June 1997
Letters to the Editor

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ON SCHOLARLY PURSUITS

Editor,
I have recently subscribed to your magazine and find it very educational, since I am interested in developing myself as a technical analyst and trader. However, I am in search of a more thorough technical education. Have you heard of any academic degree programs that specialize in technical analysis and trading? An MBA program specializing in investment perhaps?

GEORGE VAN SICKLE
via E-mail
See also the next question. -- Editor


AND...

Editor,
I am interested in a career as a technical analyst. I would appreciate any information you could provide as to education and certification requirements. Thank you
CHRIS FIRBY
via E-mail
The accreditation committee of the Market Technicians Association (MTA) administers the Chartered Market Technician (CMT) program, a continuing education effort to raise the standards and to further the professionalism of the practice of technical analysis. The CMT program is a three-step process involving a series of two exams and an original research paper accepted by a peer review committee for publication in the MTA Journal. The CMT designation is awarded to those members who successfully complete the program and agree to abide by specified standards of conduct and professional practice. The MTA can be reached at 212 912-0995, fax 212 912-1064. The E-mail address is ShelleyMTA@aol.com.

As another source of education in technical analysis, the Institute for Technical Market Analysis of Golden Gate University in San Francisco offers a curriculum of graduate-level classes that lead to a master's degree in finance. Those classes cover technical analysis topics. Future plans for the Institute for Technical Market Analysis include a six-day program leading to a certificate of achievement in technical market analysis. Readers who would like to indicate an interest in attending such a program if it were established can contact Dr. Henry Pruden at the Institute for Technical Market Analysis, Golden Gate University, 415 442-6583, fax 415 442-6579, https://www.teleport.com/~ifta/TSAA/tsaahome.html. -- Editor


DOUBTING TIMER

Editor,
I admire the obvious effort, the editorial quality, the presentation and general appearance of your magazine. But I am in doubt as to the validity of most of the techniques advocated.

Unfortunately, I have never met anyone who made any money over an extended period of time as a market timer. It seems to me that the overall approach is a way to snatch defeat from the jaws of victory. Of the people I've met who have constructed a trading system, none seem to ever be satisfied with it and always state that over time their system changes.

I was at a presentation last week that focused on chart patterns. In essence, the presenter's practice is to ascertain whether a security is going up and then raise stops accordingly, once a favorable pattern is detected. The individual would just as soon not even know the name of the security, and actually said he didn't want to bias his technical method with any knowledge of the security's fundamentals. It seems to me that approach incorporates a strong element of denial, much like the "deny reality to prove your faith" propaganda of a typical religious cult.

A serious shortcoming in this blind approach of the pure chartists is that they don't know how to measure their return on equity, let alone risk.

Undoubtedly, you know knowledgeable traders who use predominantly quantitative systems. I'd like to know whether your staff has done any surveys to find out how well different traders do financially, regardless of their school of thought.

GEORGE F. VAUGHN, CPA, MBA
Houston, TX

We haven't conducted such a survey, but The MoniResearch Newsletter, a bimonthly that has been in publication for 11 years, tracks market timers and dynamic asset allocators and publishes performance tables covering annualized returns and other administrative information. The newsletter ($129/year) can be reached at PO Box 19146, Portland, OR 97280, phone 800 615-6664. -- Editor


STATIONARY AND OTHER STATISTICAL TECHNIQUES

Editor,
I have been a subscriber since early 1993. Over time I have watched STOCKS & COMMODITIES improve with each issue. I believe the reason for this improvement is your focus on several different areas, each reaching a different set of subscribers, from novice to expert. In my case, I fall somewhere in between.

Recently, I have been exploring some statistical methods developed by Clifford Sherry in his book The Mathematics of Technical Analysis. While researching past issues of STOCKS & COMMODITIES, I found an article by Gregory Hight (April 1996) that was written very well and helped with my understanding of the methods developed by Sherry. In addition, through E-mail correspondence with him, Hight has answered some basic questions I had on his article and the material in Sherry's book.

Please keep publishing articles such as Hight's so the nonexpert subscribers can learn and develop spreadsheets to improve our understanding of technical analysis. I look forward to receiving my issue of S&C each month.

BRUCE K. ANDERSON
via E-mail
Thank you for writing. Look for Gregory Hight's article "Checking for stationarity" in this issue. -- Editor


EXCEL SPREADSHEET CODE

Editor,
I really enjoy reading your magazine. I read just about every article each issue. I enjoy trying out the formulas to see if I can apply them to monitoring my mutual funds. Sometimes I feel like the character Tim, the bumbling tool expert in the TV show "Home Improvement": I have good intentions but the formulas don't always work out for me as they did in the article.

I use Microsoft Excel spreadsheet software and I really appreciate when articles provide an Excel spreadsheet. My formulas work when I can refer to the Excel code given in the magazine.

The March 1997 issue contained an article by Dennis Meyers called "A new utility average stock market system." I always enjoy his articles. I like anything that pertains to the S&P 500 because it may help me monitor my S&P 500 index fund. I don't know why, but I am really laboring over setting up a spreadsheet for this article. I could use some help with an Excel example.

Keep up the good work and I'm looking forward to receiving my next issue.

BOB SHEA
Marlton, NJ

We try to include Excel code with articles whenever possible. Thanks for writing. -- Editor
 


DOWNLOADABLE WEB FILES

Editor,
You may want to put your Traders' Tips at your Web site into a file format that we can download, so we don't have to type the code into our systems (in my case, SuperCharts). Thanks.
ED KING
via E-mail
We are working on an extension to our Web site that adds an area for large downloadable files. In the interim, you should be able to save some typing by copying and pasting directly into your program. -- Editor
 



LIVERMORE'S TECHNIQUES

Editor,
I have read How to Trade in Stocks by Jesse Livermore and am intrigued by his explanation of trend changes and swing points. Has anyone written any code on this for TradeStation? Also, are there any books or articles that would perhaps explain Livermore's system further or discuss its strengths and weaknesses?
PETER MLYNARCZYK
New Britain, CT

Check Omega Research's Web site at https://www.OmegaResearch.com for TradeStation code on your topics of interest.

As for an article explaining the techniques, we published the following article in the May/June 1983 S&C:

The Livermore System (May/June 1983)
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.
-- Editor
 


JUST A HELLO

Editor,
Hi! I do read STOCKS & COMMODITIES from cover to cover every single month. No kidding!
LUTTRELL THOMAS
via E-mail
 


ADDITIONAL READING ON POINT & FIGURE

Here are some resources for further reading on the topic of point and figure charting. We originally intended to publish this list at the end of Daryl Guppy's March 1997 article, "On building point & figure charts."
RELATED READING
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