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The New Technical Trader: Boost Your Profit by Plugging into the Latest Indicators

by Tushar S. Chande and Stanley Kroll (1994)

Quick summary -- an in-depth PhD-level extended summary (10-30 pages) for this book is coming soon.

The New Technical Trader: Boost Your Profit by Plugging into the Latest Indicators

by Tushar S. Chande and Stanley Kroll

Quick Summary

This book could not be fully processed as the PDF contains scanned images rather than extractable text. Based on the well-known publication record, this is Tushar Chande and Stanley Kroll's influential work introducing innovative technical indicators including the Chande Momentum Oscillator (CMO), Variable Index Dynamic Average (VIDYA), and other adaptive indicators designed to improve upon traditional technical analysis tools.

Categories

  • Technical Analysis
  • Trading Systems
  • Indicator Development

Detailed Summary

"The New Technical Trader: Boost Your Profit by Plugging into the Latest Indicators" by Tushar S. Chande and Stanley Kroll is an influential technical analysis work that introduced several innovative indicators to the trading community. The PDF version available is a scanned document from 2004 that produced no extractable text, limiting the depth of this summary.

Tushar Chande is a physicist and engineer who applied quantitative methods to technical analysis, developing several widely adopted indicators. Stanley Kroll was a veteran commodity trader and author known for his practical market experience. Their collaboration combines analytical rigor with practical trading wisdom.

The book's most significant contributions include the Chande Momentum Oscillator (CMO), which measures momentum by calculating the difference between the sum of recent gains and the sum of recent losses, divided by their total sum. Unlike the RSI (Relative Strength Index), the CMO is bounded between -100 and +100, providing a symmetric measure of momentum that is directly interpretable as the net percentage of momentum in either direction.

The Variable Index Dynamic Average (VIDYA) is another major innovation, representing an adaptive moving average that adjusts its smoothing period based on market volatility. During high-volatility periods, VIDYA becomes more responsive (shorter effective period), while during low-volatility periods it becomes smoother (longer effective period). This adaptive behavior addresses a fundamental limitation of fixed-period moving averages, which are inevitably too slow in some market conditions and too fast in others.

Additional indicators covered include the Market Thrust Oscillator, various adaptive filter techniques, and methods for dynamically adjusting indicator parameters based on market conditions. The book also covers the testing and validation of these indicators using historical data, providing evidence for their effectiveness compared to traditional alternatives.

Chande and Kroll's work represents a significant contribution to the evolution of technical analysis from fixed, static tools toward adaptive systems that respond to changing market conditions. Many of the indicators introduced in this book have since been incorporated into mainstream charting platforms and continue to be used by traders worldwide.