TECHNICAL CSI JOURNAL
Volurne Nurnber IX, l0 Utober1993
In ThisIssue
BreakoutTheTechnical Trading You Gem hohablyDidn'tKnow YouHad
TradingGem Breakout- TheTechnical YouProbablvDidn't Know YouHad
(N) is used this system. is the It by number days system of the looks in backward time(thewindowsize) to determine significant if market
directionwarrantsreversal. The window sizeis the valueof N. In hindsight,through the addition
Didyouknowthereis a numerical module technical analysis tucked away in yourQuickTrieve@ software system? underQuickManager's@ It is there, "Enter Analysis menu. Subsystem" The Mid-Range CSI'S to nexttimeyouhavea moment work Opening Prica...........................2 with QuickTrieve, instead choosing of Whattonthe Drawing popular the more Board 4 AskCustomer Service.......... QuickPlot@B/ module, select hoductSummary ....,.............6 TahAnal1Ran Market Jrs execute to Statistics update InitialPublic & BREAKOUT. You Offerings..............,,......, will find a rare 6,7 & 8 gem. Letters keep coming asthis in simple, nongraphic is tool discovered by users along the xditon Sabrltra Carle way,"YourTech Systems, Inc. Publishe.Commodity progratn Anallsi^r NotlceThe viewsand information
expressed this document in rcflect exclusivelv ooinio$ and the Robett C. exDedenca the author. of P€ileti€r. NeitherCSItror the euthor undertake itrt€trdto D.ovid€tax or adviceor tradiag adviceio any merketol etrdorse outside any individual or firm. Readers should consultcomDetent financid rdvisois or outsidecdunsel beforenaking any puachase, tradin& soft$'aae or inv€stment declslon. doesnot CSt the standbehird or eodorse Droducts of any outsideflflns. Advertisements Endosed: have We for enclosed adveatisements Supedhartsofferedby omegr R€search, atrdNeuralNetwork Inc softwaredevelooed Mendelsohn _ bv Enlerpris€s, Inc. to CSIaccepts advertis€ments rccompeny T€chnic{lJournalfor off the solepurpose defrayingpostage of c06ts, 01993ComnoditySysteds, (CSt), Inc. All RightsRes€rved
performs bstterthan an! $sten I haw purchased.. eaer I follow thesignals ewry da!;' wrcte o'l.eBREAKOUT user recently.This is typical of the mail we get aboutBREAKOUT. BREAKOUT originally conceived was proasa means introduceBASIC to grammingto our users morethan fifteen yearsago. 'lVeformally describe the pfogramasTechAnalysis, because we had thought we would addother toolsto the list.Froma moredescriptive standpoint, Lctnnlly Ldopts it L form of breakoutlogic.Breakout means breakingout of an N-dayhighJow tradingrange(the trading window). Manywill recognize BREAKOUT by the numberof parameters consumed one!That'sright - only oneparameter
'we BREAKOUT, foregoexcessive hindsightconffol in favor of better signals currenttrading. for BRDAKOUT a tableof markets holds commodity number sortedby CSI's assignments. marketis identified Each with the critical lone parameter, N, which the usermay modify.Our manual warnsthat we hadonly carefully checked N-daysettings the for the currencymarketsand that no attemptwasmadeto satisfythe needs of othermarkets. Although curthe rencysettings may still work well, no valuesof the N-dayperiods includedin the softwarehavebeenchanged in morethan a decade. Theycould probably benefitfrom a little testing
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parameters, of more it is simple to control both desirable events (large profits)and undesirable events (large losses), but always therisk at of futureuncertainty.Bxcess control adds also to yourbrcker's commission and tab themarket slippage whichaccompanies everytrade. In
CSI's Mid-Range Opening Prices
Several timesa yearour DataBase Manager asked is why CSI's opening prices not matchthose commodity do Thisis such of the Wall Street Joumal. question we feela a common that comment in order. is TheCommodity Data Base Sheets Fact describe CSI the 0pening Price calculation asfollows: DataBasg concluded the way we that the Wall Street quotes the Journal openpricefor commodities not was adequately representative the of actualopening trades. opening The rangemay represent hundreds of trades occurring overseveral minutes, whereas reported first-trade price the (be it bid or ask)may only reflect a single tradewith a volume one. of Besides under-representing pricing the possibilities, Journal's the method of reportingwasapt to includean unexecuted that wasoutside bid of the dayhtradingrange a definitenono for technicians the day. of priceis viewedby Theopening actiyetraders see theygot a good to if fill andby technicians part of a as historical record synthesizing for marketbehavior. eithercase, In no oneknowswhetherthe stated open pricereflects offer to purchase an or sellor an actualfill. To blindly accept the first tradeof the day,asmany services believe require. may they is not the bestway to certifyactualfill exp€rience to simulate or hindsight performance. choice takingthe Our -is, midpoint ihe openrange in our of opinion, bestway to reporta the pfice. representative opening Wesometimes wish we had followed the Wall Street Journalin quoting either bidor askportion the of the opening range, mostnewer as datavendors havedone. because Not it wouldserve users our better, but it the because would silence critics. Fortunately, these only momenare price tary lapses; the opening In debate, will continue eschew to we "normal" that which is considered in favor of that which is better. +
"The openmg prices shown in theCSI data
base likely to be are different from those quoted the wall street in because we Journal, adopta different techniquein producing them. Thecommodity exchanges usuallyreport an opening range which is very often the opening bid andaskprices. The WSJ may report oneside of this range the for price, opening sometimes without regafdto whetherthe givenprice is within the daily tradingrange. CSI, At we avefage range prices the of if they arewithin the high andlow for the day.If oneof the prices is outsidethe openingrange, then the opening or askpriceis adjusted bid so that bothprices within the high lie and low rangefor the day.The "outside" or askis replaced the bid by low appropriate or high,respectively, before averaging place. takes This correction removes fictitiousdata pointswheretrades couldnot haYe occurred, averages resulting and the range givean unbiased to estimate." Manyyears aswe formulated ago, for the specifications the MARSTAT
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What'son the Drawing Board
Here a reviewof the proiects is at Watch this underdevelopment CSL for updates ourprogress. on Journal QuickTrieve version 4.05 1,1W3 release Notyerrt€r date: Estitnated Thislong-awaited QuickTrieve upgrade offersmanymalrrenhanceIt is for subscribers. virtually ments CSI now. testing completed is in Beta and are enhancements Themost significant This I On-line historyon demand: I Other less-visible enhancements numbers in include support larger of of data files, better support multi-layer format in CompuTrac subdirectories improYements to minor andmany and make retrieval management data for easier you.
Please not send do
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fffiH:',:xl'l:l'.?i., f Technical will Journal
f .l r for the$29.00 upgrade l-1 (39.00 newsubscrib- T for postage overseas ers, f extra). Telephone orders t.. will beaccepted beginA lst. ninsNovember
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fieaRsinstant processing histori€alof days 24 dataorders hoursa day,seven a we€k! Data I Automaticfile extension: automatically, files will be extended in eitherforwardor backward time,to (No more data. hold all collected file wasteddisk spacgyear-end moves or multiple files with different time periods!) File: Constants Correct I Stock numbers converand names, symbols, and indexes will sionfactorsfor stocks includedin your files automatically. be in Search I Stock Commodity and Whenorderingdata OrderSubsystem: you through QuickTrieYe, can page by through our lists or search nameor your orderinforsymbolto complete mation.(No morefumbling through or for numbers symfact sheets CSI bols!) file automatic sorting I lmproved with 4.05, into subdirectories: version you canidentifywhich contracts and stocks allowedto residein each are directory,and evenwhat typesof files (eg.: daily,weekly, maybe included filesor options. etc.). monthly, normal It alsoincludesseveral optionsfor parameters. these automatically setting the will, if Forexample, program for create directories all directed, groups, individualcommodcommodity ity groups individualcommodities. of by alphabetically Stocks besorted can or individualletters by alphabetical groups, by stockindustfygroups. and
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Data Compression Software Releas d.ateundetermined e : Ourprogramming hasbeen staff months on workingfor several producing ultimatealgorithm for the marketdata. archived compressing but Thevsaidit couldn't done, we be of now compress megabytes 100 can Our datainto justl0 to 20megabytes. job algorithm does amazing of an everylastbit of available squeezing to space from a file. we expect usethis in supplying compression algorithm and historical datato our users, perhaps otherQuickT(ieve-related in in watch for detajls applications. future CSITechnical Journals.
System rVtr'trTrading
Release te:undetermined d.a analysis A fast,multi-market is which system underdevelopment superior expands uponBREAKOUT's performance. will include ability the It new windowsize to investigate N-day values automatically optimal for results. alsoplanto showthe We for equityprogression trading a single groups commodities. or of commodity profitsandreduce It will improve trading drawdown effectively by + multiDle markets.
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Ask Customer Service
BREAKOUT. Can Q, I hauenewr used giuemesoffietips that might help Jnu ne getstarted? A. Before startingBREAKOUT, make sureyourprinteris online with plentyof paper. only outputis a The numericalprintout, sothe program won'twork if yourprinterisn'tready. Also, know the location the data of filesyou want to testwith BREAKoUT. You'llbe asked enterthe driveand to pathfor the datafiles(eg. C:\QUICK\DATA), without benefitof a selection menu. BREAKOUT is actuallyrun outside of QuickTrieve usingyourown BASIC program. Beforeyou start,you needto know what version BASIC stored of is on yourcomputer. BASIC part of is your DOS utility package, the so version corresponds your DOS to version. BASICA supplied was with the old IBMDOS, GWBASIC supplied was prior to version5.0and with MSDOS is supplied with MSDOS or 5.0 QBASIC higher. Q. nou doI getinto theBREAKOU\ pfogrorni' A. From QuickManager the menu, select EnterAnallsk SubsJ)stern L) Thensefect Run Te Analltsh B) You'll be promptedto exit to DOS and typea command stringto start BREAKOUT. there, From screen prompts guideyou througha few questions. simple aboul lheBASIC \t I am confused comwtnd slnng I a.ms pposed use lo to sta.rtBREAKOAT After selectingR) Run TechAnalysisand exiting to DOg I'ffi completelJ) a lus Please al explain. l A. Thecommand stringrequired to startBREAKoUT deoends the on versionof the BASIT programming utility stored your computer. on If IBMDOS, type: \DOS\BASICA BREAKOUT press then . Whenthe OKpromptappears,
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Thz BRXAKOW Tech,tical AnalJsis progrom prouided ith oar QulckTrlew sofruare ls o slnple onepafametef tfadlng q,uiJic tool that gtues trade-b!-trade reconpage menda.tions(see 1), Thls nonth\ Ash CastomerSerdce col.amn addresses some comnton Euattions about runnlng the TechAnalysh pro8f4m.
type: RUN.BRDAKOUT' press and . ff GWBASIC, type \DOS\GWBASIC BREAKOUT thEN press . Whenthe OKprompt "BREAKOUT" appears, RUN type and press . U. After starling theBREAKOUT proSran and entnfing dalaMlL the the lkt o/ auailablefila in my directorJt stops 30 contractr The at director! actuallJ)hol.d.s manlt more the files HowcanI see rcstof the list? A. To see morethan the first 30 filesin your directory, press the letter N.Youcanpagethroughthe entirelist this way.Besureto note the catalog numbers the filesyou of want to process. U. Howdo I exDeiment uith Elleren NAay hign/tou trading channek? l A. When you starting program, the areasked youwant to modifythe if "windowsize" anvcommodities. of (Y)es Answer andyou'llhavethe opportunity identifythe CSI to commodity number new winand (number davsto search dow size of for currenthigh/low channel). You canexperiment with different values see to which provides best the combination profit, trading of frequency drawdown. and BREAKOIIT lrwar V. I paue a h'lstu;iwl datafile to analltze,but theoutput tabl.e shouxonly thelast yars CanI eualu.ate longer a liae period of time? A. If you use as to QBASIC, opposed BASICA GWBASIC, youcan. or then BREAKOUT is configured at lyze to the final 1,300 tradingdays(5 years)
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