Dear Trading Friend, in this Edition of Traders Ezine we offer an
excellent trading book review from our top book reviewer Raymond Kohn.
Raymond has voluntarily been doing the detailed task of reviewing books
for us for a long time.
We also have some additional details and an update on “Greg From
Downunder,” his “No Brainer” daytrading method, and his End-of-Day
position trading methodology.
"Technical Trading Systems for Commodities & Stocks" - A Book Review by
Raymond F. Kohn
This book was originally written and copyrighted in 1980 by Charles Patel
and was currently out of print until Traders Press re-released and
published the book in August of 1998. It is 202 pages and contains 82
technical trading systems.
1980 is a lifetime ago considering all the developments that have taken
place in technology, and trading systems and software. Powerful personal
computers didn't even exist back then, let alone sophisticated trading and
back testing software.
The book was written for the investor who doesn't have a computer handy,
but does have access to a pocket calculator. This book is very reminiscent
of Wilder's classic book "New Concepts in Technical Trading Systems" that
was written in 1978. If you liked Wilder's classic reference book, you'll
like this book also.
One of the first things you notice when you review the Table of Contents,
is that most of the sophisticated analysis techniques which are typically
pre-loaded in most of today's technical analysis software, are not listed
in the Contents.
Given the original publication date of the book, it is highly likely that
most modern technical trading techniques were developed and published
after 1980.
It wasn't until Colby and Meyers book "The Encyclopedia of Technical
Market Indicators" which was published in 1988 that a number of
contemporary indicators are reviewed and evaluated such as Stochastics,
Relative Strength Index, Directional Movement Index, Commodity Channel
Index, and many others.
However, this book does cover a few of the old classics such as various
permutations of the Donchian methods, On Balance Volume, and the Williams'
Accumulation/Distribution method. But for the most part, the focus of the
book details a wide variety of trading techniques, which highlight
specific price and volume relationships, combined with certain entry and
exit filters.
Unfortunately, back-testing software was not readily available back then,
so the reader is left to do this research on his own prior to utilizing
any of the systems included in the book. In the "Forward" Mr. Dobson, of
Trader's Press, invites readers to do systems research and back-testing of
any or all of the systems contained in the book, and requested feedback on
their results of the research.
This book is a collection of trading systems numbered 1 through 82, on
average each system is given 2 to 3 pages of space and typically includes
the following information:
The "System Number" (1), (2), (3), etc. Then the "Name" of the system
being discussed, such as Simple Moving Average. The "System Definitions",
this includes the exact calculation methods that are used in creating the
indicator, along with very specific Buying and Selling rules.
And lastly, a "Discussion of the System" which identifies the pros and
cons of the system in a very general manner. Note: Not all systems listed
in the book have a "Discussion of the System", which is most unfortunate.
Some systems actually identify which markets the particular system was
designed to work in, ranging from specific commodity markets, to the
general stock market and equities. The sub-heading "Applicable For" is
used with some of the systems when specific markets are indicated.
Following these sub-headings is a "Worksheet" which is done in a ledger
column format with each of the calculation results listed with specific
Buy and Sell points identified. Typically about 30 periods are shown.
A calculation period can be days, weeks, or other segments of time.
Unfortunately the 30 periods is only enough space to provide the reader
with an "example" of how the system is used, and not to offer any
confirmation of the system's effectiveness.
The first 18 systems contained in the book cover a wide range of various
"Moving Average" based trading systems. At the end of "System 18" he
concludes with a synopsis of the various Moving Average systems by saying:
"A Single moving average without any filter (time or price) is a very
inadequate technical tool likely to be too costly to stock/commodity
traders."
"A Single moving average with time filter is a good technical tool."
"A Single moving average with time and price filter is a better technical
tool."
"An Optimized single moving average with time and price filter is the best
technical tool."
This is about as close as the author gets in providing you with an
evaluation of the effectiveness of each of the trading systems discussed.
Systems 19 thru 31 are "Volume" oriented trading systems, whereby
"Volume", or "Price and Volume" are major components within the trading
system being discussed. System 31 is titled "Volume - General Discussion"
and contains 12 key points regarding volume.
Every one of these key points is a valuable lesson in evaluating how
volume can foretell future price activity. This is a very worthwhile
couple of pages very reminiscent of the "Wykoff Trading Methods".
Don't skim over this section. Below are a few random examples of some of
these key points he mentions regarding volume:
"(2) An advance starting on high or ultra-high volume is likely to lead to
further gains."
"(6) Heavy volume following sustained advance without any appreciable
price rise is a sign of price distribution."
"(10) Light volume on decline is usually neither bullish nor bearish."
Systems 32 thru 35 are "Trading Range Indicators" which tend to use
oscillators. Buys and Sells are made when the oscillator reaches extreme
levels and begins to reverse direction.
Systems 36 thru 38 are "Momentum Indictors" which again use oscillators in
a similar fashion as in prior systems.
Systems 39 thru 46 are various "Relative Strength Indicators" which
utilize an oscillator at extremes with Buy and Sell signals given as the
oscillator reverses direction.
Systems 47 thru 59 contain a variety of "Channel Breakout Indicators"
which are strictly price action oriented indicators, such as "Donigan's
Thrust Method", "Donchian's Four Week Channel Breakout", and many
variations using different time periods.
Systems 60 thru 82 contain a wide variety of "Price Trend-Line"
indicators, ranging from "Speed Resistance Lines" to various "Momentum
Trend Indicators".
It is highly likely that some of the indicators contained in this book
have merit, it is unfortunate that a companion addendum was not added to
the reprint which attempted to back-test and evaluate the 82 systems
covered in the book.
I would recommend that you DO NOT USE ANY OF THE SYSTEMS mentioned in this
book without testing them out for yourself within the markets that you
trade. To do otherwise would be courting disaster.
However, despite this cautionary note, there are many interesting ideas
and insights throughout this book which would be of great value to any
trader. This book should be on the shelf next to Wilder's 1978 classic
reference. END:
Editor’s Note: This book costs $50 and is available for purchase by
following this link:
https://www.amazon.com/exec/obidos/ASIN/0934380457/qid%3D983432029/107-0725924-9039704
Please note, if this very long URL Link ends up breaking into 2 lines when
you view it, you may have to copy and paste it together for it to work
right and also fit it into your web-browsers address window.
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Expecting Maybe a Tech Rebound: Sell March. When it expires, sell April.
When it expires!!!
To Traders who are Interested, from Greg Donio - As printed in The Wall
Street Journal.
I am currently watching and. working with the "tech blue chips." I do
Horizontal Calendar. Spreads (same strike price, different months) with
out-of-the-money Call Options in these. stocks.
The long end or "bought" end of my spreads is several months in the future
(circa summer 2001) while my sold or "short" end is markedly nearer in
time (under snowflakes).
Currently I am in a Call Spread with Compaq (CPQ), owning 10 July 25
options and shorting or having sold 10 March 25s. If Compaq stock climbs
above 25 I shall pull out and switch to a sell April 30/buy July 30 Call
Spreads (when April. expires sell May).
Recently I profitably entered and exited a DELL Call Spread (Feb 25/May
25) and am considering another with DELL but later months and higher
strike price. I am watching ORACLE, CISCO & INTEL for similar reasons.
My methodology does not guarantee against loss. I write as an active
trader, not as an advice-giving “pure theoretician” who never trades or a
tout who never bets or a seminar teacher whose profits are the gate.
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Editor Comments: First, I wish to apologize for the delay in sending both
this Ezine and more details on Greg from Downunder. In an earlier issue
article by Greg titled “The Great Escape” we did not publish Greg’s
amazing charts, which visually depict the very impressive trading results
Greg refers to in various markets.
We wanted to send those long anticipated charts with this Ezine but due to
various problems we have had lately this Traders Ezine and Greg’s charts
have both been delayed for a few more days.
One important reason for our recent sluggishness sending these Ezine's is
the fact we have been extremely busy preparing to offer you both Greg’s No
Brainer daytrading signals via a participating broker, and also his
End-of-Day Signals in various markets as posted on our sister website. It
has been much more complex and time consuming than both Greg and I
anticipated.
In the meantime I have been receiving various P&L Reports and updates from
Greg, which by the way are very impressive, to say the least!
We wanted to get this Traders Ezine sent to you by months-end (Feb), so
there was insufficient time to include everything at this time. However,
we will be spending the next several days working on our next Ezine, which
we anticipate sending to you this weekend.
It will include a reprint of Greg’s last article and all the charts he
originally included, also additional knowledge and feedback. Plus, P&L
Reports and some other goodies. Watch for it this weekend. Thank you for
all your patience in this regard.
For those of you who already pre-paid the $75 No Brainer waiting list fee
we intend to launch that unique and potentially highly profitable
daytrading service, along with the End-of-Day Service to paid participants
soon, perhaps in about 2-weeks or so, at least that is our goal but please
do not hold us to it if we run into unforeseen issues. More on this in the
next Traders Ezine. We are also now accepting EOD Website signals list
reservations, for a refundable $50 fee.
We are still taking pre-registrations for our No Brainer waiting list. The
cost is $75. Please sign-up now
https://stronghold.netnation.com/~webtrade/webtrading/seminarorder.htm
as the number of participating traders is limited as we are somewhat
concerned about the markets possibly being adversely affected and our
ability to offer great support if too many of us are trading this method.
As previously mentioned, we have changed our seminar schedule as follows.
The first 3-day Seminar location has been scheduled for June and also
changed to Las Vegas, NV due to a number of requests from traders who
preferred not traveling all the way to London, and also wanted to attend
as soon as possible. The links to the seminar details are here
https://www.financial-seminars.com
Therefore our first Seminar, teaching both Real Success-2 and the new Real
Success-3, and also Greg From Downunder, and his End-of-Day method will be
in Las Vegas June 10, 11 and 12, 2001. Be sure to attend. Greg will be our
featured speaker all 3-days, including the Live Internet Trading days on
both Monday and Tuesday, when Greg and I both will be pulling the trigger
on some real-time trades.
Please note the one day date change. This was done for two reasons, (1) It
gives us the opportunity to trade live for 2-days, instead of 1-day. (2)
It should make it quite a lot easier to get a Las Vegas Hotel room for you
(and a meeting room for us) by avoiding a very busy Sat night.
As you know, the Sunday thru Tuesday time periods are normally the slowest
time of the week as far as accommodations go. You may start thinking about
making your long-term reservations at any Las Vegas area hotel soon.
As mentioned before via Ezine and also on our website, Greg has expressed
a desire to not completely reveal his No Brainer Daytrading secrets and
prefers to teach his EOD Position Trading Method. Click-Here for his
letter regarding this
https://www.financial-seminars.com/invitation.htm
I can't promise you this, but there is always a possibility Greg may
relent and reveal some (but perhaps not all) his No Brainer Secrets at
this Seminar. In either case, you will find his EOD Method extremely
valuable and potentially profitable involving position trades, easily
worth more than the seminar cost.
Please note our Seminar offers both Short-Term Daytrading and longer-Term
Position trading methods in various diversified markets. Real Success-2
will concentrate on daytrading the E-Mini S&P Market, and also on
longer-term position trades in other markets.
The upcoming Real Success-3 is more devoted to daytrading the E-Mini
NASDAQ Market. Greg from Downunder emphasizes his Overnight End-Of-Day
Trading Method in a number of diverse futures markets. Greg may also
include discuss the trading of individual stocks and also Forex markets.
For your information, our Traders Ezine frequency is normally 2 or 3
electronic issues per month. This way you will get rapid electronically
delivered trading knowledge to help you get on the road to profitable
trading! This is the 2nd Ezine for February 2001, or 1st issue of March,
depending on how quickly it is transmitted by the Microsoft ListBot
Service.
All the best, Dave Green, Editor/Publisher
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Here are some suggested trading related links for you: More details on the
upcoming Seminars are located here:
https://www.financial-seminars.com/brochure.htm
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Commodity Traders Club Free Knowledge Based Primary Website
https://www.webtrading.com
-----------
Real Success 2nd Edition Trading Course Information and Buying Details are
located here https://www.traders.org/realsuccess2.htm
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New RS-2 (New and Very Strong) 1-yr No-Strings-Attached Guarantee of
Satisfaction Details https://www.traders.org/guaranty.htm
-----------
To Order New RS-2 6-Tape Video Training Course:
https://www.traders.org/rsorder.htm
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Go here to Become a CTCN Paid Member https://www.webtrading.com/member.htm
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Traders Organization Portal Guide for Daytraders https://www.traders.org
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Year 2001 (June) Las Vegas, Nevada Combined RS-2 & Greg From Downunder
Trading Seminar (special Discounts for Early Registration & Prepayment:
https://financial-seminars.com
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Webtrading Knowledge Based Free Traders Search Engine
https://www.webtrading.com/searchengine.htm
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W. D. Gann Trading Techniques Gann Methods Trading Course by
Webtrading https://www.webtrading.com/gann.htm
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Low-Cost Options & Spreads Trading Course - The author (Mr. Donio) say's
90% Wins Are Possible with this specific options strategy!
https://www.webtrading.com/options.htm
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If you are reading this and you are with a trading related firm, please go
here for Website Sponsorship information
https://www.webtrading.com/advop.htm
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Please send me an email mailto:dave@webtrading.com whenever you have any
questions on trading related issues or if you wish to sign-up for a
service and have questions about it.
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Your email address and other information will be kept confidential per our
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any time if you do not find this trading knowledge useful.
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This Ezine was thoroughly virus checked just before transmittal using the
latest McAfee Virus Scan, which version is freshly updated.
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