Customer Reviews

Breaking the Black Box

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4 star:		(1)
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It doesn't break any black box. The author writes with it's usual clarity but the text does not keep up with it's promises at all. It generalizes about trading systems but it does not give any real advise. It is in line with the author who is good in teaching the basis of TA but nothing else. Unfortunately famous persons obtain a large following even with routine and useless productions like this. John Sweeney, in the back cover page of the book, states: "....a good introduction to system developments and helpul in supplying trading ideas....". That is right: introduction, no more. Ideas, right or wrong, are everywhere. Also don't get fooled by the CD ROM which comes with the book. It is just a tutorial (no productive software) and, in order to force you to see his site, where you are offered other (a lot of) things, the CD runs only with MS WIN NT. I was able to use it with Win 2000 but why not produce and offer it for the most widespread WIN operating system? Unfortunately exploiting losers is the rule. Extremely sad! Don't buy this book. There are a lot of them much better on trading systems.

Breaking the Black Box was not written for lazy traders. There is no Holy Grail. Traders who want to learn the skill of building a functional system will benefit from this CD tutorial. If you're looking for unreal profits and wild promises, you won't find it here! Great, sound advise.

Backtesting and adhering to mechanical systems is not intuitive. In a clear book written from a place of knowledge, Martin Pring makes accessible to newbies and experienced investors alike the principles and pitfalls of backtesting and following mechanical systems.

Intuition, the Popular Wisdom, and social proof are three loose-sand foundations on which to base a trading system. What we think we know, what we're told is true, what others believe, and what we suspect do not necessarily hold up to backtests that we can do with such products as VectorVest or Zack's Research Wizard or the somewhat cruder backtesting capabilities provided by some other products. If they did, we'd have nothing to learn from backtesting and the time and expense spent on it would be a waste of time. In fact, when backtesting is most valuable is when it proves to us that what we thought is true about investing doesn't work out -- a lesson that we can either learn from a backtest or from losing money in the market.

On the other hand, backtesting itself has its pitfalls including unwitting curve fitting, concluding from too few tests OR from many tests over just one market condition, the delusional discovery of a Holy Grail, issues of survivorship bias, and not accounting for price splits when selecting from the past with price as a criterion. Pring covers it all . . . and in clear prose.

But, even if the backtesting is valid and sufficient, there are yet more pitfalls -- the most common of which is not playing the system as tested but a system modified on the fly -- which isn't playing the system at all but simply flying by the seat of one's pants. This, of course, will provide different results than one might project from the system as tested.

This is a book of concepts, of priniciples, of cautions ,and of earned wisdom. It is not a how-to cookbook for dummies that one miserable review (and miserable reviewer) was looking for. It is, rather, a more useful book. It teaches the principles to follow. It teaches the pitfalls to avoid. Sorry, but the backtesting and the creation of the system are for you to do. Here, Pring isn't offering fish but fishing lessons. And, for that very reason, this book is invaluable.

I recommend this book highly for every VectorVest user, for every Research Wizard subscriber, and for anyone who wants to get beyond fear and greed to a rational, disciplined, and high-odds approach to his investing. For those willing to do the work of backtesting, this book will ensure that the work is well-directed and sound. For those looking for do-this-specific-thing-and-prosper handouts, maybe this (and investing itself!!) isn't such a good choice . . . not unless they're open to learning.

Profound concepts on System Development. Easy to understand and implement. Plenty of examples. Excellent book overall.