STOCKS & COMMODITIES magazine. The Traders' Magazine

Article Archive For SEP1996

  • Avoiding False Signals by Joe Luisi

    ARTICLE SYNOPSIS ...Some people may think that technical analysis doesn't work anymore, but here's one author's solutions to today's challenging modern markets. by Joe Luisi Having been involved with technical trading for several years, I've noticed that technical analysis doesn't seem to hold the same promise it once did. Indicators and patterns that were once tried and true are no longer reliable; false signals and breakouts occur more frequently. Frequent stop running causes moves that seem to make no sense. Over the years, with computers having become so inexpensive, and data, either real time or delayed, re...

  • Interview Howard Abell of Innergame Partners by Thom Hartle

    ARTICLE SYNOPSIS ...Interview Howard Abell of Innergame Partners by Thom Hartle With nearly 30 years' experience as a trader and broker in the commodities pits, money manager and author Howard Abell has the bead on what it takes to trade. Abell, co-author with Bob Kopell of The Innergame of Trading and The Outer Game of Trading, and whose own Day Trader's Advantage has just been published, uses technical analysis with the weather eye of experience. He also writes the IMPR Market Letter, published for professional and institutional traders. Stocks & Commodities interviewed Abell on topics such as how Abell picks ...

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

    ARTICLE SYNOPSIS ...Letters To S&C by Technical Analysis, Inc. SOMETIMES SIMPLE IS BETTER Editor, First, I want to send you all my best compliments for the magazine and for all the articles you feature, which I read every month with great interest and attention, especially the articles about trading psychology, which in my opinion is a matter of the same importance as any trading technique. I am a private, part-time trader. In your 1996 Bonus Issue, I read the article by Nelson Freeburg, ""Evolution of a timing model."" The section concerning the 4% swing system I found of great interest because of the simpli...

  • Neutral Options Strategies by David L. Caplan

    ARTICLE SYNOPSIS ...Here's an overview of using options as a technique to take advantage of unique situations in the futures markets. By David L. Caplan How can you take advantage of the same principles of success that the most profitable corporations in the world, the casinos and insurance companies, use to improve your odds in trading? Why are insurance companies and casinos so profitable? Insurance companies are consistently profitable because they use the laws of mathematics, probability and special circumstances to their advantage. They can pick and choose who they want to insure and the prices they want t...

  • Novice Trader's Notebook

    ARTICLE SYNOPSIS ...The Double Bottom Downtrends often end with a process of building a base on the chart. This pictorial display represents a shift from negative fundamentals and pessimistic investor sentiment, driving prices down, to the news turning positive, encouraging traders and investors to become net buyers. Typically, this process takes time, and market participants are dealing with conflicting news that leads to a market trading in a sideways fashion. But as the news turns more positive, the change in the fundamentals creates a new uptrend. One technical base or bottom chart pattern that distinguishes...

  • Option Strategies and Neural Networks by Thomas B. Rubino Jr.

    ARTICLE SYNOPSIS ...Option Strategies and Neural Networks by Thomas B. Rubino Jr. Confidence intervals are a statistical tool that describes the accuracy of a prediction, while neural networks provide predictions. This article combines the two to define the risk in a trade. In recent years, neural networks have gained acceptance in solving problems related to portfolio management and market timing. Traders trust these models because they are accurate; nevertheless, many traders still view neural nets as a black box where data goes in one end and a prediction comes out the other. Now it's time to shine some lig...

  • SIDEBAR: Slope of Activation Function - Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...SLOPE OF ACTIVATION FUNCTION - Technical Analysis, Inc. A new slope of activation functions to improve the neural net's fit. In an effort to improve the model's fit of the data, we updated the slope of the activation function. This approach, however, is not required to calculate neural network confidence intervals. We updated the activation function slopes because it improves the capability of neural networks to predict future values....

  • SIDEBAR: Standard Error Bands - Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...Sidebar: Standard error bands by Thom Hartle Microsoft's Excel comes with statistical formulas that can be used to create the standard error bands and the related indicators (sidebar Figure 1). The following example uses Microsoft stock price series; column A is the date. Column B is a numerical series for representing the X-axis for calculating the statistical indicators. We are not using the date column for the X-axis because the weekends will be counted in the calculation of the statistical indicators. The difference between Friday and Monday is three periods to Excel, not one, and therefo...

  • Standard Error Bands by Jon Anderson

    ARTICLE SYNOPSIS ...Standard Error Bands by Jon Anderson Here's a new technique for placing trading bands around the price action of your favorite market. This technique shows how to recognize low-volatility situations and aid in forecasting trend direction. There was a time when technical analysis consisted of hand-sketched trendlines and bar charts drawn on graph paper, but today, using powerful computers, technical analysis has evolved to include advanced oscillators and sophisticated indicators. Due to software limitations, however, statistically based indicators have been difficult to apply in security an...

  • The COT Index and Corn by Scott Barrie

    ARTICLE SYNOPSIS ...The COT Index and Corn by Scott Barrie Here's a study on using the Commitments of Traders index as an indicator for trading the corn market. The clearing houses for futures exchanges list the current number of outstanding contracts as the open interest figures. Unlike securities, where the paper is referred to as shares and which are only issued by the corporations, futures contracts can be created and dissolved by the parties actually trading the market. Whenever a new buyer goes long a contract and the other side of the trade is a new seller establishing a short position, one new contract...

  • The Trader's Commitment by Ari Kiev, M.D.

    ARTICLE SYNOPSIS ...Are you willing to explore the ramifications of your trading? Trading in terms of your objectives is a key to enhancing your success as a trader. Here's how to use your goals to develop powerful trading strategies. By Ari Kiev, M.D. The dictionary defines commitment as a decisive choice that involves a definite course of action. In trading, this refers to a proactive approach in which you promise a result and then conform your trading to that result. The promise creates a discrepancy or gap between where you are and where you have promised you would be. The discrepancy becomes a source of ten...

  • Traders' Tips by Technical Analysis, Inc.

    ARTICLE SYNOPSIS ...Traders Tips by Technical Analysis, Inc. METASTOCK Here are the MetaStock formulas for calculating the indicators used in my article, ""Standard error bands"": 21 period regression slope... TECHNIFILTER PLUS Here are the TechniFilter Plus formulas for the indicators used in ""Standard error bands"" in this issue. You can use these formulas to display the bands on bar charts. The first formula, STD_ERR, is the standard error calculation. The parameter 21 is the period used in the regression analysis. The second parameter, 19, is the first parameter minus 2. The second formula, LSF_PSE, is ...







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