Customer Reviews

Dave Landry on Swing Trading

5 star:		(15)
4 star:		(2)
3 star:		(3)
2 star:		(0)
1 star:		(2)

 

 

First off, let me say that I have made a lot of money using the information in this book as a basis. But I have found that the market has been changing over the past year or two to make the techniques in here less reliable. I have had to work to tune the information in this book to be more suited for today's markets.

Most of the book is based around finding stocks that have a strong uptrend (or downtrend for shorting opportunities) by utilizing the ADX/DMI technical indicators. Then, you look for a recent high and a pullback of a few days. The idea is that these stocks will recover and shoot higher. He gives a bunch of charts showing stocks during the tech boom reaching new highs, pulling back for 3 or 4 days, then shooting up to astronomical heights. He also gives some variations on this same theme, but most are based on the ADX indicator.

While this is a good basis for finding plays, it does not yield many plays these days on a day to day basis. I wrote software to search out the types of price movement he talks about. In any given day, you will find maybe 20-50 (out of 3000 stocks I scan) stocks that loosely fit his criteria. Out of these, there are maybe 10 that match his criteria, and the next day, maybe 1 stock will follow the pattern. But I don't see many at all reaching the high from before the pullback, never mind shooting astronomically higher.

Further, to get anything out of this book, you will need software that is capable of scanning the market. You will never be able to find these plays manually.

Thus, I can recommend this book if you have access to such software or are capable of writing your own software, as I did. If you do, you can tune these techniques and do quite well for yourself. But otherwise, I can't see spending [money]for this book, for the reasons mentioned above.

First of all, I should say that I am a convert from buy and hold to short term trading, and I have a lot to learn. This book, while expensive is worth the price if you are less than one year into short term trading.

The book is clearly written and includes excellent graphics to illustrate the authors setups. The 3 page chapter on "Stock Selection" was worth the price of the whole book for me. Mr. Landry clearly lists the 8 conditions that he uses to build his "universe". For me, this reduced my daily downloads of 8000 stocks, to about 400.

The chapter on trend qualifiers, an important prerequisite to using his setups, is very good. It covers ADX, gaps, closes and moving averages. Because of the importance of ADX (Average Directional Movement Index), a more detailed discussion was included by the author in the Appendix.

The chapter on on basic pullbacks, is also excellent and he gives clear setups for both longs and shorts.

In following chapters, Mr. Landry provides another 6 setups which he uses with clear examples for longs and shorts. All the setups can be easily programmed in TC2000, or most other charting, software packages.

His clear setup rules are refreshing, in that so many books of this genre, are poorly written and difficult to mechanize.

The chapter on Volatility, helped me to understand this concept, but more importantly, Mr. Landry provides clear and easy to deploy rules for using volatility. He also includes a chapter on Market Timing which provides 4 indicators that he uses to determine market bias.

The chapters on Trader's Psychology and Lessons Learned are easy to read and to the point.

All in all, I find this book to be one of the best I have read and I refer to it often. Mr. Landry states that the book represents how he trades and which setups he uses and does this in a refreshing way that is easy to understand.

Now the limitations, in my humble opinion. First, his style of swing trading depends strongly on trending stocks. The setups will not work in a trading / choppy market. He states this up front, but if you are searching for mechanical trading systems, it is most important to understant that most setups that work in trending markets do not work in choppy / trading markets, and visa versa.

Second, I was suprised that the author did not include any backtesting results for the setups. While backtesting is prone to many issues, the fact that he uses top down screens to ascertain market bias conditions before entering his trades, should have made any backtesting fairly reliable.

Finally, I believe his entry points (usually 1/16 above or below the trigger, is pehaps too small and prone to whiplash in today's volatile markets. I am using a slightly wider increment based on the specific stocks average daily range.

I am glad I bought this book. You can also learn more about Mr. Landry on TradingMarkets.com, where you can sign up for a one week free trial of his daily setups. The site is also a great resource for trading information in general.

One final note. The book is published in 8 1/2 by 11 inch page format, with large fonts and lots of white space. I found this to be like an instruction manual, and it enhances the ease to read as well as frequent referral and review. A small point, but a very nice touch.

Mr. Landry sets a good foundation in learning some basic setups and to understand the momentum of the market. His techiques are a little on the conservative side, and as another reviewer wrote, "a bit outdated". Buying breakouts off of basically pennant type formations, isn't really anything new. Although his emphasis on money managment still holds validity.

For futures traders, his approach is based on trend trading techniques. Again, while this is fundamentally true, it's not really swing trading. Swing trading is utilizing the momentum and volatility in whichever direction the market goes, not in one certain direction. By utilizing momentum combined with price patterns, you limit your losses, while positioning yourself in the direction of the most probable way the market may swing. I can understand short selling equities and short selling futures is a little different, but if you can only position yourself in one direction, whether equities or futures, then your really aren't swing trading.

He gives examples of short selling, but again, it's more based on the trend of the market and trend has nothing to do with swing trading.

Futures traders will find that "Street Smarts" by Linda Bradford Rashke and Laurence Conners (published by the same company) is a more realistic view on how swing trading is done.

Dave Landry On Swing Trading contains over a dozen strategies designed to make you become a nimble swing trader. The book's format is not unlike the other great trading books from M. Gordon Publishing (Street Smarts, Connor's on Advanced Trading Strategies): pattern setups, as well as trade entry signals are clearly described and numbered sequentially. Large, easy-to-read charts accompany and illuminate every strategy and example. No "where's the beef?" trading prose here.

According to Landry, the first task of the momentum swing trader is to identify the trend. And his definition of "trend" (Chapter 3) is as broad as his trade setups are specific. Landry emphasizes seeing the "bigger picture" when defining a trend.

The ADX., of course, is used as a trend filter, but not exclusively. Moving averages, as well as over a half dozen other "trend qualifiers" are described in a similar vein. Landry gives numerous chart-illustrated examples of a trend with both high and low ADX readings.

Though other basics of swing trading are discussed (e.g. drawdowns, money management, stock selection), it is Chapter 5, "Pullbacks," (deemed by Landry as the "single strongest way to trade"), along with Chapter 3, that form the core of the book's first section.

Section Two details other swing-trading patterns, including:

-Fakeouts and false moves
-Bow Ties
-Micro Patterns

The "Bow Tie" pattern is a visually descriptive one, using a moving average crossover system. Landry explains how and and why this method works, when, he emphasizes, most crossover systems do not.

Section Three, "Volatility," is an advanced lesson in swing trading. Landry adds historical volatility (HV) to the swing trading "mix" in order to capture explosive market moves over a short time frame. A formula for HV is included in the an appendix.

Next, Landry shows how to tie in his strategies with the overall performance of the market (Section Four, "Market Timing"). Included are three different systems (The Oscillator Swing System, TRIN Reversals, CVR III-Modified) designed to trade the stock index futures, all examined in detail. Like all the preceding chapters, there are examples (with charts) aplenty.

Landry continues his "treatise" on momentum swing trader with a discussion of options trading and the psychology of trading. The latter section includes "Lessons Learned" (Chapter 13), some fun, yet common sense-based trading tips based on real experiences. A sample: "Who Makes A Better Trader: An MBA Or A Receptionist?"

The last section attempts to tie everything together and includes a very interesting chapter on the importance of one's routine -- their nightly preparation to trading success. This chapter, like many throughout the book, ends with an informal review with the author in a Q&A format.

This book is chock-full of those exact techniques that Dave Landry uses day in and day out to swing trade successfully. And all are presented in an easy-to-read-and-understand format. A great investment, this book.

If you trade stocks for a living or if you take your investing seriously, you have to constantly read to hone your craft, and believe me there is a lot to read. Not often, but every once in a while you come upon a book that takes you to the next level. This is that book. If you want to make money in an ever changing market place, you need to own this book and read it over and over. Prior to March 2000 making money in the market was easy, and everybody was doing it. Since then the market has changed forever and the easy money has already been made. From now on you are going to need to know what you are doing if you want to play this game. This book puts you in the know. I bought this a few months ago, and I have read it four times and consult it often. I would suggest if you want to make money in this market during both the ups and down, you have to own this book. I recommend it as a must read. This is not your father's stock market anymore.

I have followed Landry on the TradingMarkets.com site for many years---and finally bought the book! No surprises, as I already knew his trading style and many of his setups, but it was nice to have everything in one concise book.

The two things I really like about Landry are 1) his setups are easy to understand, and 2) his writing style is very clear and simple, which is refreshing.

I recommend it.

Since I started Dave Landry's trading method's back in June of 2005 and bought his two books, my trading skills and techniques have been greatly improved. As time progresses, my skills get better and better. It becomes more natural to pick out the winning stock charts. Dave's methods are not rocket science, and egos need not apply for this book. It takes some humility to realize that it can be just pure chart reading and skills that bring home the bacon and winnings. Complicated methods, indicators, zig to the zag patterns, and hyped-up trading gimmicks make things too complicated, yet this book gives clear insight to make the grade in the trading paradigm. With patients and sticking to this book's methods, you will improve your trading performance. Guaranteed.

With that said, this book is for all type of traders. If you're long-term trader, the techniques presented in the book can help give you a better eye for stocks and help with better entry points and give your psyche a boost. Short-term traders, duh! Same thing. Dave lays out step by step, what you need to do. Starting from the basics, he guides you through finding the right stock, where to buy, where to sell, and money management. Also, the psychology section is one of the best parts for me. It will make you laugh and cry, when it comes to the trading world. I highly recommend this book. If you read it, be patient. Re-read as many times as it takes.

P.S. Pick up Dave Landry's second book, also. It has some great new concepts and patterns.

Mr. Landry's concepts are good to study at least as a first-time traders' primer. One must realize, however, that the book was written (and strategies tested) in a time when pullbacks could be measured in three days and a "monkey with a dartboard" could pick a NASDAQ stock chart and pull down 20 points profit after each breakout (that is, the stock bubble late 1990s). These techniques work best with growth stocks of that era, but are somewhat limited in volatile and sideways markets that we are experiencing currently.

Regardless of this limitation, the basic techniques are presented in a concise and simple-to-understand manner. One thing Mr. Landry gets right in this book is that the simplest trading methods really do work the best, and that documenting one's mistakes and successes in a journal is perhaps the quickest way to gain mastery in trading.

Buy it used or borrow it (as it is not the be-all-and-end-all trading reference), but give it a look if you are new to trading. Just don't dump good retail money into it.

Traders who study and learn from the lessons outlined in this book will be handsomely rewarded. An understanding of market swings is beneficial to every market participant, and after reading this book you'll have that understanding.

Dave Landry provides ideas that are easy to find in the stock market. They make sense, and over the past year have generated profits when entry opportunities have been present. A good book by an author who answers emails and clears up any questions.