Gerald Appel, veteran trader, and the man responsible for making the MACD indicator popular, shares his systems knowledge in this text. It begins with a critique of various moving average systems (good for trending markets) with a constant attention to actual trading results in the real world. He goes on to discuss "swing" based systems that are better suited for a choppy, trading market (non-trending) concentrating on an overbought/oversold oscillator. Some other systems are also examined including channel breakouts. The final chapters deal with Appel's own system which combines rules for using moving averages during trending markets, switching to oscillators for trading markets. The rules are clearly spelled out and can be applied as a purely mechanical system if desired. I haven't backtested the system myself, but Appel provides theoretical results for a time period in the 1970s when the NYSE managed little gain on buy and hold over a multiyear period. The system yielded spectacular results in the same time period excluding dividends (and commission costs, but the # of trades is not excessive and online brokers have lessened this concern). The only downside to the book is that it was written in 1980, and I haven't backtested results for the 1980s and 90s. He does however provide an excellent detailed explanation of the reasoning behind the system. I would recommend this book to both novice and intermediate systems developers. I am interested in trying the system itself, but the book goes along way in providing a background on how to approach systems development and the types of questions to think about. I found it much more practical (although nowhere near as comprehensive) than Kaufman's famous bible on trading systems.
Appel discusses a number of disjointed trading methods in this book, finally progressing to an exposition of the first version of his Time-Trend (T-T) trading method. This T-T method is momentum-based and has some useful filters incorporated in its methodology. However, it must be emphasized that this is an "expert" system which requires subjective interpretation on the part of its operator. If one is capable of making such trading decisions, then he or she does not need this book.
If you are not a collector of 15 year-old trading books or outdated systems, look elsewhere!