Colby, Robert W.

The Encyclopedia of Technical Market Indicators, Second Edition

Preface iii Acknowledgements iv PART I Evaluating Technical Market Indicators 1(44) Introducing Technical Market Indicators 3(7) 24 Advantages of Using Technical Market Indicators 3(2) Trends are the Most Important Considerations in Trading and Investing 5(1) Back-Testing Technical Market Indicators Has Proved to Be Effective 6(1) Types of Technical Market Indicators: Trend, Momentum, Sentiment 7(2) Criteria for Judging Technical Market Indicators, Trading Systems, Investment Timing Models 9(1) Walk-Forward Simulation of Technical Market Indicators Offers the Potential for Consistent Profits Through Time 10(17) Nine Steps to Walk-Forward Simulation of Technical Market Indicators 10(3) A Specific Example of a Walk-Forward Simulation of a Simple Technical Indicator 13(2) Example of Using the Nine Steps to Walk-Forward Simulation on the Dow-Jones Industrial Average 15(10) Summary and Conclusions About Walk-Forward Simulation 25(2) Finding a Technical Market Indicator that is Right for You 27(9) Six Common Errors to Avoid 27(2) Do Your Own Work 29(7) What Others Say About Technical Market Indicators, Models, and Trading Systems 36(9) A Useful Guide to Decision Making: Bierman, Bonini, and Hausman 36(1) Effective Application of Pattern Recognition Decision Rules: Ted C. Earle 37(1) The Advantages of Developing Your Own Trading System: Joe Krutsinger 38(1) Keep It Simple and Do Adequate Testing: Robert C. Pelletier 39(1) The Cells Method of Indicator Evaluation: David R. Aronson 39(6) PART II Technical Market Indicators 45(750) Absolute Breadth Index 47(4) Accumulation/Distribution (AD) 51(4) Accumulation Swing Index (ASI) 55(4) Adaptive Moving Average 59(1) Advance/Decline Divergence Oscillator (ADDO) 59(1) Advance-Decline Line, A-D Line 60(8) Advance-Decline Non-Cumulative: Hughes Breadth-Momentum Oscillator 68(7) Advance/Decline Ratio 75(3) Advisory Sentiment Index 78(5) American Association of Individual Investors Survey 83(2) Andrews' Pitchfork: Median Line Method 85(4) Arms' Ease of Movement Value (EMV) 89(3) Arms' Short-Term Trading Index (TRIN, MKDS) 92(10) Aroon, Arron Oscillator 102(6) Astrology, Financial Applications of Astronomical Cycles 108(4) Astrology, Long-Term Cycles 112(1) Average True Range 113(1) Black-Box Systems 114(1) Bollinger Bands 114(6) Bollinger Band Width Index 120(1) Bolton-Tremblay Indicator 121(1) Bracketing, Brackets, Dynamic Brackets 122(1) Breadth Advance/Decline Indicator: Breadth Thrust 123(5) Bullish Consensus 128(2) Call-Put Dollar Value Flow Line (CPFL) 130(4) Call-Put Dollar Value Ratio 134(4) Call-Put Premium Ratio 138(4) Call-Put Volume Ratio 142(4) Chande Momentum Oscillator (CMO) 146(4) Chi-Squared Test of Statistical Significance 150(2) Circuit Breakers, Daily Price Limits, Trading Halts, Curbs 152(1) Combining Multiple Technical Indicators 153(1) Commitment of Traders Report 154(1) Commodity Channel Index (CCI) 155(4) Commodity Channel Index Crossing Zero: Zero CCI 159(3) Commodity Selection Index (CSI) 162(4) Confidence Index 166(1) Contrary Opinion: The Art of Contrary Thinking 167(1) Copock Curve (Coppock Guide) 168(7) Cumulative Equity Line 175(1) Cumulative Volume Index 176(1) Cycles of Time and Price 176(13) Data 189(1) Data Exploration, Data Mining 189(1) Days of the Month 190(8) Days of the Week 198(5) Decennial Pattern, Decennial Cycle 203(5) Demand Index (DI) 208(1) DiNapoli Levels, Fibonacci Profit Objectives 209(3) Directional Movement Index (DIM) 212(5) Divergence Analysis 217(2) Donchian's 4-Week Rule 219(1) Double Exponential Moving Averages (DEMA) 219(5) Dow Theory 224(30) Dunnigan's One-Way Formula 254(1) Dunnigan's Thrust Method 254(2) Efficient Market Hypothesis 256(1) Elder-Ray 256(1) End Point Moving Average (EPMA) 257(1) Envelopes, Moving Average Envelopes, and Trading Bands 257(3) Equity Drop Ratio 260(1) Exploratory Data Analysis 261(1) Exponential Moving Average (EMA), Exponential Smoothing 261(9) Fibonacci Numbers, Fibonacci Cycles 270(5) Force Index 275(1) Fourier Analysis: Fast Fourier Transform 275(5) Funds Net Purchase Index 280(1) Futures Algorithm of Rollovers for CSI's Perpetual Contract 280(2) Futures Contracts: Expiration Months and Symbols 282(1) Gann Angles* 283(4) Gann's Square of Nine 287(2) General Motors as a Market Bellwether Stock 289(4) Gross Trinity Index 293(2) Haurlan Index 295(3) Herrick Payoff Index 298(4) Hi Mom System, High Momentum System 302(1) High Low Logic Index 302(1) The Hindenberg Omen 303(1) Holidays 303(2) Holy Grail 305(1) Hook 305(1) Hypothesis Testing 305(1) Indicator Seasons, Elder's Concept 306(8) Inertia 314(1) Insiders' Sell/Buy Ratio 314(7) Intermarket Divergences 321(1) Intraday Trading, Day Trading, Behavior of Prices Through the Day 322(5) January Barometer 327(3) January Effect 330(2) January's First Five Days, an ``Early Warning'' System 332(2) Kagi Charts 334(2) Kane's % K Hooks 336(1) Kase Indicators 336(1) Keltner Channel with EMA Filter 337(4) Keltner's Minor Trend Rule 341(1) Keltner's 10-Day Moving Average Rule 341(1) Key Reversal Day 341(5) Klinger Oscillator (KO) 346(1) KST (Know Sure Thing) 346(8) Large Block Ratio 354(1) Large Block Ratio 354(1) Large Block Transactions 355(1) Least Squares Method 355(1) Linear Regression Line 356(4) Linear Regression Slope 360(4) Liquidity 364(1) Livermore Swing System, Livermore Penetration Filter 364(1) Lowry's Reports 365(9) Lucas Numbers 374(1) Margin 375(1) Margin Debt 375(5) Margin Requirement 380(1) Market Profile 381(1) Market Vane 382(1) Mart's Master Trading Formula 382(2) Mathematical Models 384(1) Maximum Entropy Spectral Analysis 384(1) McClellan Oscillator 385(5) McClellan Summation Index 390(6) Meander 396(1) Member/Odd Lot Index 396(1) Member Short Ratio 397(3) Momentum 400(2) Months of the Year: Significant Seasonal Tendencies to Rise or Fall 402(8) Most Active Stocks 410(2) Moving Average Convergence-Divergence Trading Method (MACD) 412(4) Moving Average Filters and Multiple Confirmation 416(1) Moving Average Slope 416(1) Multicolinearity 416(1) Multiple Time Frame Analysis Using Exponential Moving Average Crossover Rules 417(5) Mutual Funds Cash/Assets Ratio 422(2) N-Day Rule 424(1) Negative Volume Index (NVI) 424(4) New Highs-New Lows 428(4) (New Highs-New Lows)/Total Issues Traded: New Highs/New Lows Ratio 432(4) New Highs/Total Issues Traded 436(4) New Issue Thermometer (IPO Monthly Total) 440(2) New Lows/Total Issues Traded 442(4) Ninety Percent Days, Nine to One Days 446(8) Nofri's Congestion-Phase System 454(1) Number of Advancing Issues 454(4) Number of Declining Issues 458(1) Number of Total Issues Traded 459(4) Odd Lot Balance Index: Odd Lot Total Sales/Odd Lot Total Purchases 463(3) Odd Lot Short Ratio 466(14) Ohama's 3-D Technique 480(1) Open Interest 480(5) Open Interest, Larry Williams' Variation 485(1) Open Interest Trend-Following Strategy 486(3) Optimism/Pessimism Index (OP) 489(1) Option Activity By Public Customers: Customer Option Activity Index 489(1) Options 490(1) Oscillators 491(2) Outside Day With an Outside Close 493(1) Overbought/Oversold Oscillators 494(1) Parabolic Time/Price System 495(7) Percentage of Stocks Above Their Own 30-Week and 10-Week Simple Moving Averages 502(8) Permission Filters, Permission Screens 510(1) Pivot Point 510(1) Pivot Point Reverse Trading System 510(4) Point and Figure Charts (P&F Charts) 514(6) Polarized Fractal Efficiency (PFE) 520(1) Positive Volume Index (PVI) 520(6) Pre-Holiday Seasonality 526(1) Presidential Election Cycle 526(8) Price Channel Trading Range Breakout Rule 534(4) Price Channel Trading Range Breakout Rule, Dynamic 538(1) Price Oscillators: Moving Average Oscillators 538(5) Price Trend Channels, Sloping Upward or Downward 543(1) Program Trading Volume 543(2) Projection Bands 545(4) Projection Oscillator 549(5) Proprietary Indicators 554(1) Psychological Line, PI Opinion Oscillator, PI 555(1) Public Short Ratio 555(5) Public/Specialist Short Ratio 560(4) Put/Call Premium Ratio 564(4) Put/Call Ratio: Put/Call Volume Ratio 568(4) Qstick 572(7) R-Squared 579(3) Random Walk Hypothesis 582(1) Random Walk Index (RWI) 583(5) Range: Upshaw's ``Home on the Range`` Price Projection Method (HOTR) 588(2) The Range Indicator (TRI) 590(6) Rate of Change (ROC) 596(4) Relative Strength (Ratio Analysis) 600(10) Relative Strength Index (RSI) 610(8) Relative Volatility Index (RVI) 618(4) Renko Charts 622(1) Resistance 622(1) Resistance Index, Art Merrill's 622(2) The Rule of Seven 624(2) Santa Claus Rally 626(1) Schultz Advances/Total Issues Traded (A/T) 626(4) Second Hour Index 630(1) Secondary Offerings 631(1) Sector Rotation 631(2) Sentimeter 633(2) Sharpe Ratio 635(1) Short Interest for Individual Stocks, Phil Erlanger's Indicators 636(1) Short Interest Ratio 637(3) Sign of the Bear 640(4) Simple Moving Average (SMA): Moving Arithmetic Mean 644(5) Specialist Short Ratio 649(4) Speed Resistance Lines 653(1) Springboard 654(1) Stage Analysis 654(3) Standard Deviation 657(1) Statistics 657(2) STIX: The Polymetric Short-Term Indicator 659(5) Stochastics (Lane's Stochastics) 664(10) Stochastic Pop Breakout: Popsteckle 674(1) Stock Market Price Indexes 674(4) Support and Resistance 678(2) Swing Filter 680(2) Swing Index (Wilder's) 682(1) Swing Retracement Levels 683(1) Taylor Book Method 684(1) Three Line Break Charts 684(2) Three Moving Average Crossover 686(1) TICK 686(5) Tick Volume Bar 691(1) Time Segmented Volume (TSV) 691(1) Time Series Forecast (TSF), Moving Linear Regression, End Point Moving Average (EPMA) 692(1) Total Issues Traded 692(1) Total Short Ratio 692(1) Total Win Trade %, the Trader's Advantage 693(1) Trap: Bull Trap, Bear Trap 693(1) Trailing Reversal Trading System 693(1) Trend Channel 694(1) Trendlines, Trend Lines 694(2) Trident Commodity Trading System 696(1) Triple Crossover Method 696(1) Triple Exponential Moving Averages (TEMA) 697(5) Triple Screen Trading System 702(1) TRIX (Triple Exponential Smoothing of the Log of Closing Price) 702(4) True Range 706(1) 25-Day Plurality Index 706(8) Two Moving Average Crossover 714(1) Turtle Soup 714(1) Typical Price 714(1) Ultimate Oscillator 715(5) Unchanged Issues Index 720(4) Upside/Downside Ratio 724(4) Volatility, Introduction 728(1) Volatility, Chaikin's 729(1) Volatility, CBOE Volatility Index (VIX) 729(4) Volatility Bands 733(1) Volatility & Price Channel 734(4) Volatility Expansions 738(1) Volatility Index, Art Merrill's Version 739(1) Volatility Ratios 739(4) Volume 743(5) Volume Acceleration 748(4) Volume Accumulation Oscillator, Volume Accumulation Trend 752(6) Volume: Cumulative Volume Index of Net Advancing Issues Minus Declining Issues 758(1) Volume: Cumulative Volume Ratio 759(1) Volume of Issues, Advancing 759(3) Volume of Issues, Declining 762(1) Volume: Klinger Oscillator (KO) 762(4) Volume: New York Stock Exchange Versus Over-The-Counter 766(1) Volume: On-Balance Volume (OBV) 766(6) Volume Oscillator 772(2) Volume * Price Momentum Oscillator (V*PMO) 774(4) Volume Reversal 778(3) Volume Up Days/Down Days 781(1) Volume: Williams' Variable Accumulation Distribution (WVAD) 782(2) Wall Street Week (WW) Technical Market Index 784(5) Weighted Moving Average: Moving Position Weighted Arithmetic Mean 789(5) Weighting Different Technical Indicators 794(1) Wilder's Smoothing 795(1) Williams' Percent Range (%R) 795(1) Wyckoff Wave 795(1) About the Author 795(1) Special Discount Offer From Metastock® and Robert W. Colby 796(3) Index 799