Customer Reviews

Trading Systems That Work: Building and Evaluating Effective Trading Systems

5 star:		(7)
4 star:		(4)
3 star:		(3)
2 star:		(2)
1 star:		(3)

 

 

The title of the book should be the subtitle: Building and evaluating effective trading systems rather than Trading systems that work. If you purchase the book thinking you have purchase a collection of trading systems that work you will be disapointed. However if you have an interest in evaluating trading systems than this is the book for you and should join similar books as the Encyclopedia of Trading Strategies by Katz. The great fun in reading this book is in the Author's opinions about everyone else. Here are a few choice comments,"There is no way you can use TradeStation as a standalone tool to build a complete straegy" p.339 "If all of these indicators do not work--"p.51 and my favorite "No wonder then that your software supplier,system vender, or market guru of choice says that your worst draw down is still to come-and they do not even know how to calculate it."p.38 This is not a man that is afraid to express his opinion. The especially good points of the book are the arguments for percentages rather than points in evaluation and the TradeStation easy language (who ever thought that up has an great imagination)code to add information to an excel sheet to get it right. If this is the subject you are interested in buy it. You will not be disapointed.

This is a wonderful book. But the title is IMO going to attract people that are looking for black box systems that will make them a mint. That isn't what this book is about. It should have been called something like, _Building and Evaluating Good Trading Systems_, or some such.

I agree completely with the other reviewers and won't restate what they said. But as an owner of TradeStation I can tell you that there is a real need to have someone spell out--in CODE (both for TradeStation and for Excel)--how to *really* evaluate a trading system. Stridsman tells you point blank which of TS's performance eval stats you should look at, and which ones are worthless.

Highly recommended.

I have to laugh at the "Doubt" review below because anyone who thinks that you can make more money as an author than as a decent trader is misguided (unless your name is S. King or D. Steele). By the time the publisher and distributor extract their pound of flesh, the author is left with a meager cut. When an author writes a book, several other factors must be considered: ego, sharing knowledge, recognition, leaving a legacy, etc. Did the reviewer actually read the book or just paint a broad stroke?

A mechanical or system trader has plenty of time to focus on other tasks throughout the day in between executing orders. In fact, the reason why many system traders fail is because they spend their time babysitting positions and get sucked into making emotional decisions, i.e., taking the quick profit or ignoring the stop loss. It is so easy to sabotage a system, especially if you feel the need to exercise control over the trading decisions (that's 99% of us).

Stridsman's book is important because it provides the framework surrounding a trading system. You can plug any trading system into his evaluation model and generate all of the required performance metrics. Further, a trader who understands the details of the system and understands its behavior gains more confidence in trading the system. I recommend this book and Ralph Vince's "Mathematics of Money Management" for further understanding.

Stridsman's work reads like a lab book recollection of his experimentations rather than a systematic study of creating profitable trading systems. The text is repetitive, and filled with illogical analogies and examples. His conclusions are based on some dubious suppositions -- he seems to lack a strong grasp of the statistical analysis he employs.

Among the benefits of the book are Stridsman's adherence to standard deviation in assessing system risk and his use of percentage measurements rather than absolute dollar values.

This book could be 75% shorter and still contain all the worthwhile information.

I would recommend Conway and Behle's "Professional Stock Trading" as a much clearer approach to creating trading systems.

This book is for the TradeStation or MetaStock trader looking to build or enhance a system. Thomas Stridsman was a writer for the magazine Futures and is an experienced trader and trading system builder. With a healthy dose of statistics and mathematical theory, the chaos that appears to exist between your %'s and $'s can be found here with clarity.

The goal of Stridsman in his book is to educate the reader, giving them a solid, working understanding of the market for the purpose of building an effective system. The idea is to keep things as simple as possible, which can often be no easy endeavor for an aspiring system programmer. Heavy on the academic side, the disciplined reader of this book will gain the basis of knowledge for creating something unique. The analogy of a car and its respective parts is used, with the engine being the actual system and money management as the transmission. Through this thinking process all of the components that act individually in the market coalesce into a device that operates in mechanical order for executing profitable trades.

The book is loaded with programming language and statistical analysis. Ventures into Microsoft Excel and Lotus 1-2-3 are also incorporated for fine-tuning the system process to capture as much reality as possible. In- depth discussion over which TradeStation and MetaStock performance summaries are likely to work or not are key. There's no need for a higher understanding of mathematical theory; the book is written with practicality in mind for traders of all levels of experience. The applications are also grounded enough to be used in any trading market.

If you're serious about putting together a trading system, or are looking for ideas to enhance your work, this book is for you. I've always had the understanding that no systems that really work are for sale, but this book is like having a key to the garage where you can put it all together.

First, what this book is not: it is NOT one of those "buy my book and make a million in three weeks" books. He is selling no particular system of trading any market. In fact, this book is targetted at people who have TRIED to trade using one or another simple system and have failed to see those astronomical profits materialize. So he teaches an approach to building simple, robust, thoughtful systems which can be used on many markets. This is like having a really good coach walk you through the elements of any complex task, explaining each element, why it is important, and how it fits in with the others. If you like the approach that Elder and Murphy use in developing trading systems and want to learn more about the nuts and bolts of putting such a system together, this is the book you want. Do not buy this book as your FIRST book--read Elder's book and Murphy's books first, think about them, then get this one. You won't be disappointed.

Very good book for serious system developers. Most books on the topic present a system, optimize it so it fits a particular market, show couple of very convincing graphs and voila, here is the contribution to the trading science.

In this book the author presents system development in the context of portfolio trading: a robust system should work in a variety of markets. Stridsman takes you through his process of testing a system, from setting the data, to performance measures. Results of his systems, by the way, are not "fantastic", and that for me adds credibility. Analysis of his systems is done in a statistical manner, so that all aspects of a system are set up using statistical methodology, as opposed to conventional wisdom. A lot of work is also done in an attempt to introduce some degree of predictability in the author's trading approach. Aspects of system design are discussed in sophisticated detail: MAE, MFE, kurtosis, different types of drawdown, trade efficiency etc.

His optimization techiques are interesting. This is the first time I have seen the use of surface graphs to present two-variable optimization.

Not once in this book I have sensed an advertisement for the author's methods. The author simply discusses his approach. There is no hype, exclamation marks. The book is very concentrated and packed with ideas, which can be applied to any other system or markets. I don't think it would be possible to make it any shorter.

Good value for money if you like quantitative approach to trading.

Without money management and an appreciation for model testing, it is impossible to evaluate and trade a market timing system. Professional traders are aware of these prerequisites but part time traders are often ill-prepared. For most lay traders this approach is the boring component of trading, but for professionals, it's implementation is essential. Mr. Stridsman has accomplished what few others have attempted to do in simple to understand language. As a veteran of the markets, he is certainly respected and knowledgeable. I recommend this book heartily. The strengths are apparent upon a cursory review and the benefits derived are immeasureable. The book should be a primary component of any one's trading library.

I was excited about this book BUT on buying it I was disappointed. Here are the reasons. The author is a competant prgrammer using Tradestation but I did not learn any new concepts that could be used in my trading. I felt it was a mixture of disconnected ideas, some good and some not so good but he really did not take these ideas and run with it.

He also did not acknowledeg the help he received from Futures truth in some of his models etc

I applaud giving money to charity but where's the beef

If you're building a computer based trading system, this title offers some interesting insight. There are several example trading systems that implement commonly used system features, and these systems are analyzed and commented on. But this is far from a blueprint--the methods used are too rough to actually use as defined, and the descriptions are very confusing in many places. Included TradeStation code is a bit easier than most to understand, but that's not saying much. Every time I read this book, I feel like my time would be better spent reviewing Conway & Behle's "Professional Stock Trading: System Design and Automation", which covers much of the same material but with considerably more coherance.