Mechanical Trading Systems examines the development process for choosing and using mechanical trading systems in conjunction with trading psychology. The book discusses the popularity of mechanical trading systems, the dangers in system development and how to avoid them, how backtesting of trading systems aid in position sizing, other risk quantification tools, and methods of improving rates of return on investment without significantly increasing risk. Through a detailed examination of various types of unsuccessful trader personality traits (e.g. fearfulness, greed, impatience, lack of discipline, etc.), the book then recommends how specific kinds of trading systems can reprogram the trader. The goal is to foster a psychological flexibility that will enable traders to succeed in all kinds of trading environments: countertrend, choppy, trending. Mechanical Trading Systems marries sophisticated technical analysis with trading psychology theory.
Book Details:
- Author: Richard L. Weissman
- ISBN: 9780470358498
- Year Published: 2005
- Pages: 217
- BISAC: BUS027000, BUSINESS & ECONOMICS/Finance
About the Book and Topic:
Mechanical Trading Systems examines the development process for choosing and using mechanical trading systems in conjunction with trading psychology. The book discusses the popularity of mechanical trading systems, the dangers in system development and how to avoid them, how backtesting of trading systems aid in position sizing, other risk quantification tools, and methods of improving rates of return on investment without significantly increasing risk. Through a detailed examination of various types of unsuccessful trader personality traits (e.g. fearfulness, greed, impatience, lack of discipline, etc.), the book then recommends how specific kinds of trading systems can reprogram the trader. The goal is to foster a psychological flexibility that will enable traders to succeed in all kinds of trading environments: countertrend, choppy, trending. Mechanical Trading Systems marries sophisticated technical analysis with trading psychology theory.
Mechanical trading systems can be defined as a method of generating trading signals and quantifying risk that is independent of an individual trader’s discretion. The types of mechanical trading systems that the book examines are all based on mathematical technical analysis, which can be defined as the utilization of past price history in order to forecast future price trends and identify low-risk/high-reward trading opportunities.
UNIQUE APPROACH: The book marries technical analysis with trading psychology, adding quantitative analysis and methods to what has traditionally been thought of as a soft topic. COMPREHENSIVE: Weissman covers every aspect of mechanical trading systems for a broad range of systems including trend following, mean reversion, and short term systems. He includes the building blocks of developing each and includes strategies, methods and tools for applying them to the specific trading approaches and mindsets.
About the Author
Richard L. Weissman (Port Richey, FL) has sixteen years’ experience as a trader and developer of trading systems. Formerly President of R. Lloyd Associates Ltd. where he focused on the development and implementation of mechanical trading systems that were applicable to all trading vehicles. In the early 1990s, Weissman acted as senior trading broker specializing in foreign exchange futures for Opportunities In Options. In addition to trading and brokerage expertise, Weissman has trained industry professionals for thirteen years at companies as diverse as Opportunities In Options, Thomson Financial Services, Telerate Energy and FutureSource Bridge (where he served as Manager of Consulting Services). Mr. Weissman has written articles on technical analysis and mechanical trading system development for various industry publications, acted as a lecturer at industry conferences and is recognized globally by industry leaders as well as the financial media as a leading authority in the field. He is currently serving as faculty member for The Oxford Princeton Programme, developing and teaching courses on technical analysis, derivatives, mechanical trading system development, and risk management.