Volatility-Based Technical Analysis, Companion Web site

Description

A framework for creating volatility-based technical analysis and trading it for profit

Volatility-Based Technical Analysis bridges the advantage gap between resource rich institutions and individual traders. It is a no-calculus, plain-English text that reveals original, highly technical, mathematical-based volatility indicators, complete with MetaStock® and TradeStation® code. With this in hand, any trader can “trade the invisible” by seeing a hidden mathematical structure on the price chart. Author Kirk Northington reveals his proprietary volatility indicators that serve as a market early warning system. Northington extensively teaches you how to build your own indicators, test them, and incorporate your original components into your specific trading methods.

Walks traders through the mathematical techniques needed to create indicators that fit their own style

Illustrates volatility-based entries and exits with over 170 descriptive chart examples

Introduces two new concepts in technical analysis: Volatility Shift and PIV

Written with the serious trader in mind, Volatility-Based Technical Analysis has what you need to successfully trade today’s institutionally dominated markets.

---

Preface.

Intended Audience.

What’s Inside?

Acknowledgments.

Part One Are You Prepared?Chapter 1 The Challenges.The Brain Power.

The Horse Power.

Options and VaR Ascendancy.

Rain Clouds or Urine?

News Folly.

Eyes on the Goal.

Chapter 2 The Opportunities.Choose Your Battles.

Take the Offensive.

Prepare and Perform.

Quiet the Noise.

Opportunities Outnumber Challenges.

Chapter 3 The Foundation: Preparations for Exploring Volatility-Based Technical Analysis.The Preparations Needed.

Trading the Invisible Indicators: Original Development.

Tenets of Volatility-Based Technical Analysis.

Component Testing.

MetaSwing QuickStart.

Discover by Doing.

Part Two Seeing the Invisible.Chapter 4 New Volatility Indicator Design.Volatility Unmasked.

Standard Deviation.

Example: Volatility-Based Support and Resistance.

Average True Range.

Molding a Volatility-Based Indicator.

The Whole Picture.

Building Blocks.

Chapter 5 Integrated Volatility Indicator Design.Volatility Pointed Forward.

Projected Implied Volatility.

More from the Math Toolbox.

Using Tools to Leverage TTI ATR Extreme.

Development Efficiency.

Inventing Wheels: You’re Not Alone.

Onward.

Chapter 6 The Framework: A Structural Approach for Cross-Verification.Adopting a Structure.

Think and See Volatility.

The Framework Components.

Constructing a Compound Derivative.

The Framework.

Going Forward.

Chapter 7 Traditional Technical Analysis: What Works, What Doesn’t, and Why.Line Studies.

Chart Patterns.

Oscillators.

Choose the Best.

Part Three Trading the Invisible.Chapter 8 Bull Bear Phase Prediction: The Intermediate and Short Term Market Swing.Why Swing With the Market?

Intermediate-Term Market Direction.

Short-Term Market Swing.

Seek the Advantage.

Chapter 9 Trading the Short-Term Reversal with Volatility-Based Technical Analysis – The Adeo.The Adeo Point.

The Adeo Trend Rally.

The Meandering Adeo.

The Adeo Short.

Adeo and FOREX.

The Fractal Adeo.

Open Your Can of Spinach.

Chapter 10 Trading the Trend With the 1-2-3.Rectangles Everywhere.

The Traditional Approach.

The 1-2-3 Construct.

The Daily 1-2-3.

The Weekly 1-2-3.

The 1-2-3: Inside and Outside.

As Simple as 1-2-3.

Chapter 11 Hidden Momentum with Adeo High Slope.We Are Experiencing Technical Difficulties, Please Stand By.

Momentum Hide and Go Seek.

Momentum Found.

The Quick and the Broke.

Chapter 12 Designing the Exit.The Objective: Optimize the Profit Target.

Using Time Slicing to Understand Your Time Frame.

First-Grade Arithmetic.

Exit Tactics.

Achieving the Objective.

Chapter 13 Correction and Surge: An Early Warning System.Market Breadth.

The Correction Event.

The Surge Event.

The Best Free Advice.

Chapter 14 Trading System Design: Detecting the Invisible.Seeing Through the Fog of War.

Nail It Down: Recognize the Specifics.

The Importance of Believing.

System Design Structure.

System Design Tactics.

Ask the Questions and Use the Advantages.

Appendix A: TradeStation Examples and EasyLanguage Code.

Average True Range.

The TTI ATR Extreme.

The TTI Stochastic Extreme.

The TTI Fabric LR.

The TTI Trend Strength.

The TTI RSIV.

The TTI Composite.

The Relative Exit.

Correction and Surge.

MetaSwing for TradeStation.

Appendix B: The PIV Options Advantages: Using Projected Implied Volatility to Trade the Butterfly, Coondor, Strangle, and Straddle. 

Appendix C: About the Companion Website.

Notes.

About the Author.

A Special Offer from MetaStock

Index.

---

“While the book is written in an easy to understand style, Northington realizes that not every trader is a programmer. For that reason, he includes the MetaStock® and TradeStation® code for the original, volatility-based indicators that he presents in the book. With these examples in hand, any trader can apply the concepts which are explained in rich detail. Northington’s goal seems to be to teach the reader how to build indicators based upon unique market insights; test the indicators on a stand-alone basis; and incorporate meaningful indicators into trading methods that suit a trader’s personality. In doing so, he also provides a ready-to-go trading system that can be applied with days of beginning the book.” (Market Technicians Association Technically Speaking, September 2009)

“Northington presents a credible framework for trading volatile markets. His creativity and advocacy merit attention. New and advanced traders alike will benefit from grasping these concepts.”
—SFO Magazine

---

Kirk Northington is the President of Northington Trading, LLC, a developer of technical analysis systems based on adaptive volatility for swing trading. The company’s flagship software product, MetaSwing, is an add-on toolkit for users of MetaStock technical analysis software. In addition to system design, Northington Trading trades stocks on the NYSE and NASDAQ exchanges. Kirk has previously held positions in several Fortune 500 companies, with experience in engineering, digital control system design, and project management.

---

In today’s markets, you won’t get very far by using outdated technical indicators and methods known to everyone. With institutions implementing innovative new tools in their trading endeavors and professionals profiting from spotting signs that an individual trader might miss, you need something to level the playing field. That’s why Kirk Northington has created Volatility-Based Technical Analysis.

As the President of Northington Trading, LLC, and a developer of technical analysis systems based on adaptive volatility, Northington knows how larger market-moving players create profits. Now, with this accessible guide, he bridges the gap between resource-rich institutions and individual traders by revealing how you can locate hidden mathematical structures on price charts and “trade the invisible.”

Written for those who want to adapt technical analysis to the volatility forces at work in today’s markets, this reliable resource contains all original, highly technical, mathematical-based volatility indicators, complete with MetaStock® and TradeStation® code; all presented without calculus. Throughout the book, you’ll not only discover how to build your own indicators and test them, but also learn how to incorporate original components into your specific trading methods.

Volatility-Based Technical Analysis is divided into three comprehensive parts:

Part One outlines the many obstacles individual traders must overcome, while carefully laying out how market changes since 2000 have produced the need for volatility measurement in all aspects of technical analysis.
• Part Two explores arithmetic measurements of volatility—within exercises that create custom indicators—and delves into specific techniques for creating those indicators. It also focuses on retrofitting classic technical indicators with volatility measurement and introduces the concept of Projected Implied Volatility (PIV).
• Part Three focuses on exact trade setups—with discussions of a new technical analysis concept known as Volatility Shift and how to exploit it—and details the process of developing volatility-based technical analysis components. It also examines the importance of forecasting the broad market’s short- and intermediate-term direction.
• Along with the practical insights found throughout these pages, you’ll also be able to build your knowledge base with information found on this book’s companion Web site (www.tradingtheinvisible.com). This site contains free trial versions of programmable technical analysis software as well as more examples and exercises that tie into the text.

Designed with the serious trader in mind, Volatility-Based Technical Analysis skillfully highlights how to use unique volatility-based tools to successfully trade today’s institutionally dominated markets.

---

Praise forVolatility-Based Technical Analysis“Kirk delivers what may be the most timely investment book ever—the volatility of the recent bear market led to large losses for many. This book clearly presents a complete methodology to profit from that volatility.”
—Michael Carr, CMT, Chief Market Strategist, Dunn Warren Investment Advisors, and Editor of the Market Technician Association’s newsletter, Technically Speaking

“Volatility-Based Technical Analysis is an outstanding study on hidden opportunity in the financial markets. Its razor-sharp focus on practical applications and detailed statistical proofs should earn the book acherished spot on every trader’s bookshelf.”
—Alan Farley, Editor/Publisher of the Hard Right Edge and author of The Master Swing Trader

“In these times of high volatility, traders need to be armed with tools that will help them gain an advantage in the marketplace. In my opinion, this book should be required reading for anyone who is serious about learning technical analysis.”
—AJ Monte, CMT, Chief Market Strategist, The Market Guys, Inc.

---

Additional information