Trading With The Odds: Using The Power Of Statistics To Profit In The Futures Market

CYNTHIA A. KASE Boston, Massachusetts Burr Ridge, Illinois Dubuque, Iowa Madison, Wisconsin New York, New York San Francisco, California St. Louis, Missouri McGraw-Hill All names of indicators are Copyright 0 by Ruse, All charts created using Tradestation” byOmega ORICHARD IX IRWIN, A Times Mirror Higher cumpm,y, IW6 Inc. Research, Inc. Education Group A i l rights resewed. No part of this publication may be reproduced, stored in a ret,rieval system, or transnrilted, in any form or hg any means, elrctmnic, mechanical. photocopying, rccurding, or otherwise, wit,hout the prior writt,en permission of the publisher. This publication is designed to provide accurate and authoritative informution in regard to the subject matter covered. It is sold with tho understanding that neither the author or the publisher is engaged in rendering legal, accnunting, or other professional service. If logal advice UT other expert assistance is required, the services of R ccmpctent professional persrm shrmld he sought. Hypothrt,ical or simulated performance results have certain inherent limitations. Unlike an actual pcrfornmm rewrd, simulated results do not represent actual trading. Also, since the trades have nut actually hem executed, the results may have under or ovcrcompensaled Ibr the impact, if any, of certain market factors, such as lack of liquidity Simulsled trading programs in general are also subject to the fact that they are desi&med wit.h the benefit of hindsight. No representation is being made that any accourd will or is likely to achieve profits or losses similar to those shown. The risk of loss in trading commodities can be substantial. You should thcrcforc carefully consider whether such trading is suitahlr for you-in light of your financial condition Inlimnation contained in this report is not to bc considered as an offer to sell or a solicitutim to buy commodities, nor do WC make any guuranters. &se will not he respomihir for any typographical crmrs. Expressions of opinion are subject to change without notice. Printed in the United States of America 4 5 6 7 8 9 0 BKMBKM 909 FOREWORD Several years ago I had the pleasure of taking Cynthia Kase on a speaking (teaching) tour to Italy and throughout many mid-eastern countries, I could easily discern that her mind was always at work. She would not take the traditional, commonly used technical analysis studies for granted, but would investigate carefully where others had blazed a trail, using their observations as a jumping off place from which to begin truly unique research. An outside observer could see at the time that she had already mined the rough gems. I can tell it took work and dedication to polish these ideas into the methodology described in this book. The book is filled with unique observations. They are best summed up by Cynthia’s own comments on the present “state of the art” of the common routines published and used by technicians today She feels that today, even with the availability of powerful computers, we are still living too close to the past where most technical analysis was done by hand, or, at best, using spreadsheets on fairly crude computers. Cynthia believes that we must make today’s powerful computers WORK and work hard. With the increase in versatility of