Letters - October 2008

October 2008 Letters To The Editor
or return to October 2008 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

POINT & FIGURE BOOKS
Editor,
In your June 2008 Letters to S&C column, Vini Mbah recommends a book by Friedrich Tolke on point & figure charts. I have read it and although it's okay, it's too basic. For the last two years I have used The Definitive Guide To Point And Figure by Jeremy DuPlessis. I recommend this book to anyone who wants the most comprehensive book available on the subject.
Ryan Bates
Thank you for your feedback. We will add this book to our list of resources.--Editor

READERS' CHOICE AWARDS
Editor,
How or where can I find the results (winners and runners-up) of the 2007 or 2008 Readers' Choice Awards?
Bohdan Podstawsky
Past years' results are available online through our online store at www.Traders.com as well as on our S&C On DVD. The current year's results are only available in the printed magazine.--Editor

S&P SHORT-RANGE OSCILLATOR
Editor,
In the August 2008 Letters to S&C, Larry Bryant asks about the S&P Oscillator. James Cramer has stated on his TV show many times that the market oscillator that he uses comes from his S&P subscription and that it is proprietary to them.
I'd be willing to bet that the oscillator he's using is the S&P short-range oscillator, which is available as part of the "Trendline Daily Action Stock Charts" publication(s), which are available by annual subscription delivered weekly, biweekly, or monthly.
Rich Houser
That may very well be correct. Either way, the calculation of the oscillator is not disclosed.--Editor

ERRATA: BID/ASK ORDER EXECUTION
Editor,
I was just reading John Devcic's article "Bid/Ask And Order Execution" in the August 2008 Stocks & Commodities. There seem to be a lot of inconsistencies in the article, or perhaps I am misunderstanding his analysis. As a trader with over 15 years of experience, I was wondering if he could defend himself on a few issues I have with the article.
First, he mentions that "you will always be buying at the bid price and selling at the ask price." This is not true. Unless you are placing a limit order, if you place an order to buy a security, you will be filled at the ask price, and vice versa. If you place an order to sell a security, you will be filled at the bid price. I think these statements are misleading here, and the novice investor would assume he/she will get the bid price if they enter a buy order. Second, he references a hypothetical euro/Usd trade, where the bid price is higher than the ask price. How can that be? Finally, he mentions how the broker keeps the spread between the bid/ask when you trade. This is not automatically true; if you enter a buy order, and the broker executes it at the ask price, the only way the broker keeps the spread is if he successfully finds a seller to hit the bid price.
It appears that the article's attempt to simplify trading situations has most likely misled or confused the average investor. The descriptions of order execution may have been helpful for some, but the analysis of bid/ask is far from clear. I would be interested in an explanation to these points I have outlined.
Ryan Harper
You are indeed correct. The retail trader would be buying "on the ask." The bid and ask were interchanged.--Editor

USING A TRADING SYSTEM
Editor,
I started subscribing to STOCKS & COMMODITIES magazine in January 2008. Yet I still do not know how to go about using a trading system. Can you recommend some articles and/or books to read that describe different trading systems and sources of data for backtesting?
By the way, I really like the magazine. Can you tell readers more about yourself, such as how you got into trading and technical analysis, and so on?
Cary McMillan
How you go about using a trading system depends on what software you use. Each program has a unique way of programming and implementing trading systems. Most trading software offers user forums where you can discuss your concerns, ask questions, and so on.
In each issue of S&C, we publish a Traders' Tips section based on a selected article in that issue. In that section, you'll find code for various software products implementing the system discussed in the article. If you are a user of any of those software products, all you have to do is put in the respective code to use the system.
As for articles we've published on trading systems, you will find many at our Online Store at our website. Look for articles in particular on trading system development to provide insight into using systems.--Editor

Back to October 2008 Contents
Originally published in the October 2008 issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights reserved. © Copyright 2008, Technical Analysis, Inc.