OPENING POSITION January 1998 

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  It's our goal here at STOCKS & COMMODITIES magazine to pack a wide range of topics into each and every issue -- something for everyone, from the most jaded veteran to the newest of newbies. Many of you are new to technical analysis, new to technical trading and investing. You're on the threshold of a brave new world; you don't need the additional eyestrain and mindfog of trying to understand overly complex trading strategies. On the other hand, many of you other readers are at the opposite end of the spectrum; you have a great deal of experience in the market already. Maybe you're at a professional level, or close, and it's your job to keep abreast of the more sophisticated techniques. But most of you are somewhere in between, and so we try to make sure that each and every one of you gets at least one good idea from each issue. Let's take a look at some topics we're presenting this time.

First off, our interview this month is with Tom Bierovic. Here's an example of an individual with a great deal of experience in the markets, more than 30 years, in fact, and yet his methods are founded in the classic use of technical analysis. He's taken his skills as a technician to a professional level simply by blending techniques into a set of rules and then mastering those rules. Bierovic is proof positive that you don't need to get that complicated in your techniques to succeed.

And speaking of classic techniques, studying charts and looking for chart patterns is another example of pure technical analysis. If this appeals to you, then be sure to read Thomas Bulkowski's "Double tops." In this piece, he examines the use of this classic chart pattern, including the analysis of the outcomes from trading this method in individual stocks.

Or maybe you're an investor in mutual funds. Our feature article this month, "Dynamic asset allocation: Beyond buy and hold" by Gary Harloff, reviews a technique for allocating your funds across different asset classes. He performs a 10-year historical review, and presents a thorough examination of the results.

At the other extreme of trading is the day trader. Day traders are always looking for technical methods that signal a trading range, as well as evidence that the range is ending and a new trend is unfolding. In Gerald Marisch's "Breaking out of channels," he presents guidelines for determining a trading range, as well as determining indications when an exit has occurred.

All of these methods should be refined into some sort of disciplined strategy or system. A historical review of a strategy will produce a series of profits and losses, and thus, performance listings may be analyzed in a fashion similar to how a market may be analyzed, and a strategy of how to best implement the system could improve market performance. How would you go about doing such an analysis? Take note of Mike DeAmicis-Roberts' article, "Profiting from the Z-score." DeAmicis-Roberts presents a statistical technique for reviewing your profits and losses so you can estimate contract size for each trade after a win or a loss.

Other topics are covered as well, ranging from trading psychology to pattern recognition. Every month, we're here working to provide you with the magazine that is your leading technical analysis resource. That's our job, and we're sticking to it!

Trade well!