An overview of possible profits, using time series analysis of market prices.
By Anthony W. Warren, PhD; page 11.
Rosenstock discusses the combination of two key commodity analysis tools:
Employing numerous market indicators and the use of a computer (to chart
and display market movement). He creates a real-time computer aided system
that provides all necessary indicators and allows him to modify indicators
at will.
By John E. Rosenstock; pages 12–14.
A discussion of minimizing investment risk: Trend-following and finding
methods for timing trades that profit from these trends.
By John E. Rosenstock; page 14.
A lively, step-by-step account of one man’s 6-month trading experience
with pork bellies. Complete with charts, details on determining when and
at what price to trade, the use of stops. The author explains his route to
a final profit of 146%!
By Jack K. Hutson; pages 15–17.
In this introductory article, Weiss begins to unravel the mysteries of a
forecasting technique called ARIMA, which “catches trends and changes
in trends” with great success. AutoRegressive Integrated Moving Average
(ARIMA) is a forecasting methodology based upon techniques described by Box
and Jenkins. Part 1 of a three article series.
By Eric Weiss, PhD; page 18.
The author describes how he uses the “momentum concept” to determine
when a market trend is about to change.
By John E. Rosenstock; page 19.
This article discusses uses of a microcomputer, other than trading the markets.
By Steve Ross; page 20.
“There is only one side of the market and it is not the bull side
or the bear side, but the right side” — Jesse Livermore. With
these words from a great trader, Krinke begins his discussion of a microcomputer “tickertape” program,
which gives the analyst up-to-the-minute market information as it is received
from various exchanges.
By Charles F. Krinke; pages 21–22.
Explores the conception of
Technical Analysis of STOCKS & COMMODITIES magazine.
By Jack K. Hutson; page 25.
In this article, Dr. Warren gives a basic explanation of mathematical techniques
developed by Joseph Fourier over 100 years ago. His purpose is to prepare
the reader to use Fourier analysis to analyze cycles in stock or commodity
prices.
By Anthony W. Warren, PhD; pages 26–28.
Complete in this issue is a Fourier BASIC subroutine readers can program
into their computer, which will run within the user’s graphic system.
A disk containing this program segment is available to STOCKS & COMMODITIES
subscribers.
By Anthony W. Warren, PhD and Jack K. Hutson; pages 29–31.
In this article, the reader learns how to use the Fourier Analysis program
(provided in this issue) to analyze price cycles underlying publicly traded
markets.
By Jack K. Hutson; pages 32–35.
The reader learns how to weight moving averages and finds out what variables
need to be considered when a moving average is being used to “filter” trading
data.
By STOCKS & COMMODITIES Staff; pages 36–38.
This is “AutoRegressive Integrated Moving Average” (ARIMA) taken
a step further. Here, the reader learns how to build an ARIMA model with
microcomputer software. He also gets a look at some of these models in action.
By Eric Weiss, PhD; pages 40–43.
By Timothy C. Slater; page 47.
W.D. Gann was a renowned trader of stocks and commodities. In this article,
Arnold selects two of Gann’s basic analysis tools and explains how
he used them in tests with T-bills and T-bonds. His paper investments “earned” him
an incredible 111% annual return!
By Curtis M. Arnold; pages 48–51.
The idea that market prices follow cycles is not new. But add to that the
concept of carefully analyzing the timing of various cycles and you have
a strong advantage in choosing market entry and exit points. Herrick provides
step-by-step instructions for using his system.
By John Herrick; pages 52–57.
How to use a monthly swing chart to determine major trend
Author Jesse Thompson draws on his many years as a professional trader in
explaining how he uses swing charts to determine whether gold was entering
a bull or bear marketand what to do about it.
By Jesse H. Thompson; pages 58–59.
In this case study, Hutson traces his experience following cotton futures
over a period of several months — a period during which the faint-hearted
stood to earn $2,000 per contract, and the stout-hearted a bit more: about
$5,000 per contract.
By Jack K. Hutson; pages 60–62.
By John E. Rosenstock; pages 65–66.
A whimsical piece about the semi-usefulness of a computer; pages 66–67.
The STOCKS & COMMODITIES magazine concept and its advantages for active
traders.
By STOCKS & COMMODITIES Staff; page 67.
The author explains application of the Fibonacci mathematical series in
analyzing the futures markets. These relations can determine reliable entry
points and risk levels. His theories are illustrated with case studies of
positions in hogs, T-bonds, soybeans and gold.
By Tucker J. Emmett; pages 70–73.
Dr. Warren discusses various data filtering methodstechniques for manipulating
market price data to eliminate random noise. The smoothing methods explained
are the basis for most trading “systems” now on the market for
trading stocks and commodities.
By Anthony W. Warren, PhD; pages 74–77.
The authors provide a 2-page BASIC subroutine you can program into your
computer, which will filter market price data using a Finite Impulse Response
(FIR) filter.
By Anthony W. Warren, PhD and Jack K. Hutson; pages 78–80.
Jesse Livermore, one of the pioneers of the trading game, is profiled, along
with some of the trading techniques he developed. Some, such as trend development,
are as important today as they were in Livermore’s time.
By Jesse H. Thompson; pages 82–85.
In this article, the author explains the significance of the so-called “head
and shoulders” pattern that forms when stock or futures prices are
plotted daily on a bar chart. The trader developing a strategy for market
entry and exit points will benefit greatly from noting these formations.
By Jesse H. Thompson; pages 86–88.
Discusses the rising application of technical analysis in trading stocks
and commodities.
By STOCKS & COMMODITIES Staff; page 89.
This article completes a series started in the October 1982 and January
1983 issues of STOCKS & COMMODITIES. Here the author explains how to
use forecasts to the trader’s advantage.
By Eric Weiss, PhD.; pages 90–91.
The thing about trading rules, says the author, is to learn the right ones
and then make sure you implement them consistently. This article notes 15
rules a trader should never be without and why.
By Jesse H. Thompson; pages 98–102.
A listing of futures trading information sources.
By Fred S. Gehm; pages 103–104.
The author explains his version of “TRIX,” a momentum oscillator,
and how he uses it to filter random market noise and give him a positive
and timely signal for trading. A short BASIC computer subroutine is provided
for the reader’s use.
By Jack K. Hutson; pages 105–108.
“A market that is trending upward or downward will usually react or
consolidate near or at a major resistance level,” says the author.
Identifying and using this level is an important advantage in trading, as
he explains in this article.
By Jesse H. Thompson; pages 110–111.
An outline of how the Elliott Wave Principle could be automated by computer.
By Robert R. Prechter, Jr.; page 112.
This article affords the reader an invaluable step-by-step look at Thompson’s
experience with trading T-bonds. The charts and facts are there, but even
more important are the in-depth explanations as to why he made the trading
decisions he did.
By Jesse H. Thompson; pages 114–120.
The Channel Index can help both stock and commodity traders detect when “real
world conditions,” such as climate, are affecting seasonal price patterns.
The author explains how to calculate as well as use the CCI.
By Donald R. Lambert; pages 120–122.
By plotting the logarithm of price, instead of price itself, the trader
can compare percentage change in prices, rather than the dollar change. The
author provides straightforward examples on how to do this and advantages
for the trader.
By Jack K. Hutson; page 123.
Information about STOCKS & COMMODITIES magazine.
By Jack K. Hutson; pages 126–127.
Reminiscences of the author’s 40 years of trading the stock markets.
By Merton A. Hill; page 128.
In this article, Dr. Venitis contrasts “Fundamental Analysis,” which
he defines as price analysis based on basic economic, political and ecological
factors, with “Technical Analysis,” described as being based
on psychological factors, such as open interest, trading activity of large
commercial houses, price chart formations and the like. He discusses these
analysis approaches in relation to various trading models.
By Basil Venitis, PhD; pages 129–132.
Thompson likens the process of developing a trading system to preparing
a blueprint for constructing a building. Using this analogy, he describes
the important components of a successful trading system, including such essentials
as measuring trends and defining and measuring risk.
By Jesse H. Thompson; pages 133–134.
Dr. Venitis explains how in this “era of hedging,” traders can
use hedging techniques not only to protect themselves against losses, but
also to increase overall profits.
By Basil Venitis, PhD.; pages 134–135.
This article should bring joy to the truly technical reader who uses a computer.
In it, Dr. Warren expands on Hutson’s Triple Exponential Smoothing
Oscillator method presented in the July 1983 issue of STOCKS & COMMODITIES.
The article explains how to use Fourier analysis to optimize the exponential
filter coefficient, “alpha.”
By Anthony W. Warren, PhD.; pages 137–141.
A review of professional conferences in the futures industry.
By Fred S. Gehm; pages 141–142.
The author discusses a chart formation that he calls a “funnel,” which
often occurs when daily high and low prices are charted over a time period.
The funnel is formed when an uptrend line meets a downtrend line. Canal explains
how to use the funnel formation to keep trades in harmony with the market.
By Ory J. Canal; pages 143–144.
The main reason futures traders lose money, says the author, is poor portfolio
management. In this article, Dr. Venitis discusses how to reverse this, by
taking into account such factors as diversification, positioning and growth,
and performance evaluation.
By Basil Venitis, PhD; pages 145–146.
Commodity spreading, a combination of a long and a short position in related
commodity futures, comes in several forms, as Dr. Venitis explains in this
article. Whether you’re spreading different delivery months of the
same commodity, different but related commodities, or any of the other types
he discusses here, there’s money to be made by using this art.
By Basil Venitis, PhD; pages 147–148.
In this article, Thompson characterizes what he considers to be the two
main schools of thought on trading techniques: Forecasting what the market
is going to do, or following the trends and analyzing what the market is
doing. He discusses the pros, cons and effects of both on a trader’s
market strategy.
By Jesse H. Thompson; pages 149–151.
Many traders base their trading decisions on one “market habit” or
another, since price patterns do occur repeatedly. But as Thompson cautions
in this article, it’s imperative to study “post-pattern activity” if
you want to reduce risk in your trading. Thompson backs up his claim by giving
a detailed example of the “head and shoulder” chart formation,
and explaining what price activity would prove it to be a valid analysis
tool and what would not.
By Jesse H. Thompson; pages 154–159.
There’s big money to be made by trading stock index futures, says
the author, but there’s also big money to be lost if you’re not
careful. To decrease your risk, yet still realize substantial profits, Kepka
recommends using computer trading systems and operating on intraday price
data. He explains some of the factors involved and presents a detailed case
study to illustrate his point.
By John F. Kepka; pages 160–165.
Lambert takes the technique of trading moving average crossovers one step
further by presenting a system for predicting when a crossover will occur.
This system is tied to Lambert’s formula for computing the Market Direction
Indicator. A short BASIC computer subroutine for figuring MDI by the STOCKS & COMMODITIES
magazine staff is included with this article.
By Donald R. Lambert; pages 166–167.
By STOCKS & COMMODITIES Staff; pages 168–169.
Thompson characterizes the “Decision Bees” as the hedgers, scalpers,
brokers, analysts and speculators who “buzz around the market hives.” The
best of thesewhich translates into the most successful traders are the ones
who trade with their heads and not their emotions.
By Jesse H. Thompson; pages 170–171.
This article continues the ongoing presentation of Fourier Spectrum Analysis
as a technical analysis tool. In it, the author attempts to shed some light
on the question: “How many data points should I use for doing Spectrum
Analysis?” The article is liberally laced with excellent charts and
formulas to illustrate the author’s point.
By Anthony W. Warren, PhD; pages 173–178.
Maturi explains how the average investor can “successfully participate
in the gold market without knowing the intricacies of commodity trading and
without having to deal with the problems associated with owning precious
metals.” He backs up his claim by detailing his experiences over 10
years with trading Benguet, a NYSE gold mining stock. He also includes a
valuable segment entitled, “Some Tips for Saving Money on Commissions
and Other Trading Costs.”
By Richard J. Maturi; pages 179–181.
One of the most important tasks of commodity market money managers is the
measurement and control of risk. Here, Gehm provides a look at several popular
ratios used to define the riskiness of a trade.
By Fred S. Gehm; pages 182–185.