Sequential Charting, and U.S. patent holder
Program(s) Developed: Computer-implemented Method for Displaying Price and Value Extremes
Interview Date: August, 2018
Interviewed by William Gallwas - President of Striker Securities, Inc.
A new type of charting method was developed by Mr. Chapman and that he filed and was granted a U.S. patent #7,844,487 B2. This is the story of a successful career, interest, and work in trading and charting.
William Gallwas: Hi Gerald, can you tell us about your education and work career?
Gerald Chapman: I have a bachelor's degree in business management with post graduate credits in finance. I have the background necessary to analyze corporate financial statements. I worked as an accountant for several companies. I retired after thirty years at Goodyear Tire and Rubber where among other financial duties I managed international exchange rates.
William Gallwas: What about your trading background?
Gerald Chapman: I have been trading stocks since receiving my degree in the 1950s. In the 1970s, just a few years after the Chicago Board of Trade opened the options exchange, I began trading options. My first option trade was a big success. My initial stock trading was not as successful due to trade frequency in an era of high commissions and greater slippage due to much slower execution speeds prior to the internet. Those initial trades would have undoubtedly done better in today's environment. I am a trend follower who utilizes support and resistance as well. During the big tech boom of the nineties I used these methods to realize good gains from the up and down internet stocks with no intrinsic value that few were willing to touch.Today I specialize in options and trade stocks less frequently.. In fact I maintain a portfolio of general and sector specific E.T.F.s with funds set set aside specifically for option trading. I trade multiple option contracts that meet my criteria using my own trend following system. Within three days I've been able to realize the average man's yearly salary with a single multi contract options trade.
William Gallwas: With all your experience in studying technical analysis, please describe the moment that you decided to create your own approach of using technical indicators.
Gerald Chapman: I used candlestick charting to back test one of my option trading systems incorporating stop losses and target price sell orders on an OCC (One cancels the other) basis when I realized that there was no way of telling which would be cancelled first without knowing the intra-period sequence of movement. Neither the traditional O.H.L.C. charting nor candlestick charting provides this Intra-period data. That is when I decided to create this new charting method.
William Gallwas: As you have a U.S. patent, please explain as much as you can about how the technique works. Does your method work for stocks? Futures? Perhaps even cyber currencies?
Gerald Chapman: My patent #7,844,487 B2 titled Computer-implemented Method For Displaying Price and Value Extremes indicates whether the period's high or low occurred first. Such information can be valuable in regular trading as well as in back testing. On a daily chart an early high followed by a depressing low is not conducive to next day's confidence, but on the other hand an early low followed by the day's high is reason for confidence unless, of course, a late day high evaporates at the day's close. These types of situations are not even revealed in other charting methods. This new charting method also reveals direction of closing momentum, a feature that is even more important than the sequence of the periods highs and lows but is also missing from conventional charting methods. It may look good when a security is up at close but that may be very deceiving if it is dropping at periods end. Also a security may look as if it's crashing if down for the day but actually may be gaining strength by upward momentum near the session's end. Under this patent one could create a more compact charting element indicating only the periods high, low, close, and direction of momentum at closing.
Not only will this new type of charting permit much better insight into intra-period movements but it could well spawn a whole new field of analysis, similar but superior to candlestick technical analysis. Candlestick analysis based on size, shape, and grouping of the candlesticks has become a popular form of technical analysis for predicting future security movements. The iconic charting element created in this new form of charting is much more unique in shape as well as being much more informative of movement sequence than the candlestick. There is a lot more pattern variation providing greater posible predictability with this new type of charting than is the case with candlestick charting. For every candlestick there can be ten or more unique sequential charting elements. When considering not only the element shapes but also the groupings of the various sequential shapes as they would occur in actual market situations the possibilities for technical analysis is virtually endless. There could be an explosion of new analytical predictability.
Best of all this new charting procedure is not limited to stocks, futures, and currencies. It can be used to chart any type of movement making it usable in the fields of science, engineering, statistics, and even medical applications or anywhere else periodic movements are to be analyzed.
William Gallwas: As I understand it, you are now willing to sell this procedure and your U.S. patent?
Gerald Chapman: Yes, I have now decided to let go of this charting and technical analysis opportunity as I am now 85 years old and partially blind. Despite good intentions my primary interests of option trading, real estate trades, and other more unique pursuits (even involvement in doggy day care) have precluded developing this procedure's full potential but the patent still has more than ten years to go which is obviously more than enough time to gain prominence in this area. My plan is to now capitalize on this patent through its sale which will allow me to pursue my current interests.
Therefore, I plan to auction this unique opportunity very soon with a reserve no larger than needed to cover past and current maintenance fees. For details of the upcoming auction interested parties may contact me at email@example.com
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