Breakthroughs in Technical Analysis E-Book

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: Bloomberg Professional
• Sprache: Englisch

Seitenzahl: 336

Veröffentlichungsjahr: 2010

Beschreibung

Technical analysts build trading strategies based on trends and patterns in the markets' movements. Their task requires mastery of the world's markets and an understanding of the latest techniques. Breakthroughs in Technical Analysis reveals the new trading methods used by the world's top technicians. Building on the success of New Thinking in Technical Analysis (Bloomberg Press, 2000), this book, edited by Bloomberg L.P.'s own expert on technical analysis, David Keller, brings together market masters from the around the world. Some of their techniques have never left their country's borders before and are not widely known or used in other parts of the world. Showing what the best and the brightest are currently using to deliver extraordinary results, this book will be eagerly sought out by all market technicians.

Leseprobe

Table of Contents

Praise

Also available from BLOOMBERG PRESS

Title Page

Copyright Page

About the Contributors

Acknowledgements

Introduction

CHAPTER 1 - Drummond Geometry: Picking Yearly Highs and Lows in Interbank Forex Trading

Drummond Geometry

Applying Drummond Geometry to a Long-Term Forex Trade

CHAPTER 2 - Trend Spotting With TD Combo

Opposing the Marketplace

Aggressive Settings for TD Combo and TD Sequential

What to Do Next

CHAPTER 3 - Charting With Candles and Clouds

Candle Basics

Working With the Elements

CHAPTER 4 - Reading Candlestick Charts

What Are Candlesticks?

How to Read Candlesticks

Reversal Patterns

Indecision Patterns

Special Patterns Worth Noting

Sakata’s Five Tactics

CHAPTER 5 - Price and Time

Fibonacci Price Targets

Price Projection Using Geometric Proportion

Using RSI to Define Trend

Using the Composite Index to Detect RSI Divergence Failures

Detrending

W.D. Gann

Time Analysis

Retrograde Motion

Gann Angles

CHAPTER 6 - Unlocking Gann

Choosing Your Path

Following Gann’s Lead

Forecasting

War and Market Cycles

CHAPTER 7 - Options-Based Technical Indicators for Stock Trading

Why Options?

CHAPTER 8 - Point and Figure Analysis: Modern Developments in an Old Technique

Point and Figure Charts: One Hundred Years of Change

Time Horizons

Internal 45° Trend Lines

Using Point and Figure Price Targets Effectively

Risk-Reward Ratios From a Point and Figure Chart

Log Scaling

Point and Figure Charts of Indicators

Moving Averages, Parabolic SAR, and Bollinger Bands

Indicators of Point and Figure Charts

Market Breadth Indicators

Flipping Point and Figure Charts

CHAPTER 9 - Deconstructing the Market: The Application of Market Profile to ...

Market Profile and the Bell Curve

The Four Stages of Sticker Shock

Application to Spreads

Finding a Larger Context

CHAPTER 10 - The Ten Commandments

Analytics

Trading Rules

Index

About Bloomberg

About the Editor

Praise for

Breakthroughs in Technical Analysis New Thinking from the World’s Top Minds

Edited by David Keller

“Mr. Keller went to great lengths to collect diverse methodology in technical analysis from around the globe. For over forty years I have seen interest in technical analysis wane and wax as markets change and practitioner skills change. Breakthroughs in Technical Analysis offers commentary from the leading experts in the newest quantitative methodologies as well as old reliable techniques. I recommend the book to established professionals as well as bright newcomers.”

PHILIP J. ROTH, CMT Chief Technical Market Analyst, Miller Tabak & Co., LLC Past President and Board Member of the Market Technicians Association

“Navigating financial markets can be a hazardous exercise. In Breakthroughs in Technical Analysis, Dave Keller has assembled contributions from an experienced crew of established technicians and market timers to ease the journey and demystify the arcane world of technical analysis. The book features a number of approaches (as diverse as DeMark and Ichimoku), which challenge conventional wisdom and are sure to form an invaluable part of your trading arsenal, whether you’re technically or fundamentally oriented.”

JASON PERL Global Head of Fixed Income, Foreign Exchange and Commodities Technical Strategy, UBS Investment Bank

“The concepts and experiences shared by the ten global contributors in David Keller’s book embody the precept that supply and demand for technical analysis is indeed a universal language. These varied topics are very timely and extremely useful in trading and investing in all markets around the world.”

RALPH J. ACAMPORA, CMT Managing Director, Director of Technical Research Knight Equity Markets, LP

Also available from BLOOMBERG PRESS

New Insights on Covered Call Writing: The Powerful TechniqueThat Enhances Return and Lowers Risk in Stock Investingby Richard Lehman and Lawrence G. McMillan

Tom Dorsey’s Trading Tips: A Playbook for Stock Market Successby Thomas J. Dorsey and the DWA Analysts

Wall Street Secrets for Tax-Efficient Investing:From Tax Pain to Investment Gainby Robert N. Gordon with Jan M. Rosen

New Thinking in Technical Analysis:Trading Models from the Mastersedited by Rick Bensignor

Option Strategies for a Directionless Market:Trading with Butterflies, Iron Butterflies, and Condorsby Anthony J. Saliba (November 2007)

Technical Analysis Tools: Creating a Profitable Trading Systemby Mark Tinghino (December 2007)

A complete list of our titles is available at www.bloomberg.com/books

ATTENTION CORPORATIONS

This book is available for bulk purchase at special discount. Special editions or chapter reprints can also be customized to specifications. For information, please e-mail Bloomberg Press, [email protected], Attention: Director of Special Markets, or phone [phone].

© 2007 by Bloomberg L.P. All rights reserved. Protected under the Berne Convention. No part of this book may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher except in the case of brief quotations embodied in critical articles and reviews. For information, please write Permissions Department, Bloomberg Press, 731 Lexington Avenue, New York, NY 10022 or send an e-mail to [email protected].

BLOOMBERG, BLOOMBERG ANYWHERE, BLOOMBERG.COM, BLOOMBERG MARKET ESSENTIALS, Bloomberg Markets, BLOOMBERG NEWS, BLOOMBERG PRESS, BLOOMBERG PROFESSIONAL, BLOOMBERG RADIO, BLOOMBERG TELEVISION, and BLOOMBERG TRADEBOOK are trademarks and service marks of Bloomberg Finance L.P. (“BFLP”), a Delaware limited partnership, or its subsidiaries. The BLOOMBERG PROFESSIONAL service (the “BPS”) is owned and distributed locally by BFLP and its subsidiaries in all jurisdictions other than Argentina, Bermuda, China, India, Japan, and Korea (the “BLP Countries”). BFLP is a wholly-owned subsidiary of Bloomberg L.P. (“BLP”). BLP provides BFLP with all global marketing and operational support and service for these products and distributes the BPS either directly or through a non-BFLP subsidiary in the BLP Countries. All rights reserved.

TD Combo and TD Sequential are trademarks of Market Studies Inc. Market Profile is a trademark of the Chicago Board of Trade.

This publication contains the authors’ opinions and is designed to provide accurate and authoritative information. It is sold with the understanding that the authors, publisher, and Bloomberg L.P. are not engaged in rendering legal, accounting, investment-planning, or other professional advice. The reader should seek the services of a qualified professional for such advice; the authors, publisher, and Bloomberg L.P. cannot be held responsible for any loss incurred as a result of specific investments or planning decisions made by the reader.

Library of Congress Cataloging-in-Publication Data

Breakthroughs in technical analysis : new thinking from the world’s top minds / edited by David Keller.

p.cm.

Summary: “Breakthroughs in Technical Analysis explains the new trading methods used by the world’s top technicians, encompassing in one volume the investing approaches of ten proven practitioners. More important, some of these techniques have never left their country’s borders before and are not known or used in other parts of the world.”--Provided by publisher.

Includes index.

ISBN 978-1-57660-242-3 (alk. paper)

1. Investment analysis. I. Keller, David, date.

HG4529.B725 2007

332.63’2042 --dc22

2007021051

Acquired by Sophia Efthimiatou

Edited by Mary Ann McGuigan and Janet Coleman

About the Contributors

David Bowden is the founder of Safety in the Market, one of Australia’s longest-running investment training organizations. Through his courses and seminars and with a clientele that spans the globe, Bowden has trained many people to understand the markets and trade them with safety. Bowden began his trading career in 1985 by studying and researching the methods of W.D. Gann, a legend in the world of stock and commodity traders. Using Gann’s unique style of forecasting and technical analysis, Bowden quickly established an impressive track record with his market forecasts. He called the market top for 1987, to the day. Catching the eye of many fellow traders and associates, he was thrust into the world of trading education in 1988. In 1995, Bowden authored the first nationally accredited Diploma of Technical Analysis course.

Constance Brown, CMT, founded the global investment company Aerodynamic Investments Inc. (www.aeroinvest.com) after working for more than twenty years as an institutional trader in New York City. She continues to actively trade from her equestrian estate in South Carolina and advises numerous financial institutions and banks around the world via the Internet. She now has more than seventy students who have moved on to manage assets themselves or work for major institutions. Seminars and lectures are viewed as an important part of contributing to the further development of technical analysis. Brown’s second book, Technical Analysis for the Trading Professional (McGraw-Hill, 1999), was selected by the Market Technicians Association (MTA) as required reading to prepare for CMT Level 3, the final examination that awards professionals the industry’s Chartered Market Technician (CMT) accreditation. She is also a member of the American Association of Professional Technical Analysts (AAPTA). Brown currently has six books in print.

Tom DeMark is the president of Market Studies Inc., a provider of proprietary market timing indicators to Bloomberg and other financial services companies. He also serves as a consultant to multibillion-dollar hedge funds. Currently, DeMark is special consultant to Steve Cohen and SAC Capital. Previously, he was special adviser to Leon Cooperman and Omega Advisors and executive vice president of Tudor. DeMark was also chairman of Logical Information Machines (LIM), a supplier of high-technology software services for sophisticated market research. He is a former partner of Charlie DiFrancesca, the largest trader on CBOT. From 1982 to 1988, DeMark was president of DeMark Investment Advisory, Inc., a consultancy to large fund managers, including Goldman Sachs, Loews Corp., Union Carbide, Citibank, Morgan Bank, IBM, Minnesota Mining, Steinhardt Partners, Soros, Trust Company of the West, and Atlantic Richfield. DeMark’s systems and indicators have been the subject of numerous feature articles in many highly regarded and widely read financial magazines and papers, and he has appeared regularly on television and radio, as well as at seminars, both domestically and internationally. He is also the author of three best-selling books, The New Science of Technical Analysis (John Wiley & Sons, 2001), New Market Timing Techniques (John Wiley & Sons, 1997), and DeMark on Day Trading Options (McGraw-Hill, 1999).

Jeremy du Plessis, CMT, FSTA, is head of technical analysis at Updata PLC, based in London. He is a member of the Market Technicians Association (MTA) and the American Association of Professional Technical Analysts (AAPTA) in the United States, as well as a fellow of the Society of Technical Analysts (STA) in the United Kingdom. Du Plessis sets the syllabus for the point-and-figure module of the International Federation of Technical Analysts (IFTA) certificate and lectures on point and figure for the STA. A regular speaker on point and figure at international conferences and seminars, du Plessis has dedicated the past twenty-five years to the field of technical analysis and in particular to developing technical analysis software. In 1983, the company he founded, Indexia Research Limited, released one of the first PC-based technical analysis systems available, with point and figure as its cornerstone. Du Plessis’s book The Definitive Guide to Point and Figure (Harriman House, 2005) is regarded by many as the bible of point and figure analysis.

Nicole Elliott is Mizuho Corporate Bank’s senior analyst in London and covers the foreign exchange, interest rate, commodity markets, and equity indexes. Elliott has worked in the City of London for twenty-five years. Technical Analysis has always been the backbone of her trading methodology, in sales and as an analyst within the Treasury departments of major international banks. She is a member of the Society of Technical Analysts and a graduate of the London School of Economics.

Robin Griffiths is one of the world’s most senior technical analysts, having published technical research for forty years and coauthored three books. He has been head of asset allocation at Rathbone Brothers PLC since 2002, overseeing $20 billion of investments, and is adviser to two hedge funds, ECU Fund and Rathpeacon. From 1986 to 2002, he was chief technical strategist at HSBC James Capel. Prior to that, Griffiths was technical analyst and Japan specialist at Grieveson Grant (1983-1986); technical analyst and partner at W.I. Carr in Hong Kong, Tokyo, and London (1971-1983); and equity broker at Phillips and Drew (1966-1971). Griffiths is a member of the Market Technicians Association; former chairman of the International Federation of Technical Analysts (1994- 1997); and former chairman (1990-1993) and now fellow of the British Society of Technical Analysts.

Ted Hearne is a private trader and the president of a consulting firm with expertise in market analysis, trading software, mass psychology, and economic behavior. Hearne has been an active trader and student of the markets for two decades. In 1991, he became acquainted with point-and-line theory and in 1993 met Charles Drummond, with whom shortly thereafter he formed a business and writing partnership. Together over the last ten years they have created a landmark body of theoretical and educational writings about the trading methodology now known as Drummond Geometry. Major writings include work on the Pldot.com Web site and The Lessons, an extensive instructional series about market structure, market analysis, and trading practice. Hearne’s Web site is www.tedtick.com.

Robin Mesch, founder and CEO of Robin Mesch Associates, enables professional traders and money managers to consistently maximize profitability and optimize their portfolios using her proprietary trading models and software. Mesch is a pioneer and educator in the field of technical analysis and market theory. She has been building market models for more than twenty years and has been profiled in numerous books such as Bloomberg’s New Thinking in Technical Analysis; Bulls, Bears and Millionaires; The Outer Game of Trading; The Day Trader’s Advantage; The Tao of Trading; and Women of the Pits.

Bernie Schaeffer is chairman and CEO of Schaeffer’s Investment Research, Inc. and author of The Option Advisor: Wealth-Building Techniques Using Equity and Index Options (Wiley, 1997). He has edited the Option Advisor newsletter since its inception in 1981, and it has since grown to be the nation’s leading options newsletter. Schaeffer is widely recognized as an expert on equity and index options, investor sentiment, and market timing. Timer Digest has been monitoring him since 1984 and ranks him as the No. 2 Gold Timer for the past ten years running and the No. 5 Bond Timer for the past ten years. In 2003, Aaron Task of TheStreet.com selected Schaeffer as the market “Guru of the Year.” Schaeffer is the proud recipient of the 2004 Traders’ Library Trader’s Hall of Fame Award for his numerous contributions to the field of trading. In addition, Schaeffer received the Best of the Best Award from the Market Technicians Association for his contributions to sentiment/psychological analysis.

Yosuke Shimizu is the general manager of the investment information department at Monex, Inc., which he joined in 2003. His work is devoted to investor education through the explanation and analysis of market activities for individual investors. Shimizu is also well known for his practical technical analysis techniques acquired through his sales and trading experiences at major securities firms. Previously, he worked at Daiwa Securities. Shimizu is a member of the Security Analysts Association of Japan and the Nippon Technical Analysts Association. He holds a BA in law from Keio University.

Acknowledgments

This book was a collaboration of many people, each lending their expertise to create a final product in which we can all take pride. I would like to thank the following individuals for their specific contributions:

My wife Carrie, for challenging me, encouraging me, and sharing this journey.

My family, for always reminding me to “relax and let it flow.”

The hardworking people at Bloomberg Press: Sophia Efthimiatiou for her enthusiasm and careful planning, Mary Ann McGuigan and Janet Coleman for their tireless work in editing the content, and the production team: Mary Macher, Dru-Ann Chuchran, and JoAnne Kanaval.

Steve Araki of Bloomberg Markets magazine for his gracious help with the Japanese translation.

The ten contributors who took time out of the trading day to lend us powerful insight into market dynamics.

And finally, the technical analysts and traders I have met over the years, who have taught me to always be a student of the markets.

Introduction

One day back in early 2001, I called an equity salesperson in Chicago to ask whether he would be interested in meeting to discuss some technical analysis techniques. He quickly declined, calling technical analysis a “voodoo science” and arguing that it was fundamental analysis that truly drives the markets.

Two years later, I received a call from that same salesperson. He had had a major change of heart. He invited me to visit him so that we could talk about technical analysis. I wondered what had made him change his mind. He said that his clients had started observing charts, and that if he wanted to keep their business he had to learn how to speak their language.