Index
trend bullishness and bearishness, 662–663
trend day, 667–668, 669
value area, 655
Market profile:
Point of control (POC), 656
volume-based value area, 657–658
Market sentiment, 779–791
assessing market participant emotion and
psychology, 779–783
assessing participant actions, 784–788
assessing participant opinions, 788–791
Bullish Consensus, 790–791
Consensus Bullish Sentiment Index, 791
Consumer Confidence Index (CCI), 788, 790
crowd irrationality, 781
flow of funds data, 784–786
gauging market tops and bottoms, 782
open interest, 786–787
optimism vs. pessimism, 782–783
participant characteristics and behavior, 780–781
price-based indicators vs. sentiment indicators, 783
reliability of sentiment readings, 782–783
trading activity, 787–788
University of Michigan Consumer Sentiment Index,
790
volatility index (VIX), 789
Market shocks, 46, 349
Market timing, 9–11
Market tops and bottoms, 149, 821–822
Market trends. See also Trend analysis; Trends
behavioral elements of, 817–820
minor, 53–54
primary, 48–51, 53–55
reversal patterns, 55–57
secondary, 51–53
Market vane, 790–791
Market volatility. See Volatility analysis
Markets and derivatives, 42
Martingales and anti-martingales, 891
Marubozu candlestick, 550–551
Maximum adverse excursion (MAE), 642
McClellan Oscillator, 768–770
Mean, 744–746
Mean deviation, 743, 746
Mean reversion bias, 906
Mean reverting approach, 12–13
Measured move (ABCD pattern), 649, 854
Measures of central tendency, 744
Measuring gaps, 166
Measuring objectives, 158, 496
Median, 744–745
Medium-term charts, 836, 837
Member short ratio, 785–786
Mental framing, 819
Midway gaps, 166
Minimum capital rule, 893
Minimum winning percentage, 898, 900–901
Minor trends, 53–54
Misinterpretation bias, 819
Mode, 744, 745
Modified Arms Index, 773
MOM oscillator, 256–257
Momentum approach, 310–312
Momentum oscillators, 255–262
Momentum principle, 310–313, 339
Momentum-seeking approach, 12
Money management, 879–912, 914
balanced trading approach, 880–881
capital sizing, 892–894
conservation of risk, 886–887
dynamic phase, 884–885
ease of recovery (EOR), 909
effective trading versus gambling, 890–891
elements of, 881
expectancy box problem, 909
expressing reward in terms of risk, 898
Geolinear Money Management System (GMMS),
912
market methodology mismatch, 899–900
maximizing positional exposure, 884–885
minefield analogy, 891
non-controllable factors, 897
passive components relationship, 890
passive stage, 883
reward to risk ratio, 894–895
risk and goals determination, 879–880
risk of ruin (ROR), 891–892
risk sizing, 903–907
risk/return ratios, 901–903
sizing determination, 882–883
stochastic exit mechanisms, 887–889
stoploss orders, 146, 821, 895–896
term structure characteristics of reward and risk,
895–896
trade sizing, 907–908, 909–912
trade system expectancy, 897
trader’s functions, 881–882
Morning star formation, 587
Motive waves, 674, 676–678
Moving average of volume, 281
Moving averages:
adaptive, 448–449
applications for, 433, 451–462
centered and non-centered, 435–436
as central value for envelopes and bands, 457
crossovers, 455
data fields, 434–435
data periodicity, 449–451
data referencing, 435–438
degree of smoothing, 449, 450
detrending as oscillator, 452–454, 730–731
exponential moving average (EMA), 440, 442,
444–445
fixed percentage, 477
forward displaced, 438–439
for gauging trend strength, 462