Financial Risk: Understanding Off-
Balance Sheet Accounting
? High Performance Options Trading: Option
Volatility & Pricing Strategies
? Investment Visionaries: Lessons In Creating
Wealth From The World's Greatest
Risk Takers
? Option Trading Indicators And Patterns
For Increasing Profits
? Trading In The Stillness...
AUTHOR: Technical Analysis, Inc.DATE: NOV2003SUBJECT: Books For Traders
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Bullish Consensus by David Penn
ARTICLE SYNOPSIS ...Bullish Consensus by David Penn
This enduring sentiment indicator was designed specifically
for the futures markets.
"Paradox is one of the deepest and most important secrets
of life, and ? irony is the punishment for not having
understood that."
--James Dines, How Investors Can Make Money
Using Mass Psychology
During times of confusion in the markets, studies
of market sentiment tend to become popular.
This is probably unfortunate. It is the
absence of a clear, distinct trend that forces
uncertain market players to look away from
their indicators and trendlines, their oscillators,
and their...
AUTHOR: David PennDATE: NOV2003SUBJECT: Basic Techniques
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Casino Trading by Phil Abel
ARTICLE SYNOPSIS ...Casino Trading by Phil Abel
The Monte Carlo simulation, a statistical technique used to
model the expected outcomes of a random series of events
such as a casino game, also has valuable applications in the
evaluation of a systematic trading program.
When you think of a successful trader,
what comes to mind? Chances are you
conjure up the image of a financial sage
like Warren Buffett or George Soros,
someone who can seemingly gaze into a
crystal ball and pick out a winner. Or maybe you picture a commodity pit trader, hardened and
wizened from days spent in battle on the exchange floor.
Now w...
AUTHOR: Phil AbelDATE: NOV2003SUBJECT: System Design
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Charting The Markets by David Penn
ARTICLE SYNOPSIS ...Charting The Markets by David Penn
MOMENTUM
Momentum? The Big Mo? Is there anything
in the physical world more exciting
than momentum? If you're going slowly and
you gain momentum, you're going faster. If
you're already going fast and you gain momentum,
watch out! Speed may be king, but
momentum is what propels unknown political
candidates into front-runner status, what
makes a team ending the regular season on a
10-game winning streak a real terror when
the playoffs start. If it is true, as Madison
Avenue would have it, that things go better
with Coke, then things go great with Mo....
AUTHOR: David PennDATE: NOV2003SUBJECT: Charting The Market
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Does The Market Have A Personality? by James Kellndorfer
ARTICLE SYNOPSIS ...Does The Market Have A Personality? by James Kellndorfer
Here's a look at how you can convert the NYSE's tick
into a sentiment indicator using statistical analysis.
Along with the other US stock exchanges,
the New York Stock Exchange (NYSE)
provides investors with an internal statistic
of the stock market called the
tick. This statistic summarizes the number of stocks that are increasing in price versus those
that are decreasing in price. But what does this really
mean and how can you use this information in a
meaningful way?
THE TICK
Generally, many view the tick as the amount of
buying o...
AUTHOR: James KellndorferDATE: NOV2003SUBJECT: Statistics
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Explore Your Options by Tom Gentile
ARTICLE SYNOPSIS ...Explore Your Options by Tom Gentile
VOLATILITY
How do I figure out which strategies
are best to implement when the volatility
of the market changes so drastically
from one season to the next?
Fortunately for option traders, volatility
is your friend, provided you understand
just what strategies to use.
Though the duration of each trend can be
difficult to predict, periods of high or low
volatility can be assessed by looking at a
chart of the VIX (the volatility index from
the Chicago Board Options Exchange) at
any given time on most charting programs.
The VIX has traded in an average
range ...
AUTHOR: Tom GentileDATE: NOV2003SUBJECT: Explore Your Options
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Finding Out About Fractals by Clem Chambers
ARTICLE SYNOPSIS ...Finding Out About Fractals by Clem Chambers
How are fractals related to the financial markets?
Fractals hold a powerful mystique, but few
truly understand what a fractal is and how it
relates to the market. To most, a fractal is a
fantastically beautiful graph with curly edges
that seems to have a hypnotic grip on the
viewer. Expressed as images, fractals have an
almost-magical charm, while the word itself, coined and
popularized by scientist and mathematician Benoit
Mandelbrot, has taken on an almost incantation-like property, as though it were a synonym for "abracadabra."
You don't have to...
AUTHOR: Clem ChambersDATE: NOV2003SUBJECT: Chaos Theory
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Interview: Trading Futures With Charles LeBeau by Jayanthi Gopalakrishnan
ARTICLE SYNOPSIS ...Interview: Trading Futures With Charles LeBeau by Jayanthi Gopalakrishnan
Charles LeBeau, who has been trading stocks and futures for more
than 40 years (20 years of which was with E.F. Hutton & Co.), is a
noted author, lecturer, and system developer and the co-author of
Technical Analysis Of The Futures Markets, which is considered a
classic of technical analysis. Currently, LeBeau is director of trading
for Tan LeBeau LLC (www.tanlebeau.com), where he supervises the
trading for a small hedge fund. He also operates an educational
website for stock and futures traders at www.traderclub.com. S...
AUTHOR: Jayanthi GopalakrishnanDATE: NOV2003SUBJECT: Interview
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Letters To S&C by Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Letters To S&C by Technical Analysis, Inc.
CODE AND TRADERS' TIPS
Editor,
I read S&C every month. It's a good
magazine with good content and presentation.
The only problem I run into is with
the Traders' Tips section of your
website. When you include the code for,
say, TradeStation or MetaStock in an
article, the problem is you don't post it
to the Traders' Tips section at your
website -- the tip simply refers us back
to the article.
...continuded...
AUTHOR: Technical Analysis, Inc.DATE: NOV2003SUBJECT: Letters To S&C
Opening Position by Jayanthi Gopalakrishnan
AUTHOR: Jayanthi GopalakrishnanDATE: NOV2003SUBJECT: Opening Position
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Q&A by Don Bright
ARTICLE SYNOPSIS ...Q&A by Don Bright
TRADING AT THE CLOSE
My interest was piqued after reading
your response in the July 2003 S&C
detailing the REDIPlus order imbalances
and how they can be used to trade at the
close. Could you please go into a little
more detail on how that works? How
can I take advantage of those orders,
since they are market-on-close/limiton-
close? Aren't these orders executed
too late for a nonprofessional trader to
utilize for a quick scalpÝ? Thanks for
your help....
AUTHOR: Don BrightDATE: NOV2003SUBJECT: Q&A
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The CCI Trade by Thomas Bulkowski
ARTICLE SYNOPSIS ...The CCI Trade by Thomas Bulkowski
It's not when you buy but when you sell
that counts. These two trades used the
commodity channel index as a sell signal.
Many traders will tell
you it's easy to buy a
stock but difficult to
sell. When you sell
determines whether
you make a profit or a loss. A buy and hold strategy in a
rising market is a winning strategy
-- until the trend changes. After
that, holding on too long leads to
reduced profits and even losses. So
when do you sell?
The easy answer is that you
should sell when prices reach their
maximum, but determining that
point takes skill and luc...
AUTHOR: Thomas BulkowskiDATE: NOV2003
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The Zigzag Trend Indicator by Spyros Raftopoulos
ARTICLE SYNOPSIS ...The Zigzag Trend Indicator by Spyros Raftopoulos
Zigzag is a powerful noise filter, but it's not without its problems. Here's a technique that incorporates the power of zigzag into a more valid and tradable indicator.
The popularity and usefulness of the zigzag
indicator can be ascribed to three important
characteristics. It is an effective noise filter;
it graphically presents the main trend with
great clarity; and it is still a very low-level
indicator, in that its final interpretation of price is not filtered through one or more algorithms, but is
based upon the price itself.
While thes...
AUTHOR: Spyros RaftopoulosDATE: NOV2003SUBJECT: Indicators
AUTHOR: Amy WuDATE: NOV2003SUBJECT: Novice Traders' Notebook
Traders' Resources: Data Services by Technical Analysis, Inc.
AUTHOR: Technical Analysis, Inc.DATE: NOV2003SUBJECT: Traders' Resource
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Traders' Tips by Technical Analysis, Inc.
ARTICLE SYNOPSIS ...Traders' Tips by Technical Analysis, Inc.
? TRADESTATION: ZIGZAG TREND INDICATOR
Spyros Raftopoulos's article in this issue, "The Zigzag Trend
Indicator," describes a method of deducing trend from reversal
filters. In earlier articles, Raftopoulos described methods for
charting zigzags, but his zigzag validity indicator only
displayed the "locked" high and low, not the moment when
the retracement criteria were met. Raftopoulos's new zigzag
trend indicator, described in this issue, can now display this
previously undisplayed information on the chart....
AUTHOR: Technical Analysis, Inc.DATE: NOV2003SUBJECT: Traders' Tips
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Trading With Open Interest by John Boere
ARTICLE SYNOPSIS ...Trading With Open Interest by John Boere
Analyzing the open interest of equities
can provide insight into the direction of
the market. Find out why the expiration
price is being manipulated, how it can
be calculated, and how you can trade it.
Open interest is the number
of open contracts
of a given option series.
An open contract
is one that is not exercised,
closed, or expired.
One unit of open interest represents
two parties: a buyer (long) and a seller
(short). Open interest increases when a
buyer opens a long position and a seller
opens a short position at the same time.
Open interest de...
AUTHOR: John BoereDATE: NOV2003SUBJECT: Options
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Websites For Traders: Trade-Ideas.com by Jayanthi Gopalakrishnan
ARTICLE SYNOPSIS ...Websites For Traders: Trade-Ideas.com by Jayanthi Gopalakrishnan
TRADE-IDEAS.COM
Looking for trading ideas? Maybe
www.Trade-Ideas.com can help. A
look at the updating intraday chart on
the homepage and the window displaying
alerts will give you a good
idea of what this site features (Figure
1). Whenever a pattern forms on the
chart, the alert window displays the
pattern and gives a short description.
This alert window is the most popular
feature on the site....
AUTHOR: Jayanthi GopalakrishnanDATE: NOV2003SUBJECT: Websites For Traders
Working Money: Are You Trading On Borrowed Time? by Matt Blackman
AUTHOR: Traders NotebookDATE: NOV2003
Working Money: Options Calculator by Dennis D. Peterson
AUTHOR: Dennis D. PetersonDATE: NOV2003SUBJECT: Novice Traders' Notebook
WorkingMoney: Insiders by David Penn
AUTHOR: David PennDATE: NOV2003SUBJECT: Focus On
WorkingMoney: Swing Trading With Trendlines by Phillip S. Duke, Ph.D.
AUTHOR: Phillip S. Duke, Ph.D.DATE: NOV2003SUBJECT: The Chartist