The page numbers in this index refer to the printed version of this book. To find the corresponding locations in the text of this digital version, please use the “search” function on your e-reader. Note that not all terms may be searchable.
Abandoned Baby candle pattern, 312
ABC of Stock Speculation, The (Nelson), 24
Acampora, Ralph, 457
Adaptive moving average (AMA), 222
Advance Block candle pattern, 315
Advance-decline (AD) line, 436
AD divergence, 437
daily vs. weekly AD lines, 437
variations in, 437-438
Advanced technical indicators, 463-473
Demand Index (DI), 463-466, 473
Herrick Payoff Index (HPI), 466-468
Keltner channels, 470-472
starc bands, 469-470
Allen, R.C., 204
Alpha cycles, 359
Analysis vs. timing, 6-7
Appel, Gerald, 252
Arithmetic scale, 39-40
Arms Index (TRIN), 444, 445
Open Arms, 446
smoothing, 445-446
TICK vs., 444
Arms, Richard, 444, 448
Art charting, 11
Art of Contrary Thinking, The (Neill), 258
Ascending triangle, 130, 131, 136-138, 331
as bottoming pattern, 138
bullish breakout, 136-137
measuring technique, 137-138
volume pattern, 140
Asset allocation, 409-410
Average, True Range, 469
Barker, David Knox, 359
Bar charts, 35, 40-46
compared to point and figure charts, 266-270
futures open interest, 35, 42-44
volume, 35, 41-42
Behavioral Finance, use of term, 21, 459
Belt Hold candle pattern, 310
Beta cycles, 359
Blowoffs, 175
Bollinger Bands, 209-211, 221
using as targets, 210
Bollinger Bands
and volatility, 211
Bollinger, John, 209
Bolton, A. Hamilton, 319
Bottom failure swings, 242-243
Bottom reversal day, 91, 92
Breakaway candle pattern, 313
Breakaway gaps, 94-95
Breakouts, tactics on, 400-401
Bressert, Walt, 359, 374, 375
Broadening formation, 130, 140-141
Brooks, John, 457
Bullish speedline, constructing, 88-89
Bull trap, 122
Buy-and-hold strategy:
and futures, 7
and Random Walk Theory, 16
Buy limit order, 403-404
Buy stop order, 404
Call open interest, 177
Candle pattern analysis, 301-306
computerized, 306
continuation candle patterns, 304-305
reversal candle patterns, 301-304
CandlePower charting, 448-449
Candlestick charts, 37-39, 297-299, 309-317
See also Japanese candlesticks
Channel line (return line), 80-85
measuring implications, 85
Chart construction, 35-47
arithmetic vs. logarithmic scale, 39-40
candlestick charts, 37-39
of daily bar charts, 36, 40-41
futures open interest, 35, 42-44
volume, 35, 41-42
intraday chart, 35
line charts, 36-37
point and figure charts, 37, 38, 278-282
types of charts available, 36-37
weekly and monthly charts, 35, 45-46
Chart patterns, 185
Chartcraft Method of Point and Figure Trading, The (Cohen), 277
Chartered market technician (CMT), 456-457
Charting, 9, 10-12
purpose of, 3
subjectivity of, 11, 16
Charting software, 378-379
Chartist, 10-12
Closing prices, 30-31
Cohen, A.W., 277
Coil, See Symmetrical triangle
Collins, Charles J., 319
Commitments of Traders (COT) Report, 175-176
and large commercial hedgers, 176
Commodities Futures Trading Commission (CFTC), 175
Commodity Channel Index (CCI), 237-239, 374
Commodity market analysis, 15
Commodity markets, chart of, 10
Commodity Research Bureau Futures, 15
Commodity Systems, Inc., 184
Commodity Trend Service, 177
Complex head and shoulders patterns, 113-115
tactics, 113
Computers:
charting software, 378-379
Directional Movement System (Welles Wilder), 378, 380, 384-387, 390
and ADX, 384-387
Parabolic System (Welles Wilder), 378, 380, 381-384, 390
system trading pros/cons, 387-389
tools/indicators, 380
using, 380
TradeStation (Omega Research), 389-390
and trading systems, 377-391
Concealing Baby Swallow candle pattern, 314
Concentration, diversification vs., 396-397
Confirmation, 155-156
Congestion area, 147-150, 274
Consensus National Commodity Futures Weekly, 258
Constant Forward Contracts vs. Continuous Contracts, 508-510
Continuation candle patterns, 304-305
Continuation charts for futures, construction of, 182-183
Continuation head and shoulders, 153-155
Continuation patterns, 100-101, 129-156
confirmation, 155-156
continuation head and shoulders, 153-155
divergence, 155-156
triangles, 130-147 See also Triangles
Continuous futures contracts, 505-510
Continuous Contracts, 507-510
Constant Forward Contracts vs., 508-510
Gann Contract, 507
Nearest Contract, 506
Next Contract, 506-507
Contract details, futures markets, 12
Contrary Opinion, 226, 257-261
combining with other technical tools, 261
interpreting bullish consensus numbers, 258, 260
market’s reaction to fundamental news, 260-261
open interest (futures), importance of, 260
and remaining buying/selling power, 259
and strong vs. weak hands, 259
Corrective waves, 320-323, 324-331
flats, 326-329
triangles, 329-331
zig-zags, 324-326
CRB Futures Price Index, 423-424
Crests, 348-351
Cybernetic Trading Strategies (Ruggiero), 428
Cycles:
and 4 week rule, 218-219
and moving averages, 212
Cycles: The Mysterious Forces That Trigger Events (Dewey and Mandino), 344
Cycle Trader, 375
Daily bar charts, 36, 40-41, 181
horizontal axis, 41-42
open interest, 35, 42-44
vertical axis, 41-42
volume, 35, 41-42
Dark Cloud Cover candle pattern, 302, 311
Day trading, 9
Deliberation candle pattern, 314
Demand Index (DI), 167, 463-466, 473
Descending triangle, 130, 138-140, 331
as a top, 138
volume pattern, 140
Descriptive statistics, 18
deVilliers, Victor, 265
Dewey, Edward R., 344-348
Dial Data Service, 505
Directional Movement System (Welles Wilder), 378, 380, 384-387, 390
and ADX, 384-387
Divergence, 27, 155-156, 227
Diversification vs. concentration, 396-397
Dobson, Edward D., 342
Doji candlesticks, 300-301
Doji Star candle pattern, 311, 312
Dominant cycles, 358-360
Donchian, Richard, 215-216, 362
Dorsey, Thomas, 292
Double crossover method, 203-204
Double tops and bottoms, 57, 100, 117-121, 122-124
measuring technique, 120-121
Dow, Charles, 23-24, 265, 460
Dow Jones & Company, 23
Dow Jones Industrial Average, 14, 33, 320, 422, 449-451
Dow Jones Transportation Average, 33
Dow Jones Utility Index, 33
Downside Gap Three Methods candle pattern, 316
Downside Tasuki Gap candle pattern, 316
Downtrend, 50-52
Dow Theory, 23-33, 319, 452
applied to futures trading, 32
basic tenets of, 24-30
averages discount everything, 24-25
averages must confirm each other, 27
major trends have three phases, 26-27
market has three trends, 25-26
trend is in effect until it signals reversal, 28-30
volume must confirm trend, 27
closing prices, 30-31
criticisms of, 31-32
lines, 31
stocks as economic indicators, 32
Dragonfly Doji, 301
Dunn & Hargitt’s Financial Services, 215
Easy Language (Omega), 390, 498-500
Economic forecasting, 10
Efficient market hypothesis, 19-21, 459
Ehlers, John, 374, 375
Ehrlich Cycle Finder, 363-365
Ehrlich Cycle Forecaster, 365, 366, 375
Ehrlich, Stan, 363
Elder, Alexander, 442
Elliott, R.N., 27, 319
Elliott Wave Supplement to the Bank Credit Analyst, 319-320
Elliott Wave Theory, 27, 76, 86, 319-342
alternation, rule of, 331-332
applied to stocks vs. commodities, 340
basic tenets of, 320-323
channeling, 332-334
combining all aspects of, 338-340
connection between Dow Theory and, 324
corrective waves, 320-323, 324-331
flats, 326-329
triangles, 329-331
zig-zags, 324-326
degrees of trend, 320-321
Elliott Wave Principle, 320, 342
Fibonacci numbers, 212-213, 322-323, 334-335
Fibonacci ratios and retracements, 335-338
Fibonacci time targets, 338
historical background, 319-320
impulse waves, 320
pattern, 320
ratio analysis, 320
time relationships, 320
using with other technical tools, 342
wave 4 as support area, 334
Engulfing candle pattern, 310
Equivolume charting, 447-448
Evening Star candle pattern, 303-304, 312
Exhaustion gaps, 96-97
Exponentially smoothed moving average, 197, 199-200
Extremes, 486-487
Failed head and shoulders pattern, 113-115
Failure swing, 29-31, 242
Fair value, 415
Falling Three Methods candle pattern, 304-305, 315
Fan principle, 74-76
Fibonacci fan lines, 90
Fibonacci numbers, 212-213, 322-323, 334-335
Fibonacci number sequence, 322-323
Fibonacci percentage retracements, 335-338
Fibonacci ratios, 86
and retracements, 335-338
Fibonacci time targets, 338
50% retracement, 85-87
Filtered candle patterns, 306-307
Filters, 71-72, 122
Financial futures, 8
Flagpole, 143-144
Flags, 141-145
construction of, 142-143
measuring implications, 143-144
Flat corrections, 326-329
Flow of funds analysis, 15
Foreign currencies, 8
Foundation for the Study of Cycles, 348, 375
4-9-18 day moving average combination, 204
how to use, 205-207
4 week rule, 212, 215-219, 362
Frost, A.J., 320, 342
Fulcrum, use of term, 275
Fundamental forecasting, technical forecasting vs., 5-6
Futures, 8
blowoffs, 175
life span, 12-13
margin requirements, 13
pricing structure, 12
time frame, 14
and timing, 14
Futures Charts, 177
Gann Contract, 507
Gann fan lines, 90
Gann, W.D., 87, 90, 183
Gaps, 76
Goldman Sachs Commodity Index, 410
Gould, Edson, 87-88
Granville, Joseph, 165
Granville’s New Key to Stock Market Profits, 165
Gravestone Doji, 300
Great Cycle, The, (Stoken), 359
Greeley, John, 457
Hamilton, William Peter, 24
Hammer candle pattern, 310
Hanging Man candle pattern, 310
Harami candle pattern, 310-311
Harami Cross candle pattern, 311
Harmonicity, principle of, 351, 352, 354
Harmonic relationships, cycles, 212, 218
Head and shoulders, 74, 76
continuation pattern, 153-155
reversal pattern:
basic ingredients of, 106
neckline, breaking of, 106
price objective, 108-110
adjusting, 109-110
finding, 108-110
return move, 106-107
volume, 107-108
Hedging process, 8
Herrick, John, 466
Herrick Payoff Index (HPI), 167, 466-468
Hirsch, Yale, 373
Histogram, 234-237, 476
Homing Pigeon candle pattern, 315
Horizontal count, 274-275
How to Build a Fortune in Commodities (Allen), 204
How to Use the 4-Day, 9-Day and 18-Day Moving Averages to Earn Larger Profits from Commodities (Allen), 204
Hurst, J.M., 348, 355-358
Identical Three Crows candle pattern, 314
Impulse waves, 320
Inductive statistics, 18
In Neck Line candle pattern, 317
Interest rate markets, 8
Intermarket analysis, 413-431
bonds:
link between commodities and, 418
link between stocks and, 416-417
commodities, link between dollar and, 419-420
deflation scenario, 427-428
dollar and large caps, 422
intermarket correlation, 428-429
intermarket neural network software, 429-430
and mutual funds, 422
program trading, 414, 415-416
relative strength:
and individual stocks, 426
and sectors, 424-425
relative strength analysis, 422-426
stock sectors and industry groups, 420-422
top-down market approach, 427
Intermarket correlation, 428-429
Intermarket neural network software, 429-430
Intermarket Technical Analysis (Murphy), 414, 430
Intermediate cycle, 359
Intermediate trend, 25, 52-54
Internal trendlines, 90
International Federation of Technical Analysts (IFTA), 457, 458
International stock markets, 8, 9
Intraday pivot points, 407-408
Intraday point and figure charts, construction of, 270-273
Intraday price charts, 45, 405-408
Market Profile, 411
Inverse head and shoulders, 110-112
neckline, slope of, 111-112
Inverted Hammer candle pattern, 310
Investor Sentiment Readings, 261-262
Investors Intelligence numbers, 262-263
Island reversal pattern, 97
January Barometer, 373
Japanese candlesticks, 37-39, 297-317
basic candlesticks, 299-301
candle pattern analysis, 301-306
computerized, 306
continuation candle patterns, 304-305
reversal candle patterns, 301-304
candle patterns, 309-317
filtered, 306-307
candlestick charting, 297-299
Doji candlesticks, 300-301
Long Days, 299
Short Days, 299
Spinning Tops, 299-300
Jones, Edward, 23
K Wave, The (Barker), 359
Kaufman, Perry, 222
Keltner channels, 470-472
Key reversal day, 91
Kicking candle pattern, 313
Kondratieff Wave, 359-360
Ladder Bottom candle pattern, 315
Ladder Top candle pattern, 315
Lambert, Donald R., 237, 307
Lane, George, 246
Larry Williams %R, 249
Leading Indicators for the 1990s (Moore), 10, 430
Life span, futures contracts 12-13
Limit days, 168
Limit order, 403-404
Linearly weighted moving average, 197, 199
Line charts, 36-37
Lines, 31, 57, 147-148
Logarithmic charts, 39-40
Longer range technical forecasting, 9
Long-legged Doji, 300
Long-term charts, 181-194
adjusting for inflation, 186-187
continuation charts for futures, construction of, 182-183
examples of, 188-194
longer range perspective, importance of, 182
long term trends, persistence of, 184-185
and moving averages, 214
patterns on, 185
Perpetual Contract, 184
and trading, 188
Long term cycles, 359
Long term to short term charts, 185-186
Long Wave Cycle (Kondratieff), 359
Lukac, Louis, 216
Lunar cycle, 362
McClellan oscillator, 438-439
McClellan, Sherman, 438
McClellan Summation Index, 439-440
Major reversal patterns, 99-128
double tops and bottoms, 100, 117-121
filters, 122
head and shoulders, 100, 103-107
complex, 113-115
as consolidation pattern, 115
failed, 113-115
inverse, 110-112
ideal pattern, variations from, 121-125
price patterns, 100-103
continuation, 100, 129-156
measuring techniques, 101
reversal, 99-128
volume, 100, 107-108
saucers/spikes, 100, 125-127
triple tops and bottoms, 100, 115-117
Major trend, 52-54
Major Works of R.N. Elliott, The, 320, 342
Managed accounts, 410-411
Mandino, Og, 344
Margin requirements, stocks vs. futures, 13
Market averages, comparing, 435, 449-451
Market breadth, measuring, 433
Market-if-touched (M.I.T.) order, 404
Market order, 403, 404
Market price, as leading indicator of fundamentals, 6
Market Profile, 411, 475-491
graphic, 476-479
defined, 476
longer term market activity, tracking, 486-490
market structure, 479-480
organizational principles, 480-483
auction setting, 480
continuous negotiation, 481
market balance/imbalance, 481
price and value, 482-483
short term trader/long term trader roles, 482
time frames and trader behavior, 481-482
range development and profile patterns, 484-485
Market Technicians Association (MTA), 24, 457
Market Technologies Corporation, 429
Matching High candle pattern, 314
Matching Low candle pattern, 314
Maximum Entropy Spectral Analysis (MESA), 374-375
Maximum retracement parameter, 86
Measured move, 151-153
Measuring gaps, 95-96
Meeting Line candle pattern, 311
Mendelsohn, Louis, 429-430
MESA and Trading Market Cycles (Ehlers), 374
Metastock charting software (Equis International), 448
M.I.T. order, 404
Momentum:
ascent/descent rates, 230
crossing of zero line, 231-232
measuring, 228-233
momentum line, and price action, 230
upper/lower boundary, need for, 232-233
Money management, 393-411, 501
asset allocation, 409-410
combining with technical factors, 403
diversification vs. concentration, 396-397
guidelines for, 395-396
managed accounts, 410-411
mutual funds, 410-411
reward-to-risk ratios, 397-398
trading multiple positions, 398-399
Monthly charts, 35, 45-46, 181-182
Monthly cycle, and moving averages, 212
Monthly reversals, 93, 185
Moore, Geoffrey, 430
Morning Doji Star candle pattern, 312
Morning Star candle pattern, 303, 312
Morris, Greg, 184, 296, 297fn, 306, 448
Moving Average Convergence/Divergence (MACD), 214, 252-255, 374
MACD histogram, 255
Moving average, 195-215
adaptive (AMA), 222
alternatives to, 223
applied to long term charts, 213-215
Bollinger bands, 209-211, 221
using as targets, 210
and volatility, 211
defined, 195-196
double crossover method, 203-204
envelopes, 207-208
exponentially smoothed, 197, 199-200
Fibonacci numbers used as, 212-213
4-9-18 day moving average combination, 204
how to use, 205-207
linearly weighted, 197, 199
optimization, 220-221
as oscillators, 214
and point and figure charts, 294-295
pros/cons of, 214
simple, 197, 199
as smoothing devices with time lag, 197-207
and time cycles, 212
triple crossover method, 204
using one, 201-203
using three, 204
using two, 203-204
which prices to average, 197-198
Moving average envelopes, 207-208
Multiple positions, trading, 398-399
Mutual funds, 410-411
and intermarket analysis, 422
NASDAQ composite, 435, 449-451
Nature’s Law—The Secret of the Universe, 319, 334
Nearest Contract, 506
Near term trend, 52-54
Neill, Humphrey B., 258
Nelson, S.A., 24
Neutral day, 484-486
New Concepts in Technical Trading Systems (Wilder), 239, 469
New High-New Low index, 440-442
New York Stock Exchange Index, 449-451
Next Contract, 506-507
Nominality, principle of, 353-355
Nonfailure swing, 30-31
Normal day, 484-486
Normal variation day, 484-486
On-balance volume (OBV), 165-167
One-third retracement, 85-87
On Neck Line candle pattern, 316, 317
Open Arms Index, 446
Open interest, 35, 42-44, 159-162
defined, 159
in futures, 42-44, 159-161
how changes occur in, 160-161
interpreting:
in futures, 169-174
general rules for, 161-162
in options, 177
put/call ratios, 178-179
as secondary indicator, 159-162
Oppenheimer Real Assets, 410
Optimization, 220-221, 496
Options, open interest in, 177
Options hedging, 8
Oscillators, 223, 225-263
Commodity Channel Index (CCI), 237-239
constructing, using two moving averages, 234-237
Oscillators
Contrary Opinion, 257-261
interpretation of, 226-227
Investor Sentiment Readings, 261-262
Investors Intelligence numbers, 262-263
Larry Williams %R, 249
momentum, measuring, 228-233
Moving Average
Convergence/Divergence (MACD), 214, 252-255
MACD histogram, 255
moving averages as, 214
rate of change (ROC), measuring, 234
Relative Strength Index (RSI), 239-245
interpreting, 242-245
70 and 30 lines, using to generate signals, 245-246
Stochastic oscillator, 246-249
and trend, 226-228
importance of, 251
usefulness of, 251-252
uses for, 227
See also Contrary Opinion
Outside day, 92
Parabolic System (Welles Wilder), 378, 380, 381-384, 390
Peaks, time between, 125
Pelletier, Robert, 184
Pennants, 141-145
construction of, 142-143
measuring implications, 143-144
Percentage envelopes, 207-208
Percentage retracements, 85-87, 402
Fibonacci, 86, 336-338
Perpetual Contract, 184
Piercing Line candle pattern, 303, 311
Pioneer range, 484
Point and Figure Charting (Dorsey), 292
Point and figure charts, 37, 38, 265-296
advantages of, 288
bar charts compared to, 266-270
computerized charting, 292-294
horizontal count, 274-275
intraday, construction of, 270-273
moving averages, 294-295
price patterns, 275-277
technical indicators, 292
3 box reversal, 277-282
trading tactics, 286-288
trend analysis and trendlines, 277
vertical count, 286
Point and Figure Method of Anticipating Stock Price Movements (deVilliers), 265
Power of Oscillator/Cycle Combinations (Bressert), 374, 375
Prechter, Robert, 320, 331, 342
Presidential Cycle, 373
Price action, and shifts in supply and demand, 2
Price channels, 219-220, 332-334
Price filters, 71-72, 122
Price forecasting, 393-394
Price gaps, 94-97, 402
breakaway gaps, 94-95
exhaustion gaps, 96-97
island reversal pattern, 97
runaway (measuring) gaps, 95-96
types of, 94
Price patterns, 57, 100-103, 185
continuation, 100-101, 129-156
measuring techniques, 101
and point and figure charts, 275-277
reversal, 99-128
volume, 100
as confirmation in, 162-164
See also Continuation patterns; Reversal patterns
Pricing structure, futures, 12
Primary cycle, 359
Primary trends, 25-26
Profit Magic of Stock Transaction Timing (Hurst), 348
Program buying, 415
Program selling, 415-416
Program trading, 414, 415-416
Proportionality, principle of, 351, 353
Protective stops, 397
Pugh, Burton, 362
Put/call ratios, 178-179
Put open interest, 177
Quantitative analyst, 11
Random Walk Theory, 19-21
and buy-and-hold strategy, 16
Range development and profile patterns, 484-485
Range extension, 486-488
Rate of change (ROC), measuring, 234
Rectangle formation, 147-151
similarities/differences, 151
swings within range, trading, 150-151
volume pattern, 150
Rectangles, 31
Relative strength analysis, 422-426, 450-451
Relative Strength Index (RSI), 239-245, 374
interpreting, 242-245
Return line, 80-85
measuring implications, 82-85
Reversal days, 90-93
Reversal candle patterns, 301-304
Dark Cloud Cover, 302, 311
Evening Star, 303-304, 312
Morning Star, 303, 312
Piercing Line, 302-303, 311
Reversal patterns, 99-128
double tops and bottoms, 100, 117-121
filters, 122
head and shoulders, 100, 103-107
complex, 113-115
as consolidation pattern, 115
failed, 113-115
inverse, 110-112
ideal pattern, variations from, 121-125
saucers/spikes, 100, 125-127
triple tops and bottoms, 100, 115-117
Reward-to-risk ratios, 397-398
Rhea, Robert, 24, 319
Right angle triangles, 138
Rising Three Methods candle pattern, 304-305, 315
Ruggiero, Murray, Jr., 428
Runaway gaps, 95-96
Russell 2000, 422, 435, 449-451
Russell, Richard, 24
S…P 500, 14, 32, 415-416, 425, 449-451
Saucers, 125-127
Seasonal cycles, 359, 369-372
Secondary trends, 25, 52-54
Self-fulfilling prophecy, and technical analysis, 15-18
Selling climax, 91, 92, 93, 175
Sell limit order, 403-404
Sell stop order, 404
Semilog chart scaling, 188
Sentiment indicators, 15
Separating Lines candle pattern, 315
70 line, using to generate signals, 245-246
Shooting Star candle pattern, 310
Side by Side White Lines candle pattern, 316
Sideways trend, 50-52
Simple moving average, 197, 199
Smarter Trading (Kaufman), 222
Speedlines, 87-89
Spikes, 125-127
Spinning Tops, 299-300
Standard deviation, 209, 476
Starc bands, 469-470
Statistical analyst, 11
Steidlmayer, J. Peter, 411, 475fn, 479-480
Stick Sandwich candle pattern, 314
Stochastic oscillator, 246-249, 374
Stock index futures, 8
Stock market analysis, 14-15
Stock Market Barometer (Rhea), 24
Stock market cycles, 373
Stock market indicators, 433-452
advance-decline (AD) line, 436
AD divergence, 437
daily vs. weekly AD lines, 437
variations in, 437-438
Arms Index (TRIN), 444, 445
Open Arms, 446
smoothing, 445-446
TICK vs., 444
CandlePower charting, 448-449
Equivolume charting, 447-448
McClellan oscillator, 438-439
McClellan Summation Index, 439-440
market averages, comparing, 435, 449-451
market breadth, measuring, 433
New High-New Low index, 440-442
sample data, 434-435
upside vs. downside volume, 443-444
See also Advanced technical indicators Stock Market Timing (Cohen), 277
Stocks, 8
as economic indicators, 32
life span, 12-13
margin requirements, 13
pricing structure, 12
time frame, 14
and timing, 14
Stock Trader’s Almanac (Hirsch), 373
Stoller, Manning, 469
Stop limit order, 404
Stop order, 404
Summation, principle of, 351-352
Support and resistance, 55-65, 401
psychology of, 59-61
resistance, defined, 55-56
reversal of roles, 56-59
support, defined, 55
and volume, 60
Swing measurement, 151-153
Symmetrical triangle, 130, 131-135, 331
defined, 132
measuring technique, 135
triangle resolution, time limit for, 133-134
volume, 134-135
Symmetric distribution, 476
Synchronicity, principle of, 351, 353, 354
Technical analysis:
applied to time dimensions, 9-10
applied to trading mediums, 8
chartered market technician (CMT), 456-457
coordinating with fundamental analysis, 455-456
criticisms of, 15-19
defined, 1
economic forecasting, 10
Federal Reserve approval, 459-460
flexibility/adaptability of, 7-8
flow of funds analysis, 15
global reach of, 458
International Federation of Technical Analysts (IFTA), 457, 458
Market Technicians Association (MTA), 457
names for, 458-459, 460
number three, importance of, 76
philosophy of, 1-22
history repeats itself, 4-5
market action discounts everything, 2-3
prices move in trends, 3-4
and self-fulfilling prophecy, 15-18
sentiment indicators, 15
in stocks and futures, comparison of, 12-14
technical checklist, 454-455
using in timing, 400
Technical analysis of Stock trends (Edwards et al.), 33, 448
Technical analyst, 10-12
Technical forecasting, fundamental forecasting vs., 5-6
Technical tools, 15, 374
Technician, 10-12
Telescan, 380
30 line, using to generate signals, 245-246
3% penetration criterion, 71
Three Black Crows candle pattern, 312
3 box reversal point and figure chart, 277-282
chart patterns, 280-282
construction of, 278-282
measuring techniques, 286
trendlines, 282-286
Three Inside Down candle pattern, 313
Three Inside Up candle pattern, 313
Three Line Strike candle pattern, 316
Three Outside Down candle pattern, 313
Three Outside Up candle pattern, 313
Three Stars in the South candle pattern, 314
Three White Soldiers candle pattern, 312
Time cycles, 212, 343-375
basic concepts, 348-351
and charting techniques, 355-358
classification of, 359
combining cycle lengths, 361
combining cycles with other technical Tools, 374
crests, 348-351
cyclic principles, 351-353
dominant cycles, 358-360
Ehrlich Cycle Finder, 363-366
and 4 week rule, 212, 215-216, 362
isolating cycles, 363-368
January Barometer, 373
Kondratieff Wave, 359-360
left and right translation, 362-363
Maximum Entropy Spectral Analysis (MESA), 374-375
and moving averages, 212
Presidential Cycle, 365, 373
qualities of, 348-351
seasonal cycles, 359, 369-372
stock market cycles, 373
and trend, 361-362
troughs, 348-351
Time dimensions, technical analysis applied To, 9-10
Time filter, 71
Time Price Opportunity (TPO), 479
Time series analysis, 19
Timing, 393-394
analysis vs., 6-7
using technical analysis in, 400
Top failure swing, 242-243
Top reversal day, 91, 92
Tower, Kenneth, 292-294, 296
Trader’s Library, 375
Trader’s Notebook, 215
TradeStation (Omega Research), 389-390, 497-500
Trading:
elements of, 393-394
after periods of success/adversity, 399
Trading cycle, 359, 362
Trading for a Living (Elder), 442
Trading mediums, technical analysis applied to, 8
Trading multiple positions, 398-399
Trading orders, types of, 403-405
Trading range, 51, 147-150
Trading system:
building, 493-503
concept design, 495-497
evaluating results, 500-501
money management, 501
objective rules, 497
testing code, 497-500
trading signals, checking on computer, 497
Trading tactics, 393-394, 400-402
applied to stocks, 409
and point and figure charts, 286-288
timing, using technical analysis in, 400
Trend, 49-98
classifications of, 52-54
definition of, 49
downtrend, 50-52
fan principle, 74-76
Fibonacci fan lines, 90
Gann fan lines, 90
intermediate trend, 52-54
internal trendlines, 90
major trend, 52-54
monthly reversals, 93
near term trend, 52-54
percentage retracements, 85-87
price gaps, 94-97
reversal days, 90-92
sideways trend, 50-52
speed resistance lines, 87-89
support and resistance, 55-65
and time cycles, 361-362
trading range, 51
trendlines, 65-74
uptrend, 50-52
weekly reversals, 93
See also Price gaps; Support and resistance; Trendlines
Trend day, 484-486
Trending vs. trading units, 398-399
Trendlines, 65-74
adjusting, 77-79
breaking of, 68, 71-72, 102
channel line (return line), 80-85
determining significance of, 69
down trendline, 65-66
drawing, 67
how to use, 67-68
internal, 90
measuring implications of, 72-74
and price action, 69
price filters, 71-72
relative steepness of, 76-80
and reversal of roles, 72-73
small penetrations, how to handle, 70-71
tentative vs. valid, 67
3 box reversal point and figure chart, 282-286
up trendline, 65-66
Trend trading, 9
Triangles, 76, 130-147
ascending, 130, 131, 136-138, 331
broadening formation, 130, 140-144
descending, 130, 138-140, 331
and Elliott Wave Theory, 329-331
flags, 141-145
measured move, 153
minimum requirement for, 132
pennants, 141-145
rectangle formation, 147-151
symmetrical, 130, 131-135, 331
time factor in, 140
wedge formation, 146-147, 148
Triangles
See also Ascending triangle; Descending Triangle; Symmetrical triangle
Triple crossover method, 204
triple tops and bottoms, 76, 115-117, 164
Tri-Star candle pattern, 312, 313
Troughs, 348-351
time between, 125
28 day trading cycle, 362
Two Crows candle pattern, 315
2 day rule, 71-72
Two-thirds retracement, 85-87
2 week rule, 212
Understanding Fibonacci Numbers (Dobson), 342
Unique Three River candle pattern, 314
Upside Gap Three Methods candle pattern, 314
Upside Gap Two Crows candle pattern, 314
Upside Tasuki Gap candle pattern, 316
Uptrend, 50-52
UST Securities, 292, 294
Value Area, 487, 488-489
Van Nice, Nick, 177
Vantage Point software, 430
Variation, principle of, 353-355
Visual Investor, The, 430, 458
Volatility, and Bollinger bands, 211
Volume:
on-balance volume (OBV), 165-166
alternatives to, 166-167
on bar charts, 41-42
as confirmation in price patterns, 163-164
defined, 158
degree of penetration, 61-64
head and shoulders reversal pattern, 100, 107-108
interpreting:
for all markets, 162-169
general rules for, 161-162
and price, 163-165
and price patterns, 100
round numbers as, 64-65
as secondary indicator, 158-162
and support and resistance, 60
Volumes Cycles in the Stock Market (Arms), 448
V-pattern, 125-127
Wall Street Journal, The, 23-24, 265-266, 434, 436
Wave Principle, The, 319
Wedge formation, 146-147, 148
Weekly charts, 35, 45-46, 181-182
Weekly price channel (weekly rule), 215-220
Weekly reversals, 93, 185
Weekly rule, 215-220
4 week rule, 212, 219
adjustments to, 217-218
and cycles, 218-219
Wilder, J. Welles, 239, 307, 378, 380, 381-387, 469
Wizard Trading, 216
Wyckoff, R.D., 265
Zig-zags, 324-326