October 2008 Letters To The Editor
or return to October 2008 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
POINT & FIGURE BOOKS
Editor,
In your June 2008 Letters to S&C column, Vini Mbah recommends
a book by Friedrich Tolke on point & figure charts. I have read it
and although it's okay, it's too basic. For the last two years I have used
The Definitive Guide To Point And Figure by Jeremy DuPlessis. I
recommend this book to anyone who wants the most comprehensive book available
on the subject.
Ryan Bates
Thank you for your feedback. We will add this book to our list of resources.--Editor
READERS' CHOICE AWARDS
Editor,
How or where can I find the results (winners and runners-up) of
the 2007 or 2008 Readers' Choice Awards?
Bohdan Podstawsky
Past years' results are available online through our online store at
www.Traders.com as well as on our S&C On DVD. The current year's results
are only available in the printed magazine.--Editor
S&P SHORT-RANGE OSCILLATOR
Editor,
In the August 2008 Letters to S&C, Larry Bryant asks about
the S&P Oscillator. James Cramer has stated on his TV show many times
that the market oscillator that he uses comes from his S&P subscription
and that it is proprietary to them.
I'd be willing to bet that the oscillator he's using is the S&P
short-range oscillator, which is available as part of the "Trendline Daily
Action Stock Charts" publication(s), which are available by annual subscription
delivered weekly, biweekly, or monthly.
Rich Houser
That may very well be correct. Either way, the calculation of the oscillator
is not disclosed.--Editor
ERRATA: BID/ASK ORDER EXECUTION
Editor,
I was just reading John Devcic's article "Bid/Ask And Order Execution"
in the August 2008 Stocks & Commodities. There seem to be a lot of
inconsistencies in the article, or perhaps I am misunderstanding his analysis.
As a trader with over 15 years of experience, I was wondering if he could
defend himself on a few issues I have with the article.
First, he mentions that "you will always be buying at the bid
price and selling at the ask price." This is not true. Unless you are placing
a limit order, if you place an order to buy a security, you will be filled
at the ask price, and vice versa. If you place an order to sell a security,
you will be filled at the bid price. I think these statements are misleading
here, and the novice investor would assume he/she will get the bid price
if they enter a buy order. Second, he references a hypothetical euro/Usd
trade, where the bid price is higher than the ask price. How can that be?
Finally, he mentions how the broker keeps the spread between the bid/ask
when you trade. This is not automatically true; if you enter a buy order,
and the broker executes it at the ask price, the only way the broker keeps
the spread is if he successfully finds a seller to hit the bid price.
It appears that the article's attempt to simplify trading situations
has most likely misled or confused the average investor. The descriptions
of order execution may have been helpful for some, but the analysis of
bid/ask is far from clear. I would be interested in an explanation to these
points I have outlined.
Ryan Harper
You are indeed correct. The retail trader would be buying "on the ask."
The bid and ask were interchanged.--Editor
USING A TRADING SYSTEM
Editor,
I started subscribing to STOCKS & COMMODITIES magazine
in January 2008. Yet I still do not know how to go about using a trading
system. Can you recommend some articles and/or books to read that describe
different trading systems and sources of data for backtesting?
By the way, I really like the magazine. Can you tell readers more
about yourself, such as how you got into trading and technical analysis,
and so on?
Cary McMillan
How you go about using a trading system depends on what software you
use. Each program has a unique way of programming and implementing trading
systems. Most trading software offers user forums where you can discuss
your concerns, ask questions, and so on.
In each issue of S&C, we publish a Traders' Tips section based on
a selected article in that issue. In that section, you'll find code for
various software products implementing the system discussed in the article.
If you are a user of any of those software products, all you have to do
is put in the respective code to use the system.
As for articles we've published on trading systems, you will find many
at our Online Store at our website. Look for articles in particular on
trading system development to provide insight into using systems.--Editor
Back to October 2008 Contents
Originally published in the October 2008 issue of Technical Analysis
of STOCKS & COMMODITIES magazine. All rights reserved. © Copyright
2008, Technical Analysis, Inc.
