November 2006 Letters To The Editor
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
BULKOWSKI INTERVIEW
Editor,
I enjoyed your recent interview with Thomas Bulkowski. Could you tell me what chart-pattern recognition computer software he uses? I'm a chart reader but I'm looking for a service/platform that helps me identify these patterns -- that brings them to my attention. I currently use TC2005 and eSignal, but you have to really "search" out the charts of stocks that offer potential profit.
In addition, any other information/services that he offers would
be appreciated, such as his email/website, and so forth.
Mike Martin
Tom Bulkowski uses software he developed. A version of it that performs chart-pattern recognition is available on his website for free at https://mysite.verizon.net/resppzq7/patternz.html. It finds 64 chart patterns, 102 candlesticks, and other related concepts, but you have to provide the data. -Editor
ENCYCLOPEDIA OF CHART PATTERNS
Editor,
I am interested in the book Encyclopedia Of Chart Patterns
by Thomas Bulkowski, but I cannot find it on your website. Please let me
know how to purchase this book.
Thompson Aderemi
Since we did not publish the book and we are not a book reseller, we do not sell it at our website; however, you should be able to purchase it from any major online bookseller, or go to Thomas Bulkowski's website directly at https://mysite.verizon.net/resppzq7 (this website was given at the end of our interview with Bulkowski in the September 2006 S&C), and it will link you to the listing for this book at Amazon.com.
Other booksellers and resellers (not necessarily publishers) that specialize in books on trading and technical analysis to let readers know about include Traders Press, Traders' Library, Fraser Publishing Co., and StockMarketStore.com, as well as those companies listed in our Traders' Resource: Books database at https://technical.traders.com/Products/catcomplist.asp?cat=20. -Editor
EHLERS'S MODELS IN EXCEL?
Editor,
I notice that John Ehlers's models have been programmed into many
different programs and platforms, but not in an Excel spreadsheet. Would
you happen to know of a resource or anyone who has replicated his work
in Excel?
-Jeff Marsick
Yes, John Ehlers's work has occasionally been replicated by various people using Excel. Start by visiting John Ehlers's website, www.mesasoftware.com/technical papers.htm. In addition, I found that performing a Google search using the terms "John Ehlers" + "Excel" seemed to return some useful results. You might give that a try. -Editor
LOOKING FOR ADVICE
Editor,
I recently purchased your magazine and I find it very interesting. I am a new investor and am looking for advice.
I discovered technical analysis three years ago, and since then, I've tried hard to understand a multitude of indicators available today. I also discovered the concept of multicolinearity, which is the importance of avoiding redundant indicators, so as not to make mistaken market decisions. I have studied several books, such as ones by William O'Neil, John J. Murphy, and so on.
What websites and software do you recommend for advanced technical analysis that shows the best indicators and strategies to use in sideways and uptrending market conditions? I would like software that gives exact buy/sell signals. Also, what are the best screens that give stock lists with the best potential for the upside? Do you prefer stop-loss orders or trailing stops?
I need help because there are so many websites available but not
all of them are good.
-Stefan Badara
It sounds like you're off to a good start. As for stock screens, we recently published two articles by Sharon Yamanaka that may interest you: "The Bowl Pattern Breakout" (May 2006) and "Going Forward Using Stock Screeners" (July 2006). These articles are available at our Online Store at www.Traders.com if you don't have these recent issues.
As for using stops, we published "Sell Using Stops" by Thomas Bulkowski
in the February 2006 S&C issue. We've also published other articles
over the years by different authors that discuss stop usage, and you can
search for these at our website, www.Traders.com.
Unfortunately, asking us what software or website you should use is
too broad a question for us to answer; however, we encourage you to keeping
reading the magazine, as this is what we hope to help readers answer for
themselves by presenting website reviews, product and software reviews,
and articles in our pages every month. You also may be interested in perusing
our annual Readers' Choice Awards for software, websites, and services,
a listing that can be found in our annual Bonus Issue. Thanks for writing.
-Editor
AVERAGE PEAK EXCURSION INDICATOR
Editor,
My question is about an article in the April 2006 S&C ("Going
Ape: The Average Peak Excursion" by Chris Young). I'm unable to reproduce
the APE indicator and wondered if there were any subsequent followups or
clarifications published in later issues. (Even though I purchased all
subsequent issues, I just got around to reading the April issue and already
discarded the others.)
-Steve Steinacker
No, we have not published any followups to that article. Have you visited the Traders' Tips section in that same issue? You don't mention which software you use, but you might take a look at how the various programmers have coded the APE indicator for implementation in their software. -Editor
PRODUCT REVIEWS
Editor,
I am reading your recent product review of the program OmniTrader
2006 (September 2006). A very good review of what it has, but can it make
good trade recommendations (buy & sell signals)? In real time?
-Isaac Randolph
When we review products in our magazine, we often discuss the features, usage, functionality, and technical support. However, we do not perform actual system-testing, which would require tracking the program over a lengthy period of time to get a record of how accurate trade signals may be. Unfortunately, that is beyond the scope of this publication, but we suggest you check with the Futures Truth publication at www.FuturesTruth.com, or Collective2 at https://www.Collective2.com. Those services specialize in tracking and reporting trading system results. -Editor
TRADING THE FOREX WAVE
Editor,
I enjoyed reading Raghee Horner's article, "Trading The Forex Wave" (September 2006) on determining market trends. She states that a sideways wave indicates the market is not trending, and that this feature can be used to draw support and trendlines to determine if a tradable chart pattern is emerging. She then shows an example of a triangle pattern with the trendlines and support levels drawn on the chart. I can see how the major support and resistance trendlines are drawn, but I do not understand how the additional trendlines are drawn. My question is, how are these additional trendlines drawn?
I also enjoyed reading Jamie Saettele's article, "Going Beyond 70
And 30 In Forex" (August 2006), but I have a question about the indicator
stops when the RSI drops below the specified values. Is it possible to
execute these stops automatically, or does one have to monitor the trade
in order to execute the stops?
-Eugene DeRose
To be able to draw the additional trendlines you ask about, you need to go back farther in the chart and identify previous swing lows or highs, then connect them.
Regarding executing stops automatically, the answer lies with your broker. Does your broker provide you with this facility? If not, then you will need to have some sort of alert that prompts you to execute the stop. -Editor
RATE OF CHANGE
Editor,
In "The Volatility Index As A Forecasting Tool" (Traders.com Advantage
at Traders.com, 5/24/2006), author Jacob Singer states that he prefers
"to look at the VIX rate of change (ROC) ... a 20% ROC." I am familiar
with rates of change but am accustomed to it being described and calculated
based on the period (day, week, and so on). How is the 20% ROC calculated?
Is it a five-period (day) ROC?
Jay G.
You are correct in stating that the ROC is calculated based on the number of periods. The ROC is calculated as follows:
MetaStock does give you the option of selecting "points" or "percent" as the method, and Singer selected "percent" as the method.
So, to answer your question, the "20" refers to the number of periods used to calculate the ROC of, in this case, the VIX. To make it into a percentage, simply divide the value by 100. -Editor
ERRATA: TRADERS' RESOURCE: COURSES & SEMINARS
In the September 2006 issue of S&C in the Traders' Resource: Courses & Seminars section, we inadvertently left out the listing contributed from DayTrading Course.com. We regret this error.
DayTradingCourse.com, at https://www.daytradingcourse.com, offers products such as:
See https://technical.traders.com/Products/catsearch.asp?cat=50 for more. -EditoreTrading Courses (Stocks, ETFs, and Options) Emini Daytrading Course Emini S&P 500 Daytrading Course IntuitiveDayTrading.com One-On-One 5-Day E-Mini Daytrading Course Zen Daytrader; and others.
READERS' CHOICE AWARDS
Editor,
I was wondering when the Readers' Choice Awards ballot would be
available for voting. (It's a lot easier now that it's online, since I
know I forgot to send mine in at least once when it was still paper.) Also,
what if I don't see the products I want to vote for in the list?
-P.A.
The ballot for the 2007 Readers' Choice Awards will be available October 1. Subscribers can log in at our website using their subscriber account number to vote in various categories of products for their favorites. We'll tally the results in January and present the winners and runners-up in the 2007 Bonus Issue, which comes out in February. If you don't see your favorite product on the list, you can use the write-in spaces provided. Thanks for writing. -Editor
Back to November 2006 Contents
Originally published in the November 2006 issue of Technical Analysis
of STOCKS & COMMODITIES magazine.
All rights reserved. © Copyright 2006, Technical Analysis,
Inc.