An in-depth interview with J. Welles Wilder, developer of the popular Relative
Strength Index and other technical indicators.
By Melanie Bowman; pages 9–12.
The first in a series of articles which outline the Richard D. Wyckoff method
of trading stocks. This method provides a foundation for analyzing the fundamental
relationships between the market’s primary forces. Through the use of such
techniques as volume analysis and studies of vertical line, figure and wave charts,
Wyckoff developed a trading method which is still applicable to today’s
markets.
By Jack K. Hutson; pages 14–17.
A basic look at mutual fundswho they are for, how to choose one, why and when
to switch. Also included are several sources of information to use to get specifics
when deciding on a mutual fund.
By Bill Dunbar; pages 18–21.
Holleman, a CTA and CPO, offers his opinions on where gold prices may be headed.
These predictions demonstrate how positions in the market are developed and show
the factors that shape a trader’s reasoning about a specific market.
By Joseph Holleman; pages 22–23.
The leverage obtained through pyramiding can be immense. But is it smart? Gehm
examines the pyramiding technique and its possible consequences.
By Fred Gehm; pages 24–25.
A look at Wilder’s Relative Strength Index oscillator and an optimization
using cycles. Also included is a BASIC computer program which follows the author’s
optimization processes.
By John F. Ehlers; pages 26–28.
By Bill Dunbar; pages 29–30.
By John F. Kepka; pages 31–35.
Jaenisch, a student of Professor Allen Andrews, reviews some of the Andrews Median
Line and pivot point techniques in a whimsical story about trading Santa’s
account.
By Ron Jaenisch; pages 36–39.
By John Sweeney; page 40.
A program based on Larry Williams’ “Ultimate Oscillator” designed
to run on a Hewlett-Packard 41C(v) hand-held calculator.
By Charles F. Johnson; page 47.
Another rendition of the Ultimate Oscillator, this time to be used with the TradePlan
system.
By Bob Wittmuss; pages 47–49.
Dr. Sherry examines the statistical concepts of randomness and independence as
they affect prices in the markets. He outlines a method of determining whether
or not prices are random and/or independent by using probability density functions,
quantile analysis and chi-square methodology.
By Clifford J. Sherry PhD; pages 50–51.
Are your trades based on skill or luck? Sherry’s simple “Skill Score” will show you how to determine whether your decisions are based on your trading prowess
or the luck of the draw.
By Clifford J. Sherry PhD; page 53.
By Bruce Babcock; pages 54–56.
The conclusion to Weinberg’s experiences as a novice trader learning how
to play the game the hard way.
By Dan Weinberg; pages 57–60.
A look at John Marshall’s Wave Theory for trading commodity markets. The
system offers a heavily diversified trend-following method in Marshall’s
specialized vernacular.
By John Sweeney; pages 61–62.
By John Sweeney; page 64.
You don’t need a computer for volume studiesthe analysis presented here
can be done with a calculator and The Wall Street Journal. This article provides an outline of technical tools derived from volume figures which can then be used for analysis to gauge the internal strength or weakness of a market.
By Howard Waxenburg; pages 65–68.
By William Taylor; page 69.
The second of a series which presents the Richard D. Wyckoff method of trading
stocks. In this article, the different types of charts upon which the Wyckoff
method is based are examined. Vertical line, figure and wave charts are all essential
to the study of the market using Wyckoff’s techniques.
By Jack K. Hutson; pages 70–73.
Directional Movement, an approach which weighs the daily difference between highs
and the difference between lows, can be optimized by applying cycle concepts.
Ehlers explains the process and includes a BASIC computer program which features
the optimized Directional Trend Indicator.
By John F. Ehlers; pages 77–80.
Most of the common methods used by traders can be classified under three main
theories. Noble outlines these trading methods, then recommends a strategy for
choosing those that best fit your trading style. His “MAP” allows you
to Minimize the time and money you spend, Analyze and compare valid methods,
and Personalize what you find to fit your own account.
By Grant D. Noble; pages 81–82.
By John Sweeney; pages 83.
The Elliott Wave Theorist’s Robert Prechter discusses his views on
Elliott analysis and how he thinks the markets work.
By Melanie Bowman; pages 89–92.
You don’t have to examine price charts very long before you can picture
the prices varying around a trendline in a trading channel. This article outlines
methods to help you visualize channels and identify price turns.
By John F. Ehlers; pages 93–97.
By Herbert R. Sorock; page 98.
If you know the price of a commodity today, can you predict what the price will
be tomorrow? Can you predict whether the price will increase or decrease? Dr.
Sherry proposes a statistical method that allows you to determine which prices
are random and/or independent.
By Clifford J. Sherry PhD; pages 101–104.
By looking at Vertical Line charts of composite averages using Wyckoff analysis,
you can learn where the market is taking your individual and group stock picks.
This third part of the Wyckoff Method series you shows clues to pinpointing future
market actions.
By Jack K. Hutson; pages 106–108.
A close-up look at life in the pitstrading on the floor at the Chicago Board
of Trade.
By Phyllis Brock; pages 109–110.
Empirical decision rules can help you recognize patterns in price actions. Earle
provides detailed buy and sell rules along with examples using data on gold price
changes over time.
By Ted C. Earle; pages 111–119.
A look at the basic IBM PC hardware configuration.
By Jack K. Hutson; page 120.
By Jack K. Hutson; page 123.
A personal look at what’s moving and shaking in the trading world.
By John Sweeney; pages 127–129.
A continuation of Sherry’s statistical technique for determining whether
dependence exists between prices in a time series.
By Clifford J. Sherry, PhD; pages 132–135.
An example of the Wyckoff Method of trading as used to determine price swings
in Treasury Bonds. Weis runs through his reasoning step-by-step through the price
action in June 1982 bonds over a 30-day period.
By David H. Weis; page 136.
By Thomas R. Sewell; page 139.
By John Sweeney; page 140.
The Demand Index, which utilizes price and volume, calculates the buying pressure
and selling pressure exerted on prices. These can be used to create an oscillator
to identify accumulation or distribution in both stocks and commodities.
By Thomas E. Aspray; pages 141–143.
Do you need any direction before buying or selling a stock? Do you need to know
the right time to buy or sell stocks? Cumulative Volume, a technical tool based
on supply and demand, can do just that.
By Stuart Thomson; pages 144–149.
By John Sweeney; pages 150–153.
By John Sweeney; page 154.
Bob Pelletier, president of Commodity Systems, Inc., discusses the merits of
testing different parameter combinations to find the most effective methods for
maximizing profits.
By Robert C. Pelletier; pages 155-156.
Bruce Babcock, publisher of Commodity Traders Consumer Report, offers his opinions of trading systems and the “watchdog” role of
CTCR.
By Melanie Bowman; pages 163–168.
Are you reaching your full potential in your trading? Analytical techniques alone
do not allow you to use all of the resources your brain commands. Here, McMaster
discusses the concept of synergy and how, by using both hemispheres of your brain,
you can trade more effectively.
By R.E. McMaster; pages 169–171.
Stochastics have become relatively popular in recent years. But just how effective
are they for trading? Using several different parameter sets, the authors tested
stochastics on a hypothetical $1.3 million commodity portfolio. Their results
may surprise you.
By Jack Schwager and Norman Strahm; pages 172–175.
By John Sweeney; page 176.
Using the mean, the standard deviation and the coefficient of variation, price
volatility can be gauged to help you place protective stops. This in turn can
help your money management and trading overall.
By Robert W. Hull; pages 177–183.
Hanson, a former floor broker, outlines the different type of market orders used
by brokers on the floor. In addition, he describes some of the “tricks of
the trade” that professional brokers use to determine the right climate
for a trade.
By Allen D. Hanson; pages 185–187.
Group stock behavior guides the trader to sections of the market that look promising.
By comparing group averages to broad market trends you can find signals that
allow you trade both the up and down sides of the market profitably. This fourth
part of the Wyckoff Method series also explains the Process of Rotation that
large-scale operators use to their advantage as supply and demand shift.
By Jack K. Hutson; pages 188–190.
By John Sweeney; pages 191–193.
When used correctly, swing charts can help the trader plan exit points and show
the trade’s exact risk exposure. Here, the author outlines his mechanical
system which uses short-term swing charts to set stop points and limit losses.
By William F. Eng; page 194.
A recap of the top finishers in the U.S. Trading Championship over the past three
competitions.
By Norm Zadeh; page 200.
Does Gann analysis really work? In this case it did! The author outlines the
basic premises of Gann’s Seven Zones of Stock Activity and how they clued
him in on accumulative activity in R.H. Macy stock.
By Hans Hannula; page 205.
Professional programmer and software developer Lenny Yates describes how your
computer can help put you on the right track in calculating the “fair value” of
options and in making the smartest option trade.
By Leonard Yates; page 207.
By describing prices mathematically, the trader can extend the equation into
the future to predict what the prices will be. Cycle analysis makes this easier
to accomplish. Here, Ehlers examines two of the more well-known methods, Fourier
analysis and Maximum Entropy, and compares their relative usefulness in predicting
future prices.
By John F. Ehlers; page 209.
Fear and greed play large roles in trading psychology. But, if you know your
system, you can beat these demons and keep your head when trading.
By Ron Jaenisch; pages 216–216.
Can “bottom fishing” for winning junk stocks be profitable? Dunbar
studies past “dogs” to find out.
By Bill Dunbar; pages 217–219.
By John Sweeney; page 220.
A copper trading example allows the author to outline the practical application
of Elliott wave theory to price movements.
By Clarence J. Liautaud; pages 221–223.
By Alexander Elder; page 224.
Sequences of price changes (runs) can be used in statistical formulae to determine
whether price increases or decreases are random or not.
By Clifford J. Sherry, PhD; page 225.
By William T. Taylor; page 228.
The “physics” of investment forces allow market action to be described
by phasesaccumulation, mark up, distribution and mark down. By seeing the market
in terms of these phases, as large operators do, you can anticipate price movements
and position your trades accordingly. This segment of the Wyckoff Method series
explains these phases and how to read them on vertical charts.
By Jack K. Hutson; pages 229–332.
Computer spreadsheets can make the trader’s life easier. Stuart Meibuhr
explains how.
By Stuart G. Meibuhr; pages 233–236.
By John Sweeney; pages 241–243.
Fine-tuning your assessment of risk can help you initiate better trades, place
your stops and limit your losses. Bryce offers some suggestions to help you in
this all-important endeavor.
By James Covington Bryce; page 254.
The random walk theory provides a way of evaluating risk before an investment
is made. By asking “what if” questions based on a security’s
price, both risk and expected profit can be better determined. This first of
a series of articles outlines the basic premises for determining how much risk
is too much.
By Thomas A. Rorro; pages 256–258.
By John Sweeney; pages 259–260.
Using the chi-square analysis as outlined by Clifford Sherry, Tarkany has analyzed
the closing prices of the Dow Jones Industrial Averages and the daily total volume figures for the New York Stock Exchange to determine if they were random and/or independent. What he found were statistically significant trading windows in both series. This article explains
how he found them and what it could mean to your trading strategy.
By Frank Tarkany; pages 261–266.
Yates continues his look at options with three reliable methods for succeeding
in options without having to forecast the price of the underlying security. He
also includes a basic glossary of specialized option vocabulary useful for novice
option traders.
By Leonard Yates; pages 267–274.
Jones and Stromquist revise the calculation of the popular Relative Strength
Index to make it more sensitive to individual markets. Their “Quality Factor” is
based on the life-of-contract historical average of a particular future’s
RSI.
By Donald Jones and Tod Stromquist; pages 275–278.
By Alexander Elder; page 43.
Figure charts allow the analyst to quickly see where and how strongly supply
or support is building and actually calculate the distance a price should rise
or fall. It also shows horizontal formations, price lines that show where and
how strongly the forces of demand and supply are gathering. This installment
of the Wyckoff series includes examples of point-and-figure chart patterns which
can be very effective when combined with more detailed vertical charts.
By Jack K. Hutson; page 279.
By Hans Hannula; page 284.
By John Sweeney; pages 288.
Do trading windows exist in weekly closing price and volume data? This continuation
of Tarkany’s chi-square analysis shows that there are and how to find them.
By Frank Tarkany; pages 295–298.
A real-world trade and the reasoning behind it form the basis of this letter
between two traders. By detailing a trade in Comex gold, the complex combinations
of tools and techniques which factor into a trader’s decision-making process
can be seen.
By Stuart J. Pahn; pages 299–300.
Advanced computer technology has allowed for the development of artificial intelligence
(AI) techniques. These sophisticated decision making tools can allow traders
to use more of the information available more effectively.
By Jerry Felsen; pages 301–304.
A short comparison of the probability similarities between New York Stock Exchange
Advance- Decline data, dice and roulette.
By Henry S. Patricoff; page 305.
By using Vertical and Figure charts in tandem, Wyckoff analysts can determine
where trends are headed and how far they will go. In this installment of the
Wyckoff Method series, the coordinated use of various charts is explained.
By Jack K. Hutson; pages 306–308.
Using the Random Walk theory to statistically model stock price movement can
fine-tune your assessment of the risk involved in trades.
By Thomas A. Rorro; pages 309–314.
By John Sweeney; page 315.
Is speculating in junk stocks like playing roulette? Not necessarily. Author
Bill Dunbar analyzed the past performance of junks to find out just how much
risk was involved.
By Bill Dunbar; pages 316–318.
By using the relatively simple statistical technique of averaging, you can analyze
data to determine if a signal is buried in noise.
By Clifford J. Sherry, PhD; pages 319–320.
Over the years, the correlation between moves in the bond market and the stock
market has been tremendous. So it makes sense to be able to predict the movement
of the debt market. Here, Waxenburg outlines how to use several technical tools
to monitor this vital market via the Dow 20 Bond Index.
By Howard K. Waxenburg; pages 321–324.
Master cycle finder Peter Eliades shares his insights into cycles and their effects
on the market in this in-depth interview.
By Melanie Bowman; pages 325–328.
In this conclusion to his series on assessing risk, Rorro explains how computer
spreadsheets can be used to keep track of the myriad calculations necessary to
gauge risk factors in the markets.
By Thomas A. Rorro; pages 331–333.
Using the Standard & Poor’s 400 stock index as an example, the effectiveness
of the alpha-beta trend-following method (outlined in the June and December 1985
issues) is examined.
By Anthony W. Warren, PhD; pages 334–336.
The predictive capabilities of pattern recognition can be enhanced using a statistical
method known as Markov analysis. This method is used to study natural processes
(like the weather) in which previous events influence, but do not rigidly control,
subsequent events. Since today’s prices are influenced by prices yesterday,
Markov analysis can be used to identify which transitions from one pattern to
another are statistically significant.
By Curtis McKallip, Jr.; pages 338–339.
Trendlines can aid Wyckoff analysts in interpreting chart formations by graphically
representing the momentum imparted to stock prices. Part 8 of the Wyckoff series
describes how to implement trendlines on Vertical and Figure charts to get a
more complete view of the market.
By Jack K. Hutson; pages 340–342.
Here is the original Relative Strength concept as conceived by J. Welles Wilder,
Jr. In this reprinted chapter from Wilder’s well-known book,
New Concepts in Technical Trading Systems, the original calculations
for the Relative Strength Index are outlined along with examples. In addition,
two BASIC computer subroutines by Jack K. Hutson are provided which allow users
of the Dow Jones Market Analyzer and CompuTrac to implement the Relative Strength
Index on their systems.
By J. Welles Wilder, Jr.; pages 343–348.
The longevity of the COMMODEX system makes in unusual in the rapidly changing
world of trading systems. Here, author Ron Goodis (who once worked for COMMODEX
founder Philip Gotthelf) explains the concepts behind the system and evaluates
its effectiveness after 27 years in operation.
By Ronald R. Goodis; pages 352–354.
Are large increases or decreases in the price of a given stock or commodity evenly
distributed throughout the trading day? The trading week? The trading month?
Cliff Sherry offers this simple statistical method to confirm patterns in price
changes.
By Clifford J. Sherry, PhD; page 355.