I already have a what I feel is a pretty good grasp on technical analysis: I've read TAFM twice and absorbed most of it. I know what most all of the indicators do and I have a decent feel for how markets flow. After reading about William Eckhardt in new market wizards I want to try my hand at system design. I've got experience programming and I'm good with math so it seems like something I'd be good at. What are the best books about system design? I'm looking to trade equities interday (no desire or time to trade intraday).
trend following by michael covel Other than that, good luck. Nobody gives away secrets to the kingdom.
I would be interested in the following one which has been already overdue for more than 12 months. Q Financial Trading Systems Design and Development with C++ (+CD) (Wiley Finance) (Paperback) by Gaurav Mangla Availability: This item has not yet been released. You may order it now and we will ship it to you when it arrives. Ships from and sold by Amazon.com. Product Details * Paperback: 512 pages * Publisher: John Wiley & Sons (April 22, 2005) UQ
Alan Farley, "The Master Swing Trader" Vadym Graifer and Christopher Schumacher, "Techniques of Tape Reading"... ...it's a short list!
OK let me add on to this original quesiton. Eckhardt and another trader both agree that the RSI and stochastics are useless. Eckhardt conceeds that moving averages have some value. Their reasoning for this is because of all the false signals they generate when the market isn't trending and then when it finally begins to you can't realize it. Are there any public indicators that while you can't use them solely to design a system they actually do have some sort of use? I'm thinking ADX, Money Flow index, and OBV. What else ?
Take a look at Rickey Cheung's interview at Futures Truth. His Emini SP500 system is not built from any commercial indicators. He built it bottom up. To succeed today you need to start from scratch.
I would recommend these three books if you are serious about system development. Technical Traders Guide to Computer Analysis of the Futures Markets (Hardcover) by Charles Lebeau, David W. Lucas Tradings Systems That Work: Building and Evaluating Effective Trading Systems (Hardcover) by Thomas Stridsman Professional Stock Trading: System Design and Automation (Hardcover) by Mark R. Conway, Aaron N. Behle