Customer Reviews

The Handbook of Pairs Trading : Strategies Using Equities, Options, & Futures

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

 

 

I found the text poorly written: Repetitious; overly general on basic trade methodology; then not enough specifics regarding pairs trading. Math formulas were given without sufficient explanation or application, as if the author was just filling space with them (and the fonts used for the math was amateurish and not up to math text typographic standards -- in some cases even making them difficult to read). I was quite shocked at the overall low quality of the book. John Wiley trade texts are often of uneven quality I'm finding, even though the publishing house is thought to have a good reputation.

The book "The Handbook of Pairs Trading" is innacurate, incomplete, vauge, poorly written, and ultimately fails to define a pairs trading strategy. The first three chapters are a bad summary of fundamental analysis, technical analysis, market-neutral invsting, and arbitrage. The author then presents his "Unified Theory", where he begins, "The pairs trading investment strategy is comprised of three central elements: the market-neutral element, the arbitrage element, and the technical analysis element". He then proceeds with Chapter 9, titled "Reviewing the Elements", which is unbelievably, an even-worse summary of the preceeding 8 chapters. The final section of the book, "Advanced Strategies and Examples", still fails to present a strategy for pairs selection or trading. Instead, it presents more tertiary review of basic finance knowledge, such as "The purchase of call option is the most basic strategy in options trading". This book is full of filler; yet another worthless volume in the long line of so-called finance books published by John Wiley and Sons.

It is amazing to me that that the same company can at the same time publish a book like "Pairs Trading", by Ganapathy Vidyamurthy. I consider Vidyamurthy's book the best published texts on pairs trading. Unlike Erhman's book, Vidyamurthy's started as a PhD thesis. Readers without a quantitative or scientific background will not find Vidyamurthy's book helpful. However, as pairs trading is inherently a quantitative strategy, the book is well suited to the target audience and is an excellent introductory text on the subject.

This book is a rehash of an earlier book offered by the author's now extinct website/subscription-service. It is simplistic, repetitive and wrong. Avoid.

When I first saw this book I was sceptical, but bought it anyway. I am so glad I did because it has unlocked for me a way to trade that consistently makes me money. I am a doctor and don't have a background in finance. This book was easy to follow and taught me how to approach the market. Since reading the book, I am finally making profitable trades; I'd be lost without it. Thanks...

When it comes to quantitative finance and financial
modeling, there are two poles that represent the books that
are available. On one poll there are easy to understand books
by people who don't have experience successfully applying the
technique. On the other poll there are books that require a
Phd in advanced statistics and applied math to understand.
Finance books also tend to be expensive, so making a choice
on one of these polls is painful. Obviously what most of us
seek is an authoritative book that we can understand.

One way to determine if the author is an authority is to
look at their background. At least to the web, Mr. Ehrman seems
more or less invisible. I've found this description:
"Doug Ehrman, a hedge fund manager with AlphAmerica Asset Management LLC",
but I can't find any other references on the
web to AlphAmerica Asset Management, except those relating to
Mr. Ehrman. For example, AlphAmerica Asset Management does not
seem to have a web page. Mr. Ehrman also seems
to be assocaited with the web site pairstrading.com, but
at least when I tried to access the site, it was not available.

What does all this mean? I don't know. If you, dear reader,
have read this book, I hope you will post a review, since
right now I don't know enough to plunk down my hard earned
money for yet another finance book which may turn out to be
a disappointment.

This book was recommended to me by a friend who knew that I was going to use it to trade myself. I liked the idea of pairs trading and needed some help. Unlike one of the earlier reviewers, I found other pairs books either way too technical or just hard to follow. That was not the case with this book. It walks through enough basics to be helpful, but not too much, and then gives a solid approach that I have been able to successfully apply.

I found Ehrman's writing style very easy to follow and clean. It has made a big difference in my trading already. As to the author's fame (as mentioned by an earlier reviewer), he is a practicioner of his method. While PairsTrading.com no longer exists, it merged and is now PairTrader.com. There newsletters are very helpful and have helped to improve my trading as well. Anyway, hope this helps perspective buyers, particularly in light of some of the nay-sayers.

For the first revier, who claims to apply wavelet and SDP that is not an invention since you can buy the code for Trade Station . Also Alchemy Research products for tradestation, have pairs trading that you can also copy and claim that you invented it.