The book describes how to effectively calculate the potential profit available in the markets with the idea of developing a money management system which maximizes profits and minimizes risks. The book introduces new notions of s-function, s-matrix, s-interval, polarities of s-intervals and applies them for building the r- and l-algorithms. The book pays particular attention to money management and the discrete nature of trading. A trader applying concepts and programs described in the book can understand better the market offer, its statistical properties, and underlying risks. A system developer will find performance indicators based on potential profit and profit optimization algorithms. A reader interested in money management will learn about the extended formula for optimal allocation fraction and will understand how the discrete nature of trading affects results. In short, the book is a nuts and bolts how-to guide for calculating potential profit and an overview of money management, trading, and C++.
Book Details:
- Author: Valerii Salov
- ISBN: 9781119196877
- Year Published: 2007
- Pages: 264
- BISAC: BUS027000, BUSINESS & ECONOMICS/Finance
About the Book and Topic:
The book describes how to effectively calculate the potential profit available in the markets with the idea of developing a money management system which maximizes profits and minimizes risks. The book introduces new notions of s-function, s-matrix, s-interval, polarities of s-intervals and applies them for building the r- and l-algorithms. The book pays particular attention to money management and the discrete nature of trading. A trader applying concepts and programs described in the book can understand better the market offer, its statistical properties, and underlying risks. A system developer will find performance indicators based on potential profit and profit optimization algorithms. A reader interested in money management will learn about the extended formula for optimal allocation fraction and will understand how the discrete nature of trading affects results. In short, the book is a nuts and bolts how-to guide for calculating potential profit and an overview of money management, trading, and C++.
The random nature of price movements makes the construction of a trading system based on past price history very difficult. While patterns in the market repeat, they never repeat in exactly the same manner. Understanding the statistical significance of price movements and constructing a money management system that minimizes risk and allows for large profits is a key to trading profitably over the long term. Potential profit can be calculated by measuring market tops and bottoms, while factoring in transaction costs and the difficulty of precisely catching market peaks and valleys. By understanding potential profit, a trader can devise a system that optimizes his/her projected profits while maintaining a money management systems which limits projected losses.
Provides original algorithms for maximizing profit: Advances current industry knowledge by providing new equations to quantify potential profit and loss on a real-time basis. C++ program included: Traders will be able to test and implement concepts described in book using C++ program in companion website. Perry Kaufman to possibly write foreword. Kaufman (author of New Trading Systems and Methods, ISBN 047126847X) will either write the foreword himself or procure a foreword from a well-known industry figure. Original, thought-provoking approach to trading: Concepts and techniques will provide value to traders, system developers, and C++ programmers.
About the Author
Valerii Salov (Savoy, IL) is director of product development at NumeriX LLC, a firm which provides software solutions for the pricing and management of derivatives. Previously, he worked at Merrill Lynch, where he helped develop automated systems for trading futures, equities, and foreign exchange. He also worked at Deutsche Morgan Greenfell Capital Limited. Salov received a PhD in analytical chemistry from the Russian Academy of Sciences.