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Study Guide for The New Trading for a Living by Dr. Alexander Elder

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FOUR

Computerized Technical Analysis

Today it would be unusual to see an analyst or a trader who doesn't use a computer. The dropping cost of equipment, software, and data has evened out the playing field between individuals and institutions.

A computer can help you process the torrent of market information and make your analysis more objective, but it is only a tool. Buying the best car will not automatically turn a beginning driver into an expert. In this section, you'll test yourself to see how well you've mastered the lessons on computerized market analysis. If you own technical analysis software, please feel free to use it while answering questions in this chapter.

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Correct answers

 

Question 4-1

  1. Computerized technical analysis

    1. is more objective than classical charting.
    2. allows traders to forecast the future.
    3. removes emotions from trading.
    4. assures success in trading.
      1. I
      2. I and II
      3. I, II, and III
      4. I, II, III, and IV

Question 4-2

  1. Match the following three types of software with their descriptions:

    1. Gray box
    2. Toolbox
    3. Black box
      1. You feed this program current market data and receive specific buy and sell signals.
      2. Same as above, but you can choose indicator settings.
      3. A collection of charting tools ...

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