Article Archive For Readers Choice Awards Best Articles 2007-2022
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'Trendy' Chart Patterns
ARTICLE SYNOPSIS...Which chart patterns precede a strong breakout move?...
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10 Selling Tips
ARTICLE SYNOPSIS...Do you spend as much time deciding to sell as deciding to buy? Here are 10 tips to make deciding when to sell easier...
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2015 Readers' Choice Awards
ARTICLE SYNOPSIS...We are pleased to present the Technical Analysis of Stocks & Commodities magazine 2015 Readers' Choice Awards (RCA) ...
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A Better Trend
ARTICLE SYNOPSIS...How can a trend be better? Here's a unique approach to viewing trends so you can gain the most from them ...
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A Fresh Look At Short-Term Patterns
ARTICLE SYNOPSIS...You may be familiar with some of the most popular short-term patterns, but do you know which work best? These test results may help you find out...
A Smoothed RSI Inverse Fisher Transform by Sylvain Vervoort
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ADX Breakouts
ARTICLE SYNOPSIS...Breakouts are a popular method to trade with, but how do you differentiate between strong and weak breakouts? This professional daytrader demonstrates one method of identifying breakouts that could make a difference...
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Adaptive Moving Averages
ARTICLE SYNOPSIS...The biggest challenge for any trader is identifying turning points in price movements. You never know if you'll end up getting whipsawed out of a trade. Here's one way to avoid those whipsaws...
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Algo Q&A
ARTICLE SYNOPSIS...I currently trade in a discretionary manner using price action and trendlines. I find it very difficult. I have heard a lot about systematic and algorithmic trading. Can you tell me more about it ...
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Algo Q&A
ARTICLE SYNOPSIS...Have a question about system or algo trading? Kevin J. Davey is a full-time trader, and has over 25 years of system trading experience. Send your questions or topic suggestions to Kevin Davey at kdavey@kjtradingsystems.com. Selected questions will appear in a future issue of S&C. This month: Sourcing Trading Ideas...
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Algo Q&A
ARTICLE SYNOPSIS...Have a question about system or algo trading? Kevin J. Davey is a full-time trader, and has over 25 years of system trading experience. Send your questions or topic suggestions to Kevin Davey at kdavey@kjtradingsystems.com. Selected questions will appear in a future issue of S&C. This month: Closing Time(s)...
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Algo Q&A
ARTICLE SYNOPSIS...Have a question about system or algo trading? Kevin J. Davey is a full-time trader, and has over 25 years of system trading experience. Send your questions or topic suggestions to Kevin Davey at kdavey@kjtradingsystems.com. Selected questions will appear in a future issue of S&C. This month: Strategy Correlation And Market Correlation: A Look At Seeking Diversification...
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Aliasing
ARTICLE SYNOPSIS...Since you are likely using sampled data when trading, there is a chance that there could be some distortions in the data. Here's what you can do to avoid those distortions...
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Anticipating Moving Average Crossovers by Dimitris Tsokakis
ARTICLE SYNOPSIS...Stocks & Commodities V. 25:2 (20-26): Anticipating Moving Average Crossovers by Dimitris Tsokakis Although simple moving averages may be a technical analyst's best friend, they do tend to lag. Here's how you can overcome this problem. Moving averages are excellent indicators to confirm existing trends in spite of their lag. To overcome this lag, several alternatives such as the exponential moving average (EMA) and the weighted moving average (WMA) have been applied to price charts. In this article, I will not tweak the simple moving average (SMA). Instead, I will decrease the lag of the SMA ...
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Applying The Put/Call Ratio Indicator
ARTICLE SYNOPSIS...In this third part of the series, you will find a trading method based on using the three put/call ratio indicators introduced in part 2 ...
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Average True Range Trailing Stops by Sylvain Vervoort
ARTICLE SYNOPSIS...Average True Range Trailing Stops by Sylvain Vervoort In this second of a three-part series we will compare trailing-stop methods using an average true range (Atr) trailing stop. by Sylvain Vervoort The average true range (Atr) was developed by J. Welles Wilder and introduced in his book New Concepts In Technical Trading Systems. The Atr indicator measures a security's volatility. Wilder defined the true range concept as the greatest value of the: ? Current high less the current low ? Absolute value of the current high less the previous close ? Absolute value of the current low less the...
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Be Your Own Hedge Fund
ARTICLE SYNOPSIS...Think being your own hedge fund is out of reach? Maybe it's time to rethink it. It could be a lot simpler than you expected...
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Bollinger Bands & RSI: A Magical Combo
ARTICLE SYNOPSIS...When combined in uncommon ways, Bollinger Bands and the RSI generate subtle but dependable signals. Here are four ways to combine them to uncover trading opportunities...
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Bottom Fishing & The Ugly Double Bottom Setup
ARTICLE SYNOPSIS...Profiting from bottom fishing is notoriously difficult, but this setup may help...
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Breakaway Gaps by Kenneth Gillilan
ARTICLE SYNOPSIS...A gap up in a stock's price is an exciting event. Usually, such moves will be covered by the financial media, creating hysteria and resulting in some people frantically buying the stock "before it's too late." Rarely do the pundits provide a reasoned and thorough explanation as to why the large jump in price will lead to any sort of substantial gains over the near future; they just report the awe-inspiring numbers without touching on their technical significance. Sometimes, armed with simply a headline, the uninformed will buy the stock and get lucky. Over the long term, howeve...
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Buy & Sell Signals Using Stochastics
ARTICLE SYNOPSIS...Combining moving averages with stochastics can generate reliable buy and sell signals. Find out how you can use them to identify attractive trading opportunities in stocks and ETFs ...
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Buy Support, Sell Resistance
ARTICLE SYNOPSIS...Here's what to look for if you want to trade within a price channel...
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Calendar Spreads With Dan Sheridan by John A. Sarkett
ARTICLE SYNOPSIS...Stocks & Commodities V. 25:5 (18-26): Calendar Sprerads With Dan Sheridan by John A. Sarkett In the first part of a series based on a seminar on option strategies with Dan Sheridan, we take a look at calendar spreads. Options and seminars go together like yin and yang, baseball and hot dogs, Abbott and Costello. Can't separate ?em, wouldn't want to. Ten or more years ago, some of the prominent seminars focused on straightforward strategies like put selling or vertical spreads. In a surging NASDAQ market, these one-day affairs served their purpose in helping retail stock traders become more k...
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Candlesticks, Condensed
ARTICLE SYNOPSIS...They're the life of the party-simple, elegant, and they add so much value. Here's how you can turn each candle bar into a set of three numbers so you can identify patterns and determine the strength of their predictive power ...
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Combining RSI with RSI by Peter Konne
ARTICLE SYNOPSIS...Optimization and stop-losses can help you minimize risks and give you better returns. ou would like to be long in a market that's trending up, but what about when the trend turns down? Do you exit and just watch from the sidelines, or do you try to trade on the corrections in the downtrend? Here's a simple combination where you can trade long-term uptrends and short-term corrections, all in one chart. One of my previous strategies didn't allow me to enter a trade and stay there in a long and strong uptrend, since the strategy was designed to use the relative strength index (Rs...
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Correlation As A Cycle Indicator
ARTICLE SYNOPSIS...As traders know, markets have trend modes and cyclic (mean-reversion) modes. Last month, we introduced a new indicator--the trend correlation indicator--for trend trading, based on a straightforward yet novel concept. This month, we follow up with a second new indicator to help you profit in cycling markets...
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Correlation As A Trend Indicator
ARTICLE SYNOPSIS...Here, we introduce a new indicator: the correlation trend indicator. It could help you to identify the onset of a trend. It could also help you to detect the failure of a trend--thereby giving you an indication that a cyclic mode may be beginning...
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Daytrading ADX Breakouts
ARTICLE SYNOPSIS...Would you like to know about a technical indicator that provides a consistent way to spot volatile breakouts in a timely manner? This tool may be sitting right in front of you. If you aren't already using the ADX, here's how to use it to determine whether a breakout is strong enough for a daytrade entry...
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Daytrading VWMA Breakouts
ARTICLE SYNOPSIS...Adding in a volume component to your moving average calculation can help you know when momentum may be slowing, which may improve your trade timing. Here's how...
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Developing And Testing A Trading Strategy From The Vault
ARTICLE SYNOPSIS...A dive into this magazine's vast article archives can provide you with myriad ideas for trading strategies to develop and test. Here's an example of doing just that by returning to the very first issue of this magazine to pull out a trading idea. Will it work? Let's find out...
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Developing Your Own Trading Plan
ARTICLE SYNOPSIS...Here's an example of how you can execute your own trading system based on current market analysis ...
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Do Chart Patterns Still Work? Thomas Bulkowski
ARTICLE SYNOPSIS...Do Chart Patterns Still Work? Thomas Bulkowski Has the failure rate of chart patterns increased in recent years? In the last several years, have you found it more difficult to make money in the stock market? Do you get the feeling that indicators are less effective than they used to be in spotting profitable opportunities? I decided to find the answers to those questions with a new study. I spent a week updating a database of chart patterns that I used during research for writing my books, and found an alarming result. In my investigation, I used 13,932 chart patterns spread over the years ...
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Does The RSI Give You An Edge? by Larry Connors & Ashton Dorkins
ARTICLE SYNOPSIS...Does The RSI Give You An Edge? by Larry Connors & Ashton Dorkins The relative strength index has been heavily used since its creation, but does it work for you? The relative strength index (RSI) is one of the most popular tools used by traders. As such, there are many books and articles written showing how to use RSI. Unfortunately, most of the published material doesn't show any statistical evidence to support the indicator's performance. This is surprising, considering how popular the RSI is and how many traders rely upon it. Before using any indicator, it is important to test if the indic...
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ETF Sector Investing
ARTICLE SYNOPSIS...Are you interested in learning more about using exchange traded funds (ETFs) in your trading? Leslie N. Masonson, an active ETF trader, is president of Cash Management Resources, a financial consulting firm that focuses on ETF strategies. He is the author of Buy-Don't Hold: Investing With ETFs Using Relative Strength To Increase Returns With Less Risk; and All About Market Timing, as well as Day Trading On The Edge. His website is www.buydonthold.com, where he writes a weekly blog. To submit topics for future columns, reach him at lesmasonson@yahoo.com...
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Elliott Wave Theory, Simplified by Koos van der Merwe
ARTICLE SYNOPSIS...Elliott Wave Theory, Simplified by Koos van der Merwe Elliott wave counts can get complicated, but it doesn't have to. Here's a simplified look at how to study Elliott wave theory. IN the late 1920s, Ralph Nelson Elliott came to the conclusion that the movement of the stock market could be predicted by identifying a repetitive pattern of waves. He theorized that movement in the market was the result of investors' reaction to outside influences. Over my years as a trader and investor in the stock market, I came to realize that the outside influences that Ralph Elliott believed moved the mark...
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Explore Your Options
ARTICLE SYNOPSIS...Got a question about options? Jay Kaeppel has over three decades of experience in the options markets. He was a head trader for a CTA firm, an options trading software developer, and is a portfolio manager for an investment management firm. This month: Sideways Stocks: An Opportunity To Use Calendar Spreads...
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Explore Your Options
ARTICLE SYNOPSIS...Got a question about options? Jay Kaeppel has over three decades of experience in the options markets. He was a head trader for a CTA firm, an options trading software developer, and is a portfolio manager for an investment management firm. This month: Bull Put Spreads: A Look At Timing...
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Exploring Charting Techniques, Part 1
ARTICLE SYNOPSIS...What type of chart should you be using? Lines, bars, candlesticks... there are so many choices. In this first part of a six-part series, an overview of charting styles is presented that may help you make the right choice for analyzing the markets ...
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Exploring Charting Techniques: Creating A Trading Strategy, Part 3
ARTICLE SYNOPSIS...Creating our own indicators and turning them into a trading strategy is something all technical analysts strive to do. Unfortunately, a lack of programming skills can often discourage us from accomplishing this. But there are ways to get around it. Here's one way to create and backtest an indicator without writing any code ...
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Finally! A Buy & Hold Sell Signal
ARTICLE SYNOPSIS...When should you sell a long-term holding? Here's a trading setup that answers that question...
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Finding Low-Risk Entry Points
ARTICLE SYNOPSIS...Sometimes you have to go back to the basics, especially when you hit a rut. One of the most basic technical indicators you can go back to is the moving average. It works well in trending markets but it also has its shortcomings. Here's how you can use it to your advantage ...
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Forex Focus: An MACD Trading System by Alexander Sabodin
ARTICLE SYNOPSIS...Forex Focus: An MACD Trading System by Alexander Sabodin This simple trading system was applied successfully to forex pairs using the moving average convergence/divergence. See if it'll work for you. Today, we see advertisements of different automatic trading systems at numerous websites and forums. If we took those ads seriously, all we would have to do is click the mouse and money would pour into our pockets. Not only that, such black boxes usually don't come cheap. Keeping all that in mind, let's try to create our own trading system. As long as you don't lay claim to the holy grail, a tra...
Forex Focus: Spotting Trend Reversals by Cornelius Luca
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Forex Focus: The Alligator Indicator by Alexander Sabodin
ARTICLE SYNOPSIS...Forex Focus: The Alligator Indicator by Alexander Sabodin Here's a trading system you can apply to trending markets such as the currencies. There is a moving average?based trading system that I have found works best in trending markets, with its main instrument the alligator indicator. The alligator was first described by Bill Williams in his book New Trading Dimensions. Some software packages include the alligator indicator, but if it's not available, all you have to do is take three smoothed moving averages using 13, eight, and five periods and shift them by eight, five, and three bars int...
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Four Lessons From Three Decades Of Trading
ARTICLE SYNOPSIS...If you had the opportunity, why not learn a thing or two from those who have already figured out what works and what doesn't? Here's a chance to soak up some wisdoms as one trader shares lessons he learned as he traveled along his 30-year trading journey...
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Fourier Transform For Traders by John F. Ehlers
ARTICLE SYNOPSIS...Stocks & Commodities V. 25:1 (24-34): Fourier Transform For Traders by John F. Ehlers When market conditions are variable, adapting to them becomes a challenge. Here's how you can use a dominant cycle to tune the relevant indicators so you don't have to drive through the fog. It is intrinsically wrong to use a 14-bar relative strength index (RSI), a nine-bar stochastic, a 5/25 double moving average crossover, or any other fixed-length indicator when the market conditions are variable. It's like driving on a curving mountain road in a fog bank with your cruise control locked -- and you've desp...
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Gap Fill And Go by Jamie Theiss
ARTICLE SYNOPSIS...Here's a look at two trades using a strategy you can use almost every day. I'm going to show you two trades using a bread & butter strategy you can use almost every day to capture profits from the stock market. As you can see from Figures 1 and 2, I use candlesticks and moving averages on a five-minute time frame. I use the eight- and 21-period simple moving averages (Sma), which are displayed in green and blue, respectively, along with the 200-period Sma (red). Of course, eight and 21 are Fibonacci numbers. In addition, the 200-day Sma is watched by so many that it has practicall...
Getting Clear With Short-Term Swings by Ron Black
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High-Volume Breakouts
ARTICLE SYNOPSIS...In this final article in a series we've been presenting on breakout trading strategies from this professional daytrader and educator, we look at the role that volume and price-action breakout patterns play in confirming entry signals...
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How Good Is Your Data? by Sunny Harris
ARTICLE SYNOPSIS...Is all data equal? If truth be told, I never gave it much thought. I have been using one vendor nearly exclusively for about 20 years. My fills are good enough. My closing prices seem to match what I see on television or find online. As long as the profits roll in, there has been no reason to question the data. But then I was told by another vendor that my vendor's data is off by just enough to generate a side income, through the slippage from actual price to the price I am presented. My curiosity was piqued, and so I decided to investigate. First, I set up a spreadsheet an...
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How To Trade Volatility
ARTICLE SYNOPSIS...Volatility can be a trader's best friend, but trading volatility can be tricky. Here we look at an indicator that has a negative correlation with the Cboe Volatility Index (VIX) and could help you identify when volatility could increase...
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Hurst's Cyclic Analysis by David Hickson
ARTICLE SYNOPSIS...This crash course on an almost-forgotten theory could shed some light on how you can trade consistently and profitably. In the 1970s, an American engineer named J.M. Hurst published a thesis about why financial markets move the way they do. His expounded theory was the result of many years of research, and it became known as Hurst's cyclic theory. Hurst claimed a 90% success rate trading on the basis of his theory, and yet his work has remained largely undiscovered and often misunderstood ...
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Ichimoku Charts
ARTICLE SYNOPSIS...Some indicators may appear to be more complicated than they really are. Here, we dissect ichimoku charts and take the mystery out of them...
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Identifying Stops And Targets
ARTICLE SYNOPSIS...How do you figure out where to place stops and targets? Try using support and resistance levels together with the average true range ...
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In The Volume Zone by Walid Khalil and David Steckler
ARTICLE SYNOPSIS...Here's a look at the volume zone oscillator, which can be applied to trending and nontrending markets. Find out how it can be used to trade the Djia, Spy, and gold ...
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Indicator Rules For Swing Trading Strategies, Part 1
ARTICLE SYNOPSIS...In today's volatile markets, making money consistently is a challenge. You need a good strategy with reliable trading rules. This seven-part series will discuss such a strategy and its trading rules. In this, the first part, an overview is presented ...
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Interview: Charting Your Way With Steve Bigalow
ARTICLE SYNOPSIS...Stephen W. Bigalow has more than 40 years of investment experience, including eight years as a stockbroker with major Wall Street firms: Kidder, Peabody & Company, Cowen And Company, and Oppenheimer & Company. This was followed by 15 years of commodity trading, overlapped with 12 years of real estate investing. He holds a business and economics degree from Cornell University, and has lectured at Cornell and at many private educational investment functions over the past 20 years. Bigalow has advised professional traders, money managers, mutual funds, and hedge funds, and is recognized by many i...
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Interview: Classic Swing Trading With Linda Bradford Raschke by J. Gopalakrishnan and B. R. Faber
ARTICLE SYNOPSIS...Interview: Classic Swing Trading With Linda Bradford Raschke by J. Gopalakrishnan and B. R. Faber Hers is a name that you've probably heard or read any number of times if you've been interested in or involved in technical analysis for very long. Linda Bradford Raschke began her trading career in 1981 on the floor of the Pacific Coast Stock Exchange before moving to the Philadelphia Stock Exchange, eventually trading her own account from home. StockS & commoditieS Editor Jayanthi Gopalakrishnan (JG) and Staff Writer Bruce Faber (BF) spoke to Raschke via telephone on December 4, 2008. Linda, h...
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Larry Williams And The Art Of Short-Term Trading
ARTICLE SYNOPSIS...Larry Williams has taught thousands to trade the markets, won many trading championships, and has been the only futures trader in the world to repeatedly trade $1 million of his own money live at seminars around the globe ...
MACD and Trendlines by Danish Kapur
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Making A Good System Great by Donald W. Pendergast Jr
ARTICLE SYNOPSIS...Once you have a trading system, you still need to evaluate it. You can apply optimization strategies to increase profitability, reduce drawdowns, and enhance the stability of your system ...
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Mean-Reversion Daytrading
ARTICLE SYNOPSIS...Last month, this professional trader discussed swing trading mean-reversion pivot entries. This month, he continues on the same topic but this time for daytrading...
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Measuring Cycle Periods by John F. Ehlers
ARTICLE SYNOPSIS...Measuring Cycle Periods by John F. Ehlers Measuring cycle periods allows you to adjust your indicators so they adapt to current market conditions. Here's how. IF you want to make your indicators and strategies adaptive to current market conditions, you must first measure the cycle periods that are present in the data. Given that you know the dominant cycle, you can then use that information to dynamically adjust your computations. For example, you can set the observation period of the relative strength index (RSI) to be half the dominant cycle. I have previously described a practical way to ...
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Moving Average Breakouts
ARTICLE SYNOPSIS...Welcome to a new column on techniques for active traders. Each month, this daytrader and founder of TradeMastery.com will cover topics such as momentum trading, breakout trading, and other technical analysisÐbased techniques. This month, you'll learn an updated trading technique with specific, actionable technical analysis, and you'll also learn how to identify and manage the trade from start to finish...
My Kondratieff Wave by Koos van der Merwe
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NinjaTrader
ARTICLE SYNOPSIS...A full-featured trading platform that's free: That's the reason behind the success of NinjaTrader ...
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Oscillators, Smoothed
ARTICLE SYNOPSIS...In this fifth part of our article series on indicator rules for a swing trading strategy (IRSTS), we will introduce an oscillator based on Percent B ...
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Predictive And Successful Indicators
ARTICLE SYNOPSIS...Have you ever thought about how the high-to-low price swings increase as the time interval increases on a chart? This tends to create more noise and distorts indicators. Here are a couple of filters you can incorporate into your trading system to smooth data and remove indicator distortions ...
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Price Action And Volume Correlations
ARTICLE SYNOPSIS...The market always brings us something we can at least eke out a little profit from, but we often miss those signals. This is why it's necessary for traders to continuously search for opportunities, whether it be patterns that keep repeating themselves, pattern breakouts, or a pattern that's your best secret. Here's one pattern that can help you identify breakout opportunities...
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Probability--Probably A Good Thing To Know
ARTICLE SYNOPSIS...The idea of reversion to the mean is one that traders tend to take for granted. Can you confidently assume all indicators subscribe to the normal probability distribution? Here, we measure the probability distribution of a few indicators to determine if they can be used as part of your reversion-to-the-mean trading strategy...
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Profit-Taking And Resets Part 1: Trend-Following
ARTICLE SYNOPSIS...In this first part of a two-part series, we look at long-term trends and different ways to take profits and reenter trades...
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Reflex: A New Zero-Lag Indicator
ARTICLE SYNOPSIS...For indicators to be useful, the indications they produce can't arrive too late. Toward that all-important goal, here we introduce a new indicator plus a variation on that indicator that you will want to add to your charts...
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Reversing MACD
ARTICLE SYNOPSIS...These two functions complement the MACD and can be used to calculate the price value of a specific MACD level and the price value that will cause the MACD to change direction. Find out how you can apply it to your trading ...
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Risk Management, Position Sizing, And Probability by Brian Auit
ARTICLE SYNOPSIS...Risk Management, Position Sizing, And Probability by Brian Auit Implement a well-planned strategy before initiating your next trade so you can sustain losses. This methodical approach allows you to consider all the factors before initiating your next trade so you can build that elusive 45-degree angled equity curve with your trading capital. by Brian Ault Say you've booked 16 winning trades in a row. Your account has jumped 12% in value. Your ability to define your edge has never been more focused and your confidence increases with each and every successful outcome. But out of nowhere comes...
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RocketRSI - A Solid Propellant For Your Rocket Science Trading
ARTICLE SYNOPSIS...Wouldn't it be great to know that there's a strong chance a cyclic reversal will take place? How many indicators can identify this event? The RSI is a favorite indicator among technical analysts. Make it a tad bit more flexible and it may help you find those high-probability reversal points...
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Short-Term Continuation And Reversal Signals
ARTICLE SYNOPSIS...Combining two classic oscillators, the directional movement oscillator and the commodity channel index, and adding a few twists described here can help you more easily recognize price continuations and reversals that take place within a trend...
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Short-Term Volume And Price Oscillator by Sylvain Vervoort
ARTICLE SYNOPSIS...Short-Term Volume And Price Oscillator by Sylvain Vervoort Using the turning points in the oscillator gives profitable trades. Come look. Before telling you about the construction and application of the short-term volume and price oscillator (SVAPO) I am using, let's talk about some basics using an indicator as a buy & sell trigger. The indicator must have clear reversal points and be as fast as possible on the entry side. The faster you can get in at a price reversal, the tighter your initial stop-loss can be. This will save you a lot of money on those trades that move the wrong way. A trai...
Smoothing The Bollinger %b by Sylvain Vervoort
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Swing Trade With The Gann Hi-Lo Activator
ARTICLE SYNOPSIS...Here's an indicator that swing traders can use to help find peaks and valleys of price movement, which is crucial to their success...
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Swing Trading With Momentum On Your Side
ARTICLE SYNOPSIS...Seeing a simple breakout may convince you to place a trade, but how do you know if a breakout is really a breakout? Here's one way you can jump into a trade and not get caught off-guard ...
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Swing Trading MACD Pivots
ARTICLE SYNOPSIS...After sustained selling, you may be interested in purchasing shares of a stock that is starting to pivot back to the upside. Here is a signal you can use to help time that...
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Swing Trading With Sylvain Vervoort
ARTICLE SYNOPSIS...Sylvain Vervoort was involved with computers and software since the early days of microcomputing. He has always been fascinated by computer hardware, computer programming, and later on, technical analysis of the stock market. Many of his S&C articles over the years have received our Readers' Choice Award in the "favorite articles" category. We interviewed him about how to profit from swings in the market...
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Swing Trading With Three Indicators
ARTICLE SYNOPSIS...You've heard it time and time again: You need to have a trading plan. But how do you create one? You have to start somewhere, and here's one system that can lift you into the world of system traders ...
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TC2000 Version 12
ARTICLE SYNOPSIS...Version 12 is the latest upgrade to the nowÐcloud based TC2000. As long as your computer can run Microsoft Silverlight, you have a very fast charting program at your disposal ...
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The 1-2-3 Wave Count
ARTICLE SYNOPSIS...In this second part of a seven-article series, find out about the 1-2-3 wave count system that's part of the indicator rules for a swing trading strategy (IRSTS) ...
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The 350 Swing Trade by Barbara Star, PhD.
ARTICLE SYNOPSIS...The 350 Swing Trade by Barbara Star, PhD. This indicator can help you identify the beginning and end of a price swing. When markets exhibit greater and greater volatility, traders move away from longer-term trading methods with their potentially devastating drawdowns and move toward more nimble strategies that catch shorter-term price moves. Among the many short-term trading methods, swing trading, with its emphasis on trades that last from a few days to a few weeks, offers a good middle ground that makes trading more manageable. Traders may use a variety of methods to identify the begin...
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The Best Chart Pattern Entry
ARTICLE SYNOPSIS...Can traders better time the entry ...
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The DMH: An Improved Directional Movement Indicator
ARTICLE SYNOPSIS...The directional movement indicator originally developed by J. Welles Wilder has been a mainstay in technical analysis. It's time to modernize it...
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The DMI Stochastic
ARTICLE SYNOPSIS...When a trend has already begun, does that mean it's too late to get in? Not necessarily. This trading technique can help you get into a trend so you don't have to miss trading opportunities ...
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The Eight Best-Performing Candles
ARTICLE SYNOPSIS...After removing rare candlesticks and combining reversal or continuation rates with performance after 10 days, surprising winners emerge ...
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The MAD Indicator, Enhanced
ARTICLE SYNOPSIS...Here, the MAD indicator introduced last month is made even better for technical traders. We'll explain how the MADH is created and how you can put it to use...
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The Put/Call Ratio And Price Cycles
ARTICLE SYNOPSIS...The put/call ratio and open interest can be used as a leading indicator to predict the next index move. In this, the first part of a three-part series, the put/call ratio is defined and the cyclical phases this indicator goes through ...
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The Quest For Reliable Crossovers by Sylvania Vervoort
ARTICLE SYNOPSIS...The Quest For Reliable Crossovers by Sylvania Vervoort Moving average crossovers should be reliable and they need to have minimal lag. Here's a technique to achieve it. Generally, it's a contradiction to have a smooth reliable moving average crossover on one side while having a fast reaction to price turning points on the other. "Faster" normally refers to shorter moving averages, but that in turn will result in more choppy moves, creating more false buy and sell signals. So if you want to create fast and reliable crossovers, the first thing you have to look at is a way to smooth closing pri...
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The Reverse EMA Indicator
ARTICLE SYNOPSIS...The exponential moving average is a popular indicator among technical analysts. But it has its shortcomings. Here's a look at how the indicator can be used so it results in minimum lag and provides crisper trading signals...
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The Search For Your Trading Style by Donald Pendergast
ARTICLE SYNOPSIS...The Search For Your Trading Style by Donald Pendergast Here's a simple trading method you can apply if you trade with a longer-term outlook. I hope my recent article, "Crash Course For Novice Traders," caused you to reflect on the critical decisions that you'll need to make before pursuing an aggressive program of trading or investing. If you haven't read the article yet and you're struggling to stay afloat as a trader and/or investor, consider taking a few minutes now and read that article, as it may help you locate significant areas of deficiency in your overall trading plan. A PLAN WIT...
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The Stochastic MACD Oscillator
ARTICLE SYNOPSIS...The moving average convergence/divergence (MACD) is a well-known oscillator used to signal trend changes and indicate trend direction. Combining the stochastic oscillator and MACD allows you to define overbought/oversold MACD levels. Here's how to do it ...
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The V-Trade Part 1: Five Basic Trading Rules
ARTICLE SYNOPSIS...Technical analysis, money management, and trading rules--these are the three basic components to a technically based trading system. But even if you've got these three components down, you still need to stay alert to...
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The Vortex Indicator by Etienne Botes and Douglas Siepman
ARTICLE SYNOPSIS...The Vortex Indicator by Etienne Botes and Douglas Siepman The search for a reliable technical indicator for trading a change in market direction seems to be a never-ending quest. Ideally, such an indicator should be on time; neither lagging the market nor too sensitive. The Vortex Indicator was developed as a new directional movement indicator, drawing inspiration in part from J. Welles Wilder's directional movement indicator. The result is a simple but effective indicator that can be used to develop intriguing trading ideas. After thoroughly researching technical tools, we concluded that t...
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Thinkorswim.com
ARTICLE SYNOPSIS...Thinkorswim (TOS) by TD Ameritrade is software you can use with a number of different devices such as an iPhone, BlackBerry, Android, PC, touch iPod, or Apple Macintosh to trade stocks, stock options, futures, currency, spread orders, or future options ...
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Three Rules, One Easy Way To Trade ETFs by Larry Conners and David Penn
ARTICLE SYNOPSIS...Three Rules, One Easy Way To Trade ETFs by Larry Conners and David Penn Here's a short-term trading strategy to trade exchange traded funds. A famous trader once remarked that he could publish the secrets to his winning trading strategy in the newspapers and no one would follow them. The key, this famous trader explained, was consistency and discipline. In our opinion, when it comes to trading and trading strategies, one of the things that makes consistency easier and discipline a bit less daunting is simplicity. With few exceptions, all the trading strategies we have developed over the yea...
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Three-Bar Inside Bar Pattern by Johnan Prathap
ARTICLE SYNOPSIS...This trading strategy uses an inside bar as a three-bar pattern for long and short positions. Find out how it performed on gold, silver, and crude oil contracts. Whether you look at an intraday, daily, weekly, or monthly chart you will, without a doubt, see many inside bars. They appear in uptrends, downtrends, and sideways markets. Typically, most traders think of an inside bar as a two-bar pattern, but I have found successful trades using an inside bar pattern as a three-bar pattern for both long and short signals. An inside bar accompanied by higher closes indicates a s...
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Top 10 Candles That Work
ARTICLE SYNOPSIS...In my last article, I described 13 candlesticks that worked best as reversal or continuation patterns. That means price closed above the top of the candle pattern or below the bottom of it, signaling a reversal or continuation not just once, but reliably in thousands of cases. However, just because a candle acts as a reversal 66% of the time doesn't mean that price moves far beyond the candlestick boundaries. This article discusses candles that perform best over time -- that trend furthest -- but they may not be good reversal or continuation candidates ...
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Top Three Indicators For Your 2016 Trades (And Beyond)
ARTICLE SYNOPSIS...You'll have more confidence in the trades you place if you use the right combination of confirming indicators. Need a good set to get started with? Here are three you can use to help get your trading geared up for the new year...
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Trade Breakouts And Retracements With TMV
ARTICLE SYNOPSIS...Making good trading decisions involves finding indicators that cut through the market noise. But how do you do it without collapsing under the weight of information?...
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Trade System Evaluation by Donald W. Pendergast Jr.
ARTICLE SYNOPSIS...Trade System Evaluation by Donald W. Pendergast Jr. Here we evaluate a simple trading system that will enable you to simulate the results of realistic trading with a portfolio of stocks. Evaluating your trading system performance before you put real money on the line is essential to your profitability. In this article, we'll evaluate a simple momentum-based system using TradeSim Enterprise, a Monte Carlo simulation/ backtesting program that enables a trader to simulate the results of realistic trading with a portfolio of stocks. Then we'll dig a little deeper, learning how to best interpret ...
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Trading A Moving Average System: Important Choices
ARTICLE SYNOPSIS...Most traders have used moving average-based trading systems to derive trading signals. But how you define the signal can greatly affect the outcome. Here's a study to help determine the best ways to apply a moving average system...
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Trading System Design: A Statistical Approach
ARTICLE SYNOPSIS...Here's how to start with the basics and determine if an identifiable event has a statistical edge in predicting future prices - before you even start to build a trading system ...
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Trading Systems Defined by Martha Stokes
ARTICLE SYNOPSIS...Stocks & Commodities V. 25:1 (16-22): Trading Systems Defined by Martha Stokes What is your trading style? Here's an overview of different types of trading systems that can be applied to different markets. To succeed as a trader, you must understand how the market works. This begins with a foundation of core market knowledge, as can be seen in Figure 1. The next level is trading styles, followed by trading systems, and then, at the top, the implementation of trading strategies. One of the least-understood aspects of this formation is the trading systems level, second from the top. Without a...
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Trailing Resistance And Support Stops by Sylvain Vervoort
ARTICLE SYNOPSIS...Trailing Resistance And Support Stops by Sylvain Vervoort In this, the final part of a three-part series, we will look at a short-term trailing stop that moves close to the price action. The different trailing stops I discussed in parts 1 and 2 allow for enough of a price reaction that makes them most effective for medium-term trend trading. Using lower percentages or a smaller multiplication factor for the average true range (Atr) trailing stop will mostly result in too many losing trades. If you want a short-term trailing stop, it will have to move much closer to the price action. With tha...
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Tuning Intraday Strategies by Lee Leibfarth
ARTICLE SYNOPSIS...Stocks & Commodities V. 25:2 (64-67): Tuning Intraday Strategies by Lee Leibfarth Developing a daytrading strategy that is consistent across all markets is impossible. But here are some things to keep in mind when assessing your daytrading strategy. The growing availability of trading platforms that can build, backtest, and automate intraday trading strategies is allowing more and more traders to develop and test their own unique daytrading ideas. Constructing a rulebased daytrading system using historical data can help traders develop sound, statistical logic and create a higher level of co...
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Understanding The Yield Curve, Part 1
ARTICLE SYNOPSIS...In this two-part series, you'll get a comprehensive review of yield curve analysis and how it can be applied to making decisions in the stock market. In this first part, we'll look at basic theory as well as some guidelines for how discretionary investors can use it to gauge the investing landscape ...
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Using Bollinger Bands For Better Technical Analysis
ARTICLE SYNOPSIS...Harness the power of John Bollinger's work in ways you may not currently be taking advantage of...
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Using ETF Momentum Strategies With Les Masonson
ARTICLE SYNOPSIS...Leslie N. Masonson is president of Cash Management Resources, a financial consulting firm that he founded in 1987. Masonson's 44-year career has spanned trading, investing, financial advisory services, bank operations management, teaching, and corporate cash/treasury management consulting. He was a financial advisor for six years offering investment management services to retail clients of large financial institutions. We spoke with him about trading and investing in ETFs using momentum strategies ...
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Using Initial And Trailing Stops by Sylvain Vervoort
ARTICLE SYNOPSIS...Using Initial And Trailing Stops by Sylvain Vervoort In this first of a three-part series, we will look at initial stop methods and compare trailing-stop strategies starting with a fixed-percentage trailing stop. Most people have no problem buying a stock, but selling it is another matter. Selling is best accomplished based on technical analysis signals reaching a price target, breaking a trend, money management, or whatever rules you apply for trading the stock market. But you must also consider a last warning signal. This warning is an initial stop and a trailing-stop signal. In this se...
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Using VIX To Forecast The S&P 500
ARTICLE SYNOPSIS...Finding a trading system that beats the buy & hold method is a good find, especially in a volatile market. Here is a trading system that uses the volatility index as a forecasting tool and outperforms the buy & hold approach ...
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VIX Or Historical Volatility?
ARTICLE SYNOPSIS...Position sizing is an often overlooked variable when it comes to strategizing your trades. There are different ways to decide how big your positions should be and here we look at a unique approach to size your positions using volatility...
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Volatility: What They Don't Teach You In Grad School
ARTICLE SYNOPSIS...You're most likely not going to engage in a conversation about "lognormal volatility" at a cocktail party. But you may have come across the term in financial texts. This may or may not surprise you: When it comes to the stock market, what you read may not be completely accurate. Here's something that may turn out to be important to you ...
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Volume-Weighted MACD Histogram by David Hawkins
ARTICLE SYNOPSIS...Volume-Weighted MACD Histogram by David Hawkins Find out how the performance of the Macd improves by volume-weighting it. MY goal was to make the Macd-histogram (Macdh) perform better by volume weighting it. It uses three exponential moving averages. So, what's needed is to volume weight the exponential moving average (Ema). The Ema is widely used because it is more responsive than the simple moving average (Sma). The volume-weighted moving average (Vwma) responds proportionately more to higher-volume trading so it emphasizes significant trading while deemphasizing less-significant, light-v...
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Volume-Weighted Moving Average Breakouts
ARTICLE SYNOPSIS...Here's a moving average crossover technique to help spot strong breakout trading patterns in volatile markets...
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What You Don't Know About Candlesticks by Thomas N. Bulkowski
ARTICLE SYNOPSIS...In writing my latest book, Encyclopedia Of Candlestick Charts, I made some startling discoveries. I used more than 4.7 million candle lines (price bars) for the research with data going back as far as the 1980s in hundreds of stocks, but not all stocks covered the entire period. REVERSALS WIN One famous technical analyst wrote that continuations perform better than reversals. That would make sense, since it is easier for price to swim with the tide than against it. There is just one problem: That's wrong. I tested this on thousands of chart patterns and candlesticks wi...
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Whiter Is Brighter
ARTICLE SYNOPSIS...White noise, pink noise -- does it make a difference? It sure does, and here is how you can use noise theory to create an indicator with zero lag that works both as a countertrend oscillator and as a trend identifier ...
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(Yet Another) Improved RSI
ARTICLE SYNOPSIS...Over the years there have been many looks at this venerable, longstanding tool of technical analysis. Here, we introduce an improvement to the RSI that brings this indicator into the age of algorithmic trading. This improved RSI takes advantage of the Hann windowing technique described in an article earlier this year...
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Zero In On The MACD
ARTICLE SYNOPSIS...Do you find that you trade more than you'd like to while a market is trending? Here's a variation on the moving average convergence/divergence you can use to keep you in trending markets longer so you can capture more of a trend...
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