September 2001 Letters To The Editor
or return to September 2001 Contents
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
VERTICAL HORIZONTAL FILTER
Editor,
First of all, congratulations on your magazine. I have read the
article "Vertical Horizontal Filter" (Stocks & Commodities,
July 2000) and I would like to know how I can apply it in MetaStock. I
used it in a spreadsheet in Excel and it is really fantastic!
Ignacio Huerta Sánchez, Madrid, Spain
Unfortunately, the VHF wasn't a Traders' Tips topic for that issue, so
check with Equis International at Equis.com for MetaStock code. --Editor
VOLATILITY STOP FORMULA
Editor,
I would like to ask if you have a formula in MetaStock for Wilder's
volatility stop.
Alex S. Bender, via e-mail Henderson, NV
Please check with Equis International at Equis.com for MetaStock code.
--Editor
.ELA AND .ELS DOWNLOADS
Editor,
As a new subscriber, I must say that your magazine is great. I
read the article by R.G. Boomers about MetaTrends in the June 2001 S&C.
Do you know where I can download any .Ela or .Els files for this technique?
Helgo Wilberg, via e-mail Sweden
Please check the TradeStation website at TradeStation.com for .Ela and
.Els code. --Editor
BRAZILIAN READER
Editor,
I am a student of economics at Sao Paulo University in Brazil. I
also work at CMA(which is a company like Bloomberg and deals in financial
systems information). I use technical analysis everyday and I saw a back
issue of STOCKS & COMMODITIES in my office. I liked it very much, although
the reading is difficult -- too technical! But I must learn, so I would
like to ask you two things:
1. I went to your website at Traders.com to subscribe, but as I am
still a student, it was too expensive for me. Do you offer any student
discounts? I am very impressed with the magazine and would like to start
reading it!
2. I am curious about the study MFI (market facilitation index).
What is this? How is it calculated?
Maria Carolina, via e-mail Brazil
Sorry, we do not offer student discounts, although we do offer discount
subscription rates for multiyear subscriptions. Call our subscriptions
department at 800-TECHNICAL for information.
Regarding the market facilitation index (MFI), this is an indicator
that synthesizes both price and volume analysis. The MFI is the ratio of
the current bar's range (high-low) to the bar's volume. The MFI is designed
to gauge the efficiency of price movement and is written this way:
MFI= (range/volume)
We've published several articles on this topic over the years, among which
have been "The Market Facilitation Index" by Gary Hoover (June
1994), "The Market Facilitation Index" by Thom Hartle (July 1996),
and "The Market Facilitation Index" by Charles F. Wright (October
1989). Visit the Online Store at Traders.com to order individual articles
in electronic format. --Editor
SCHOOLING IN TECHNICAL ANALYSIS
Editor,
In some of your past Letters to S&C columns, you've mentioned
universities that offer courses in technical analysis. I believe most of
the schools that offer such courses are small. I think you've mentioned
which universities teach some technical analysis-related subjects as part
of a program toward earning a master's degree in business administration.
Could you please direct me to the issue(s) that this information appeared
in?
Josh Brottlund, via e-mail
The June 1999 Letters to S&C answered a question on college-level classes
in technical analysis. Programs in technical analysis are offered at New
York Institute of Finance (http://www.nyif.com) and other universities
in New York City. The Technical Analysis Institute at Golden Gate University
in San Francisco (http://tele-port.com/~ifta/TSAA/tsaahome.html) also offers
courses. --Editor
HILBERT CHANNEL/SIROC
Editor,
I have read about and tried to apply the Hilbert channel function/indicator
to TradeStation. I applied it to the strategy stage and optimized this.
While it gives a fairly good result, I have found that the inputs entry,
exit K have no effect in the optimization process whatsoever. They appear
completely irrelevant. My installation was copied exactly from the November
2000 S&C. In addition, when I was in the UK, I came across the indicator
SIROC (apparently a smoothed ROC with two inputs). Does anyone know the
formulas or, even better, the EasyLanguage syntax for this?
Mel Cohen, via e-mail Capetown, South Africa
Check out the November and December 2000 Traders' Tips and the November
2000 article "Optimizing With Hilbert Indicators" by Roger Darley.
The code and variables are too lengthy to reprint here, but the November
2000 Traders' Tips does give the Hilbert channel EasyLanguage code.
Traders' Tips are posted at our website, Traders.com, free for public
viewing. You can copy the actual code from our web page for use in your
application. To locate the November and December 2000 tips, use our site's
search engine or click on the STOCKS & COMMODITIES magazine icon on
the left-hand side of our homepage (or go to http://www.traders.com/S&C_homepg.html),
then scroll down and click on the "Back issues archive"
located under the "This month in S&C" section on the left-hand
side. --Editor
ELLIOTT WAVE PRINCIPLE
Editor,
Not to pounce on your self-professed ignorance regarding the Elliott
wave principle (July 2001 Letters to S&C), but the phi ratio is actually
integral to the Elliott wave principle.
The Elliott wave principle is based on the mathematics of the
Fibonacci sequence, generated from the famous rabbit-breeding problem,
which the Italian mathematician Leonardo Fibonacci mentioned in his 13th-century
work, Liber Abacci. The sequence goes like this: 1, 1, 2, 3, 5, 8, 13,
21, 34, 55, 89, 144, and so on. It has many fascinating properties, one
of them being that any number in the sequence divided by the next-highest
number yields approximately 0.618. Any number divided by the preceding
number yields approximately 1.618. An interesting point to note is that
0.618 is simply the reciprocal of 1.618, that is, 1/1.618 = 0.618. This
ratio, 0.618 (for some, 1.618) is known as "the golden ratio"
and denoted by the Greek letter phi. It occurs numerously in nature, the
sciences, and even the arts (the list is too exhaustive to mention here).
Suffice it to say that the Elliott wave principle being based on the Fibonacci
sequence, phi enters the equation of wave relationships numerously, though
"ratio" analysis is given a back seat to the traditional "form"
analysis in the Elliott wave principle. Hope this helps.
Kamran Khan, via e-mail
MORE ON ELLIOTT WAVE
Editor,
I've subscribed for the last two years and I can't wait to read
your magazine each month. There are always some new and interesting articles
to read.
Regarding the July 2001 Letters to S&C, page 14, "Elliott
wave theory": One of your readers inquired about the phi ratio in
Elliott wave analysis. I've been working with Elliott wave theory for just
over a year. You can find a very good definition of phi and golden ratio
and more in the book Elliott Wave Principle: Key To Market Behavior by
A.J. Frost and Robert Prechter. In addition, some software programs support
the use of phi as a technical analysis tool. The golden ratio time ruler
and spiral are phi-related tools I use with Elwave 6 from Prognosis Software
Development.
Thomas R. Gilchrist, via e-mail
UNIQUE ARTICLES?
Editor,
I am extremely disappointed in the article "Estimating Future
Drawdown" by Tushar Chande that appeared in the July 2001 issue of
Technical Analysis of STOCKS & COMMODITIES. I have no problem with
the content or quality of the article but with the fact that you carried
an article that also appeared in the July 2001 issue of Active Trader
magazine. I really do not feel I am getting my money's worth when I
see an article that is not exclusive to your magazine. As a business you
also do not have a competitive advantage when you carry an article appearing
in a competing magazine. In the future when purchasing articles from freelance
writers, maybe you should require their articles to be exclusive.
Name withheld
We also are extremely disappointed that this problem occurred. As a magazine,
our copyright policies do require exclusivity, and acceptance of articles
is based on this. This was an unfortunate aberration of which we were not
aware until we saw the July Active Trader. We are dedicated to bringing
our readers original material on technical analysis and have done so for
18 years. We will continue to present original material and will endeavor
to uphold our copyright requirements to every extent possible. Thank you
for writing and we apologize for this slip in our usual standards. --Editor
