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Volume 6 Article list
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January 1988
The Compulsive Trader
What's your potential for becoming a winning trader or a losing gambler? When do your cross the line to compulsive trading? Investment psychologist Van K. Tharp interviews one trader who crossed the line. By Van K. Tharp, Ph.D..; pages 11-13.
Trading Options Volatility
Volatility how fast and how much prices change is the most important factor affecting option premiums. This author describes how to apply volatility calculations and forecasts to different options trading strategies such as straddle and strangle purchases and ratio writes. By John Nelson and Stephen Kreis; pages 14-17.
Spreadsheet series, Part 1: Making Spreadsheets Part of Your Trading System
This article begins a column that shows how to use computer spreadsheets to develop a trading and a historical testing system to evaluate indicators. By Jim Summers, Ph.D.. Pages 18-19.
Volume Called the Market
A chartist's view of tracking the Dow prices using cumulative volume. A four-month period leading up to the market high of January 1987 is analyzed. By R. Stuart Thomson; pages 20-22.
Stock Indicators
This article begins a column focusing on the whys and the wherefores of leading indicators and their performance records. Indicators to be covered are listed here along with a description of what types of things each indicator may indicate for the stock market. By Arthur A. Merrill; page 23.
Product review: Market Maker
A fast and easy-to-use analytical tool, with some unique extras, presents a tempting option for busy traders. By John Sweeney; page 24.
Which Money Manager?
Objective evaluation and selection of potential advisors can increase your annual rate of return. This article presents some practical means of determining the probability of a money manager's success. By Charles Milmoe; page 28-30.
Trends and Price Channels
The technician believes that current market prices are related to past prices. Identifying trends is the most basic, reliable tool a technician has to get to the heart of market symmetry. A good article for beginners. By Heidi Schmidt; page 31-32.
Book review: Winning on Wall Street
Trading guidelines and indicators for newcomers to the market. By John Sweeney; page 33.
Market Profile, Part 2
The market is composed of time, price and volume. CBOT's new service to traders, Market Profile, can help a trader judge when a security's price diverges from its market value.
By Thomas P. Drinka, Ph.D.; pages 34-36.
Volume Analysis, Part 1
Increasing the reliability and accuracy of volume analysis by imposing new limits and moving price averages. By John C. Lawlor; pages 27-39.
February 1988
Pelletier on PDI
A special S&C interview with Bob Pelletier of CSI, noted inventor of the Probable Direction Indicator. Pages 46-50.
Trading with Elliott Wave and Gann
Successful Elliott wave analysis is highly dependent on an individual's ability to recognize and identify price patterns. Gann lines and data compression can help traders to ride the Elliott wave with greater confidence. By David Lamarr; pages 46-50.
Market Wave Analysis
Wave patterns can either indicate trading opportunities or the madness of the gambling public. Here, sugar is analyzed using methods typically used by a wave analyst: time cycles, price retracements, trend lines and Gann angles, channels, detrending price analysis, momentum oscillators, volume and open interest, and lunar nodes. By Bryce T. Gilmore; pages 55-58.
Market Profile and Trends, Part 3
In this article, the authors investigate how CBOT's new trader service can be used to evaluate trends. By Thomas P. Drinka, Ph.D. and Robert L. McNutt; pages 59-61.
Night Trading: The Impact on Technical Charts
Should chartists include CBOT's new night trading session in their analyses, or can they afford to ignore it? By Heidi Schmidt; pages 62-64.
Spike Protection
How to avoid the computer trader's ultimate nightmare: data losses during a system crash. By John McCormick; pages 65-66.
Cumulative Volume and Momentum, Part 2
Volume times price change equals the momentum that drives the market. Learn how to chart cumulative volume to reveal and confirm price changes. By John C. Lawlor; pages 67-69.
Product Review: Optionvue Plus
A close look at this analytical tool designed to exploit option flexibility produces a good report card by an S&C editor. By John Sweeney; pages 70-72.
Students Select a Winning Portfolio
By taking an objective approach and following their teacher's advice, teens outperformed top investment advisors. By Michael Scott; pages 73-74.
Spreadsheet series, Part 2: Wilder's Directional Movement Index System
J. Welles Wilder Jr.'s Directional Movement Index (DMI) indicator is explained in preparation for incorporating it into a spreadsheet trading plan. By Jim Summers, Ph.D; pages 75-76.
Taming the Indicators
How to use exponential averaging techniques to smooth data. By Arthur Merrill; pages 77-78.
Money Flow Analysis
Two authors take Joseph Granville's classic on-balance volume technique and improve on it by creating a weighted on-balance volume with better market sensitivity. By Steven Goldstein and Michael Kahn; pages 79-81.
March 1988
Spreadsheet series, Part 3: Introduction to Macros
Learning macro commands is the first step in building a trading system on Lotus 1-2-3. By Jim Summers, Ph.D; page 89.
Moving Averages
Learning to effectively use the most popular of these technical tools. By Heidi Schmidt.; pages 90-92.
Fitting your "Social Style" into Trading
Knowing your own decision-making skills and behavior under stress may be the key to investment success. By Herbert Friedman, Ph.D.; pages 93-96.
Reading Indicator Charts
How to translate smoothed data into a forecast; how to read the chart. By Arthur A. Merrill; pages 97-98.
Survival of the Fittest
Why the October 1987 stock market tumble provided one of the best profit opportunities in history. By Philip Gotthelf; pages 99-101.
Market Profile, Part 4
This article explains how to analyze price rotations using CBOT daily volume and auction activity data. By Thomas P. Drinka,
Ph.D. and Robert L. McNutt; pages 102-106..
Wave Market Analysis, Part 2
More analyses to help you identify the trend wave patterns that indicate trading opportunities. By Bryce T. Gilmore; pages 107-109.
Black Phantasy in P
The pragmatic path of Peter Parsifal following a positively pitiless trading day in October. By Stephen Edwards; pages 110-111.
Curvilinear Analysis
Why curved lines may be better than straight ones in analyzing price trends. By D.O. Christian Reiger; pges 112-113.
Payoff Index
Use the Herrick Payoff Index to incorporate the action of open interest into your market analysis. By Thomas A. Aspray; page 115.
April 1988
Interview
Kaufman on Commodity Trading
A revealing S&C interview with Perry Kaufman, one of the best commodity futures analysts in the business. By John Sweeney; pages 123-128.
Peaking of a Grand Supercycle
The October 1987 Crash marked the end of a great "fifth wave" bull marketbut what does it mean for the future? Elliottician Robert Prechter delves into history to lay out the theory of the grand supercycle. By Robert J. Prechter, Jr; pages 129-132.
Correlating Price Patterns
Auto and serial correlograms can be used to test for significantly significant relationships between price movements and indicators or between price patterns and future price movements. to study the relationships in price patterns. By Clifford J. Sherry, Ph.D; pages 133-134.
Price Reactions Within a Trend
Understanding price movement is the foundation of profitable trading. Both stock and commodity markets move in only two ways they trend or consolidate. Learn some basic concepts for tracking price movements within a trend as well as the key to swing trading. By Bill McLaren; pages 136-137.
The Compulsive Trader, Part 2
What can you do to avoid the dangers of compulsive trading? An investment psychologist describes the stages so you can learn to recognize the symptoms. Then take a 20-question test to find out your compulsiveness rating. By Van K. Tharp, Ph.D; pages 138-141.
OVRA New Indicator
On-balance volume reflex goes a step beyond OBV by incorporating open interest into the equation. By Fred Purifoy; pages 142-144.
On-Balance Volume
In the world of high-tech trading, this classical but often overlooked tool may solve some basic problems. By Thomas E. Aspray; pages 145-148.
Finding Reliable Trading Strategies
The real focus of any research should be the reliability of a system during actual trading, not the level of profits. Presented here are three methods to help distinguish reliable from unreliable trading strategies : forward testing, Profit Distribution Charts and Cluster Spotting. By Steve Kille; pages 149-152.
Spreadsheet series, Part 4: Programming the True Range in Wilder's DMI
By programming Lotus to calculate true range, spreadsheet traders can start building a DMI system. By Jim Summers; pages 153-156.
Consensus Indicators
Comparing indicators with the market average, using the time-honored correlation coefficient and chi-square, can help sort out which indicators are truly worth watching and which simply "got lucky." By Arthur A. Merrill; page 157.
May 1988
Spread Trading the CRB Index
Learn how to use relative strength analysis in spread trading between individual commodities and CRB Index futures. By J.J. Murphy and D.J. Hirschfeld; pages 166-169.
Validating Elliott Wave Counts
Confirming Elliott wave counts using the 21-week stochastic improves correlation of patterns. By H. Ralph Cripps; pages 170-172.
An Assist in Market Timing
Coming to grips with the stock market is made easier by using an indicator composed of stocks that make new highs each week. By Irving Lehren; page 173-174.
Exorcise Fear of a Depression
Living in troubled times may be an advantage, because no one panics over a minor setback like the market crash. By Charles Bebber; page 175-177..
Principles of Market Activity
Linked histograms provide a quick and accurate picture of what the market is doing at any given time. By Robert Pisani; pages 178-182.
Spying the Black Hole
For most traders, the October '87 crash was an incredible shorting opportunity lost. What signals did we miss? By Carl Wyman; pages 183-184.
System Rankings
Check out this six-month report on system performances. Systems were tested and ranked according to their Pessimistic Return on Margin by Futures Truth Company. By John Hill; pages 188-191.
Comparing Data Vendors
Here is a rundown of data vendors and the quality of data they offer. Information is gathered by Computer Asset Management Company. By Steven B. Achelis; pages 192-193.
Spreadsheet series, Part 6: Programming for Speed
This installment of the series sets the stage for faster data processing and more efficient indicator calculations. By Jim Summers; pages 194-195.
Trend Detection
The trend of prices is itself an indicator of the future, since trends tend to continue. It pays to invest in the direction of a trend. But how do you determine this direction? Here are a few methods: filtered waves, eyeball, zigzags and support/resistance levels. By Arthur A. Merrill; pages 196-197.
June 1988
Spreadsheet series, Part 6: Debugging and the Virtues of Experimentation
Debugging the trading range formula makes the difference between trades and trash in your 1-2-3 system. By Jim Summers, Ph.D.; pages 205-209..
Contrary Opinion
How to profit by watching the market and bucking the trends, instead of following those who follow. By Henry Van Kessel; pages 210-213.
If the Boss Only Knew Technical Analysis
Using public reports on insider trading to analyze trends in the stock market could put you ahead of the masses. By Vincent Cosentino; pages 214-217.
More Trend Detection
Moving averages, A/D oscillators and other indicators are useful for tracking trends. By Arthur Merrill.; pages 218-219.
Moving Averages
Getting back to basics: Moving averages, a mainstay of technical analysis, is a trading signal and system component as well as the best estimator of a random variable. By John Ehlers; pages 220-223.
Product review: Spectrum
S&C takes a close look at Technicom's trading system with advanced simulation and optimizing capability. By John Sweeney; page 224.
Diagnosing Market Bottoms
What works at the top of the market may not be as effective at the bottom. Which indicators should you be using? By Thomas Aspray; pages 227-231.
Creating Charts with Lotus
Some BASIC programming can help you evaluate indicators and produce charts using the old Lotus workhorse. By John O'Donahue; pages 232-236.
Trading With Steidlmayer
J. Peter Steidlmayer, author of CBOT Market Profile, takes a philosophical look at life in the commodities game. By Ellen G. Williams; page 237.
July 1988
Mutual Fund Trading
Examining a simple strategy that can help mutual fund traders increase profits in mutual fund switching. By Stan Jones; pages 240-243.
Moving Averages, Part 2
Here's a new indicator using only exponential moving averages, and the BASIC program to do it yourself. By John Ehlers; pages 250-252.
Fitting a Trendline by Least Squares
Here's a tried-and-true method of calculating regression lines for any number of points to define a trend. By Arthur A. Merrill; page 254.
Peter Hackstedde: Profile of a Winning Trader
Trading psychologist Dr. Tharp takes a close-up look at a well-known contrarian and commodities trader. By Van K. Tharp, Ph.D; page 255-257.
Trading Clues from Options Volatility
Knowing how volatility acts can give traders an overwhelming advantage in the options arena. In this article, the author presents three easy-to-use rules for using volatility when trading options. By David L. Caplan; pages 259-261..
The Value of Optimization
This statistical study set out to determine if optimization is of any value in determining optimal parameters and if one re-optimization strategy is better than the next. The unexpected results are that no significant difference exists between any of the strategies' mean returns, including the random one. By Louis P. Lukac & B. Wade Brorsen; pages 262-264.
Martingale Money Management
An age-old doubling system can improve profits in commodity trades. By Robert Pelletier; pages 265-267.
Spreadsheet series, Part 6: Loops: Static and Dynamic
Manipulate the macros to develop a program loop that manages calculation of the DMI trading ranges on Lotus. By Jim Summers, Ph.D; pages 268-271.
Technifilter Plus
This package takes the concept of formula-generating analytical software to the limit in PC-based systems. By John Sweeney & Steve Notis; page 272.
Book review: The Adam Theory of Markets
Another view of J. Welles Wilder's basic book on "making profits trading...anywhere in the world." By Lesley Orr; page 275.
August 1988
Interview
Profit Taking with Mendelsohn
S&C talks trades and trading systems with Lou Mendelsohn, one of the leading vendors in the business. By John Sweeney; pages 278-281.
Holt-Winter Channel
While it is not a forecasting method, this new timing device can provide advance warning of market disaster. A time series analysis technique, its function is to analyze the rate of change from the current condition. By Ichu Cheng. Pages 285-290.
Peak Performance in Volatile Markets
What does it take to "get in shape" to become a consistent winner? Self-confidence, a positive attitude, good concentration, commitment and stress control. Follow this exercise in self-examination to find your weak links. By Neil Weintraub and Susan Arenson; pages 291-293.
MACD Momentum, Part 1
Adding a new twist to convergence/divergence, this author finds it more effective than other indicators. By Thomas Aspray; pages 294-297.
Contrary Opinion
How to determine when to take a contrary opinion position. By R. Earl Hadady; pages 298-300.
Real World Technical Analysis
Why simplicity and common sense are the basics of effective analysis. This article describes different trading methods, including a technique of defining the probability of continued price-trend direction by counting the frequency of movements of different sizes. By Kent Calhoun; pages 301-306.
Market Entry with Action/Reaction Lines
Every market action has an equal and opposite reaction, and this can be charted to show market entry points. By Ron Jaenisch; pages 307-308.
Spreadsheet series, Part 7: Defining Directional Movement
For readers who have built their Lotus trading systems, it's time to try the Directional Movement Index. By Jim Summers, Ph.D; pages 309-312.
Book review: Kroll on Futures Trading Strategy
A review of Stanley Kroll's latest book on trading. By Alexander Elder; page 313.
Computing Curved Trendlines
When a straight line doesn't fit the data, the curved trendline can be a more useful tool. By Arthur A. Merrill; page 314.
September 1988
The Trade Facilitation Factor
Trade facilitation tables are used as a way to locate a quantifiable, measurable way of determining levels of trade facilitation factors. By Donald L. Jones; page 318-321.
Planetary Analysis
The ABCs of astrological analysis demystifies planetary influences on the markets. By Bill Meridian; pages 324-327.
Intraday Trading
Point and figure chart patterns are used to plot price fluctuations on an intraday basis. By John W. Labuszewski and John E. Nyhoff; pages 328-329.
Peak Performance in Volatile Markets, Part 2
Set your goals and manage stress for better personal performance. By Susan Arenson and Neal Weintraub; pages 330-332.
Day Trading and Short-term Trading Techniques
Don't make the same mistakes that burned out other day traders! Here's technical and personal insight into what really works. By Kent Calhoun; pages 333-336..
Playing the Opening Range Breakout
Author Crabel lays out the nitty-gritty details of a daily trading strategy based on opening range calculations. By Toby Crabel; pages 337-339.
Behavior of the Standard & Poor's 500 Stock Index
Is it stationary, random or independent? The answer may affect you choice of trading system. By Cliff Sherry, Ph.D; pages 340-345.
MACD Momentum, Part 2
MACD studies can be used to analyze daily data. Three step-by-step examples show you how to incorporate MACD-Mo and MACD-H in your analyses. By Thomas Aspray; pages 346-349.
Spreadsheet Trading: Finishing DMI Calculations
Program the final Lotus 1-2-3 calculations for the complete Directional Movement Index system. By Jim Summers, Ph.D; pages 350-353.
Advance-Decline Divergence as an Oscillator
Refining this traditional indicator gives more timely bullish/bearish stock market signals. By Arthur A. Merrill; page 354.
October 1988
Dealing With Conflict
A fear of success and the desire for accomplishment resolve themselves in one trader's life. By Van K. Tharp, Ph. D; page s 358-361.
Risk vs. Exposure
Smart money management demands that you know the difference between risk and exposure. By Philip Gotthelf; pages 363- 365.
Opening Range Breakout: Early Entry Part 2
How to get in on the action as it first unfolds and get out quickly if the market moves against you. By Toby Crabel; pages 366-368.
The 40.68-Month Stock Price Cycle
This recurring cycle made its mark in 1987 and is due again next year. Is another decline around the corner? By Gertrude Shirk; pages 369-371.
Black-Scholes vs. Cox-Ross-Rubinstein
Here, at last, the differences in options models are explained. By John W. Labuszewski and John E. Nyhoff; pages 372-376.
Volume As a Proxy For Time
An innovative view of traditional market data brings to light new insights into the relationships of time, price and volume. By Robert Pisani; pages 377-380.
AIQ/Stock Expert
Generate computerized trading signals from 12 familiar indicators. By John Sweeney; page 381.
Diagnosing Market Tops
Work step-by-step through the chart analysis of seven indicators at stock market tops. By Thomas Aspray; page 385.
Price/Dividends Ratio
This indicator is a measure of expensiveness that signaled the October 1987 crash. By Arthur A. Merrill; page 389.
Spreadsheet series, Part 8: Custom Messages
Lotus 1-2-3 tells you on screen when your trading parameters have been hit. By Jim Summers, Ph.D. ; pages 390-394.
The Tragic Neglect of the Old Masters
Classic techniques are teetering on extinction if we forget the founders of technical analysis. By James Alphier; page 395.
November 1988
Before the Chartbook
Words of advice from a futures speculator who's been there. By Raymond J. Kaider; pages 405-407.
Technical Analysis of Industry Groups
Beat the stock market averages with indicators designed for industry groups. By Richard K. Carlin, Ph.D; page 408-410.
Dealing with Conflict, Part 2
How to exorcise the internal conflicts that hinder trading success. By Van K. Tharp, Ph.D; pages 411-414.
Cycles
How regular, repeating cycles affect the stock market. By Arthur Merrill; page 415.
Patterns that Detect Stock Market Reversals
The Titanic Syndromehow stock market data warns of the "icebergs" lying in wait for stock traders. By Bill Ohama; pages 416-421.
Market Profile/Liquidity Data Bank: A Procedural Outline
A step-by-step procedure for evaluation data in CBOT's daily market reports. By Donald L. Jones; pages 422-424.
Option Valuation Model
Pick under- and overvalued options with software. By Steve Barr; pages 425-428.
Half-day Trading Techniques
When intraday markets changeand how to trade them. By Kent Calhoun; pages 429-431.
{Put}, @Index vs. Copy
Speed up Lotus 1-2-3 with faster macros. By A.O.T. Fayiga; pages 432-433.
Who Said Greed Is Dead?
Systems? Systems! Let's talk systems. A humorous look at one trader's quest for success. By Ann Marie Wilson; pages 434-435.
December 1988
Survival Strategies for Exchanges
Can the exchanges cope with trading technology and market manipulation? By Robert A. Wood; pages 443-447.
Price Path: A New Volatility Measure
The way prices move may be more important than how much they move. By Joanne Hill, Ph.D. and Matthew Celebuski; pages 457-461.
Market Profile
Futures markets reveal their typical Profile patterns in this analysis of 38 contracts. By Thomas Drinka, Stephen Ptasienski and Robby Humes; pages 448-450.
Spreadsheet series, Part 9: DMI Trading Rules
Program Wilder's DMI rules into Lotus 1-2-3. By Jim Summers; pages 451-456.
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