May, 2011 // Posts published in May, 2011

29 May Posted by Glenn Thompson in Market Forecasting | Comments Off

System Design Alternatives

There is certainly no lack of methods for predicting time series. Traditional econometric models (e.g. ARMA) as well as various GARCH formulations have been extensively applied. More recently models based on Pareto-Levy (nonlinear) distributions incorporating embeddings in phase-space reconstructions have had some success. Neural networks, genetic algorithms, and their A.I. spinoffs are also used with […]

20 May Posted by Mike Bridges in Day Trading | Comments Off

CORRELATION:The true relationship between technical indicators and price movement

My good friend and fellow mentor, Ken Chow, developed a trading technique he calls SuperStructure. It uses only price. No indicators at all. He and his students do quite well. But, success at SuperStructure requires a certain mathematical aptitude that not everyone has. I know I don’t have it. I need more visual cues […]

19 May Posted by Dale Brethauer in Option Vertical Spreads | Comments Off

Steady Monthly Income by, selling out-of-the-money near term options.

Out-of-the-money options, in the near term month, lose their premium rapidly as they approach expiration. An excellent strategy to take advantage of this phenomenon is to sell these options. Set-up the trade as seen below: Sell options on non-volatile indexes like the small cap Russell 2000 index (RUT). Sell options with a probability of […]

13 May Posted by Glenn Thompson in Market Microstructure | Comments Off

Impact of Size

Even if your not an institution, there may come a point where the size of your trades impacts the price you receive. What size threshold behooves you to recognize (ala Heisenberg), that your interaction (interference) with the market, changes the market? In order to cleverly adjust order entry for optimal fills, market microstructure assessment is essential. […]

03 May Posted by Dale Brethauer in Candle Sticks | Comments Off

The Importance of the Exit Strategy (Part II)

After entering the Abbott Labs (ABT) trade on 2/16 @ $46.77 and the May 42 call @ $5.05 we stayed with the trend until the beginning of April. At that point the call had yielded a great return. I was looking to exit at the first sign of weakness. Two confirming signals: Fibonacci extensions […]

02 May Posted by Ken W. Chow in Techical Analysis | Comments Off

Confirming Signals

Whenever we look at a possible signal on whatever trading system or methodology you use, it’s always best to add confirming “sub-signals”. These smaller minor signals reinforce the original signal and make the trade much more reliable. I call these “Supporting Structures”. I use primarily a basic bar chart to read trend direction and […]

“Hi Ken, I’ve been diligently studying your course every available minute of the day since I got it, and enjoying it immensely, and seeing just how much potential there is in it to make me consistently successful. I just got to chapter 4, Strategy #1. WOW! This is awesome!! I can only imagine what’s waiting for me around the next corner. You must have been completely unable to sleep at night when you first discovered these things! You have no idea how grateful I am that you and your course have come into my life. There is nothing more important to me, nothing (other than God and my family) than becoming a successful commodities trader, and now I know, after 10 years of trying and trying and trying, that I am going to reach that goal. I know I’m still only on Chapter 4, but I just wanted to stop what I was doing and thank you. Thank you!!”

Bill W.

Ken W. Chow's Mentoring Student

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May, 2011 // Posts published in May, 2011

System Design Alternatives

CORRELATION:The true relationship between technical indicators and price movement

Steady Monthly Income by, selling out-of-the-money near term options.

Impact of Size

The Importance of the Exit Strategy (Part II)

Confirming Signals

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