Trading with Fibonacci Ratios

  One of the most powerful set of tools we can use with tremendous accuracy and reliability are the Fibonacci ratios. These ratios are part of a class of ancient mathematical phenomenon known as sacred geometry. Fibonacci patterns are found in all things natural, including all freely traded markets. Many traders have had some exposure […]

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Signals for 06/13/2011

    SELL GOLD This is what John Maynard Keynes would say if he were alive today! A recent article in a financial paper advocated a return to the Gold Standard, and disagreed with John Maynard Keynes’ famous statement “Gold is a barbarous relic”. The financial meltdown of 2008 and the current Middle East turmoil […]

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Update on time target arrival

  In my Webinar presentation last Saturday, I provided some dates that I think will mark turning points for the stockmarket. The next date to arrive is June 12, 2011 (This coming Sunday). Since this arrives on the weekend, I’m anticipating a turn on Monday 06/13/11. Considering the recent trend, it appears the market is likely to […]

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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 […]

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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 […]

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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 […]

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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. […]

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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 […]

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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 […]

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Trend Analysis

  All forms of technical analysis are arbitrary from the standpoint of attempting to indicate what should or could occur. They are also arbitrary to the extent they attempt to anticipate a change in the market’s behavior, say from moving up to down or vice versa. The one exception to this is a certain pure […]

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