Graphs and Application to Spec

Graphs and Application to Spec


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The classic technical analysis guide to graphing: mapping the mass psychology of market speculators!

  • Introduces key graphing and technical analysis techniques still in use today!
  • A breakthrough in transforming technical analysis from art to science.
  • Techniques that are equally applicable to bull, bear, and volatile markets.

Originally published in 1936, this book introduced powerful market graphing strategies, many of which are not only still in use today — but often are more useful than the versions today's technical analysts depend upon!

George W. Cole wrote this book with the intention of transforming technical speculation from an art to a profession: replacing uninformed gambling with the application of a set of thorough analytical techniques and formulas. The book successfully demonstrates that graphs of price action in the market can visually reflect the mass psychology of market speculators — and that future movements based on this behavior can be accurately predicted. Cole's "science of interpreting market graphs" can be applied to bull and bear markets with equal effect — and help any technical investor discover when to swim with the market tides, and when to swim against them.

Product Details

ISBN-13: 9780273637387
Publisher: Financial Times/Prentice Hall Books
Publication date: 06/01/1998
Series: Traders Masterclass Series
Edition description: REPRINT
Pages: 290
Product dimensions: 7.65(w) x 9.93(h) x 1.15(d)

Table of Contents

Editor's Introduction xv(10)
Preface to First Edition xxv
Chapter I GRAPHS: WHAT ARE THEY? Value of Graphs in Speculation. Price Controlled by Universal Laws. Science of Price. My Development in Graph Reading. Logical reason for Actions; Mob Psychology. The Human Equation. Comparison of Grain and Stock Prices. Speculation a Profession
Chapter II HOW TO MAKE SIMPLE GRAPHS Geometrical Graph Paper. Ratio Graph Paper. The Four Essentials in Graph Making. Complete Daily Movements. The Movement of Two Days or More: Angle or Block Graph. Closing Graph. Primary, Secondary, Minor Trends. Combination Graph. Figure Chart
Chapter III DAILY FACTORS AND INDICATIONS Daily Range Indication. Inside Days. Outside Days. Neutral Days. Up-turn and Down-turn Days. Hook Closings. Double Hook. Time and Cycles
Chapter IV INTERMEDIATE FORMATIONS AND MOVEMENTS Recurrence. Runs. Reverses of Movement of Two Days or More. Reverses of Futures. Trends. Objectives. Mechanical Formula for Figuring Objectives. Congestions. This Sports. Gaps. Averages. Daily Average. Movement of Two Days or More Average. Average Over All. Major Straight Average. Triple Average Trend Triple Average. Major Combination Average. Resistance Levels. Reactions From New Prices. Closings
Chapter V TOP AND BOTTOM FORMATIONS Head and Shoulder Top and Bottom. Trading on the Head and Shoulder Irrespective of Other Factors. Broadening Tops and Bottoms. The Double Spread. Declining Top and Inclining Bottom. Coiling Top and Bottom. Compound Tops and Bottoms. Seasonal Tops and Bottoms. Seasonal Tops and Bottoms, One Commodity. Seasonal Tops and Bottoms, Several Commodities
Chapter VI DAILY ANALYSIS OF THE MARKET Positions. Trends. Averages. Movements. Distances Unfinished and Distances Finished. Runs Unfinished and Runs Finished. Cycles. Top and Bottom Day of The Week. Daily Action and Closings. Closings. Recapitulation The Bull and Bear Bulletin
Chapter VII MECHANICAL RULES Scalping Rules. Unit. Stop Loss and Stop Profit. Stop Profit Plan. Averaging and Doubling. Scaliping Against the Trend. Going With The Trend. Year Around Trading Plan
Chapter VIII GENERAL INFORMATION IN TRADING Await Definite Indication. Stop Loss Orders. Trading When in Congestion. Going With the Market in Trading
Chapter IX LONG PULL TRADING Study and Application. Sufficient Capital. Patience. When to Enter the Market for Long Pull Trading. General Condition of the Market. Interpretation as per Market Graphs
Chapter X THE ALL PRICE CURVE Normal Value of Wheat. Supply and Demand. Export Surplus or Deficit. Domestic surplus or Deficit. Relative Action of Grain and Commodity Prices. How to Plot Curves in Figures X.1 and X.2
Chapter XI GREGORY KING'S LAW OF PRICES Feudal System of Land Tenure. Attempted Price Control for 500 Years. Bounty on Exports Failed. Duties Based on Sliding Scale Failed. Price Control Failed After 500 Years' King's Study and Analysis
Chapter XII FINDING THE MAJOR OBJECTIVE Establishing the Primary Movement. Establishing the Secondary Trend. Calculating the Objectives. Objectives Conjectural
Chapter XIII APPLYING THE DOW THEORY TO GRAIN Similarity. Manipulation. The Averages Discount Everything. The Theory is Not Infallible. Dow's Three Movements. Primary Movements. Primary Bear Markets. Primary Bull Markets. Secondary Reactions. Daily Daily Fluctuations. Both Averages Must Confirm. Determining the Trend. Lines. The Relation of Volume to Price Movements. Double Tops and Double Bottoms. William Peter Hamilton, Market Analyst. Action of Wheat and Corn Should Conform. Graphs for Applying The Dow Theory
Chapter XIV HEDGING Three Purposes in Hedging. Hedging Eliminates Speculation. Hedging Protects Profits. The Origin of Future Trading Contracts. How a Hedge Operates. Hedge Not a Speculation
Chapter XV PRIVILEGES Explanation of How Privileges Are Exercised. Privileges, or Bids and Offers, are of Value. Bids and Offers as an Outright Speculation. Trading Against Privileges. Selling Privileges. Privileges as a Positive Stop Loss. Selling Bids. Selling Offers. Experienced Speculators Seldom Buy Privileges. Privileges as Insurance or Hedge on Cash Grain Transactions. Privileges Used as a Protection. Conclusion
Index of Figures 283(2)
Index of Tables 285(2)
Index 287



In writing this book the prime idea of the author is to write a sequel to his book, Successful Speculation a Business, because speculation is a business exactly the same as any other line of endeavor. In fact, speculation is more of a profession or an art than ordinary commercial business. Therefore, the intention of the author is, first, to show conclusively that there is a science in speculation, the same as in any profession; second, the same as in any line of business, a dealer in the purchase and sale of stocks and commodities physically or in contracts for future delivery is a gambler with all the inherent risks of outright gambling if he enters into such transactions without proper preparation and knowledge; third, to logically prove that there is a science in trading in future contracts in stocks or grain, the knowledge and application of which reduces the risk in speculation to the level of all other lines of business.

There are very few books, in fact the number is almost negligible, that cover this subject as it is covered in this book. The method taught is not entirely new, but as promulgated is the result of many years of study.

The author insists upon it being clearly understood that the method which he terms The Science of the Interpretation of Market Graphs is not a "get rich quick" scheme, plan or mechanical rule by which profits are assured. There is no intention even to imply such an idea. The author's intention is to prove that Graphs of the action of the market price show in pictorial form the psychology of the mass mind as influenced by world conditions; that the future trend of prices ofall commodities is based upon the law of occurrence or recurrence as shown by study of price action as clearly set forth in understandable form in graphs of past price movements; but that judgment is paramount in correlating the facts and applying them successfully in buying and selling commodities.

The author faithfully believes that, no matter what regulations or restrictions are placed on trading in contracts for future delivery in the commodity or security markets, as long as prices are quoted, the psychology of the market will be clearly shown in the graph record.

Some systems or sciences used in forecasting the market are especially good for bull markets and others are exceptionally good for bear markets. The Science of the Interpretation of Market Graphs is the only science that we have found to work with either a bull or a bear market. It always indicates when to go with the market.

In addition to the author's original interpretation of The Science of the Interpretation of Market Graphs, many methods of others are included. The author is indebted to E. P. Miller, Statistician and Preceptor, Pickell-Daniel, Inc., Commodity Statisticians; Robert Rhea, author of the book The Dow Theory; Thomas Temple Hoyne, author of Speculation, Its Sound Principles and Rules of Practice; Professor G. Wright Hoffman of the University of Pennsylvania, author of Future Trading; Ralph M. Ainsworth, forecaster and student of commodity economics, and others, all of whom are given full credit in the text.

The preparation of this book has required considerably over a year of hard, persistent application and study. It has been intensely interesting and it is the author's hope that his readers will not only be interested, but also gain from this study immeasurable benefit and material profit. It is not a subject that can be read lightly without application, but one that must be studied seriously and with the certain knowledge that the full measure of material benefit will be obtained from its perusal.

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