Mastering the Stock Market: High Probability Market Timing and Stock Selection Tools

by John L. Person

Overview

For more than thirty years, noted technical analyst John Person has honed his investing skills as a floor trader, broker, analyst, and founder of NationalFutures.com. Now, in Mastering the Stock Market, Person offers sophisticated traders as well as those new to the field a wealth of information on his proven trading concepts. Throughout the book, he outlines a comprehensive top-down approach to capturing profits that entails making more-informed trading decisions and pinpointing the best possible opportunities.

Today's rapid-fire technology offers you a more equal playing field when determining pricing, accessing various markets, and identifying platform transparency. Mastering the Stock Market gives traders an extra advantage by outlining the most relevant tools for making investment decisions that are characterized by lower risk and ultimately prove to be more profitable. Some of the tools Person touches upon include:

• Sector and seasonal trend analysis
• Contrarian and momentum indicators
• Price patterns
• Volume studies (OBV)
• Breadth indicators (Advance/Decline)
• Moving averages
• Support and resistance

Using the information outlined here, you'll discover the answers to the important questions all successful traders must ask, such as: what is the value of a certain stock, commodity, or ETF?

Awareness of seasonal trends in both the economy and stock market can put you in a better position to profit from sectors and stocks that are likely to outperform the overall market. And technical tools can then be used to confirm emerging trends, among other things. Person shows you how using a combination of both approaches can give you an edge in your trading endeavors. In addition to this, Mastering the Stock Market shows you how to use the author's own indicators, Person Pivots, to identify support/resistance areas and pinpoint optimal entry and exit points.

There are still opportunities to make money in today's markets. The key is choosing the right sectors and the right stocks, at the right time. Mastering the Stock Market reveals how you can effectively implement this proven approach and achieve your trading goals.

Product Details

ISBN-13:	9781118416594
Publisher:	Wiley
Publication date:	11/29/2012
Series:	Wiley Trading
Sold by:	JOHN WILEY & SONS
Format:	eBook
Pages:	304
File size:	8 MB

About the Author

JOHN L. PERSON is a thirty-two-year veteran of the trading industry, having worked as a floor trader, broker, analyst, and founder of NationalFutures.com, an online education site. He developed the Person Pivots (PPS) and other technical indicators that are on several companies' popular trading platforms, including TD Ameritrade, TradeStation, Open E Cry, NinjaTrader, Tradesignal, and Trade Navigator. Person has taught thousands of traders including members of the largest exchanges, and frequently speaks at industry conferences. He is the author of three nationally and internationally popular trading books as well as three trading courses and a DVD seminar series. Person's latest book, Commodity Trader's Almanac, is the authoritative guide to trading the seasonal aspects of the commodity markets and the correlated ETFs and stocks of those markets.

Table of Contents

Foreword x

Introduction xi

Chapter 1: Stock Indexes and Sectors 1

Stock-Picking Quandary 4

Exchange-Traded Funds 6

The Options Market 14

Why Use Seasonal Analysis? 18

Chapter 2: Seasonal analysis 21

Pondering the Perks 25

Not All ETFs Are Measured Equally 30

Conclusion 58

Chapter 3: Sentiment analysis 59

The AAII Sentiment Survey 60

COT Data 61

Insider Trading Information 62

COT Data Components 63

Can Traders Benefit and Make Money from This Information? 64

How Can This Information Possibly Be of Any Help to Us? 68

Compelling Evidence 75

Conclusion: COT Option Strategy 76

Chapter 4: Comparative relative Strength 79

What Is It Used For? 79

Creating the Charts 80

Spread Terminology 87

Automating Signals 95

Comparing Market Performance 99

Conclusion 102

Chapter 5: Breadth Studies 105

Trend-Line Analysis 107

Bearish Divergence Signals 114

Bullish Convergence Signals 119

Support and Resistance 121

Indicators and Moving Averages 125

Conclusion 135

Chapter 6: Volume Analysis 137

Hindsight Is 20/20 145

Current Event Analysis 148

Individual Stocks 149

Bearish Divergence 152

Bullish Convergence 154

Selling Climax 155

Exhaustion Tops 156

Trading Patterns 157

Volume and High-Frequency Traders 161

Volume Weighted Average Price 162

Chapter 7: Patterns, Indicators, and Oscillators 165

Candlesticks 166

The Doji 168

Reversal Patterns 169

Continuation Patterns 180

Conclusion: Indicator 101 201

Chapter 8: Scanning for Profits 203

Scanning the Universe 204

Trade Navigator 204

High- and Low-Close Doji Scans 206

Daily Scan Signals 208

Tradestation 212

Conclusion 227

Chapter 9: Pivot Point Analysis 233

Stock Trader’s Time Frame 238

Person’s Pivots Calculations 248

Fibonacci Combined with Pivot Points 262

Summary 263

Chapter 10: Putting It All Together 265

Position Sizing, Trade Entry Techniques, Risk Management, Trailing Stops, and Trade Management Calculating Position Size 267

Profit Targets 269

Stock Replacement Option Strategy 271

Day-Trading Position Sizing 271

Average True Range 272

Twice Baked 275

Order Entry Using PPS 276

Snap-Back Technique 276

Order Types 277

Stop Selection 279

The Exit 281

Expectations 282

Discipline 282

About the Author 285

Index 287