Beating the Financial Futures Market: Combining Small Biases into Powerful Money Making Strategies (Wiley Trading) (Hardcover)

by Art Collins (Author), Robert Pardo (Foreword)
Key Phrases: short next bar, vice versa for sells, final command lines, Trade Max, Profit Profit, Profit Factor (more...)

Editorial Reviews

Product Description
Beating the Financial Futures Market provides you with a straightforward, historically proven program to cut through the noise, determine what bits of information are valuable, and integrate those bits into an overall trading program designed to jump on lucrative trading opportunities as they occur. It will help you improve both your percentage of winning trades and the bottom line profitability of those winning trades.

From the Inside Flap
Traders in today's fast-moving financial futures markets must contend with market noise that is ambiguous, contradictory, and (here's the worst part) almost entirely random. More than ninety percent of traders will eventually go broke trying to make sense of, and systemize, that noise.

But for those that learn the tricks of survival, the rewards can be phenomenal. How can you become one of the five to ten percent of traders that survive the learning curve, design a profitable system, and turn financial futures trading into a profitable sideline or even a full-time career?

Beating the Financial Futures Market provides you with a straightforward, historically proven program to cut through the noise, determine what bits of information are valuable, and integrate those bits into an overall trading program designed to jump on lucrative trading opportunities as they occur. Written by veteran commodities trader, systems designer, lecturer, author, and Chicago Board of Trade member Art Collins, this comprehensive trading handbook details:

• Guidelines for overcoming dead-end discretionary trading "insights" to focus on market-tested, mechanical trading rules and knowledge
• The four rules of prudent optimization, essential for identifying the best performing variables within your formulas
• Eight consistent biases that, when followed, can lead you to more reliable and profitable trades
• Statistically verifiable strategies for combining—and recombining—specific indicators based on prevailing market environments
• Actual TradeStation® summaries, showing in black and white which concepts worked and which didn't, and when, and why

The backroads of financial futures trading are littered with failed geniuses, traders who spent their days trying to outthink the markets. Beating the Financial Futures Markets will show you how to simplify your trading program by strictly adhering, 100 percent of the time, to a focused roster of mechanical trading techniques. It will help you remove much of the difficulty from your trading day by developing a disciplined, turnkey system and letting the system do the work—leaving you to simply make trades as specified by your system, institute the necessary safeguards, and dramatically improve both your percentage of winning trades and the bottomline profitability of those winning trades.

For a free, downloadable, user-friendly document containing the TradeStation® code in this book's Appendix, please visit this book's homepage on www.wiley.com. Simply type the ISBN of the book into Wiley's search field and click on the available link. This free document allows users to manipulate, cut, and paste the exact codes from the book into their trades without having to rekey it.

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Product Details

• Hardcover: 245 pages
• Publisher: Wiley (October 6, 2006)
• Language: English
• ISBN-10: 0470038659
• ISBN-13: 978-0470038659
• Product Dimensions: 9.1 x 6.2 x 1.1 inches
• Shipping Weight: 1 pounds (View shipping rates and policies)
• Average Customer Review: 4.3 out of 5 stars See all reviews (6 customer reviews)
• Amazon.com Sales Rank: #512,657 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

20 of 20 people found the following review helpful:

3.0 out of 5 stars Very simple strategies; good for beginners in pure mechanical trading, December 1, 2007

By	Joe - See all my reviews

The book is quite slim if you notice that there are many tables, and the TS code begins at page 205. The strategies are so simple that the TS code was only useful a few times for confirming the rules that were not completely clear in the text.
The book shows a series of "strategies" and some backtests.
The problem is that all these strategies are extremely simple and very similar to each other. They often involve daytrades, buying the open and selling at the close, or entering on stop at the open +- a buffer. For the majority of the strategies, no slippage and no commissions are taken into account. The problem is that in the real world, they often turn daytrading strategies from apparently good to losers. The author does point out slippage and commissions, but often forget about them in the second half of the book.
The author is easy to please. Many strategies give drawdown of more than 50% of the profit for the confirmation markets. I would not find that a validation, particularly after looking at the equity curve (I did test many of the strategies of the book across many markets).
Of course, robust often means simple, but another problem I find is that all the techniques in the book have been optimized for the period used and often for the selected indexes. For example, a system was reasonably performing from 2001 to 2005 in the book. I tested back from 1995, and the out of sample simulation did not give good results. Using European indexes did not show so nice result as well (I confess I am not as easy to please as the author). The author never looks at the difference between short and long signals. Of course, if the concept is strong, there should be no differences. For the indexes, the fact is the simulation of the combined indicators strategies show that longs are doing well in bull markets and bad in bear markets, the opposite for shorts, of course. Interestingly, the strategy appears to behave reasonably well (without slippage, commissions) only in the optimized time frame. Also, the analysis of the equity curve shows that, in some cases, most of the profits are made in a limited amount of time and the rest of the time it is not productive or counter productive. These very simple strategies heavily rely on optimization.
The concept of strategies aggregation to enhance the probability of success is of course good, though not new.

To summarize, I find the strategies quite weak (after slippage, commissions) and the tests too limited. However, the book is still a very good read for those really wanting to begin in mechanical trading. Many traps of mechanical trading are described. The author does not mislead the reader, though I find him easy to please for the test results.

10 of 12 people found the following review helpful:

5.0 out of 5 stars Real Life Advice, November 16, 2006

By	Michael S. O'Brien (Hoboken, N.J.) - See all my reviews (REAL NAME)

There are two things I love about this book. One, the author backs every
contention with historic performance summaries. How many investment books
do that-like maybe one in a thousand? Second, you just know the author's
expertise is genuine. Read Art Collins' daily commentaries for Elite Trader
and Tiger Shark, or any of his magazine articles. He earns his living
trading-he's therefore, unlike most self-appointed gurus, actually walking
the walk.

This is really exciting stuff! I've already started testing his ideas
on my own.

8 of 10 people found the following review helpful:

5.0 out of 5 stars Great book. See examples of working mechanical systems., January 13, 2007

By	F. C. Greene (California) - See all my reviews (REAL NAME)

This book takes 10 biases, explains their reasoning and gives quantitative back-up for how each does in a Tradestation simulated back-test. Art is a successful mechanical trader so you get a look into how he thinks and how he interprets the results. Each bias is relatively simple and demonstrated to have a small but definable edge across multiple markets.

The aspect to this book that is most interesting is how to integrate these various small biases into a master composite 'index'. As Bob Pardo writes in the Foreward section of this book "indexing can be very powerful... It can be a very effective way to 'summarize' large amounts of complex information."

I find that if I can take just 1 or 2 practical ideas from a book, it is a good book. This book did more than that -- it got me started on 'indexing' for individual stock lists and sparking new directions for me. I highly recommend this book to anyone -- but especially those with some kind of competence in quantitative methods to trading.