September 2001 Letters To The Editor
or return to September 2001 Contents
The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine would not exist.
Address your correspondence to: Editor, Stocks & Commodities, 4757 California Ave. SW, Seattle, WA 98116-4499, or E-mail to editor@traders.com. All letters become the property of Technical Analysis, Inc. Letter-writers must include their full name and address for verification. Letters may be edited for length or clarity. The opinions expressed in this column do not necessarily represent those of the magazine. -Editor
VERTICAL HORIZONTAL FILTER
Editor,
First of all, congratulations on your magazine. I have read the article "Vertical Horizontal Filter" (Stocks & Commodities, July 2000) and I would like to know how I can apply it in MetaStock. I used it in a spreadsheet in Excel and it is really fantastic!
Ignacio Huerta Sánchez, Madrid, Spain
Unfortunately, the VHF wasn't a Traders' Tips topic for that issue, so check with Equis International at Equis.com for MetaStock code. --Editor
VOLATILITY STOP FORMULA
Editor,
I would like to ask if you have a formula in MetaStock for Wilder's volatility stop.
Alex S. Bender, via e-mail Henderson, NV
Please check with Equis International at Equis.com for MetaStock code. --Editor
.ELA AND .ELS DOWNLOADS
Editor,
As a new subscriber, I must say that your magazine is great. I read the article by R.G. Boomers about MetaTrends in the June 2001 S&C. Do you know where I can download any .Ela or .Els files for this technique?
Helgo Wilberg, via e-mail Sweden
Please check the TradeStation website at TradeStation.com for .Ela and .Els code. --Editor
BRAZILIAN READER
Editor,
I am a student of economics at Sao Paulo University in Brazil. I also work at CMA(which is a company like Bloomberg and deals in financial systems information). I use technical analysis everyday and I saw a back issue of STOCKS & COMMODITIES in my office. I liked it very much, although the reading is difficult -- too technical! But I must learn, so I would like to ask you two things:
1. I went to your website at Traders.com to subscribe, but as I am still a student, it was too expensive for me. Do you offer any student discounts? I am very impressed with the magazine and would like to start reading it!2. I am curious about the study MFI (market facilitation index). What is this? How is it calculated?
Maria Carolina, via e-mail Brazil
Sorry, we do not offer student discounts, although we do offer discount subscription rates for multiyear subscriptions. Call our subscriptions department at 800-TECHNICAL for information.Regarding the market facilitation index (MFI), this is an indicator that synthesizes both price and volume analysis. The MFI is the ratio of the current bar's range (high-low) to the bar's volume. The MFI is designed to gauge the efficiency of price movement and is written this way:
MFI= (range/volume)
We've published several articles on this topic over the years, among which have been "The Market Facilitation Index" by Gary Hoover (June 1994), "The Market Facilitation Index" by Thom Hartle (July 1996), and "The Market Facilitation Index" by Charles F. Wright (October 1989). Visit the Online Store at Traders.com to order individual articles in electronic format. --Editor
SCHOOLING IN TECHNICAL ANALYSIS
Editor,
In some of your past Letters to S&C columns, you've mentioned universities that offer courses in technical analysis. I believe most of the schools that offer such courses are small. I think you've mentioned which universities teach some technical analysis-related subjects as part of a program toward earning a master's degree in business administration. Could you please direct me to the issue(s) that this information appeared in?Josh Brottlund, via e-mail
The June 1999 Letters to S&C answered a question on college-level classes in technical analysis. Programs in technical analysis are offered at New York Institute of Finance (https://www.nyif.com) and other universities in New York City. The Technical Analysis Institute at Golden Gate University in San Francisco (https://tele-port.com/~ifta/TSAA/tsaahome.html) also offers courses. --Editor
HILBERT CHANNEL/SIROC
Editor,
I have read about and tried to apply the Hilbert channel function/indicator to TradeStation. I applied it to the strategy stage and optimized this. While it gives a fairly good result, I have found that the inputs entry, exit K have no effect in the optimization process whatsoever. They appear completely irrelevant. My installation was copied exactly from the November 2000 S&C. In addition, when I was in the UK, I came across the indicator SIROC (apparently a smoothed ROC with two inputs). Does anyone know the formulas or, even better, the EasyLanguage syntax for this?
Mel Cohen, via e-mail Capetown, South Africa
Check out the November and December 2000 Traders' Tips and the November 2000 article "Optimizing With Hilbert Indicators" by Roger Darley. The code and variables are too lengthy to reprint here, but the November 2000 Traders' Tips does give the Hilbert channel EasyLanguage code.
Traders' Tips are posted at our website, Traders.com, free for public viewing. You can copy the actual code from our web page for use in your application. To locate the November and December 2000 tips, use our site's search engine or click on the STOCKS & COMMODITIES magazine icon on the left-hand side of our homepage (or go to https://www.traders.com/S&C_homepg.html), then scroll down and click on the "Back issues archive" located under the "This month in S&C" section on the left-hand side. --Editor
ELLIOTT WAVE PRINCIPLE
Editor,
Not to pounce on your self-professed ignorance regarding the Elliott wave principle (July 2001 Letters to S&C), but the phi ratio is actually integral to the Elliott wave principle.
The Elliott wave principle is based on the mathematics of the Fibonacci sequence, generated from the famous rabbit-breeding problem, which the Italian mathematician Leonardo Fibonacci mentioned in his 13th-century work, Liber Abacci. The sequence goes like this: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, and so on. It has many fascinating properties, one of them being that any number in the sequence divided by the next-highest number yields approximately 0.618. Any number divided by the preceding number yields approximately 1.618. An interesting point to note is that 0.618 is simply the reciprocal of 1.618, that is, 1/1.618 = 0.618. This ratio, 0.618 (for some, 1.618) is known as "the golden ratio" and denoted by the Greek letter phi. It occurs numerously in nature, the sciences, and even the arts (the list is too exhaustive to mention here). Suffice it to say that the Elliott wave principle being based on the Fibonacci sequence, phi enters the equation of wave relationships numerously, though "ratio" analysis is given a back seat to the traditional "form" analysis in the Elliott wave principle. Hope this helps.
Kamran Khan, via e-mail
MORE ON ELLIOTT WAVE
Editor,
I've subscribed for the last two years and I can't wait to read your magazine each month. There are always some new and interesting articles to read.
Regarding the July 2001 Letters to S&C, page 14, "Elliott wave theory": One of your readers inquired about the phi ratio in Elliott wave analysis. I've been working with Elliott wave theory for just over a year. You can find a very good definition of phi and golden ratio and more in the book Elliott Wave Principle: Key To Market Behavior by A.J. Frost and Robert Prechter. In addition, some software programs support the use of phi as a technical analysis tool. The golden ratio time ruler and spiral are phi-related tools I use with Elwave 6 from Prognosis Software Development.
Thomas R. Gilchrist, via e-mail
UNIQUE ARTICLES?
Editor,
I am extremely disappointed in the article "Estimating Future Drawdown" by Tushar Chande that appeared in the July 2001 issue of Technical Analysis of STOCKS & COMMODITIES. I have no problem with the content or quality of the article but with the fact that you carried an article that also appeared in the July 2001 issue of Active Trader magazine. I really do not feel I am getting my money's worth when I see an article that is not exclusive to your magazine. As a business you also do not have a competitive advantage when you carry an article appearing in a competing magazine. In the future when purchasing articles from freelance writers, maybe you should require their articles to be exclusive.
Name withheld
We also are extremely disappointed that this problem occurred. As a magazine, our copyright policies do require exclusivity, and acceptance of articles is based on this. This was an unfortunate aberration of which we were not aware until we saw the July Active Trader. We are dedicated to bringing our readers original material on technical analysis and have done so for 18 years. We will continue to present original material and will endeavor to uphold our copyright requirements to every extent possible. Thank you for writing and we apologize for this slip in our usual standards. --Editor