Smarter Trading: Improving Performance In Changing Markets

Smarter Trading tries to be realistic about how to find broad-based trading strategies that can survive change. It uses a lateral solution rather than a vertical one.

Introduction:

Trading is a difficult business. Finding a way to build steady profits takes long, hard work or very good luck. Sometimes the effort fails; no matter how much energy is applied, there is no answer to be found. Other times, a successful program has only a short lifespan before the market changes.

In dealing with a market problem, we must ask if we are looking at the real cause of the price move. Patterns may be coincidental. Even if we know the cause, can we predict the result? Throughout this book, we will return to the need for a logical solution, rather than one that is computer-generated. Trading programs cannot be perfect, but we need to know what to expect. Is a stop-loss a good way to control risk, or does it only give us unfounded confidence? It is not important whether a stop-loss is good or bad, only that we know the right answer.

Smarter Trading: Improving Performance In Changing Markets will also present some new ideas, such as an adaptive, or self-adjusting, moving average and a detailed plan for creating a robust trading program. In the spirit of a lateral solution, it will take a new look at simple ways to improve most trading models, extracting the essential aspects from each idea. Examples will use forex, futures, stock, and stock index markets to show how readily these techniques apply to all markets, and trading in general.

Contents:

– Part 1. Bow Changing Markets and Technology Affect Results

• The Impact of Change on Markets and Trading
• Assessing Market Reality
• Reasonable Expectationa Give Achievable Results
• Risk and Return

– Part 2. Using Old and New Trading Tools to Achieve Reasonable Objectives

• Profit-Taking
• The Mixed Role of Stops for Controlling Risk
• Understanding Price Shocks
• Smarter Trend-Following

– Part 3. Making a Trading Strategy Robust

• Teeting for Robuetness
• Improving the Performance of Existing Systems

Smarter Trading: Improving Performance In Changing Markets By Perry J. Kaufman PDF