ES Emini Day Trading Welles Wilders Continuing Legacy in Technical Trading

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I would be remiss if I failed to mention Wilder's later work, which in my opinion, bordered on either the greatest fraud of all time or sheer lunacy. He and Jim Sloman developed a theory of market behavior of a distinctly different taste than his earlier work recognized as the Delta Phenomenon. Wilder tried, with some success, to convince his admirers that the markets were in reality controlled by lunar-solar-earth cycles. Based upon his past work, many human beings invested $35,000 a chunk and he have become (at least it is rumored) very prosperous. There are still several websites proclaiming the Delta Phenomena as a flooring breaking theory for investing. Of course, Mr. Wilder and I would element ways on trading the markets primarily based upon astrological observation. To many technical traders, the Delta Phenomena dimmed the great intellectual light of Wilder's work. The Delta Phenomena is basically some strange stuff.

So I went to the library to search out this book by arguably the greatest technical analyst of our time. I was, in reality, expecting an big book with lavish charts and complicated to decipher language. But I was determined to read the book and be taught a little about this area of study that Wilder was making wildly popular, much to the chagrin of the old guard and Dow theorists. Imagine my surprise when the librarian directed me to the book and it was a thinnish sort of thing, not much in the way of writing or explanation, and pretty heavy on mathematic formulae.

But what a book! And Wilder's insightful mind and thoughtful mathematic procedure to trading is still resonating with traders today. The book has six individual trading systems that Wilder proposed and in short explained the reason behind, which, at first glance, seemed less than impressive to me at the time. You might comprehend several of the names now, because they are just as relevant today as they ever were.

I had not yet read the book.

With the quantification of market movement Wilder exposed the elemental relationship between price action and the indicators ability to discern the diffused movement in prices. By implication, he was able to quantify the emotions of fear and greed and the outcome they had on price action. These factors are still not fully understood, but are diagnosed as prime movers in the each day price action we all observe.

Many years ago, early in my trading career, I began to gravitate from the straight support/resistance/quantity trading systems and become inquisitive about oscillators and other "exotic" indicators, as they were referred to at the time. Of course, Welles Wilder's 'New Concepts in Technical Trading Systems" was repeatedly discussed. The book was written in 1978.

Wilder's early work is the stuff of brilliance, and I would recommend that every trader read the book, then be taught the book, as a requisite to understanding modern day trading systems. Of course, my enthusiasm for his Delta Phenomena is not slightly as warm. However, I feel to get a very respectable overview of the fellow it is vital, at least in summary form, to watch the body of work he produced, both respectable and high debatable.

Thirty years later many traders have continued to use these indicators in their each day work and their popularity continues unabated, and traders have combined and cultivated the use of the indicators in ways Wilder never would have dreamed. Even more impressive, these indicators are included in each software charting package I have ever used, which is a testament to their enduring popularity and accuracy. Wilder wrote and imagined these concepts prior to the time of the basically versatile computer, which makes his achievement more impressive than ever.

Wilder himself was an engineer, then a actual estate broker, and at last found his groove in what then was the fairly new field of technical analysis. Yes, this thin little book I got at the library contained some of the seminal work in technical analysis because in it, he explained the theory behind his indicators which include the Relative Strength Index (RSI), Directional Movement Indicator (DMI), Average True Range (ATR), Average Directional Index (ADX), and the repeatedly misunderstood Parabolic Stop and Reverse. Many technicians bear in mind these indicators to be the core of present technical analysis.