Editor’s note: Richard Brath is among the presenters at the Annual Symposium in April. Below is a reprint of his work from his blog at RichardBrath.wordpress.com. Financial charting has long used alphanumerics as point indicators in charts. One of the oldest I can find is Hoyle’s Figure Chart (from The Game in Wall Street and How to Play it Successfully: 1898) which essentially plots individual security prices in a matrix organized by time (horizontally) and price (vertically). An early figure chart (from Hoyle: 1898). Time is implied horizontally, price vertically. A numeric “figure” is recorded for each price that occurs for each day. This textual representation evolved over the decades. By 1910, Wyckoff (Studies in Tape Reading: 1910) was creating charts where x and y are still time and price, but he was writing down volumes instead of prices, and connecting together subsequent observations with a line. Wyckoff’s figure chart records rising and falling prices in adjacent columns. For each price

Editor’s note: Tucker Balch is among the presenters at the Annual Symposium in April. Below is a reprint of his work from his web site at AugmentedTrader.com. “A stop order is an order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit an investor’s loss on a position in a security” —investopedia. In this article, we investigate how the addition of stop-loss orders affect a generic trading strategy. When investors enter a new position in a stock, they often simultaneously put in an order to exit that position if the price dips to a certain level.  The intent being to prevent a substantial loss on that stock if a significant unanticipated negative event occurs. As an example, if we bought a fictitious stock XYZ at $100.00, we might put in a 5% stop-loss order (at $95.00).  If the price of XYZ continues upward as we

Editor’s note: Cory Hoffstein is among the presenters at the Annual Symposium in April. This post was originally published at ThinkNewfound.com and is available as a PDF here. Summary­­ Prospect theory states that the pain of losses exceeds the pleasure of equivalent gains. An oft-quoted ratio for this pain-to-pleasure experience is 2-to-1. Evidence suggests a similar emotional experience is true for relative performance when investors compare their performance to common reference benchmarks. The anxiety of underperforming can cause investors to abandon approaches before they benefit from the long-term outperformance opportunity. We plot the “emotional” experience investors might have based upon the active approach they are employing as well as the frequency with which they review results. The more volatile the approach, the greater the emotional drag. Not surprisingly, diversifying across multiple active approaches can help significantly reduce anxiety. Last week, Longboard Asset Management published blog post titled A Watched Portfolio Never Performs. What we particularly enjoyed about this post was

Editor’s note: This was originally published at EducatedTrader.com, the website of the Independent Investor Institute, an organization dedicated to providing unbiased education to Canadian investors that Larry M. Berman, CMT, CTA, CFA cofounded. Larry is among the presenters at the Annual Symposium in April. If someone were to pick you up in a helicopter, put blinders over your eyes, then drop you into the middle of a jungle, it’s likely you’d have a tough time lasting for any length of time. Undoubtedly, it’s hard enough surviving in the jungle, let alone with blinders on. The stock market is a lot like the jungle—it’s a dangerous place for those who don’t know what they’re doing, or even those who think they know what they’re doing. It isn’t a far stretch to see how biases (a.k.a. “blinders”) can compound the challenges posed by the wilderness of the markets. When it comes to investing,

Editor’s note: This report was originally published on March 6, 2017. All data and opinions are current as of that date but may have changed since publication. Executive Summary The latest up-swing in the USD index reactivated a historic 31-year trend breakout signal. Its final impulsive move offers a paradigm shift for the market’s collective investor psychology, capital flow trends and perception of key events ahead. Such a positive technical backdrop, coupled with a hawkish long-term policy shift, helped amplify price reactions to the Fed’s sequel 0.25% hike in Dec 2016, relative to the prior year. History had a positive market rhyme, but to a much larger extent. USD gains are likely to extend sharply higher, as part of a 5-wave impulsive cycle, coupled with positive speculative flows, which signals further upside scope into 120. Long-term cycles project an average 8-year cycle, extending into 2019. Expect a non-linear move, supported by positive seasonality