Book Description: The Mathematics of Technical Analysis by Clifford J. Sherry and Jason W. Sherry promises to revolutionize how we think about the markets. In this ground-breaking work, the authors challenge the random walk hypothesisthe idea that there is neither rhyme nor reason to the markets. This far-reaching text describes a series of simple but statistically rigorous methods for analyzing time series. Originally developed to study information processing in the nervous system, they have been modified to analyze economically important time series. These statistical techniques allow traders to determine if a time series is stationary/non-stationary, independent/dependent, and/or random/non-random. These statistical questions are vital for traders because if a time series is non-stationary, independent, and random, it is unlikely that any analysis method, technical or fundamental, will work because the underlying rules that generate the time series change from time to time without warning. However, if a time series is stationary, dependent and non-random, the underlying rules generating prices demonstrate a consistency that will allow analysts to identify low risk/high reward trades.Author Bio: Clifford Sherry has written extensively on applying statistics to investments. He holds a Ph.D. from the Illinois Institute of Technology. He is a senior analyst and CEO of Intuitive Concepts Innovative Testing, LLC. Jason Sherry, a graduate of the University of Texas, Austin, is a financial advisor for Morgan Stanley Dean Witter.
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Book Description
Editorial Reviews
About the Author
Clifford Sherry has written extensively on applying statistics to investments. He holds a Ph.D. from the Illinois Institute of Technology. He is a senior analyst and CEO of Intuitive Concepts Innovative Testing, LLC. Jason Sherry, a graduate of the University of Texas, Austin, is a financial advisor for Morgan Stanley Dean Witter.
--This text refers to the
Paperback
edition.
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Most Helpful Customer Reviews
19 of 21 people found the following review helpful:
3.0 out of 5 stars
It is more like a draft than a serious book,
By A Customer
This review is from: The Mathematics of Technical Analysis: Applying Statistics to Trading Stocks, Options and Futures (Paperback)
Books which teach trade-methodology never give you any real result. They will show you some successful examples but never tell you what is the real chance of their systems. So you can learn different kinds of trading systems from those books but you can not do any real comparison for them. I have bought the Sherry's book with the hope that I can learn some analysis for real results. I was dissapointed. It is not difficult to understand the math in the book if you have college degree. However, there is not sufficient discussion on connecting probability/statistic theory to financial market.
17 of 19 people found the following review helpful:
1.0 out of 5 stars
Serious misunderstandings and outright errors,
Amazon Verified Purchase(What's this?)
This review is from: The Mathematics of Technical Analysis: Applying Statistics to Trading Stocks, Options and Futures (Paperback)
I am a professional trader, have an MBA from a major business school, and a decent amount of Finance PhD coursework, so I do know a bit of what I'm talking about. This is one of the worst trading books I have seen. It presents extremely simple time-series analysis, using methods the author developed in some cases (and mis-applied from existing techniques in other cases). The problem is, the math and tools to do these analysis already exists and is implemented in every statistical software available.
If you need more proof of this author's misunderstanding, turn to the last chapter where he discusses portfolio theory. You would think someone writing a book on stats would understand this, but he makes a fundamental error that no one who ever took a single finance class could make: He claims that "Beta-type risk" (market risk) can be reduced by holding a diversified portfolio if the correlations are negative!! This is absolutely wrong on two fronts -- Beta risk is specifically non-diversifiable (and to reduce company-specific risk the correlations just need to be less than 1, not negative). This is one example of the many many errors in this book. One of the authors is an "investment advisor for Morgan Stanley"?! I wonder how that is working out...
3.0 out of 5 stars
it's only a practice book,
Amazon Verified Purchase(What's this?)
This review is from: The Mathematics of Technical Analysis: Applying Statistics to Trading Stocks, Options and Futures (Hardcover)
It is only a practice book. Careful mathematic foundation is missing. Maybe technics work, I don't know, because I have no proof.
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Key Phrases - Statistically Improbable Phrases (SIPs):
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pattern detection techniques, independence figure, two cumulative probability density functions, temporal correlogram, price change histogram, first price change, price change data, serial dependencies, underlying time series, categorized price, trading week, first histogram, artificial prices, differential spectrum, serial correlation coefficient, running sum, temporal window, same histogram, next sequential, unvarying rule Key Phrases - Capitalized Phrases (CAPs): (learn more)
Error Variance Coef, Mean Std, Mean Har, Mode Geo, Mean Kurtosis Skewness, Cumul Percent, Median Thirds, Stock Index, Digrams Prices-Digrams Comex Silver, Stationarity Table, Security Pacific Median, Observed Expected, Symbols Digrams Trigrams, Decrease Median, Continued Comex Gold, Artificial Half, Security Pacific Corporation, Sears Daily, Digram Digram Trigram Tetragram, Artificial Delta, Daily Delta, Randomness Table, Independence Table, Gold Half, Persistence Table Browse Sample Pages:
Front Cover | Table of Contents | First Pages | Index | Back Cover | Surprise Me!
pattern detection techniques, independence figure, two cumulative probability density functions, temporal correlogram, price change histogram, first price change, price change data, serial dependencies, underlying time series, categorized price, trading week, first histogram, artificial prices, differential spectrum, serial correlation coefficient, running sum, temporal window, same histogram, next sequential, unvarying rule Key Phrases - Capitalized Phrases (CAPs): (learn more)
Error Variance Coef, Mean Std, Mean Har, Mode Geo, Mean Kurtosis Skewness, Cumul Percent, Median Thirds, Stock Index, Digrams Prices-Digrams Comex Silver, Stationarity Table, Security Pacific Median, Observed Expected, Symbols Digrams Trigrams, Decrease Median, Continued Comex Gold, Artificial Half, Security Pacific Corporation, Sears Daily, Digram Digram Trigram Tetragram, Artificial Delta, Daily Delta, Randomness Table, Independence Table, Gold Half, Persistence Table Browse Sample Pages:
Front Cover | Table of Contents | First Pages | Index | Back Cover | Surprise Me!
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