STOCKS & COMMODITIES magazine. The Traders' Magazine

Article Archive For OCT1995

  • A Mathematical Game Plan by Gene Carey

    ARTICLE SYNOPSIS ...MONEY MANAGEMENT A Mathematical Game Plan by Gene Carey Here's how the elements of a successful trading plan - profits, losses, commissions and slippage - can be used to quantify performance goals. I t's a given: Operating with a game plan is a necessary ingredient in trading success. A trader needs to develop a plan that suits his or her personality and provides an efficient means of operating in the trading framework of choice, be it intraday trading the Standard & Poor's 500, position trading oats, or anything in between. What does it mean to have a game plan? What is a game plan, ho...

  • Andrew Addison of the Addison Report by Thom Hartle

    ARTICLE SYNOPSIS ...INTERVIEW Simplicity for Simplicity's Sake: Andrew Addison Of The Addison Report by Thom Hartle In this increasingly complicated world, it's a comfort to hear that indicators don't have to be complicated to work well, as Andrew Addison of The Addison Report will tell you. Addison, who edits and publishes the newsletter, which is aimed at individual investors and stockbrokers, uses his law-school training to boil down what's important and eliminate the peripherals - a handy thing for those who subscribe to the Report, as well as The Institutional View, his publication for professional fund man...

  • Identifying Powerful Breakouts Early by Tushar S. Chande

    ARTICLE SYNOPSIS ...TRADING TECHNIQUES Identifying Powerful Breakouts Early by Tushar S. Chande High-powered breakouts occur with a strong surge of momentum in the direction of the price change. Such breakouts may be short-lived, however, occurring toward the latter stages of a long trend. Sometimes, such breakouts signal the end of one trend and the beginning of another. In either case, identifying such market action early is likely to be highly profitable. Here, Contributing Editor Tushar Chande shows how you can use his original indicators, VIDYA and the dynamic momentum index, to find big market moves. Ta...

  • OEX Options Expiration Trading Patterns by David K. Moy

    ARTICLE SYNOPSIS ...STATISTICS Oex Options Expiration Trading Patterns by David K. Moy There's a statistically significant bias in the weekly trading of the Standard & Poor's 100 index, in that the week that options expire is noticeably stronger than the week that follows. Statistics that check for significantly different means and ratios can help options traders detect these patterns. Not only that, options expiration patterns can also be useful neural network inputs. Can the tail wag the dog? It can, if the tail is the expiration of Standard & Poor's 100 index options and the dog is the stock market. These...

  • Options Spread Psychology by Steven P. Schinke, Ph.D

    ARTICLE SYNOPSIS ...TRADING PSYCHOLOGY Options Spread Psychology by Steven P. Schinke, Ph.D. Choosing an options spread strategy depends in part on individual psychology about market conditions. By understanding how emotions affect behavior, traders can add precision to their options spread positions. Options spread positions are trades that involve the simultaneous purchase and sale of two or more options to exploit differences in price change between them. By initiating such a position, the trader can forecast how the market will move. Implicit in that forecast is the trader's confidence about the directi...

  • Put-Call Ratios by Lawrence G. McMillan

    ARTICLE SYNOPSIS ...DERIVATIVES Put-Call Ratios by Lawrence G. McMillan This measure of market sentiment uses options trading volume to measure crowd psychology. Here's one use of the ratio. The ratio of put option volume to call option volume is the major sentiment indicator for listed options. This ratio, called the put-call ratio, is usually computed daily and moving averages are kept. The resulting indicator is a contrary one: when a great many - too many - people are buying calls, for example, then there are a great many -perhaps too many - bulls, and the interpretation as a contrary indicator would be t...

  • SIDEBAR: Expectations and Spread Positions

    ARTICLE SYNOPSIS ...EXPECTATIONS AND SPREAD POSITIONS For bull market forecasts, graphs in the top half of the article's Figure 3 portray two spread positions. In these positions, the leftmost line on each graph depicts maximum loss as the premium paid for the call debit spread and the difference in strike prices less premium received for the put credit spread. If the price of the underlying issue increases, the loss line first assumes an upward movement as it transverses diagonally to the right and across the zero or breakeven line. The breakeven point for a two-contract call debit spread position is the sum of...

  • SIDEBAR: Technicals

    ARTICLE SYNOPSIS ...TECHNICALS Z test for significance of difference between two proportions Assume first CTA has 8 winning trades out of 15 Assume second CTA has 41 winning trades out of 113 Test for statistical significance in difference of ratios ......

  • SIDEBAR: Variable-length moving average

    ARTICLE SYNOPSIS ...VARIABLE-LENGTH MOVING AVERAGE by Thom Hartle Tushar Chande's variable-length moving average (VIDYA) uses a measure of volatility to modify the smoothing constant used in an exponential moving average (EMA). In the article, Chande uses the Chande momentum oscillator (CMO) to measure volatility. The CMO is based on the popular indicator relative strength indicator (RSI). The only difference between the two oscillators is the ratio has an extra term (- Sd ) in the numerator of the formula: ......

  • The End Point Moving Average by Patrick E. Lafferty

    ARTICLE SYNOPSIS ...INDICATORS The End Point Moving Average by Patrick E. Lafferty Moving averages have been used for decades to smooth out the noise in the prices of tradables. Here's an entry in the category, one that may provide a more accurate representation of market trends and turn out to be a more sensitive indicator of trend changes. A century ago, Charles Henry Dow observed that trends and noise were major components of stock market price movements. Recent research into the fractal nature of markets has confirmed those observations by demonstrating that economic and capital market time series are bi...

  • Traders' Tips by Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...Traders' Tips by Technical Analysis, Inc. Code for EQUIS METASTOCK is given for Steven Schinke's article ""Options spread psychology."" In it, he demonstrated the advantages of trading option spreads and discussed how a trader's emotions and expectations affect which option spread he or she uses for a particular market opportunity. In addition, code for the variable moving average (VIDYA) by Tushar Chande is given for SmarTrader, Technifilter Plus, Behold!, and TradeStation....

  • V13:10 Letters to S&C

    ARTICLE SYNOPSIS ...LETTERS TO S&C OVERBOUGHT/OVERSOLD LIMITS Editor, I'm new to the markets, technical analysis and SuperCharts. I'm constantly agonizing over where to set my overbought and oversold limits. What I would like to do is shift them up in a clearly definable uptrend and shift them down in a clearly definable downtrend. Presumably, then, an indicator such as stochastics wouldn't take me out of the market prematurely. Is my logic sound or dangerous? Should I shift or spread my overbought/oversold levels? For example, subsequent to a long position, should I shift my oversold 25 and overbought 75 lev...

  • Whipsaws, Linear Trends and Simple Moving Averages by Robert Wayman

    ARTICLE SYNOPSIS ...TRADING TECHNIQUES Whipsaws, Linear Trends And Simple Moving Averages by Robert Wayman How does whipsaw magnitude affect a simple moving average system? Here's a common solution for the problems of the SMA. Previously, we looked at cycles and found that there was a noise level-based spectral cutoff point, above which were tradable cycles. We also found that selecting a cycle to trade established the averaging period we need to use in any simple moving average (SMA) crossover trading system. This time, let's look at whipsaws and how whipsaw magnitude actually affects the profitability of ...







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 © 1982–2017 Technical Analysis, Inc. All rights reserved. Read our disclaimer & privacy statement.