{"title":"Favorite Articles from 2012","description":"Each year we survey our readers for our Readers' Choice Awards, which are published in the annual Bonus Issue. As part of the survey, we ask readers to vote for their favorite article from the past year. Here are the award winners for \"Favorite STOCKS \u0026amp; COMMODITIES Article\" from 2012:","products":[{"product_id":"stcov301usvi","title":"Stocks \u0026 Commodities V. 30:12 (16-22): Using VIX To Forecast The S\u0026P 500 by Trent Gardner","description":"Using VIX To Forecast The S\u0026amp;P 500 by Trent Gardner\u003cbr\u003e\u003cbr\u003eFinding a trading system that beats the buy \u0026amp; hold method is a good find, especially in a volatile market. Here is a trading system that uses the volatility index as a forecasting tool and outperforms the buy \u0026amp; hold approach.\u003cbr\u003e\u003cbr\u003eCan the volatility index (VIX) be used to predict the future of the Standard \u0026amp; Poors 500? New ideas have arisen in academic literature that suggest that combining technical analysis with the VIX can result in a predictive model that will beat the buy \u0026amp; hold of the S\u0026amp;P 500. James Kozyra and Camillo Lento tested nine trading rules and found that eight of the nine produced positive results.\u003cbr\u003e\u003cbr\u003eThe VIX is often referred to as the fear index or fear gauge. It represents the implied volatility in the stock market for the next 30 days. The VIX is calculated in real time by the Chicago Board Options Exchange (CBOE) and is a weighted blend of option prices for the S\u0026amp;P 500. The formula that calculates the index takes current market prices for all out-of-the-money options for the first and second nearest months.\u003cbr\u003e\u003cbr\u003eFigure 1 shows the VIX from 2003 to October 2012. Note how it is mostly flat to down and is punctuated with violent spikes. The spikes in the data occur during times when the S\u0026amp;P 500 is selling off. Thus, it is safe to say that the VIX is negatively correlated with the S\u0026amp;P 500.\u003cbr\u003e\u003cbr\u003eUSING THE VIX TO FORECAST\u003cbr\u003e\u003cbr\u003eThe most robust trading rule is a simple 50-day moving average crossover of the VIX. It was able to produce 12.7% annual returns over the period from January 1999 through July 2009. These performances exceed the buy \u0026amp; hold approach by 12.49%, leading them to conclude that the VIX can predict the S\u0026amp;P 500. For the period, buy \u0026amp; hold yielded a total of 2.28% or an annualized yield of just 0.21%.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133922701681,"sku":"443GARDPDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_c7ba78c3-1546-46be-b51e-54aecedd2d67.jpg?v=1739657491"},{"product_id":"stcov301trbr","title":"Stocks \u0026 Commodities V. 30:2 (12-21): Trade Breakouts And Retracements With TMV","description":"Trade Breakouts And Retracements With TMV\u003cbr\u003e\u003cbr\u003eA Series Of Indicators Used As One\u003cbr\u003e\u003cbr\u003eTrade Breakouts And\nRetracements With TMV\u003cbr\u003e\u003cbr\u003eMaking good trading decisions involves finding indicators that cut through the market noise. But how do you do it without collapsing under the weight of information?\u003cbr\u003e\u003cbr\u003eby Barbara Star, PhD\u003cbr\u003e\u003cbr\u003eChart analysis is a multidimensional affair; no single indicator can tell the entire story. After spending years cluttering my screen with multiple indicators, I discovered that more is not necessarily better because they sometimes present conflicting information. Often, it takes longer to analyze the information needed to make decisions.\u003cbr\u003e\u003cbr\u003eThe goal is to integrate the knowledge that indicators provide in order to evaluate the situation that leads to making good trading decisions. That means each trader needs to find those indicators that cut through the market news (and noise) in a way that makes most sense to him or her without collapsing from information overload. Heres a method I have found useful.\u003cbr\u003e\u003cbr\u003eThe first step is to determine the categories from which to draw the indicators. For me, that includes trend, momentum, volatility, and volume (TMV). These present a multidimensional view of price behavior to supply a more complete picture.\u003cbr\u003e\u003cbr\u003eThe second step is to determine which indicators in those categories best fit our own personal trading styles. The TMV indicators I use are taken from technical tools found in most major charting packages: Keltner channels, the commodity channel index (CCI), the average directional movement index (ADX), and a volume oscillator. When combined, they reduce the clutter and offer the most bang for the informational buck (Figure 1).\u003cbr\u003e\u003cbr\u003eThe third and final step is to apply the chosen TMV indicators to trading. Because my preference is to trade in the direction of a trend, my examples will show how the indicators can be applied to trading price breakouts and retracements using either intraday or end-of-day data.\u003cbr\u003e\u003cbr\u003e","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133952946545,"sku":"V30C02_239STARPDF","price":4.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_891c2bc9-b87b-482a-b576-15465904b9e8.jpg?v=1739658823"},{"product_id":"stcov305prre","title":"Stocks \u0026 Commodities V. 30:1 (52-55): Product Review TC2000 Version 12 by Bruce R. Faber","description":"Product Review TC2000 Version 12 by Bruce R. Faber\u003cbr\u003e\u003cbr\u003eVersion 12 is the latest upgrade to the nowcloud based TC2000. As long as your computer can run Microsoft Silverlight, you have a very fast charting program at your disposal because the actual program calculations are being run on banks of Worden Brothers super-fast computers and delivering the results to you using real-time data. Okay, lets be honest: We are talking about two levels of real-time data. The Platinum users get the good stuff straight from the exchanges and pay an extra $9.25 per month for the up-to-the-millisecond data. The Gold users get the pretty good stuff from the BATS exchange (www.batstrading.com), and so far, Worden is eating the cost of that feed. But even pretty good real-time data is nice when you are only paying for end-of-day (EOD) data.\u003cbr\u003e\u003cbr\u003eIf you have followed the progression of what seems to be the philosophy of the Worden Brothers charting programs, it makes some sense that what used to be their EOD data plan is now nearly real-time. From what I have seen, they work to get the best affordable data for the TC family. From the old days of half a penny per day for each stock followed, with the data available two hours after the close of trading, to the current $1 a day for real-time data on thousands of stocks, indexes, and exchange traded funds (ETFs) is a great progression of value for program users.\u003cbr\u003e\u003cbr\u003eThough data is a very important part of any charting program, Version 12 has also made important strides in its prime objective, that being to help traders make better decisions in buying and selling equities. Ive spent a couple of days at well-planned seminars where Worden trainer-in-chief Michael Thompson, with the help of hundreds of great slides (and a deep understanding of the inner workings of the program), demonstrated the many abilities of this software. On top of that, I have watched hours of free webinars combined with tutorials on the specific abilities of TC2000, which is the first thing you should look at after you download the program and begin your 14 days of free data. I have used the cloud-based TC2000 since the release of Version 11, and I have only scratched the surface of what this cloud-based TC2000 is capable of.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133989876081,"sku":"V30C01_227PRTCPDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_364c0d65-cb66-40fa-94d4-02c88537a8bb.jpg?v=1739660808"},{"product_id":"stcov302buys","title":"Stocks \u0026 Commodities V. 30:10 (22-26): Buy \u0026 Sell Signals Using Stochastics by Chris Pratsch","description":"Buy \u0026amp; Sell Signals Using Stochastics by Chris Pratsch\u003cbr\u003e\u003cbr\u003eCombining moving averages with stochastics can generate reliable buy and sell signals. Find out how you can use them to identify attractive trading opportunities in stocks and ETFs.\u003cbr\u003e\u003cbr\u003eMany technical analysis indicators are based on complex mathematics that only seasoned mathematicians can handle, and sometimes even they can fail. Unfortunately, higher mathematics are required to handle intricate statistical formulations needed for large volume trades.\u003cbr\u003e\u003cbr\u003eThe single trader, however, for whom much smaller stock volume is available, cannot participate in such large trades. These single traders and I consider myself to be part of such a group can only react to market moves that, with or without influences from outside forces, gyrate in irregular cycles.\u003cbr\u003e\u003cbr\u003eWHICH INDICATORS DO YOU USE?\u003cbr\u003e\u003cbr\u003eThe task here is to use technical indicators that describe price moves and have maximum forecasting power. Fortunately, quite a number of useful and valid indicators are available. They are simple to use, mathematically correct, and often are well displayed and easy to handle by normal trading platforms.\u003cbr\u003e\u003cbr\u003eI will discuss using moving averages and stochastics in a number of combinations. You will be able to see how valuable buy \u0026amp; sell signals can be established and, when followed, form a basis for attractive trading activities of stocks and exchange traded funds (ETFs) by single traders.\u003cbr\u003e\u003cbr\u003eMOVING AVERAGES\u003cbr\u003e\u003cbr\u003eMy basic demand for an indicator is for it to describe and signal price trends. Trend following is a key condition for successful trading. For this purpose, moving averages are quite useful; they are simple to select, simple to understand, and simple to define the current trend.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52134130286961,"sku":"402PRATPDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_38b0754e-d170-49a9-b3fd-196b0e801c81.jpg?v=1739667936"},{"product_id":"stcov30581pr","title":"Stocks \u0026 Commodities V. 30:5 (54-58, 81): Product Review: ThinkorSwim.com by Dennis D. Peterson","description":"Product Review: ThinkorSwim.com by Dennis D. Peterson\u003cbr\u003e\u003cbr\u003eThinkorswim (TOS) by TD Ameritrade is software you can use with a number of different devices such as an iPhone, BlackBerry, Android, PC, touch iPod, or Apple Macintosh to trade stocks, stock options, futures, currency, spread orders, or future options. It has a number of order types, such as trailing stops, OCO (one cancels other), and one triggers all. It covers a broad spectrum of trading activities. It is free if you can live with delayed quotes; you can go to thinkorswim.com, fill out a brief registration form, and download the software for a trial, which is good for 60 days, or you can open a TD Ameritrade brokerage account (with no funds) with delayed quotes, and you can paper trade indefinitely. Such a deal!\u003cbr\u003e\u003cbr\u003eI reviewed this product using a paper trading account, so some features were not available such as Level II quotes, although if you put up a price chart, it will show the current inside bid and ask. Thinkorswim is loaded with features, and some of the navigation techniques are unique to TOS such as the colored dots to the left of the titles, or entry windows respond to a left-click, resulting in a dropdown list. To set the background color, there are three choices: metal, white, black. You need to select Configure at the bottom of the log-in screen. At the log-in, you might get a warning message that a 1024x768 resolution is recommended, but you can get by with 800x600. For the tutorials, however, I recommend a 24-inch screen.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52134154469745,"sku":"310PRTHIPDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_7b96b499-6aeb-4929-9ded-f2d540678d48.jpg?v=1739669174"},{"product_id":"stcov302rema","title":"Stocks \u0026 Commodities V. 30:1 (24-28): Reversing MACD by Johnny Dough","description":"Reversing MACD by Johnny Dough\u003cbr\u003e\u003cbr\u003eThese two functions complement the MACD and can be used to calculate the price value of a specific MACD level and the price value that will cause the MACD to change direction. Find out how you can apply it to your trading.\u003cbr\u003e\u003cbr\u003eMoving average convergence\/divergence (MACD) created by Gerald Appel is probably one of the more popular momentum oscillators in use today. It is calculated using two exponential moving averages (EMAs) of different lengths and is the value of the shorter (fast) period MACD less the value of the longer (slow) period EMA. MACD fluctuates above and below the zero value where the moving averages cross.\u003cbr\u003e\u003cbr\u003eIn Giorgos Siligardos article Reverse Engineering RSI, he showed that the reverse-engineered relative strength index (RSI) can help determine the following time periods closing price using the value of the oscillator. And in the article RSI Bands, Franois Bertrand showed overlaying RSI overbought\/oversold levels on the price chart.\u003cbr\u003e\u003cbr\u003eI will show the calculation of the price value of a specific MACD level and the calculation of the price value that will cause the MACD to change direction. These values in relation to price can then be shown by overlaying them on the price chart. Price charts and code shown here are from the AmiBroker charting package.\u003cbr\u003e\u003cbr\u003e","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52134184681841,"sku":"V30C01_221DOUGPDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_ad65593d-5fef-4877-b220-6a1643cb33c1.jpg?v=1739670719"}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/collections\/favorite-articles-from-2012-18.gif?v=1790892011","url":"https:\/\/shop.traders.com\/collections\/faarfr204.oembed","provider":"Stocks \u0026 Commodities","version":"1.0","type":"link"}