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• A better way to smooth data by J.S. Payne, Ph.D.

  ARTICLE SYNOPSIS ...A better way to smooth data by J.S. Payne, Ph.D. What every trader desires is indicators that give strong signals with no misleading period-to period jitter, or noise. We all know what noise is to a trader, but let's restate it. Noise is something in your data that happens so quickly you can't take advantage of it. Noise is ""high frequency"" data not indicative of price movement sustained through several time periods. For a day trader, this could be a price spike shown in a one-minute bar chart. For an overnight trader, noise could be a price spike that occurred as a false breakout on a sing...

AUTHOR: J.S. Payne, Ph.D.DATE: OCT1989

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• A case for patterns by Kent Calhoun

  ARTICLE SYNOPSIS ...A case for patterns by Kent Calhoun Probabilities are nothing more than mathematical odds of occurrence. The success of any trading system is a direct function of probability, yet how often is a trader aware when the odds shift strongly in his or her favor, especially after two, three or four consecutive losses?...

AUTHOR: Kent CalhounDATE: OCT1989

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• Are you piloting your trading with safety? by Ana Maria Wilson

  ARTICLE SYNOPSIS ...Are you piloting your trading with safety? by Ana Maria Wilson As a full-time trader of highly speculative stock and commodity options armed with a basically sound system, I'm always looking for ways to strengthen the weakest link in my trading program: the human factor. Specifically, I find challenge in maintaining the discipline to respect a set of trading criteria that I've: ? designed to protect profits and preserve capital, ? arrived at after much research and not a few costly mistakes, and ? laid down clearly in writing to avoid any deviation from a prudent trading path. I regret to...

AUTHOR: Ana Maria WilsonDATE: OCT1989

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• Bi signal indicator by Joseph Barics

  ARTICLE SYNOPSIS ...Bi signal indicator by Joseph Barics To minimize false signals associated with moving average crossings, I began searching for an indicator that would ""suggest first"" and ""confirm or reject later."" During this search I found interesting concepts in three articles published by Stocks & Commodities --""Volume-weighted RSI: Money flow,"" (March 1989), ""Money flow analysis,"" (February 1988) and ""Speeding up the oscillator"" (June 1989)--which I used with modifications to make up this indicator. The heart of this indicator is the Money Flow Index (MFI): ... Over any time period a trader se...

AUTHOR: Joseph BaricsDATE: OCT1989

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• Christmas tree spread - the all-purpose strategy by Jerry Kopf

  ARTICLE SYNOPSIS ...When a football team breaks from the huddle, the players set up at the line of scrimmage in a formation. Usually, it's the I or T formation. As the center snaps the ball, each player knows exactly what to do. There is no guesswork, no deciding at the line. Gaining a first and 10 depends on how well each play is executed. Investors who expect to profit from put and call strategies should apply this strict football discipline to option trading. The most versatile strategy that offers the average retail trader a structured approach to trading options is a type of spread knows as the Christmas tr...

AUTHOR: Jerry KopfDATE: OCT1989

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• Constructing an efficient short-term timing model by Marcus S. Robinson

  ARTICLE SYNOPSIS ...Constructing an efficient short-term timing model by Marcus S. Robinson You can use two sets of ratios to forecast short-and intermediate-term turning points in stocks and commodities . In my trading, I look for these ""change in trend"" (CIT) days using simple ratios rather than elaborate charting. The first set of ratios I use is called the Golden Section ratios and the second set is called the Square of the Range. I'll show you how I use the exact numbers and you can learn more about them through the references listed at the end of the article. The first thing is to determine the last in...

AUTHOR: Marcus S. RobinsonDATE: OCT1989

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• Developing and using pattern recognition by Tom Johnson and Mark Boucher

  ARTICLE SYNOPSIS ...Developing and using pattern recognition by Tom Johnson and Mark Boucher Do you find yourself getting drawn into the game of predicting market trends? Are you awash with newsletters, TV programs and news stories about ""gurus"" calling the markets? Such crystal ball gazing is often idolized by the media. But does sorting bulls from bears help your bottom line? Sure, it makes good cocktail party talk, but we need more. We all know profitable investing depends on the whole trading system--selection, entry, exit and money management. How your account does is the real question, not how the market...

AUTHOR: Tom Johnson and Mark BoucherDATE: OCT1989

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• Do funds distort price movements? by B. Wade Brorsen and Scott H. Irwin

  ARTICLE SYNOPSIS ...Do funds distort price movements? by B. Wade Brorsen and Scott H. Irwin The rapid rise of large-scale technical trading by futures funds has led to a concern that such trading could distort futures price movements. Our previous research shows that quite different technical trading systems do, in fact, signal trades on the same day a significant amount of the time. Whether this similarity is actually translated into price-distorting trading depends on the total size of trading and the particular trading techniques of futures fund trading advisors. We surveyed the 32 largest public futures fun...

AUTHOR: B. Wade Brorsen and Scott H. IrwinDATE: OCT1989

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• Finding patterns in random data by Nelson Weiderman, Ph.D.

  ARTICLE SYNOPSIS ...Finding patterns in random data by Nelson Weiderman, Ph.D. Since the advent of the personal computer, a great deal of time has been devoted to finding tradeable patterns in stock and commodity data. The idea is that patterns found in historical data are likely to repeat themselves, indicating opportunities for successful trading (see ""Trading close-to-close patterns"" in this issue). Unfortunately, not much attention has been given to the statistical significance of historical patterns and whether they are different from patterns observed in random data. The purpose of this article is to po...

AUTHOR: Nelson Weiderman, Ph.D.DATE: OCT1989

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• Key reversal days by Peter Aan

  ARTICLE SYNOPSIS ...Key reversal days by Peter Aan Note the differences in this bearish pattern, however. Pattern A requires only a lower close than the previous day and does not require that the previous day's low be penetrated. Pattern B does require such a penetration, but does not require the close to be below the previous day's low . Pattern C requires a close below the low of the previous day. Of course, a simple chart pattern does not necessarily constitute a complete, viable trading system. What I have done in this study is attempt to isolate occurrences of the pattern at points that might become signif...

AUTHOR: Peter AanDATE: OCT1989

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• Market Facilitation Index Charles F. Wright

  ARTICLE SYNOPSIS ...Market Facilitation Index Charles F. Wright The Market Facilitation Index (MFI) is an objective means of measuring facilitation of trade which, in its simplest terms, means how well the market is working efficiently. An efficient market is very liquid and both short- and long-term investors are actively trading, from the locals in the pit to commercials and speculative traders. A market that is not facilitating trade is generally a one timeframe market, dominated by short-term oriented locals. Volume is low and there is very little activity from the longer term traders and investors. The loc...

AUTHOR: Technical Analysis, Inc.DATE: OCT1989

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• Programming for a global perspective by Charles Milmoe

  ARTICLE SYNOPSIS ...Programming for a global perspective by Charles Milmoe Today's global economy requires a global perspective. In March, when Drs. Pons and Fleischmann's cold fusion announcement directed my attention to palladium, I used the improved capabilities of today's software to enhance my analysis. Palladium, the most undervalued precious metal, has always intrigued me. It is the least expensive metal in the platinum group by one-third. It has the unique distinction of being the only platinum group metal to absorb a large quantity -- 900 times its volume--of hydrogen gas into its crystalline lattice. Th...

AUTHOR: Charles MilmoeDATE: OCT1989

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• SIDEBAR: Numeric weighting

  ARTICLE SYNOPSIS ...Numeric weighting Mathematical formula for calculating numeric weighting data....

AUTHOR: Technical Analysis, Inc.DATE: OCT1989

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• SIDEBAR: System Writer Plus programming

  ARTICLE SYNOPSIS ...System Writer Plus programming The System Writer can be copied and modified to use with other currencies or to graph cross-currency rates....

AUTHOR: Technical Analysis, Inc.DATE: OCT1989

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• Speculative indicators by Arthur Merrill

  ARTICLE SYNOPSIS ...Heavy speculation is a sign of a dangerous market-- one that is riding for a fall. I believe I was the first to suggest, in a 1963 radio interview, that the volume of the American Stock Exchange (AMEX) could be used as a measure of the degree of speculation. The reason is simple. Typical stocks listed on the AMEX tend to be smaller in capitalization and more volatile in price--the type of stock preferred by a speculator who wants fast action. In recent years, the Over-the-Counter exchange has become prominent. Typical OTC stocks are even more volatile than those on the AMEX. It has been suggest...

AUTHOR: Arthur A. Merrill, C.M.T.DATE: OCT1989

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• The best trading indicator- the media by Grant Noble

  ARTICLE SYNOPSIS ...The best trading indicator- the media by Grant Noble Anyone who has studied technical analysis knows that what has been written about it stems from a limited number of approaches. Most of the books, systems and seminars on the market boil down to 12 basic categoriesóoverboug ht/oversold, number theory, retracements, gaps, trends, chart formations, trendlines, cycles, spreads, flow of funds, seasonals and reports (see ""A map for the trading jungle,"" Stocks & Commodities, March 1986). Only a handful of those depend on something other than volume, open interest, high, low, open and clo...

AUTHOR: Grant NobleDATE: OCT1989

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• Trading close-to-close patterns by Toby Crabel

  ARTICLE SYNOPSIS ...Trading close-to-close patterns by Toby Crabel Do the relationships between day-to-day closing prices predict the next day's price moves and, if so, is it possible to isolate these profitable chart patterns and incorporate them as entry signals in a larger trading system? In pursuit of these answers, I have tested all two- through five-day close-to-close patterns in the T-bond futures market from 1978 to 1987 (Figure 1) and discovered the beginnings of some excellent low-risk entry techniques. My tests assumed that trades were entered on the last close of the pattern and exited on the next da...

AUTHOR: Toby CrabelDATE: OCT1989