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Trading Book Reviews

Book Review: George Lindsay and the Art of Technical Analysis

[easyazon-link asin=”0132699060″][/easyazon-link]I was recently given the opportunity to pick up a copy of [easyazon-link asin=”0132699060″]George Lindsay and the Art of Technical Analysis[/easyazon-link], written by Ed Carlson. I was attracted to it by the reported quality of George Lindsay’s market analysis, though he’s not someone with which I was familiar prior to reading the book. He was a bit before my time in terms of when I started following the markets. 🙂

This book comprises a couple of primary parts. The first is a brief biography of Lindsay. It’s not particularly lengthy, however, as apparently Lindsay wasn’t someone well known on a personal level. He is known for his stock market newsletter writing back during the 1960s and 1970s. His market calls were apparently so good that key market followers of the time praised him very highly.

After the bio, the book gets into the featured technique of Lindsay’s – the Three Peaks and a Domed House chart formation. The author lays that out over four chapters. Although Lindsay didn’t really leave behind any singular technical manual type of explanation of the pattern, the author (Carlson) does do a pretty good job of teasing out the specifics from his writings on the subject.

The next part of the book covers The Lindsay Timing Model. This the application of “counts” to project market turning points. We’re not talking cycles here. It’s not about consistently repeating patterns, but rather taking a recently completed chart pattern and using it as the basis for a projection of a trend move timing.

The final section extends the counting element and brings in intervals and cycles. It also provides some case study evidence.

Now, it should be noted that the patterns and counts and whatnot discussed in the book are not short-term in nature. They are mainly based on daily bars and can take quite a while to unfold. For example, Three Peaks and a Domed House is a daily chart pattern which takes months to play out, though there are elements of it which could be traded along the way in slightly shorter-term ways.

Overall, I found the Lindsay work interesting. Readers familiar with Elliott Wave analysis will see some of those elements in the patterns described in the book. I would have liked to have seen more in the way of real world examples, particularly more modern ones. For someone interested in studying price action, however, this book could provide quite a bit of inspiration for research.

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Trader Resources

My Tools of the Trade

Trader Mike and Blain at StockToGo both posted recently on the various tools they use in their trading. I know I’ve talked about this before, but I figured it was worth revisiting the subject. Seeing as I work for one of the biggest information companies in the world (Thomson Reuters), I have access to all kinds of stuff. The jealousy factor among my peers is quite high. 🙂

At Work
For my daily work as a forex analyst I have four monitors running from one CPU. One of displays Thomson One, with which I keep track of the equity markets. Another screen has Reuters 3000 Xtra (haven’t updated yet to Eikon). That’s my primary data and news workhorse application. I’m mainly a technician, but I cannot ignore the fundamental side of things as I have to write about that as well. On a 3rd screen I have a version of MetaStock Professional to use some custom indicators, run the occasional screener or test, etc. My fourth monitor is my working screen, of course.

Among the other tools of my trade during the work day are Reuters Messenger (we’ve got Compliance limits on what IM apps we can use) for quick contact with colleagues and contacts, Feedly to keep track of a long list of blogs and news sites, and SnagIt for grabbing and editing charts and other graphics. All of our content creation and editing is web-based, for which I generally use Firefox. I also use Excel a fair bit, in many cases bringing data in (live and/or EOD) from Reuters or MetaStock (which is really the same data), either as a drag-and-drop or through a special plug-in. Seeing as I have a very geeky research-oriented side, Having access to all this data is very cool. 🙂

My own trading
In my work I have to follow the markets in real time and know what’s going on across the board all the time. For my own trading my needs are much, much less. In fact, I can generally get all the information I need from free and/or low cost sources, and I don’t need anything special on the computing side beyond a relatively modern machine and a high speed internet connection.

I have always done my stock and option trading with Charles Schwab (I may think about changing that this year), and have had plenty of access to information, screeners, and all the stuff I use in my equity market trading through their website and other tools. My other primary trading focus is forex, and for that I use Oanda’s fx Trade platform. The commonly expressed complaint about the Oanda platform is the lack of charting tools, but it’s got more than enough for my purposes as I don’t really need much more than a price chart. The one drawback for me is the lack of chart time frames above daily.

There are only three data/charting packages I have ever paid to use. One is Daily Graphs. Readers of The Essentials of Trading will know that I have long had the CANSLIM system as the underlying philosophy of my stock trading. I can get much of the same info through my broker, but using the Daily Graphs service can make the process quicker and more efficient.

I have also paid for MetaStock and Sierra Chart with IQ Feed data. Seeing as I work for the parent company of MetaStock now, I get the software and data free these days. I first started using it back in the middle 90s, however, and paid for the software and EOD data (didn’t need intraday, and still really don’t) for more than a decade as something to back-up the free charting I was getting through my broker accounts and to work on research ideas. In the case of Sierra Chart, it was strictly about price distribution charting (Market Profile/TPO). Sierra Chart is very reasonably priced and has some other nice features, like a replay function.

Beyond that, I’m probably pretty boring. I use Excel a great deal for performance tracking, data analysis and research. My knowledge of and experience with VBA makes it a powerful tool for me. That’s about it, though. I tend toward swing/position trading time frames, so I don’t need a lot of the decision-support help day trading can require.