A 20-page guide to computer programs for traders, complete with product
descriptions and addresses and phone numbers of manufacturers.
Pages 28–47.
BackTrak/High Tech from MicroVest.
By John Sweeney; pages 10–13.
Direc-Tree Plus from Micro-Z.
By John Sweeney; page 14.
MetaStock Downloader from Computer Asset Management.
By John Sweeney; pages 15–18.
Master Chartist from Roberts-Slade, Inc.
By Robert Bukowski; pages 19–23.
Historical Data from Tick Data, Inc.
By John Sweeney; pages 24–27.
Interview with Jack Schwager, self-confessed skeptic and diligent debunker
of “new and improved” commodity trading systems. Mr. Schwager is
director of both research and managed trading for Paine Webber and is a not-too-recent
convert to the ways of technical analysis.
Pages 50–54.
Technical analysts strive to find patterns in the past history of the prices
of stocks and commodities that will allow them to predict future prices or
price movements. The major argument against this idea is the assumption that
prices are determined by a random and independent process. The author of
this article has developed a number of statistical techniques that allow
analysts to determine if the processes they are interested in are random
and/or independent using real data.
By Clifford J. Sherry, PhD; pages 56–58.
In the December 1985 issue of STOCKS & COMMODITIES, these authors reported
the results of applying moving averages, momentum, %R, and Relative Strength
(RSI) to five December corn futures contracts, reviewed the formulas and
trading techniques for these indicators, and presented for each the net trading
profit or loss generated by the five most profitable parameter sets from
exclusively long positions, exclusively short positions, and alternating
long and short positions. In this article the authors review similar information
for Chicago Board of Trade long-term U.S. Treasury Bond futures.
By Dr. Thomas P. Drinka and Steven L. Kille; pages 59–61.
While every trader has preferred methods of analysis, there is currently
no known method which can guarantee selecting winners every time. To have
a chance at consistent profits, says this author, the ability to forecast
stock prices must be subordinated to the jungle tactics of a wartime general.
By Vincent Cosentino; pages 62–63.
This article presents a simple trend-following technique and applies it
to the Dow Jones Industrial Average.
By Gregory L. Morris; pages 64–66.
Statistical pattern recognition (SPR) is a subfield of artificial intelligence
concerned with automatic recognition of meaningful regularities in noisy
or complex environments. This article introduces the reader to some basic
SPR tools which can be used to create automatic trading systems, and gives
two demonstrations of how these may be applied to a weekly gold trading scenario
using a personal computer.
By Scott Brill; pages 67–71.
Ganntrader I, Release 1.4 from Gannsoft Publishing Co.
By Hans Hannula, PhD; page 72.
By John Sweeney; page 77.
This article investigates auto/cross-correlations for the weekly Dow Jones
Industrial Average (DJIA) price close and the New York Stock Exchange (NYSE)
total volume from January 9, 1897 to December 27, 1985. Using the correlation
coefficient and chi-square statistic, the author discovered an almost random
relationship between price and volume.
By Frank Tarkany; page 85.
In previous issues of STOCKS & COMMODITIES, these authors reported the
results of applying moving averages, momentum, %R, and Relative Strength
Index (RSI) to Chicago Board of Trade corn and long-term U.S. Treasury bond
futures. The formulas and use of these popular technical indicators were
reviewed. In this article, they report similar information for Commodity
Exchange of New York (COMEX) silver.
By Thomas P. Drinka and Steven L. Kille; pages 86–87.
In the near future, says this author, it will no longer be economical to
buy investment software. Instead, investors will be dialing up and renting
the capability from one of the national timesharing services. This article
is an exploration of the issues which surround the investment software industry.
By Thomas A. Rorro; pages 89–92.
People have, for centuries, noticed cycles in many things, including the
stock market. This author presents the unorthodox view that the planets are
the cause of cycles.
By Hans Hannula, PhD; pages 93–98.
A step-by-step continuation of the June 1986 article on the Wyckoff Method
of trading as used to determine price swings in Treasury Bonds.
By David Weis; pages 99–101.
The first of four articles, including computer listing, enabling the reader
to perform technical analysis with his or her computer. The finished program
will produce charts similar to the author’s Summit program.
By John F. Ehlers; pages 102–104.
Market Manager PLUS from Dow Jones News/Retrieval.
By John Sweeney; pages 105–107.
Personal Options Advisor from MarketSoft.
By Hans Hannula; pages 108–110.
By Robert W. Hull; page 112.
Editor John Sweeney interviewed this psychological researcher and counselor
to find out how traders and investors could overcome their emotional or mental
roadblocks to financial success. In this interview, Dr. Tharp discusses the
psychological variables most important for winning and losing.
By John Sweeney; pages 116–119.
See if you can figure out what Santa’s trading system is as he tries
his hand at the futures market.
By Ron Jaenisch; pages 121–125.
The author discusses the importance of keeping mum about your trading position. “No
one can be told...not even your wife. And if you are a wife, no one can know,
not even the kids!”
By William Eng; page 126.
This concludes last month’s article which examined Dow Jones Industrial
Average weekly closing price data for price auto-correlation and cross-correlation
with total weekly NYSE volume. This work found cycles which compare favorably
with previous cycle studies.
By Frank Tarkany; page 127.
In previous issues, these authors reported the results of applying moving
averages, momentum, Williams’ %R, and Wilder’s Relative Strength
Index to Chicago Board of Trade corn and long-term U.S. Treasury bond futures,
as well as to silver on the Commodity Exchange of New York (COMEX). In this
article, they report similar information for Eurodollar futures traded at
the International Monetary Market of the Chicago Mercantile Exchange.
By Steven Kille and Thomas Drinka, PhD; pages 128–131.
This forecasting method is an approach to charting price retracement in
stocks, commodities, indices or any free market. It is a study of momentum,
an evolution somewhere between Gann and Elliott Wave, that allows traders
to project an ideal price correction in both price and time.
By Hal Swanson; pages 132–135.
In this 9th part of the Wyckoff series of articles, the author explains
how to use a Position Sheet to keep track of the potential movements of individual
stocks. This helps the Wyckoff analyst determine which stocks offer the best
trading opportunities, judge stocks’ turning points, determine groups
trends, forecast group movements, and ascertain the trend of the entire market.
By Jack K. Hutson; pages 136–139.
The Hardcard is a 10 million byte hard disk from Plus Development Corp.
that plugs into one of the expansion slots at the back of the IBM Personal
Computer. The author reviews this product and compares it to similar disks-on-a-card
that have been developed in response to the Hardcard’s success.
By Howard Falk; pages 140–141.
Based on the evidence of the past couple of decades, say these authors,
the Arms Index method of measuring panic selling in a single day may be worth
considering for those who wish to measure excessive public fearand the bargains
it produces in the stock market.
By James Alphier and Bill Kuhn; pages 142–143.
This second of four articles covers the basics of reading data from a standard
format and plotting price history on a graph.
By John F. Ehlers; pages 144–148.
In the October 1985 issue of STOCKS & COMMODITIES, Editor John Sweeney
described how to determine stop placement quantitatively. Responding to a
reader’s request for a concrete example, he shows in this article how
to use the information on T-bonds.
By John Sweeney; pages 148–150.
The 28-year-old founder of MicroVest shares his views on today’s and
tomorrow’s technical analysis software;
pages 154–156.
Having covered the major tenets of the Wyckoff Method of trading in previous
articles, this 10th article in the Wyckoff series covers the technical refinements
which distinguish slapdash amateurs from proficient traders and investors.
By Jack K. Hutson; pages 158–160.
In this article, the authors explore the impact of money management on total
net profit from simulated trading of Eurodollar futures with RSI.
By Steven Kille and Thomas Drinka, PhD; pages 162–164.
To the casual observer, price jumps in takeover or merger candidate stocks
appears to be totally unexpected. This article shows, however, that comparing
price and DCV charts can identify takeover or re-structuring stocks weeks
or months before the official announcement.
By Norman S. Wei; pages 165–170.
Many who analyze price charts of stocks or commodities recognize that cycles
influence the patterns they observe. But, says this author, few carry this
insight through the logical steps (such as isolation, synthesis, (re)combination,
and projection of cycles) that could mean better trade timing. This article
illustrates some effects of the synthesis and (re)combination of cycles.
By Anthony F. Herbst; pages 171–172.
This is the third of four articles that five a description and BASIC computer
program listing enabling the reader to perform technical analysis on an Apple
II computer. This article covers selectively plotting moving averages and
J. Welles Wilder’s Parabolic Systems over the price history.
By John F. Ehlers; page 175.
This is a discussion of the Enhanced Williams %R Index on Volume and Price
(EWRVP), which is based on the original %R oscillator constructed by Larry
Williams. The original %R considers only changes in price, while the Enhanced
Williams %R Index on Volume and Price reacts to changes in price, volume
and the current state of the market.
By Robert J. Kinder, Jr.; pages 180–182.
Market Analyzer PLUS from Dow Jones & Co., Inc.
By John Sweeney; page 183.
By Dr. Alexander Elder; page 173.
By John Sweeney; page 174.
This author, trader, and technical systems designer is probably best known
for the $1 million he made and wrote about in the 1973 bull market. In this
interview, he tells readers what he’s doing now.
Pages 188–190.
Stop orders are insurance that little losses will not run into big ones.
In this 11th article in the Wyckoff series, the author covers stop order
basics.
By Jack K. Hutson; pages 192–194.
Artificial intelligence is the field of computer science that attempts to
imitate human cognitive behavior in computers. Says this author, the impact
of this new computer technology on market trading will be revolutionary.
By Neil Gordon, PhD; pages 195–199.
In an effort to improve on the traditional risk and return characteristics
available from investment opportunities, academic researchers developed Modern
Portfolio Theory. This article explores this theory that shifts the focus
of attention from individual investments to portfolios of investments.
By Gary S. Antonacci; pages 200–202.
This is the conclusion of four articles that give a description and listing
of an Apple II BASIC computer program, enabling the reader to perform technical
analysis on his or her computer with 48K of memory and one disk drive. This
article adds the Commodity Channel Index, Directional Trend Indicator and
Relative Strength Index to the graphical representation of price, moving
averages and the Parabolic system.
By John F. Ehlers; pages 203–206.
In primitive times, basic survival was man’s most potent source of
stress. Today, the stressor is financial survival; but we’re still
coping with the same “fight-flight” reaction our Ice Age counterparts
experienced.
By Van K. Tharp, PhD; pages 207–210.
Owing to the myriad decisions and complexities involved in trading options,
why bother learning and using professional option strategies? Because, says
this author, trading options is the only way to get a real “jump” on
the markets. This article presents several examples of the strategies and
methods a trader can use to get such a trading edge.
By David L. Caplan; pages 211–213.
In the May 1987 issue of STOCKS & COMMODITIES, these authors reported
the impact of money management on total net profit from simulated trading
of Eurodollar futures with Relative Strength Index (RSI) using stops and
filters. In this issue, they continue this analysis by examining the impact
on total profit of entry/exit methods.
By Steven L. Kille and Thomas P. Drinka, PhD; pages 214–216.
Telescan Stock Evaluation Service from Telescan.
By John Sweeney; page 217.
Says this investment psychologist, people who generally worry a lot will
worry a lot about their investments; and people who worry about their investments
will tend to do so constantly. Learn to break out of this damaging psychological
pattern and improve your trading success.
By Van K. Tharp, PhD; pages 226–228.
The terms “overbought” and “oversold” are often used
to discuss market conditions. However, as anyone who has placed a short trade
simply on the basis that the market is overbought knows, the market can remain
overbought for long periods of time. This article takes a look at an indicator
which can be used to quantify overbought/oversold conditions.
By Steven B. Achelis; pages 231–232.
Many technical systems, simple and complex, come down to a decision based
on inequality. This article is a mathematical examination of these inequalities.
By Donald D. Bump, PhD; pages 233–235.
In this 12th part of the Wyckoff series of articles, the author looks at
the Wyckoff Wave, a price vs. time chart that tracks intraday swings. The
Wave Chart frequently warns its reader of upcoming trend changes several
days to a week before they would become apparent in the composite averages.
By Jack K. Hutson; pages 236–238.
Says this author, optimal portfolio diversification using Modern Portfolio
Theory is a particularly valuable tool when applied to futures trading and
is the key to earning attractive returns with less risk. This article discusses
methods for developing efficient portfolios comprised of professionally managed
commodity futures trading programs.
By Gary S. Antonacci; pages 239–241.
The use of stochastics, particularly in the futures markets, has become
a necessary part of the trader’s daily strategy. This article presents
a general summary of the stochastic and its use, as well as a financial software
survey.
By Cynthia Keel and Heidi Schmidt; pages 242–244.
By Bob Bukowski; page 245.
Hubert Cafritz, a pension fund manager, has used his trading strategy for
managing mutual fund portfolios for three years. The author tested the Cafritz
system and reports the results in this article.
By Fay H. Dworkin, PhD; page 247.
This first of three articles on widely used futures trading programs takes
a look at ProfitTaker, developed by Louis Mendelsohn. In subsequent months,
the author will cover Profit Catcher III by Ray Green and Swing Trader by
Robert Pardo.
By Terry Apple; page 251.
By John Sweeney; page 254.
The prime question for every trader is whether to get into a market, or
if in, whether to stay in or get out. To help make these decisions, the author
explores a trading technique that can give a reasonable estimate of the day’s
Value Area prior to the close, instead of waiting for the Liquidity Data
Bank report. The day trader now has a guide in addition to tail counts, TPOs,
range extensions and the like.
By Donald L. Jones; pages 258–251.
The TEM systems developed by this futures trader use an unusual combination
of technical and cyclical analysis to pinpoint exact buy and sell points.
In this article, he discusses the principles that have guided him in the
research and development of these systems.
By William Cruz; pages 260–261.
Life in the trenches from the perspective of an advisory service.
By Philip Gotthelf; pages 262–263.
Spread investing allows one to identify attractive spread trades that can
be used to construct a diversified portfolio of profitable and reliable spread
trades. It is this diversification, says this author, that allows steady
profit growth.
By Frank Taucher; pages 269–271.
By Bob Lang; pages 272–274.
By John Sweeney; page 275.
This author’s trading system, Eurotrader, was developed with three
primary principles in mind: trade with the trend, let your profits run, and
cut your losses short. This article outlines Eurotrader’s development.
By Frank Alphonso; page 281.
Gaps are a chart’s way of showing you the trading ranges in which
no actual trading took place. This article lists the four types of gaps and
tells how to interpret them.
By Joe Van Nice; page 284.
In previous issues, these authors reported the results of applying moving
averages, momentum, Williams’ %R, Wilder’s Relative Strength
Index (RSI), and Wilder’s Directional Movement Indicator (DMI) to Chicago
Board of Trade corn and long-term U.S. Treasury bond futures, COMEX silver
futures, and Chicago Mercantile Exchange IMM Eurodollar futures. In this
article, they report similar information for Standard & Poor’s
500 futures traded at the International Monetary Market of the Chicago Mercantile
Exchange.
By Thomas P. Drinka & Steven L. Kille; page 288.
An S&C author argues against Curtis McKallip’s statistical
reasoning in “Investigating Chart Patterns Using Markov Analysis” (Volume
4; pages 338–339).
By Clifford S. Sherry, PhD; pages 292–293.
Wyckoff offers a comprehensive package of detours around the common pitfalls
that often sidetrack beginning technical analysts. This 13th article in the
Wyckoff series shows how students of the market can, with a minimum of frustration,
learn from experience and graduate into actual trading.
By Jack K. Hutson; pages 294–296.
The objective of spread investing is to develop a diversified portfolio
of many spreads that can be used throughout the year for investment purposes.
In this article, the author discusses two tools to uncover these seasonal
gems.
By Frank Taucher; pages 297–300.
CF-DM from J.C. Productions.
By John Sweeney; pages 301–303.
This article demonstrates an analytical technique that you can use to estimate
the probability of future price increases or decreases. The author uses the
money supply figures (M2) from 1948-1978 as an example, but the technique
can be applied to any consistent, continuous series of prices.
By Clifford J. Sherry, PhD; pages 304–308.
“A stock market operator must be as hard-boiled as a five-minute egg;
cold-blooded as a fish; deaf to all gossip; blind to news, and dumb as a
doorknob when it comes to discussing the market with others.” The article
begins with this quote from Richard D. Wyckoff, and discusses the importance
of personality and personal perseverance when trading the Wyckoff Method.
By Jack K. Hutson; pages 316–318.
Can the study of planetary cycles enables stock option traders to realize
an increased profit advantage? This author shares the results of the research
he conducted to test some of the more obscure elements of W.D. Gann’s
effort to establish correlations between individual stock prices and planetary
cycles.
By Robert S. Kimball; pages 326–330.
In this third article in the series on spread investing, the author discusses
money management concepts, the purpose and use of trading filters, “legging” techniques
and stop payment.
By Frank Taucher; page 27.
Once people commit themselves to a position, even if it goes strongly against
them, they are often so sure they are right that they are willing to bet
more and more money in their misplaced confidence. The more the investor
struggles with losses, the worse the losses become. Learn how to break out
of the Loss Trap.
By Van K. Tharp, PhD; pages 331–334.
David Salsburg’s Understanding Randomness.
By Clifford J. Sherry, PhD; page 325.
Maximum Entropy Spectrum Analysis (MESA) is a forecasting method that filters
the “noise” from time series data and can uncover useful cycles.
The author discusses the advantages of the maximum entropy method over Fourier
analysis, especially for short-term trading.
By John F. Ehlers; page 334.
Options-80A from Options-80.
By Hans Hannula, PhD; page 340.
Readers who hate mathematics will enjoy this simple method for tracking
repeating market cycles. If you can use grid paper, a pencil and straightedge,
you can master this technique in five minutes.
By Hans Hannula, PhD; page 350.
Better access to market-generated information helps traders get the feel
of a market without being in the trading pit. This article briefly explains
the manner in which CBOT Market Profile portrays market activity.
By Thomas P. Drinka & Robert L. McNutt; page 352.
Few games of chance are perfectly random. To the extent they are not,
profit may be made by betting on those states which occur with less than
random frequency. Learn how to use statistics to beat the odds in the trading
game.
By Curtis McKillip, Jr.; page 356.
This fourth article in the series on spread investing shows how to use the
quarter-month seasonal trade matrix and seasonal history printout as analytical
tools.
By Frank Taucher; page 361.
This article concludes the 15-part series on the trading method developed
by Richard D. Wyckoff. The reasoning behind this classic method of chart
analysis is simple: when demand for a stock exceeds supply, prices rise;
when supply is greater than demand, prices decline.
By Jack K. Hutson; page 364.
A comparison of prominent tipsters and how they fared in the “real
world” of trading.
By Vincent Cosentino; page 369.
Have you ever wondered why you can paper trade successfully, but fail miserably
when real money is at stake? The reason, this psychologist says, is simple:
the trader who concentrates on profits will have difficulty winning, as will
the investor who concentrates on losses. Learn how to concentrate on doing
your best, not on your immediate profit and loss.
By Van K. Tharp, PhD; page 371.
This article examines the use of a Price Percent Filter (PPF) on daily Dow
Jones Industrial Average (DJIA) closing prices from January 2, 1897 to January
2, 1987. Price changes from the filter are cross-correlated with their corresponding
New York Stock Exchange (NYSE) total volume changes. The correlation coefficient
and chi-square statistics results from recent times indicate good price/volume
cross-correlations.
By Frank Tarkany; page 374.
Volatility Breakout System, Version 2 from Technical Trading Strategies,
Inc.
By John Sweeney; page 377.
Macro*World Investor from Black River Software.
By John Sweeney; page 380.