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Download How to Take Money from the Markets: Creating Profitable Strategies plus Six Ready-to-Use Systems epub

by Steve Palmquist

Trading is a statistical business that requires a variety of tools in order to manage risk and adapt quickly to changing market conditions. Put the stats in your favor with the backtested, proven trading systems presented in Steve Palmquist's new book.

Palmquist uses the results of his extensive backtesting techniques to smash many of today's popular trading myths and get down to the truth -- while handing you six complete trading systems, including exactly how and when to use them.

Each system has been analyzed and tested in various time periods and market conditions using specific rules and various filters, all in order to determine how and when each system is most effective. Palmquist shares all of the research and results with you to reveal the design, development, and testing that goes into creating profitable trading strategies. You will learn:

- How to determine market conditions, - Four key things to look for in backtesting results, - How to use Bollinger bands to trade overbought and oversold stocks, - How to play pullbacks and retracements in trending stocks, volume accumulations, and distribution patterns, - And much more.

Smart traders will realize that making predictions about the market is a losing battle. Learn to observe and determine market conditions--then simply select the tool that you know works the best, and see how profitable this kind of market adaptive trading can be.

Download How to Take Money from the Markets: Creating Profitable Strategies plus Six Ready-to-Use Systems epub
ISBN: 1592804128
ISBN13: 978-1592804122
Category: Business
Subcategory: Investing
Author: Steve Palmquist
Language: English
Publisher: Marketplace Books (August 17, 2010)
Pages: 320 pages
ePUB size: 1913 kb
FB2 size: 1716 kb
Rating: 4.4
Votes: 515
Other Formats: lrf doc docx rtf

I love how he use stats. but he didn't come up with where the criteria came from in the first place.
Mr Palmquist preaches the need to test every trading system. It would have been nice if he had followed his own advice.

The six systems he describes include:
Sell short when the price is above the upper Bollinger band.
Buy when the price is below the lower Bollinger band.
Buy when the price is declining on low volume.
Sell short when the price is rising on low volume.
Buy when price is relatively low and there is strong accumulation.
Sell short when price is relatively high and there is strong distribution.

The descriptions are reasonably well defined, although the text frequently suggests modifications that are not tested.

He points out that each system works best in a particular market environment. He precisely defines the date ranges for each bull, bear, and trading range market, and presents limited performance statistics for the systems related to the environment. But he does not give actionable rules for determining which environment the market is in or when it changes.

He tests his systems by applying the rules to all stocks in his (undefined) database of 2500 stocks. He reports results for a specific one year period (often 2007 or 2008), giving a table of the number of trades, average amount won per trade, etc. He reports amount won or lost in raw dollars without regard to the price of the stock.

There are no examples of applying any of the systems to a single broad market index or highly liquid ETF.

There are no charts showing any equity curve for any period.

He mentions the importance of having trades evenly distributed throughout the period, but the trades produced by all of these systems are strongly correlated. There are long periods with no activity separating short periods with multiple signals -- far too many to take. There are no charts showing how many stocks would be held at any time.

There is no discussion of risk of drawdown, safe position sizing, or profit potential.

I coded the indicators and rules into a trading system development platform and tested a wide range of parameter values, a range of time periods, and a range of stocks. At best, performance is ragged; more typically, during most time periods these systems are losers.

Mean reversion trading systems, when properly designed, tested, and validated can be very consistently profitable over a wide range of market conditions and time periods. (See, for example, Larry Connors and Cesar Alvarez, or Chris White.) Unfortunately, the ones described by Mr. Palmquist are not profitable outside the periods he chose to discuss.
Another well thought out book on trading by Palmquist. He backs up his ideas for trades. Now he needs to do a book on how to backtest. The mechanics. The software company he uses is pretty pricey for a beginner.
I have found the book very good at explaining Candlesticks to make money. Palmquist also shows one how to remove most of the risk from trading by back testing. He then shows how to find the most ideal trades to generate large gains.
This is a clear and well organized analysis of six popular trading systems. The book analyzed each trading system and shows you how it works and ways to improve results. The tips on market analysis and general trading principals alone are worth the price of the book.

Shows how and when to use pullback trading tools.

Shows how to effectively use the Bollinger Bands to improve trading results.

Uses clearly presented backtesting results to illustrate what works and what is just a myth.

Shows how trading systems results are effected by time periods and market conditions.

Provides several clear tools to use to quickly know whether the current market environment is suitable for trading.

Shows how to use distribution patterns.

A great book that shows how to improve trading results.

This book by Steve Palmquest is one of the best books on technical trading systems I have read. By using his trading system it looks like timely and profitable trades can be made on a regular basis.