Looking Forward And Looking Back
Ken Tower And The Future Of Electronic Trading
by Jayanthi Gopalakrishnan
A member and former president of the Market Technicians Association (MTA), Ken Tower is chief market strategist at CyberTrader, and one of the best-known point & figure chartists in financial services today. He is a frequent guest speaker on CNBC, CNN, FOX, Bloomberg TV, Bloomberg Radio, MarketWatch Radio, and AP Radio financial programs. Tower also produces daily and weekly technical market commentary and contributes regularly to online trading seminars and workshops for clients of both CyberTrader and Charles Schwab & Co. He is also a frequent speaker at regional chapters of the MTA and the CFA Institute.STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Tower via telephone on January 6, 2005.
There used to be a scarcity of data. Now it's how to use the overwhelming amount of data we have available that's at a premium.
Ken, how did you get interested in the markets?
I was exposed to the stock market when I got out of sixth grade. I was given five shares of stock, and I watched them for a while, not intensely, but on and off. It was a little oil and gas company, and I followed its swings up and down.
So you started really early!
I did! Later, I went to Lehigh University and ended up a finance major. I really disliked almost everything they were teaching me. There was one chapter in our portfolio management and security analysis class textbook that was about technical analysis. The professor said, "We're not going to pay any attention to this," and I was immediately intrigued since I didn't like anything else he was telling us! I also got involved with the investment club at Lehigh, and I just took off from there.
I was an early subscriber to William O'Neil's Daily Graphs, and I used to get the options daily graphs presentations. Out of college, I got a job with Delafield, Harvey, Tabell, a boutique institutional research firm -- at least the Tabell portion was; the rest was more money management. So I was an institutional salesman at this firm for a long time, and since it was such a small firm, you really had to do a lot of your own analysis. Tony Tabell was our leader, but we did a lot of our own work.
Did you apply technical analysis?
Of course. Tabell was a long-time technician. He learned from his father, Edmund Tabell, whose uncle was Richard Wyckoff. We had this long lineage of technical analysis at this firm, so yes, that's what we did.
So you've been with it for quite a while.
Oh, yeah. One of my old boss' favorite sayings was, "Fundamentals is the last refuge of the technician." So when the technicals are so confusing you don't have anything else to say, you can always pull out something fundamental. That's how far down the list we considered fundamentals.
Did you use the typical type of analysis?
No, actually, Tony was a major proponent of point & figure charts.
We relied extensively -- although not exclusively -- on P&F charts.
...Continued in the March 2006 issue of Technical Analysis of STOCKS & COMMODITIES
Excerpted from an article originally published in the March 2006 issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights reserved. © Copyright 2006, Technical Analysis, Inc.
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