Technical analysis tools : creating a profitable trading system

319 Pages·2008·22.85 MB·English

by  Tinghino

Technical

Analysis Tools
Also available from
Bloomberg Press
Investing in Hedge Funds:
Revised and Updated Edition
by Joseph G. Nicholas
Hedge Fund of Funds Investing:
An Investor’s Guide
by Joseph G. Nicholas
Market-Neutral Investing:
Long/Short Hedge Fund Strategies
by Joseph G. Nicholas
Hedge Fund Risk Fundamentals:
Solving the Risk Management and Transparency Challenge
by Richard Horwitz
A complete list of our titles is available at
www.bloomberg.com/books
Attention Corporations
This book is available for bulk purchase at special discount. Special editions
or chapter reprints can also be customized to specifications. For informa-
tion, please e-mail Bloomberg Press, [email protected], Attention:
Director of Special Markets, or phone [phone].
Technical

Analysis Tools
Creating a Profitable Trading System
Mark Tinghino
BloomBerg PreSS
New York
© 2008 by Mark Tinghino. All rights reserved. Protected under the Berne Convention. Printed in the United States
of America. No part of this book may be reproduced, stored in a retrieval system, or transmitted, in any form or
by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission
of the publisher except in the case of brief quotations embodied in critical articles and reviews. For information,
please write: Permissions Department, Bloomberg Press, 731 Lexington Avenue, New York, NY 10022 or send an
e-mail to [email protected].
BLOOMBERG, BLOOMBERG ANYWHERE, BLOOMBERG.COM, BLOOMBERG MARKET ESSENTIALS,
Bloomberg Markets, BLOOMBERG NEWS, BLOOMBERG PRESS, BLOOMBERG PROFESSIONAL, BLOOMBERG
RADIO, BLOOMBERG TELEVISION, and BLOOMBERG TRADEBOOK are trademarks and service marks of
Bloomberg Finance L.P. (“BFLP”), a Delaware limited partnership, or its subsidiaries. The BLOOMBERG
PROFESSIONAL service (the “BPS”) is owned and distributed locally by BFLP and its subsidiaries in all jurisdic-
tions other than Argentina, Bermuda, China, India, Japan, and Korea (the “BLP Countries”). BFLP is a wholly-
owned subsidiary of Bloomberg L.P. (“BLP”). BLP provides BFLP with all global marketing and operational
support and service for these products and distributes the BPS either directly or through a non-BFLP subsidiary
in the BLP Countries. All rights reserved.
AutoCAD is a registered trademark of Autodesk, Inc.
COMEX is a registered trademark of the New York Mercantile Exchange.
CQG, and CQG Trader are trademarks of CQG, Inc.
Excel, Microsoft, MSN, Office, Windows, and Windows Vista are registered trademarks of Microsoft
Corporation.
Google search is a trademark of Google.
Java and RCG Onyx are trademarks of Sun Microsystems.
Market Profile and Liquidity Data Bank are registered trademarks of the Chicago Board of Trade.
Sesame Street is a registered trademark of Sesame Workshop.
WINdoTRADEr is a registered trademark of WindoTrader Corporation.
X-Trader and X_Study are registered trademarks of Trading Technologies.
Yahoo! is a registered trademark of Yahoo! Inc.
This publication contains the author’s opinions and is designed to provide accurate and authoritative information.
It is sold with the understanding that the author, publisher, and Bloomberg L.P. are not engaged in rendering legal,
accounting, investment-planning, or other professional advice. The reader should seek the services of a qualified pro-
fessional for such advice; the author, publisher, and Bloomberg L.P. cannot be held responsible for any loss incurred
as a result of specific investments or planning decisions made by the reader.
First edition published 2008
1 3 5 7 9 10 8 6 4 2
Library of Congress Cataloging-in-Publication Data
Tinghino, Mark.
Technical analysis tools : creating a profitable trading system / Mark Tinghino. - - 1st ed.
p. cm.
Summary: “Technical Analysis Tools gives readers an arsenal of technical analysis tools. From a brief discussion
of fundamental analysis to an in-depth discussion of technical analysis and the author’s own cycles method, readers
will find time-tested approaches to technical analysis. They’ll learn how to determine which technique is best for
them in this hands-on guide. Helpful appendixes are included” --Provided by publisher.
Includes bibliographical references and index.
ISBN 978-1-57660-248-5 (alk. paper)
1. Investment analysis. I. Title.
HG4529.T56 2008
332.63'2042--dc22 2007045459
Acquired by Stephen Isaacs
To Carol

Contents
Foreword by Alan Rohrbach ix
Acknowledgments xiii
Introduction xv
P a r t O n e
Technical Analysis Trading Arsenal
1 ApproAches To MArkeT AnAlysis 3
2 FundAMenTAls: nAvigATing The lAbyrinTh 9
3 chArT pATTerns: lAndscApe oF The MArkeT 25
4 AlTernATive chArTing Techniques 49
5 indicATor soup: noT-so-secreT recipes 91
6 The MArkeT As A WAve phenoMenon 117
7 leverAging derivATives 131
8 Finessing The risk FAcTor WiTh spreAds 145
P a r t T w o
putting it All Together
9 A cyclicAl Model oF The MArkeTs 179
10 bAckTesTing And plAnning TrAding sTrATegies 215
11 MenTAl discipline And risk MAnAgeMenT 223
Appendix A: Commonly Used Technical Indicators 233
Appendix B: Futures Products with High Daily Volume 249
Appendix C: Educational Resources 269
Appendix D: Trading Reports and Other Forms of News Service 271
Appendix E: Software Products 275
Index 285