Traders Advantage Series Preface
The Trader's Advantage series is a new concept in publishing for traders and analysts of futures, options, equity and generally all world economic markets. Books in the series present single ideas with only that background information needed to understand the content. No long introductions, no definitions of the futures contract, clearing house and order entry. Focused. The Futures and Options Industry is no longer in its infancy. From its role as an agricultural vehicle it has become the...
Exponential Moving Averages
The exponential moving average EMA is a way of recursively calculating the average, emphasizing most recent data more than older data. The EMA, by the way, is a mathematical realization of real filters. Simple averages can only be calculated, they cannot be generated in physically realizable filters. The equation for the EMA is NEW EMA - 1 - K OLD EMA K NEW SAMPLE In words, this equation says that today's EMA is formed by taking a fraction of today's data and adding it to the compliment of the...
Marker Cycles
lohn Wiley amp Sons, Inc. New York Chichester Brisbane Toronto Singapore In recognition of the importance of preserving what ha been written, it n a policy of John Wiley amp Sons, Inc., to have books of enduring value published in the United Slates printed on acid-free paper, and we exert our best efforts to that end. Copyright 1992 by John F. Ehlers Published by John Wiley amp Sons. Inc. All rights reserved. Published simultaneously in Canada. Reproduction or translation of any part of this...
Leading Indicators
An optimum predictive filter can be derived for a message source having a Poisson probability distribution for its waveform 1 A Poisson distribution describes the probability of zero crossings within a given interval for a waveform having a zero mean and swinging between positive and negative values. Skipping all the heavy math and applying the optimum predictive filter to trading, this filter turns out to be basically the price less its EMA if the price function is modified to have a zero...
Mesa
John Ehlers is the consummate technical analyst. Eminently qualified, highly experienced and deeply committed, he is willing to share the method behind his efforts. MESA Maximum Entropy Spect ral Analysis is primarily the ident ification of short-term cycles for trading. But it is taken much further. Cycles alone are an interesting application of price analysis because they forecast, rather than explain, price movement. The goal of explaining price action is to be able to say what prices are...