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About the Author | |
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About the Contributors | |
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Introduction | |
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Acknowledgments | |
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Philosophy of Technical Analysis | |
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Introduction | |
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Philosophy or Rationale | |
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Technical versus Fundamental Forecasting | |
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Analysis versus Timing | |
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Flexibility and Adaptability of Technical Analysis | |
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Technical Analysis Applied to Different Trading Mediums | |
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Technical Analysis Applied to Different Time Dimensions | |
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Economic Forecasting | |
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Technician or Chartist? | |
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A Brief Comparison of Technical Analysis in Stocks and Futures | |
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Less Reliance on Market Averages and Indicators | |
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Some Criticisms of the Technical Approach | |
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Random Walk Theory | |
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Universal Principles | |
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Dow Theory | |
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Introduction | |
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Basic Tenets | |
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The Use of Closing Prices and the Presence of Lines | |
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Some Criticisms of Dow Theory | |
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Stocks as Economic Indicators | |
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Dow Theory Applied to Futures Trading | |
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Conclusion | |
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Chart Construction | |
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Introduction | |
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Types of Charts Available | |
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Candlesticks | |
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Arithmetic versus Logarithmic Scale | |
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Construction of the Daily Bar Chart | |
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Volume | |
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Futures Open Interest | |
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Weekly and Monthly Bar Charts | |
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Conclusion | |
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Basic Concepts of Trend | |
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Definition of Trend | |
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Trend Has Three Directions | |
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Trend Has Three Classifications | |
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Support and Resistance | |
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Trendlines | |
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The Fan Principle | |
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The Importance of the Number Three | |
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The Relative Steepness of the Trendline | |
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The Channel Line | |
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Percentage Retracements | |
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Speed Resistance Lines | |
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Gann and Fibonacci Fan Lines | |
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Internal Trendlines | |
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Reversal Days | |
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Price Gaps | |
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Conclusion | |
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Major Reversal Patterns | |
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Introduction | |
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Price Patterns | |
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Two Types of Patterns: Reversal and Continuation | |
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The Head and Shoulders Reversal Pattern | |
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The Importance of Volume | |
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Finding a Price Objective | |
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The Inverse Head and Shoulders | |
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Complex Head and Shoulders | |
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Triple Tops and Bottoms | |
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Double Tops and Bottoms | |
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Variations from the Ideal Pattern | |
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Saucers and Spikes | |
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Conclusion | |
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Continuation Patterns | |
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Introduction | |
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Triangles | |
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The Symmetrical Triangle | |
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The Ascending Triangle | |
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The Descending Triangle | |
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The Broadening Formation | |
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Flags and Pennants | |
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The Wedge Formation | |
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The Rectangle Formation | |
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The Measured Move | |
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The Continuation Head and Shoulders Pattern | |
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Confirmation and Divergence | |
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Conclusion | |
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Volume and Open Interest | |
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Introduction | |
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Volume and Open Interest as Secondary Indicators | |
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Interpretation of Volume for All Markets | |
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Interpretation of Open Interest in Futures | |
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Summary of Volume and Open Interest Rules | |
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Blowoffs and Selling Climaxes | |
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Commitments of Traders Report | |
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Watch the Commercials | |
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Net Trader Positions | |
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Open Interest In Options | |
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Put/Call Ratios | |
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Combine Option Sentiment With Technicals | |
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Conclusion | |
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Long Term Charts | |
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Introduction | |
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The Importance of Longer Range Perspective | |
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Construction of Continuation Charts for Futures | |
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The Perpetual Contract | |
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Long Term Trends Dispute Randomness | |
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Patterns on Charts: Weekly and Monthly Reversals | |
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Long Term to Short Term Charts | |
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Why Should Long Range Charts Be Adjusted for Inflation? | |
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Long Term Charts Not Intended for Trading Purposes | |
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Examples of Long Term Charts | |
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Moving Averages | |
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Introduction | |
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The Moving Average: A Smoothing Device with a Time Lag | |
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Moving Average Envelopes | |
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Bollinger Bands | |
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Using Bollinger Bands as Targets | |
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Band Width Measures Volatility | |
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Moving Averages Tied to Cycles | |
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Fibonacci Numbers Used as Moving Averages | |
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Moving Averages Applied to Long Term Charts | |
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The Weekly Rule | |
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To Optimize or Not | |
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Summary | |
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The Adaptive Moving Average | |
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Alternatives to the Moving Average | |
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Oscillators and Contrary Opinion | |
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Introduction | |
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Oscillator Usage in Conjunction with Trend | |
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Measuring Momentum | |
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Measuring Rate of Change (ROC) | |
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Constructing an Oscillator Using Two Moving Averages | |
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Commodity Channel Index | |
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The Relative Strength Index (RSI) | |
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Using the 70 and 30 Lines to Generate Signals | |
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Stochastics (K%D) | |
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Larry Williams %R | |
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The Importance of Trend | |
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When Oscillators are Most Useful | |
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Moving Average Convergence/Divergence (MACD) | |
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MACD Histogram | |
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Combine Weeklies and Dailies | |
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The Principle of Contrary Opinion in Futures | |
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Investor Sentiment Readings | |
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Investors Intelligence Numbers | |
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Point and Figure Charting | |
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Introduction | |
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The Point and Figure Versus the Bar Chart | |
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Construction of the Intraday Point and Figure Chart | |
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The Horizontal Count | |
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Price Patterns | |
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3 Box Reversal Point and Figure Charting | |
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Construction of the 3 Point Reversal Chart | |
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The Drawing of Trendlines | |
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Measuring Techniques | |
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Trading Tactics | |
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Advantages of Point and Figure Charts | |
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PandF Technical Indicators | |
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Computerized PandF Charting | |
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PandF Moving Averages | |
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Conclusion | |
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Japanese Candlesticks | |
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Introduction | |
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Candlestick Charting | |
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Basic Candlesticks | |
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Candle Pattern Analysis | |
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Filtered Candle Patterns | |
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Conclusion | |
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Candle Patterns | |
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Elliott Wave Theory | |
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Historical Background | |
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The Basic Tenets of the Elliott Wave Principle | |
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Connection Between Elliott Wave and Dow Theory | |
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Corrective Waves | |
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The Rule of Alternation | |
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Channeling | |
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Wave 4 as a Support Area | |
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Fibonacci Numbers as the Basis of the Wave Principle | |
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Fibonacci Ratios and Retracements | |
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Fibonacci Time Targets | |
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Combining All Three Aspects of Wave Theory | |
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Elliott Wave Applied to Stocks Versus Commodities | |
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Summary and Conclusions | |
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Reference Material | |
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Time Cycles | |
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Introduction | |
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Cycles | |
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How Cyclic Concepts Help Explain Charting Techniques | |
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Dominant Cycles | |
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Combining Cycle Lengths | |
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The Importance of Trend | |
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Left and Right Translation | |
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How to Isolate Cycles | |
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Seasonal Cycles | |
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Stock Market Cycles | |
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The January Barometer | |
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The Presidential Cycle | |
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Combining Cycles with Other Technical Tools | |
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Maximum Entropy Spectral Analysis | |
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Cycle Reading and Software | |
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Computers and Trading Systems | |
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Introduction | |
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Some Computer Needs | |
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Grouping Tools and Indicators | |
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Using the Tools and Indicators | |
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Welles Wilder's Parabolic and Directional Movement Systems | |
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Pros and Cons of System Trading | |
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Need Expert Help? | |
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Test Systems or Create Your Own | |
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Conclusion | |
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Money Management and Trading Tactics | |
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Introduction | |
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The Three Elements of Successful Trading | |
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Money Management | |
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Reward to Risk Ratios | |
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Trading Multiple Positions: Trending versus Trading Units | |
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What to Do After Periods of Success and Adversity | |
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Trading Tactics | |
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Combining Technical Factors and Money Management | |
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Types of Trading Orders | |
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From Daily Charts to Intraday Price Charts | |
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The Use of Intraday Pivot Points | |
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Summary of Money Management and Trading Guidelines | |
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Application to Stocks | |
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Asset Allocation | |
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Managed Accounts and Mutual Funds | |
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Market Profile | |
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The Link Between Stocks and Futures: Intermarket Analysis | |
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Intermarket Analysis | |
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Program Trading: The Ultimate Link | |
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The Link Between Bonds and Stocks | |
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The Link Between Bonds and Commodities | |
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The Link Between Commodities and the Dollar | |
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Stock Sectors and Industry Groups | |
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The Dollar and Large Caps | |
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Intermarket Analysis and Mutual Funds | |
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Relative Strength Analysis | |
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Relative Strength and Sectors | |
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Relative Strength and Individual Stocks | |
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Top-Down Market Approach | |
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Deflation Scenario | |
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Intermarket Correlation | |
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Intermarket Neural Network Software | |
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Conclusion | |
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Stock Market Indicators | |
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Measuring Market Breadth | |
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Sample Data | |
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Comparing Market Averages | |
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The Advance-Decline Line | |
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AD Divergence | |
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Daily Versus Weekly AD Lines | |
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Variations in AD Line | |
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McClellan Oscillator | |
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McClellan Summation Index | |
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New Highs Versus New Lows | |
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New High-New Low Index | |
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Upside Versus Downside Volume | |
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The Arms Index | |
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TRIN Versus TICK | |
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Smoothing the Arms Index | |
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Open Arms | |
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Equivolume Charting | |
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Candlepower | |
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Comparing Market Averages | |
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Conclusion | |
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Pulling It All Together--A Checklist | |
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Technical Checklist | |
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How to Coordinate Technical and Fundamental Analysis | |
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Chartered Market Technician (CMT) | |
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Market Technicians Association (MTA) | |
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The Global Reach of Technical Analysis | |
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Technical Analysis by Any Name | |
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Federal Reserve Finally Approves | |
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Conclusion | |
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Advanced Technical Indicators | |
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Demand Index (DI) | |
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Herrick Payoff Index (HPI) | |
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Starc Bands and Keltner Channels | |
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Formula for Demand Index | |
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Market Profile | |
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Introduction | |
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Market Profile Graphic | |
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Market Structure | |
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Market Profile Organizing Principles | |
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Range Development and Profile Patterns | |
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Tracking Longer Term Market Activity | |
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Conclusion | |
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The Essentials of Building a Trading System | |
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5-Step Plan | |
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Start with a Concept (an Idea) | |
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Turn Your Idea into a Set of Objective Rules | |
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Visually Check It Out on the Charts | |
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Formally Test It with a Computer | |
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Evaluate Results | |
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Money Management | |
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Conclusion | |
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Continuous Futures Contracts | |
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Nearest Contract | |
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Next Contract | |
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Gann Contract | |
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Continuous Contracts | |
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Constant Forward Continuous Contracts | |
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Glossary | |
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Selected Bibliography | |
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Selected Resources | |
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Index | |