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Volume 1 Article List

Mathematician's Viewpoint

An overview of possible profits, using time series analysis of market prices. By Anthony W. Warren, Ph.D.; page 11.

Integrated Systems Approach to Technical Commodity Analysis

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.

Risk Management

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.

To Trade or Not to Trade (or How I Done It)

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.

Forecasting Commodity Prices Using ARIMA

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, Ph.D.; page 18.

Handling Market Reactions

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.

What Else Does It Do?

This article discusses uses of a microcomputer, other than trading the markets. By Steve Ross; page 20.

The New Ticker-Tape

"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.

Technical Analysis Information

Explores the conception of Technical Analysis of Stocks & Commodities magazine. By Jack K. Hutson; page 25.

A MiniGuide to Fourier Spectrum Analysis

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, Ph.D.; pages 26-28.

Fast Fourier Transform

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, Ph.D. and Jack K. Hutson; pages 29-31.

Using Fourier

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.

A Technical Review: Moving Averages

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.

ARIMA Forecasting

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, Ph.D.; pages 40-43.

The Intraday Analyst A Report

By Timothy C. Slater; page 47.

Gann

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.

Cyclic Timing

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.

Gold: Bull or Bear Market?

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.

Anatomy of a Trade

In this case study, Hutson traces his experience following cotton futures over a period of several monthsa 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.

Product Review: The CompuTrac Corvus Hard Disk

By John E. Rosenstock; pages 65-66.

Personal Computers

A whimsical piece about the semi-usefulness of a computer; pages 66-67.

Philosophy

The Stocks & Commodities magazine concept and its advantages for active traders. By Stocks & Commodities Staff; page 67.

Fibonacci Cycles

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.

Optimum Moving Averages: Data Filtering Methods for Technical Analysis

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, Ph.D.; pages 74-77.

Finite Impulse Response Filter

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, Ph.D. and Jack K. Hutson; pages 78-80.

The Livermore System

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.

The Head and Shoulders Formation (A Classic Pattern Revisited)

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.

The Evolving State of Technical Analysis

Discusses the rising application of technical analysis in trading stocks and commodities. By Stocks & Commodities Staff; page 89.

Applying ARIMA Forecasts

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, Ph.D.; pages 90-91.

Confessions of a Speculator: Why Losses Occur

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.

Crooks, Cranks and Honest Citizens: Commodity Periodicals

A listing of futures trading information sources. By Fred S. Gehm; pages 103-104.

Triple Exponential Smoothing Oscillator: Good TRIX

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.

The Nature of Price Resistance

"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.

Computerizing Elliott An outline of how the Elliott Wave Principle could be automated by computer. By Robert R. Prechter, Jr.; page 112.

Anatomy of a Trade: December Treasury Bonds 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.

Commodity Channel Index: Tool for Trading Cyclic Trends 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.

The Logarithmic Scale 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.

Technical Analysis

Information about Stocks & Commodities magazine. By Jack K. Hutson; pages 126-127.

My One and Only Stock Market Recommendation

Reminiscences of the author's 40 years of trading the stock markets. By Merton A. Hill; page 128.

Taking Stock of Commodity Trading Methods

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, Ph.D.; pages 129-132.

Market Blueprints

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.

Modern Hedging for Everyone

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, Ph.D.; pages 134-135.

Optimizing TRIX: Further Analysis of Triple Exponential Smoothing

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, Ph.D.; pages 137-141.

Crooks, Cranks and Honest Citizens: Commodity Conferences

A review of professional conferences in the futures industry. By Fred S. Gehm; pages 141-142.

The Funnel Formation

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.

Commodity Portfolios 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, Ph.D.; pages 145-146.

Commodity Spreading: An Art of Price Differentials 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, Ph.D.; pages 147-148.

To Forecast or To Follow 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.

What Textbooks Never Tell You

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.

Day Trading The Averages

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.

The Market Direction Indicator (Anticipating Moving Average Crossovers)

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.

Software Review: Call/Put Options 2.0

By Stocks & Commodities Staff; pages 168-169.

Decision Psychology (The Psychology of the Decision Bee)

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 tradersare the ones who trade with their heads and not their emotions. By Jesse H. Thompson; pages 170-171.

Fourier Analysis! In a Nutshell Faster and Better
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, Ph.D.; pages 173-178.

Gold Stocks
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.

Risk Management: The Square Root of Sharpe's, Stone's and Ockham's Ratios
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.