Sentiment Indicators E-Book

Abe Cofnas

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

Seitenzahl: 236

Veröffentlichungsjahr: 2010

Beschreibung

A practical guide to profiting from the proper use of sentiment indicators In Sentiment Indicators, noted trading expert Abe Cofnas draws on his own trading and training experience as he shares his knowledge about the latest techniques and strategies for using Renko, price break, Kagi, and point and figure tools to successfully analyze all markets. Written with the serious trader in mind, Sentiment Indicators offers key information on these potential-filled tools and how to use each in shaping trading strategies. Along the way, it provides a practical overview of how to implement these little-known indicators and why each can enhance your trading endeavors. * Shows how these indicators work in different markets: futures, equities, forex, and others * Provides a solid understanding of charting techniques and uses real-world examples to illustrate strategies and tactics * Presents new sentiment research that analyzes word mining and what it means for markets From historical context and Robot Trading alerts to the critical factors of a trading system, Sentiment Indicators presents a proven approach to trading that will help you identify conditions that have a high probability of profit.

Leseprobe

Table of Contents

Title Page

Copyright Page

Dedication

Acknowledgements

Introduction

The Decision Path of the Trader

CHAPTER 1 - The Geometry of Emotions and Price Action

Building Investor Emotional Intelligence

CHAPTER 2 - Price Break Charts Key Concepts

High-Probable Entry Conditions

What are Price Break Charts? Basic Concepts

Reversal Distances: A Key Metric

Consecutive High and Low Close Sequences

Is the Reversal Serious?

CHAPTER 3 - General Trading Strategies for Applying Price Break Charts

Trading in the Direction of the Trend after a Counterreversal Block

Join the Trend after the Appearance of the First or Second Reversal Block

Fibonacci Resistance Confirmation

Countertrend Scalper

Always-In Strategy

Flip-Flop Reversal Entry

Momentum Trading—Six-Line Break

Price Break and Volume Data for Equity Charts

Multiple Setting Intervals and Price Break Charts

CHAPTER 4 - Applying Price Break Charts to Markets and Data

S&P 500: Price Break Chart Patterns Using the Day Chart

Crude Oil and Price Break Charts

Microdetection of Sentiment Reversals—The Use of Price Break Charts for ...

Price Break and Tick-Level Price Action

Six-Line Breaks and Fibs

CHAPTER 5 - Channel Patterns, Cycles, and Price Breaks

Cycles and Price Break Charts

CHAPTER 6 - Multiple Market Applications of Price Break Charts

Contemporaneous Visual Correlation of Instruments

Volatility and Price Break Charts

Price Break Charts and Sentiment Data: Innovative Applications

Price Break Charts and the Global Financial Crises

CHAPTER 7 - Price Break Charts and Option Trading

Selecting Direction with Price Break Charts

Selecting the Strike Price

Risk Reversal Price Break Charts Analysis for Currency Traders

Price Breaks and Currency Volatility Smiles

CHAPTER 8 - Renko Charts Revived

What is Renko Charting?

Tactical Trading Rules for Renko Charts

Key Components of a Renko Charts Trade

Step 1: Renko Chart Setting Sizes and Time Intervals

Step 2: Select Chart Time Interval: Use Three Time Intervals

Step 3: When a Trade Enters the Average Target of Profitability, Turn On the ...

Time and Bricks

Renko Charts and Economic Data Release Trading

Using Renko Charts to Enter Positions

Renko Charts in Multiple Markets

Renko Charts and Six-Line Break: Tools for the Scalper

Renko Bricks at the Tick Level

Renko and Volume

CHAPTER 9 - Kagi Charts Waiting for the Turn of Sentiment

Kagi Chart Basics

Buy and Sell Signals with Kagi Charts—When Yin Turns to Yang

Kagi Charts: The Keys to the Turn of Sentiment

Quantifying Kagi Charts

Kagi Versus Candlesticks—Which Is Better?

CHAPTER 10 - Point and Figure Charts

How Point and Figure Charts Work

Variations in Settings in Selected Markets

Combining Chart Types

CHAPTER 11 - Integrating Price Break, Kagi, Renko, and Point and Figure Charting

Using the Price Landmark Matrix

CHAPTER 12 - New Directions in Sentiment Analysis

Decreasing Frequency Comparison

CHAPTER 13 - Beyond the Trend

Cycle Detection and Projection

Epilogue

Index

About the Author

Copyright © 2010 by Abe Cofnas. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, [phone], fax [phone], or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, [phone], fax [phone], or online at www.wiley.com/go/permissions.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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Library of Congress Cataloging-in-Publication Data:

Cofnas, Abe.

p. cm.

Includes bibliographical references and index.

Summary: “A noted charting expert shows how to use Renko, price break, Kagi, and related sentiment indicators in any market. This book introduces these little-known technical analysis tools to active traders, and is filled with key information on how to use them”-Provided by publisher.

ISBN 978-1-57660-347-5 (alk. paper)

1. Stocks-Charts, diagrams, etc. 2. Technical analysis (Investment analysis) I. Title.

HG4638.C64 2010

332.63’2042-dc22

2010002402

This book builds upon the knowledge gained from working with my students all over the world. Through them, I gained a deeper understanding of the role of emotions in markets and analysis.

A special note is due to my wife, Paula, whose support during the research and writing of this book was indispensable.

Acknowledgments

I want to acknowledge the assistance of Professor Hadley Wickham at Rice University and Joe Egbulefu, PhD candidate in the Department of Statistics, Rice University who provide invaluable assistance in R-graphics programs, and Sridhar Iyer, PhD who provided valuable assistance in formulating the architecture of the Price Landmark Matrix. I also want to express my gratitude to my wife Paula for her support during the process of creating this book.

Introduction

THE PURPOSE OF this book is to give beginning and more experienced traders a fresh look at the principles and applications of alternative charting types. These charts share one significant attribute: they display information independent of time. These types include price break; Kagi; Renko; point and figure, and cycle charts. These charts are important because when the trader applies them correctly, they provide different views of the shape of market sentiment as well as the shape of trends. The hoped-for result is that they will give the trader an enhanced ability to detect changes in price action. The use of these charts can have a significant impact on trader fitness levels, which most traders are looking to improve. (There are very few traders that cannot improve their performance.) There are even fewer that are consistent. A huge trader training industry supplies a seemingly unending stream of content and tutorials, in seminars and on the Web, with the goal of assisting traders. The search for new tools and techniques is all-consuming, but the ability to improve trading does not rest on a new technique. Rather, it centers on the trader’s own behavior.

In over a decade of trader training, I have found that trader inconsistency and trading losses often arise from the central error of participating in counter-trend trading, as well as timing errors. While there are many other sources of strategic and tactical trading errors, this book focuses on the critical area of measuring sentiment changes. When all is said and done about trading, all prices reflect sentiment. Being able to visualize sentiment more accurately can have a huge impact on the trader’s ability to achieve a professional level of fitness. To use an evolutionary metaphor, if traders were a species, to survive they would need to replicate successful trades, select entries and exits, and adapt new strategies to changing markets. These are all skills essential to evolving into an accomplished trader.