J. Welles Wilder Jr.

- Market Master
Neil A Costa
J. Welles Wilder Jr. stated his working life as a mechanical engineer, and remained an engineer for just seven years. This overlapped with his investing in the real estate market which he then did full time for a few years. His partners bought him out in the early 1970s. He commenced 13 years of full-time market research and trading in his retirement. He became interested in buying silver, and concluded that futures were the best way to gain leverage and tried to learn all he could about futures markets.

The Contributions of J. Welles Wilder Jr. to Technical Analysis

Mr. Wilder has written many articles on trading, appeared on numerous radio and television programs, and conducted technical trading seminars in Asia, Australia, Canada, USA, and Europe. He also developed software through his company Trend Research, Ltd. Australias Dawn Bolton-Smith is proud to say she attended two of Mr. Wilders seminars in Sydney in 1986 and 1992. She is also a keen user of the software he developed, One Day at a Time (ODAT). Welles Wilder is best known for his technical indicators now considered to be core indicators in technical analysis software. These include Average True Range, the Relative Strength Index, Directional Movement and the Parabolic Stop and Reverse. The following is a candlestick chart of News Corporation, showing Welles Wilders Parabolic S&R (dotted lines on the chart itself), his Directional Movement Index and his Relative Strength Index respectively.

Chart 1 A Gann Analyst 3 Chart of News Corporation Being a trader at heart, Mr. Wilder understood what were the real factors that determined whether a trader was likely to be successful or not. In an interview in Technical Analysis of Stocks and Commoditiesmagazine, he stated:

 Ive found that the most important thing in trading is always doing the right thing whether or not you win or lose this is market savvy money management... I would go so far as to say that whether one makes money in the markets depends on whether or not one uses the proper money management how much you make depends on where you enter and exit the markets. (Wilder, J. Welles., Wilders Back, Technical Analysis of Stocks and Commodities, February 1986.) J. Welles Wilder Jr wrote three books, New Concepts in Technical Trading (published in 1978), The Adam Theory of the Markets (1987), and The Delta Phenomenon (1991).

Conclusion
J. Welles Wilder is possibly the best-known market guru alive today. His contribution to technical analysis has been, to say the least, very substantial. It is appropriate to conclude this article with a selection of the accolades he has received during the last three decades: Forbes Magazine (October, 1980) Welles Wilder is "the premier technical trader publishing his work today." Barron's (July 1984) - "In 1978 the basis of mathematical analysis was expanded when J. Welles Wilder, Jr. published New Concepts in Technical Trading Systems. Financial World (July 1985) - "Over the years, Wilder has developed more accurate commodity trading systems and concepts than any other expert." Technical Analysis of Stocks and Commodities (February 1986) "It's not often that truly original discoveries are made in technical market analysis. J. Welles Wilder, however, lays claim to an entire collection of systems that have reshaped contemporary commodities trading and analysis. Technical Analysis of Stocks and Commodities (October 2002), in an article titled The Titans of Technical Analysis, Welles Wilder was selected as one of the Heroes of Technical Analysis with the following accolade: J. Welles Wilder engineer, turned real estate developer, turned technical analyst, Wilder is credited with developing some of the most widely used and modified technical indicators in the field, from Average True Range to the Parabolic Time/Price System to the Relative Strength Index. His first book, New Concepts in Technical Trading Systems, remains an important reference for both stock and futures traders. Now in his 70s, Mr. Wilder has retired and resides on the beautiful South Island of New Zealand. J. Welles Wilder Jr. is, without any reasonable doubt, a market master. [This article was first published in the ATAA Journal, July/August 2004. Reprinted with permission.]