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Trade with the Odds: How To Construct Market-Beating Trading Systems

Trade with the Odds: How To Construct Market-Beating Trading Systems

Anthony Trongone

ISBN: 978-1-118-23941-4

Nov 2012

336 pages

Select type: E-Book

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Hands-on tools to identify and profit from the market's recent patterns

Trading is all about managing probabilities. In Trading with the Odds, Anthony Trongone explains that the quest for developing a perfect system, which drives most traders, is fruitless. Instead, traders should focus on developing the analytic and trading skills necessary to stay in tune with the constant evolution of the financial markets. In this book, Trongone emphasizes the importance of testing and monitoring trading strategies and raw market data as a means of developing an edge over other traders who are unwilling to get their hands dirty and dig into the data on a continuing basis.

Importantly, he shows that Excel, a program almost all traders are familiar with, can be utilized to measure virtually every important aspect of trading system performance and to search for tradable market patterns. In addition, the book includes several applications that will allow you to calculate current market conditions and market patterns based on time of day, intermarket relationships, and other factors.

  • Advocates an analytical approach which evolves in concert with changing market conditions
  • Explains why it's hard to make money from off-the-shelf systems and indicators
  • Provides in-depth analysis of other major industries generating worthwhile IPOs
  • Includes applications that allow users to calculate recent market patterns

Underlying Trongone's approach is the conviction that traders must constantly innovate in response to the market, and those that rely on static analysis, will fail to achieve the results they expect.

Preface ix

Acknowledgments xiii

CHAPTER 1 Invest in Yourself, Not a Trading System 1

CHAPTER 2 Playing the Percentages 11

CHAPTER 3 Performance Measures 19

CHAPTER 4 Extracting Performance Results 45

CHAPTER 5 Monitoring Performance 69

CHAPTER 6 Breaking Down a Stock or Commodity 87

CHAPTER 7 Quantifying Risk 109

CHAPTER 8 Trading in Trendless Markets 121

CHAPTER 9 Integrating Variables into a Moving Average 141

CHAPTER 10 Going against the Grain 161

CHAPTER 11 Restrictive Trading Systems 181

CHAPTER 12 Identifying the Shifting Characteristics of Volume 199

CHAPTER 13 Predictor Variables 221

CHAPTER 14 Cross-Hedging Strategies 243

CHAPTER 15 Formulating Trading Decisions 271

CHAPTER 16 Preparing for Success 285

Technical Appendix 291

About the Companion Website 305

About the Author 307

Index 309

About the Website
Description of the web material.
Web Material
Excel spreadsheets, as described in the text.