Most blog authors on StockCharts.com are writing about the current markets and do an exceptional job. I do not write about the current markets as I want to share my experiences after 40+ years as a technical analyst. Not only experiences with trading and investing, but model building and money management. I also share the details of all the Master’s degrees I have – those expensive learning experiences that hopefully I learned something from. Since I rarely go back into the archives of other’s blogs that I read, I wondered if that is common or not. Hence, after talking with Chip, a summary of my past articles might encourage new readers to take a look as most of the material is timeless. That’s timeless, not worthless! This is the third of the summary series and starts in September, 2015 and ends in November, 2015. My goal is to do them whenever I have a dozen or so articles to include. You can click on the article name for a link directly to the article.
The Zahorchak Method was a really popular article with lots of response so I decided to more fully develop the concept and offer considerable detail on the method in this article. Here, the specifics of actual trade signals are shown for the relationships between the various moving averages of the NYSE Composite and the NYSE AD Line. Another detailed table shows the specifics for the timing of purchase and sale of individual stocks.
In money management the concept of risk is truly beat to death. The problem I see is not that it is dealt with but that modern finance uses a bogus concept to define risk. In this article I offer my beliefs on what is risk and how to measure it; while also showing why standard deviation, which is the risk of modern finance, is faulty at best.
Wow! Did I ever enjoy writing this one; especially after the first Technical Analysis Magic was so popular. In this and the previous one, I show some of the many things that are misunderstood and certainly misused in technical analysis. The subtitles are: Analysis vs. Reporting, Polls and Surveys, Using Technical Analysis Techniques on Inappropriate Data, Visual Correlations/Analog Charts, and Miscellaneous. Finally, I demonstrate how to frame a question to get a wrong answer.
As you hopefully guessed, this one is the first in this series of article summaries. I did this so that one can reference articles that do not change as the market changes.
Each quarter or thereabouts, I take questions asked via the Comments section that follows each article and provide answers. Some of the questions, if fact most of them are excellent. The reason I do this is that if someone asks a question, then many will hopefully benefit from the exchange. Seriously, ask questions; I'll answer them - eventually.
This is one of a series of articles that covers the basics of each chapter in my market breadth book. This one deals exclusively with new high and new low data. This is important because it is DRASTICALLY different than advance and decline data. New high and new low data is based upon a change from 52 weeks ago, whereas, advance decline data deals with the change from the previous day. Big, big difference!
The purpose here is to explain the distribution of returns and the concept of what can move the mean (average) of the distribution to the right, which means more positive returns. I cover both the good ones (move to the right) and the bad ones (move to the left). Then a short segment on the rules of model building from Will McGough, Senior Portfolio Manager at Stadion Money Management, LLC, the company I worked with/for since 1998.
I have often been critical of modern finance for using standard deviation (sigma) as a measure of risk for years. Here I try to show why it is such a poor measure for risk. I take October 19, 1987, a 22 sigma day, and try to demonstrate how wildly giant that number is, both in galactic terms and atomic terms. It was kind of fun and I think you will enjoy it.
This is the continuing series of my upcoming book on market breadth (which is available now). The chapter deals solely with up volume and down volume. Up volume is the volume of the advancing issues and down volume is the volume of the declining issues. Up and down volume breadth indicators are some of the more reliable ones.
The second article in an ongoing series. Since I do not write about the machinations of the current market and only focus on technical analysis and money management, I would like to think that some (maybe at least one?) of my articles are timeless. Hence a series of summaries especially for new readers will help them wade back through all the old ones.
Why does a book like The Stock Trader’s Almanac sell so well? Simple, people like data and statistics. I like them, and study them all the time. However, there is a difference between what I use them for and what I’m afraid many investors will use them for. The past is there to learn; it is not prologue. If you think something that has worked 70% of the time is good, remember that some of the results contribute to the 30% of the time it does not work; and you do not know how many of those bad results there will be in succession. You may run out of money before you find out.
This is the next to the last in the series of articles that highlights each chapter in my The Complete Guide to Market Breadth Indicators Book. In fact, as I am writing this article, I have also announced the release of the second edition of The Complete Guide to Market Breadth Indicators on Amazon’s Kindle.
Trade with Knowledge,