{"title":"Volume 14 (1996)","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-14\/issue-02?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 2 February\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-14\/issue-03?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 3 March\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-14\/issue-04?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 4 April\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-14\/issue-05?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 5 May\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-14\/issue-06?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 6 June\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-14\/issue-07?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 7 July\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-14\/issue-08?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 8 August\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-14\/issue-09?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 9 September\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-14\/issue-10?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 10 October\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-14\/issue-11?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 11 November\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-14\/issue-12?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 12 December\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-14\/issue-13?sort_by=title-ascending#ProductGridContainer\" style=\"margin-right:16px;\"\u003eChapter 13 Quick Scans\u003c\/a\u003e\u003ca href=\"\/collections\/articles-volume-14\/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":"v14-c03-develop-pdf","title":"V.14:3 Developing a Trading System by Greg Morris","description":"NOVICE TRADER\u003cbr\u003e\u003cbr\u003eDeveloping A Trading System\u003cbr\u003e\u003cbr\u003eOn the road to using technical analysis for trading, developing a trading system is\na logical step to take along the way. Here are some guidelines to develop a basic\nsystem.\nby Greg Morris\u003cbr\u003e\u003cbr\u003eBeginners in the art of technical analysis using indicators should not recoil at the mention of a trading system,\nbecause a trading system is built upon one or more indicators used in a systematic fashion. The advantage is the user\ncan take the indicators beyond a seat-of-the-pants approach, develop some rules and test applications. Here, we will\ndeal with the development of a trading system from an idea built on Bollinger bands, a well-known indicator. The\ntrading system discussed is fairly straightforward, but the concepts can be applied to any degree of system\ncomplexity the reader desires.\u003cbr\u003e\u003cbr\u003eA trading system means different things to different people. Some focus on finding the ultimate system that will\nfulfill their desire to gain great wealth from the marketplace. Others, however, just enjoy the art of building a system,\nthen tinkering with it endlessly. What, then, is the real purpose of a trading system? Personally, I design them to\nassist in making trading decisions in the markets, to help me overcome the demon of emotion, and to separate fact\nfrom fiction. In fact, this is what I, at least, believe technical analysis is all about. A trading system is a sound\napproach to discovering the technical approaches that work in the marketplace.\u003cbr\u003e\u003cbr\u003eThat said, a trader benefits by using a system to assist in making trading decisions. This system should be based on\nmethods and analysis that the trader fully subscribes to. It would be foolish to think that one could use a trading\nsystem based on a methodology that he or she didn't fully trust.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133794382193,"sku":"\\V14\\C03\\DEVELOP.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_04277492-b763-45b4-967e-40e8fea5eef3.jpg?v=1739652685"},{"product_id":"v14-c03-theknig-pdf","title":"V.14:3 (111-114): The Knight-Ridder CRB Index by Raymond T. Murphy","description":"STATISTICS\u003cbr\u003e\u003cbr\u003eThe Knight-Ridder Crb Index\u003cbr\u003e\u003cbr\u003eThe Knight-Ridder-Commodity Research Bureau Index - the CRB to you and me\n- has been updated to reflect today's commodity markets. Here's an explanation\nof the changes to this industry barometer.\nby Raymond T. Murphy\u003cbr\u003e\u003cbr\u003eThe Knight-Ridder-Commodity Research Bureau (CRB) Index has been the premier barometer of commodity\nprices since 1956, tracking tradables such as wheat and corn, crude and heating oil. Over the years, the index has\nevolved into a comprehensive commodity benchmark covering a wide range of actively traded commodity futures\ncontracts. As futures markets have matured and new markets have come into being, the KR-CRB Index has changed\nalong with them. By adding crude oil to the index in 1982 and deleting some agricultural commodities in 1987, the\nindex has kept pace with many of the advances in the commodity investment area.\u003cbr\u003e\u003cbr\u003eThe KR-CRB Index futures contract began trading on the New York Futures Exchange (NYFE) in 1986. Since then,\nthe index has been scrutinized to make available a market where both large investors and small are able to replicate\nthe movement of a basket of commodity futures contracts at a fraction of the cost of owning the individual contracts.\nOver the years, several component commodities of the index came to be viewed as nonessential, while other\nimportant commodities were added. As time passed, these changes were all undertaken with the sole purpose of\nmaintaining an accurate and meaningful measurement of commodity prices. The final and most significant changes\nwere implemented on December 6, 1995.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133794480497,"sku":"\\V14\\C03\\THEKNIG.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_a02628f0-9218-4b63-8ec5-4dc3ed6ea0c9.jpg?v=1739652687"},{"product_id":"v14-c05-sidemon-pdf","title":"V.14:5 (197-199): SIDEBAR: Monte Carlo Simulation","description":"MONTE CARLO SIMULATION\u003cbr\u003e\u003cbr\u003eLet us assume we have a specified string of profits and losses for example, the 1985-89 string of profits and losses for\nthe 25-market portfolio used in the article. The Monte Carlo simulation is the technique we use to determine the probability\nof losing a specified number of dollars when trading this string of profits and losses before reaching a specified profit goal.\nThe technique simulates how a trader would fare if he were to sequentially place trades that were randomly selected from\nthe specified listing of profits and losses.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133794546033,"sku":"\\V14\\C05\\SIDEMON.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_46f98bab-abb1-409f-b005-bf67f4e20ac2.jpg?v=1739652690"},{"product_id":"v14-c10-sidekra-pdf","title":"V.14:10 (441-449): SIDEBAR: The K-Ratio Precious Metals Switch Fund","description":"In the July 1996 STOCKS \u0026amp; COMMODITIES, Jay Kaeppel described a technique for evaluating gold stocks using\nthe Barron's Gold Mining Index (GMI) relative to gold bullion. He showed that analysis of the ratio between the\nGMI and the price of gold bullion could establish favorable and unfavorable outlooks for the direction of gold stocks\nand gold bullion. Nelson Freeburg modified Kaeppel's method, which he referred to as the K-ratio, and developed\na trading system for the gold stock's group. The following discussion details Freeburg's precious metals switch fund\nsystem.\u003cbr\u003e\u003cbr\u003eThe first step in the trading system is to calculate the K-ratio. The K-ratio is the GMI, found on the \"Commodities\nand Financial Futures\" page in Barron's , divided by the price of gold. The specific price is the Handy \u0026amp; Harmon\nquote listed on Barron's \"Market Laboratory Economic Indicators\" page. This ratio is used as the key indicator for\nthe trading system, which is actually a dual band model.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133794644337,"sku":"\\V14\\C10\\SIDEKRA.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_e3fd1532-b781-4995-858a-79963c07f074.jpg?v=1739652693"},{"product_id":"v14-c03-sidethe-pdf","title":"V.14:3 (117): SIDEBAR: The K-ratio TradeStation Code","description":"THE K-RATIO TRADESTATION CODE\u003cbr\u003e\u003cbr\u003eThe K-ratio system includes no buy or sell signals. When run simultaneously with other trade-generating systems, it prints\nthe K-ratio of the trade-generating system to the print log window.\u003cbr\u003e\u003cbr\u003eSystem Name : K-ratio\u003cbr\u003e\u003cbr\u003eVAR: Observation(0), Count(0), SumXY(0), SumX(0), SumY(0), SumXSqr(0);\u003cbr\u003e\u003cbr\u003eVAR : Beta0(0), Beta1(0), SumResidSqr(0), SigmaRegress(0), StandardErrB1(0);\u003cbr\u003e\u003cbr\u003eVAR: StandardErrB1Denom(0), YProjected(0), KRatio(0);\u003cbr\u003e\u003cbr\u003eARRAY: Equity[5000](0);\u003cbr\u003e\u003cbr\u003eObservation = Observation+1;\u003cbr\u003e\u003cbr\u003eEquity[Observation] = NetProfit + OpenPositionProfit; ...","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133797429617,"sku":"\\V14\\C03\\SIDETHE.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_be1bb4fe-df28-4f1b-adc3-7020ec109541.jpg?v=1739652766"},{"product_id":"v14-c06-sidemet-pdf","title":"V.14:6 (255): SIDEBAR: MetaStock syntax - Technical Analysis, Inc.","description":"\u003cp\u003eMETASTOCK SYNTAX - Technical Analysis, Inc.\u003c\/p\u003e","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133797626225,"sku":"\\V14\\C06\\SIDEMET.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_d6c04d44-d56f-4a37-b8c2-5bf75556f98f.jpg?v=1739652768"},{"product_id":"v14-c11-stayinp-pdf","title":"V.14:11 (483-487): Stay In Phase by John F. Ehlers","description":"Stay In Phase by John F. Ehlers\u003cbr\u003e\u003cbr\u003eThis cycles software specialist discusses an indicator based on cyclical analysis.\u003cbr\u003e\u003cbr\u003eA cycle is one market characteristic that can be scientifically measured. Although they can be measured, they are still maddening because they are in essence ephemeral; they come and they go. Our recent research, however, indicates there is a fundamental cycle parameter that leads us to the correct trading strategy for any current market mode. To\nfind out more, we must start by defining two possible market modes, the trend mode and the cycle mode. In the trend mode, the correct strategy is to buy (or sell, for downtrends) and hold. In the cycle mode, the correct strategy is to buy and sell on the cyclic valleys and\npeaks.\u003cbr\u003e\u003cbr\u003eThe parameter we use is the phase of the cycle. The measured phase tells us with great sensitivity when we are in the trend mode, enabling the capture of a large fraction of the trend movement. Typically, this capture range is far larger than can be obtained with a crossing moving average or other usual trend identification techniques. In the cycle mode, the measured phase pinpoints the cyclic turns in advance, with the further advantage that the false whipsaw signals of typical oscillator signals are avoided.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133801099633,"sku":"\\V14\\C11\\STAYINP.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_3ad2b3e0-c392-4b5e-813d-f7006f216335.jpg?v=1739652821"},{"product_id":"v14-c06-enhanci-pdf","title":"V.14:6(265-270) Enhancing On-Balance And Negative Volume - by Phillip C. Holt","description":"Here's a new technique that can be used to identify when on-balance volume or negative volume is indicating something notable about the direction of the New York Stock Exchange Composite Index. If your objective is to keep the bear away from the door, this may help. By Phillip C. Holt\u003cbr\u003e\u003cbr\u003eAnalysts have mined the relationship between price and volume for decades. Joseph Granville,\nMarc Chaikin, Richard Arms and Norman Fosback, to name only a few of technical analysis'\nall-stars, have studied the relationship in depth. On-balance volume, accumulation\/distribution,\nease of movement and negative volume are all methods these technicians developed or\npopularized to quantify the relationship. Each of these methods produces a series of values that\ncan be compared over time with price to determine divergence or confirmation, with resulting\nanalytical insight. Although the methods at issue vary widely, these analysts agree that valuable\ninformation about price movement can be found in the relationship between price and volume.\u003cbr\u003e\u003cbr\u003eADAPTING BOLLINGER'S %B\u003cbr\u003e\u003cbr\u003eCertain techniques popularized by John Bollinger can be used to identify divergence between\nprice and on-balance or negative volume. Ordinarily, market analysts use visual comparison of\nprice and price-volume indicators to identify divergence, but visually identifying the extent of\nthe divergence can be especially tricky. Thus, a method that quantifies divergence so it can be\nused for objective decision-making is necessary.\u003cbr\u003e\u003cbr\u003eJohn Bollinger popularized the Bollinger bands channel-building technique that is often included\nin technical analysis software today. The technique constructs a line that is two standard\ndeviations above and below a 20-period simple moving average (SMA) of price (see Figure 1).\nBollinger estimates that 85% of a security's daily closing prices will fall within the channel. The\nlength of the moving average and the number of standard deviations can be adjusted to\ncircumstance (for example, weekly or monthly prices).","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133802541425,"sku":"\\V14\\C06\\ENHANCI.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_d45bb3a5-daf3-42f4-9472-f0890ca89081.jpg?v=1739652854"},{"product_id":"v14-c06-thehigh-pdf","title":"V.14:6(248-252) The High, Tight Flag by Greg Kuhn","description":"During a strong trend, a stock will still spend some time in a consolidation period before the next run. Here's a chart pattern that can be found during a consolidation of a strong stock. By Greg Kuhn\u003cbr\u003e\u003cbr\u003eIn most cases, when a stock skyrockets 40%, 50% or even 60% in just a few weeks, it's considered overextended and prone to a deep correction. This is true especially if the rally - often referred to as a climax run or parabolic spike - occurs at the end of an advance that developed over many months. Sometimes the situations could even be the beginning of an even larger advance, and often, such opportunities are forewarned by a particular chart pattern called the high, tight flag.\u003cbr\u003e\u003cbr\u003eThe high, tight flag pattern is a rare formation characterized by its occurrence after an advance that takes a stock up approximately 100% to 120% in just four to eight weeks, less in some cases. Following such a run, the stock usually corrects in a tight, sideways pattern lasting anywhere from three to six weeks, retracing no more than 10% to 20% of the advance. Many stocks can rise another 100% or more after the formation. The high, tight flag pattern consolidates an advance that often occurs after a stock has established a substantial base. The stock\ntypically spends time in a well-contained base formation lasting from many months to many years. Then, some important news event usually emerges to lift the stock out of its dormancy - for example, an exceptionally strong earnings surprise or perhaps word that a major investor is taking a large position in the stock.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133803622769,"sku":"\\V14\\C06\\THEHIGH.PDF","price":4.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_55d0db0b-1c3a-41c4-b5cf-d0989d08eb1f.jpg?v=1739652883"},{"product_id":"v14-c09-sidesta-pdf","title":"V.14:9 (375-378): SIDEBAR: Standard Error Bands - Technical Analysis, Inc.","description":"Sidebar: Standard error bands by Thom Hartle\u003cbr\u003e\u003cbr\u003eMicrosofts Excel comes with statistical formulas that can be used to create the standard error bands and the related indicators (sidebar Figure 1). The following example uses Microsoft stock price series; column A is the date. Column B is a numerical series for representing the X-axis for calculating the statistical indicators. We are not using the date column for the X-axis because the weekends will be counted in the calculation of the statistical indicators. The difference between Friday and Monday is three periods to Excel, not one, and therefore, the statistical indicators will\nuse column B. In cell B2, enter the number 1, then in cell B3, enter the following formula and copy down: =B2+1","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133805195633,"sku":"\\V14\\C09\\SIDESTA.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_e9accf88-db46-41ea-9765-7fba002a0747.jpg?v=1739652925"},{"product_id":"v14-c11-onthepr-pdf","title":"V.14:11 (497-504): On the Principle of Parsimony: James O'Shaughnessy by Thom Hartle","description":"On the Principle of Parsimony\nJames O'Shaughnessy by Thom Hartle\u003cbr\u003e\u003cbr\u003eI wanted to understand why certain stocks went up and why others went\ndown. I went looking for literature that would explain what I could see\nhappening in the marketplace. I found that a lot of the available material\nwas anecdotal. Where was the scientific methodology to support the claims?\nI was surprised that there wasn't much of that type of research available. James O'Shaughnessy\u003cbr\u003e\u003cbr\u003eMoney manager and author James O'Shaughnessy, founder and\npresident of O'Shaughnessy Capital Management, has been called a\n\"statistical guru\" (by Barron's, no less), while his first book, Invest\nLike the Best, was pronounced \"awesome\" by Forbes.\nO'Shaughnessy's latest work, What Works on Wall Street, is a\nserious inquiry into the investment stategies that stand up under\nlong-term scrutiny and is refreshing research for every investor. So\nwhat does work on Wall Street, and more important, why? To find\nout, STOCKS \u0026amp; COMMODITIES Editor Thom Hartle spoke to\nO'Shaughnessy on August 27, 1996, via telephone interview about\ninvesting for the long term, why human nature is brilliant as well as\ndestructive and what class of companies offers the best\nopportunities.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133809553777,"sku":"\\V14\\C11\\ONTHEPR.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_a40c9996-03e2-4efa-8f89-7076cee2cd87.jpg?v=1739653004"},{"product_id":"v14-c07-sidethe-pdf","title":"V.14:7 (290-293): SIDEBAR: The Alpha Indicator - Technical Analysis, Inc.","description":"THE ALPHA INDICATOR - Technical Analysis, Inc.\u003cbr\u003e\u003cbr\u003eTo build your own alpha indicator in Microsoft Excel, use the following steps. Column A should\nbe the date, column B the Treasury bond futures data and column C is the Fidelity Select\nChemical Fund data.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133810438513,"sku":"\\V14\\C07\\SIDETHE.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_6f9dec33-771d-4d4b-8bb1-3e75127bd3b4.jpg?v=1739653036"},{"product_id":"v14-c05-thevolu-pdf","title":"V.14:5 (204-206): The Volume Indicators by Bruce R. Faber","description":"The Volume Indicators by Bruce R. Faber\u003cbr\u003e\u003cbr\u003eIn spite of its importance, much less is written about volume than about price. Here's an introduction on the subject for the novices and a refresher for the veterans.\u003cbr\u003e\u003cbr\u003eTo technical analysis, volume is as important as price. Some analysts would even claim that volume is more\nimportant of the two. But price without volume is like Standard without Poor's; by itself, price represents only half of the necessary information. At the very least, what volume is doing in relation to price should always be taken into consideration when making trading decisions.\u003cbr\u003e\u003cbr\u003eOn most charts, the daily volume is depicted by a vertical line\/bar directly below the corresponding price\npoint, bar or candlestick. In Figure 1, which shows Intel Corp. [INTC], volume lines can be seen at the bottom. The relative height of the volume line is usually compared only with the other volume bars within the\nperiod covered by that particular chart.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133812568433,"sku":"\\V14\\C05\\THEVOLU.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_34dfd72a-e505-4517-a721-cc31662ed362.jpg?v=1739653079"},{"product_id":"v14-c12-stillba-pdf","title":"V.14:12 (534-540): Author and Analyst John Murphy by Thom Hartle","description":"Author and Analyst John Murpy by Thom Hartle\u003cbr\u003e\u003cbr\u003eJohn Murphy, a veteran of nearly 30 years in the equities and futures markets, is the technical analyst for CNBC television, publisher of the \"Futures Trends and Intermarket Analysis\" newsletter and author of such classics in the field as Technical Analysis of the Futures Market and Intermarket Technical Analysis, and his newest work, The Visual Investor, promises to be comparably memorable. Most recently, he's also cofounder of MurphyMorris Inc., a joint venture to develop multimedia software for investors interested in technical analysis. With all that he's seen and done, what are some of the technical approaches he's most impressed with? Stocks \u0026amp; Commodities asked him about the steps he takes to profiling which markets are offering opportunities and which are not, his favorite technical indicators, and more.\u003cbr\u003e\u003cbr\u003eQ: Where and when did you start your career as a market analyst?\u003cbr\u003e\u003cbr\u003eA: I started in 1968 as a very junior technical analyst for the CIT Financial Corp. My job was just to chart the stocks that they had in their portfolio. At meetings we reviewed the charts, and every now and then, I would very carefully offer a comment or an observation.\u003cbr\u003e\u003cbr\u003eQ: And they took your advice?\u003cbr\u003e\u003cbr\u003eA: Oh, they usually ignored it. At any rate, I spent the first couple of years learning everything I could about technical analysis. I read every book I could find, even though there werent a lot of books available at the time. I read the classics that were available, and I took one or two courses at the New York Institute of Finance (NYIF). Then in the early 1970s, the stock market really cooled off and went into a very bad period. I switched over, temporarily I thought, into commodities, which was red hot at the time.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133812797809,"sku":"\\V14\\C12\\STILLBA.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_ace6a0ef-21ce-4511-bc24-ab7b793b458e.jpg?v=1739653081"},{"product_id":"v14-c01-sidehis-pdf","title":"V.14:1 (33): SIDEBAR: Historical Market Turning Points","description":"HISTORICAL MARKET TURNING POINTS\u003cbr\u003e\u003cbr\u003eThe Kinsman smoothed A-D has caught major trend changes in the market well over the past two decades. The most\nrecent of these:\u003cbr\u003e\u003cbr\u003e1987\u003cbr\u003e\u003cbr\u003e1 Selecting norms for 1987 was one of the more complicated exercises in using this oscillator. The problem was the\n1986 market (not shown), with four spikes above +400 and four under -400, plus one at -649 in September. Still,\nthe other highs and lows averaged out to a range of +100 to +300 and -200 to -300. The September spike low barely\nqualified as a bear alert and no following second spike announced a trend change.\u003cbr\u003e\u003cbr\u003e2 January 1987 saw a bull alert at +550 that cancelled the prior bear alert. It was a rare spike in that it was followed\nby sharply declining highs averaging around +200 with lows below -75, while the S\u0026amp;P soared from 250 to 300,\nposting a 20% gain by March. This was a dramatic divergence between the smoothed A-D and the S\u0026amp;P, a definite\nnegative for the overall market. Then a -753 spike low was hit in April at S\u0026amp;P 280, a low-risk buy that also formed a\nbear alert as it cancelled the January bull alert.\u003cbr\u003e\u003cbr\u003e3 Despite the messy March-May period, the norms continued to hold around +300 tops and -200 lows until the bear\nconfirmation at -644 in early September around S\u0026amp;P 315.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133815615857,"sku":"\\V14\\C01\\SIDEHIS.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_7077f5c2-fa3b-46f5-9f51-d8e9ca0159e1.jpg?v=1739653166"},{"product_id":"v14-c03-measuri-pdf","title":"V.14:3 (115-118): Measuring System Performance by Lars N. Kestner","description":"TRADING TECHNIQUES\u003cbr\u003e\u003cbr\u003eMeasuring System Performance\u003cbr\u003e\u003cbr\u003eWant to improve the evaluation of your trading systems? Here's a new\nperformance measure that uses some statistics to measure profitability through\ntime.\nby Lars N. Kestner\u003cbr\u003e\u003cbr\u003eStarting with an idea and developing a trading system is a relatively simple and straightforward process. Because\nit is a simple process, it is possible to create numerous systems in a short time. Since trading is a profit-oriented process, our interest lies in the performance of the best systems created, not the number of systems created. How,\nthen, can performance be determined in order to select the optimal system? Looking at total profits is a major part of\nthis question, but other factors are perhaps as important, if not more. Consistency of profits is probably the most\ninfluential factor in performance. Basing performance evaluation on consistency of returns can provide better insight\nto our ultimate question: How will the system perform in the future?\u003cbr\u003e\u003cbr\u003eMany measures exist to quantify trading system performance, but all have certain weaknesses. Some can be biased\nby one or two big trades, while some do not account for risk properly. Some are biased by correlation in returns,\nwhile others are not comparable over different periods. I have developed a new method of evaluating performance\nthat is more robust than current popular techniques. This method, which maintains the idea of measuring reward as\ncompared with risk, utilizes more advanced statistical techniques to quantify performance. Rather than simply\nlooking at returns independently, consistency of results through time will be the focal point of this new performance\nmethod.\u003cbr\u003e\u003cbr\u003eThe new measure, which I call the K-ratio, works with the equity curve of a system. An equity curve is simply a\nchart of accumulated profits through time. A mathematical model must be created for equity to calculate the\ncomponents of the new method. In the model, equity on any day is explained solely by its distance from the start of\nthe test.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133816107377,"sku":"\\V14\\C03\\MEASURI.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_3ac35f58-f475-4cca-a8ca-a9fd7adea03f.jpg?v=1739653189"},{"product_id":"v14-c02-options-pdf","title":"V.14:2 (79-86): Options Strategist Lawrence G. McMillan by Thom Hartle","description":"INTERVIEW: Options As A Strategic Investment\u003cbr\u003e\u003cbr\u003eI pretty much determined that it was hard to predict stock prices, and of course, back in 1973 and 1974, it was a bear market. Options were a good vehicle for me\nto work with because of their advantages, like shorting a stock, and that fit in well with the way I thought about things.-Lawrence McMillan\u003cbr\u003e\u003cbr\u003eOptions are a part of general financial strategy that at once draws and repels market participants. It's also a strategy that ironically you've basically got to lose money at in order to understand. So how do you learn more about it? It helps if you're familiar with Lawrence McMillan's Options As A Strategic Investment, a classic tome in the investment field. STOCKS \u0026amp; COMMODITIES spoke to McMillan, who is also the publisher of The Options Strategist newsletter, and asked him about the ins and outs of options. S\u0026amp;C Editor Thom Hartle asked McMillan about, among other things, implied volatility; how far McMillan goes out to buy options; why it's important to do research on your portfolio; some strategies he uses and how expirations of index options move the market. The interview was conducted on November 13, 1995, via telephone.\nby Thom Harle\u003cbr\u003e\u003cbr\u003eHow did you get started in the business?\u003cbr\u003e\u003cbr\u003eAfter I completed my masters' degrees in math and computer science in 1972, I went to work for Bell Labs. Then in 1973 listed options began trading and I was intrigued with that market, so I focused my attention on options. That was my start in the business.\u003cbr\u003e\u003cbr\u003eAs a private investor?\u003cbr\u003e\u003cbr\u003eRight. I ended up writing a newsletter on options on the side. That was in 1974 and 1975. Then in 1976, I became the retail strategist for Thomson-McKinnon. Eventually, I became the senior vice president of the equity arbitrage department and I traded the firm's capital. I did that through the 1980s.\u003cbr\u003e\u003cbr\u003eWhen did you write Options As A Strategic Investment?\u003cbr\u003e\u003cbr\u003eIt would have been late in the 1970s. The first edition came out in 1980. I wrote the book because the publisher, the New York Institute of Finance, was looking for someone to write a book about options and they went to the Chicago Board Options Exchange, and Jim Dolan, who was the president of the CBOE at the time, referred me to them. It took me about two years to write the first edition, and then I did the second edition in 1986 and the third edition in 1993. I've been keeping it fairly current in the meantime, weeding out some things and adding a few others.\u003cbr\u003e\u003cbr\u003eSo when did you decide to go out on your own?\u003cbr\u003e\u003cbr\u003eIt took a while to come to that decision. After Thomson-McKinnon went out of business in 1989, I went to Prudential for a while, but that position wasn't right for me so about a year later I started my own company. Today, I'm publishing a couple of newsletters and trading for my own account.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133817254257,"sku":"\\V14\\C02\\OPTIONS.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_3e6505f5-517d-445b-be12-3f5a1387f473.jpg?v=1739653237"},{"product_id":"v14-c12-side220-pdf","title":"V.14:12 (526-529): SIDEBAR: 2\/20-Day EMA Breakout System by Jeremy G. Konstenius","description":"Sidebar: 2\/20-Day EMA Breakout System Defined\u003cbr\u003e\u003cbr\u003eMost trading systems fall into two categories. One, the most popular, is the trend-following method, where the signals are oriented toward putting the trader on board long-term trends. The profits acquired during the long-term trends will, hopefully, recover the monies lost during trendless activity. The other category takes advantage of trading ranges, and the trader makes the most money when the market's primary direction is sideways. Here's a trading system that incorporates both approaches to time entry and exit positions.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133817319793,"sku":"\\V14\\C12\\SIDE220.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_aa8895f8-e867-4192-94d8-be50b657303f.jpg?v=1739653239"},{"product_id":"v14-c02-sidepri-pdf","title":"V. 14:2 (55-62): Sidebars: Price Distribution Functions and Mobility Oscillator by Mel Widner, Ph.D.","description":"V. 14:2 (55-62): Sidebars: Price Distribution Functions and Mobility Oscillator by Mel Widner, Ph.D.\u003cbr\u003e\u003cbr\u003ePDFs are computed using a Microsoft Excel 5.0 spreadsheet. The first step is compute the price range and divide the range into intervals. The maximum high and minimum low are:\u003cbr\u003e\u003cbr\u003e{Cell C19} = MAX(C3:C16)\u003cbr\u003e\u003cbr\u003e{Cell D19} = MIN(D3:D16)\u003cbr\u003e\u003cbr\u003eInterval boundaries start in cell G2 as\u003cbr\u003e\u003cbr\u003e= $D$19 + (G1\/10)*($C$19-$D$19)\u003cbr\u003e\u003cbr\u003ethen fill right through cell P2. The contributing terms Ti,j start in cell G3 as\u003cbr\u003e\u003cbr\u003e= IF(G$2\u0026lt;$D3,0,IF(G$2\u0026gt;$C3,1,(G$2-$D3)\/($C3-$D3)))\u003cbr\u003e\u003cbr\u003ethen fill right through cell P3. Next, select from cell G3 through cell P3 and fill down through row 16. The CPDF\nvalues are given in cell G17 as\u003cbr\u003e\u003cbr\u003e= SUM(G3:G16)\/14\u003cbr\u003e\u003cbr\u003eFill right through cell P17. The PDF values are given as\u003cbr\u003e\u003cbr\u003e{Cell G18} = G17\u003cbr\u003e\u003cbr\u003e{Cell H18} = H17 - G17","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133817909617,"sku":"\\V14\\C02\\SIDEPRI.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_5f68b948-aa93-4de6-b384-d773f6e26279.jpg?v=1739653265"},{"product_id":"v14-c03-sidemax-pdf","title":"V.14:3 (132): SIDEBAR: Maximizing your Zen meditation experience","description":"MAXIMIZING YOUR ZEN MEDITATION EXPERIENCE\u003cbr\u003e\u003cbr\u003eHere are eight pointers to help you make the most of your meditation exercise.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133818794353,"sku":"\\V14\\C03\\SIDEMAX.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_ce5adcc1-2500-45ae-9ee0-cc5f61331abb.jpg?v=1739653294"},{"product_id":"v14-c04-sidecon-pdf","title":"V.14:4 (177): SIDEBAR: Converting Absolute Data to Change in Log of Price","description":"CONVERTING ABSOLUTE DATA TO\nCHANGE IN LOG OF PRICE\u003cbr\u003e\u003cbr\u003eSidebar Figure 1 is a sample of weekly interest rate and S\u0026amp;P 500 index data and the formula used to convert\nabsolute interest rate data to changes in logs. Formulas first calculate the log of price and then subtract the\nweek-earlier value from the current week value. Change in log of interest rates and the S\u0026amp;P index is the data\nused throughout.\u003cbr\u003e\u003cbr\u003eASSESSING STATIONARITY\u003cbr\u003e\u003cbr\u003e1. Divide the range of data into five to 10 equally sized bins so that each observation falls into a bin. The two\nbins at the upper and lower extremes of the range should be defined so they are unbounded on the side of the\nbin away from the mean.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133820334449,"sku":"\\V14\\C04\\SIDECON.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_053c48ca-8ed5-4703-8562-613e35509bec.jpg?v=1739653325"},{"product_id":"v14-c10-managin-pdf","title":"V.14:10 (455-459): Managing the Future with Managed Futures by Victor Sperandeo","description":"Managing The Future With Managed Futures by Victor Sperandeo\u003cbr\u003e\u003cbr\u003eThe stock market has been trending higher for a record period, and a correction is long overdue. What can you do to stay in the game, besides reduce your risk? Consider diversifying your assets beyond just a basket of stocks. Here's the rationale.\u003cbr\u003e\u003cbr\u003eWhen the equity market tops, what should you expect to happen? We can't know for certain, but we do have a model on which to base our expectations. The Japanese market is on record as having had the longest bubble in history, a span of 288 months between 1965 and 1990 - a total of 24 years. Today, the US secular bull market is not that far behind, with a bubble that began in October 1974 and which continues as of this writing.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133822497137,"sku":"\\V14\\C10\\MANAGIN.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_8250dc81-3a8e-49c9-85e4-1733eb9f11f9.jpg?v=1739653327"},{"product_id":"v14-c05-thegold-pdf","title":"V.14:5 (222-228): The Gold and Silver Bond Fund System by Dennis Meyers, Ph.D.","description":"The Gold And Silver Bond Fund System by Dennis Meyers, Ph.D.\u003cbr\u003e\u003cbr\u003eBuilding on his previous Gmi system article, this Contributing Editor develops a system using the Philadelphia Stock Exchange daily gold and silver stock index to trade a long-term government bond fund.\u003cbr\u003e\u003cbr\u003eLast month, I examined the relationship between Barron's Gold Mining Index (GMI) and the 30-year Treasury bond rates. A system was developed to predict the weekly direction of the 30-year T-bond rate using the GMI. One of the problems encountered in developing that system was that the GMI is only available from Barron's on a weekly basis. While a system using weekly data is certainly valuable for filtering out daily price fluctuation noise, significant changes in prices or events during the week cannot be addressed by the system until the weekend. This\none-week gap in the ability to take action carries with it significant economic risk or the loss of opportunity.\u003cbr\u003e\u003cbr\u003eHere, I will build on last month's article and develop a system using the Philadelphia Stock Exchange (PHLX) daily gold and silver stock index (XAU) to trade a long-term government bond fund.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133825118577,"sku":"\\V14\\C05\\THEGOLD.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_aff9b336-2586-45d0-9ed0-4a6173a4ec44.jpg?v=1739653390"},{"product_id":"v14-c11-statist-pdf","title":"V.14:11 (465-470): Statistically Analyzing Volume by William M. Goodman, Ph.D.","description":"Statistically Analyzing Volume by William M. Goodman, Ph.D.\u003cbr\u003e\u003cbr\u003eIs an increase in the activity of a stock a meaningful indication of the direction of price? To answer this question, you can use statistical methods and most any spreadsheet to analyze the relationship between price and volume.\u003cbr\u003e\u003cbr\u003eTechnical analysis is an ongoing creative process of determining order in a complex pattern. In general, the pattern is reduced to a graphical or mathematical model, but a model is simply not enough. You need confirmation, and by rigorously testing your methods, you gain confidence that your findings have value.\u003cbr\u003e\u003cbr\u003eHow can you be sure a new technical indicator has merit? In the case of a price pattern, you test the pattern over different time periods or sets of charts, making buys and sells at the points suggested by the technique. This simple research can easily answer the pertinent question: Would trading based on the price pattern make you money?\u003cbr\u003e\u003cbr\u003eThis elementary form of research can be effective. Alex Saitta used it in a STOCKS \u0026amp; COMMODITIES article to confirm a link between US employment reports and the Treasury bond futures market. He tracked the gains and losses that would have occurred if his method had\nbeen applied over a selected period. The trading system made more money than if the buy\/sell\ndecisions had been made by chance alone.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133826003313,"sku":"\\V14\\C11\\STATIST.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_3ecf93c4-3769-43ef-9107-2bdf4e320b5c.jpg?v=1739653420"},{"product_id":"v14-c06-employm-pdf","title":"V.14:6 (262-264) Employment As A Bond Market Forecast by Alex Saitta","description":"How good a barometer is the monthly US employment report for the bond market? One analyst decided to find out. By Alex Saitta\u003cbr\u003e\u003cbr\u003eThe US employment report that the federal government releases on a monthly basis contains an assortment of\ndata on many different sectors of the economy, so it is known as an excellent barometer of the prior month's\neconomic activity. Market volatility supports the significance of this report. The day the report is released, the\nTreasury bond futures' trading range is larger than it is on the release dates of other economic reports. In the last\neight years, the size of the T-bond's trading range has averaged 44 ticks on the release day of the employment\nreport. By comparison, on the day that the Producer Price Index (PPI) has been released, the average T-bond\nrange is 36 ticks, for retail sales numbers 33 ticks, and on the release day of the Consumer Price Index (CPI), the\nTreasury bond's trading range has averaged 32 ticks.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133828264305,"sku":"\\V14\\C06\\EMPLOYM.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_f89f02d0-1f8c-48a5-812c-6101b5851dd1.jpg?v=1739653479"},{"product_id":"v14-c06-seasona-pdf","title":"V.14:6 (241-243) Seasonality And The S\u0026P 500 by Mark Vakkur, M.D.","description":"Looking at the seasonality of the stock market from different viewpoints can give you new insight into an old concept. Here's a look at the best and worst months in which to invest as well as some suggested investing guidelines. By Mark Vakkur, M.D.\u003cbr\u003e\u003cbr\u003eOne of the strongest arguments against the random walk theory is the observation that the stock\nmarket tends to make most of its gains during certain months that are far from randomly\ndistributed. As Yale Hirsch points out in The 1996 Stock Traders Almanac, if an investor were to have\ninvested $10,000 in the Standard \u0026amp; Poors 500 index in May through October since 1950 but switched to\ncash for the remainder of each year, that investment would have grown to $15,285 by 1994; however, if the\ninvestor had invested that $10,000 every November through April since 1950, that investment would have\ncompounded to $173,788 quite a difference.\u003cbr\u003e\u003cbr\u003eWhen I first studied seasonality, I wondered if its effect were strong enough and consistent enough to\ngenerate reliable trading signals. The answer to this question, as it turned out, is an emphatic yes. Here, I\nwill explore the development of a simple trading system that uses seasonality to generate buy and sell signals\nfor the Standard \u0026amp; Poors 500 index. In using these signals, a trader could have generated substantially\ngreater returns than buy and hold with less risk but note this is offered more to illustrate the power of\nseasonality than as a complete trading system in itself. As with any indicator, seasonality should be used\nin conjunction with other indicators before actual capital is placed at risk.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133828297073,"sku":"\\V14\\C06\\SEASONA.PDF","price":4.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_83f1eb83-f5c3-49cb-b918-43515c827742.jpg?v=1739653481"},{"product_id":"v14-c10-porkbel-pdf","title":"V.14:10 (450-454): Pork Bellies and the COT Index by Scott W. Barrie","description":"Pork Bellies And The COT Index by Scott W. Barrie\u003cbr\u003e\u003cbr\u003eWhen presented with sentiment data, you'll need to know when to follow the crowd or be a contrarian. In our continuing look at using the COT index to predict market direction for commodities, here's a study on the\nCOT report as an indicator for trading pork bellies.\u003cbr\u003e\u003cbr\u003ePreviously, we showed some common misconceptions about the Commitments of Traders data and reevaluated some of the conventional interpretations surrounding it. Using the July corn contract on Chicago Board of Trade as the basis for our study, we determined how accurate the various classes of traders are in speculating about the future direction of the corn market during specific conditions. We tied the accuracy of the trader classifications (commercial hedgers, large speculators and small speculators) to the natural production and consumption cycles of corn.\u003cbr\u003e\u003cbr\u003eSuch analysis is well suited to the grain markets because grain markets are very seasonal in nature. We\nconcluded that the speculative accuracy of the various groups of traders depended in large part on where in the natural production and consumption cycle the commodity was.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133828329841,"sku":"\\V14\\C10\\PORKBEL.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_13ed82e9-39aa-4a98-9f52-5a3d60568662.jpg?v=1739653484"},{"product_id":"v14-c12-aruleba-pdf","title":"V.14:12 (509-514): A Rule-Based Approach to Trading by Jeffrey Owen Katz, Ph.D.","description":"A Rule-Based Approach to Trading by Jeffrey Owen Katz, Ph.D.\u003cbr\u003e\u003cbr\u003eLast month, Katz presented his experience developing a trading system using a neural networkbased approach. This month, he delves into a rule-based approach to trading.\u003cbr\u003e\u003cbr\u003ePreviously, I showed that attempts to model the markets by applying sophisticated technology such as neural networks in a simplistic manner does not work well. Present-day attempts to apply the neural-net novice approach fail because the market inefficiencies discovered by the simplistic application of sophisticated technologies have already been \"traded away\" by speculators who used the technology to discover and trade the inefficiencies.\u003cbr\u003e\u003cbr\u003eOnce observations have been made, these ideas must be formalized into computer programming instructions.\nWhile inefficiencies may still be discovered by crude applications of such technology, more often than not the inefficiencies that are found will not be practicably tradable. In order to develop successful systems, isolated market inefficiencies that cannot be captured by the simplistic application of sophisticated technology must be identified. I decided my initial search for such inefficiencies might best be tackled not through the use of advanced technologies but through traditional rule-based systems.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133828362609,"sku":"\\V14\\C12\\ARULEBA.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_932cdd24-a341-4c31-9755-23d48f394c95.jpg?v=1739653486"},{"product_id":"v14-c04-thegmib-pdf","title":"V.14:4 (143-151): The GMI Bond Market System by Dennis Meyers, Ph.D.","description":"The GMI Bond Market\nSystem by Dennis Meyers, Ph.D.\u003cbr\u003e\u003cbr\u003eThis S\u0026amp;C Contributing Editor details a trading system for predicting Treasury\nbond yields that uses Barron's Gold Mining Index (GMI) to signal changes. He\ncompares the performance of the trading system with his previous use of the\nS\u0026amp;P electric utility bond market system. In addition, he tests the GMI T-bond\nsystem for trading the Fidelity Government Securities Fund.\u003cbr\u003e\u003cbr\u003eThe connection between gold and interest rates is well known; gold prices are often used as a proxy for future\ninflation. Today's perception of future inflation rates causes bond prices to rise and fall. If inflation is perceived as\nrising in the future, then bond prices will decline and bond yields will rise. If inflation is perceived as declining in the\nfuture, then bond prices will rise and bond yields will fall. Although the current inflation rate is published by the\ngovernment on a monthly basis, this statistic relates to inflation in the past, not future inflation. The price of gold has\nhistorically been used as a store of value and as a predictor of future inflation. As gold prices climb, investors feel\nthat future inflation will rise. If gold prices decline, investors feel that future inflation will decline. But there are no\nformulas or rules to determine the exact relationship between gold and future inflation or between gold and the\ndirection of future interest rates.\u003cbr\u003e\u003cbr\u003eThis article will use the Barron's Gold Mining Index (GMI) as a bond price direction gauge. Various technical\nanalysis indicators on GMI will be created and tested in an attempt to formulate a system to predict the direction of\nlong-term interest rates.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133830787441,"sku":"\\V14\\C04\\THEGMIB.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_ba315605-6f53-44a8-b57f-fb62e81d3946.jpg?v=1739653546"},{"product_id":"v14-c08-sidecal-pdf","title":"V.14:8 (338-341): SIDEBAR: Calculating Historical Volatility - Technical Analysis, Inc.","description":"CALCULATING HISTORICAL VOLATILITY - Technical Analysis, Inc.\u003cbr\u003e\u003cbr\u003eHistorical volatility is the annualized standard deviation of the one-day price changes of the\nsecurity or futures contract. To perform this calculation in a Microsoft Excel spreadsheet (as\ncan be seen in sidebar Figure 1), follow these steps. First, convert the price changes to\npercentage daily price basis.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133831016817,"sku":"\\V14\\C08\\SIDECAL.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_ffa683e9-34e8-4a82-a60b-e0c1e47d1edc.jpg?v=1739653563"},{"product_id":"v14-c02-theadva-pdf","title":"V.14:2 (69-75): The Advance-Decline, New-High, New-Low Market System by D. Meyers","description":"V.14:2 (69-75): The Advance-Decline, New-High, New-Low Market System by Dennis Meyers\u003cbr\u003e\u003cbr\u003eTry combining popular technical stock market indicators - the advance-decline line, the number of stocks making new highs and the number of stocks making new lows - to develop a trading system for the stock market.\u003cbr\u003e\u003cbr\u003eThe advance-decline line (ADL) has long been acknowledged as a valuable indicator of future market direction. Much of the discussion to date on how to use the ADL has been anecdotal, however. There have been numerous references on how negative divergences between the ADL and the Dow Jones averages (DJ) or negative relative strength between the ADL and DJ have led to substantial market declines. However, none of the studies have presented a rigorous test of their theories over an extended market period or have shown the details of every case that\nsatisfies their buy and sell criteria over an extended market time horizon.\u003cbr\u003e\u003cbr\u003eThe New York Stock Exchange (NYSE) new 52-week highs (NH) and new 52-week lows (NL) have often been cited as valuable indicators of future market action. Since January 1978, the NHs and NLs have been calculated on a 52-week basis. Before then, the NHs and NLs were calculated for a time horizon of anywhere from two and a half months to 14 1 \/ 2 months. A number of studies have used the NH\/(NH+NL) ratio or its averages as a stock market\nindicator. While these studies have provided valuable indicators, it is possible NHs and NLs represent two distinct investor expectations and would provide more information about the future direction of the stock market if treated separately and not combined.\u003cbr\u003e\u003cbr\u003eIn this article I will create new NH and NL indicators and a new ADL relative strength indicator and test the\ncombination of these new indicators to predict the direction of the Standard \u0026amp; Poor's 500.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133831704945,"sku":"\\V14\\C02\\THEADVA.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_7769f4b1-ca8f-425d-80f6-8e73fb6a6ddc.jpg?v=1739653585"},{"product_id":"v14-c05-livingt-pdf","title":"V.14:5 (215-221): Living the Dream: Trader Gary Smith by Thom Hartle","description":"Living The Dream: Trader Gary Smith\u003cbr\u003e\u003cbr\u003eI always dreamed of trading for a living and I finally have\nachieved that, but never in the way I had imagined. I always envisioned myself as one of these Jesse Livermore-tape reader types, but it's been very different. - Gary Smith\u003cbr\u003e\u003cbr\u003eIn this day and age of computers and high technology, trader Gary Smith is certainly an anomaly, as he uses no computer, disapproves of mechanical systems and simply uses the data off CNBC with which to trade. How does he do it? How has he done it? His recently published book, Live the Dream By Profitably Day Trading Stock Futures, explains. To find out more about this unique trader, STOCKS \u0026amp; COMMODITIES Editor Thom Hartle conducted a telephone interview with Smith on February 20, 1996.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133832589681,"sku":"\\V14\\C05\\LIVINGT.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_5959191e-878a-4f04-a4ac-fb3b99aa2dcd.jpg?v=1739653608"},{"product_id":"v14-c05-eventtr-pdf","title":"V.14:5 (207-211): Event Trading in the Bond Market by Ben Warwick","description":"Event Trading In The Bond Market by Ben Warwick\u003cbr\u003e\u003cbr\u003eThe financial markets frequently react with large price movements after the government and private agencies release their economic reports. Are there any reliable patterns to the way a market reacts to the news? One money manager decided to find out, and here, he shows how monitoring the reaction to those reports can be a profitable endeavor.\u003cbr\u003e\u003cbr\u003eMarkets are driven by the fundamentals. Stock traders look at earnings reports and commodity traders look at crop estimates. Bond market participants track economic reports, issued by government and private agencies, to estimate the strength in the economy that will ultimately drive interest rates. As traders scramble to decipher the meaning behind the most recent government reports, markets frequently exhibit greater than average volatility. These occasions can mark the beginning, or culmination of major trends. But how can traders profit from these market reactions to economic data announcements? Here's a new trading methodology called event trading , which is a systematic way to capture the large price moves commonly associated with economic data.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133833113969,"sku":"\\V14\\C05\\EVENTTR.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_05b770ca-0391-4dd8-839d-90238a200e43.jpg?v=1739653630"},{"product_id":"v14-c01-onusing-pdf","title":"V.14:1 (45-49): On Using Stops by Joe Luisi","description":"V. 14:1 (45-49): On Using Stops by Joe Luisi\u003cbr\u003e\u003cbr\u003eStop orders are used to manage risk and to enter and exit positions. But what are some of the methods you can use to do so? For a look at the basics plus some of\nthe finer points, read on.\u003cbr\u003e\u003cbr\u003eSay your favorite indicator flashes a buy signal. You proceed to call your broker and enter the market. Then what do you do? Do you just sit back and wait for the profits to roll in? What happens if the market falls apart and it turns out you're facing a big loss? Getting into a trade is the easy part; learning how to protect and manage the trade is the hard part. That's where the stop order comes in.\u003cbr\u003e\u003cbr\u003eStop orders, which are often referred to as just stops, are placed at price points where you want to enter or exit a trade. Technically, a stop order is one that you give your broker stating if the market trades at a certain price, then the order is triggered and becomes an order to be executed at the current market price. Buy stop orders are placed above the current market price. If the market price rises to the price on the stop order, then the order becomes a \"buy at the market\" order. Sell stop orders, on the other hand, are placed below the current market price. If the market falls to the stop-order price, then the order becomes a sell at the market order.\u003cbr\u003e\u003cbr\u003eAll traders should use stops, whether they are mental or actually placed with a broker. There are a variety of stops that can be used depending on your situation, the market you are trading and what you are trying to accomplish. Here, we will focus only on using a stop once you are in a trade (that is, protective stops). We will explore the various types of available stops and the various techniques that can be used with them to help you manage your position and reduce your overall risk.\u003cbr\u003e\u003cbr\u003eTHE VALUE OF STOPS\u003cbr\u003e\u003cbr\u003eOnce you enter a trade or even before, you should have a stop in mind. I would not recommend mental stops unless you have the discipline to follow through with placing the order if that level is hit. People who prefer mental stops do so because they feel the floor traders will try to push the market to price levels that will trigger the execution of stop orders, and if you have your stop order in the floor broker's hand, you will suffer an unnecessary loss.\u003cbr\u003e\u003cbr\u003eStop running occurs when a large number of stops accumulate above resistance levels or below support levels. Stops often collect at price levels that are whole numbers (for example, 452.00). When the market seems to lack a sense of direction, floor traders will try to push the market into these stop levels to create a temporary influx of price activity. Because these moves are the result of noise, not market fundamentals, the market tends to fall back into the normal zone of trading. Fortunately, this does not happen frequently enough to be a problem. If you place your stops\nwisely, you can prevent yourself from getting caught in this activity. It is frustrating when you enter a trade, only to be stopped out; it seems as if the market moved exactly to your stop, only to reverse and move in your anticipated direction.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133834064241,"sku":"\\V14\\C01\\ONUSING.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_1a5d5201-210b-4911-9bcc-60844af162c7.jpg?v=1739653656"},{"product_id":"v14-c08-thesp50-pdf","title":"V.14:8 (333-337): The S\u0026P 500 Seasonal Day Trade by William Brower, C.T.A.","description":"The S\u0026amp;P 500 Seasonal Day Trade by William Brower, C.T.A.\u003cbr\u003e\u003cbr\u003eIs there a particular day of the week within a month that offers the most opportunity? Here's a trading system based on the best days of the week for trading Standard \u0026amp; Poor's 500 futures.\u003cbr\u003e\u003cbr\u003eMuch research has been done on seasonal trading. Originally, the concept derived from the theory that\nthere had to be certain times of the year when it is better to buy and other times when it is better to sell. If you take a commodity and run a simulation in which you pair up all possible entry days with all possible exit days in a given year, you should be able to locate the best days to trade. If you perform this task over several years of data, it is possible some patterns will appear to identify those days with the highest probability of success for both long and short trades.\u003cbr\u003e\u003cbr\u003eIn 1994 I was present at a speech given by statistician Sheldon Knight that shed new light on this old trading\nstrategy. Knight runs a company using statistics in processing financial data and has more than 30 years'\nexperience in computerized analysis of stocks and futures. During the presentation in 1994, Knight reasoned that seasonal trading approaches were ineffective because commodity futures prices react to government reports and other events based on a monthly calendar, not on a yearly one. Many government reports are released not on the nth day of the calendar year, such as the fifth of every month, but on predetermined positions within a given month. For example, employment data comes out on the first Friday of every month, while money supply figures come out every Thursday. Likewise, the producer price index comes out on the second Wednesday of the month and export sales numbers are released on the fourth Thursday.\u003cbr\u003e\u003cbr\u003eArmed with this insight, Knight forged the concept of a seasonal trading system based on the day of week in a\ngiven month. He developed the K-data timeline method, which, according to him, was almost a successful\nposition trading system, except for the sizable drawdowns. This was later improved upon to include the influence of the actual first notice days. Recalling Knight's work in this area, I decided to use his concepts to develop trading systems.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133834097009,"sku":"\\V14\\C08\\THESP50.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_ba6a90e7-8ec4-4112-bd5e-c7dd72dffa31.jpg?v=1739653658"},{"product_id":"v14-c02-gauging-pdf","title":"V.14:2 (55-62): Gauging Mobility with Price Distributions by Mel Widner, Ph.D.","description":"NEW TECHNIQUES\u003cbr\u003e\u003cbr\u003eGauging Mobility\nWith Price Distributions\u003cbr\u003e\u003cbr\u003eThe price distribution function, which analyzes the distribution of prices over a lookback period, is useful for predicting price mobility. Here's a new method called the mobility oscillator that will allow you to do so. By Mel Widner Ph.D.\u003cbr\u003e\u003cbr\u003eWhen prices remain about the same for a given period, that indicates that, essentially, buying and selling\npressures are in balance. If this persists, then the area of price activity represents an area of congestion. Since traders often place stop orders, take profits and open new positions based on their entry or exit point, it is most likely market participants will make note of this congestion area. The more time the market spends in this area, the greater its significance, and the more recent the congestion is, the greater its significance.\u003cbr\u003e\u003cbr\u003eBasically, all price histories have ranges where the price spends more time than in others, and so there is always some degree of congestion. For some data histories, there can be regions of large and small congestion and multiple regions of congestion. These regions of congestion can be measured by determining how prices are distributed. In fact, it is possible to construct a price distribution function (PDF) to identify areas of congestion for analysis.\u003cbr\u003e\u003cbr\u003eA PDF can be developed from a recent history of prices by computing the frequency of occurrence of a price for each\nprice within the price range. Large values of the distribution correspond to areas where the price history spend a long\ntime and small values to areas where the price history spend a short time. The PDF is determined over the range from\nthe minimum low to the maximum high for the period and may contain one or more peaks within the range.\u003cbr\u003e\u003cbr\u003eSo what does this mean? If the current price has moved from a region where the distribution function is small to a\nregion where it is large, then it might be expected that the move started with a small number of traders and is moving\nto a region where there are a larger number of traders waiting to enter. It is possible the move will be stopped by the\nreaction of the larger number of traders or be absorbed by increased market activity. Conversely, if the move is from\nlarge to small, then it is plausible that there is less reaction and less activity and the move will go further. The\nhypothesis to be examined is that it is easier for prices to move in regions where the PDF is smaller (high mobility)\nand more difficult in regions where the PDF is larger (low mobility).\u003cbr\u003e\u003cbr\u003eIf the price move is significant, then the situation is different and other factors must be considered. There can be\nreversals corresponding to profit taking or entry of new traders. Such reversals result in peaks or troughs that are the\nbasis for well-established support and resistance analysis. These peaks and troughs are implicitly included in the\nPDF analysis, since the PDF is bounded by the maximum high and minimum low for the period. It is possible to\nconstruct a mobility oscillator (MO) that captures reversals often occurring at the price extremes as well as reflections\nthat occur from the mode of the PDF.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133837537649,"sku":"\\V14\\C02\\GAUGING.PDF","price":5.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_9f63d2d6-cd7e-408d-a212-324f28eeec56.jpg?v=1739653791"},{"product_id":"v14-c08-beatthe-pdf","title":"V.14:8 (360-363): Beat the Market with Cyclicals by Paul and Carole Huebotter","description":"\"The new Dow strategy\" outlined here is a method to pick a 10-stock portfolio to\noutperform both the Dow 30 and the well-known Dow dividend strategy. Take a look.\nby Paul and Carole Huebotter\u003cbr\u003e\u003cbr\u003eEconomists maintain that the markets are too efficient for any trading system to regularly outperform, say,\nthe 30 stocks that make up the Dow Jones Industrial Average (DJIA) or the Standard \u0026amp; Poor's 500 index. We\ndisagree. Here's one that not only theoretically should, but does. The system, to which we refer as the new\nDow strategy , is akin to the well-known Dow dividend strategy, which used to work well but has faltered\nconsiderably in the past decade. When the DJIA was mainly a collection of large cyclical-company stocks\npaying similar yields when averaged over the entire business cycle, investing in the top 10 yielders made\nsense. But the stock substitutions - 10 in the last 17 years - have transformed the DJIA into a hybrid group\noften dominated by growth companies.\u003cbr\u003e\u003cbr\u003eFor example, the three energy giants - Chevron [CHV], Exxon [XON] and Texaco [TX] - are always in the\nDow dividend portfolio, but their performance doesn't usually merit such loyalty. On the other hand, the\nlow-yielding newcomers, such as McDonald's [MCD], Coca-Cola [KO] and Disney [DIS], never make the top 10. The symmetry of the DJIA has gradually eroded. As a result, the Dow dividend strategy has had an\naverage annual return only 1% better than the DJIA since 1985, a far cry from the system's glory days of the\n1970s and early 1980s.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133837570417,"sku":"\\V14\\C08\\BEATTHE.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_c7fcedd9-e43c-4a74-b1b7-c82e8658650d.jpg?v=1739653793"},{"product_id":"v14-c08-sideyou-pdf","title":"V.14:8 (353-359): SIDEBAR: Your Trading Performance - Technical Analysis, Inc.","description":"YOUR TRADING PERFORMANCE - Technical Analysis, Inc.\u003cbr\u003e\u003cbr\u003eKoppel explains in The Intuitive Trader that trading performance is a direct reflection of how you, the trader,\nfeel. When you feel good, therefore, you perform at high levels. Further, Koppel explains that trading\nperformance at the highest levels occurs without conscious deliberation when the right internal climate for\ntrading has been established.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133837635953,"sku":"\\V14\\C08\\SIDEYOU.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_1fc3ac9b-bf0f-4710-a6d8-044a09125dab.jpg?v=1739653796"},{"product_id":"v14-c03-topdown-pdf","title":"V.14:3 (124-129): Top Down Investing with S\u0026P's Sam Stovall by Thom Hartle","description":"INTERVIEW\u003cbr\u003e\u003cbr\u003eTop Down Investing\nwith S\u0026amp;P's Sam Stovall\u003cbr\u003e\u003cbr\u003eSome wander onto Wall Street by mistake, while others seem destined to find\ntheir way there. Sam Stovall is a member of Standard \u0026amp; Poor's Investment\nPolicy Committee, editor of S\u0026amp;P's Industry Reports and author of Standard \u0026amp;\nPoor's Guide to Sector Investing. Stovall spoke with STOCKS \u0026amp;\nCOMMODITIES Editor Thom Hartle on December 20, 1995, via telephone\ninterview about market cycles, sector investing and relative strength, among\nother topics.\u003cbr\u003e\u003cbr\u003eI had all this data on industry indices, and anybody can find out when economic constractions and expansions\nstarted and ended, so I decided to determine what sectors performed the best during different periods of an\neconomic cycle. That's how I became involved in sector investment and analysis. -Sam Stovall","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133839044977,"sku":"\\V14\\C03\\TOPDOWN.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_93aa4bd6-3d7a-4f39-af34-aee9328484ed.jpg?v=1739653842"},{"product_id":"v14-c06-thederi-pdf","title":"V.14:6 (253-257) The Derivative Moving Average by Adam White","description":"Here's a strategic variation of the tried-and-true simple moving average that uses a moving average for entry signals and the trend analysis index for exit signals. By Adam White\u003cbr\u003e\u003cbr\u003eTo get that all-important edge over other market participants, the creative investor must use methods that other investors are not. Thus, as a technician I am always looking for different twists on reliable indicators and trading\nstrategies. Let me explain the derivative moving average, a new twist to one of the most reliable and best-known\nindicators of all, the simple moving averageY.\u003cbr\u003e\u003cbr\u003eMoving averages are widely used because they are simple to calculate, intuitive to apply and, most important for\nthe trend-follower, allow profits to run while cutting losses. However, moving averages also suffer from two\nimportant flaws when used in a traditional trend-following capacity. First, consider the common trading strategy\nin which the trader enters into a position when the market crosses a moving average in the desired direction and\nexits when the market crosses a moving average in the opposite direction. Markets typically spend most of the\ntime moving sideways, not trending. In this case, the market can cross the moving average a number of times in\nquick succession, producing a string of whipsawY losses. Call this the whipsaw flaw .\u003cbr\u003e\u003cbr\u003eThe second flaw of moving averages is due to their natural lag. By definition, a simple moving average trails price\nby a period equal to half its length, and so, the market can move quite a distance after reversing from its extreme\nto the price at which it crosses the moving average. This can give back much of the equity earned by the trade.\nCall this the equity surrender flaw . Figure 1 illustrates these two limitations.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133839503729,"sku":"\\V14\\C06\\THEDERI.PDF","price":4.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_d39ce1aa-1fb1-4b7b-ba0b-85bb726c7126.jpg?v=1739653860"},{"product_id":"v14-c07-cyclesw-pdf","title":"V.14:7 (317-325): Interview Richard Mogey by Thom Hartle","description":"Markets ebb and flow, rise and fall, come and go in short, they appear to be cyclical. To learn more about using cycles, there is probably no better source than Richard Mogey, the executive director of the Foundation for the Study of Cycles. Stocks \u0026amp; Commodities spoke with Mogey about the Foundation's research into the influence of cycles on the stock market, commodities and bond markets. By Thom Hartle\u003cbr\u003e\u003cbr\u003eMarkets ebb and flow, rise and fall, come and go - in short, they appear to be cyclical. To\nlearn more about using cycles, there is probably no better source than Richard Mogey, the\nexecutive director of the Foundation for the Study of Cycles.\nSTOCKS \u0026amp; COMMODITIES\nEditor Thom Hartle spoke with Mogey via telephone on April 24, 1996, about the\nFoundation's research into the influence of cycles on the stock market and the commodities\nand bond markets.\u003cbr\u003e\u003cbr\u003eHave you always been interested in economic and market cycles?\u003cbr\u003e\u003cbr\u003eNo. In college, I studied the classics - Greek and Latin and philosophy. But during my high school days, I was keenly interested in\ninvesting and had a portfolio of stocks. That was in the late 1950s, and then I started trading futures in the late 1960s. I continued\nto trade futures, and I made money, so I assumed that I was brilliant, but, of course, it turned out it was just a bull market and I\nwas long.\u003cbr\u003e\u003cbr\u003eWere you using technical and fundamental methods?\u003cbr\u003e\u003cbr\u003eI used just fundamental methods during the early days. Then I started using technical methods when I started trading futures. I\ncontinued to study trading futures and equities and I primarily traded the short-term trends. Ultimately, I went full time into trading\nin the 1980s and specialized in trading metals.\u003cbr\u003e\u003cbr\u003eFor a company?\u003cbr\u003e\u003cbr\u003eIt was a private investment company on the West Coast.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133839536497,"sku":"\\V14\\C07\\CYCLESW.PDF","price":4.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_5d5208bb-ec53-4121-9b28-a70593621d4d.jpg?v=1739653862"},{"product_id":"v14-c08-sidethe-pdf","title":"V.14:8 (342-347): SIDEBAR: The Exchanges and Indices - Technical Analysis, Inc.","description":"Listing of Exchanges and indicators. - Technical Analysis, Inc.\u003cbr\u003e\u003cbr\u003eTHE EXCHANGES AND INDICES\u003cbr\u003e\u003cbr\u003e\nNew York Futures Exchange (NYFE)\u003cbr\u003e\u003cbr\u003eThe New York Futures Exchange, a wholly owned subsidiary of the New York Cotton Exchange (NYCE),\nhas approximately 359 members holding 435 seats; its members include many of the country's largest and\nmost prestigious brokerage houses.\u003cbr\u003e\u003cbr\u003ePacific Stock Exchange (PSE)\u003cbr\u003e\u003cbr\u003eThe Pacific Stock Exchange, located in San Francisco and Los Angeles, lists 1,784 different equity issues and\n297 equity options. During 1994, option volume surged to 20.9 million contracts.\u003cbr\u003e\u003cbr\u003ePSE Technology Index\u003cbr\u003e\u003cbr\u003eThe PSE Technology Index measures the performance of the technology sector of the US equity market and is\nconsidered one of the most consistent and accurate proxies for technology issues.\nThe PSE is a price-weighted, broad-based index, representing 100 exchange-listed and over-the-counter stocks\nfrom 15 different technology-oriented industries. Approximately half the stocks, 51.1%, are listed on the\nNYSE, and approximately half, 48.1%, are listed on the NASDAQ. The PSE is price weighted; that is, the\ncomponent stocks are given a percentage weighting based on their price. The PSE is calculated by adding the\nprices of the component stocks and using a divisor that is adjusted for splits and stock dividends equal to or\ngreater than 10% of the market value of an issue. The index is calculated and disseminated every 15 seconds.\nSince 1983, the index has been disseminated to all major quotation vendors.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133839667569,"sku":"\\V14\\C08\\SIDETHE.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_40f93ad4-7035-4bd6-914a-57ad3925d211.jpg?v=1739653865"},{"product_id":"v14-c08-treasur-pdf","title":"V.14:8 (364-369): Treasury Bond Yields and the S\u0026P 500 by Mark Vakkur, M.D.","description":"Interest rates have long been tied to movement in the stock market. Here's how to test trading rules for the stock market based on a six-month moving average of the 30-year Treasury bond yield, showing us when it may and may not be profitable to invest in stocks. By Mark Vakkur, M.D.\u003cbr\u003e\u003cbr\u003eI nterest rates exert a powerful influence on equity prices. Since World War II, there has been a strong,\ninverse relationship between the movement in the stock market and prevailing interest rates, such as the yield\non the 30-year Treasury bond. Here, I will explore the development of a simple trading system that uses the\ntrend in interest rates to generate buy and sell signals for the Standard \u0026amp; Poor's 500 stock index. By using\nthese signals, a trader could have generated substantially greater returns than a buy-and-hold strategy would\nhave produced and with less risk.\u003cbr\u003e\u003cbr\u003eBACKGROUND\u003cbr\u003e\u003cbr\u003eThe 30-year Treasury yield is an excellent stock market indicator. Widely available and actively traded, the\nbond market reflects international and domestic traders' consensus on, among other things, inflationary\noutlook, future economic growth and confidence in the fiscal and monetary policies of the US government.\nAll things being equal, a falling yield means traders are discounting future good news about inflation, one of\nthe most powerful negative influences on stock prices. Falling yields, of course, result from rallying bond\nprices, and over any significant historical period - as John Murphy most cogently pointed out in his\nIntermarket Technical Analysis - bonds and stocks move in tandem. Ignoring this relationship is like\nignoring a red light at an intersection; you might beat the odds several times in a row, but eventually you'll end\nup in a crash.\u003cbr\u003e\u003cbr\u003eAs every trader and investor knows, making a general observation such as \"Falling yields translate into rising\nstock prices\" is useless unless we can first objectively and rigorously define what we mean by falling yields,\nthen develop buy and sell signals, and finally, back-test the system.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133839765873,"sku":"\\V14\\C08\\TREASUR.PDF","price":5.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_12cf0017-06c4-441a-be2b-0e5d22199c78.jpg?v=1739653868"},{"product_id":"v14-c12-theexpa-pdf","title":"V.14:12 (530-533): The Expanding Triangle by Kit Webster","description":"The Expanding Triangle by Kit Webster\u003cbr\u003e\u003cbr\u003eClassic chart analysis and Elliott wave theory both consider the expanding or broadening triangle chart pattern to be a reversal of a long-term trend, and further, that such an event may be occurring in the Dow Jones Industrial Average. Here are the details.\u003cbr\u003e\u003cbr\u003eAs technicians ply their trade, they look at myriad manifestations of price and volume such as stochastics, head and shoulder patterns, and advance-decline lines to attempt to divine the market's direction. Most often the scene we see is a variation on an old theme, played out in new ways. Every now and then, however, something unusual occurs, and this\nis such a time for the stock market. The Dow Jones Industrial Average (DJIA), the Standard \u0026amp; Poor's 500 and the New York Stock Exchange index appear to be tracing a rare but powerful formation that will influence the ongoing discussion of bull versus bear markets -and, in my opinion, the formation is decidedly bearish. This rare pattern is the expanding triangle or broadening top.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133839929713,"sku":"\\V14\\C12\\THEEXPA.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_35eae687-5b48-4ff3-9f5e-19fd62944839.jpg?v=1739653871"},{"product_id":"v14-c07-hiddend-pdf","title":"V.14:7 (285-289): Hidden Divergence by Barbara Star, Ph.D.","description":"Divergence, which is a term that technicians use when two or more averages or indices fail to show confirming trends, is one of the mainstays of technical analysis. Here's a new way to use oscillators and divergence as well as methods to locate entry levels during a trend. By Barbara Star, Ph.D.\u003cbr\u003e\u003cbr\u003eMost technical indicators mirror or confirm price movement. When price moves up, the\nindicator moves up; when price moves down, the indicator moves down. When prices peak, the\nindicator peaks; and when prices bottom, the indicator bottoms. Sometimes, however, a\ndiscrepancy occurs between price and indicator movement. That discrepancy is known as\nnonconfirmation and can be seen most clearly on overbought or oversold indicators as well as\non indicators that move above or below a zero line.\u003cbr\u003e\u003cbr\u003eMany traders only learn to recognize the type of nonconfirmation that occurs at market tops and\nbottoms, which is the classic divergence. But there are other forms of nonconfirmation I call\nhidden divergence (HD) that, when present, offer additional profit potential.\u003cbr\u003e\u003cbr\u003eHidden divergences are the opposite of classic divergences. Classic divergence looks for lower\nlow prices accompanied by higher indicator values at price bottoms and higher high prices\naccompanied by lower indicator values at price tops. Hidden divergences, on the other hand,\nseek higher price lows accompanied by lower indicator values during up moves and lower price\nhighs accompanied by higher indicator values during down moves. Most hidden divergences\nsignal continuation moves in the direction of the prevailing trend.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133841535345,"sku":"\\V14\\C07\\HIDDEND.pdf","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_73e7e080-5189-40e2-9ebc-07dd2fe4f7b1.jpg?v=1739653924"},{"product_id":"v14-c03-zenande-pdf","title":"V.14:3 (130-133): Zen and Emotional Control by Richard D. McCall","description":"TRADING PSYCHOLOGY\u003cbr\u003e\u003cbr\u003eZen And Emotional Control\u003cbr\u003e\u003cbr\u003eThis occupational psychologist explains that trading combines market knowledge\nand emotional discipline and that through meditation techniques, a trader can\ndevelop better emotional control.\nby Richard D. McCall\u003cbr\u003e\u003cbr\u003eTraders in the futures and commodities markets can probably empathize with Mike Hoban, an aspiring basketball\nplayer from Strongsville, OH. In early 1995, fate dealt Mike an opportunity when his name was drawn from among\nmillions of other contestants in the Footlocker \"Million-Dollar Shot\" sweepstakes. Winning the drawing entitled the\nwould-be hoopster the right to make one potentially life-changing three-point shot during the half-time festivities of\nthe NBA Rookie All-Star game in February. If he made the shot, he would walk away with a cool $1 million; if he\nmissed it, he would walk away empty-handed. It was that simple.\u003cbr\u003e\u003cbr\u003eBy his own admission, Mike is a \"pretty good\" shooter, having had his share of three-pointers in his young career.\nIn fact, during his warm-up before the actual event, he was knocking them down with regular consistency. When it\ncame to the moment of truth, however, his shooting prowess seemed to leave him. Despite some of the best coaching\nand advice available (from Dan Majerle of the Phoenix Suns), Mike Hoban's shot fell short of the rim by almost\nthree feet, bringing a quick end to his dreams of millionaire status.\u003cbr\u003e\u003cbr\u003eWhy did Mike's well-practiced shooting \"system\" fail him? The answer is simple and can be summarized in one\nword: Risk ! How can such a subtle obstacle as risk have such an overtly negative effect on the emotions, behavior\nand apparent skills - in other words, the inner game - of highly practiced individuals, be they basketball players or\nmarket traders? A brief examination of how we learn behavioral skills may shed some light on this subject.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133841961329,"sku":"\\V14\\C03\\ZENANDE.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_7cc9d98c-7e03-4fe9-b028-37a0b7e304ca.jpg?v=1739653944"},{"product_id":"v14-c02-quantif-pdf","title":"V.14:2 (76-78): Quantifying Percentage Retracements by Alex Saitta","description":"V. 14:2 (76-78): Quantifying Percentage Retracements by Alex Saitta\u003cbr\u003e\u003cbr\u003eTraders often look for retracements of a market trend to establish new positions with that trend. But how often and how far does a market retrace the prior move\nbefore continuing? For the answer, this market analyst examines the Treasury bond futures market to determine typical retracement behavior.\u003cbr\u003e\u003cbr\u003eWhen the market is in a trend, it often retraces a portion of the prior move before the trend resumes. When a\ncorrection begins and the market retraces a portion of the prior advance, traders who missed the previous advance enter the market and buy at this point. Then the trend resumes (Figure 1).\u003cbr\u003e\u003cbr\u003eAfter an advance has been in motion for a lengthy period, latecomers start jumping in. These market participants buy not because they are compelled by strong technical or fundamental evidence; they buy because the uptrend has conditioned them to think the market will rise again tomorrow. Without strong reasoning, such traders lack conviction, so they will liquidate at the first signs of weakness. As soon as the advance stalls or the market drops slightly, these traders sell out, and in turn their liquidation triggers the start of a correction. Technicians believe a decline to at least the 33.3% retracement level will follow as these latecomers dump their positions. Because of this,\ntechnical analysts have identified the 33.3% retracement as the minimum retracement.\u003cbr\u003e\u003cbr\u003eAfter the 33.3% retracement level has been reached, technicians assume these participants have been flushed out of the market. Only then is it possible for the uptrend to resume. So at that level, the most bullish technicians re-enter the market, creating initial support in the area of the 33.3% retracement. Often, the trend resumes from there.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133842518385,"sku":"\\V14\\C02\\QUANTIF.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_3be20707-bb34-4166-a75c-ec8ab8402207.jpg?v=1739653969"},{"product_id":"v14-c12-floatan-pdf","title":"V.14:12 (515-519): Float Analysis by Steve Woods and Jan Arps","description":"Float Analysis by Steve Woods and Jan Arps\u003cbr\u003e\u003cbr\u003eHere's a close look at the turnover of a stock's float, based on an idea from the works of W.D. Gann, that reveals some dramatic patterns and expands the definition of a base or consolidation zone.\u003cbr\u003e\u003cbr\u003eThe floating supply of shares - or simply, float - is all of the shares actually available for trading by the public that are not owned by the company's management. This number can be incorporated into an understanding of the direct relationship between the stock price and its volume of shares traded. This is easily seen when a backward cumulative count of the volume is studied in relation to a stock's floating supply of shares. What emerges from this analysis are price-volume patterns that clearly show stocks forming bottoms, bases in a rising trend, and tops, as well as giving buy and sell signals. To understand this relationship between price and volume and see its powerful implications, one must understand the term float analysis.\u003cbr\u003e\u003cbr\u003eThe turnover of the float is the approximate time it takes for the float to change ownership. For example, if a stock's float has 50 million shares actively trading and the volume for the last four weeks was exactly 50 million shares, then the float's turnover would be a four-week span starting from the current date and going back to the day when a cumulative total of the volume equaled 50 million shares.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133843239281,"sku":"\\V14\\C12\\FLOATAN.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_c3d2191e-ff01-4a57-982c-27bafaebd97f.jpg?v=1739653998"},{"product_id":"v14-c01-quasise-pdf","title":"V.14:1 (19-25): Quasi-Seasonal Tendencies in Bond Futures by Scott Barrie","description":"V.14:1 (19-25): Quasi-Seasonal Tendencies in Bond Futures by Scott Barrie\u003cbr\u003e\u003cbr\u003eMarkets may have certain persistent characteristics. Here, a market analyst takes a close look at the Treasury bond futures markets to see if there are tradable patterns.\u003cbr\u003e\u003cbr\u003eAgricultural commodities traders are familiar with seasonal tendencies. Crops are planted at around the same time each year and harvested around the same time each year, so prices tend to follow the normal planting and harvesting cycle of production. Soybeans seem to rally in April, May or June based on drought scares, except in 1993, when soybeans rallied on flood scares instead. During September and October, exchange floor participants are always talking about harvest pressures. These well-documented tendencies present a sound building block for trading\nagricultural futures. Financial traders have no simple production cycle upon which to base trading, but\nquasi-seasonal biases do exist in the bond market. These tendencies may be based on the cycle of economic report releases, the refunding of the federal debt or other factors that affect interest rates.\u003cbr\u003e\u003cbr\u003eAs a basis for the analysis of directional bias in the bond market, I followed the studies done by Arthur A. Merrill in his ground-breaking Behavior of Prices on Wall Street , as well as the work done by Yale Hirsch in Stock Trader's Almanac . Both works deal only with the stock market and therefore were used as guides in analytic method only. As a proxy for the bond market, I used the Chicago Board of Trade (CBOT) long bond futures contract from 1979 to 1994 unless otherwise stated. This work is intended in no way to be as complete as the previously mentioned writers' studies, simply because the number of occurrences available to study are not nearly as plentiful for bond futures as it is for the stock averages.\u003cbr\u003e\u003cbr\u003eANALYZING BIASES\u003cbr\u003e\u003cbr\u003eIn examining central tendencies, I began my study by looking for particular days of the week with high propensities to be the weekly high, weekly low or the weekly extreme close.\u003cbr\u003e\u003cbr\u003eFigure 1 reveals the outcome of this analysis. On a percentage basis, no day of the week is drastically different. In comparing the results, however, Friday has the highest probability of making both the weekly high and low. On close examination, Friday has more than twice the probability for having the extreme price of the week over Tuesday through Thursday, while Monday has the highest probability of being the low close for the week.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133844091249,"sku":"\\V14\\C01\\QUASISE.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_99be777d-c218-450f-be31-8bc779f42234.jpg?v=1739654031"},{"product_id":"v14-c09-avoidin-pdf","title":"V.14:9 (387-391): Avoiding False Signals by Joe Luisi","description":"Some people may think that technical analysis doesn't work anymore, but here's one author's\nsolutions to today's challenging modern markets.\nby Joe Luisi\u003cbr\u003e\u003cbr\u003eHaving been involved with technical trading for several years, I've noticed that technical analysis doesn't seem to\nhold the same promise it once did. Indicators and patterns that were once tried and true are no longer reliable; false\nsignals and breakouts occur more frequently. Frequent stop running causes moves that seem to make no sense. Over\nthe years, with computers having become so inexpensive, and data, either real time or delayed, relatively cheap and\naccessible, many more traders have become technical. Software packages that once cost $400-$2,000 are now\navailable for less than $200, some as low as $20. Look at the classified advertisements of a trading publication, and\nyou can see literally dozens of technical (mechanical) trading systems for sale, with fantastic claims attached.\nMoreover, everyone seems to have a system for sale. Five to 10 years ago, those same classified ads had only a few\nsystems for sale. This onslaught of technology has created a change in the markets, and if you can't see it or prepare\nfor it, you will become a financial victim.\u003cbr\u003e\u003cbr\u003eTHE NEW WAVE\u003cbr\u003e\u003cbr\u003eEvery new technician reads the basics of chart patterns and indicators and applies them to his or her trading, only to\nfind they don't work. So how can traders overcome this new wave?\u003cbr\u003e\u003cbr\u003eOn the surface, these problems appear to make perfect sense; after all, the more people following the same indicators\nand patterns, the greater the possibility for aberration. If everyone is following the stochastic indicator and it falls\nbelow 30, a classic buy signal is triggered. At that point, thousands of screen-based technical traders who follow this\nindicator will call their brokers to buy at the market. This rush to the phones causes a brief runup in prices, and so it\nappears that the signal is working out.\u003cbr\u003e\u003cbr\u003eHowever - of course, there's a however - once the buying dries up, and it always does, no buyers are left to propel\nthe market higher and the only thing left to do is sell. The brief influx was caused by technicians all jumping in at\nonce. This causes a false move up, because the buy side is heavily favored temporarily. After the last technician\nbuys, there are no more buyers left in the market at that price, and therefore, sellers take over and the market reverses\ndirection. The technician scrambles to cover his or her position or lock in a profit, thus adding fuel to the selloff.\nHence, the classic false signal.\u003cbr\u003e\u003cbr\u003eLet's look at several examples of how the market can make moves that appear to make no sense at all, and then we\nwill look at ways to avoid these situations. Finally, we will look at several patterns that I have found to work over\ntime.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133844713841,"sku":"\\V14\\C09\\AVOIDIN.PDF","price":4.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_5785d02e-4293-4a02-8e50-48bf71f2eb72.jpg?v=1739654058"}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/collections\/volume-14-1996-18.gif?v=1739676601","url":"https:\/\/shop.traders.com\/collections\/articles-volume-14\/issue-10.oembed","provider":"Stocks \u0026 Commodities","version":"1.0","type":"link"}