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.
Introduction:
Many traders use the latest in electronic trading programs, and many have over 100 technical indicators, but the majority of traders use very few of them. Most indicators give you similar results, because either they play on running with momentum or use some form of trading between the bands. Still one important aspect is missing—you cannot run a statistical analysis of current market conditions.
For example, after absorbing heavy early morning causalities 30 minutes after the ringing of the opening bell, the market claws back, sharply cutting its percentage loss by three-fifths. Given this information, would you take a long position from 10:00 to the closing bell? Most trading programs are not capable of performing an analysis giving you the winning percentage and summary statistics, nor can they produce a scattergram reflecting the past performance of this trading condition.
A charting program cannot give you these statistics, but by using the functions contained in Excel you can quickly produce this information. Furthermore, the indicators in other programs are restrictive because the focus of prediction is on a single variable. Within the pages of this book, most of the studies implement a multiplicative approach. For instance, a moving average may be encouraging you to take a long position, but is its buy signal getting stronger or weaker? Along with this information, a system should be able to factor in other variables such as trading volume. Each indicator, by itself, is suggestive, but many variables working together offer a more conclusive analysis.
This book supplements what is missing in other trading programs. By using Excel with your existing trading platform, it expands the investor’s ability to assess current market conditions. Since my forecasting procedures afford you more flexibility to study market dynamics, they are a more powerful weapon.
Unlike most trading books, which regiment practically every click of your mouse, this one gives you the autonomy to make your own trading decisions. Certainly there are guidelines and discussions on what to do and what not to do, but its value comes from allowing you to use your own aptitude to create the systems that work best for you. After all, the efficacy of even the best systems are questionable if they are incompatible with your risk tolerance, trading experience, emotional disposition, or your ability to follow their guidelines because of your busy schedule and daily demands.
There is always some material basis on which to begin your analysis. This book gives you a working knowledge of the assessment functions in Excel, how to run the analysis, and a discussion on the interpretation of your findings, as well as a discussion on placing orders on the basis of your conclusions, not arbitrary decision making.
Contents:
- Invest in Yourself, Not a Trading System
- Playing the Percentages
- Performance Measures
- Extracting Performance Results
- Monitoring Performance
- Breaking Down a Stock or Commodity
- Quantifying Risk
- Trading in Trendless Markets
- Integrating Variables into a Moving Average
- Going against the Grain
- Restrictive Trading Systems
- Identifying the Shifting Characteristics of Volume
- Predictor Variables
- Cross-Hedging Strategies
- Formulating Trading Decisions
- Preparing for Success
Trade with the Odds: How to Construct Market-Beating Trading Systems By Anthony Trongone pdf
Musa Alfaro (verified owner) –
A true master always interprets complicated things in a simple way. The author of this book is absolutely such a master. In addition to the plenty of amazingly persuasive charts developed with Excel that you can never see elsewhere, there are quotes at the beginning of each chapter, precisely cited to enlighten readers with philosophy and wisdom. It hits what others can neither hit nor see. For those who are determined to invest in themselves for greater success in trading, this book is really a must.
Donald Miles (verified owner) –
In this book, Dr. Trongone takes you on a journey to build your trading system strategy. He uses simple, well known market examples and quotes from historical figures that you can understand and relate to. Because of his experience and knowledge, he is able to expand your understanding of solid trading techniques. You’ll gain confidence in knowing you are in control of your trades and that, through determination and self-discipline, you can, not only succeed, but learn to recognize your market opportunities.
Lionel Malone (verified owner) –
Being a novice at trading I have purchased a number of books. This is definitely the best I have bought yet. I do not need any other book to help me become a great trader. Each day I am impressed and find my skills improving dramatically. Thank you Dr. Trongone for an insight to the stock market that has not been presented before. I am having great results!
Skyler Massey (verified owner) –
“Trade with the odds” is one of the best stock trading books I have read. It is a book which could easily require 4 or 5 reads before extracting everything useful. My software based strategies are more sophisticated so some of his work seems simplistic but still quite useful. If you are not an expert programmer then Anthony shows how to use Excel to accomplish things I would normally not attempt without custom software. I invested thousands of hours engineering our trading software but Anthony shows how a non-programmer willing to use Excel can obtain favorable results with a far smaller investment.
One challenge with this book is that after Anthony presents an idea you can easily consume a month exploring the boundaries and extensions. I recommend a quick read all the way through the first time because some of the better content is near the end. Buy a copy because this is one where you will want to scribble in the margins. Antony’s tone can be overblown almost to the point of offensive but I found it worth reading past the hype to reach the informational nuggets.
For fellow engineers; Anthony’s book is one of those where the notes scribbled in the margin represent opportunities for thousands of hours of programming, exploration and testing. There isn’t a lot of theoretically challenging material but I found a number of Oh, I hadn’t thought of that angle ideas.
I recommend also reading Predictive Analytics: Microsoft Excel by Conrad Carlberg between the two they illustrate how to harvest the power of Excel to deliver real financial benefit.