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Trade Like a Hedge Fund: 20 Successful Uncorrelated Strategies and Techniques to Winning Profits Hardcover – March 8, 2004
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"Should you have this in your library? Most definitely, it...maps out exactly how to turn theory into profits." -- Gary B. Smith, TheStreet.com
From the Inside Flap
Trade Like a Hedge Fund changes all that. Written by hedge fund manager James Altucher, this technique-heavy introduction to the day-in, day-out world of hedge fund trading explores twenty trading systems, strategies, and techniques that active traders can use to uncover hidden pockets of inefficiency in any market. Altucher is well known to hedge fund managers and other market professionals for his regular contributions to TheStreet.com, and he wastes no time in getting right to the bread-and-butter trading strategies that form the foundation of todays well-documented hedge fund successes.
Learn the tips and techniques that allow fund managers and frontline traders to:
- Identify stocks that are gapping up or down, then trade those with the greatest short-term likelihood of filling that gap
- Intraday trade the NYSE tick indicatorperhaps the purest indicator of investor sentiment at any given second
- Provide impressive short-term trading profits using an innovative Bollinger Bandbased trading system
- Buy a portfolio of less-than-five-dollar stocksand average over 100 percent annual return
- Follow the low-profile movements of fixed-income investors for valuable clues to equity market direction
- Profit from playing stocks on the verge of being deletednot added, but deletedfrom major indices
- Profit from trading against common market fallacies that continually win praise even as they are continually proven wrong
Despite evidence to the contrary, hedge fund managers and traders are not magicians. But they are distinctive and savvy traders whoas opposed to staid, rules-driven mutual fund or portfolio managersenjoy the freedom to employ virtually any strategy in search of trading profits for their high-wealth clients. Let Trade Like a Hedge Fund give you a rare first-person look inside the world of the hedge fund manager, and introduce you to numerous hedge-fund techniques and tactics that you can seamlesslyand profitablyintegrate into your own trading program.
Top Customer Reviews
First, there are not "20 Successful Uncorrelated Strategies". "Technique 19" is simply a list of what the author believes doesn't work. "Technique 20" is a reading list of books the author likes; there are probably hundreds of Wall Street listmanias listing the same books. The other 18 present absolutely nothing new or interesting, most of them are simply "buy the dip" strategies.
Second, this book should rather be called "Trade Like James Altucher", unless you believe there are no longer any hedge funds that have discretionary traders or are willing to use options and go short. There is almost nothing in this book with regards to real money or risk management either. I suppose no one would have bought with that title though.
This is the only good sentence in the entire book: "Table 3.1 shows some recent large bankruptcies that were liquid enough to trade after filing Technique [sic] 11" (p. 49).
But what disappoints me most about this book is not that it is content free, but that it wastes the time and money of those who really are interested in learning. This book, I speculate, was meant to exploit the members of TheStreet.com and its children. Like another reviewer said, my copy is available for burning. I recommend Perry Kaufman's book instead, it may be twice the pirce, but has a thousand times the content.
What sets "Trade Like a Hedge Fund" apart is that we don't have to take the author's word that these strategies are successful. Included in every chapter are the specific rules for each strategy and the tested trading results over the recent past. I particularly like the fact that he has tested the results across broad market indices and individual equities. For example, Altucher creates his own version of the famous "Turtle" trend- following system and tests it on the S&P 500 Index, the NASDAQ 100 stocks, and a basket of uncorrelated stocks. This very much helps display the robustness of the underlying trading concept.
Among the specific strategies disclosed and tested are a unique method for trading the spread between S&P and NASDAQ stocks; an intraday method for trading the Cumulative NYSE TICK; a short-term trading system that makes use of Bollinger Bands; a technique for allocating money to bonds; and a straightforward method for arbitraging preferred and common stock of companies.
Where I think this book is strongest is in illustrating how a professional hedge fund manager thinks about the markets. Many of the strategies are designed to take advantage of extremes in the market, where inefficiencies are most likely to be present due to traders' panic and overconfidence. Altucher's creativity in searching for these inefficiencies stimulates the reader to engage in a similar search.Read more ›
In fact there are variations on most of the systems presented. I found some of the variations/systems to be interesting. I will be trading my own variations of his variations with my own money. Frankly I would not feel comfortable trading some of the systems presented and I will not. But those are my preferences and need not be yours. I am sure there is at least one system in the book that would suit your style. Given the potential profits the cost of the book is trivial.
Blindly following a system might make you money for the short to medium term. However the real strength I found in the book was to spur my imagination to modify his systems to suit myself, thereby turning them into my systems. Since they are now "mine", I am free to change them as conditions change going forward.
Now the downsides. First there is little in the book on money management. In some of his examples he uses 100% equity to put positions on. I doubt anyone in their right mind would ever consider doing this.
Continuing on the first downside there is little risk management expressed. For at least one of the strategies, you stay in until you make a profit or you eat your losses after 20 days. Staying in any position for 20 days should have you in a profit at some point, no matter why you entered it (making me wonder just how good the system is). But if the market never moved to your number in that time, it is likely you have lost quite a bit of money along the way.Read more ›
Most Recent Customer Reviews
There is no bankruptcy bounce. In chapter 3 of his book, James gives a half dozen cases where a stock did bounce after declaring bankruptcy, but generally speaking this does not... Read morePublished 2 months ago by Patient Researcher
Amazing book and very informative. Item arrived as described and I'm very pleased with the seller. A++Published 21 months ago by Sergei A
Strategies are for STOCK traders only.
There are no futures or Forex ideas presented, although some of the ideas can transfer over. Read more
Altucher has a blog where he says the techniques in this book don't work. He seems to be a failed trader. Buy this book at your own risk.
The set-ups described are a mix of intra-day and "swing" (i.e. the holding periods span multiple day sessions) systematic trading strategies. Read morePublished on March 14, 2011 by Another Trader
Clear understandable look into Hedge Fund strategies and how they work. Altucher's writing style is straightforward and helps you understand the concepts.Published on March 11, 2011 by Amazon Customer
1. The text was clearly written and would be easily understood by anyone with a basic grasp of technical analysis.
2. Mr. Read more
You wont like every strategy in the book but you'll definitely find something you like, i enjoyed reading itPublished on May 15, 2009 by R. Zerbo