Cycle Analytics for Traders: Advanced Technical Trading Concepts

$28.46

  • Format: PDF
  • Pages: 247
  • Published Date: 2013
Category:

Description

CyCycle Analytics for Traders will allow traders to think of their indicators and trading strategies in the frequency domain as well as their motions in the time domain. This new viewpoint will enable them to select the most efficient filter lengths for the job at hand. The descriptions are written for understanding at several different levels. Traders with little mathematical background will be able to assess general market conditions to their advantage. More technically advanced traders will be able to create indicators and strategies that automatically adapt to measured market conditions by using combinations of computer code that are described.

Introduction:

This is a technical resource book written for self-directed traders who want to understand the scientific underpinnings of the filters and indicators they use in their trading decisions rather than to use the trading tools on blind faith. There is plenty of theory and years of research behind the unique solutions provided in this book, but the emphasis is on simplicity rather than mathematical purity. In particular, the solutions use a pragmatic approach to attain effective trading results.

The concepts are presented so they can be understood with only a background in algebra. The writing style in the book is intentionally terse so the reader doesn’t need to wade through a mountain of words to find the ideas being presented. EasyLanguage computer code is used to calculate and display the indicators. From my viewpoint, Easy Language is just a dialect of Pascal with key words for trading. Therefore, the code should be nearly as readable as English.

Cycles are unique because they are one of the few characteristics of market data that can be scientifically measured. However, cycle measurement is extremely complex. In the most general sense, there is a triple infinity of parameters–period, phase, and amplitude–that must be identified simultaneously to completely describe the cycles. Additionally, market cycles are ephemeral and are often buried in pure noise. So the compromises begin. One of the first realizations that a trader must make is that cycles cannot be the basis of trades all the time. Sometimes the cycle swings are swamped by trends, and it is folly to try to fight the trend. However, the cyclic swings can be helpful to know when to buy on a dip in the direction of the trend. Traditional indicators such as Stochastics, relative strength index (RSI), moving average convergence/divergence (MACD), and commodity channel index (CCI) are subject to the same constraints, and therefore this book will lead to a greater understanding of all technical indicators.

Contents:

  • Unified Filter Theory
  • SMAs, EMAs, or Other?
  • Smoothing Filters on Steroids
  • Decyclers
  • Band-Pass Filters
  • Market Structure and the Hurst Coefficient
  • Spectral Dilation
  • Autocorrelation
  • Fourier Transforms
  • Comb Filter Spectral Estimates
  • Adaptive Filters
  • The Even Better Sinewave Indicator
  • Convolution
  • The Hilbert Transformer
  • Indicator Transforms
  • SwamiCharts
  • Swing-Trading Strategies