Archive for May, 2009
A Short Primer on Welles Wilder’s “True Range” and “Average True Range”
Posted on30. May, 2009 by admin.
A Short Primer on Welles Wilder’s “True Range” and “Average True Range”
Respected trader and educator J. Welles Wilder developed “Average True Range” (ATR) as a tool for a more precise and realistic calculation of market’s price activity and volatility.
The ATR is useful when calculating the directional movement of a market. Wilder defined the “True Range” [...]
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The K-Wave: A Longer-Term Cycle Worth Examining
Posted on30. May, 2009 by admin.
The K-Wave: A Longer-Term Cycle Worth Examining
The long-term Kondratieff cycle (also called the “K-Wave”) is based on the study of nineteenth century price behavior that included wages, interest rates, raw material prices, foreign trade, bank deposits, wars, technological discoveries, public opinion, politics, weather and other available data. In this educational feature, I will touch upon [...]
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Hank Pruden on “Behavioral Finance” and Technical Analysis
Posted on28. May, 2009 by admin.
Hank Pruden on “Behavioral Finance” and Technical Analysis
Hank Pruden’s theory of “Behavioral Finance” proposes that human flaws are consistent, measurable and predictable, and being aware of and utilizing this phenomenon can benefit a trader.
“For the better part of 30 years, the discipline of finance has been under the thrall of the random walk\cum efficient market [...]
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Technical Traders: You should Still Examine Fundamentals
Posted on28. May, 2009 by admin.
Technical Traders: You should Still Examine Fundamentals
I base the majority of my trading decisions on technical indicators and chart analysis–and also on market psychology. However, I do not ignore important fundamentals that could impact the markets I’m trading. Neither should you.
In this feature I’d like to share with you the types of fundamentals in various [...]
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The Importance of the Risk:Reward Ratio
Posted on27. May, 2009 by admin.
The Importance of the Risk:Reward Ratio
Trader A has a win percentage of 75% on all trades while trader B has a win percentage of closer to 40% on all trades. Which trader is more profitable? Of course we can’t answer that as we don’t know how much each trader makes when they are right compared [...]
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Kaufman: Multiple Trading Methods and Market “Noise”
Posted on27. May, 2009 by admin.
Kaufman: Multiple Trading Methods and Market “Noise”
Many traders attempt to find the single-most “robust” trading strategy possible by looking for one set of rules which works for all markets. Such systems don’t take into account the fact that markets can change quickly and dramatically due to a news event, according to Perry Kaufman.
“There are times [...]
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Generally Right Vs. Precisely Wrong
Posted on25. May, 2009 by admin.
Generally Right Vs. Precisely Wrong
As traders we all spend an inordinate amount of time obsessing about our trade entries. We shop brokers to make sure that we get the lowest spread possible. We put on limit orders to assure ourselves of not paying a tenth of a pip more than we intend to. And, we [...]
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Evidence Based Trading
Posted on25. May, 2009 by admin.
In this past Friday’s day trading session in our chat room many subscribers asked me to explain in detail my approach to short term trading. So I could think of nothing better for an end of the year column then sharing with you my evidence based approach to the markets. Before I begin let me [...]
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Japan’s Economy Shrinks at Record Pace
Posted on20. May, 2009 by admin.
The Yen fell for a 3rd day against the EUR as stocks gained after a government report showed Japan’s economy shrank less than expected last quarter. The Yen fell to 131.17 per EUR from 130.81 yesterday in New York trading. The Japanese currency also declined against the Dollar to 95.70.
Japan’s economy shrank an annualized 15.2% [...]
