Techniques of a Professional Commodity Chart Analyst
Techniques of a Professional Commodity Chart Analyst by Arthur Sklarew
Sklarew emhasizes throughout the book that the one word which best describes what chart analysis is all about is trend. Most techniques described have as their purose the identification of trend direction. He divides all techniques into the two separate categories of chart analysis: general price chart techniques, and authomatic trading techniques. Both are based solely on market action.
Sklarew's Rule of Multiple Techniques is desribed as being of paramount importance in chart analysis. It requires the analyst to disregard any chart signal which is not confirmed by other techniques or technical indicators. Following this rule greatly improves the accuracy of forecasts related to general price charting techniques. His Principle of Selective Techniques, which applies to authomatic trading methods, states that the trading method which works best in a particular market at a particular time is the one to be used in that market at that time.
Other general observations of interest: Sklarew advocates that the technical trader always be aware of the fundamentals, and not turn a deaf ear to fundamental analysis. He refutes the Random Walk Theory and tells us the price chart analysis is based on the theory that prices move in trends, and past price behavior can give clues as the future trend direction. Volume and open interest are dismissed as one of the least important tools.
Of the many tools and techniques available, Sklarew emphasizes that the techniques selected for use should be the ones most suited to one's temperament and taste. The tools that...serve one best are the tools best used.
Major sections of the book deal with techniques relating to interpretation of chart formations, trendlines, projection of price objectives, oscillators, moving averages, and long term (weekly) charts. On each of these topics, as is typical of the whole book, new techniques and ideas take center stange. A chart pattern new to most readers will be the drift pattern, which gives important advance warning of impending trend change. Elliott Wave Theory is discussed and summarized, but given a negative assessment.
The most interesting section is on methods of projecting price objectives, which must be viewed as supplementary to basic trend analysis. Of 12 methods, the two he emphasizes appear to be uncannily accurate: the Rule of 7, and the 17-35 Measurement. Every trader not familiar with these methods should be.
Moving average techniques are thoroughly explored. Included is a detialed description of the famous 4, 9, and 18 day moving average system, and the summary results of Frank Hochheimer's landmark studies on optimized moving averages.
Hardcover: 180 pages
Publisher: Windsor Books (April 1, 1980)
Availability: In Stock - Usually ships the next business day.