THE MARKET CHARTER (CHARTS.EXE) Version: 1.00 CHARTS.EXE is a stock market analysis program that allows you to display and analyze certain stock market price data on an hourly, daily, weekly or monthly basis. CHARTS includes several data files and requires VGA graphics and a mouse. You must load your mouse driver before running CHARTS. If you do not, then the program will exit immediately. CHARTS also allows you to print out your data displays to an Epson or Epson-compatible printer (REGISTERED VERSION ONLY, subject to change). CHARTS.EXE is a tool that can help you learn more about technical analysis of the stock market, any index in the stock market or any stock in the market. Using your new found knowledge, you should be in a better position to make money in the market. One of the age-old questions asked by any market participant is, "Should I be in the market?", or if you are already in the market, "When should I get out of the market?". This program can help you better answer these questions. This program charts the prices and many technical analysis quantities for any stock or index that you have collected and maintained prices for. The prices can be closing prices only or high, low, and closing prices for hourly, daily, weekly, monthly or yearly time intervals. All data files are in easily modifiable ASCII format so that you may keep track of the stocks or indices that you are most interested in. Data on some of my favorite indices are included with the program. Many more come with the registered version of the program. This program is not written for the complete computer or stock market novice. I expect you to know your way around DOS and your favorite text editor. I expect you to know something of the stock market and a few of the basic terms used in the stock market and in technical analysis. If you want a recommendation as to a good book to read to increase your knowledge of technical analysis, then I recommend "Technical Traders Guide to Computer Analysis of the Futures Market" by Charles LeBeau and David W. Lucas (ISBN 1- 55623-468-6). This book is available for around $65 from Traders Press, Inc., P.O. Box 6206, Greenville, SC. 29606. Write them for a catalog of other books concerning the stock market and technical analysis. I do not trade futures, I trade options, mostly on the OEX (S&P 100 index). It is exciting, risky, and potentially very profitable. Before I wrote this program I used to "play the market" with not much real bottom-line success. Since having written this program, it has become painfully obvious to me how much I was just plain guessing about the market and its direction in days gone by. You will not be a success in the market by guessing about the next directional move of the market. You need a tool that will help you analyze what the market is doing and likely to do next. Guessing will bankrupt you (I should know - I was an inch from declaring bankruptcy 5 or 6 years ago). The point is this: if you want to guess about the market and its direction, then do not play the futures or options market. I don't think you should even be in the stock market at all if all you care about is guessing on its next direction. If you are not interested in learning about the market, it will eat you up and all your money. There are a lot of sharks out there and they are just waiting to eat you if you are going to remain a small fish (an unknowledgeable investor or speculator). SYSTEM REQUIREMENTS: Around 125K RAM memory, one disk drive (hard disk preferred), VGA graphics, and a mouse. Optional: printer (preferably Epson FX or compatible). HOW TO START: Type 'FIRST', then . Read the information and follow the instructions. Type 'DOCS', to print out all documentation (hit again if needed). Please read the documentation before running CHARTS.EXE. NOTES ON USAGE: --------------- After starting the program, the first thing you must do is select the data file you are interested in viewing (some data files are not included and thus not viewable with the non-registered version of this program). Move the mouse and select the data file you want to view and analyze. Click the LEFT mouse button. Alternatively, you may select the DOS shell option to go to DOS to list a directory, edit a data file, etc. Type 'EXIT', then to return to CHARTS after shelling out to DOS. You may also click on the "USER SELECTED DATA FILE" option to view a file that is not on this menu but in the CHARTS directory. Next, select the start date of the data you want to view. Point the mouse cursor to the date desired, then click the LEFT mouse button. Next, select the end date. There are other options. Below is a description of the commands on the date screen. Forward - Select this option to move the dates forward. Backward - Select this option to move the dates backward. Start list - Select this option to go to the first date of the data file. End list - Select this option to go to the last date of the data file. All dates - Select this option to view all dates in the data file. All page - Select this option to view all the dates listed on the screen. New index - Select this option to choose a different data file. THE GRAPH DISPLAY ----------------- After having selected the data file you want to display and the chosen time interval, the program next graphs the price data. The prices are graphed for each date that you have selected. Some data files contain high, low, and closing prices. If a data file is in this format, then the program draws a vertical line representing the high and low prices for each day. A thick white dot shows the closing price. The data filename is shown in the middle of the display on the left side of the screen. Prices are shown down the left side of the graph and dates are shown horizontally under the graph. The commands available are shown at the bottom of the screen enclosed in boxes. Below are listed the various options you have at this point. Marking a data point - Mark data points by pointing the mouse cursor on the graph where you want to make a mark (the mark is invisible, but data associated with that data point is shown at the top of the screen, to the left if the left mouse button was hit, or in the middle if the right mouse button was hit. The data is PRICE, DATE, DATA NUMBER or DAY NUMBER). Click the left mouse button OR the right mouse button on your desired data point. Generally speaking, for all operations that draw lines, you will need to have both left and right data points selected. This enables you to draw channel lines, Fibonacci retracements, etc. The price difference between two data points marked with the left and right mouse buttons is shown at the far top right of the display. NOTE: You may enter Elliott wave counts or other data or text on the graph by moving the mouse cursor to the position desired and pressing the desired keyboard key. Repeat as necessary. Lft and Rt - Select the Lft box to view prior date price data. Select the Rt box to view subsequent date price data. Click the left mouse button in either box to change dates, past or future. Sto (slow stochastics) - Point the cursor to this command box and press the left mouse button. Enter a time period (I like 9) and hit . The stochastics will be graphed at the bottom of the display. The bright line is the %K slow stochastic data and the less bright line is the %D slow stochastic data. Overbought and oversold areas are indicated by blue lines running horizontally. RSI (relative strength indicator) - Point the cursor to the left side of this command box and press the left mouse button. Enter a time period (I like 9) and hit . The RSI will be graphed at the bottom of the display. The bright line is the RSI data and the less bright line is the moving average of the RSI. Overbought and oversold areas are indicated by blue lines running horizontally. MF (money flow) - Point the cursor to the right side of this command box and press the left mouse button. Enter a time period (I like 6) and hit . The money flow will be graphed at the bottom of the display. The bright line is the money flow data and the less bright line is the moving average of the money flow. Overbought and oversold areas are indicated by blue lines running horizontally. Not all data files can use this indicator. The registered version tells you which data files that money flow has validity for. The file NYA.ASC is the best data file to use with this indicator. %R (percent R) - Point the cursor to this command box and press the left mouse button. Enter a time period (I like 9) and hit . The %R will be graphed at the bottom of the display. Overbought and oversold areas are indicated by blue lines running horizontally. Pa1Pa2 (parabolics) - Point the cursor to this command box and press the left mouse button. If you clicked on the left half of the command box, then you will graph one version of parabolics. If you clicked on the right half of the command box, then you will graph the other version of parabolics. Each parabolic can be used to get an idea of when to exit a position in the market or when to switch from long to short or vice-versa. LogSc - Point the cursor to this command box and press the left mouse button to graph the data using a log scale for price instead of an arithmetic scale. This option is only good for viewing price data. If you click on a data point, the information that appears at the top of the screen will NOT be accurate. The registered version may deal with this anomaly. MACD (moving average convergence-divergence) - Point the cursor to this command box and press the left mouse button. The MACD will be graphed at the bottom of the display using the parameters found in the OPTIONS.FIL file. The buy side MACD will be graphed if you clicked on the 'MA' side of the box. The sell side MACD will be graphed if you clicked on the 'CD' side of the box. The bright line is the differential moving average line and the less bright line is the signal line. Overbought and oversold areas for each specific index are indicated by blue lines running horizontally. CCI (commodity channel index) - Point the cursor to this command box and press the left mouse button. Enter a time period (I like 9) and hit . The CCI will be graphed at the bottom of the display. Overbought (+100), oversold (-100), and zero CCI values are indicated by the 3 blue horizontal lines. Bands - For data that has closing prices only, enter a period for a moving average. Bands indicating +/- 3.33 % above and below the moving average price line are shown on the display. For data files that have high, low, and closing prices, enter a moving average value (I like 15), then another moving average value (I like 2). The display will show the moving average of the highs and lows according to the first value entered and the moving average of the closing prices for the second value entered. This display can indicate overbought/oversold price levels. 2MA (two moving averages) - Using the values contained in the OPTIONS.FIL file, the program graphs both moving averages using the closing prices. From this you can tell whether the short term trend is up or down. 3MA.4 (three or four moving averages) - Using the values contained in the OPTIONS.FIL file, the program graphs either 3 moving averages or four moving averages, based on closing prices, depending on whether you clicked on the left side of the command box or the right side of the command box. From this you can tell whether the short-term/intermediate-term trends are up or down. Draw - After you have clicked your left and right mouse buttons on the two data points you are interested in, then select this option to draw a straight line connecting those two data points (the data points are shown at the top of the screen). Click the LEFT mouse button on this option to connect the left and right data points. || - Select this option in order to draw a vertical line on the data point you selected with the left mouse button. Click on your data point, then click on this option with the LEFT mouse button. Cycles - Select your first data point with the left mouse button. Select your second data point with the right mouse button. Click the left mouse button on this command box to draw vertical lines across the width of the display at equal time intervals. This option allows you to see equal time intervals or cycles that may exist in the market. ADX (average directional movement index) - Point the cursor to this command box and press the left mouse button. Enter a period value (I like 9 or 18). The ADX will be graphed at the bottom of the display. The bright white line is the ADX value, the green line is the +DMI (directional movement index), and the red line is the -DMI. Use to ADX to find out whether the market is trending or moving within a trading range. A rising ADX line indicates a trending market (up or down depending on whether the green +DMI indicator line is above the red -DMI indicator line or vice- versa), whereas a falling ADX line indicates a trendless (trading range) market. KST (stochastic using 4 set periods) - Point the cursor to this command box and press the left mouse button. A form of stochastics will be graphed at the bottom of the display according to the data values in the OPTIONS.FIL file. The bright line is the %K slow stochastic line and the less bright line is the %D slow stochastic line. A value of zero is indicated by the horizontal blue line. AI/AD - Select the AI (Arms Index) option only when viewing the New York Composite data file (NYA.ASC). Enter a value for the period (I like 10). The graph of the n-period Arms Index will be displayed at the bottom of the graph. The upper blue line represents a TRIN of .75 and the lower blue line represents a TRIN of 1.25. An oversold condition is indicated when the TRIN is below the bottom blue line. Consider going long the market. An overbought condition is indicated when the TRIN is above the upper blue line. Consider shorting or getting out of the market. Below the graph, under the dates, are displayed green and red marks. The green marks indicate when the 21 day TRIN is below the 55 day TRIN and thus, you should consider being long or in the market. When the 21 day TRIN is above the 55 day TRIN, then the marks are in red and you should consider being short or out of the market. The values of 21 and 55 can be changed by modifying the OPTIONS.FIL file. A/D - Select this option when viewing the NYA.ASC data file. It displays the advance/decline line (dark blue), the summation index (red), and the advance/decline oscillator (green). The red horizontal line represents zero on the summation index. Also, shown by red and green bars, are the 21 day minus 55 day moving average advance/decline data and the 19 day minus 39 day moving average advance/decline data. PPI - Select this option to display the Price Phase Indicator. Green lines on the top row indicate a rising PPI. Red lines on the top row indicate a falling PPI. Green lines at the bottom indicate that the PPI is positive (above 0). Red lines at the bottom indicate that the PPI is negative (below 0). The horizontal blue line indicates a PPI of zero. The PPI is an oscillator that shows the difference between short- and intermediate-term price averages. It indicates the direction, or phase, of the prices of the index (the market's movement). When the PPI changes direction, it is telling you to consider taking action. The default number of time units used for the PPI are given below. You may change the time units used for the short-term and intermediate term price averages by changing the OPTIONS.FIL file using any standard text editor. Be sure to save your changes in ASCII format. # time units Data file name(s) affected ------------ -------------------------- 8 (short-term) all files except DJIAHOUR.ASC 60 (intermediate term) all files except DJIAHOUR.ASC 31 (short term) DJIAHOUR.ASC file only 175 (intermediate term) DJIAHOUR.ASC file only Fibo (Fibonacci retracements) - After you have marked a high (or low) and a low (or high) on the graph by using the LEFT and RIGHT mouse buttons, select this option by clicking the LEFT mouse button to display Fibonacci retracements of 23.6% and 76.4% (shown in blue), 38.2% and 61.8% (shown in green), or 50% retracements (shown in red). Redraw - Select this option to redraw the graph using the same time interval as previously selected (arithmetic price scale). OSC - Select and draw the x-day oscillator. Input the number of days (x) that you want for your oscillator (I like 10 and 24 periods). The bright line is the oscillator value, the duller line is the moving average of that oscillator, and the blue horizontal line represents a value of zero. Prt - Select this option to print the display to your Epson or Epson-compatible printer (Registered version only, subject to change). Color - Select this option to change the color of subsequent data as it is drawn on the graph as well as keyboard entered display data. 1MA - Select this option to display a moving average of price data. After clicking on this option, enter your value using the keyboard keys, then hit . Change colors before displaying another moving average or you may get a display that is hard to read. The graph at the bottom of the display shows the difference between the current price and its designated moving average. The horizontal blue line represents a value of zero. DTrnd - Select this option to detrend the price data. Input the period desired, followed by . The horizontal blue line represents a value of zero. Draw X - Click on your first data point using the left mouse button. Click on your second data point using the right mouse button. To draw an extended line through both data points, place your cursor on this command box and click the left mouse button. An extended line across the whole graph will be displayed. // - Select this option in order to draw a parallel channel line to the line you drew using Draw X. Click on this option with the LEFT mouse button, then place the mouse cursor on the data point through which you want to draw a parallel channel line. Click the RIGHT mouse button in order to draw the parallel channel line. Repeat as necessary. Da/Ix - Select the left half of this command box in order to choose different start and end dates for the graphic display using the same data file. Select the right half of this command box if you want to view another data file. Qu - Select this option to exit the program. NOTE! NOTE! NOTE! NOTE! NOTE! NOTE! NOTE! NOTE! NOTE! NOTE! NOTE! ------------------------------------------------------------------ Now I know that you do not understand everything I have said and I know some of the indicators seem like Greek. But, it is not my purpose to teach you technical analysis and to hold your hand while you learn about it. What I have given you is a tool to learn and do technical analysis by and for yourself. You don't even need to learn technical analysis if you will study all the price data and look for patterns of overbought/oversold, etc. Use the different data files and work with the indicators, using the suggested periods I have given you, and learn and see for yourself what indicators give what information and when. Relate it all back to price and, voila, you should be able to make some money in the market by stopping your guessing about the market's direction. Sure, there will be times when you are unsure. I'm unsure at times, too. At those times, wait until the indicators give you a clearer picture. If you have any comments, questions or suggestions, I would be pleased to hear from you. You may write or call me at: Allen Edwall 912 Ridge Square, #218 Elk Grove, Illinois U.S.A. 60007 (708) 593-5327 Information on Licenses Private Use License This license is not necessary for clubs or user groups distributing the software on a SHAREWARE basis, providing that the entire CHARTS package with accompanying documentation and data files are included in the distribution, and no more than a nominal fee (not to exceed $5.00) is charged for such distribution. REGISTRATION INFORMATION ____________________________________________________________ | | | If you find CHARTS.EXE fast, easy, and convenient to use, | | a registration fee of $50 would be appreciated. | | | | Please state the current version number of the software | | you are presently using and fill out the order form. | |____________________________________________________________| The registered version of CHARTS.EXE includes lots more data files, the ability to print to Epson compatible printers, and an information file which explains more about the indicators mentioned above along with tips on how to apply them. Some of the additional data files included in the registered version are: Microsoft - 03/13/86 to present Novell - 08/17/88 to present OEX - 09/25/85 to present S&P 500 - 11/01/89 to present Japan Idx - 09/20/90 to present VLA - 12/10/85 to present OTC - 01/04/82 to present VLG - 01/02/85 to present XMI - 06/07/90 to present DJTA - 02/08/90 to present plus various weekly and monthly data for the OEX, DJIA, DJTA, VLA, and OTCI. SOFTWARE LICENSE CHARTS.EXE Copyright 1992, Allen Edwall, All Rights Reserved You are free to use, copy and distribute CHARTS.EXE for NON- COMMERCIAL use if: 1). No fee is charged for use, copying or distribution. 2). It is not modified in any way. Legal Stuff I, Allen Edwall, hereby disclaim all warranties relating to this software, whether express or implied, including, without limitation, any implied warranties of merchantability or fitness for a particular purpose. I will not be liable for any special, incidental, consequential, indirect or similar damages due to loss of data or any other reason, even if my agent or I have been advised of the possibility of such damages. In no event shall my liability for any damages ever exceed the price paid for the license to use this software, regardless of the form of the claim. The person using the software bears all risk as to the quality and performance of the software. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or loss similar to those shown, mentioned or discussed. In options trading or in any stock market trading, there can be no assurance of profit. Losses can and do occur. As with any investment, you should carefully consider your suitability to trade options or stocks and your ability to bear the financial risk of losing your entire investment. Do not assume that the theories, methods or indicators presented herein will be profitable or that they will not result in losses. The information contained herein has been obtained from sources believed to be reliable, but cannot be guaranteed as to accuracy or completeness, and is subject to change without notice. The risk of using any trading method rests with the user.