Issuu

The Market Technician Issue 101 - September 2026 The Journal of the Society of Technical Analysts

NEWS

RESEARCH

ANALYST FOCUS

London Calling: The Next Wave in TA

Does trend following still work on stocks?

Taming Volatility

Proving the case for cycles

Interview with Guido Riolo, MSTA

The Society of Technical Analysts

Carlo Zarattin, Alberto Pagani, Cole Wilcox

Perry Kaufman, FSTA

Tom Bundgaard, MSTA

Patricia Elbaz, MSTA

Contents FOREWORD Editor's Letter Advertisement: IFTA 2026 Advertisement: ETW 2026

03 04 05

NEWS London Calling: The Next Wave in TA Charter for Technical Excellence Does Technical Analysis Share a Pillar with Alchemy

06 09 10

RESEARCH Does Trend Following Still Work on Stocks? Carlo Zarattin, Alberto Pagani and Cole Wilcox Taming Volatility Perry Kaufman, FSTA Proving the Case for Cycles Tom Bundgaard, MSTA

12 18 21

ANALYST FOCUS Interview with Guido Riolo MSTA Patricia Elbaz, MSTA

BOOK REVIEW Wall Street Uncut: Unconventional Interviews with Giants of TA Author: Dave Allman The Wobbly Universe Author: Ray Tomes

25 26

THE STA Benefits of STA Membership STA Calendar 2026/27 The Education Channel / STA Library Enhanced Student Offering STA Diploma Part 1 Course STA Diploma Part 2 Course STA Home Study Course Congratulations to the latest STA Diploma MSTAs STA Executive Committee STA Advertising Rates 2026/27 Contact

27 28 29 30 31 32 33 35 36 37 38

Disclaimer: The Society is not responsible for any material published in The Market Technician and publication of any material or expression of opinions does not necessarily imply that the Society agrees with them. The Society is not authorised to conduct investment business and does not provide investment advice or recommendations. Articles are published without responsibility on the part of the Society, the editor or authors for loss occasioned by any person acting or refraining from action as a result of any view expressed therein.

www.technicalanalysts.com

FOREWORD

Editor's Letter Welcome to the latest edition of The Market Technician Technical analysis has always been a discipline that evolves. While its foundations remain rooted in the careful study of price, trend and market behaviour, the tools available to today's practitioners continue to develop at an extraordinary pace. Artificial intelligence, quantitative methods and ever-increasing computing power are changing how markets are analysed—but they are not replacing the judgement, experience and disciplined thinking that remain at the heart of successful market analysis. That balance between innovation and proven methodology runs throughout this issue. As we prepare to welcome the global technical analysis community to London for the IFTA 2026 Conference, (pg 06) we look ahead to discussions on where our profession is heading. The conference theme, The Next Wave in Technical Analysis, could not be timelier. The challenge facing today's analyst is not whether to embrace new technologies, but how to integrate them with the enduring principles that have guided generations of market professionals. Research remains central to that process. This edition features an outstanding collection of original work, including Carlo Zarattini, Alberto Pagani and Cole Wilcox's comprehensive study of equity trend following; (pg 12) Perry Kaufman's practical insights into managing portfolio volatility (pg 18) and Tom Bundgaard's compelling examination of cycle analysis and long-term forecasting (pg 21). Each article demonstrates that robust technical analysis is grounded not in opinion, but in disciplined observation, testing and continuous refinement. Alongside this research, we continue to explore the broader questions

shaping our profession. Guido Riolo's (pg 10) thoughtprovoking discussion asking whether technical analysis shares common ground with alchemy reminds us that innovation has often come from those willing to challenge conventional thinking while remaining accountable to real-world results. We also introduce the STA Charter for Technical Excellence (pg 09), an important step in defining the Society's purpose, values and ambitions as we continue to strengthen professional standards, education and advocacy for technical analysis. This issue also celebrates the people who make our community so valuable. From Patricia Elbaz's interview (pg 24) with Guido Riolo to David Watts' reviews of Wall Street Uncut (pg 25) and The Wobbly Universe (pg 26), we are reminded that technical analysis is ultimately a discipline built on the sharing of ideas, experience

and intellectual curiosity. Whether through conferences, publications, education or debate, the exchange of knowledge remains one of our greatest strengths. Finally, we would like to thank all our contributors, reviewers and volunteers who continue to make Market Technician a publication worthy of our profession. Your willingness to share your research, experience and insights ensures that our discipline continues to grow stronger and more relevant in an increasingly complex financial world. We hope you enjoy this edition, find ideas that challenge your thinking, and, above all, continue to question, test and learn—because that has always been the hallmark of the very best technical analysts.

The Society of Technical Analysts is thrilled to be hosting the 39th IFTA conference here in London on the 9th-10th October 2026 Over two exciting days, IFTA 2026 will bring together the world’s leading experts in technical analysis, quantitative trading and financial markets to explore cutting-edge strategies, modern applications, and emerging trends shaping the future of finance. With artificial intelligence becoming increasingly commonplace, delegates will explore how technical analysis can advance, examine changes in trading strategies and consider new opportunities and emerging challenges. Attendees will gain insights from top industry experts on cutting-edge AI applications, quantitative techniques, practical trading methods, and robust risk management in today’s fast-changing markets. Headline speakers include the biggest global names in technical analysis: Perry Kaufman, Kaufman Signals; Linda Bradford Raschke; Zoe Bollinger, Bollinger Bands; David Keller, Sierra Alpha, Robin Mesch, Robin Mesch Associates and Seiji Adachi, former member of the Bank of Japan’s Monetary Policy Board.

The City of London provides the perfect location for this prestigious global gathering. The distinctive combination of historic character and financial setting offers a memorable environment for both the conference sessions and related social events. To complement the formal programme, delegates will have the opportunity to enjoy a Welcome Cocktail Reception:

FR I DAY, 9 OCTO B E R

A Welcome Cocktail Reception at the prestigious National Liberal Club, one of the finest private members’ clubs in the UK. Set in a Renaissance-style grand clubhouse steeped in political history, it offers a fascinating glimpse into Britain’s political past.

The event will also include a reunion for STA Diploma holders who have graduated since 2016. If you interested in this reunion please email Katie Abberton at info@technicalanalysts.com Join the IFTA 2026 Conference and be part of the global technical analysis community! Discounts for STA and IFTA members.

This exclusive global event will bring together a diverse group of up to 200 in-person delegates, providing access to a live-stream audience and connecting you to an influential TA community of over 7,500 traders, investors, quants and financial professionals worldwide.

2500+ ATTENDEES

200+

SPEAKERS

TRACKS

ENERGY TRADING WEEK EUROPE 24-25 SEPTEMBER, 2026 LONDON BUSINESS DESIGN CENTRE

europe.energytradingweek.com commoditiespeople.com

A free library of content for the ENERGY trading community.

NEWS

We last hosted IFTA in 2014

IFTA 2026 Brings Together Global Leaders to Explore AI, Innovation and the Future of Market Analysis On 9 and 10 October, The International Federation of Technical Analysts (IFTA) will return to London for its 39th Annual Conference, bringing together some of the most influential figures in technical analysis, quantitative research, trading, and investment management. Held at One Moorgate Place in the heart of the City of London and streamed globally, IFTA 2026 carries the theme “The Next Wave in TA: Where Legacy Meets Innovation – AI, Insight and Global Market Strategy.” At a time when financial markets are being reshaped by artificial intelligence, algorithmic trading, geopolitical uncertainty, and unprecedented volumes of market data, the conference aims to examine how technical analysis continues to evolve while remaining grounded in the core principles that have guided market practitioners for decades. This two-day event promises a unique blend of thought leadership, practical applications, and international networking.

A Gathering of Industry Leaders One of the defining features of IFTA 2026 is the calibre of its speaker lineup. The conference brings together six internationally recognised experts whose collective contributions have shaped modern technical analysis. Among the headline speakers are Perry Kaufman, renowned author and founder of Kaufman Signals; legendary trader Linda Bradford Raschke; Zoe Bollinger of Bollinger Capital Management; market theorist Robin Mesch; David Keller, President and Chief Strategist of Sierra Alpha

Research; and Seiji Adachi, former member of the Bank of Japan’s Monetary Policy Board. Rarely do these industry leaders appear on the same platform, making the conference a significant event for practitioners seeking direct insight from those influencing the future direction of the discipline.

Technical Analysis in an Age of AI The central question underpinning IFTA 2026 is straightforward yet profound: what role will technical analysis play in markets increasingly dominated by automation and machine learning? Conference sessions will address topics including the impact of artificial intelligence on market forecasting, the resilience of traditional indicators in modern market environments, the development of robust trading systems, and methods for identifying meaningful signals amid growing market noise. Rather than focusing solely on theory, speakers will present practical frameworks and evidence-based approaches that attendees can apply directly to investment and trading decisions.

Day One: The Big Picture The first day of the conference, themed “Should I Stay or Should I Trade? The Big Picture,” focuses on strategic perspectives and long-term market trends. Opening keynote speaker, Zoe Bollinger, will set the stage for discussions examining the evolving landscape of technical analysis and investment management.

www.technicalanalysts.com

NEWS

Among the highlights is Gautam Shah’s presentation on identifying and investing in megatrends through technical analysis. Shah will demonstrate how investors can shift their focus from short-term trading opportunities to longterm wealth creation through compounding strategies aligned with structural market trends. Nick Glydon, of Rothschild & Co, will provide insights into how European fund managers integrate technical analysis into institutional investment processes, while Julius de Kempenaer will showcase the use of Relative Rotation Graphs® (RRG®) as a framework for portfolio construction across equities, bonds and currencies. Veteran market technician Trevor Neil will tackle one of the industry’s most debated questions: whether technical analysis remains relevant in an era characterised by quantitative models, algorithmic trading, and artificial intelligence. The afternoon programme continues with Linda Bradford Raschke’s keynote address, followed by presentations covering objective market structure analysis, forecasting future price targets, and the application of technical methodologies to global energy markets.

Day Two: Technical Analysis in Practice The second day, entitled “Rock the Market: TA in the Real World,” shifts attention toward practical implementation and contemporary market challenges. Robin Mesch opens the day with a keynote exploring markets as dynamic narratives shaped by changing balances of control between buyers and sellers. Her presentation emphasises understanding market behaviour through evolving conviction rather than relying solely on predictive signals. Other sessions focus on market profile analysis, behavioural finance, macro asset allocation, and systematic trend-following strategies. David Keller’s presentation, “The Four Deadly Sins for Investors,” examines common behavioural mistakes that undermine investment performance and demonstrates how disciplined technical processes can help investors avoid them. Meanwhile, Charlie Morris introduces ByteTrend, a quantitative framework that transforms chart analysis into a numerical system for evaluating trends across thousands of global equities, offering new tools for both trend followers and contrarian investors.

AI, Quantitative Methods and the Future of Trading The conference concludes with a strong emphasis on artificial intelligence and quantitative methodologies. Perry Kaufman’s keynote, “Forecasting the Future,” provides a fitting bridge between traditional market analysis and emerging technologies. Subsequent presentations explore how machine learning can uncover insights hidden within traders’ equity curves, helping analysts identify strengths and weaknesses in strategy design, risk management, and position sizing. Eoghan Leahy, Chief Executive Officer of Quant Market Intelligence, closes the educational programme with an examination of AI-driven trading system optimisation. His session highlights the limitations of large language models for market prediction while demonstrating how evolutionary computing techniques, such as genetic algorithms, can enhance investment strategy development.

Building a Global Community Beyond the educational content, IFTA 2026 serves as an important forum for professional networking and collaboration. The conference attracts fund managers, portfolio managers, institutional traders, quantitative researchers, market strategists, fintech innovators, and financial educators from around the world. Industry participants will have opportunities to exchange ideas during panel discussions, networking receptions, and the conference cocktail event hosted at London’s historic National Liberal Club. As technical analysis continues to adapt to new technologies and increasingly complex market structures, IFTA 2026 offers a timely opportunity for practitioners to examine both the enduring principles and the emerging innovations shaping the profession. The message behind this year’s conference is clear: while markets may change, the pursuit of understanding price behaviour remains as relevant as ever. The next wave of technical analysis is not about replacing traditional methods but enhancing them through technology, data, and global collaboration. For market professionals seeking to understand where the discipline is headed next, London will be the place to be in October 2026.

With thanks to our sponsors GOLD SPONSOR

BRONZE SPONSOR

Special Journal Offer! We have put together a great offer for you. Book onto any of our STA Diploma courses, including the Home Study Course, before 31 December 2026 and save £50. SIMPLY CLICK HERE and enter code 'JNLPROMO' in the coupon box to redeem your £50 discount.

www.technicalanalysts.com

NEWS

The STA Charter for Technical Excellence As we shape the strategic direction of www.technicalanalysts.com, we are taking a step back to clearly define the purpose, role, and long-term vision of the Society of Technical Analysts (STA). At the heart of this discussion is a simple but powerful question: What should the STA stand for in the 21st Century? To guide this process, we have introduced a structured framework — “The STA Charter for Technical Excellence” — designed to articulate why the STA exists, what it represents, and how it delivers value to its members and the world. The STA Charter for Technical Excellence sets out the following:

Why the STA exists

What the STA is

How the STA delivers value

The STA’s purpose goes far beyond the essentials of information, education, examination and accreditation. It sits at the centre of a global professional ecosystem, built on six core pillars:

Clarity of identity is essential.

The STA brings its mission to life through tangible, high-impact activities:

1. Professional Development: Technical Analysis is a high-impact skill that sharpens decisions and boosts prospects across trading, investing and financial analysis. 2. Standardisation & Credibility: Establishing recognised benchmarks that define quality and professionalism in the field. 3. Community & Networking: Creating a trusted network of analysts, traders, and investment professionals. 4. Research & Debate: Encouraging critical thinking, innovation, and the exchange of ideas. 5. Advocacy for Technical Analysis: Promoting the discipline as a valuable and rigorous approach to market analysis. 6. Preservation of History: Safeguarding the heritage and intellectual foundations of technical analysis.

The STA is not just one thing — it operates across multiple dimensions:

An Education Provider: Delivering structured learning and globally recognised qualifications. A Membership Community & Network: Connecting professionals across markets, geographies, and experience levels. A Global Organisation: Part of an international community shaping the future of the discipline with a global reach. A Publisher: Producing thought leadership, research, and educational content on Technical Analysis whilst preserving, distributing and reprinting key words on TA.

Education & Qualifications: Providing informative, genuine Technical Analysis education and rigorous certification pathways that build expertise and credibility. Events & Networking: Hosting conferences and seminars that connect the global Technical Analysis community. Publications & Library: Offering access to knowledge, research, and historical resources. Career Support: Helping individuals gain a competitive advantage in their careers by developing their knowledge of technical analysis.

“The STA’s purpose goes far beyond the essentials of information, education, examination and accreditation. It sits at the centre of a global professional ecosystem.” Society of Technical Analysts

As we refine and evolve “The STA Charter for Technical Excellence,” this is not intended to be a static document, but a living framework that reflects both the needs of today's Members and the ambitions of future generations of Technical Analysts as we go forth through 21st Century.

NEWS

Does Technical Analysis Share a Pillar with Alchemy? At our recent Society meeting, we were treated to a thought-provoking (and refreshingly honest) talk by long-time practitioner Guido Riolo, who posed an unusual question: Does technical analysis share a pillar with alchemy?

At first glance, it sounds provocative — even playful. But as Guido unfolded his journey and ideas, it became clear that this comparison opens a deeper conversation about experimentation, open-mindedness, and what it really means to be a market analyst. From Finance Student to Technical Analyst Guido started by sharing his personal path into technical analysis. Like many, he began with fundamentals while studying finance, only to discover — through interviews and early career experiences — that markets demanded more than balance sheets and macro models. What stood out was his willingness to say, “I don’t know” — followed immediately by “but I’ll learn.” That mindset ultimately led him into technical analysis, then to a long career at Bloomberg, and later into hedge fund investing. Along the way, Guido encountered (and eventually embraced) tools he initially resisted: Elliott Wave, Ichimoku, and DeMark studies. Ironically, these became the backbone of his professional framework. GUIDO RIOLO

His takeaway? Life forced me to become open-minded — and that’s exactly what makes a good technical analyst. Not technical versus fundamental, he argued — but good analysts versus bad analysts, regardless of discipline. What Alchemists and Technicians Have in Common So where does alchemy come in? Historically, alchemists weren’t just chasing gold. They were early experimenters, observers, and innovators. Figures like Isaac Newton and Galileo Galilei even considered themselves alchemists. They:

“If there is a danger today, it isn’t that technical analysis resembles alchemy... It’s that too many unqualified voices claim to practise it.” Guido Riolo

• • • • •

Experimented relentlessly Tested ideas in the real world Focused on what worked, often more than why it worked Operated outside established institutions Shared knowledge selectively, sometimes secretively

Sound familiar? Guido drew clear parallels with technical analysts today: • • • • •

We experiment with indicators, patterns, and strategies. We care deeply about results. We often don’t worry why a head-and-shoulders works — only that it does. We can be surprisingly secretive about our “edge.” We exist somewhat outside academic finance, despite decades of practical success.

www.technicalanalysts.com

NEWS

Just like alchemy, technical analysis thrives in an open ecosystem where creativity is unbundled — where anyone can test an idea, build a method, or create a new framework.

The Real Risk: Unqualified Voices If there is a danger today, it isn’t that technical analysis resembles alchemy. It’s that too many unqualified voices claim to practise it.

Outsiders — But Productive Ones One recurring theme from the discussion was how technical analysts are still perceived as outsiders in much of the investment world. In some firms, openly identifying as a technician can feel like a career risk. Many practitioners quietly use charts on the side, while presenting their ideas through a fundamental lens.

With online content everywhere, it’s easy for people to present themselves as technicians after watching a few videos or copying indicators. Guido stressed that this hurts the entire profession — and that qualified practitioners must be willing to call it out. Education, professional standards, and greater integration with universities are essential if technical analysis is to gain the recognition it deserves.

Yet Guido made a crucial distinction: Unlike alchemists, we don’t have the luxury of being wrong for long.

So… Are We Alchemists? Guido closed with a balanced reflection.

Markets are brutally competitive. Bad ideas are quickly punished. Analysts must deliver actionable insights from day one. That pressure forces constant self-evaluation and refinement.

Yes, there are similarities:

In other words, technical analysis has a built-in survival mechanism.

• Both communities are creative and experimental • Both focus on transformation (price into profit; base metals into gold) • Both value practical results • Both sit outside traditional power structures But there’s a key difference.

Ahead of the Curve Guido also reminded us that technicians have often been early explorers of concepts that later became mainstream: • • • •

Market psychology and behavioural bias Momentum Quantitative pattern recognition Timing and risk management

Long before these ideas were formalised in academia, technicians were already working with them on live price data. Rather than apologising for this, Guido argued, we should be proud of it.

Technical analysts are accountable to markets every single day. We test ideas in real time. We discard what doesn’t work. We evolve. And that, Guido suggested, is what truly defines us: An open-minded, diverse, inventive community that gives every idea a fair chance — and keeps only what survives contact with reality.

RESEARCH

Does Trend Following Still Work on Stocks? A Breakout System to Capture the Stocks That Really Matter

ALBERTO PAGANI

COLE WILCOX

CARLO ZARATTINI

Alberto Pagani is a quantitative analyst at Concretum Research. Born in Piacenza, Italy, he holds a degree in management engineering from the University of Parma. His research focuses on quantitative investment strategies, with particular interest in trend-following, volatility-based approaches and systematic portfolio construction.

Cole Wilcox is the Founder, Chief Executive Officer and Chief Investment Officer of Longboard Asset Management, a boutique manager specialising in alternative investment strategies. He has more than 25 years of experience in hedge fund investment strategies and was co-author of the original 2005 paper Does Trend Following Work on Stocks? Longboard Asset Management specialises in systematic alternative investment strategies and has long focused on the practical challenge of capturing divergent return streams, including trendfollowing behaviour in equities.

Carlo Zarattini is the founder of Concretum Research in Lugano, Switzerland. After studying mathematics in Padova and quantitative finance at Imperial College London and USI Lugano, he worked as a quantitative analyst at BlackRock, where he developed volatility and trend-following strategies. Concretum Research develops quantitative research and systematic trading models for institutional and professional investors.

Trend following is often associated with futures markets, diversified CTAs and the idea of riding persistent moves across asset classes. Stocks are usually discussed differently. Equity momentum is commonly framed as a cross-sectional phenomenon: buy the winners, avoid or short the losers, and periodically rebalance. But an older and more direct question remains important for technical analysts: can a pure long-only trend-following approach still work on individual stocks? Nearly twenty years ago, Cole Wilcox and Eric Crittenden addressed that question in their 2005 study “Does Trend Following Work on Stocks?”. Their conclusion was striking: most trades were ordinary, but only a small number of large winners accounted for the strategy's long-term profitability. Twenty years later, Concretum Research and Cole Wilcox revisited and extended that work using a survivorship-bias-free database of U.S. common stocks from 1950 through 2024. The study examines more than 66,000 simulated long-only trend trades and then develops a tradable portfolio designed to capture the same positive outliers systematically. The answer is clear, but with an important qualification. Trend following still works on stocks and the edge remains economically meaningful. However, implementation matters. Without careful control of turnover and transaction costs, much of the theoretical edge can disappear in real-world trading.

www.technicalanalysts.com

RESEARCH

Why Stocks Are Different The fundamental intuition behind trend following is simple: when a market starts to advance persistently, the trader attempts to participate and remain invested until the trend breaks. Trend following can be applied to two fundamentally different opportunity sets. In futures markets — the natural home of macro trend strategies — a relatively small number of liquid contracts capture broad economic regime shifts in commodities, currencies, rates, and equity indices. These trends are driven by macroeconomic forces that move many assets simultaneously. In individual equities, the dynamics are different in almost every important respect. The U.S. equity market contains thousands of securities, each with its own liquidity profile, volatility regime, and corporate life cycle. Stocks are partially connected to the broader market, but they also follow company-specific paths shaped by fundamental microeconomic forces: competitive disruption, market-share consolidation, and company-level earnings cycles. This creates a large and uneven opportunity set of idiosyncratic moves — micro trends — where a systematic process can attempt to ride the few stocks that develop into exceptional long-term winners. Because these micro trends originate in fundamentals rather than macroeconomic regimes, they are structurally independent of the trends that drive macro trend following strategies.

highs, the stop is trailed upward using the same volatilityadjusted logic, but it is never lowered; if the stock closes below its trailing stop, the position is exited at the next open. This structure expresses a core principle of trend following: enter strength, give the trade room to develop, and exit only when the trend has deteriorated enough to invalidate the original thesis. As Figures 1 and 2 illustrate, the same process can help investors participate in extraordinary winners, such as Northrop Grumman, while also exiting failed trends before severe damage occurs, as in the case of Bear Stearns. Figure 1. Riding a winner: Northrop Grumman shows how an all-timehigh breakout and a wide trailing stop can keep the portfolio invested through a persistent long-term trend.

This same diversity makes survivorship bias especially dangerous; it is not enough to test today's successful stocks backward in time. The research therefore uses a survivorship-bias-free database of approximately 31,000 common stocks listed on NYSE, AMEX, and Nasdaq between 1950 and 2024, including roughly 24,000 delisted securities — testing the strategy on the U.S. equity market as it actually existed through time, not only on the stocks that survived. To keep the test focused on tradable names, the study excluded very low-priced and illiquid securities by requiring a minimum unadjusted price of 10 dollars and a 42-day average dollar volume above 1 million dollars, with historical liquidity thresholds adjusted for inflation.

Figure 2. Cutting a failed trend: Bear Stearns shows how the same exit discipline can remove a position before a severe collapse unfolds.

A Simple Definition of Trend This research uses an all-time high breakout as the trend signal. If a stock meets the price and liquidity filters and its adjusted close reaches or exceeds the highest adjusted close in its history, a buy order is placed for the following open. The rule is simple, unambiguous and selective: a stock making a new all-time high is, by definition, in an uptrend. At entry, the initial stop is placed below the all-time high at a distance linked to the stock’s recent volatility, namely 10 times its 42-day Average True Range (ATR). 1 This gives the trade enough room to absorb ordinary fluctuations without being forced out by normal noise. As the stock makes new

Average True Range (ATR), introduced by J. Welles Wilder, measures a security’s average trading range over a chosen lookback period, including price gaps. Here it is calculated over 42 trading days and used to make stop-loss distances volatility-adjusted.

RESEARCH

The Trade Distribution: Most Trades Do Not Matter

Figure 3. Profit concentration in equity trend following. When trades are sorted from worst to best, the cumulative profitability of the system is generated by a small right tail: less than 7% of trades account for the total long-term profit.

Across more than 66,000 simulated trades from 1950 until 2024, the return distribution exhibits the classic signature of trend following: positive skew. Average winning trades generated about 1.90R 2 , while average losing trades lost about 0.70R. The win rate was 43.90%, but the strategy does not require a high win rate because profitability is driven by the size of winners, not their frequency.

Trend-Following System (1950-2024)

The most important result is the concentration of profits. Approximately 56% of trades lost money, another large middle group of trades recovered those losses and left the strategy roughly flat and less than 7% of trades were responsible for the cumulative profitability of the entire system, as shown in Figure 3. Trend following on stocks is not about being right most of the time. It is about surviving the many small and moderate failures while staying invested in the rare companies that trend far enough and long enough to dominate the return distribution. If the distribution is not symmetrical, its underlying process should not be assessed as though it were.

Did the Edge Survive Publication? The original Wilcox and Crittenden paper was published in 2005, giving a clean out-of-sample period from 2005 through 2024. The post-publication results, illustrated in Figure 4, show some minor decay, but not disappearance. Average profitability per trade declined from roughly 0.37R before publication to about 0.28R afterward. This result is important because many systematic edges weaken once they become widely known. In this case, the effect appears to have persisted, although at a slightly lower average profitability per trade. The likely reason is that the underlying source of return is not a narrow technical pattern, but the broader and more structural tendency of equity markets to produce a small number of exceptional long-term winners.

Figure 4. Average trade profitability by year, expressed in units of initial risk. The post-2005 period shows some decay, but the edge does not disappear.

Average PnL (R) per year

R denotes the initial risk unit of a trade, defined as the distance between the entry price and the initial stop-loss level. A result of 1.90R means the trade earned 1.9 times the amount initially at risk.

www.technicalanalysts.com

RESEARCH

From Theory to Practice

Drawdown and Market Regimes

Trade-level statistics are useful, but investors ultimately need to know whether an edge can be harvested inside a real portfolio. The second part of the research builds a systematic long-only portfolio from January 1991 through October 2024, using Russell 3000 constituents. The portfolio applies the same all-time-high entry rule and volatility-based exit logic but adds portfolio-level risk management.

One of the most attractive features of a long-only trendfollowing portfolio is its ability to reduce overall exposure when individual stock trends begin to fail. Unlike a traditional buy-and-hold equity portfolio, the strategy does not remain fully invested by design: when fewer stocks are making new highs and existing holdings violate their trailing stops, the portfolio naturally moves toward cash. In periods of broad market weakness, this mechanism can substantially reduce equity exposure, allowing the portfolio to step aside when the opportunity set deteriorates. This behaviour helped the theoretical portfolio limit its maximum drawdown to approximately 32%, compared with about 55% for the broad U.S. equity benchmark over the same period.

Position sizes are set inversely to each stock’s recent volatility, so that more volatile stocks receive smaller allocations and lower-volatility stocks receive larger ones. The allocation is also diversified across the number of qualifying holdings, and total portfolio leverage is capped at 200%. The goal is not to forecast which stock will become the next major outlier. The ultimate objective is to own a complete set of liquid stocks that are behaving like potential outliers, then let the exit process decide which ones deserve to remain inside the portfolio. In its theoretical form, before transaction costs, slippage and financing, the portfolio performed strongly from January 1991 through October 2024. It achieved a 15% CAGR, compared with 11.2% for the broad U.S. market benchmark; a Sharpe ratio of 0.85, compared with 0.54 for the market; a maximum drawdown of 32%, compared with 55% for the market; and annualized alpha of 6.2%, statistically significant in the tested framework. Figure 5. Theoretical Trend Portfolio versus the broad U.S. equity market, January 1991 to October 2024. Before transaction costs, slippage and financing, the trend portfolio delivered higher CAGR, higher Sharpe ratio, lower maximum drawdown and positive annualized alpha.

Equity Lines

The same mechanism, however, creates a potential drawback. Trend following is designed to respond to confirmed strength, not to anticipate market bottoms. After abrupt sell-offs followed by violent rebounds, the portfolio may remain underinvested during the early phase of the recovery because many stocks have not yet requalified by making new all-time highs. This was visible after the Global Financial Crisis in 2009 and again after the Covid sell-off in 2020: the strategy protected capital during the initial decline but lagged as the market rebounded sharply. This trade-off is central to understanding the strategy. Equity trend following can reduce participation in prolonged downtrends, but it will often pay for that protection by entering late when markets recover quickly. It is therefore better understood as a process for surviving weak regimes and participating in confirmed leadership, rather than as a tool for calling market bottoms.

The Implementation Problem: Turnover and Cost The theoretical portfolio shows that the signal has value, but a theoretical portfolio is not enough. In particular, a highly diversified stock trend-following strategy has a practical challenge that is easy to underestimate: turnover. Weights must be recalculated as volatility changes, stocks reaching new all-time highs must be added, and existing holdings must be resized or removed. Many of these adjustments are small, with some being reversed quickly but in a frictionless backtest they seem harmless. In a real account they accumulate commissions, slippage and operational complexity. To evaluate this, the study introduces realistic frictions: brokerage commissions, SEC fees, slippage (estimated with a market-impact model), borrowing costs when leverage is used, and the constraint that fractional shares cannot be traded. Portfolios were then tested with starting capital ranging from $100,000 to $100 million. For a $100,000 portfolio, CAGR fell from the theoretical 15% to only 2.5%, showing negative alpha as well. Small portfolios were especially penalized by minimum commissions and small rebalancing trades while larger portfolios were less affected by minimum commissions but increasingly exposed to market impact drag. Under those assumptions, the most efficient range appeared to be

RESEARCH

around $10 million in assets, where the yearly cost drag was approximately 2.5%. Figure 6 illustrates how transaction costs can materially erode the theoretical edge when turnover is not controlled. Figure 6. Estimated annual cost drag by portfolio size before Turnover Control. Without turnover controls, smaller portfolios are heavily penalized by commissions, while larger portfolios face increasing slippage.

Performance Drag

Turnover Control: Preserving the Edge To address this problem, the study introduced a Turnover Control mechanism. The objective was not to change the philosophy of the strategy, but to reduce unnecessary trading. The mechanism skips rebalancing trades when the required adjustment is too small, distributes larger trades over multiple days to reduce market impact, and avoids trades when expected commission costs are too high relative to the notional amount traded.3 After applying Turnover Control, performance improved substantially across all tested portfolio sizes, as summarized in Table 1. The $100,000 portfolio, which had been almost destroyed by costs in the naive implementation, achieved a CAGR of 13% with a Sharpe ratio of 0.75 and an alpha of 4.9%. Portfolios from $250,000 to $10 million produced CAGRs around 13.3% to 13.5%, with Sharpe ratios near 0.75. Even the $100 million portfolio remained attractive, with a CAGR of 12.4%, a Sharpe ratio of 0.70 and an alpha of 4.3%. The lesson is that the signal matters, but so does the implementation required to harvest it. For equity trend following, turnover control is not a cosmetic improvement: it is a key condition to allow the statistical edge to survive real-world trading frictions. Table 1. Selected portfolio statistics before and after applying Turnover Control. Figures are based on the 1991-2024 backtest.

AUM

CAGR

Sharpe

Alpha

TC Off

TC On

TC Off

TC On

TC Off

TC On

$0.10M

2.45%

12.97%

0.06

0.75

-4.63%

4.94%

$1M

9.01%

13.40%

0.49

0.75

0.91%

4.93%

$10M

12.53%

13.38%

0.70

0.74

4.13%

4.86%

$100M

10.97%

12.43%

0.65

0.70

2.72%

4.28%

A full specification of the Turnover Control mechanism and transaction-cost assumptions is available in the original research paper.

www.technicalanalysts.com

RESEARCH

Conclusion The evidence supports a clear conclusion: trend following can still work on individual stocks, but not because most trades are successful. It works because equity markets occasionally produce extraordinary longterm winners, and a systematic process can keep investors exposed to them while cutting many failed trends early. Across more than seven decades of U.S. equity data, the same pattern appears repeatedly. Only a small minority of winners drive performance, and this is also where the essence of convexity lies: accept many small disappointments in exchange for the possibility of participating in rare, outsized moves. The real challenge is that this convexity is not free. It requires patience, diversification, disciplined exits and, at the portfolio level, careful implementation, with transaction costs and turnover determining whether the edge can survive in practice. Identifying the right-tail opportunity is only the first step; harvesting it efficiently is the real work. For technical analysts, the broader lesson is surely familiar but still powerful. The value of trend following is not prediction: it is participation through asymmetry... not knowing in advance which stocks will become exceptional but being able to capture them when they do.

RESEARCH

Taming Volatility Next to price, volatility is the most important statistic for a systematic trader – perhaps any trader. I thought it was best to start by asking AI.

“How do you reduce volatility in a futures portfolio?” The most important were: • Hedge systematic risk • Use Beta-Weighting Hedge • Diversify Across Uncorrelated Markets • Reduce Position Size and Leverage • Hedge Event Risk PERRY KAUFMAN FSTA Perry Kaufman is the author of the well-known Trading Systems and Methods, and more recently Kaufman Constructs Trading Systems and Learn To Trade. He is an active trader and has spent his career as the architect for trading systems used by institutions and funds, often partnering with those firms. His experience includes commodities and equities. He has traded and managed money through the U.S.-Russian wheat deal of 1973, 20% interest rates of 1980, the stock market crash of 1987, the internet bubble of 2000, and the subprime crisis of 2008, and now the Covid pandemic. He understands risk control and believes that not all trading needs to be complex to be profitable. Perry can be reached through his website, www.kaufmansignals.com

And for “Reducing volatility in stocks:” • Diversify (across assets and stocks) • Use broad-based Index funds • Increase exposure to defensive Investments • Rebalance regularly • Reduce correlations • Decrease exposure In addition, they advised against overreacting and suggested dollar-cost averaging. Many of those suggestions make sense. But they reduce returns and opportunity while they reduce volatility. Traders, like me, want better returns than the S&P with lower risk. How do we do that? Then here is the problem: • Diversification lowers both risk and returns, • Using a broad-based index doesn’t help us beat the S&P -- it is the S&P • Increasing exposure to stocks with lower volatility means we might as well trade utilities • Rebalancing often takes money from good trades and adds to the bad ones • Hedging your stock by selling the index leads to very small returns. My own solution goes as follows: • I don’t trade low-priced stocks • I use equal risk allocations • I have my own way of selecting markets • I avoid extreme volatility • I avoid too little volatility • I don’t rebalance stocks, but I do manage futures risk • I allow a profitable market to run

www.technicalanalysts.com

RESEARCH

Subscribe to Kaufman Signals

Let’s Look at Stocks First (Stocks are easier than futures) Don’t Trade Low-Priced Stocks Contrary to what is taught in graduate school, volatility is not log-normal, that is, it doesn’t increase as a percent. That’s what futures do. Figure 1 (above) shows the price “differences” (the daily range) of Bank of America versus price and Figure 1 (below) shows the stock returns versus price.

Don’t Trade Too Many Stocks The more stocks you trade, the closer you get to the broad index. I trade 10. If you look at the increased diversification, shown in Figure 2, trading more than 10 doesn’t do much. Figure 2. Impact of diversification.

Figure 1. Bank of America volatility (above) price difference versus price, and (below) stock returns versus price.

Bank of America price changes

Bank of America returns

Correlations Yes, low correlations reduce risk. But is that what we want? If the semiconductor stocks are the ones moving, don’t I want to be there? Yes, the risk is higher, but the rewards can be much higher. Using a stock selection approach, I will trade whatever is moving. It will also get me out, as I’ll show later. Extreme Volatility While I don’t mind volatility, there is a level of extreme volatility. Using the formula for annualised volatility, the 20day STD of returns times the SQRT(252), that’s the same as VIX. I exit a trade if the annualised volatility of a stock is over 0.90. I reduce exposure of the entire portfolio if volatility is above 0.32. We all have limits.

The price difference remains constant while the returns are more volatile at lower prices. We might remember when BOA was at $5 it could jump 50¢ in a day. That’s 10%. Then the first step for a stock trader is not to trade any stock below $10. After that, you can divide your investment by the number of stocks in your portfolio, then divide that allocation by the closing price. Not perfect, but easy.

Portfolio Volatility Futures do not have the same volatility issues as stocks – at least until recently when silver exploded. For both stocks and futures, we don’t reduce exposure when a single stock or futures market is moving higher with more volatility. We want those profits. Instead, we look at the portfolio volatility. If the entire portfolio volatility is increasing above 0.32, we reduce exposure. That means something global is happening.

RESEARCH

How I Handle Futures, which can be more complicated Sizing the Position I use “volatility parity” to size initial positions. Divide the investment by the number of markets. You will want no less than $25,000 to allow each market to have multiple contracts. Then divide that allocation by the 20-day average true range times the contract value (the value of a 1.0 point move). Then all positions have the same risk. Sector Correlations Using the position sizing, run all markets through your system. Get the profit stream for each. Group the markets into the basic six sectors, interest rates, FX, Index, energy, metals, and ags. Using the profits, find the correlation within each sector. You will find that the correlations are highest for interest rates and lowest for agriculture. Create a factor that equalizes all the sectors. If the correlations of rates are 0.60 and the correlations of ags are 0.30, we will trade 2 contracts of ags for every one of rates. Again, we are equalising the volatility. Target Volatility It’s time to decide how much risk you are willing to accept. Run your system using the new allocations and create your portfolio NAVs. Find the annualised volatility. If your target volatility is 12% and the portfolio volatility is 20%, then reduce all positions by 12/20, or 60%. You can see why the original $25,000 doesn’t matter, because we’ve adjusted to the target volatility. Maintaining the Target Volatility Each day I record my returns and create a continuous NAV. I then calculate the annualised volatility of the past 20 days. If the volatility exceeds my target by 4%, I reduce all my positions sizes. If it drops below 4% of my target, I increase positions size. That way I’m taking profits on a strong surge in the market and adding to lower volatility. If I don’t add to lower volatility, my returns will be less than my target.

will reduce the holding period to under 20 days. If a market drops out of the top 10, replace it with the new stock. You may want to sort by a return to risk ratio. I’ve found that asking too much of performance is overfitting. It looks good on paper but doesn’t perform. Futures are Similar, but Not Quite Because interest rates are highly correlated, as are the currency markets against the U.S. dollar, and often the index markets, we need to be careful if the best futures are all in one sector. Futures can be highly leveraged, which makes the volatility more important. I assign a maximum number of markets from each sector, rather than a total of 10. If the only markets that sort to the top are in one sector, I reduce exposure by 50%. If there are only two sectors, I reduce exposure by 25%. Three or more sectors are no problem.

AI Can’t Always Be Wrong One suggestion that is clearly correct is to add bonds to your portfolio. I used SPY and IEF to test the results, going back to 2008. Checking the volatility, I found that SPY was about three times the volatility of IEF. These were my values • SPY risk = 17.9%, IEF risk = 6.8% • SPY AROR = 14.2%, IEF AROR (x3) = 7.4% • Combined returns, AROR = 12.1%, risk = 11.6% • Returns ratio > 1.0 (a very good ratio) Figure 3 shows the returns of the SPY, IEFx3, and a 50% allocation to both. Figure 3. Combining SPY with 3xIEF, equally.

Detail for 1 SPY nad 3 IEF 1 SPY

3 IEF

Combined

AROR

14.8%

4.7%

7.7%

Volatility

19.83%

6.98%

6.08%

Ratio

0.74%

0.67%

1.27%

Portfolio Selection I use this method for all strategies. It can allow you to exit before the trend gives back a large part of the profits at the end of a trade. Again, Stocks are a Bit Easier Once you have run all your markets through your strategy, sort them by highest profit over the past few months (you’ll need to decide). You want to allow markets that were not doing well to surface, and markets that were not good to move further down the list. Then choose the top 10 stocks to trade. By doing this you can exit a profitable trade before it gives back much of the profits at the end. If a typical trend is held for 40 days, this

Summing Up Volatility Controlling volatility is controlling risk. It’s important to start out with equal risk because, of the stocks selected for the portfolio, I have no idea which will be the best. We need to stay with the trending (or the profitable) markets, even while we limit our exposure to extreme volatility. So, a single volatility market is OK, but a volatile portfolio needs to be deleveraged. It can be a complicated process, but an important one. See how much of it you can implement in your trading. Remember, use your own system! But applying this process will help.

www.technicalanalysts.com

RESEARCH

Proving the Case for Cycles

Revisiting a Five Year Old Cycle Forecast “Extraordinary claims require extraordinary proof,” Carl Sagan famously said — and he was right. However, in market analysis, true proof is rarely seen. Forecasts are often forgotten, revised, or quietly retired. But right here we get a chance to revisit a forecast exactly as it was made five years ago.

TOM BUNDGAARD After a formal education in logistics and purchasing, Tom Bundgaard worked for 13 years in procurement as a Purchasing Manager. This naturally involves all the traditional aspects of purchasing, especially with sourcing in the Far East. This work had a heavy focus on materials, commodities and semifinished products. From 2000 onward, Tom Bundgaard specialised in commodities from an analytical forecasting standpoint based on technical and fundamental analysis. Three educations have supported this specialisation: An ongoing mentoring education, an MSTA degree from the Society of Technical Analysts in London and a Master of Financial Technical Analysis degree from IFTA in the USA.

To be clear: I did not make this forecast in the traditional sense — not by sitting down and reasoning my way through what prices might do over the next five years. This forecast was made by the cycles. Yes, it takes craftsmanship to assemble the right cycles, but when you see how closely reality matched the projection, it becomes clear that most of the credit belongs to the underlying power of cycle analysis. In April 2021, I presented a webinar for the STA. Among several topics, I included a cycle-based projection for a commodity price — chosen casually, with no intention of revisiting it. Five years later in 2026, curiosity struck: How did that forecast actually perform? So, I went back to the 2021 recording, pulled the updated price data, and compared the two. The result was not perfect, but compelling enough to share with the technical analysis community again. Below is the essence of that comparison, based on the original chart and the updated price path – Figure 1. Figure 1. Screenshot from April 2021 STA webinar

Tom Bundgaard has been given lectures all over Europe since 2008 in various conferences, both on commodity price forecasts and macro economy, as well as being frequently interviewed on radio and TV.

www.tombundgaard.com

Updated prices, 2026 014

2016 2018 2020 2022 2024

RESEARCH

The Proof Is in the Pudding

“The goal is not perfection but reliability”.

POINT 1 The Initial Decline In 2021, the cycle composite (the dotted black line) projected a decline from the target 1 peak. The updated price (orange line in the lower graph) did indeed decline, roughly matching the expected timing and direction. This alignment is encouraging — though not extraordinary, since short term forecasts are usually easier.

Just as important as what works is to understand what doesn’t. Amplitude will always be approximate, and timing has a natural elasticity. These are not flaws — they are characteristics of any model that attempts to describe a non physical system.

POINT 2 A Major Rise The cycle model projected a significant rise towards the target 2 peak. The real price delivered exactly that — and more. The cycle composite argued for ‘a higher high’ and that certainly happened, and then some. This was forecasted in spring 2021 – to happen from 2022 to mid2023, and it did. If you look at the graph there is one downside - a limitation of cycles becomes clear. Cycles excel at trend and duration, but amplitude is inherently an approximation. The model correctly anticipated a major rise, and it did occur — but the real world amplitude exceeded the projection. That’s normal — and acceptable — because the core value of cycles lies in timing and direction. POINT 3 The Expected Decline The model projected a decline after Point 2, and the market delivered one. Again, the amplitude differed somewhat, but the timing and direction were spot on. The cycles expected prices to decline to a final low at the end of 2024, and it happened – despite the forecast being made in spring 2021. Over the full five year span, the cycle composite acted very much like a GPS: it outlined the journey, the turns, and the approximate duration. When a cycle projection is demonstrated to hold up across five years of real world events, policy changes, and market surprises, it offers something we almost never get: tangible evidence that market rhythms can be measured, modelled, and used proactively. That is the case for using cycles.

Correlation — The Statistical Backbone The correlation between the Cycle Composite and the real price is stunning, and that is the kind of correlation I see over and over again in many commodities, stocks, interest rates, etc. I’ve been doing this for 30 years, and it still never ceases to amaze me. But there is a natural limit to the enthusiasm. Cycles will never reach a correlation of 1.00, nor should we expect them to. I typically work on a cycle until it is really solid and reliable, and I find that to be a correlation above 0.70 (your mileage may vary). The chart in Figure 1 has a correlation of 0.77 and that is indeed very solid and workable, but it is not 1.00 and will never be. Don’t expect perfection. If 0.70 is really solid, then 0.80 is awesome and 0.90 is outstanding. We simply have to expect some differences between the model and reality.

Are there any downsides, you ask? Yes, I can see one. A GPS is simply amazing, but it is only as good as the map you feed it. We can apply the IT expression here: “Garbage in – garbage out”. If you don’t know what you are doing with cycles, you will feed garbage in, and you won’t get anything useful out. The good news is that we have math and software to help us make the cycles. I used a specific software for this, but there are several to choose from. That is a great help. However, nothing worthwhile is ever easy. You have to work at it and apply yourself. But you know this already. You did not master your current technical analysis knowledge in 10 days, did you? Cycles also require work, experience and craftsmanship. That is a barrier that nature always puts in front of us. People who want something ‘quick and easy’ will trip over that barrier and move on. Anything worthwhile naturally requires some effort – but it is worth it.

How to Use Cycles in Your Own Work Cycles are powerful, but they are not meant to stand alone. That is the second learning. The best results come from integrating them into a structured process, and I usually suggest the sequence shown in Figure 2 (opposite). STEP 1 The Cycle (Static GPS) The cycle composite gives you the long term roadmap: trend, duration, and a rough amplitude. It tells you whether the next major move is likely to be up or down, and how long that move may last. The blue arrow in Figure 1 points to the start of a substantial increase that was forecast (black line) — and that indeed occurred (orange line). Again, the match is incredibly good, this time with a correlation of 0.86. Incidentally, this chart shows the US 3-month treasury bill. Once you have created your cycle chart, you are then ready for Step 2. STEP 2 Technical Confirmation (Dynamic Tools) Cycles are static; markets are dynamic. Before acting, you need confirmation from tools that respond dynamically to real time price behaviour, which is our trusted technical analysis. In Figure 2 “Dynamic signal” the three blue arrows point to a low RSI with a bullish divergence, a moving average crossover, and a MACD crossover. All of them confirmed the cycle’s projected uptrend, and this confirmation is important. So, you might say “Why do we then need the cycle projection?” Because a break above the moving average cannot tell you whether the move will last a month or two years — or how high it is likely to run. That perspective is something cycles provide, and it is a unique trait. It tells you whether this move is worth trading.

www.technicalanalysts.com

RESEARCH

Figure 2. Screenshot from April 2021 STA webinar

Static (cycles)

2000

2010

Dynamic signal (TA tools)

Double Confirmation

2020

STEP 3 Fundamental Confirmation (Optional but Powerful) Finally, I prefer to add a fundamental layer. This is optional, but I recommend it. In Figure 2 I call this “Double Confirmation”. In my book (“Spying on Tomorrow”) I state the need for at least one or two key drivers that explain the why behind the increase. In the chart on the far-right side, the blue line is a fundamental aspect that has a lead lag relationship with the 3-month treasury bill (orange line). At the arrow the blue line starts increasing before the orange (and this is the one we are trying to forecast), confirming a well-established reason behind the increase. This simply provides an additional confirmation of the uptrend, as well as a deeper understanding of why the move is happening. When all three steps align with the same message — and they do about 85% of the time — you have a high confidence setup. When they don’t, you simply wait or tread carefully. Within a month or two, the models will almost always fall back into alignment at which point you can act decisively. But as mentioned, about 85% of the time they fully agree and confirm each other.

A Final Thought Imagine if the markets you trade came with the same kind of GPS guidance you rely on in your car. A system that tells you the likely route ahead, the twists and turns to expect, and roughly how long the journey will take. Markets are, by nature, unfamiliar terrain — but cycles can act as that navigation system. Cycles won’t give you perfection - but they will give you structure, timing, and a remarkably clear sense of direction. Cycles are not magic, nor are they effortless. Anything worthwhile requires some effort. But once you build your first cycle model and see how it tracks and predicts the market’s behaviour, you may well find yourself hooked. I do recommend it. It will likely change how you think about time, structure, and the rhythms that are underlying price movement. And perhaps the next time you glance at your car’s GPS, you’ll smile – knowing that markets, too, seem to have their own hidden navigation system.

ANALYST FOCUS

Patricia Elbaz puts 5 questions to Guido Riolo, Senior Technical Analyst at Symmetry Investments 1. First of all, can you tell us how you were first introduced to Technical Analysis? GR: While at Uni I was looking for work experience. Every interview I went to for a position in the front office would include a question on how to find a support or a resistance. So, I bought “The Murphy” and read it cover to cover a few times and the bug had bitten. 2. Do you find that there is a specific technical analysis indicator that you prefer to use or do you use a number of indicators together? GUIDO RIOLO

Guido it’s an absolute pleasure to interview you for the Market Technician Journal. Especially as we have on many occasions attended and presented for IFTA and the STA and always manage to have some great market discussions! Interview by: Patricia Elbaz MSTA

GR: I look at multiple things. Price action is king but also, I have a few indicators I like. I look at Elliott Wave as a roadmap, Ichimoku is my trend confirmation, DeMark is my contrarian/ mean reversion tool, but then I look at candle patterns, chartist patterns, momentum divergences. It’s not good to get stuck on only one tool. 3. Can you tell us which strategy you recommend when trading? Do you look more at short term or long-term strategies? GR: I think everyone should look at a minimum of 3-time frames and the daily chart should always be one of them. I tend to look at 6 different time frames. A wiggle on a monthly chart could be a trend on a daily or shorter. 4. Being an MBA graduate from Long Island University, would you advise students to carry out a master’s or go straight into work and aim for a post grad training scheme? GR: I think that it is useful to have

some work experience before going for a master’s degree. 5. Finally, what advice would you give students and young professionals who are starting to learn about technical analysis and the many indicators? GR: Take a qualification such as the MSTA or similar; talk to people and try to learn from what they can give you; keep a journal of your thinking behind a decision and review it once the move has played out; remember that unless you make mistakes you are not improving, make the most of your mistakes; spend hours looking at charts, there is no replacement for experience. Thank you so much Guido for being an active member of the STA for having invited us to Bloomberg on many occasions and for sharing your valuable knowledge with us.

We look forward to seeing many of you at future STA events listed on the website www.technicalanalysts.com

www.technicalanalysts.com

BOOK REVIEW

Wall Street Uncut David Allman Unconventional Interviews with Giants of Technical Analysis

In early 1999, Bob Prechter and Dave Allman set out to capture and publish the state of Technical Analysis at that time. The result was a series of interviews with many of the leading US technical analysts of the day. If there was ever a golden age of Technical Analysis, perhaps the 1990s, leading up to the Dot-com crash, was it. This was an era of computerised market information, together with the rapid development of technical analysis software and market data services, both of which were just coming into their own. These interviews therefore provide a timely reminder of that period, together with the outlook, methods, and thinking of these respected pioneers. As the interviews were conducted on a one-to-one basis, the text has a relaxed, conversational style. Alongside discussions of market analysis, the interviews include many personal stories and contemporary market observations from these "giants" of technical analysis.

developed a distinctive methodology through years of practical experience. It was also enjoyable to be reminded of meeting many of these personalities at presentations and conferences in both London and the United States. The book is not intended to provide detailed explanations of technical analysis—that material can be found in the interviewees' published works—but the informal interview format makes for an engaging and highly readable volume. As such, it comes highly recommended.

"What I particularly enjoyed about this book were the personal stories and the insights into the markets of that era, together with the accounts of how each analyst developed a distinctive methodology through years of practical experience."

The interviewees, each forming a separate chapter, are:

David Watts FSTA

R. Earl Hadady, Evelyn Browning-Garriss, Bert Dohmen, Joe Granville, Victor Sperandeo, Jim Bianco, Harry Dent, Jim Stack, Stan Weinstein, Connie Brown, Ned Davis, Ralph Acampora, Dick Arms, Justin Mamis, Arch Crawford, and Steve Nison.

The book is available in both paperback and eBook formats and is published by Elliott Wave International.

In total, the book comprises 16 interviews and chapters. Most of these individuals became well known for developing their own distinctive approaches to technical analysis and went on to publish influential books, many of which can be found in our Barbican Library. Several also enjoyed successful careers on Wall Street before establishing independent research businesses and publishing their own market newsletters. A useful appendix entitled "Interviewee Resources" provides website and email contact details. What I particularly enjoyed about this book were the personal stories and the insights into the markets of that era, together with the accounts of how each analyst

THE STA

The Wobbly Universe Ray Tomes Harmonic Theory Reveals the Cycles and Previously Hidden Structure of the Universe

Ray Tomes is not a well-known name in Europe, but he has been a cycle researcher in New Zealand since his association with the Foundation for the Study of Cycles in 1990. This book presents Harmonic Theory as a new explanation for phenomena across all scales. At its heart is Tomes' original research, covering subjects as diverse as the Solar System and music, and extending from solar cycles to climate cycles. In fact, Harmonic Theory has a long history, stretching from Pythagoras and musical harmony to Edward Dewey, and indeed even earlier, as a visit to the British Museum will attest. In this book, Ray attempts to apply harmonics as a universal underlying theory of the physical world across 18 chapters. The topics range from the wave nature of matter to a chapter by Edward Dewey on cycle theory, which is not easily obtained elsewhere. Of particular interest to market technicians is Chapter 11, "And What About Markets?", which explores the application of cycle theory to financial markets. The first four chapters develop Harmonic Theory as presented by Dewey, while also discussing the work of the Russian contemporary Alexander Chizhevsky. From there, Tomes demonstrates the theory across numerous and diverse fields of the universe. In the markets chapter, readers are given further details of Dewey's cycle research, particularly his work on the 17-week cycle, which is clearly demonstrated. The sunspot cycle is also discussed, together with questions and answers taken from the accompanying video interviews. However, this is not a specialist book on market cycles; rather, it is a broad and general text on cycle theory. Also of interest is CATS (Cycle Analysis and Time Cycles Software), developed by Ray Tomes and available free from the Cycles Research Institute. The Foundation for the Study of Cycles now also has its own Windows-based cycle analysis software, developed by Dr Richard Smith and available to FSC members.

"The immediate impression on opening this book is that Harmonic Theory is both fascinating and intriguing. However, it is not a lightweight read and is certainly not holiday reading." David Watts FSTA

This book apparently grew out of a series of eight interviews with Richard Smith, then CEO of the Foundation for the Study of Cycles, combined with decades of Ray's research and accumulated material. One of its strengths is that it does not stand alone but is supported by Ray's website, WobbyUniverse.com, where readers can find further explanations and ask questions about topics covered in the book. The immediate impression on opening this book is that Harmonic Theory is both fascinating and intriguing. However, it is not a lightweight read and is certainly not holiday reading. I found its universal application particularly interesting, as it ventures into many diverse subjects that would not normally form part of my reading agenda. Finally, Chapter 18 provides a brief "order of comprehension"—a guide for readers—and concludes with an appeal to a younger generation to continue this work. Personally, I would have welcomed a detailed appendix containing references and citations. Even so, the book provides a comprehensive overview of cycle theory and offers many stimulating avenues for further research. Available via Amazon or WobbyUniverse.com Published by Ray Tomes and Radiance Trust.

Books reviewed by: David Watts FSTA

www.technicalanalysts.com

THE STA

Benefits of STA membership

The STA holds 11 monthly meetings in the City of London, including a summer and Christmas party where canapés and refreshments are served. • Chance to hear talks by leading practitioners. • Networking. • CPD (Continuous Professional Development).

The STA holds 10 monthly talks either in-person in the City of London or online and a number of social events including the Annual Drinks Reception and a Christmas Party. • Chance to hear talks by leading practitioners • Networking with members and other finance professional • CPD (Continuous Professional Development).

As a service to our members, many of whom are unable to attend all our monthly meetings, we have been making videos of meeting presentations for several years. • Never miss the latest meeting. • Browse our extensive video archive of previous meetings.

Student members have access to an education forum which is available in the member’s area of the website. Members can ask questions on technical analysis in the Technical Analysis Forum which a course lecturer, author or Fellow will answer.

The STA ”Market Technician” journal is published online twice a year.

The STA has an extensive library of classic technical analysis texts.

Members receive the latest issue of the “Market Technician” via e-mail. They are also able to access an archive of past editions in the member’s area of the website. Technical analysts from all over the world contribute to the STA journal.

There are over 1000 books in the collection, held at the Barbican Library with a smaller selection available at the City Library. As a member you can now browse which titles are available on-line. Members are encouraged to suggest new titles for the collection and, where possible, these are acquired for the library. The complete listing can be downloaded in Excel format from within the member’s area.

The Society of Technical Analysts and the Chartered Institute for Securities & Investment (CISI) have formed a partnership to work together on areas of mutual interest for our respective memberships. CISI examination exemptions for STA Diploma Part 1 and 2 holders. MSTAs with three+ years’ experience can become full members (MCSI).

Endorsed by the Chartered Institute for Securities & Investment (CISI), members of the STA are entitled to receive continuing professional development points (CPD for their attendance on the taught course lectures. • Remain compliant. • Be informed of all new industry developments.

STA members receive all International Federation of Technical Analysts (IFTA) quarterly bulletins and annual journal and invitations to attend their monthly online webinars. • Chance to hear talks by international practitioners • Access to research from market analysts around the globe • CPD (Continuous Professional Development).

THE STA

STA Calendar 2026/27 More information about the STA events can be found here

2026

2027

OCT

STA Celebration - IFTA 2026 Cocktail Party 7.00pm, National Liberal Club

JA N

STA Diploma Part 2 Course starts (online)

OCT

IFTA 39th Conference One Moorgate Place, London

JA N

Joint STA/ACI/The Broker Club/CTC Market Outlook Panel 6.30pm, One Moorgate Place, London

OCT

STA Monthly Meeting (Oct 2026) 6.30pm, via live webinar Speakers: Javier Pineda, SkyCrypto

FEB

STA Monthly Meeting (Feb 2027) 6.30pm, via live webinar - speaker tbc

OCT

STA Diploma Part 1 Course starts (online)

MAR

STA Diploma Part 1 exam (online)

OCT

STA Diploma Part 2 Exam (online)

MAR

STA Monthly Meeting (Mar 2027) 6.30pm, One Moorgate Place- speaker tbc

N OV

STA Monthly Meeting (Nov 2026) 6.30pm, via live webinar - speaker tbc

APR

STA Monthly Meeting (Apr 2027) 6.30pm, One Moorgate Place - speaker tbc

DEC

STA Diploma Part 1 exam (online)

APR

STA Diploma Part 2 Exam (online)

DEC

AGM and Christmas Party 6.30pm, One Moorgate Place, London

9-10

www.technicalanalysts.com

THE STA

The Education Channel Monthly meetings videos are accessable via member section on website

Date 2026

2025

Speaker

Description

June

Dr Enrico Malverti

Engineering Trading Systems: How AI and Quantitative Models are Reshaping Investment Decisions

May

Tom Bundgaard

Proving the case for cycles

April

Robin Griffiths and Ron William

Navigating the 2026 Cycle Convergence

March

Tom Hicks

From Charts to Strategies - Unlock the power of technical analysis

February

Guido Riolo

Does Technical Analysis share a Pillar with Alchemy

November

Liam Boggan

Building Trust in the era of AI

October

Trevor Neil

Trust me, I'm a Technical Analyst: A professional's case for why the world needs technical analysis - now more than ever

STA Library (Online and Physical) STA UK members are eligible to join the Barbican library as standard adult library members. The STA is delighted that STA UK members are able to access the City of London Barbican Library in-person or digitally via their Libby App. Library members can choose from a great selection of eBooks, eAudiobooks, eMagazines, eComics and music videos which can be downloaded onto many devices including tablets, mobile phone and many devices compatible with the Libby App. As before, UK STA members wishing to become a member of the City of London libraries do this by going into the Barbican Library or another one of their libraries to join with proof of home address and ID, or you can apply for temporary online membership which will currently give access to Overdrive and Libby. If your library card has expired, then you will need to get it reinstated before you will be able to access Overdrive / Libby. Once you have a valid membership number you can access the collection by downloading the Libby / Overdrive app to your device, search for City of London Libraries and then input your library membership number.

Read on Libby. The one-tap reading app from our library.

Over the coming months the STA and the Barbican Library are working together to add a selection of technical analysis. Meantime, UK members an explore the collection of books, magazines via https://cityoflondonuk.overdrive.com

THE STA

Enhanced Student Offering

Calling all university students with an interest in financial markets and technical analysis! We're excited to launch three new student initiatives from the Society of Technical Analysts, making it easier than ever for the next generation of market professionals to access world-class education, industry events and professional qualifications. Whether you're considering a career in investment management, trading, research or financial markets, these new initiatives provide an affordable pathway into the world of professional technical analysis. If you're a full-time student at a recognised academic institution, we'd love to hear from you. Contact the STA office on +44 (0) 20 7125 0038 or info@technicalanalysts.com Please share this information with any students or universities that may benefit from these opportunities.

STA Current Offering We currently provide universities with access to our Foundation Diploma in Technical Analysis (Part 1) - Online Video Programme. To build on this, we are introducing the following enhancements:

Full time university students can gain full online access to the 2026 IFTA Conference on 9 and 10 October 2026. At a cost of £100 per student, one-year student membership is included. • IFTA Conference access via specially priced package • One-year student membership is included • Full online conference access

£100 per student

Society of Technical Analysts

S T U D E N T P R O F E S S I O N A L S TA R T E R PAC K

We’re offering 100 exclusive university student places to learn technical analysts through our world-class Home Study Course. One-year student membership included. • 100 exclusive places available • 100 Home Study Courses (HSCs) • STA student membership included

£100 per pack

“Designed to make industryrecognised education more accessible - supporting students from learning to professional qualification.”

G L O B A L S T U D E N T AC C E S S PAC K

D I S C O U N T E D C E R T I F I C AT I O N PAT H WAY

Preferential pricing on the STA examinations for all university students on the Student Professional Starter Pack. Candidates on the Student Professional Starter Pack will receive a £100 discount on the STA Diploma Part 1 exam and £100 discount on the STA Diploma Part 2 exam. • Preferencial pricing on STA examinations (Available to those on Student Starter Pack)

Preferential pricing

www.technicalanalysts.com

THE STA

STA Diploma Part 1 Course 7x1 evening a week classes A two-hour exam Qualification accredited by CISI and IFTA

STA Education: Get qualified in Technical Analysis Booking is well underway for the CISI and IFTA accredited online STA Diploma Part 1 and Diploma Part 2 courses. The two courses have been designed to cater for newcomers and experienced professionals who are looking to challenge themselves. They will learn to develop the methodology, tools and confidence to make better informed trading and investment decisions in any asset class, anywhere in the world.

The course takes place from October to December each year. Delivered online via live Zoom, lectures are held once a week, from 6.00pm to 8.00pm London time. The 2026 course will start on Wednesday 14 October 2026. It costs £1,495 if booked by 30 September; £1,695 thereafter. This course is designed for those with little or no previous experience and individuals looking to initiate themselves in the practice of technical analysis. The course will give you an introduction to technical analysis and provide you with the tools to progress to the Diploma Part 2 Course. The Diploma Part 1 schedule enables you to maximise your learning while complementing your work and home life. The course is accredited for Continuing Professional Development (CPD) by the Chartered Institute for Securities and Investment (CISI). Programme at a glance • Introduction to technical analysis and comparison to fundamental analysis. • Construction and interpretation of Line, Bar, Point and Figure and Candlestick charts; introduction to HeikinAshi, Three-Line Break, Renko and Kagi charts. • Support and resistance, theory, identification, utilisation, breakouts. • Trend and return lines, where and how to draw them. • Fibonacci numbers and retracements. • Reversal and continuation patterns, target projection from patterns. • Moving averages, different types and how to interpret them. • Momentum, indicators/oscillators, relative strength, sentiment measures; definition, interpretation and how to use them. • Dow Theory, introduction to Elliott Wave Theory - how to use technical analysis strategically.

Lectures are delivered via live Zoom webinar and are fully interactive with students being able to ask questions as they would in a classroom. Any students unable to watch live will be able to catch up with a recording post event and email the STA office with any questions. They may also post questions on the STA Student Forum which will be answered by course lecturers. Students are able to gain access to lecture recordings for the duration of the course. Dates for the 2026 course are: • • • • • • •

Wednesday 14 October Wenesdayd 21 October Wednesday 28 October Wednesday 4 November Wednesday 11 November Wednesday 18 November Wednesday 25 November

The Part 1 exam will be held on Monday 7 December during the daytime.

“This was a great programme. The staff are experts on their topics and have a true passion for technical analysis. I highly recommend this to anyone looking for a well-rounded understanding of technical analysis.” Amanda Rastovic, MINTEC Global, student on the STA Diploma Part 1 Course 2024

“The course provided all I needed to get a thorough understanding of the concepts and techniques that I need for my job. On top of that, it provided many other methods that can be used and easily referenced to.” Octavian Canta, ADM, student on the STA Diploma Part 2 Course 2025

THE STA

STA Diploma Part 2 Course 12x1 evening a week classes Exam preparation video & guide booklet Three-hour exam Qualification accredited by CISI and IFTA

The course starts in January of each year and consists of 12 Wednesday evening online lectures (from 6.00pm8.00pm London time). The STA Diploma Part 2 exam is held in the April. The 2027 STA Diploma Part 2 Course will commence on Wednesday 6 January 2027 and costs £2,299 if booked by 31 December 2026; £3,299 thereafter. The Part 2 Course provides you with advanced professional knowledge, understanding and skills to use technical analysis as a vital investment tool or to pursue a career in technical analysis within the investment community. Basic technical analysis knowledge is a prerequisite for attending this course. During the 12-week programme you will learn from leading experts and develop both theory and practical experience in the major techniques, analytical tools and indicators to enable you to select the most advantageous portfolios, trades, hedges and much more for your clients, your employers or your own trading systems. The Diploma Part 2 Course provides you with a deeper understanding of technical analysis, added confidence and the capabilities to further develop your career. The course is accredited for Continuing Professional Development (CPD) by the Chartered Institute for Securities and Investment (CISI). Programme at a glance • The practical application of support, resistance and price objectives by market professionals - how they build on the essential basics and add advanced techniques. e.g. Fibonacci projections; working in different time frames. • Construction and advanced applications of Candlestick and Point and Figure charts, including Point and Figure moving averages and indicators. • Advanced moving average, momentum indicator and oscillator techniques; use of market breadth and sentiment measures. • The practical application by market professionals of Dow, Elliott Wave and Gann Theory; Ichimoku Charts; Market Profile®; Behavioural Finance; Risk Management - and much, much more.

Lecture 1 (Wednesday 6 January) Lecture 2 (Wednesday 13 January) Lecture 3 (Wednesday 20 January) Lecture 4 (Wednesday 27 January) Lecture 5 (Wednesday 3 February) Lecture 6 (Wednesday 10 February) Lecture 7 (Wednesday 17 February) Lecture 8 (Wednesday 24 February) Lecture 9 (Wednesday 3 March) Lecture 10 (Wednesday 10 March) Lecture 11 (Wednesday 17 March) Lecture 12 (Wednesday 24 March)

The Diploma Part 2 Exam will take place on Thursday 22 April (daytime).

Save £1,000 by booking both courses together before 30 September! Book the STA Diploma Part 1 & 2 Online Course package for £3,399 (early bird) and £4,399 thereafter.

www.technicalanalysts.com

THE STA

Balance professional development and your personal life with the STA Home Study Course© Why purchase the Home Study Course? ©

The world-class e-learning Home Study Course (HSC) is written by leading industry practitioners, making it one of the best online products available on the technical analysis market. Whether this is your first introduction to technical analysis, you want to refresh your existing knowledge, or you wish to become a qualified technical analyst, the STA offers a tailored Home Study Course as part of our portfolio of world respected courses preparing students for our internationally accredited STA Diploma qualification. You can learn from the comfort of your home at times that best suit you. Although website based, it is fully downloadable and may be used online or offline via PC, Mac, iPad or Android machines.

Since the HSC is International Federation of Technical Analysts (IFTA) syllabus compliant it can also be used to prepare candidates for both the IFTA CFTe I and II examinations. Who is the course for? The course is intended for individuals who want to use technical analysis in a professional manner or who want to become a qualified technical analyst and advance their career. Enrol and start studying now! For more details click below or contact the STA office on +44 (0) 207 125 0038 or info@technicalanalysts.com When would you like to start?

What will it cover? • The syllabi for both STA Diploma Part 1 & Part 2 examinations • 15 in-depth subject teaching units • Exercises to self-test progress • Exam preparation module & video • Advice on report writing. ...find out more visit Home Study Course

Learn at your own pace rather than in a classroom the HSC course is designed for those who need a truly part-time study option with maximum flexibility!

STA HOME STUDY COURSE

Congratulations to the latest STA Diploma MSTAs Distinction Thomas Hughes Vidushi Singh

Pass Aaron Patel Abdo Nasser Aldine Abhishek Tiwari Benedict Carmichael Camille Pouvreau Chuah Teong Khoon Daniel Barrett Davide Nugnes Griffin Cooper Hussein Hasan John Aaku Khalil Tayouga Matthew Sessler Matthias Eisel

Michail Michailidis Morris Brueckner Naman Jindal Nandan Jhawar Pawel Bala Peter Waithaka Ross Jarrett Sam Bedford Scott Finnigan Sean Edwards Sylvia Fung Yee Therese Sliva-Marion Vineeth Nair

THE STA

STA Executive Committee Executive Commitee on STA website

Eddie Tofpik MSTA, ACI-UK, ACSI Chair

Karen Jones BSc FSTA Treasurer

Jeff Boccaccio MSTA Director

Murray Gunn FSTA Director

Michael Hewson MSTA CFTe Director

David Watts BSc (Hons) CEng MICE MIWEM MSTA FSTA Systems and Website Specialist

Please keep the articles coming! The success of the Journal depends on its authors, and we would like to thank all those who have supported us with their high standard of work. The aim is to make the Journal a valuable showcase for members’ research - as well as to inform and entertain readers.

Keep up to date with the conversation:

STA Advertising Rates 2026/27 The Society of Technical Analysts Journal The Market Technician is a bi-annual publication, published in PDF format only. The STA will accept advertisements in this publication if the advertising does not interfere with its objectives. The appearance of advertising in the Market Technician is neither a guarantee nor an endorsement by the STA.

Position

Price

Specification

Inside Cover

£500.00

A4 Portrait, 210mm (w) x297mm (h), plus 3mm bleed

Full Page

£500.00

A4 Portrait, 210mm (w) x297mm (h), plus 3mm bleed

Half Page

£300.00

Landscape, 198mm (w) x 139.5mm (h)

Quarter Page

£200.00

96mm (w) x 139.5mm (h)

Circulation

Contact

The Market Technician has a circulation of approximately 1,500. Readership includes technical analysts, traders, brokers, dealers, fund managers, portfolio managers, market analysts, other investment professionals and private investors.

Contact Katie Abberton, Society of Technical Analysts on info@technicalanalysts.com or +44 (0) 207 125 0038 for more information.

Advertising policy Advertising is subject to approval by the STA Journal Committee. All advertisements must be non-discriminatory and comply with all applicable laws and regulations. The STA reserves the right to decline, withdraw and/or edit at their discretion.

The UK’s network for Technical Analysts. Founded in 1968. The oldest of its kind in the world. The Society of Technical Analysts Dean House Vernham Dean Andover SP11 0JZ tel: +44 (0) 20 7125 0038 info@technicalanalysts.com www.technicalanalysts.com