English, Simple Charting Systems in Commodities?
recently saw a new book advertised by Gerald Marisch called
"The W.D. Gann Method of Trading - A Simplified, Clear
Approach." Is this book any good? Does it explain
things better than Larry Williams' "Batting .800"?
I know Larry Williams is a proven commodities trader,
however I read a review of his course recently and I agree
with that review. His book is sloppy and does not reference
things on the page very well. Also, the video course is
not very easy to follow. I'm looking for some plain english,
simple charting systems to get started in commodities
trading. Can you help? Thanks for your time." Alex
Charting Systems Answer...
Mr. Smith, I have long admired your work at FNN. I have
previously been a subscriber to CTCR...thanks for taking
it over. I just received your special reprint of the Nov
1998 issue and indeed it was fascinating! A good job...I
agree with your assessment of Jake Bernstein (How did
Larry ever get mixed up with him?) Right now I'm interested
in combining multiple seasonal factors for the nearby
S&P contract (not spread) or the cash index. But maybe
Jake's the best out there in seasonals...
ordered and studied The Stock Trader's Almanac. Traditionally,
they're the experts at stock market seasonals but I find
the data incomplete. The same to a slightly lesser degree
with the Supertrader's Almanac. The newsletter Market
Logic is fairly good but analyzed data only goes to 1994-5.
you ever or do you know of any company that makes (or
could make) software that produces the expected daily
% change of the S&P -- taking into account the year of
the presidential cycle, the annual bias, holiday effect,
monthly, five (six) day and 401(k) bulge, day-of-month
and day-of-the week historical record. All those "seasonals"
could be combined into a final grand score (without double
counting) for each and every trading day of any particular
year. For instance you could start with the average yearly
gain of 4.5%, which is four and one-half% or .045 in decimal
form. Divide that by the number of trading days (250),
and you get .00018, which is due to the secular increase;
the monthly % change in March, for example is .01 and
dividing that by 21 (days) results in .00048, etc. I remember
in the early days there was a fellow who predicted the
market on a daily basis for a whole year (or more) ahead.
I believe anyone could do it with reasonbly accurate results
with the available seasonal data and a computer program!
result, of course, could be profitably used by anyone
according to his or her style as either a standalone or
supplement to other techniques. It's remarkable that by
now such an obvious statistically viable and stable bias
has not been long since discounted by the market but such
seems not the case... (see page four, THE 1999 STOCK TRADER'S
ALMANAC). Since 1950 the only major shift would seem to
be the day of week strengh reversal (from Friday to Monday)
and the 401(k) mid-month bulge as well as an extra end
of month bullish day.
niche procedure would seem to be a natural and I have
either overlooked it (serious vendors - even after searching
the web) or it has been neglected by vendors altogether.
If the latter is the case, do you think the data could
be customized by a programmer? The bottom line is that
the info can be gathered and processed but it is very
tedious to do it by hand. Would you please comment and
Reader Comments on CTCR Index (May
CTCR Index graph is very important because it gives an
indication of how the Commodity Advisory Industry has
performed over the short and long run. I would, however,
include the yearly long-term graph ONLY in the Jan/Feb
newsletter (together with the Advisory Forecasts for the
following year). As for the short term graph, I would
put it in every issue, showing the monthly index evolution
for ONLY the present year ( prior years are already reflected
in the long term graph). Samuel.
Courtney Smith: Excellent
idea! Although we might want to also include it in the
July issue where we wrap up the first half of the year.
Scheduling for Volatility Tamer (May
in the year you were working on a report of Bruce Babcock's
Volatility Tamer. Do you still intend to publish the results
of your tests of this system? I would look forward to
it. Thank you, George
Courtney Smith: Yes,
we are. But we've had so many other great things to look
at that it has been bumped in our schedule.
Slices Alert Reader (May
just started trading silver a few months ago. I knew nothing
about commodity trading before, but I thought I'd give
it a shot. I invested approximately $20,000 in 1,000 troy
ounce silver boullion in a margin account that gave me
approximately $80,000 leveraged funds. My equity was down
to $15,000 when my trader suggested that I try to do a
short transaction. I did this to get a few thousand in
profits by selling long, so I could take the profit also
when the price went down. Meanwhile, I'm paying 11.65%
interest on an account where my equity is decreasing steadily.
Is this normal? Shouldn't my equity have increased when
I sold my silver? At what point should I be worried about
my decreasing equity? Can you share any data and trading
strategies for silver?
Courtney Smith: Stop doing
what you are doing now! Frankly, it sounds
like you are being ripped off.
Trading silver answer...