February 2005 Letters To The Editor
The editors of S&C invite readers to submit their opinions and information on subjects relating to technical analysis and this magazine. This column is our means of communication with our readers. Is there something you would like to know more (or less) about? Tell us about it. Without a source of new ideas and subjects coming from our readers, this magazine would not exist.
Address your correspondence to: Editor, STOCKS & COMMODITIES, 4757 California Ave. SW, Seattle, WA 98116-4499, or E-mail to editor@traders.com. All letters become the property of Technical Analysis, Inc. Letter-writers must include their full name and address for verification. Letters may be edited for length or clarity. The opinions expressed in this column do not necessarily represent those of the magazine. -Editor
Editor,
I wanted to let you know that your article about Google (Opening
Position, Technical Analysis of Stocks & Commodities, December 2004)
was great. I'm a beginning investor, so understanding is key to investing.
Thanks.
Raven Goforth
via email
S&CFOREIGN PUBLICATION
Editor,
After going through the samples of your magazine, I have concluded
that Stocks & Commodities is indeed very informative. Although I have
been trying to learn technical analysis for the past several months, I
have not been successful because of the lack of education [in India] that
is available in the US. Therefore, subscribing to your magazine is out
of the question now, but one year down the line, I can look into it.
You will have to customize your magazine in every country to make
it successful. You could perhaps hook up with an Indian-based magazine.
India is on the threshold of an economic boom and there is no such magazine
in India. It is a virgin market.
Hiren Shan
India
Thank you for your suggestion, but customizing S&C for every country in which we are read would be prohibitively expensive. And since we do have a good number of subscribers in India, I think we are making inroads there to teach our own brand of technical analysis. Thanks again, and good luck. --Editor
READERS' CHOICE AWARDS
Editor,
Can you please tell me where can I find a list of products ranked
by your Readers' Choice Awards?
S. Richter
via email
Thank you for your interest in Stocks & Commodities. Unfortunately,
you won't find the results for our Readers' Choice Awards online; they're
only available in our annual Bonus Issue, which is sent to current subscribers.
--Editor
MORNING STAR: CANDLESTICK SIGNALS
Editor,
In "The Morning Star" by Stephen Bigalow (S&C, December 2004),
the writer indicates "...[T]here are 10 major [candlestick] signals that
often occur at reversals. The morning star is one of them." Can Bigalow
share the other nine reversal signals?
Colin Johnston
via email
The nine other reversal patterns are subjects for future articles. In the meantime, feel free to search through our archives for other candlestick reversal patterns that we have published.--Editor
FOREX BEGINNER PACKAGES
Editor,
I have a couple of copies of your magazine, and as a result, I recently
visited your website. Wow -- I am still trying to make my way through all
of the information on the page! To that end, I was hoping you could assist
me. I am a beginning trader interested in trading in foreign currencies.
I have begun to educate myself on the subject. I was hoping you would be
in a position to recommend software, brokers, training courses, and analysis
programs that are popular with your readership. I attended a promotional
seminar for foreign exchange trading made easy. I was not impressed with
the "carnival" atmosphere of the presentation, but I did find some interesting
features in the software, such as the stop/go arrows, the stop-loss indicator,
and the graphical indicators available. I am certain there must be other
software packages available with similar features, but it is difficult
to evaluate them as a beginner. Any assistance you can offer would be appreciated.
Kevin Tischer
via email
We do not recommend products/services, but we do conduct a survey every year and publish the results in our Bonus Issue as the Readers' Choice Awards. The categories include (among others) software, brokers, training courses, and analytical programs. I also recommend you visit www.fxstreet.com for educational material on currency trading.--Editor
TTF EXCEL CODES
Editor,
I would like to congratulate M.H. Pee, first on the very excellent
Ttf indicator ("Trend Trigger Factor," Stocks & Commodities, December
2004), and also on providing readers with the Excel code. I wish more authors
would follow Pee's fine example and include Excel code with their articles,
especially since we are not going to get Microsoft to provide it! Many
authors provide code for TradeStation or other trading programs, but that
doesn't help readers who don't have that program.
I am a long-time subscriber to S&C and have always found it so frustrating to see all the different codes provided in the "Traders' Tips" section but no Excel. Trying to translate TradeStation, MetaStock, or some other code into Excel can be a frustrating task. Even if readers don't need Excel, they would benefit from its inclusion for educational purposes alone. Also, seeing how an indicator is put together mathematically does much to increase understanding of that indicator.
I would like to make an open appeal to all those who submit articles
to please consider including Excel code. If there are other readers who
feel the same way, please write and express your feelings on this matter.
Marc Carfi
via email
WEAKEST LINK CLARIFICATIOM
Editor,
I found the article "Where Is The Weakest Link?" by Damir Smitlener
(Stocks & Commodities, December 2004) very difficult to follow. Specifically,
the figures are poorly explained. For example, in Figure 1, both red and
green have three rows. What red and green refer to is never stated. I guess
it is a string of advancing or declining prices. Is it? Nor is it clear
what information is in each of the three rows. For example, in Figure 1,
we have for red and under 7, the numbers 30, 48%, and 20%. What do these
numbers refer to? The reader is left to guess. Figure 2A is kind of intelligible,
but 2B is another story. Why is "above 5" different for 2A, then 2B? And
what does pct(%) refer to? Some type of percentage? Of what? Figures 5,
6, and 7 are not clear. I had no trouble understanding the other articles
in the issue and I thought that the editorial by Ms. Gopalakrishnan was
informative and encouraging to read.
Alvan Kamis
via email
Damir Smitlener replies:
In Figure 1, the first row is the number of instances of streak length
X, the second row is the percent odds of streak length X given a streak
of length X-1, and the third row is the percent odds of streak length X
given a streak of length X-2. Using an example from the red table, a streak
of length 5 has a 48% (71/146) chance of becoming a streak of length 6,
and a 20% (30/146) chance of becoming a streak of length 7. Hope this helps.
TRADERS' TIPS & SUBSCRIBERS' AREA
Editor,
The article "Trend Trigger Factor" by MH Pee (Stocks & Commodities,
December 2004) got my interest, and I wanted to download the code from
Traders' Tips. When I went online, I found the latest available tips code
was from the September issue. Are the Traders' Tips normally three months
behind the hard copy? Or am I doing something wrong on the website, so
I can't find the article code for MetaStock? In addition, can you clarify
where I can find articles from other issues? It seems to me that in the
Subscribers' Area, I should be able to find all the articles.
Ron Gaillard
via email
You may have been looking for Traders' Tips in the Subscribers' Area,
whereas they are located in a separate section under the heading "Current
Issue." The most current Tips can be found at: www.traders.com/Documentation/FEEDbk_docs/TradersTips/TradersTips.htm
(You can also get there by browsing our homepage at www.traders.com
to "Stocks & Commodities" and then clicking the "Traders' Tips" link.)
Previous Traders' Tips can be found in the archives at:
https://www.traders.com/Documentation/FEEDbk_docs/backissues.html
As for past articles, complete articles are not available on the website except through our Online Store. The Subscribers' Area is for code printed in articles or sidebars that is either too long for readers to retype easily, or was too long to be printed in full. The Subscribers' Area allows readers to get the code to copy and paste. For issues without code that fits this description, the area will be blank for that month.
To avoid further confusion, a link has been added to the top of the Subscribers' Area page that will take readers to the Traders' Tips section.--Editor
ERRATA: WEAKEST LINK DATA SOURCES
Editor,
The article "Where Is The Weakest Link?" by Damir Smitlener says
that over the past century, the DJIA has returned roughly 4.5% compounded
annually over the last century. This is much lower than other statistics
I have seen on historical stock market returns. What is the source of this
number? Are dividends included? Also, in Figure 1, the 6% number in the
green section should be 56%.
Vivek Rao
via email
Damir Smitlener replies:
Rate of return calculations are highly dependent on the endpoints,
especially when they fall in periods of turbulent market activity. Using
Yahoo! data (chosen because it is readily available), the DJIA was at 240
in October 1928 and is at roughly 10,500 today. The Cagr over this period
is given by the equation:
where FV is future value (10,500), PV is present value (240), and n is the number of periods, in this case 76 years. This yields:
Doing the same calculation from two years sooner or two years later
-- especially two years later, as that is postcrash -- will yield different
results.
I hope that helps.
ERRATA: TRADOLOGY.COM
In the January 2005 issue, in the Advertising Index, we printed an incorrect
website address for Tradology. The correct address is www.Tradology.com.
We regret the error.
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