STOCKS & COMMODITIES magazine. The Traders' Magazine

Article Archive For OCT2004

  • A Tale Of Two Indicators by Andrew Tomlinson

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 22:10 (22-27): A Tale Of Two Indicators by Andrew Tomlinson What do you do when two apparently similar indicators give opposite signals? On July 6, 2004, I was feeling pretty pleased with myself. The stock market was falling and my short positions were making money for the first time in a couple of months (hey, stay on one side of the market for long enough and you're sure to be right sooner or later). One of my short positions, Micromuse (MUSE), gapped down 20% at the open on a revised outlook. When I checked the market later in the day (I trade from home, so the fir...

  • At The Close by Jayanthi Gopalakrishnan

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 22:10 (130, 118): At The Close by Jayanthi Gopalakrishnan How did the markets open today? For the last four months, I've been watching market movements in the e-minis. After all, they are a popular trading instrument, and one that provides the opportunity to make a few points in a trading day. This, along with my strong belief that you should only trade a market that you understand, piqued my interest in paper-trading them. Let me walk you through a trading day. I've set a few guidelines I intend to follow. The first thing I look at before trading anything is the dail...

  • Books For Traders by Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 22:10 (117): Books For Traders by Technical Analysis, Inc. Analysing & Interpreting The Yield Curve (359 pages, $79.95 hardcover, 2004, ISBN 0470821256) by Moorad Choudhry, published by John Wiley & Sons. The yield curve is the defining indicator of the global debt capital markets, and understanding it is vital to the smooth running of the economy. All participants in the market, whether they are issuers of capital, investors, or banking intermediaries, have a need to estimate, interpret, and understand the yield curve. Fund managers who accurately predict the shape a...

  • Breakeven Analysis For Daytrading by Roberto Chahin

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 22:10 (42-46): Breakeven Analysis For Daytrading by Roberto Chahin When you're creating a business plan, you've got to make sure you can break even, or better yet, make a profit. That goes for the business of daytrading, too. Serious daytrading is a full-time business; it is not something that can be taken lightly. It is especially dangerous to try to daytrade while you are working at another job. Think about it: You're in between meetings or phone calls, and you're simultaneously trying to follow a market depth window or a time & sales screen. Your job will cause you...

  • Charting The Market by David Penn

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 22:10 (58-61): Charting The Market by David Penn Writing in Commodities Magazine back in 1980, technical analyst Donald Lambert observed that: Many commodities exhibit some type of cyclical or seasonal price pattern. But the commodity trade still faces the problem of detecting when the regular price movements begin and end because climate and other real world conditions may affect their timing. To be useful in cyclical markets, an index must examine current prices in light of past prices but must not allow data from the distant past to confuse present patterns ? ...

  • Explore Your Options by Tom Gentile

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 22:10 (56): Explore Your Options by Tom Gentile Got a question about options? Tom Gentile is the chief options strategist at Optionetics (www.optionetics.com), an education and publishing firm dedicated to teaching investors how to minimize their risk while maximizing profits using options. To submit a question, post it to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C. INTEREST RATE INDEXES The five-year note index (FVX), the 10-year note index (TNX), and the 30-year bond in...

  • Fibonacci And Gann Projections by Dennis D. Peterson

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 22:10 (28-34): Fibonacci And Gann Projections by Dennis D. Peterson It's time to have a little fun and see what a day-at-a-time replay can reveal in terms of future projections. In 2002, I wrote an article in Working Money about using Fibonacci projections. Since then, the charting techniques in eSignal have improved considerably and with the generous help of eSignal's Jason Keck, I decided to revisit the topic. Along the way, I thought, why not throw in couple of other goodies, like Gann's square of nine and a retracement readout? The Fibonacci projections used here ...

  • Intermarket Review by David Penn

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 22:10 (72-73): Intermarket Review by David Penn HOLDRS, or Holding Company Depositary Receipts, are exchange-traded products created by Merrill Lynch & Co. that allow individual investors and institutions to own a basket of common stocks from companies within a specific industry or market sector. Unlike other exchange-traded products, HOLDRS investors have ownership rights to the underlying stocks in a given HOLDR should they choose to exercise them (a process called "canceling"). The component stocks of individual HOLDRS are selected based on market capitalization, li...

  • Interview: Leo Zamansky Of RINA Systems by Jayanthi Gopalakrishnan

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 22:10 (62-67): Interview: Leo Zamansky Of RINA Systems by Jayanthi Gopalakrishnan RINA Systems founder Leo Zamansky has more than 20 years of experience in managing large software development projects, creating modeling and optimization technology. He is a professional developer with experience in applying mathematics and computer expertise to a range of applications. Much of his work has been in the field of quantitative analysis and operations research, and further, he has published a book and numerous articles in the fields of operations research, discrete optimizat...

  • It Ain't Over Till. . . Well, You Know by Adrienne Laris Toghraie

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 22:10 (78-80): It Ain't Over Till. . . Well, You Know by Adrienne Laris Toghraie Are you looking for a way to revive your passion for trading after a long, hot, summer? A visit to the ballpark before baseball season is over may do the trick. Baseball may be the greatest of all summer pastimes, and it may also be the perfect metaphor for trading. If you want to have a long and successful trading career, you can learn valuable lessons by following baseball. Here are some lessons I've learned about the game that can help you become a better trader. EVERY MOVE COUNTS Li...

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

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 22:10 (10-15): Letters To S&C by Technical Analysis, Inc. The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine would not exist. Address your correspondence to: Editor, STOCKS & COMMODITIES, 4757 California Ave. SW, Seattle, WA 98116-4499, or email to Editor@Traders....

  • Maximizing The Mini by Mike Paulenoff

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 22:10 (16-20): Maximizing The Mini by Mike Paulenoff Here's a look at a successful short-term trade on the e-mini contract. One morning in June, with the Standard & Poor's 500 riding a nearly four week uptrend, a friend of mine decided to bet the market would decline. Rather than short the cash index through funds or exchangetraded funds (ETFs) that track the S&P 500, Tom decided to trade the index futures, where he has far more margin power and where nearly round-the-clock trading enables him to buy before the cash market opens. His early morning price on the S&P fu...

Opening Position by Jayanthi Gopalakrishnan

  • Q&A by Don Bright

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 22:10 (47): Q&A by Don Bright SINCE YOU ASKED Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C. ARBITRAGE AND VWAP For arbitrage (as with Bank One and JPMorgan Chase), you have said to use the "ratio" and "spread number" as a reference. What is the ratio? Is th...

  • Risk/Reward In Trading by Don Bright

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 22:10 (52-55): Risk/Reward In Trading by Don Bright Every investor and trader has been taught to be fearful of risk in the marketplace. That makes sense, right? You have to be cautious with your money, right? You have to limit losses, right? Well, maybe not. As in most other things, risk in the marketplace comes with a counterpart: reward. These rewards can be financial, physical, mental, or even emotional. We all risk so many things every day, from the moment we get out of bed in the morning, head to work in traffic, engage our peers in conversation, and otherwise ne...

  • Sidebar: Fitting a trendline by least squares by Arthur A. Merrill

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 22:10 (86): Sidebar: Fitting a trendline by least squares by Arthur A. Merrill Trendlines usually are drawn through tops or bottoms. They also are drawn through the center of prices by a lagged moving average or by eye. A straight line through the center of a price channel, if the scale is logarithmic, will give you the percentage growth or decline rate. If the straight line is drawn by eye, it is subject to debate. This doubt can be resolved by a mathematically calculated line called "least squares." The deviations of the points from the line are A, B, C, D and E in...

  • Sidebar: Four steps to calculate Lambert's commodity channel index

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 22:10 (61): Sidebar: Four steps to calculate Lambert's commodity channel index Formulas are provided for the following four steps that calculate Lambert's commodity channel index. 1. Compute today's "typical" price, using high, low, and close: 2. Compute a moving average of the N most recent typical prices: 3. Compute the mean deviation of the N most recent typical prices: 4. Compute the commodity channel index:...

  • Traders' Resource: Mutual Funds by Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 22:10 (124-129): Traders' Resource: Mutual Funds by Technical Analysis, Inc. When investing with mutual funds, the issue is cost of all kinds. Sales charges, turnover costs (trading costs), tax costs, management fees, marketing costs, and cash-holding costs all eat into your returns; then the compounding effect magnifies your losses. It's critical to consider all of these costs when approaching mutual fund investing and do the appropriate research to make sure you are making the most of your investment. A family of low-cost, no-load funds that allows costless switching...

  • Traders' Tips by Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 22:10 (94-107): Traders' Tips by Technical Analysis, Inc. Here is this month's selection of Traders' Tips, contributed by various developers of technical analysis software, all to help readers more easily implement some of the strategies presented in this issue. In this issue code has been provided for Dennis Peterson's article ""Fibonacci And Gann Projections,"" which presents a technique for forecasting time and price turning points. Included are Tradestation, AmiBroker, Wealth-Lab, eSignal, NeuroShell Trader, NeoTicker, and Prophet.Net code. Finally, Stratagem So...

  • Trading Sector Funds Using Statistics by John P. Twardy

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 22:10 (82-88): Trading Sector Funds Using Statistics by John P. Twardy Ever thought of trading sector funds? Here's a method that'll give you an edge on the market. Sector fund analysis and trading always seem to require tools other than the standards used by the average stock trader. Because sector funds deal with a specific family of stocks, which are associated with a specific sector of the economy, at a specific time in the economic cycle, several layers of complexity are added to the analysis problem. Thus, while typical analysis packages provide moving averages,...

  • Websites For Traders: FuturesExaminer.com by Jayanthi Gopalakrishnan

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 22:10 (81): Websites For Traders: FuturesExaminer.com by Jayanthi Gopalakrishnan FUTURESEXAMINER.COM "What's the best trading system out there?" Many of you have called the editorial staff at STOCKS & COMMODITIES to ask this question, but unfortunately, there is no right answer. It's an individual thing: It all depends on what you trade and what you consider to be good. And given the plethora of trading systems out there, it's really difficult, if not impossible, for me to come up with a definitive answer. For starters, I haven't tried every single trading system out ...

  • Websites For Traders: Prophet Patterns In Prophet.net by David Penn

    ARTICLE SYNOPSIS ...Stocks & Commodities V. 22:10 (89-90): Websites For Traders: Prophet Patterns In Prophet.net by David Penn There is an irony in trying to introduce Prophet Patterns, which is one of the newer modules in Prophet.net -- aka the "complete technical analysis suite in a browser" -- developed by Prophet Financial Systems. That irony lies in the fact that it is difficult to talk about one component of this "suite" -- such as Prophet Patterns -- without talking about its relationship to other components in the suite. That's not to say that these components are dependent upon one another. While each comp...

Working Money: Candlesticks 101: Doji by Margaret Austin

Working Money: The Harami: A Strong Reversal Signal by Steve Bigalow

Working Money: Topping And The Energy Complex by David Penn

Working Money: Where Are The Real Investors? by James Kellndorfer








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