{"title":"Favorite Articles from 2009","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 2009:","products":[{"product_id":"stcov274doch","title":"Stocks \u0026 Commodities V. 27:5 (48-50): Do Chart Patterns Still Work? Thomas Bulkowski","description":"Do Chart Patterns Still Work? Thomas Bulkowski\u003cbr\u003e\u003cbr\u003eHas the failure rate of chart patterns increased in recent years?\u003cbr\u003e\u003cbr\u003eIN the last several years, have you found it more difficult to make money in the stock market? Do you get the feeling that indicators are less effective than they used to be in spotting profitable opportunities? I decided to find the answers to those questions with a new study. I spent a week updating a database of chart patterns that I used during research for writing my books, and found an alarming result.\u003cbr\u003e\u003cbr\u003eIn my investigation, I used 13,932 chart patterns spread over the years from 1991 to 2008. I did not use all of the chart pattern types in my analysis but concentrated on 23 of the most common and popular. They are: diamond tops and bottoms; double tops and bottoms (eight types of Adam and Eve combinations); triple tops and bottoms; rising and falling wedges; head \u0026amp; shoulders tops and bottoms (four types of simple and complex); ascending, descending, and symmetrical triangles; and rectangle tops and bottoms.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133925978481,"sku":"\\V27\\C05\\090BULK.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_48b63d1f-0baf-4080-834b-1900e6013f40.jpg?v=1739657684"},{"product_id":"stcov276thru","title":"Stocks \u0026 Commodities V. 27:01 (66-69): Three Rules, One Easy Way To Trade ETFs by Larry Conners and David Penn","description":"Three Rules, One Easy Way To Trade ETFs by Larry Conners and David Penn\u003cbr\u003e\u003cbr\u003eHeres a short-term trading strategy to trade exchange traded funds.\u003cbr\u003e\u003cbr\u003eA famous trader once remarked that he could publish the secrets to his winning trading strategy in the newspapers and no one would follow them. The key, this famous trader explained, was consistency and discipline.\u003cbr\u003e\u003cbr\u003eIn our opinion, when it comes to trading and trading strategies, one of the things that makes consistency easier and discipline a bit less daunting is simplicity. With few exceptions, all the trading strategies we have developed over the years have had simplicity as their hallmarks.\u003cbr\u003e\u003cbr\u003eWhat weve developed in this latest trading strategy is short-term trading at its simplest. Instead of stocks, we focus on the smaller universe of market index exchange-traded funds (Etfs). We also created the system as long-only no need to worry about borrowing shares of Etfs. And last but not least, we limited the strategy to three simple rules.\u003cbr\u003e\u003cbr\u003eTHE DOUBLE 7'S\u003cbr\u003e\u003cbr\u003eBefore we tell you those rules, first understand a bit about this trading strategy, which we call Double 7s. We tested this strategy on both the Standard \u0026amp; Poors 500 (Spx) and the Nasdaq 100 (Ndx) from January 1995 through April 2008. The results over that time period for the S\u0026amp;P 500 were +1,133 points, with nearly 80% of the trades closing profitably. In the Nasdaq 100, the results were similarly impressive. From January 1995 through April 2008, the Double 7s strategy in the Nasdaq 100 yielded 2,822 points, with 79.84% of the trades closing in the green.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133927879025,"sku":"\\V27\\C01\\013PENN.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_aa1586e5-79a0-4374-8878-71f3efd4a60a.jpg?v=1739657811"},{"product_id":"stcov274elwa","title":"Stocks \u0026 Commodities V. 27:2 (40-45): Elliott Wave Theory, Simplified by Koos van der Merwe","description":"Elliott Wave Theory, Simplified by Koos van der Merwe\u003cbr\u003e\u003cbr\u003eElliott wave counts can get complicated,\nbut it doesnt have to. Heres a simplified\nlook at how to study Elliott wave theory.\u003cbr\u003e\u003cbr\u003eIN the late 1920s, Ralph\nNelson Elliott came to the\nconclusion that the movement\nof the stock market\ncould be predicted by identifying\na repetitive pattern of waves. He\ntheorized that movement in the market\nwas the result of investors reaction to\noutside influences.\u003cbr\u003e\u003cbr\u003eOver my years as a trader and investor\nin the stock market, I came to realize that\nthe outside influences that Ralph Elliott\nbelieved moved the market was nothing\nother than emotion. In my 50 years as a\npharmacist, I found that emotion played a\ntremendous part in the physical and mental\nhealth of a patient. I also found that\nhealth and emotion occurred in cycles\nmore obvious in women than in men.\nEventually, I determined that the gravitational\nattraction by the moon plays a real\npart in how a trader trades. After all, the\ngravitational pull creates the tides in the\nocean. More than 80% of the human body\nconsists of water. So even by a small\ndegree, that same lunar gravitation must\ninfluence the movement of water, chemicals,\nand proteins within the human body,\nand in this way influence the emotions of\na person, especially of a trader who lives\nhigh on the knife edge of emotion.\u003cbr\u003e\u003cbr\u003eRalph Elliott came to the conclusion that the market moves upward in five\nwaves, and corrects in three waves. I first\nencountered the Elliott wave theory in 1969 and have been an avid follower and student since then.\nI have studied wave patterns but over the years have found\nthat the complexity of the wave theory leads only to complexity\nin interpretation. Thus, I decided that simplicity was the\nanswer, and so, the simpler the wave, the easier the interpretation.\nTo achieve this simplification, I decided on the following\nset of rules.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133941510513,"sku":"\\V27\\C02\\027KOOS.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_2ad5773b-729d-4a42-bd33-ba19330b9abc.jpg?v=1739658605"},{"product_id":"stcov273usin","title":"Stocks \u0026 Commodities V. 27:5 (36-43): Using Initial And Trailing Stops by Sylvain Vervoort","description":"Using Initial And Trailing Stops by Sylvain Vervoort\u003cbr\u003e\u003cbr\u003e\nIn this first of a three-part series, we will look at initial stop methods and compare trailing-stop strategies starting with a fixed-percentage trailing stop.\u003cbr\u003e\u003cbr\u003eMost people have no problem buying a stock, but selling it is another matter. Selling is best accomplished based on technical analysis signals reaching a price target, breaking a trend, money management, or whatever rules you apply for trading the stock market. But you must also consider a last warning signal. This warning is an initial stop and a trailing-stop signal.\u003cbr\u003e\u003cbr\u003eIn this series of three articles, we will look at initial stop methods and compare trailing-stop methods using a fixed- percentage trailing stop, an average true range (Atr) trailing stop, a modified Atr trailing stop, and Tr\u0026amp;nds (read Trends), a trailing resistance and support stop.\u003cbr\u003e\u003cbr\u003eINITIAL STOP\u003cbr\u003e\u003cbr\u003eThe initial stop is set when you open your trade. When this stop level is broken, it is the ultimate and last warning sign to close your position. Setting the initial stop requires applying technical analysis basics and risk\/reward ratio. Here are a few examples.\u003cbr\u003e\u003cbr\u003eIn the daily chart of Allis Chalmers (Aly) in Figure 1, you see a significant short-term correction, one that would make you consider opening a trade. But where would you set the initial stop? There is a positive confirmed bullish harami pattern in the candlestick chart.\u003cbr\u003e\u003cbr\u003eLogically, you would use the bottom level of the bullish harami pattern and consider the support level broken when the closing price falls below this line. This means buying now at a closing price of $12.02 and setting a stop at $10.12 or a loss of about 20%. If you are like me, you probably wouldnt like the idea that this trade may result in a 20% loss. The first resistance for a further up move is at $14, which is a last top in the previous downtrend. Buying at $12.02 with a stop at $10.12 and a first price target at $14 gives you a risk\/reward ratio of not much more than 1, which is not attractive. There should be at minimum a ratio of 2:1, but 3:1 is preferred. This is the main reason why I would not open a trade here. There are more technical reasons why I would not take this trade, but I am just going to look at the use of stops.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133974999409,"sku":"\\V27\\C05\\088VERV.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_be204abd-c1e6-4965-9f37-b201c0fba597.jpg?v=1739659850"},{"product_id":"stcov271trsy","title":"Stocks \u0026 Commodities V. 27:3 (10-15): Trade System Evaluation by Donald W. Pendergast Jr.","description":"Trade System Evaluation by Donald W. Pendergast Jr.\u003cbr\u003e\u003cbr\u003eHere we evaluate a simple trading\nsystem that will enable you to\nsimulate the results of realistic\ntrading with a portfolio of stocks.\u003cbr\u003e\u003cbr\u003eEvaluating your trading system\nperformance before you\nput real money on the line is\nessential to your profitability. In this article, well evaluate a\nsimple momentum-based system\nusing TradeSim Enterprise, a\nMonte Carlo simulation\/\nbacktesting program that enables\na trader to simulate the results of\nrealistic trading with a portfolio\nof stocks. Then well dig a little\ndeeper, learning how to best interpret\nthe statistics, matching system\nperformance characteristics\nto a traders temperament.\u003cbr\u003e\u003cbr\u003eA BASIC SYSTEM\u003cbr\u003e\u003cbr\u003eA simple, daily-based momentum\nsystem provides the basis for all\nof the statistical analysis here. Its\na moving average convergence\/\ndivergence (MACD) crossover system,\nbut with the entry and exit triggers reversed. The system\nenters at the next days open after a buy signal, and it exits at\nthe next days open after a sell signal. No stop-loss is used.\nOnly long entries were taken, and no margin was used in\ntesting. All key portfolio trade parameters are listed later in\nthis article. This system is included with TradeSim.\u003cbr\u003e\u003cbr\u003eBACKTESTING, MONTE CARLO STYLE\u003cbr\u003e\u003cbr\u003ePortfolio backtesting is the only practical way to obtain\nrealistic trading system test results, especially if you trade a\nvariety of stocks (futures, mutual funds, and so on) at any\ngiven time. Further, such portfolio backtesting needs to be\nsimulated using thousands of different iterations to ensure\nthat any given mix of tradables will reliably attain profitability.\nTradeSim Enterprise easily automates portfolio\nbacktesting with its advanced Monte Carlo analysis.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52134082576753,"sku":"\\V27\\C03\\042PEND.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_22d5133d-d56d-4b98-b1bf-5aa390650d0b.jpg?v=1739665208"},{"product_id":"stcov272trre","title":"Stocks \u0026 Commodities V. 27:7 (26-30): Trailing Resistance And Support Stops by Sylvain Vervoort","description":"Trailing Resistance And Support Stops by Sylvain Vervoort\u003cbr\u003e\u003cbr\u003eIn this, the final part of a three-part series, we will look at a short-term trailing stop that moves close to the price action.\u003cbr\u003e\u003cbr\u003eThe different trailing stops I discussed in parts 1 and 2 allow for enough of a price reaction that makes them most effective for medium-term trend trading. Using lower percentages or a smaller multiplication factor for the average true range (Atr) trailing stop will mostly result in too many losing trades. If you want a short-term trailing stop, it will have to move much closer to the price action. With that in mind, I created Tr\u0026amp;nds, an acronym (more or less) for trailing resistance \u0026amp; support stop, which will look directly at the price movement. The most reliable reference is price support and resistance, and the main item here is price turning points.\u003cbr\u003e\u003cbr\u003eSUPPORT TRAILING STOP\u003cbr\u003e\u003cbr\u003eI define a pivot support point in an up move when there is a low price that is equal or lower than the two prices preceding and following this low price. You can use the following MetaStock expression for this:\u003cbr\u003e\u003cbr\u003esupport:=If(L\u0026gt;=Ref(L,-2) AND Ref(L,-1)\u0026gt;=Ref(L,-2)\nAND Ref(L,-3)\u0026gt;=Ref(L,-2) AND Ref(L,-4)\u0026gt;= Ref\n(L,-2),Ref(L,-2),{else}\u003cbr\u003e\u003cbr\u003eIn Figure 1, you can see that this follows the uptrend in the Amd chart. But there are a couple of bigger price moves where the trailing stop stays too far away from the price action. How do we account for them?","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52134084313457,"sku":"\\V27\\C07\\126VERV.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_92b85ba9-a0cc-40ce-a93b-45dca39a98a0.jpg?v=1739665346"},{"product_id":"stcov275incl","title":"Stocks \u0026 Commodities V. 27:02 (52-57): Interview: Classic Swing Trading With Linda Bradford Raschke by J. Gopalakrishnan and B. R. Faber","description":"Interview: Classic Swing Trading With Linda Bradford Raschke by J. Gopalakrishnan and B. R. Faber\u003cbr\u003e\u003cbr\u003eHers is a name that youve probably heard or read any number of\ntimes if youve been interested in or involved in technical analysis for\nvery long. Linda Bradford Raschke began her trading career in 1981\non the floor of the Pacific Coast Stock Exchange before moving to the\nPhiladelphia Stock Exchange, eventually trading her own account from\nhome. StockS \u0026amp; commoditieS Editor Jayanthi Gopalakrishnan (JG)\nand Staff Writer Bruce Faber (BF) spoke to Raschke via telephone on\nDecember 4, 2008.\u003cbr\u003e\u003cbr\u003eLinda, how did you get interested\nin trading?\u003cbr\u003e\u003cbr\u003eIt was when I was just out\nof college and I had these glamorous ideas that I was going to\nbe a stockbroker. I had moved to San\nFrancisco and applied to every firm in\nthe city, and got turned down by all of\nthem.\u003cbr\u003e\u003cbr\u003eBF: They are kicking themselves\nnow.\u003cbr\u003e\u003cbr\u003eOf course nobody wanted a kid out of\ncollege with no experience. So I ended\nup taking a job at Crown Zellerbach,\nwhich was right across the street from\nthe Pacific Coast Stock Exchange. Every\nmorning I would see these traders going\nin and out of the exchange wearing their\ntrading jackets. I befriended one of them\nwho taught me about options, and then\nwent through this course that the clearing\nfirm offered at the time on how to price\nthem. This was in equity options. After\nabout six months, my friend the trader\nsaw that I was still interested and offered\nto back me if I wanted to become a floor\ntrader. In those days this was back in\n1981 we did not have computers or\nonline trading. The only access we had\nto a short-term trading environment was\nto go to one of the exchanges and work\nyour way up by clerking or whatever you\ncould do at the time.\u003cbr\u003e\u003cbr\u003eI got lucky and got backing to become a trader, and thats how I\nstarted. In this business, you\nlearn by doing. I cannot stress\nthat enough.\u003cbr\u003e\u003cbr\u003eJG: You started out working\non the floor and after that,\nyou just ventured out on\nyour own?\u003cbr\u003e\u003cbr\u003eThat trader backed me to become a floor trader. A short while\nafter that, I got caught in a takeover bid\nin 1982 where I was on the wrong side.\nThat pretty much put me into debt to\nmy clearing firm. They found another\ncompany that needed a floor trader to\nexecute some of their orders and strategies\nfor them on that particular exchange,\nso thats what I did for the next two years\nbefore I eventually moved to the Philadelphia\nStock Exchange. I still owed\nmoney to the clearing firm, but I found\nanother backer, and it took me about\nfive years to pay off that trading loss.\nBut eventually I made enough money\nto go out on my own.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52134089130353,"sku":"\\V27\\C02\\030INTR.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_b6c86ac9-217e-43b0-bef0-44f4b09bbc1e.jpg?v=1739665715"},{"product_id":"stcov272voma","title":"Stocks \u0026 Commodities V. 27:10 (22-31): Volume-Weighted MACD Histogram by David Hawkins","description":"Volume-Weighted MACD Histogram by David Hawkins\u003cbr\u003e\u003cbr\u003eFind out how the performance of the Macd improves by volume-weighting it.\u003cbr\u003e\u003cbr\u003eMY goal was to make the Macd-histogram (Macdh) perform better by volume weighting it. It uses three exponential moving averages. So, whats needed is to volume weight the exponential moving average (Ema). The Ema is widely used because it is more responsive than the simple moving average (Sma). The volume-weighted moving average (Vwma) responds proportionately more to higher-volume trading so it emphasizes significant trading while deemphasizing less-significant, light-volume trading. The goal here is to combine them into one moving average, the volume-weighted exponential moving average (Vwema), using an algorithm that is simple and easy to implement with indicator scripting languages in standard technical analysis programs, such as the Indicator Builder in MetaStock.\u003cbr\u003e\u003cbr\u003eEMA FROM THE SMA\u003cbr\u003e\u003cbr\u003eThe Sma is just the mean of the prices of the last n trading bars. One simply takes the sum of those prices and divides by n. To make the Ema, we start by making the Sma for the first n bars in the dataset. Thereafter, the general formula is:\u003cbr\u003e\u003cbr\u003ePercentage * (present bars price)\n+ (1 percentage)*(last bars Ema)\u003cbr\u003e\u003cbr\u003eWhere, for an n-period Ema, the percentage is given by 2\/(n + 1)\u003cbr\u003e\u003cbr\u003eThis has the effect of both giving most weight to the most recent bars and of including information from all previous bars with decreasing weights going back in time.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52134138478961,"sku":"V27_C10187HAWKPDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_7d3c06a6-30f0-4699-ab02-9b0f552f8f01.jpg?v=1739668544"},{"product_id":"stcov273avtr","title":"Stocks \u0026 Commodities V. 27:6 (34-40): Average True Range Trailing Stops by Sylvain Vervoort","description":"Average True Range Trailing Stops by Sylvain Vervoort\u003cbr\u003e\u003cbr\u003eIn this second of a three-part series we will compare trailing-stop methods using an average true range (Atr) trailing stop.\u003cbr\u003e\u003cbr\u003eby Sylvain Vervoort\u003cbr\u003e\u003cbr\u003eThe average true range (Atr) was developed by J. Welles Wilder and introduced in his book New Concepts In Technical Trading Systems. The Atr indicator measures a securitys volatility. Wilder defined the true range concept as the greatest value of the:\u003cbr\u003e\u003cbr\u003e Current high less the current low\u003cbr\u003e\u003cbr\u003e Absolute value of the current high less the previous close\u003cbr\u003e\u003cbr\u003e Absolute value of the current low less the previous close\u003cbr\u003e\u003cbr\u003eWilder then calculated an average of this value for creating the average true range.\u003cbr\u003e\u003cbr\u003eLike most technical analysis programs, MetaStock has a predefined Atr indicator (Atr (period)). But if you need to calculate it yourself, it can be created as follows:\u003cbr\u003e\u003cbr\u003e\n{Get the required ATR period;}\nperiod:=Input(ATR Period :,1,100,5);\n{Calculate the biggest difference based on the true range concept;}\ndiff1:=Max(H-L,Abs(H-Ref(C,-1)));\ndiff2:=Max(diff1,Abs(L-Ref(C,-1)));\n{Use Wilders moving average method to calculate the Average True Range;}\nMov(diff2,period*2-1,E)\u003cbr\u003e\u003cbr\u003e\nWith this formula you could create an Atr value based on something other than the close, such as an average price.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52134173180273,"sku":"\\V27\\C06\\106VERV.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_1ea8d7f6-78e4-4d50-a198-7517e27466f6.jpg?v=1739670137"},{"product_id":"stcov273rima","title":"Stocks \u0026 Commodities V. 27:9 (38-44): Risk Management, Position Sizing, And Probability by Brian Auit","description":"Risk Management, Position Sizing, And Probability by Brian Auit\u003cbr\u003e\u003cbr\u003eImplement a well-planned strategy before initiating your next trade so you can sustain losses. This methodical approach allows you to consider all the factors before initiating your next trade so you can build that elusive 45-degree angled equity curve with your trading capital.\u003cbr\u003e\u003cbr\u003eby Brian Ault\u003cbr\u003e\u003cbr\u003eSay youve booked 16 winning trades in a row. Your account has jumped 12% in value. Your ability to define your edge has never been more focused and your confidence increases with each and every successful outcome. But out of nowhere comes\nNovember 18, 1985, Monday Night Football. Millions of viewers watched in horror as an event still considered to be the most shocking moment in Nfl history unfolded. Within seconds, an attempted blitz literally snapped quarterback Joe Theismanns leg, causing a horrific compound fracture and putting a definitive end to his career.\u003cbr\u003e\u003cbr\u003eThis event had the same characteristics that too many traders are all too familiar with, in which a trade we didnt see coming blindsides us and not only wipes out our profit but cripples our account to the point of retirement without a fresh injection of capital. This happens every day in trading and perhaps it has even happened to you.\u003cbr\u003e\u003cbr\u003eMost of us have experienced something similar at some point in our trading career. So how could we let this happen, and more important, how can we prevent this from ever happening again? You can do this by employing three simple disciplines: risk management, position sizing, and probability.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52134191333745,"sku":"\\V27\\C09\\172AULT.PDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_9ce011e5-affa-42b6-bfb3-4165cb9a51fe.jpg?v=1739671076"}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/collections\/favorite-articles-from-2013-21_7949ae48-ed01-4dce-8ba6-193f86907676.gif?v=1790892740","url":"https:\/\/shop.traders.com\/collections\/faarof20.oembed","provider":"Stocks \u0026 Commodities","version":"1.0","type":"link"}