STOCKS & COMMODITIES magazine. The Traders' Magazine

Article Archive For OCT1986

  • Agricultural Options by Dr. Alexander Elder

    ARTICLE SYNOPSIS ...Agricultural Options by Dr. Alexander Elder Agricultural Options George Angell American Management Associates 135 West 50th St. New York, NY 10020 230 pages, $22.95 hardcover It used to be that each new book by George Angell could be counted on to provide fresh insights into the workings of the futures markets and give a few good trading ideas, Agricultural Options, however, is relatively disappointing for anyone who has read Angell's earlier books. This is the author's first major foray into the new and growing field of agricultural options. Buying agricultural options allows market partic...

  • Considering risk by James Covington Bryce

    ARTICLE SYNOPSIS ...Considering risk by James Covington Bryce Risk and reward appear to be a double-edged sword. Most professionals advocate that you calculate them both before entering a position. This is normally done in terms of a ratio where first you determine the difference between your entry price and your stop loss--this is your risk. Then you determine the difference between your entry point and your expected profit. This is your reward. A risk-to-reward ratio of 1-to-3 is normally considered the minimum you should accept and ratios of 1-to-5 or higher are even better. Let's look at this idea a little m...

  • Daily price and volume study: trading windows by Frank Tarkany

    ARTICLE SYNOPSIS ...Daily price and volume study: trading windows by Frank Tarkany This article investigates day-to-day price changes of the Dow Jones Industrial Averages (DJIA) and New York Stock Exchange (NYSE) total volume over a 85 year period to see whether the changes are random and/or serial independent, as is generally believed. Using a chi-square (x2) goodness of fit statistical analysis of daily DJIA price and NYSE volume changes, I found statistically significant trading windows in both series. The NYSE volume is serially time dependent while the DJIA daily closing price is both non-random and serial...

In This Issue by John Sweeney

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

    ARTICLE SYNOPSIS ...Letters to S&C by Technical Analysis, Inc. More on the Computer-Assisted Investment Handbook Editor, Thanks for the Computer-Assisted Investment Handbook review in your June issue. However, there are some factual errors that need correction: 1. It was published in 1983 (not 1982) 2. The Foreign Exchange programs are not ""genuinely trivial"" (see pages 134-145 of the handbook). The use of these programs could have successfully forecast the trends in foreign exchange rates since generalized floating in March 1973. (Also see Richard & Schumpeter, et.al.) 3. It is not true that ""no evidence i...

  • Part 1 Assessing risk on Wall Street A philosophy of investing by Thomas A. Rorro

    ARTICLE SYNOPSIS ...part 1 Assessing risk on Wall Street A philosophy of investing by Thomas A. Rorro The goal of investing is to make a profit. To achieve this goal, the investor places his money at risk--with the hope of increasing his wealth. Whether by buying real estate, depositing funds in a savings account, or buying shares of stock, the investor wants to protect his current assets and make a profit. Investors invest with an intuitive knowledge of risk. But only the banking community has been able to quantify both the expected profit and the risk. Most banks provide a specified rate of return in a risk-fr...

  • Part 2 Succeeding with options by Leonard Yates

    ARTICLE SYNOPSIS ...part 2 Succeeding with options by Leonard Yates As promised in the first half of this article, here are three safe and reliable methods for succeeding in options without forecasting the underlying security. Method #1: Temporary mispricings Options frequently trade for as much as a one-half point difference from theoretical values for short periods. In such times of temporary mispricings, you should buy undervalued options and/or sell overvalued options. Strategies can be found that minimize your exposure to price movements in the underlying asset if desired, while waiting for option prices ...

  • SIDEBAR: Ode to the Sow or Bellies Up by Wilbur Corella

    ARTICLE SYNOPSIS ...SIDEBAR: Ode to the Sow or Bellies Up by Wilbur Corella...

  • SIDEBAR: The basics by Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...SIDEBAR: The basics by Technical Analysis, Inc. There is a special vocabulary of options trading that must be mastered in order to understand the uses of options and communicate with brokers and other option traders. An option is a legal contract that gives the holder the right to buy or sell a specified amount of the underlying asset at a fixed or determinable price (called the exercise or strike price) upon exercise of the option. Options that can be exercised at any time before they expire are sometimes called American options. They are to be distinguished from European options, which can...

  • Sweeney Agonistes by Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...Sweeney Agonistes by Technical Analysis, Inc. KNOW YOUR TIME-HORIZONS My Club 3000 buddies and subscribers often ask how I go about trading. The truth is I use only moving averages and RSI. These are both ""optimized"" with time-horizons approximating the cycle length which I literally eye-balled on daily and weekly charts drawn on my Commodore 64 with QuickTrieve software! Believe me, none of this impresses anyone else. Yet my back-testing and actual trading is consistently profitable. That simple basis is continually being refined these days and that work has convinced me that far more wo...

  • The relative strength quality factor by Donald Jones and Tod Stromquist

    ARTICLE SYNOPSIS ...The relative strength quality factor by Donald Jones and Tod Stromquist The relative strength index (RSI), as popularized by J. Welles Wilder in his book and later by a chart service, is possibly the most widely used technical indicator in futures trading. An oscillator, the RSI can take values from zero to l00, with 50 being the neutral, or most expected value. As suggested by Wilder and generally used, an RSI of 70 or more indicates an overbought (OB) market; 30 or less is oversold (OS). Consequently, the real action, i.e., the OB/OS areas, tends to be crammed into limited regions. Experien...

  • Wyckoff method of trading stocks part 6 Figure charts by Jack K Hutson

    ARTICLE SYNOPSIS ...Wyckoff method of trading stocks part 6 Figure charts by Jack K Hutson Thus far in this series we've concentrated on the price volume information supplied by vertical charts, which are the mainstay of Richard D. Wyckoff's technical analysis. But as an adjunct to vertical charts, most Wyckoff analysts also employ figure charts, which record only price movement. Figure charting allows the analyst to quickly see where and how strongly supply or support is building and to actually calculate the distance a price should rise or fall. Therefore with a vertical chart pointing out direction, the figu...








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