Customer Reviews

Trading Systems and Methods (Wiley Trading)

5 star:		(16)
4 star:		(6)
3 star:		(3)
2 star:		(0)
1 star:		(2)

 

 

My bookshelf now has about 50 books on options, daytrading, TA, bonds, futures, fundamental analysis, and the psychology of trading. This book is one of the best on TA. Though I do not have Tradestation this book should come with the program. Many of the trading systems that it talks about are laid out in easy language (the way to input into Tradestation). Since I use WOW it would be nice if it laid out the programming for WOW so that I did not have to translate it. But now Omega owns WOW so let's hope the best of each come out of the merger and not the worst (like easy language).

For TA it is up there with Murphy's and Schwager's and perhaps goes a bit beyond in how to take the indicators and put them together into a system. Also it explains many of the systems that various market Gurus expound. Where most of the books on the market try to explain it all like beginning addition and subtraction this book is many steps beyond the first grade and does take some serious study, which I appreciate.

In short, if you are interested in TA and how it combines to form a system of trading this book will be worth you money.

This is not so much an encyclopedia as it is a fairly complete compendium of various trading tools and strategies. Almost all such research focuses on the futures markets; the closest these get to the stock market is the S&P 500 index. This is true of technical analysis in general, so if you're interested in the stock market you will generally have to extrapolate.

Kaufman is a pretty able and knowledgeable reporter on the research results of others, but I have to say that in places the transcriptions are confusing, unclear and ambiguous. Even though the book is nearly 700 pages long, some of the coverage is too sparse -- while in other areas it seems too wordy. This 3rd edition could benefit from a start-to-finish re-organization/re-write, as some ideas are explained multiple times in various places and other ideas which are introduced early and deemed important are then ignored throughout the rest of the book. I'm thinking primarily of the basics of statistics and tests for significance; much of what might work at times is superfluous. My impression is that while Kaufman is very experienced in the markets and with trading systems in general, that he's a dilettante so far as really rigorous mathematics is concerned. Pick and choose among the many clever ideas here carefully. 3 1/2 stars.

Don't get me wrong, the author doesn't seem stupid - he developed his own adaptive trend following method. But he has completely no idea how the market works and what can possibly work in the market. This book is a compilation of many technical trading methods, but most of them are stale and some ridiculously insane. Page 376-377 he has a chart and program to compute the moon's phase, because we should buy at full moon and sell at new moon? The selling point of the book is it contains some source code, but most of them are naive. Page 640 betrayed that the author only wrote the programs over twenty years ago when there was no graphics output. In regression he had to use many "*"s to draw the line. And why would any reader need the Fortran source code in the appendix to do regression? Remind you that those ten pages would cost you a buck.

In short, the book has no value for professionals. For individual investors, be aware - the book could actually be harmful because it gives you false confidence. In the investment world half bottle may be worse than you know you have nothing in the bottle.

My bookshelf now has about 50 books on options, daytrading, TA, bonds, futures, fundamental analysis, and the psychology of trading. This book is one of the best on TA. Though I do not have Tradestation this book should come with the program. Many of the trading systems that it talks about are laid out in easy language (the way to input into Tradestation). Since I use WOW it would be nice if it laid out the programming for WOW so that I did not have to translate it. But now Omega owns WOW so let's hope the best of each come out of the merger and not the worst (like easy language).

For TA it is up there with Murphy's and Schwager's and perhaps goes a bit beyond in how to take the indicators and put them together into a system. Also it explains many of the systems that various market Gurus expound. Where most of the books on the market try to explain it all like beginning addition and subtraction this book is many steps beyond the first grade and does take some serious study, which I appreciate.

In short, if you are interested in TA and how it combines to form a system of trading this book will be worth you money.

There was plenty to learn in this book and overall it offers much reasonable advice. However, it also packs a large portion of bizarre and obviously silly content, such as the phase-of-the-moon and the "Jupiter-Saturn cycle" trading systems mentioned in other reviews. Still, I find even this bit useful as a reminder of the danger of being lured in by a trading system based on numerology instead of relevant data. It's nice to remember that the reason analysts compute the 14-day and 28-day moving averages are because these are half and a full moon's cycle, respectively. Of course, these became popular even though they refer to trading days instead of Earth days (what? doesn't the moon phase stop progressing over the weekend too??)

My other complaint is the use of proprietary "Easy Language" code samples; this would be fine if it included an appendix on Easy Language syntax, but this is conspicuously missing... and would have been more useful than the secion of the book titled "Financial Astrology" or the appendix on constructing a pentagon with straightedge and compass (I'm not kidding).

Suprisingly, I did find the discussion of solar eclipses informative from an astronomy viewpoint.

Overall, even with the negatives, I enjoyed the other reference material.... just figure out which chapters to tear out of the book before reading.

This book should be mandatory reading for all traders, new and old. Every trader should have this in their Library. If you only have the money for one book and you want it to be the best and that it covers almost every type of technical analysis, this is it. I have bought every edition of this book. Whenever I want ideas to investigate I open this book immediately and am rewarded with dozens of golden nuggets. Thank you Perry Kaufman for writing this book and then taking the time to update it.

First let me disclose that I have not read this book front-to-back, but I have gone through most of it from time to time over the past 3 years.

I believe this book is an excellent reference for anyone who is serious about building a robust systematic strategy for trading. Mr. Kaufman starts by going over the basics of statistics, supply and demand, trends, etc...and later gets into the particular trading strategies. The final section of the book deals with system testing and risk control, and this is the part that I found most valueable.

The book doesn't cover any subjects in enough detail to give you a complete understanding of the subject, but I don't believe that this was the intent anyway. It's a starting point to give you high-level ideas about trading systems, testing strategies, and risk control, and it is an excellent book in this respect.

For beginning traders, I would recommend the standard books (Market Wizards, Remeniscence of a Stock Operator, Trade Your Way to Financial Freedom, etc.) over this one because those ones cover the psych aspect of trading better, and this is probably the most important foundation for success. For those who are serious, and realistic about trading, 'Trading Systems and Methods' is an important reference book...but by no means the last book you'll ever need.

An incredibly detailed survey of just about anything & everything that has ever been designed for technical analysis of markets. The truly amazing aspect is that, for most subjects, the author presents more detail & useful information than entire books on the particular subject.

IMHO this is a must-have book to understand what all is out there, and as a spring-board for further exploration. (BTW, while most of the programming he presents is oriented towards TradeStation, converting it to MetaStock is trivial.)

Going more for breadth than depth, "Trading Systems and Methods" hits an enormous number of approaches for building a mechanical trading system. Many (some would say all) of these technical analysis approaches are obviously utter rubbish (anyone who has seen "Pi" can chuckle along with me at the section about Fibonacci Ratios), but the shear volume of techniques outlined make this a particularly good title for people new to trading systems development. The included computer code isn't particularly useful because of both its simplicity and its reliance on TradeStation features.

If you're looking for a survey of mechanical, technical trading techniques with enough detail for a jumping off point to inspire further research, this provides that on a large scale and with commendably wide coverage. I found it most helpful to identify which wheels I was busy reinventing when doing my own system development, outside of that context it doesn't have quite as much utility.

After two years since I first read it, this is still the book that I refer to when I need to change my trading system. It is so updated and completed that I can not (and don't need to) find any other book. Few other books contain so much information about indicators and systems. Even it was published in 1998, it is still much better than many other trading books. I found some new books published by Wiley are really bad. Many of them are only for absolute beginners. The contents of this one are quite mathematical and technical. So it is helpful for traders at higher level. It is expensive but worth the price.

The section about using astrology may make some people feel it is crazy. But we should know that there are some people REALLY using this kind of methods in trading. It is useful for us to know what other people are doing.