{"title":"Volume 11 (1993)","description":"\u003cp\u003eBrowse Volume articles by issue:\u003c\/p\u003e\u003cdiv style=\"display:flex;flex-wrap:wrap;gap:12px;\"\u003e\n\u003ca href=\"\/collections\/articles-volume-11\/issue-01?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 1 January\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-11\/issue-02?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 2 February\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-11\/issue-03?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 3 March\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-11\/issue-04?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 4 April\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-11\/issue-05?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 5 May\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-11\/issue-06?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 6 June\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-11\/issue-07?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 7 July\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-11\/issue-08?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 8 August\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-11\/issue-09?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 9 September\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-11\/issue-10?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 10 October\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-11\/issue-11?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 11 November\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-11\/issue-12?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 12 December\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-11\/issue-13?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 13 Quick Scans\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-11\/issue-14?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 14 Product Reviews\u003c\/a\u003e\n\u003c\/div\u003e","products":[{"product_id":"v11-c11-compari-pdf","title":"V.11:11 (472-476): Comparing Three Indicators by J.R. Davis","description":"Comparing Three Indicators by J.R. Davis\u003cbr\u003e\u003cbr\u003eThree trend-following indicators swing charts, random walks and moving averages are compared as separate mechanical trading methods.\u003cbr\u003e\u003cbr\u003eAlthough the markets that we trade are (arguably) fractal in nature and so not subject to close\napproximation by linear systems, purely mechanical approaches do have advantages over more\nindividual, human approaches. Mechanical systems never have a bad day due to a head cold, for example,\nnor do they wait for more evidence before entering or exiting a position. At the very least, mechanical\nsystems should provide useful additions to some traditional and more subjective methods of technical\nanalysis. Mechanical systems should function like signposts. A signpost is designed to point the traveler\nin the right direction. A good signpost is invaluable.\u003cbr\u003e\u003cbr\u003eBY LANTERN'S LIGHT\u003cbr\u003e\u003cbr\u003eIn my search for purely mechanical signposts, I tested swing charts and the random walk index (RWI). As\na benchmark, I used crossover moving averages (XMA). I thought there might be some compatibility\nbetween swing charts and the RWI, so I devised a program that used both. I did not intend the test results\nto simulate actual trading. Rather, they are tests to discover utility and point out ways to improve my\ntrading.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133795561841,"sku":"\\V11\\C11\\COMPARI.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_cf3949a9-f970-491c-bc6f-890f05825a50.jpg?v=1739652716"},{"product_id":"v11-c01-pointfi-pdf","title":"V.11:1 (30-33): Point \u0026 Figure Charting by Gary Van Powell","description":"Point \u0026amp; Figure Charting\nby Gary Van Powell\u003cbr\u003e\u003cbr\u003ePoint and figure charting, a technique for following stocks and commodities, may be simplistic but still\noffers the keys to success: trend identification, price objectives and money management, all of which it\nprovides.\u003cbr\u003e\u003cbr\u003eUsing point and figure, also known as the price reversal method, is an excellent way to identify\nreliable buy or sell signals for trading individual stocks. Point and figure charts are designed to remove\nmarket noise, thus allowing the market participant to trade the real moves, leaving the insignificant\nmoves to the short-term traders. The noise is filtered out by plotting point and figure. This charting\ntechnique requires less time to keep updated than do other methods.\u003cbr\u003e\u003cbr\u003ePlotting a point and figure chart is straightforward. Here, we will use Xs and Os to graph price\nmovements. The scale for the vertical axis is known as the box size. For example, the box could equal\none point. As prices rise, place an X on the chart for each price rise equal to the box size chosen. To plot\na downtrend, plot an O for each price decline equal to the box size chosen.\u003cbr\u003e\u003cbr\u003eTo consider a movement on a point and figure chart a trend reversal that is, a change from an up\nmarket to a down market or from a down market to an up market a change in price by a preselected\namount must occur. Typically, a three-point or three box reversal is used. As long as the price advance\ndoes not reverse by three points (boxes), the uptrend is still intact. If the price does decline three or more\nboxes, then the Os are entered in the next column, indicating the price movement downward.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133797101937,"sku":"\\V11\\C01\\POINTFI.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_91000ba3-0872-44f0-828b-e62c6e63af21.jpg?v=1739652753"},{"product_id":"v11-c03-trading-pdf","title":"V.11:3 (133-139): Trading Spreads by Thomas Cronin","description":"Trading Spreads\nby Thomas Cronin\u003cbr\u003e\u003cbr\u003eThe price relationship between delivery months of a futures contract or between different futures\ncontracts often change. And of course, where there is change opportunity arises for traders. Here,\nSTOCKS \u0026amp; COMMODITIES author and commodity trading advisor Thomas Cronin explains how to trade\nspreads.\u003cbr\u003e\u003cbr\u003eSpreads, because of their lower margin requirements and in many cases lower risk, have always been\npopular and especially among grain and livestock traders. Although spreads are commonly used, few\ntraders have even a basic understanding of the mechanics of spread trading. Even most commodity\nbrokers tend to fumble their way through the placement of spread orders. So here are a few details\ninvolved in trading spreads as well as a seasonal spread as an example.\u003cbr\u003e\u003cbr\u003eBasically, spread trading involves taking a long position in a futures contract while taking a short position\nin another futures contract at the same time, either in the same market or a related market. Similar to\narbitrage, a spread trader attempts to take advantage of price differences between these two positions,\nbetting that the difference will move in his or her favor. Generally, a spread trader is more concerned\nwith price relationships than with price direction.\u003cbr\u003e\u003cbr\u003eTo understand spreads best, they are always written as follows: Buy or long side is first, sell or short side\nsecond and then the spread difference. A minus sign means the buy, (long) side is a discount, a plus sign\nmeans the buy, (long) side is at a premium. This way, you always want the spread difference to become\nmore positive that is, a higher number. This helps immediately understand the current profit position\nin relation to the entry level. However, it is not necessarily the acceptable way used in trading or quoting\nspreads. Here are some standard practices on the exchange trading floors.\u003cbr\u003e\u003cbr\u003eSPREAD QUOTES AND PLACING ORDERS\u003cbr\u003e\u003cbr\u003eGrains\/livestock: Generally, most grain and livestock spread orders are given buy side, then sell side with\nthe premium stated either buy or sell. For example, if you wanted to execute a December\/June live cattle\nspread at +$3.00, the order would read: buy one December cattle\/sell one June cattle, 3.00 premium the\nbuy side. If you wanted to execute an old crop (July)\/ new crop (November) soybean spread at -0.04-1\/2,\nthe order would read: buy 5,000 bushels July\/sell 5,000 bushels November soybeans, 4-1\/2 cents\npremium the sell side (soybeans, corn, wheat and oats are quoted in 5,000 bushels). Most phone clerks on\nthe trading floor are used to dealing this way; this order will accomplish what you intend to do in any\nkind of spread.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133797134705,"sku":"\\V11\\C03\\TRADING.PDF","price":5.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_3480ec7b-444e-4fec-b10d-f73bddae2bba.jpg?v=1739652755"},{"product_id":"v11-c07-sidemet-pdf","title":"V.11:7 (292-297): SIDEBAR: METASTOCK CUSTOM RSI FORMULAS by Technical Analysis, Inc.","description":"\u003cp\u003eMETASTOCK CUSTOM RSI FORMULAS by Technical Analysis, Inc.\u003c\/p\u003e","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133801886065,"sku":"\\V11\\C07\\SIDEMET.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_6d42bc4b-5baa-453c-a337-f932e1fd1738.jpg?v=1739652835"},{"product_id":"v11-c08-usingmu-pdf","title":"V.11:8 (319-324): Using Multiple Regression Analysis by Jack Karczewski","description":"Using Multiple Regression Analysis by Jack Karczewski\u003cbr\u003e\u003cbr\u003eHappily, today's spreadsheets enable traders and investors to measure the relationships between any times series of data. In this article, a linear regression technique is explained for analyzing the relationship between interest rates, the yield on the S\u0026amp;P 500 and the S\u0026amp;P 500 price\/earnings ratio.\u003cbr\u003e\u003cbr\u003eTime series analysis is simply a tool for measuring the relationships, if any, among various sets of data.\nOne statistical method for data analysis is the linear regression technique, which is used to measure the\nrelationships among variables. The regression is referred to as linear because a straight line that best fits\nthe data can be approximated. thereby explaining the relationship. Once you have a formula for the line\nthat best fits the data, you have then created a model for future reference. Here, we will focus on using\nthe least-squares method for measuring linear relationships of interest rates as well as a popular stock\nmarket indicator.\u003cbr\u003e\u003cbr\u003eCHOOSING THE COMPONENTS\u003cbr\u003e\u003cbr\u003eTraders and investors routinely look at a host of indicators that includes valuation measures and intermarket relationships for planning their next trade or investment. One popular intermarket\nrelationship is the effect of interest rates on the stock market. I have often wondered about the impact of\nthese changing interest rates on the stock market. However, instead of looking at the relationship between\ninterest rates and the stock market, I decided to explore the relationship between interest rates and a very\npopular valuation tool the price\/earnings ratio (P\/E) of the Standard \u0026amp; Poor's (S\u0026amp;P) 500. I also\nincluded the yield on the S\u0026amp;P 500 as an input because I was curious about this indicator's association\nwith the P\/E ratio. It appears that interest rate changes have an impact on the market's P\/E ratio and\ntherefore on one of the basic valuation measures of the stock market.\u003cbr\u003e\u003cbr\u003eTo explore this question, let's construct a rudimentary model of this economic phenomenon and analyze\nthe results. We'll use short- and long-term interest rates and stock market yields as our model components\nand then determine their association with the price\/earnings multiple of the S\u0026amp;P 500 index.\u003cbr\u003e\u003cbr\u003eGathering the data and arranging it in a spreadsheet helps understand the relationship of the variables.\nViewing the data graphically is also useful. Figure I illustrates the S\u0026amp;P 500 index as a graph. While it is\nuseful to examine and compare the other charts to the S\u0026amp;P 500, bear in mind that it is the P\/E ratio\n(Figure 2) that we are interested in exploring.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133802508657,"sku":"\\V11\\C08\\USINGMU.PDF","price":5.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_27d1aa43-3a79-46f5-8ce3-63f73ad47e41.jpg?v=1739652852"},{"product_id":"v11-c04-filteri-pdf","title":"V.11:4 (149-155): Filtering Breakouts by Adam White","description":"Filtering Breakouts\nby Adam White\u003cbr\u003e\u003cbr\u003eWhich is more effective as a signal filter, the average directional movement index (A DX), the indicator\ndeveloped by J. Welles Wilder to measure market trend intensity, or the unsmoothed version, the\ndirectional index (DX)? Adam White of the Technical Traders Bulletin measures the performance of a\nbreakout trading system using the ADX or the DX as signal filters.\u003cbr\u003e\u003cbr\u003eIn hindsight, few things look better on a chart than a successful breakout a profitable move to a\nbetter price signaled by the crossing of an established support or resistance level. But for every successful\nbreakout there are several that fail. There are many ways that a trader can try to tip the strategic odds of\ntrading breakouts in their favor; here, I will look at a method involving ADX and its cousin, DX . I will\nalso share a technique aimed at reducing some deleterious aspects of optimization, a technique I call\nuniversalization.\u003cbr\u003e\u003cbr\u003eSTANDARD BREAKOUT\u003cbr\u003e\u003cbr\u003eMost traders are familiar with traditional breakouts as a means by which to enter a trending market.\nConsidering moves to the upside only, a breakout can be mechanically recognized as making an n-bar\nhigh, assuring that the market has risen above the resistance level that previously kept it in the trading\nrange. A breakout can be a sign that the fundamental market outlook has changed from a balance of\nbullish and bearish forces to a scenario in which the bulls prevail (see Figure 1).\u003cbr\u003e\u003cbr\u003eA second, and more subtle, tug of war is also going on for market psychology, and that is whether\nparticipants expect the market to be primarily a trading range market or an openly trending market. On some level, market participants make some of their decisions about expected future price movement by\nreferring to past movement. But what aspect of past movement are participants focusing on, the turning\npoints or the trends? When the focus on the turning points dominates the focus on the trends, the market\nis more likely to stay in a trading range than it is to move to new territory.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133803426161,"sku":"\\V11\\C04\\FILTERI.PDF","price":5.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_89862091-c903-4c25-b76c-12b44d0ead0c.jpg?v=1739652876"},{"product_id":"v11-c01-goldand-pdf","title":"V.11:1 (25-26): Gold And The DJIA by Richard C. Forest","description":"Gold And The DJIA\nby Richard C. Forest\u003cbr\u003e\u003cbr\u003eGold has its own cycles. How best to interpret them? STOCKS \u0026amp; COMMODITIES contributor Richard\nForest illustrates that gold cycles can be best understood when analyzed and compared to the DOW\nJones Industrial Average (DJIA). Here's why.\u003cbr\u003e\u003cbr\u003eGold cycles have their own unique rhythm, sometimes not immediately recognizable. They can,\nhowever, be understood when analyzed and compared with the Dow Jones Industrial Average (DJIA).\nGold can sometimes forewarn of a market rally or correction and gold cycles are influenced by cycles of\nthe DJIA, perhaps because of the relationship between gold and the equity market; when the economy is\ngenerally bullish for the market, it is bearish for gold and vice versa. Therefore, it is imperative for an\ninvestor to look closely at gold prices' fluctuations, as they may indicate market turning points or strength\nin the equity market.\u003cbr\u003e\u003cbr\u003eMETHODOLOGY\u003cbr\u003e\u003cbr\u003eTo monitor the price of gold in relation to the value of the DJIA, daily gold prices are plotted using an\ninverse scale (scale increasing downward along the y-axis) along with the daily DJIA values. This type of\ngraph demonstrates the inverse relationship between gold prices and the DJIA (Figures 1, 2 and 3).","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133804573041,"sku":"\\V11\\C01\\GOLDAND.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_8cf56bb8-3211-4952-bb9a-af46b90cdb80.jpg?v=1739652907"},{"product_id":"v11-c08-pattern-pdf","title":"V.11:8 (346-350): Pattern Recognition, Price And The RSI by John Knaggs","description":"Pattern Recognition, Price And The RSI by John Knaggs\u003cbr\u003e\u003cbr\u003eHere's how to combine price and relative strength index patterns for trading signals.\u003cbr\u003e\u003cbr\u003ePatterns can be found between price formations and such mathematical trading tools as the relative\nstrength index, the momentum oscillator developed by J. Welles Wilder Jr. Such price and indicator\npatterns, together with their variations, tend to repeat, allowing traders familiar with them to gauge the\nmaturity of a given buy side or sell side price trend and thus recognize when the trend is peaking. This\nknowledge can help a trader stay with a price trend until the trend has run its course. It can then aid in\ngenerating a trading signal to either exit an established position or initiate a new one.\u003cbr\u003e\u003cbr\u003eThe relative strength index (RSI) plotted along with price is used to ascertain overbought\/oversold and\ndivergent situations. Price declines have many different forms, each with their own characteristic RSI\npattern. The RSI as used here is calculated on a 14-day cycle, an interval I find to be most useful when the\nprice trend is changing. The trading signal we will be watching for is characterized by these elements:\u003cbr\u003e\u003cbr\u003e1 A downtrend in prices characterized by lower lows.\u003cbr\u003e\u003cbr\u003e2 An uptrend in the RSI (divergence), which in turn creates a gradually rising support zone. The RSI\nprobes this zone as prices make new lows.\u003cbr\u003e\u003cbr\u003e3 Some buy side activity in price behavior that precedes our trading signal but does little more than\nrun price to the upper region of its down channel. This results in an upward spike in the RSI, which\nhelps us see the potential end of the price decline. We'll use this spike to help determine the timing\nfor a potential trend-reversing trade.\u003cbr\u003e\u003cbr\u003e4 The first consolidation of prices after they accelerate into the new trend.\u003cbr\u003e\u003cbr\u003eFigure 1 is a chart of December 1987 Treasury bonds for the period September 8 through October 19.\nCompare the price trend to the shallow, angled trendline drawn under the RSI for the same period. Note\nthe price and RSI diverge. On October 13 the RSI spikes upward, with buy side prices well within the\ndownside price channel. As the RSI gradually settles into its own rising support level, prices begin to fall\nto new lows.\u003cbr\u003e\u003cbr\u003eStudying price alone in this example as it makes new lows gives you little or no clue to the fact that\nprices have gathered support and are ready to reverse direction. A study of the RSI, however, shows that\neach successive marginal new low in closing price for the four days leading up to October 19 draws the\nRSI down closer to its own rising support level. This pattern hints that price support is accumulating and\nwe can interpret it as a trading signal.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133804605809,"sku":"\\V11\\C08\\PATTERN.PDF","price":4.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_a89addfb-7d60-48e4-aa92-04bd1647ab96.jpg?v=1739652909"},{"product_id":"v11-c09-theperf-pdf","title":"V.11:9 (372-375): The Perfect Trader by Van K. Tharp, Ph.D., and Jennifer Benson","description":"The Perfect Trader by Van K. Tharp, Ph.D., and Jennifer Benson\u003cbr\u003e\u003cbr\u003eWhat is a perfect trader and is such a condition desirable? Does such a creature exist? Psychologist Van K. Tharp of Investment Psychology Consulting says not and further, you're far more likely to succeed if you don't try to be perfect.\u003cbr\u003e\u003cbr\u003eE lmer was a perfectionist who was trying to develop a trading system that would win in nine out of 10\ntrades and would make five times as much money as he was risking on any given trade. When he first\ntried to develop such a system, he came up with something that was just profitable after commissions and\nslippage. But when he saw the results only a 2% gain each year he wanted to beat his head into the\nwall. After three failed attempts, he was beside himself. His family found him hard to live with; he just\nlocked himself in his computer room doing more testing and feeling more and more dissatisfied with\nhimself. Normally, Elmer would have just given up after about six months. But in the case of trading, he\nseemed exceptionally committed to finding something that would meet his standards. He'd abandon a lot\nof good ideas before testing them, and those he did test, no matter how well they turned out, did not meet\nhis exceedingly high standards. In fact, he had several good systems that he was trying to trade, but he\ncould not get himself to trade a system that wasn't perfect. Eventually, Elmer's wife left him and Elmer\nfound himself broke, without a family or even a trading system that met his standards.\u003cbr\u003e\u003cbr\u003eWHAT IS PERFECTIONISM\u003cbr\u003e\u003cbr\u003ePeople strive to be perfect in what they do because their parents demanded they be perfect as children.\nUnfortunately, these unreasonably high standards sometimes keep them from ever coming close to\nachieving them. Production seems to go down in perfectionists. Businessmen make less effective\ndecisions, traders make less money, and athletes perform poorly mostly because of the unreasonably high standards they set for themselves.\u003cbr\u003e\u003cbr\u003eBut the perfectionists' problem is not just created by unreasonably high standards. You can have high\nstandards without being a perfectionist. But perfectionism becomes a problem when perfectionism means\nthat those standards are tied into your self-esteem. If you don't achieve those standards (and for the\nperfectionist, those standards are all or none, nothing in between), then you feel as if you are less of a\nperson. The perfectionist has trouble tolerating a mistake or a distraction. Perfectionists tend to have all\nor naught thinking, so that little everyday setbacks can lead them into a world of despair.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133804736881,"sku":"\\V11\\C09\\THEPERF.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_d7e16d97-3233-40c6-9891-2a71f1891ade.jpg?v=1739652912"},{"product_id":"v11-c12-activer-pdf","title":"V.11:12 (512-517): Active Risk Management by Richard Gard","description":"Active Risk Management\nby Richard Gard\u003cbr\u003e\u003cbr\u003eThe options market is often thought of as a simple directional play: Buy a call option if you're bullish or\nbuy a put option if you're bearish. But options can also be used to manage a position. Here's a real-life\nexample of a trade that started as a simple long future position, became a synthetic call option, mutated\nto a long derivative strangle and (finally!) ended up as a dynamic put ratio backspread.\u003cbr\u003e\u003cbr\u003eOften, traders using trend-following systems with passive risk management face day-to-day changes in\nthe markets' direction that can challenge the discipline of the best traders. After all, the global economy is\nin a constant state of flux, and the markets generate a lot of noise. Constant whipsaws, volatile ranges and\npolitically induced price shocks have wreaked havoc with markets. The strong trends have ended with\nsudden major reversals, giving many traders a serious reduction of open profits as stop-loss orders are\nfilled at terrible price levels. So what's a trend-following speculator to do when stop-loss orders are not\neffective in controlling risk?\u003cbr\u003e\u003cbr\u003eThe answer is active trade management with exchange-traded derivatives. Derivatives or options\nstrategies in a toolkit can transform a position to fit the trader's particular risk tolerance and price\nprojection. Modeling position risk with options analytical software keeps one aware of the market in a\ndimension other than price or volume. Active trade management keeps you focused on opportunities\nthrough the use of option hedge strategies.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133804769649,"sku":"\\V11\\C12\\ACTIVER.PDF","price":5.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_9dcc7dac-5528-4a45-a8ea-71b187fcde46.jpg?v=1739652915"},{"product_id":"v11-c12-weighte-pdf","title":"V.11:12 (500-505): Weighted Moving Averages by Thomas Hutchinson and Peter G. Zhang, Ph.D.","description":"Weighted Moving Averages\nby Thomas Hutchinson and Peter G. Zhang, PhD.\u003cbr\u003e\u003cbr\u003eThe moving average is well known and much used in the field of technical analysis, but it also has a\nflaw: its lack of flexibility. But it need not be fatal. First-time STOCKS \u0026amp; COMMODITIES contributors\nThomas Hutchinson and Peter Zhang of MMS International present variations of moving averages to\ncombat the lack of flexibility in simple moving averages and linearly weighted moving averages by\nintroducing the general weighted moving average (GWMA).\u003cbr\u003e\u003cbr\u003eMoving averages are used in most forms of technical analysis to forecast trends and to smooth data.\nOf these, the most widely used and best known is the simple moving average (SMA), which is the\narithmetic mean or average of a series of prices over a period of time.\u003cbr\u003e\u003cbr\u003eTo take an example, let the lookback period be, say, five. Sum the last five periods and divide the result\nby five. For example, a five-period simple moving average of the Standard \u0026amp; Poor's 500 would be:","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133804900721,"sku":"\\V11\\C12\\WEIGHTE.PDF","price":4.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_1982d6d4-ea55-435b-be98-72fb9d232ffb.jpg?v=1739652917"},{"product_id":"v11-c04-oscilla-pdf","title":"V.11:4 (174-177): Oscillator Variations by Barbara Star","description":"Oscillator Variations\nby Barbara Star\u003cbr\u003e\u003cbr\u003eHere, Barbara Star takes a 1985 STOCKS \u0026amp; COMMODITIES article by John Navarte called \"Reading\nbetween the lines\" and uses it as the basis for a tutorial on oscillators for trading.\u003cbr\u003e\u003cbr\u003eOscillators are handy tools for traders. An oscillator plots the difference between two sets of data.\nPopular methods include the difference between the current closing price and a moving average, the\ncurrent closing price and a closing price n periods ago or the difference between two moving averages.\nTraders use oscillators to identify changes in market momentum, temporary price extremes within trends\nand changes in market trends. Some traders smooth the oscillators with a moving average to identify\nchanges in the direction of the oscillator. In \"Reading between the lines,\" John Navarte examined\nmethods for calculating and interpreting oscillators. His first concept was price excess.\u003cbr\u003e\u003cbr\u003ePRICE EXCESS\u003cbr\u003e\u003cbr\u003eThe price excess indicator shows when a tradable (that is, stocks, commodities and so forth) is too high\n(overbought) or too low (oversold) relative to historical extremes by comparing the price fluctuation to\nthe fluctuation of its moving average. The price excess oscillator compares the difference between today's\nclose and the security's 24-day moving average.\u003cbr\u003e\u003cbr\u003eThis indicator can be closely approximated without a custom formula (see sidebar, \"MetaStock custom\nformula\") by selecting the price oscillator indicator offered on many charting packages and choosing the\nvalue \"1\" as the shorter-term moving average and \"24\" as the longer-term moving average, both as simple\nmoving averages.\u003cbr\u003e\u003cbr\u003eNavarte suggested plotting a 12-unit simple moving average on the indicator to better see when the\noscillator would turn. Buy and sell signals would be generated when the oscillator crossed the moving\naverage. Figure 1 illustrates the price excess oscillator with a daily chart of the New York Stock\nExchange (NYSE) Composite. In addition, the oscillator works well with weekly data.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133805457777,"sku":"\\V11\\C04\\OSCILLA.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_8cb66e09-d705-4c3d-a524-5f991149c08b.jpg?v=1739652934"},{"product_id":"v11-c07-fearand-pdf","title":"V.11:7 (314-315): Fear And Trading by Ruth Roosevelt","description":"Fear And Trading by Ruth Roosevelt\u003cbr\u003e\u003cbr\u003eFear limits your focus, and this is particularly true in trading. In this, her third article for Stocks \u0026amp; Commodities on trading psychology, Ruth Roosevelt, director of the Wall Street Hypnosis Center, explores fear in trading and how to overcome it.\u003cbr\u003e\u003cbr\u003eOne of the great ironies of fear is that we tend to bring the very thing we fear upon ourselves. Thought\ncan create reality; thought charged with an emotion such as fear can realize the dreaded possibility with\nan amazing speed and effectiveness. This is also true in the activity of trading. What happens if you fear\nloss when you're trading? That's right. You lose.\u003cbr\u003e\u003cbr\u003eOne way to deal with fear when trading is to control your focus. Race car drivers know that you must\nlook where you want to go, not where you are afraid you may go. If you're skidding toward a wall, you're\nmore likely to hit it if you stare at it than if you look away. If you look toward where you want to go and\nturn your head in the direction of the track, you are more likely to be able to turn the car out of the skid.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133805621617,"sku":"\\V11\\C07\\FEARAND.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_00a2ce7a-d81b-4e74-98f2-009a3bcd58e6.jpg?v=1739652937"},{"product_id":"v11-c07-intervi-pdf","title":"V.11:7 (277-284): John Bollinger Of Bollinger Capital Management by Thom Hartle","description":"John Bollinger Of Bollinger Capital Management by Thom Hartle\u003cbr\u003e\u003cbr\u003eJohn Bollinger, C.F.A., C.M.T., former market analyst for CNBC\/FNN, president and founder of Bollinger Capital Management, author of the \"Capital Growth Letter\" a market letter for the average investor employing a technically driven asset allocation approach began as a cameraman for the movies before he switched to the quickly expanding world of computerized investing. From there, he went on to form investment techniques for which he gained renown, including the Bollinger Bands, in which moving standard deviations are used to plot trading bands around a moving average. Stocks \u0026amp; Commodities spoke with Bollinger on topics ranging from those trading bands to his philosophies on going long and going short.\u003cbr\u003e\u003cbr\u003eHow did you get started in the business?\nOriginally, I was a camera man in the motion picture business. In the late 1970's, I purchased one of the\nearly microcomputers and started thinking about how the early computer technology could be married\nwith investment technology, such as it was in those days. The technology was rapidly evolving at the\ntime. Over the next few years, I slowly switched my focus from the film business to the investment\nbusiness.\u003cbr\u003e\u003cbr\u003eWhat an unusual beginning!\u003cbr\u003e\u003cbr\u003eAnd out of that beginning came a logical theme that continues to dominate. When you look at the\ncapacity of a computer, even the early microcomputers, you see how they could help in the investment\nprocess. The calculation of even the simplest indicator was done by hand then, and it was a\ntime-consuming task; but it was easy to write a basic program that could calculate the indicators that we\nused at the time. So by using this little microcomputer pre-IBM PC, I might add I was really able to\nmake a lot of progress and do some things that weren't being done widely because computationally they\nwere too complex. It allowed me to get a leg up on the rest of the market participants .\u003cbr\u003e\u003cbr\u003eDid you look for the Holy Grail of investment, like everyone else?\u003cbr\u003e\u003cbr\u003eI started off as probably everyone does, as a fundamentalist, and then became very frustrated with that\napproach. I would find time and time again that the fundamental stock facts would indicate you should\nown this stock or- that stock and then that stock would go down, or the fundamentals would say that you\nshould sell the stock and when you did, the stock would go up!\u003cbr\u003e\u003cbr\u003eSo what did you do?\u003cbr\u003e\u003cbr\u003eI tried to add some value with technical analysis, and over the years I've developed an approach that\nmarries the two disciplines. The buzzword I would hope that's a rare event. What that I use is rational\nanalysis, which is a would look good? combination of technical and fundamental analysis.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133805654385,"sku":"\\V11\\C07\\INTERVI.PDF","price":5.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_ce946d5f-2ff4-4ea2-841d-410f74438dfa.jpg?v=1739652940"},{"product_id":"v11-c12-sidegre-pdf","title":"V.11:12 (512-517): SIDEBAR: THE GREEKS","description":"THE GREEKS\u003cbr\u003e\u003cbr\u003eDelta: The rate of change of option price with regard to its underlying asset. An option with a delta of 25\nwill move 25% as much as the underlying asset. The delta of options changes with the distance of the\nstrike price from the underlying. It also measures the equivalent unhedged position in the underlying.\nCalls have positive delta; puts are negative.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133805687153,"sku":"\\V11\\C12\\SIDEGRE.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_174dcfd1-1ac2-42c9-9d7c-2850b0fdfb54.jpg?v=1739652942"},{"product_id":"v11-c04-placing-pdf","title":"V.11:4 (178-181): Placing Stop-Loss Orders by Curtis Arnold","description":"Placing Stop-Loss Orders\nby Curtis Arnold\u003cbr\u003e\u003cbr\u003eUnsuccessful small speculators tend to waste time and money trying to reinvent the wheel rather than\nusing what has proved to work in the past: Trade with the trend, cut losses short and let profits run.\nHere, STOCKS \u0026amp; COMMODITIES contributor Curtis Arnold assumes that you accept those investment tenets\nand aspire to adhere to them. If you do, you will greatly benefit from this lesson on the correct placement\nof stop-loss orders.\u003cbr\u003e\u003cbr\u003eWhen you talk about stops, you're talking about an exit system. An exit system is the most difficult\npart of any trading plan to create and implement. An exit system must work hand in hand with an entry\nsystem; they must be designed together and complement each other. For the purposes of this article I have\nassumed that because you intend to let your profits run, you want to catch big trends. I will also assume\nthat you will not use price objectives. If you employ price objectives (that is, placing limit orders to exit a\ntrade at a predetermined price), you are using a trading technique that, by definition, defies letting your\nprofits run. Finally, I will assume your entry system serves to place you in a trending market.\nGiven that these assumptions are true, how do you place your stops to cut losses short and let profits run?\nThose objectives can be met by employing two kinds of stops one to limit losses and one to retain\nprofits.\u003cbr\u003e\u003cbr\u003eINITIAL STOP\u003cbr\u003e\u003cbr\u003eThe initial stop should be determined beforehand and given to your broker when you receive your fill on\nyour entry. You have a choice of using an open stop (also referred to as good 'til canceled) or a day stop\n(that is, good for today only). With the use of the day stop, you will need to place the stop again the next\nday. With the use of the open stop, your stop will remain in place until you cancel it. You must remember\nto cancel the order if you roll forward to another contract month. In addition, when you wish to change\nthe stop price, you will need to place a \"cancel or replace\" order that cancels the stop at the former price and replaces it with a new stop at another price.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133808308593,"sku":"\\V11\\C04\\PLACING.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_a2edfa43-b56d-4166-b580-ab45829a469c.jpg?v=1739652971"},{"product_id":"v11-c08-variabl-pdf","title":"V.11:8 (338-342): Variable Cycle Lengths And Intraday Candlestick Analysis by Gary S. Wagner and Bradley L. Matheny","description":"Variable Cycle Lengths And Intraday Candlestick Analysis by Gary S. Wagner and Bradley L. Matheny\u003cbr\u003e\u003cbr\u003eTrading methods often use different length filters for generating trades, both entries and exits. The most common filters are moving averages with different lookback periods. Here, you'll apply different filter lengths to candlestick charts by using different period lengths of candlestick charts for confirmation of bullish and bearish patterns.\u003cbr\u003e\u003cbr\u003eIn \"Candlesticks and intraday market analysis,\" we looked at the signals generated using a 22-minute candlestick chart of the March 1993 Standard \u0026amp; Poor's 500. That article illustrated the candlestick patterns generated with intraday data. Although simplistic in design, the 22-minute filter provides valid results. However, there are two drawbacks in this technique. First, a 22-minute cycle will not be sensitive enough to capture the very short-term price swings that occur during the day. Second, the entry and exit points may not be as timely as the ones obtained from the use of multiple time cycles.\u003cbr\u003e\u003cbr\u003eThe 22-minute cycle study is the first step of a more intricate technique that attempts to capitalize on short-term price fluctuations. This technique compares candlestick patterns produced by multiple time cycles and only takes signals if two or more cycle lengths confirm each other. If correctly used, this approach can increase your probability of success. Trading signals generated from the shorter cycle length are more sensitive to imminent market changes, but they are also more likely to generate false calls. Taking only the signals that are confirmed by longer cycle lengths will filter out many of the false calls produced by a shorter time cycle. In this way, the edge gained with the use of very short cycles will be balanced with the reliability of longer time cycles, thereby producing more effective results.\u003cbr\u003e\u003cbr\u003eIn this article, we will examine a single day of trading using varying candle cycle lengths. All example charts were taken from the June 1993 contract of the Standard \u0026amp; Poor's 500 index on March 30,1993.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133808341361,"sku":"\\V11\\C08\\VARIABL.PDF","price":5.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_e25f8778-aafe-4fe8-a453-cc86be88c427.jpg?v=1739652974"},{"product_id":"v11-c12-usingne-pdf","title":"V.11:12 (518-521): Using Neural Networks For Financial Forecasting by Lou Mendelsohn","description":"Using Neural Networks For Financial\nForecasting\nby Lou Mendelsohn\u003cbr\u003e\u003cbr\u003eWith this offering, STOCKS \u0026amp; COMMODITIES contributor Lou Mendelsohn concludes his examination of\nneural networks for financial forecasting in today's globalized trading environment. Here, Mendelsohn\nconcentrates on implementation issues and discusses how neural networks should be utilized as part of\nan overall trading strategy. Finally, he takes a brief look at the future of artificial intelligence\ntechnologies to implement synergistic market analysis.\u003cbr\u003e\u003cbr\u003eNo discussion of the design, training and testing of neural networks could be complete without\naddressing the topic of implementation. How can a neural network, or combination of networks, be\nintegrated into information systems and trading systems? Here is an example that uses many of the\nconcepts of neural network development covered previously: training and testing, preprocessing, fact\nselection, input selection, architecture and paradigms.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133808505201,"sku":"\\V11\\C12\\USINGNE.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_e86af05f-a59a-463f-918d-2002c975f55a.jpg?v=1739652976"},{"product_id":"v11-c03-datafilt-pdf","title":"V.11:3 (103-111): Data Filtering For Trend Channel Analysis by Anthony W. Warren, Ph.D.","description":"Data Filtering For Trend Channel Analysis\nby Anthony W. Warren, Ph.D.\u003cbr\u003e\u003cbr\u003eTrend-following methods typically utilize moving averages of closing price data for buy and sell signals.\nOften, the signals turn out to be false due to short-term market fluctuations. Here, longtime STOCKS \u0026amp;\nCOMMODITIES contributor Anthony W. Warren, correcting one of the major drawbacks of moving\naverages, introduces a trend-following method that smoothes the data for trend identification and\nmeasures short-term price fluctuations to establish statistical boundaries.\u003cbr\u003e\u003cbr\u003eThe following article will teach you how to use a zero lag filter of the closing price data to create trading\nbands. The trading bands are used with a long-term price filter for trading the intermediate trend of the stock market.\u003cbr\u003e\u003cbr\u003eI recently developed a simplified version of the alpha-beta trend-following method that can be\nimplemented using custom formulas either in a technical analysis program such as MetaStock version 3\n(see sidebar, \"MetaStock\") or using a spreadsheet program (see sidebar, \"Trend channel spreadsheet\").\nAlthough the formulas are easily implemented, they make use of some data filtering techniques that are\nnot widely known in technical analysis. Consequently, here are both a tutorial on the design and synthesis\nof data filters for trading systems and an application example that uses several data filtering principles to\nimplement trend channels for buy and sell trade timing. The formulas used are pulled from the\nderivations found in the \"Mathematica\" sidebar.\u003cbr\u003e\u003cbr\u003eBut before I go any further, a few basic terms should be explained. First, input data is data such as a\nseries of closing prices of the stock market. A data filter is a mathematical means to modify the data; for\nexample, a moving average is a data filter. A moving average smoothes the data, reducing the extreme\nswings of the daily closing prices. If you plot the closing prices along with a moving average, you will\nfind that the moving average is a smoothed version of the closing prices. A five-day moving average is\nthe total of the last five days' closing prices divided by 5: ...\u003cbr\u003e\u003cbr\u003eDATA FILTER PROPERTIES\u003cbr\u003e\u003cbr\u003eThe two most important properties of data filters for technical analysis are noise smoothing and data lag\nbetween the input data and the smoothed output values. Traditionally, moving average (MA) data filtering\nhas been the mainstay of most trading methods. Typically, if the main purpose is noise smoothing, then\nthe moving average length N is chosen as the smallest value that provides adequate noise smoothing, and\nfilter lag is an undesirable byproduct of the process. On the other hand, with trend following methods\nsuch as, say, 39-week moving average crossings, the MA length N is chosen to obtain sufficient filter lag\nto reduce false alarm buy and sell signals. In this case, the extra noise smoothing obtained with long MA\nlengths is simply a result of the filtering process. The main principle here is that increased noise\nsmoothing requires longer filter lengths and thus more lag in the filtering process.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133812109681,"sku":"\\V11\\C03\\DATAFILT.PDF","price":5.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_1989e101-f754-4301-850c-1b00d733a168.jpg?v=1739653069"},{"product_id":"v11-c02-intervi-pdf","title":"V.11:2 (61-69): The Critical Eye Of Laszlo Birinyi by Thom Hartle","description":"The Critical Eye Of Laszlo Birinyi by Thom Hartle\u003cbr\u003e\u003cbr\u003eLaszlo Birinyi of Birinyi Associates is a most unusual technician, one who is critical of most technical\nmethods. Birinyi, a former director of Salomon Brothers, is currently head of his own market research\nconsulting firm and one of Wall $treet Week's 10 technical elves. STOCKS \u0026amp; COMMODITIES Editor Thom\nHartle spoke with Birinyi via telephone on November 25, 1992, discussing his work on researching\nindicators, the importance of historical analysis and his work on money flow analysis.\u003cbr\u003e\u003cbr\u003eAt one point, perhaps by examining the market and living with it constantly, I began to get the sense that\nmost people talking about the market were not in touch with what really goes on in the market.\u003cbr\u003e\u003cbr\u003eQuite frankly, people practice too much technical commentary, always focusing on where the market is\ngoing, instead of having a better understanding of where the market is.\u003cbr\u003e\u003cbr\u003eFor starters, could you give our readers a short summary of your background?\u003cbr\u003e\u003cbr\u003eI began my career on Wall Street in the 1970s as a trader on the desk of Arbach, Pollack \u0026amp; Richardson. I\nwas there until November 1974, when I went to Mitchell Hutchins. At Mitchell Hutchins I was concerned\nwith what you might call trading toolstraders were pretty much left to their own devices and there\nwasn't really much information on the short term or on the market. I tried to develop some sense of the\nmarket by subscribing to any number of technical services, and I tried a lot of newsletters. At one point,\nperhaps by examining the market and living with it constantly, I began to get the sense that most people talking about the market were not in touch with what really goes on in the market.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133815222641,"sku":"\\V11\\C02\\INTERVI.PDF","price":5.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_ea844287-96ef-4469-96e0-4fa8c8e012ed.jpg?v=1739653152"},{"product_id":"v11-c03-determi-pdf","title":"V.11:3 (122-124): Determining Optimal Risk by Ed Seykota and Dave Druz","description":"Determining Optimal Risk\nby Ed Seykota and Dave Druz\u003cbr\u003e\u003cbr\u003eSeasoned traders know the importance of risk management. If you risk little, you win little. If you risk too\nmuch, you eventually run to ruin. The optimum, of course, is somewhere in the middle. Here, Ed Seykota\nof Technical Tools and Dave Druz of Tactical lnvestment Management, using subject matter and\nmaterials that they have used in lectures and workshops around the US, present a method to measure\nrisk and return.\u003cbr\u003e\u003cbr\u003ePlacing a trade with a predetermined stop-loss point can be compared to placing a bet: The more\nmoney risked, the larger the bet. Conservative betting produces conservative performance, while bold\nbetting leads to spectacular ruin. A bold trader placing large bets feels pressure or heat from the\nvolatility of the portfolio. A hot portfolio keeps more at risk than does a cold one. Portfolio heat seems to\nbe associated with personality preference; bold traders prefer and are able to take more heat, while more\nconservative traders generally avoid the circumstances that give rise to heat.\u003cbr\u003e\u003cbr\u003eIn portfolio management, we call the distributed bet size the heat of the portfolio. A diversified portfolio\nrisking 2% on each of five instrument \u0026amp; has a total heat of 10%, as does a portfolio risking 5% on each\nof two instruments.\u003cbr\u003e\u003cbr\u003eOur studies of heat show several factors, which are:\u003cbr\u003e\u003cbr\u003e1 Trading systems have an inherent optimal heat.\u003cbr\u003e\u003cbr\u003e2 Setting the heat level is far and away more important than fiddling with trade timing parameters.\u003cbr\u003e\u003cbr\u003e3 Many traders are unaware of both these factors.\u003cbr\u003e\u003cbr\u003eCOIN FLIPPING\u003cbr\u003e\u003cbr\u003eOne way to understand portfolio heat is to imagine a series of coin flips. Heads, you win two; tails, you\nlose one is a fair model of good trading. The heat question is: What fixed fraction of your running total\nstake should you bet on a series of flips?","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133815288177,"sku":"\\V11\\C03\\DETERMI.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_000d0937-214f-4a79-b1dd-1bd3786e19fc.jpg?v=1739653154"},{"product_id":"v11-c08-physiol-pdf","title":"V.11:8 (343-345): Physiology And Trading by Ruth Roosevelt","description":"Physiology And Trading by Ruth Roosevelt\u003cbr\u003e\u003cbr\u003eDeveloping a winning attitude for trading may be easier than you think if you start with some basic physical adjustments to the way you relate to your workstation. In this month's article on trading psychology, Ruth Roosevelt, director of the Wall Street Hypnosis Center, examines how to correct habits that may be inhibiting your ability to achieve.\u003cbr\u003e\u003cbr\u003eThe three basic ways to change your mental state are through changing your beliefs, changing your\nmental focus or changing your physiology. The simplest and most immediate of these is to change your\nphysiology. Facial expression, posture, movement, gesture, breathing and voice tonality and tempo can be\nconsidered physiology. Your physiology profoundly affects your emotions, thinking, behavior and\nself-image, as well as the image you project to the world. You are the message, and that message feeds\nback to you through your subconscious and through the responses of others to that message, creating\nmore and more of the same.\u003cbr\u003e\u003cbr\u003eAs you read this, try slumping your shoulders forward and bending slightly at the waist while dropping\nyour head down so your chin practically touches your chest. Turn the corners of your mouth down a little.\nBreathe shallowly or barely at all. Notice how easy it would be to get depressed doing this. Now, if you\nreally want to experiment, add belief and focus. While sitting like this, start thinking about all your past\ntrading losses and then worry about future losses. Try believing that it's just not possible to beat the\nmarket, no matter what you do. How do you like it?","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133815320945,"sku":"\\V11\\C08\\PHYSIOL.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_6c11e57d-4818-405b-853f-fa17f5fc6dea.jpg?v=1739653156"},{"product_id":"v11-c03-tradinb-pdf","title":"V.11:3 (140-143): Trading Bond And Currency Funds by Joe Duarte","description":"Trading Bond And Currency Funds\nby Joe Duarte\u003cbr\u003e\u003cbr\u003eToday's broad selection of different types of mutual funds allows traders to allocate assets based on\npersonal expectations of changes in the stock market, interest rates and currencies. S\u0026amp;C contributor and\nnewsletter publisher Joe Duarte presents his methods to increase gains in a portfolio by including\ncurrency-based mutual funds as a choice for instruments.\u003cbr\u003e\u003cbr\u003eAsset allocation has become a popular investment strategy. In this strategy, capital is usually divided\ninto stocks, bonds and cash, and capital is transferred from one category to another based on whichever\ntrading method the portfolio manager favors, technical or otherwise.\nDuring periods of economic retrenchment, however, asset allocation models may have low returns\nbecause portfolio managers choose to increase their portfolios' cash positions because they fear falling\nstock prices. Recessions usually lead to lower interest rates, reducing a portfolio's cash portion return.\nOften, during periods of economic weakness technical conditions favor taking the increased risk of\nlong-term bonds and foreign currencies to enhance the return on the cash portion of the asset allocation\nportfolio.\u003cbr\u003e\u003cbr\u003eVARIABLES AND VOLATILITY\u003cbr\u003e\u003cbr\u003eHere's a review of the variables involved. Falling bond prices lead to higher bond yields. These rising\ninterest rates make a country's currency more attractive to traders. In our global fiat monetary system, a\ngovernment's promise to make its currency legal tender provides that currency's sole backing. The recent\nEuropean currency crisis illustrated this point well, as falling currencies led to extreme volatility in European bond and currency markets.\u003cbr\u003e\u003cbr\u003eBond market volatility, which usually reflects market participants' perceptions of a nation's political and\neconomic conditions, creates ample opportunity to trade in both bonds and currencies. By trading both\nmarkets simultaneously when it is warranted, traders can enhance their profits by dividing their assets\nbetween both sectors. In previous STOCKS \u0026amp; COMMODITIES articles, I have described different methods of\nparticipating in the currency and bond markets via mutual funds. Here, I will describe a combination of\nmethods to create an interdependent trading system.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133815943537,"sku":"\\V11\\C03\\TRADINB.PDF","price":4.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_d9ffae1a-e151-4615-8178-8d854e456700.jpg?v=1739653181"},{"product_id":"v11-c10-redefin-pdf","title":"V.11:10 (432-436): Redefining Volatility And Position Risk by C.A. Kase, C.T.A.","description":"Redefining Volatility And Position Risk by C.A. Kase, C.T.A.\u003cbr\u003e\u003cbr\u003eA method on looking at the volatility of intraday price bars using a stop system called the \"dev-stop.\"\u003cbr\u003e\u003cbr\u003eVolatility is the key to understanding market behavior. Volatility is the change in price and thus, by\ndefinition, is directly related to price. I normally use true closing range (TCR) as a measure of volatility\nrather than the annualized price probability that options traders employ. The true closing range is the\nlargest absolute value of three possibilities: (1) high minus low, (2) high minus previous close or (3) low\nminus previous close. This is expressed in the same units as the underlying contract or issue we are\ntrading. Specifically, the true closing range tells us the maximum theoretical amount of money we could\nhave made or lost between the close of one bar to the next. Thus, it is easier for a stock or commodity\ntrader to relate to than a percentage measurement.\u003cbr\u003e\u003cbr\u003eUSING VOLATILITY\u003cbr\u003e\u003cbr\u003eAs traders, our primary interest is volatility itself. If price does not change, you cannot make any money.\nOf course, without price change you can't lose any money, either. Thus, both reward and risk are directly\nrelated to volatility. By defining volatility in terms of range, we can develop rules (algorithms) for stops that may be universal, working in all markets in all timeframes. We can use the volatility of range as a\nsubstitute for fixed estimates of stop sizes and thus develop a system that will expand and contract \nbreathe, if you will with the market's own activity. For example, one published system that is an\nimprovement over using a fixed value as a stop employs the average true range times a fixed value, say 3.\nSo, as volatility increases and decreases, the stop also expands and contracts.\u003cbr\u003e\u003cbr\u003eOne problem with this approach: Market conditions may dictate that narrower or wider stops be used\ndepending on the status of the trade. For example, during a surging impulse move, when danger of a\nreversal is low, a trader may want to use a wide stop. At other times, when danger of a reversal is\nincreased such as when momentum divergence is present the trader may wish to use a narrow stop.\nProblems remain, however, even if we use different factors or multipliers for different conditions.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133816009073,"sku":"\\V11\\C10\\REDEFIN.PDF","price":4.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_7962205b-c1fb-43c3-8306-2df17d2c69dc.jpg?v=1739653184"},{"product_id":"v11-c10-sidejsa-pdf","title":"V.11:10 (427-431): SIDEBAR: JSA MOVING AVERAGE CALCULATIONS by Technical Analysis, Inc.","description":"JSA MOVING AVERAGE CALCULATIONS by Technical Analysis, Inc.\u003cbr\u003e\u003cbr\u003eCalculations for the simple, linear, and exponential moving average, plus the authors new interpretation.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133816238449,"sku":"\\V11\\C10\\SIDEJSA.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_cfe49e34-d193-41b9-a809-f65164a8ec75.jpg?v=1739653194"},{"product_id":"v11-c10-theimpo-pdf","title":"V.11:10 (440-442): The Importance of Stop Orders by Patrick Cifaldi, C.M.T.","description":"The Importance of Stop Orders by Patrick Cifaldi, C.M.T.\u003cbr\u003e\u003cbr\u003eSome traders view stop orders as an affront to their analytical skills, but they shouldn't. Here are some simple guidelines on using stop orders and saving yourself some painful and costly lessons.\u003cbr\u003e\u003cbr\u003eStop orders are a necessary part of trading. Stop orders have price trigger points that modify them from\nresting orders to be filled at the market if the trigger price is traded at or through during market hours.\nStop orders are used to initiate trades, lock in profits and limit losses on existing trades. Of these,\nsell-stop orders are placed below current prices, while buy-stop orders are placed above current prices.\u003cbr\u003e\u003cbr\u003eStop orders can be used to manage the risk on trades. For example, if a trader were to take a long position\nand then place a sell-stop order with a specific price that is, an August gold contract trading at $392 \nthen the sell order might be \"Sell one August gold contract with a 388.80 stop,\" which is placed below m,\nthe current market price. If the market then trades down to the stop-level price, the order then becomes an\ninstruction to sell at the market and either limits the loss on the long position or locks in the profit. If a\ntrader takes a short position, a buy-stop order is placed above the market. If the price rallies to the\nstop-order price, the order then becomes an instruction to buy at the market, just as if an order to buy had\nbeen placed.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133816271217,"sku":"\\V11\\C10\\THEIMPO.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_d957c917-431a-4305-8568-727e12c4712d.jpg?v=1739653197"},{"product_id":"v11-c12-sidetre-pdf","title":"V.11:12 (489-495): SIDEBAR: TREND REVERSAL","description":"TREND REVERSAL\u003cbr\u003e\u003cbr\u003eBefore discussing the concept of a trend reversal, the proper way to draw a trendline must be discussed. If\na market is in a downtrend, the trendline is drawn from the highest high to the lowest minor high before\nthe lowest low on the chart.\u003cbr\u003e\u003cbr\u003eIn sidebar Figure 1, two downward trendlines are drawn. Trendline A is incorrect because the line uses\nthe minor high after the lowest low. Trendline B is the correct trendline because it uses the lowest minor\nhigh just before the lowest low.\u003cbr\u003e\u003cbr\u003eFinally, the trendline should not have any prices trading through the trendline between these two points.\nIf the market is in an uptrend, the trendline is drawn from the lowest low to the highest minor low before\nthe highest high on the chart. The trendline should not have any prices trading through the trendline\nbetween these two points.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133816664433,"sku":"\\V11\\C12\\SIDETRE.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_e158fae2-4dcb-4932-9cf5-685ed105add8.jpg?v=1739653214"},{"product_id":"v11-c06-aspread-pdf","title":"V.11:6 (243-252): A Spreadsheet For Price Ratio Projection Analysis by Robert Miner","description":"A Spreadsheet For Price Ratio Projection Analysis by Robert Miner\u003cbr\u003e\u003cbr\u003eTraders who follow Gann and Elliott wave analysis use ratios of past price movement as guidelines for possible turning points in the future. Here, Robert Miner of Gann\/Elliott Educators gives you the spreadsheet custom formulas for you to calculate price objectives based on ratios of previous price moves.\u003cbr\u003e\u003cbr\u003eMy previous article, \"A spreadsheet for time ratio analysis,\" described how to construct a spreadsheet\nto project time periods when a market is most likely to change trend. This time, I will instruct traders how\nto construct a spreadsheet that will calculate all of the important ratio projections for price targets with\nthe greatest probability of support and resistance and, more important, target those with the greatest\nprobability of terminating a trend.\u003cbr\u003e\u003cbr\u003eI will utilize terms from the Elliott wave method for labeling market movements throughout. For\nexample, impulse waves, the trend of the market, are five wave movements together, while correcting\nwave patterns are three wave movements together. Understanding this method will help you in using this\nspreadsheet.\u003cbr\u003e\u003cbr\u003eTo deter nine the price targets where trend change should occur, price cycles are proportioned by the\ngeometric ratios as the market in question unfolds and then projected from various swing relationships. If\nthere is a fairly narrow price zone where several price cycle projections point to a cluster of price cycle\ntargets, a likely turning point is indicated. The more wave-ratio projections that fall within the price zone,\nthe greater the probability of trend change or at least minor support or resistance at the targeted price\nzone.\u003cbr\u003e\u003cbr\u003eAs with the time projection spreadsheet, four considerations must be addressed before we can construct\nthe price projection spreadsheet: which price cycles or waves to compare; what ratios to use; which\nwave-ratio relationships are the most important, and how to use the price projections to make a trading decision.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133817221489,"sku":"\\V11\\C06\\ASPREAD.PDF","price":5.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_ca30bb13-c137-44d0-a0e5-fa114fb7ba39.jpg?v=1739653234"},{"product_id":"v11-c09-sidesel-pdf","title":"V.11:9 (372-375): SIDEBAR: SELF-EVALUATION by Technical Analysis, Inc.","description":"SELF-EVALUATION by Technical Analysis, Inc.\u003cbr\u003e\u003cbr\u003eTesting your level of perfectionism.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133817844081,"sku":"\\V11\\C09\\SIDESEL.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_5deaa7b2-522b-453e-86b0-7e3ef03f0585.jpg?v=1739653259"},{"product_id":"v11-c10-intervi-pdf","title":"V.11:10 (401-407): Dean Barr On Artificial Intelligence by Thom Hartle","description":"Dean Barr On Artificial Intelligence by Thom Hartle\u003cbr\u003e\u003cbr\u003eBarr explains the differences between expert systems and neural networks and some of the keys to successfully applying neural network technology to trading. He also looks at the future of neural network technology.\u003cbr\u003e\u003cbr\u003eHow did you get started managing money?\u003cbr\u003e\u003cbr\u003eI started on Wall Street in 1983 in a Merrill Lynch training program. Prior to that, I was fortunate enough\nto spend a few summers on a trading desk. When I joined Merrill Lynch in 1983, I was shipped off to\nEurope for about a year, where I learned a great deal about the international markets and the way they\noperate, particularly on the equities side.\u003cbr\u003e\u003cbr\u003eAnd after working for Merrill Lynch?\u003cbr\u003e\u003cbr\u003eI was recruited by Goldman Sachs and returned to New York. There I was exposed to emerging trading\nand analytical technologies, both in portfolio restructuring as well as trading, through some of my larger\ninstitutional clients. I was working with a lot of large hedge funds, arbitrageurs and big index-type\ncompanies.\u003cbr\u003e\u003cbr\u003eWas your educational background mathematical?\u003cbr\u003e\u003cbr\u003eActually, it was a smattering of finance and computer science. I did my undergraduate work at Cornell University and received an MBA from New York University. I was fortunate to be exposed to a lot of very\nbright people. Many new creative, innovative techniques were evolving. The thing that really struck me\n which backs into where I am today is that there are a lot of ways to make money in the markets. A\nlot of my clients were making real money in the markets. I was exposed to the good, the bad and the ugly\nin money management: firms that did well, those that did okay and those that did poorly.\u003cbr\u003e\u003cbr\u003eWhat kind of ideas did you come away with?\u003cbr\u003e\u003cbr\u003eI felt that inherent in the market environment the opportunity to make money was there, but you had to\nhave an edge. I thought that the edge could be technology-driven that's where I thought the future\nwould be.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133817876849,"sku":"\\V11\\C10\\INTERVI.PDF","price":5.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_ec8b1e09-b477-49fc-8c52-dfc4bc7e2097.jpg?v=1739653262"},{"product_id":"v11-c05-combini-pdf","title":"V.11:5 (220-223): Combining Negatively Correlated Forecasts by Denis Ridley, Ph.D.","description":"Combining Negatively Correlated Forecasts\nby Denis Ridley, Ph.D.\u003cbr\u003e\u003cbr\u003eWill combining two negatively correlated forecasts of price data produce a more accurate forecast?\nSTOCKS \u0026amp; COMMODITIES contributor Denis Ridley says yes. It's called \"antithetic forecasting\", as he\nexplains here.\u003cbr\u003e\u003cbr\u003eTraders and investors may find that forecasting models are useful for estimating future values of a\nfinancial time series. However, serial correlation creates a biased forecast, and that bias in turn is\ncorrelated with the forecast origin. Antitheticor contradictory errorforecasting creates a new but\nreverse correlated forecast and combines it with the original forecast, thereby canceling out the errors.\nThis article will illustrate an application to the monthly closings of the Dow Jones Industrial Average\n(DJIA) in which the forecast mean square error was reduced by approximately 50% .\u003cbr\u003e\u003cbr\u003eAntithetic forecasting falls into the category of methods referred to as combining forecasts. The antithetic\nforecasting method can be applied when the historical data is autocorrelatedthat is, when the data is\ncorrelated with itself in previous time periods.\u003cbr\u003e\u003cbr\u003eAutocorrelation is the basis for assuming that a historical series contains a pattern. If that is the case, then\nthere should be a forecasting model that can emulate that pattern, thereby generating the desired\nforecasts. At the same time, we are reminded (see J.F. Elder and M.T. Finn's work in the reference\nsection) that the financial markets are normally difficult to forecast, so every effort to reduce forecasting\nerror becomes important. Statistical models assume that historical data is a collection of independent\nobservations.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133818466673,"sku":"\\V11\\C05\\Combini.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_476fc05a-919e-4f5a-a42e-350ef055d705.jpg?v=1739653285"},{"product_id":"v11-c09-sidebca-pdf","title":"V.11:9 (381): SIDEBAR: Calculating Bollinger Bands by Technical Analysis, Inc.","description":"Calculating Bollinger Bands by Technical Analysis, Inc.\u003cbr\u003e\u003cbr\u003eBollinger band formulas for an Excel spreadsheet.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133818499441,"sku":"\\V11\\C09\\SIDEBCA.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_82641b81-d343-49df-a0f0-561989c3f778.jpg?v=1739653288"},{"product_id":"v11-c02-congest-pdf","title":"V.11:2 (70-75): Congestion Phase Analysis With Candlesticks by Holliston Hill Hurd","description":"You can trade markets by combining congestion phase analysis with candlestick charting patterns. This\ntechnique, a form of pattern recognition, can be used to profit from stocks, commodities and futures.\nHolliston Hill Hurd explains.\u003cbr\u003e\u003cbr\u003eThree steps are necessary in using candlestick charts for trading congestion areas. Firstand it is\nindeed a very important firstthe trader must understand congestion areas. Second, the trader must\nunderstand reversal patterns within the congestion areas using candlestick charts. Third, the trader must\ndefine when and how to enter the market. For beginning traders, this technique is an excellent\nintroduction to trading with pattern recognition. For experienced traders, this technique is a new way to\nsimplify their market perception and might inspire some new ideas to test on a computer.\u003cbr\u003e\u003cbr\u003eAbove all, it is important to recognize the situation that the market is currently in, which is where\ncongestion phase analysis comes into play. Most markets are in a congestion situation perhaps 85% of the\ntimethat is, most of the time and in a trend run only 15% of the time. Thus, it benefits traders to\nstudy methods for trading congestions. Following are some basic definitions of congestion phases:\u003cbr\u003e\u003cbr\u003eCONGESTION PHASES\u003cbr\u003e\u003cbr\u003eLine congestion areas: A congestion area forms when neither the bulls nor the bears are in control of the\nmarket (Figure 1), when the forces of supply and demand keep prices between support and resistance\npoints of a particular trading range. As supply and demand apply pressure to a range from both the top\nand the bottom, together they form a line congestion area. The more time that is spent in a line\ncongestion area, the more dramatic the breakout and run that ensues will be.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133819318641,"sku":"\\V11\\C02\\CONGEST.PDF","price":5.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_85357d60-d132-43c3-8bb7-a75d99f989d2.jpg?v=1739653311"},{"product_id":"v11-c09-tactica-pdf","title":"V.11:9 (367-371): Tactical Trading Revisited by Roger Altman, Ph.D.","description":"Tactical Trading Revisited by Roger Altman, Ph.D.\u003cbr\u003e\u003cbr\u003eHow would the Martingale trading technique work with a trading system that does not assume that the market is a random walk but instead relies on its own system parameters to determine stop-loss points, entry and exit prices? Further, how would these strategies work with a standalone system with a win probability that is not 50\/50?","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133823283569,"sku":"\\V11\\C09\\TACTICA.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_c3cc40cf-d8e5-4c49-935c-6b6a1d8341ea.jpg?v=1739653343"},{"product_id":"v11-c02-sidecan-pdf","title":"V.11:2 (70-75): SIDEBAR: THE CANDLESTICK METHOD","description":"THE CANDLESTICK METHOD\u003cbr\u003e\u003cbr\u003eThe candlestick chart can be used to interpret the movement of markets from intraday out to a monthly\nchart format. The basic candlestick chart depicts the market open, high, low and close.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133824790897,"sku":"\\V11\\C02\\SIDECAN.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_7ea39e54-6bd7-44ca-9cc6-32312d461b2c.jpg?v=1739653373"},{"product_id":"v11-c06-cyclica-pdf","title":"V.11:6 (229-234): Cyclical Channel Analysis And The Commodity Channel Index by D.W. Davies","description":"Cyclical Channel Analysis And The Commodity Channel Index by D.W. Davies\u003cbr\u003e\u003cbr\u003eTrading bands and the commodity channel index, two popular indicators, are used together here by D.W. Davies, who publishes the \"Chameleon\" financial newsletter. Davies analyzes price direction using trading bands built around moving averages with different time periods as a form of cyclical analysis and uses the commodity channel index as a timing tool with the cyclical analysis to assist in generating trading opportunities.\u003cbr\u003e\u003cbr\u003eCycles exist in financial markets. That is accepted. Unfortunately, I found it difficult to identify and\nuse cycles with any amount of precision or confidence until I discovered Brian Millard's concept of\ncyclical channel analysis (CCA). J.M. Hurst in the United States and Brian Millard in the United Kingdom\nindependently and by different means developed the concept of CCA. Millard's concept of CCA is elegant\nbut simple and I use it to predict time and price opportunities in the market. It is a powerful method to\nindicate future periods of exceptional probability of a price reversal. Once the opportunities have been\nidentified, other means can be used to pinpoint the timing of entry or exit. One suggested method is the\ncommodity channel index (CCI) (see sidebar, \"Commodity channel index\"), which is included in most\nanalytical software.\u003cbr\u003e\u003cbr\u003eIn this article, I will outline Millard's method of channel analysis and then describe how the CCI can be\nused to pinpoint the time for entry and exit. The basis for Millard's channels are:\u003cbr\u003e\u003cbr\u003e A moving average (MA) shows only those fluctuations of price for periods greater than the value\nchosen for the MA, lessening the importance of those of lesser periods .\u003cbr\u003e\u003cbr\u003e The MA plot should be centeredthat is, placed back in time half the numerical value of the MA.\nSome technicians place the moving average value on today's date. This is mathematically incorrect.\u003cbr\u003e\u003cbr\u003e Once this midpoint of the cycle (the centered moving average value) has been identified, then the\ntheoretical end point can be calculated.\u003cbr\u003e\u003cbr\u003e Prices fluctuate around the average, forming a channel of variance about the average.\u003cbr\u003e\u003cbr\u003e A channel of variance can be drawn so that the lines of the channel passes through most of the\nextremes of the variance. This will be some percentage of the moving average price plotted above\nand below the moving average: a small percentage for short time periods and a larger percentage\nfor longer time periods.\u003cbr\u003e\u003cbr\u003e If we can identify the channel of variance, then we can measure the amplitude of the cycle.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133824889201,"sku":"\\V11\\C06\\CYCLICA.PDF","price":5.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_09bf76ff-27e1-4e7d-bd1a-51ad20c0bd63.jpg?v=1739653376"},{"product_id":"v11-c09-ratingt-pdf","title":"V.11:9 (382-386): Rating Trend Strength by Tushar S. Chande","description":"Rating Trend Strength by Tushar S. Chande\u003cbr\u003e\u003cbr\u003eHere's a simple indicator of trend strength. It goes like this: A value of +10 signals an uptrend; a value of -10 signals a downtrend. Stocks \u0026amp; Commodities Contributing Editor Tushar Chande uses this simple rating system to help answer the eternal traders' question: Is the market trending?\u003cbr\u003e\u003cbr\u003eAs you may have noticed, a number of rather complicated indicators are available to measure trend\nstrength. None of these indicators, unfortunately, is perfect. You could use J. Welles Wilder's average\ndirectional index (ADX) as an indicator of trend strength, or perhaps the r2 value from linear regression\nanalysis. Or you could even use the vertical horizontal filter (VHF) to help determine whether the market\nis trending.\u003cbr\u003e\u003cbr\u003eEach of these indicators requires the user to determine how many days' data should be used in the\ncalculations. As you vary the indicator length or number of days used in the calculation, however, the\nresult of the calculation changes also. Thus, there is no unambiguous answer. If the market were about to\nenter or leave a trading range, you could get a different indication of trend strength every day a\nfrustrating set of circumstances.\u003cbr\u003e\u003cbr\u003eRATING THE TREND\u003cbr\u003e\u003cbr\u003eHere is my way of rating a trend, a method I call trendscore. If today's close is greater than or equal to the\nclose x days ago, score one point. If today's close is less than the close x days ago, the trend's rating loses\none point.\u003cbr\u003e\u003cbr\u003eNext, compare today's close to the close x+1 days ago. If today's close is greater than or equal to that\nclose, score another point. Deduct one point if the close is lower than the prior close.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133824954737,"sku":"\\V11\\C09\\RATINGT.PDF","price":4.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_36fd9451-3fb9-4f98-a87d-0df7bc350332.jpg?v=1739653380"},{"product_id":"v11-c11-equival-pdf","title":"V.11:11 (445-450): Equivalent Option Strategies by Lawrence G. McMillan","description":"Equivalent Option Strategies by Lawrence G. McMillan\u003cbr\u003e\u003cbr\u003eStock option traders and futures option traders may think they're already outsmarting stock and futures traders by trading options against their stock or futures positions, but Larry McMillan, author of Options As a Strategic Investment, suggests you take another look: Substituting options for a position in the underlying instrument may be the more efficient alternative. This article presents a simple way to compare alternative options strategies. See what you could be doing.\u003cbr\u003e\u003cbr\u003eOne of the advantages of options is that they are versatile. Options can be a speculative vehicle or a\nrisk-reducing vehicle. In this article, we'll look at some simple uses of options that can increase your\ntrading efficiency in terms of capital usage and execution without requiring an understanding of complex\noptions strategies.\u003cbr\u003e\u003cbr\u003eWhen options are combined that is, assuming more than one option position at a time the profit\npotential that results often resembles that of a more traditional trading position but may be more efficient\nin one of several ways. The key to determining how to compare option combinations with more\ntraditional positions (such as a long stock) is to understand how to determine when two strategies are\nequivalent. Experienced option traders know that understanding equivalent strategies or positions is vital.\nBy establishing the more favorable equivalent strategy, the trader may be able to use his capital more\neffectively or get a better execution when trading.\u003cbr\u003e\u003cbr\u003eTwo strategies are equivalent when they have the same profit potential that is, their profit graphs have\nthe same shape. Two equivalent strategies will most likely have vastly different margin requirements, but\ntheir ultimate profit or loss potential is the same in dollars and thus, their rates of return may be\nsubstantially different. Almost every strategy using call options, for example, has an equivalent strategy\nusing put options. (In most of the strategies discussed here, futures may be substituted for stocks.)\u003cbr\u003e\u003cbr\u003eLet's look at an example. The purchase of a call option is equivalent to the simultaneous purchase of\ncommon stock plus a put option. Both strategies have profit graphs with the same shape (Figure 1). Both\nhave unlimited upside profit potential and limited risk. Of course, the call purchase requires a much\nsmaller initial investment and has a loss potential of up to 100%. The combined stock and put purchase\nhas a much larger investment, but the potential losses and gains are much smaller on a percentage basis\nthan those of the call purchase.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133824987505,"sku":"\\V11\\C11\\Equival.PDF","price":5.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_ebbccb3b-235c-447c-ae8b-4226f301bf6b.jpg?v=1739653384"},{"product_id":"v11-c07-rsivari-pdf","title":"V.11:7 (292-297): RSI Variations Barbara Star, Ph.D.","description":"RSI Variations Barbara Star, Ph.D.\u003cbr\u003e\u003cbr\u003eSometimes we forget that indicators long considered standard contain parameters that can be adjusted to become more responsive to various trading needs. Here, Barbara Star presents four variations of the classic relative strength index: one that provides readings on only the most recent data; one that incorporates volume; one that substitutes the average price for the close; and one that combines two days of price action. This month, she uses Greg Morris's article, \"Facelift for an old favorite,\" as a basis for this tutorial.\u003cbr\u003e\u003cbr\u003eMost charting software contains the relative strength index (RSI) indicator that J. Welles Wilder\noriginally developed in the late 1970s . The RSI (not to be confused with relative strength, which\nmeasures the relationship between a stock and the overall market or industry group) compares the\nstrength of a stock or commodity price in relation to itself over a certain period of time (most commonly\n14 days).\u003cbr\u003e\u003cbr\u003eTraders usually use the RSI as an oversold\/overbought momentum indicator that fluctuates within a scale\nof zero to 100.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133825773937,"sku":"\\V11\\C07\\RSIVARI.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_34971fa2-ef97-4f7d-abce-449704014325.jpg?v=1739653411"},{"product_id":"v11-c10-preproc-pdf","title":"V.11:10 (416-420): Preprocessing Data For Neural Networks by Lou Mendelsohn","description":"Preprocessing Data For Neural Networks by Lou Mendelsohn\u003cbr\u003e\u003cbr\u003eToday's global markets demand new analytical tools for survival and profit as prevailing methods of analysis lose their luster. Here, Stocks \u0026amp; Commodities contributor Lou Mendelsohn explains how an emerging method of synergistic market analysis can be applied to neural networks for financial forecasting and discusses how to select and combine various types of market information and transform the data into a format appropriate for neural network training.\u003cbr\u003e\u003cbr\u003eWith the rise of artificial intelligence technology and the growing interrelated markets of the 1990s\noffering unprecedented trading opportunities, technical analysis simply based on single market historical\ntesting is no longer enough. To meet the trading challenge in today's global markets, technical analysis\nmust be redefined. I propose a multidimensional method of analysis known as synergistic market\nanalysis, which utilizes artificial intelligence technologies, including neural networks, to synthesize\ntechnical, fundamental and intermarket data. Synergistic analysis can quantify and discern underlying\nrelationships and patterns between related markets, capturing information that reflects global market\ndynamics, which can markedly improve trading performance.\u003cbr\u003e\u003cbr\u003ePreviously, I discussed the selection of neural network paradigms and architectures for synergistic\ntrading. This time, I will explore several issues related to input data selection and preprocessing. Because\navailable technical, intermarket and fundamental market data is extensive and useful preprocessing\nmethods quite extensive, here are some ways to handle input data effectively and efficiently in\ndeveloping neural networks.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133825806705,"sku":"\\V11\\C10\\Preproc.PDF","price":4.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_19675ae7-1abe-47f0-906c-25e5d6ba4f65.jpg?v=1739653414"},{"product_id":"v11-c03-sidecoi-pdf","title":"V.11:3 (122-124): SIDEBAR: COIN FLIPPING MATH","description":"COIN FLIPPING MATH\u003cbr\u003e\u003cbr\u003eTo find the optimal bet size for a coin that heads wins two times the fraction bet, and tails loses the\nfraction bet of the running total stake on tails:\u003cbr\u003e\u003cbr\u003e...","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133827084657,"sku":"\\V11\\C03\\SIDECOI.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_0534efb6-8a4f-4710-909c-1e481fe6398f.jpg?v=1739653447"},{"product_id":"v11-c09-trading-pdf","title":"V.11:9 (376-381): Trading Options With Bollinger Bands And The Dual CCI by D.W. Davies","description":"Trading Options With Bollinger Bands And The Dual CCI by D.W. Davies\u003cbr\u003e\u003cbr\u003eCombining two classic indicators, the commodity channel index (CCI) and Bollinger bands, can be a potent timing tool for options trading. This author was inspired by John Bollinger's article \"Bollinger Bands\" from the 1993 S\u0026amp;C Bonus Issue to develop a way of using the CCI to confirm Bollinger bands' trading opportunities. His technique uses a new variation of the CCI, the dual CCI. Here's how to put the technique to work.\u003cbr\u003e\u003cbr\u003eTo trade options successfully, traders need to consistently and correctly predict three elements of the\nunderlying asset: price, price direction and the amount of time it will take for price to arrive at the\nexpected price changes.\u003cbr\u003e\u003cbr\u003eBollinger bands are lines plotted around price to form a trading band or range. The bands are used to\nidentify trading opportunities where market prices are relatively overvalued or undervalued. Rather than\nproviding absolute buy and sell signals, Bollinger bands tell the trader whether prices are high or low on\na relative basis. The concept of channels or trading bands is well recognized as an aid in determining the\nprobable range of prices.\u003cbr\u003e\u003cbr\u003eThe centered channel analysis (CCA) technique tries to define cycles and predict price by drawing price\nbands around centered moving averages of price and measuring the amplitude of price cycles within the\nprice channel. The disadvantage of centered channel analysis is that it requires the trader to visualize or\nproject the channels into the future, which introduces an element of subjectivity. Because of this\nsubjectivity, the CCA is not ideally suited for technical analysis.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133827117425,"sku":"\\V11\\C09\\TRADING.PDF","price":4.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_4c27a3cc-2001-4a04-bb69-5a7edcd96014.jpg?v=1739653450"},{"product_id":"v11-c04-sidemet-pdf","title":"V.11:4 (174-177): SIDEBAR: Spreadsheet Calculations by Thom Hartle","description":"SPREADSHEET CALCULATIONS\u003cbr\u003e\u003cbr\u003eThis set of oscillators is easily calculated in\na spreadsheet (sidebar Figure 1). The first\nfour column are the date, high, low and\nclosing price of Boeing (BA). Column E is\nthe calculation of the 24-period moving average,\nthe basis for the price excess oscillator.\nThe formula for cell E25 is:\u003cbr\u003e\u003cbr\u003e...","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133828198769,"sku":"\\V11\\C04\\SIDEMET.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_c63f723c-b25c-4dd1-a201-ab14c6918476.jpg?v=1739653474"},{"product_id":"v11-c05-stochas-pdf","title":"V.11:5 (189-199): Stochastic RSI And Dynamic Momentum Index by Tushar Chande and Stanley Kroll","description":"Stochastic RSI And Dynamic Momentum Index\nby Tushar Chande and Stanley Kroll\u003cbr\u003e\u003cbr\u003eHere, a relative strength index (RSI) tutorial clarifies the basics of the time-honored indicator. The\ntutorial also introduces new variants that STOCKS \u0026amp; COMMODITIES contributor Tushar Chande and Kroll,\nChande \u0026amp; Co.'s Stanley Kroll call net momentum oscillator and the stochastic RSI, which are better at\nflagging overbought and oversold conditions than RSI itself. Also introduced and examined is a\nvariable-length RSI called the dynamic momentum index (DMI), which we indexed to market volatility.\nThe new variants, Chande explains, extend the scope and power of momentum indices, as we will see.\u003cbr\u003e\u003cbr\u003eMany articles in STOCKS \u0026amp; COMMODITIES have described J. Welles Wilder's relative strength index\n(RSI) and its derivatives. One recent example was the relative momentum index (RMI), which was\ndiscussed by Roger Altman. In another, William Blau wrote about the true strength index (TSI), a\ndouble-smoothed version of RSI that is identical to the RSI except for a scaling constant.\nEach RSI derivative is a valuable extension of the approach. However, details of RSI development were\nnot shown in either derivation, and thus, it is sometimes difficult to determine what RSI and its\nderivatives are measuring. They are, of course, measuring momentum. But that is only part of the story.\u003cbr\u003e\u003cbr\u003eWe will take a tutorial look at RSI and its derivatives, then break down RSI and reassemble it so we know\nhow it works. After that we will do the same with the derivatives. First, we will discuss a net momentum\noscillator and a stochastic RSI, which are better at flagging extremes in prices than RSI. Then we will\nindex the RSI to price volatility. This leads to a variable-length dynamic momentum index (DMI) that\nautomatically adjusts to market action. The new RSI variants extend the scope and power of momentum indices.\u003cbr\u003e\u003cbr\u003eTHE BASICS OF MOMENTUM\u003cbr\u003e\u003cbr\u003eIn technical analysis, we define momentum as the difference between two prices. The time period\nbetween the two prices varies. The two prices can be as little as one period apart, while the period can be\nany time length from minutes to months. Most commonly, we use one trading day as the unit of time.\nWith a one day time period, the closing prices (C) define momentum as shown here.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133832950129,"sku":"\\V11\\C05\\STOCHAS.PDF","price":5.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_a255d522-4ee8-43e6-86e1-3c1229a1e68d.jpg?v=1739653623"},{"product_id":"v11-c12-markovc-pdf","title":"V.11:12 (496-499): Markov Chains by George R. Arrington, Ph.D.","description":"Markov Chains\nby George R. Arrington, Ph.D.\u003cbr\u003e\u003cbr\u003eA Markov chain, the concept of which was developed in 1906 by Russian mathematician A.A. Markov, is\na mathematical tool that traders might use to predict future price changes on the basis of past price\nchanges. STOCKS \u0026amp; COMMODITIES contributor George R. Arrington explains how.\u003cbr\u003e\u003cbr\u003eA Markov chain is a mathematical tool that was developed in the early 1900s. It has been used in a\nvariety of applications, including but not limited to forecasting weather changes, voting patterns,\ndemographic trends, agricultural yields, insurance payout and even outcomes of sporting events. It is a\ntechnique that traders can conceivably use to predict future price changes on the basis of past price\nchanges, to identify the probabilities of future price changes and to assess potential risk.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133832982897,"sku":"\\V11\\C12\\MARKOVC.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_a01c9ffb-e212-467b-8635-133c6ceed394.jpg?v=1739653626"},{"product_id":"v11-c04-sideadx-pdf","title":"V.11:4 (154-155): The ADX by John Sweeney","description":"THE ADX\u003cbr\u003e\u003cbr\u003eThe calculation of the average directional movement (ADX)\nindicator is built on the intuitive notion that a trend is a series\nof price ranges extending in a consistent direction. In sidebar\nFigure 1, example A, the second days trading range is higher\nthan the first days trading range, indicating positive directional\nmovement. ...","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133833539953,"sku":"\\V11\\C04\\THEADXB.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_4a964cb7-4aa2-400a-8933-1c8127d473b3.jpg?v=1739653648"},{"product_id":"v11-c10-thejsam-pdf","title":"V.11:10 (427-431): The JSA Moving Average by George R. Arrington, Ph.D.","description":"The JSA Moving Average by George R. Arrington, Ph.D.\u003cbr\u003e\u003cbr\u003ePresenting the JSA, a unique moving average that could provide an early warning that other technical indicators may have an impending signal. In addition, comparing the JSA with other moving averages raises interesting questions about the information that moving averages in general provide.\u003cbr\u003e\u003cbr\u003eMost traders use moving averages to identify underlying price trends and to help signal the timing of a\ntrade. In slow- moving markets, the three most common moving averages (simple, linear and\nexponential) may do just fine. But in fast-moving markets with sudden and large price changes, the JSA\nmoving average may be a better indicator to watch.\u003cbr\u003e\u003cbr\u003eCOMPARISON OF MOVING AVERAGES\nFigures 1 and 2 illustrate the simple, linear, exponential and JSA moving averages. (The calculation for\neach average is explained in the sidebar, \"JSA calculations,\" but the JSA can be defined as\u003cbr\u003e\u003cbr\u003e(P1 + Pn) \/ 2\nin which P = price.)\u003cbr\u003e\u003cbr\u003eThe price series is the same in both Figures 1 and 2, and price changes are exaggerated to illustrate the\ndifferences in the averages. To summarize, prices rise slowly at first; then a large spike increase is\nfollowed by a large decline; then prices stabilize.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133833769329,"sku":"\\V11\\C10\\THEJSAM.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_26f24479-3e37-460f-ab00-599fe13c153b.jpg?v=1739653650"},{"product_id":"v11-c02-relativ-pdf","title":"V.11:2 (57-60): Relative Momentum Index: Modifying RSI by Roger Altman","description":"Relative Momentum Index: Modifying RSI\nby Roger Altman\u003cbr\u003e\u003cbr\u003eOverbought\/oversold indicators are popular among traders for identifying market turns. The relative\nstrength index (RSI) is one such popular indicator. Here, Roger Altman presents his work on modifying\nthe index to smooth the indicator's sensitivity to momentum and the benefits that result.\u003cbr\u003e\u003cbr\u003eWhen a technical indicator such as a moving average or stochastics fails to give a timely signal, it is\nalmost always due to the indicator's lookback period being out of phase with price movement. For most\nindicators to work properly, they need to use an accurate lookback value. Unfortunately, there is no\ncorrelation between the best lookback value from one period to another, and that is why most technical\nindicators are unreliable. But not all.\u003cbr\u003e\u003cbr\u003eJ. Welles Wilder's relative strength index (RSI) has been one of the most popular overbought\/oversold\nindicators since its publication in New Concepts in Technical Trading Systems in 1978. A notable\nattribute of the RSI is that its response to price fluctuations is insensitive to its sole parameter, the\nlookback period (value X shown in sidebar \"The RSI and the RMI\"). But the RSI is not always easy to\ninterpret, because it doesn't oscillate evenly between overbought and oversold regions (Figure 1 gives an\nexample for the Standard \u0026amp; Poor's 500). To compensate for this erratic behavior, technicians often use\ntrendlines as well as support and resistance analysis of the RSI itself to help anticipate reversal points.\nThese techniques have done little to improve the reliability of the relative strength index because chart\nanalysis is more an art (that is, subjective) than it is a science (that is, objective) and, therefore, almost\nimpossible to test statistically by computer.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133834588529,"sku":"\\V11\\C02\\RELATIV.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_7e759864-9632-4d3f-951e-645507012001.jpg?v=1739653679"},{"product_id":"v11-c05-theadxb-pdf","title":"V.11:5 (213-214): The ADX by John Sweeney","description":"THE ADX\u003cbr\u003e\u003cbr\u003eThe calculation of the average directional movement (ADX)\nindicator is built on the intuitive notion that a trend is a series\nof price ranges extending in a consistent direction. In sidebar\nFigure 1, example A, the second days trading range is higher\nthan the first days trading range, indicating positive directional\nmovement. In example B, the second days trading\nrange is below the first days trading range, an indication of\nnegative directional movement. ...","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133835112817,"sku":"\\V11\\C05\\THEADXB.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_e2b52f3e-97a2-4b08-9e85-12a2d907ba02.jpg?v=1739653700"},{"product_id":"v11-c07-interna-pdf","title":"V.11:7 (298-305): Internal Market Momentum by Martin J. Pring","description":"Internal Market Momentum by Martin J. Pring\u003cbr\u003e\u003cbr\u003eBreadth momentum analysis takes momentum analysis, traditionally gleaned from price and volume, a step further by examining a particular market in closer detail. Market analyst Martin Pring delves into three categories of breadth momentum indicators in this excerpt from his new book, Martin Pring on Market Momentum.\u003cbr\u003e\u003cbr\u003eTypical momentum indicators are constructed from price or volume data related to a specific security.\nHowever, a market comprises an aggregate measure of a number of different components. A stock\nmarket, for instance, consists of a universe of stocks. Similarly, a commodity index is calculated from the\nprices of a number of different commodities.\u003cbr\u003e\u003cbr\u003eIn such cases, it is possible to extend analysis of momentum indicators by studying some or all of the\ncomponents within a particular momentum format. This concept is known as breadth momentum analysis\nbecause it measures a broad spectrum of the components of the specific market under consideration. In\nsome ways breadth momentum is far more revealing than price momentum because the index, or price,\nmay be unduly influenced by a few highly weighted elements, but a momentum indicator calculated from\na basket of components can better reveal more of what is occurring below the surface of a particular\nmarket, as more information is available upon which to draw. Generally, the fewer issues that participate\nin an uptrend, the greater the probability that the trend is about to reverse. Similarly, the fewer stocks\ndeclining in the face of a new low in the market averages, the greater possibility that the market is about\nto reverse to the upside. Breadth momentum thus serves as an additional tool for monitoring potential\ndivergences.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133835145585,"sku":"\\V11\\C07\\INTERNA.PDF","price":5.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_ea1ed832-8204-4436-8c20-2e9b43b3a7d0.jpg?v=1739653702"}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/collections\/volume-11-1993-18.gif?v=1739676534","url":"https:\/\/shop.traders.com\/collections\/articles-volume-11.oembed","provider":"Stocks \u0026 Commodities","version":"1.0","type":"link"}