Beating the Financial Futures Market: Combining Small Biases into Powerful Money Making Strategies (Wiley Trading) [Hardcover]

Art Collins (Author), Robert Pardo (Foreword)

Book Description

Series: Wiley Trading | Publication Date: October 6, 2006

Beating the Financial Futures Market provides you with a straightforward, historically proven program to cut through the noise, determine what bits of information are valuable, and integrate those bits into an overall trading program designed to jump on lucrative trading opportunities as they occur. It will help you improve both your percentage of winning trades and the bottom line profitability of those winning trades.

Editorial Reviews

From the Inside Flap

Traders in today's fast-moving financial futures markets must contend with market noise that is ambiguous, contradictory, and (here's the worst part) almost entirely random. More than ninety percent of traders will eventually go broke trying to make sense of, and systemize, that noise.

But for those that learn the tricks of survival, the rewards can be phenomenal. How can you become one of the five to ten percent of traders that survive the learning curve, design a profitable system, and turn financial futures trading into a profitable sideline or even a full-time career?

Beating the Financial Futures Market provides you with a straightforward, historically proven program to cut through the noise, determine what bits of information are valuable, and integrate those bits into an overall trading program designed to jump on lucrative trading opportunities as they occur. Written by veteran commodities trader, systems designer, lecturer, author, and Chicago Board of Trade member Art Collins, this comprehensive trading handbook details:

• Guidelines for overcoming dead-end discretionary trading "insights" to focus on market-tested, mechanical trading rules and knowledge
• The four rules of prudent optimization, essential for identifying the best performing variables within your formulas
• Eight consistent biases that, when followed, can lead you to more reliable and profitable trades
• Statistically verifiable strategies for combining—and recombining—specific indicators based on prevailing market environments
• Actual TradeStation® summaries, showing in black and white which concepts worked and which didn't, and when, and why

The backroads of financial futures trading are littered with failed geniuses, traders who spent their days trying to outthink the markets. Beating the Financial Futures Markets will show you how to simplify your trading program by strictly adhering, 100 percent of the time, to a focused roster of mechanical trading techniques. It will help you remove much of the difficulty from your trading day by developing a disciplined, turnkey system and letting the system do the work—leaving you to simply make trades as specified by your system, institute the necessary safeguards, and dramatically improve both your percentage of winning trades and the bottomline profitability of those winning trades.

For a free, downloadable, user-friendly document containing the TradeStation® code in this book's Appendix, please visit this book's homepage on www.wiley.com. Simply type the ISBN of the book into Wiley's search field and click on the available link. This free document allows users to manipulate, cut, and paste the exact codes from the book into their trades without having to rekey it.

From the Back Cover

Praise for Beating the Financial Futures Market

"A must-read for all system traders—and even for those who aren't. Art Collins demonstrates why system trading works, and points out the biggest pitfall: the trader himself! By the way, there are a lot of good trading systems in this book, too."
—Lawrence G. McMillan author of McMillan on Options, and President, McMillan Analysis Corp.

"Art Collins's new book is a technical toolbox gem that presents many examples that you can use to profitably trade financial futures."
—William A. Dunn founder and Chairman, Dunn Capital Management, Inc.

"Read Beating the Financial Futures Market by veteran trader/researcher/system developer Art Collins for examples of the thought processes and explorations he employs to develop and perfect his own trading logic. After all these years of experience and successes, Art is still continually searching out market tendencies and truths."
—Wayne Griffith developer of the top-ranked Anticipation Trading System, and profiled in Market Beaters

"Finally! Well thought out research that is a delightful read! Art knows how to combine legitimate market tendencies to create durable and robust trading models and present them in a logical, well laid out fashion. A work of this caliber has been long overdue!"
—Linda Raschke President, LBRGroup, Inc.

"Art Collins makes the strong case for a scientific view of the trading.Ignore his market wizard wisdom at your peril."
—Michael Covel author of the bestseller Trend Following: How Great Traders Make Millions in Up or Down Markets

See all Editorial Reviews

Product Details

• Hardcover: 245 pages
• Publisher: Wiley; 1 edition (October 6, 2006)
• Language: English
• ISBN-10: 0470038659
• ISBN-13: 978-0470038659
• Product Dimensions: 6.4 x 1 x 9.1 inches
• Shipping Weight: 1 pounds (View shipping rates and policies)
• Average Customer Review: 4.3 out of 5 stars  See all reviews (6 customer reviews)
• Amazon Best Sellers Rank: #1,077,421 in Books (See Top 100 in Books)

More About the Author

Discover books, learn about writers, read author blogs, and more.

Customer Reviews

Most Helpful Customer Reviews

26 of 28 people found the following review helpful:

3.0 out of 5 stars Very simple strategies; good for beginners in pure mechanical trading, December 1, 2007

By 

Joe - See all my reviews

This review is from: Beating the Financial Futures Market: Combining Small Biases into Powerful Money Making Strategies (Wiley Trading) (Hardcover)

The book is quite slim if you notice that there are many tables, and the TS code begins at page 205. The strategies are so simple that the TS code was only useful a few times for confirming the rules that were not completely clear in the text.
The book shows a series of "strategies" and some backtests.
The problem is that all these strategies are extremely simple and very similar to each other. They often involve daytrades, buying the open and selling at the close, or entering on stop at the open +- a buffer. For the majority of the strategies, no slippage and no commissions are taken into account. The problem is that in the real world, they often turn daytrading strategies from apparently good to losers. The author does point out slippage and commissions, but often forget about them in the second half of the book.
The author is easy to please. Many strategies give drawdown of more than 50% of the profit for the confirmation markets. I would not find that a validation, particularly after looking at the equity curve (I did test many of the strategies of the book across many markets).
Of course, robust often means simple, but another problem I find is that all the techniques in the book have been optimized for the period used and often for the selected indexes. For example, a system was reasonably performing from 2001 to 2005 in the book. I tested back from 1995, and the out of sample simulation did not give good results. Using European indexes did not show so nice result as well (I confess I am not as easy to please as the author). The author never looks at the difference between short and long signals. Of course, if the concept is strong, there should be no differences. For the indexes, the fact is the simulation of the combined indicators strategies show that longs are doing well in bull markets and bad in bear markets, the opposite for shorts, of course. Interestingly, the strategy appears to behave reasonably well (without slippage, commissions) only in the optimized time frame. Also, the analysis of the equity curve shows that, in some cases, most of the profits are made in a limited amount of time and the rest of the time it is not productive or counter productive. These very simple strategies heavily rely on optimization.
The concept of strategies aggregation to enhance the probability of success is of course good, though not new.

To summarize, I find the strategies quite weak (after slippage, commissions) and the tests too limited. However, the book is still a very good read for those really wanting to begin in mechanical trading. Many traps of mechanical trading are described. The author does not mislead the reader, though I find him easy to please for the test results.

14 of 16 people found the following review helpful:

5.0 out of 5 stars Real Life Advice, November 16, 2006

By 

Michael S. O'Brien (Hoboken, N.J.) - See all my reviews
(REAL NAME)   

This review is from: Beating the Financial Futures Market: Combining Small Biases into Powerful Money Making Strategies (Wiley Trading) (Hardcover)

There are two things I love about this book. One, the author backs every
contention with historic performance summaries. How many investment books
do that-like maybe one in a thousand? Second, you just know the author's
expertise is genuine. Read Art Collins' daily commentaries for Elite Trader
and Tiger Shark, or any of his magazine articles. He earns his living
trading-he's therefore, unlike most self-appointed gurus, actually walking
the walk.

This is really exciting stuff! I've already started testing his ideas
on my own.

13 of 15 people found the following review helpful:

5.0 out of 5 stars Great book. See examples of working mechanical systems., January 13, 2007

By 

Jennifer (Mill Valley, US, Canada) - See all my reviews
(REAL NAME)   

Amazon Verified Purchase

This review is from: Beating the Financial Futures Market: Combining Small Biases into Powerful Money Making Strategies (Wiley Trading) (Hardcover)

This book takes 10 biases, explains their reasoning and gives quantitative back-up for how each does in a Tradestation simulated back-test. Art is a successful mechanical trader so you get a look into how he thinks and how he interprets the results. Each bias is relatively simple and demonstrated to have a small but definable edge across multiple markets.

The aspect to this book that is most interesting is how to integrate these various small biases into a master composite 'index'. As Bob Pardo writes in the Foreward section of this book "indexing can be very powerful... It can be a very effective way to 'summarize' large amounts of complex information."

I find that if I can take just 1 or 2 practical ideas from a book, it is a good book. This book did more than that -- it got me started on 'indexing' for individual stock lists and sparking new directions for me. I highly recommend this book to anyone -- but especially those with some kind of competence in quantitative methods to trading.