Customer Reviews

New Concepts in Technical Trading Systems

5 star:		(13)
4 star:		(2)
3 star:		(1)
2 star:		(0)
1 star:		(2)

 

 

Parabolic SAR, Relative Strength Index, Directional Movement Index (ADX) -- developing even just one of these would constitute an important contribution to technical analysis. Yet all of these popularly followed indicators and more were the work of this one man and were first popularized in this single 1978 classic.

But this book merits more than mere admiration. For traders looking for carefully presented formulas, clear discussions of their logic, and helpful discussion of indicators' interpretation straight from the horse's mouth, this book is a great asset.

I would acknowledge that for discretionary traders who do little if any backtesting or who pay no more than scant attention to indicators other than price, volume, and maybe some moving averages, this book probably won't hit your hot button.

But as a systems trader, I'm especially appreciative, since nowhere have I found a better or more authoritative discussion of ADX and ADXR, two especially potent indicators whose multi-stage calculations haven't been consistently represented in various secondary sources I've examined.

Finally, for traders who tend to enjoy tinkering with the development of their own novel indicators, Wilder's discussions of his conceptual starting points in developing each of his indicators will probably prove very stimulating.

You'd have to appreciate that nearly every method or tool in this book is almost common knowledge. RSI, ADX, DMI, Parabolic, volatility breakouts, pivot point reversals and so forth are all commonly used nowadays. However, back in 1978 when it was hand calculated and charted.. Wilder probably had no idea how revolutionary his work has become.

I bought this book mostly for the Directional Movement System. I have been trying to figure out the best way to use this system for some time, and could not get a handle on how to effectively trade with it. I found the explanation of the way the system is constructed to be very helpful. There is not a lot of text explaining how to use the different systems. but,if you understand the concept of what is being measured and how the indicator got there, the rules of applying the system is quite easy. Only time will tell if I am on the right track, but today I feel more confident when making a decision on when to take a position.

As a graduate student of beginning, intermediate, and advanced statistics in the 1960s, I became quite familiar with rotary calculators. While reading this superb technical trading systems manual by Wilder, I could imagine myself back in the calculator lab sitting in front of a mechanical wonder (a Monroe IQ-213) with a pad of columned paper near at hand. When I learned computer programming in the 1970s, I was pleasantly surprised by how quickly my old paper and pencil and mechanical tabulations could be converted into software algorithms. Modern writers of charting software for technical analysis have surely benefited by Wilder's statistical handwork from a bygone but not forgotten era. If I were still active in computer programming today, Wilder's book would be my mentor. His book will take the reader who loves statistics, as I do, from awareness, to understanding, to mastery as quickly as keyboard skills will permit. Do you want to comprehend what Average True Range, the Relative Strength Index, Directional Movement, Parabolic Stop & Reverse, Pivot Points, and Volatility are really all about? Then read this book. It is foundational.

As a CPA who wants to understand stock trading systems and set up stock trading systems. I found this book to be one of the best I have ever read. I purchased a second book for my son to read as I hope he could learn to invest and trade in the stock market also. I did not want to give up my copy.

New Concepts in Technical Trading Systems, written in 1978 by Welles Wilder was- and still is- a landmark book in the field of Technical Analysis. The Relative Strength Index, (RSI) Average Directional Movement (ADX), The Parabolic Time/Price System and the Volatility System detailing the average true range concept (ATR) are a few of the foundational systems and indicators broadly used by charting services around the globe today.

Lesser known gems such as the Reaction Trend System and the Swing Index System are detailed as well. Capital management techniques book-end these primary "market concepts" to give readers of all levels a solid basis to develop technical ideas- or use Wilder's as he plainly illustrated over 30 years ago. I would highly recommend this primer for beginners, as well as more advanced traders who value a mechanical and objective approach to market analysis.

Anyone that would ever give a negative rating for this classic of trading literature, doesn't have the slightest clue as to what they have just read. This is "THE" single most innovative trading text to hit the public's bookshelves in the last 30 years. This book single-handedly revolutionized the technical analysis of financial markets. I am almost speechless that someone could write a negative review of this book....

This classic trading-systems book is superb and unique - it is for those who know, or want to know, the important details of trading systems (admittedly, few traders have the goal of developing a deeper understanding of the important, win-based details of trading systems). Wilder wrote his book in pre-computer days, when the chief way of keeping track of one's investments was `pad and pencil' calculations.

His book is full of innovative and highly creative trading concepts for use in trading systems. In Wilder's time, just like today, several `conventional' trading systems were/are available. Wilder added to these and at the same time expanded traders' possibilities through his brilliant thinking.

In this fully-illustrated book, Wilder begins with the basics, and then takes the reader behind the scenes to explain, in significant detail, the how-to and the why about trading systems, including his famous Parabolic System, the Volatility System, Directional Movement, Wilder's own Relative Strength Index, and other systems as well.

Welles cautiously explains the technical limits of parameters that comprise each system. He is careful to point out that no one trading system works for all market conditions - traders must select and apply the appropriate `tool' for the market conditions.

This book is for cream-of-the-crop traders who want assurance - through thoughtful understanding - that their trades will be winning trades. Such traders do not rely on self-proclaimed experts (who themselves might not even think of trading on a regular basis), but who are quite willing to take traders' money for their advice. Winning, cream-of-the-crop traders want to understand their own trading in order to avoid the pitfalls.

The publication of this authoritative book was decades in the past, but the ideas within it still live on.

What's happened since "New Concepts in Technical Trading Systems" was published? Ironically, many of Wilder's trading systems are partly or wholly in use today - there are few original thinkers in trading systems who have published newer and better trading indicators (a notable exception to this are some of the Turtle Traders). Trading systems that are decades old tend to erode in their effectiveness - when too many traders use the same indicator, the effectiveness of that indicator naturally decreases.

A chief virtue of this trading-system book is that it reveals how Welles Wilder (the author) thinks. He is an `out of the box' thinker, avoiding the same old trading systems used by `the crowd.'

This is a `must buy' for traders who want to increase their percentage of winning trades.

"New Concepts ... " is one of my all-time favorites. Pity there are only 5 stars, or I would have rated it higher.

Thank you, Welles Wilder.

James Kowalick

As other reviewers have pointed out, many of the techniques first described in New Concept in Technical Trading have filtered into common practice, as well as most charting software.

In spite of its influence, many of Welles Wilder's ideas outlined in this book still haven't been discussed much. This lack of discussion is by no means a reflection of their usefulness.

For example, how often do you see systems like the reaction trend system, that has a default setting of trading short term swings in counter trend fashion, but also has the capacity to shift gears, and follow the trend, should one arise? As the markets have become tougher, having a system like this (in reality, 2 systems in 1), is essential.

Or how about the swing index, which provides an alternative formula and chart to objectively identify the concept of a price "swing", useful in finding appropriate places to set stops?

This is a great book for the technician interested in developing a system.

it will be useful if you want to go into details and step by step development of indicators developed by Wilder.
However, the book does not add much to the experienced analysts.