Capturing Profit with Technical Analysis: Hands-On Rules for Exploiting Candlestick, Indicator, and Money Management Techniques
FORWARD BY JOHN M. NORQUAY:The following is my weak attempt to glorify a book that I have fallen in love with.This decade has been resounding proof that the philosophy of ''buy and hold'' doesn't work and certainly doesn't reduce risk. In the late '90s, advisors were illustrating returns above 12 percent because that is what they experienced from the market in the 10 years prior. Now, after two recessions in one decade where many lost half their portfolios two different times, I believe there is a new awareness about risk in the asset allocation methodology. We are told time and again from investment representatives that return is derived from asset allocation, NOT market timing. I wouldn't want to be the one still selling that!There is a vast difference between asset allocation and market timing. In between lies an area of opportunity that would shock the average investor who trusts their large firm investment advisor. In this world, investors buy near support levels and sell at resistance levels. They buy when the cycle is low and sell when it is peaking. Each time they buy, they know exactly where it is they would sell if things go wrong. They never lose unacceptable amounts on any single investment position. The result is outperformance of the market with less portfolio volatility. The bottom line is they never experience 50 percent draw downs in their portfolios like their buy and hold counterparts.The Lockit system that Sylvain has outlined in his book is exactly such a system. You don't need to have years of experience in the market to understand this approach. He leads you step-by-step through the decision process of which stocks to buy and when. More importantly, he helps you determine an opportune time to sell.The robustness of this system is what I like the most. It will work on any type of stock you want to follow. Some like the blue chip names while others look for more growth potential. Simply follow his methodical approach and you will come out ahead of the crowd.I have been in the investment business since 1992 and have continually worked to improve my investment performance. I have spent countless hours developing quantitative mechanical investment systems and backtesting them. I have taken nearly every formula Sylvain includes in this book and rewrote it to test with my system. I couldn't be more pleased with the results.There is no doubt in my mind that good technical analysis will beat the market every time. The struggle is going through the maze of technical analysis tools and determining which ones make sense alongside each other. Sylvain has taken the tools that I have liked the most and turned them into a complete system.John M. Norquay --John M. Norquay has been offering investment advice since 1992. He is the owner of a registered investment advisory service in Madison, Wisconsin, where he utilizes both fundamental and technical analysis for his investment decisions. Mr.Norquay is also the founder of eWatch401k.com, a service which helps individuals keep their 401k accounts invested properly with a quantitative mechanical investment system he designed using technical analysis. --John M. Norquay''In this well researched and documented book Sylvain Vervoort presents a concise, but highly readable, methodology. His strength is his ability to examine a large number of technical analysis tools, explain them understandably but briefly, and then select from them the strongest features of each. These he then combines and relates to one another, using his own proprietary calculations, emerging with a complete and concise trading method. Marrying this to strong computer tools, he gives us a comprehensive way of buying and selling, and also managing our money. This is a worthwhile addition to the realm of Technical Analysis.'' --Richard W. Arms, Jr.-- Publisher of Arms Advisory; Inventor of the Arms Index and Equivolume Charting''Sylvain Vervoots new book describes a technical trading method he calls ''LOCKIT,'' which is an acronym for the principle components of any good investment or trading system: selection, timing, capital risk control, and money management. The great value I found in the book is the extraordinarily clear descriptions of the technical indicators, charts, and oscillators he uses, both traditional and esoteric. For this reason alone, his book is a valuable technical-analysis guide and reference.'' --Charles D. Kirkpatrick II--co-author of Technical Analysis: The Complete Resource for Financial Market Technicians and Adjunct Professor in Finance at Brandeis University