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Type of bind: Hardcover
Dewey Decimal Number: 332.6
EAN num: 9780471197218
ISBN number: 0471197211
Label: Wiley
Manufacturer: Wiley
Quantity: 1
Page Count: 426
Printing Date: 1998-11
Publishing house: Wiley
Sale Popularity Level: 1312308
Studio: Wiley
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Product Description:
The use of technical market indicators has long been a controversial subject, highly regarded by some and treated with great skepticism by others. Yet, the number of indicators—and the number of individual investors and finance professionals using them—continues to grow. Now, more than ever, there is an urgent need for objective testing to determine the validity of these indicators.
Technical Market Indicators is a unique study of the performance of many of the most widely used technical analysis indicators. The authors explore in an unbiased, rigorous manner whether these indicators consistently perform well or fail to do the job. They explain which indicators work best and why, providing a clear picture of what the investor is likely to experience when using technical analysis.
Unlike other books on the subject, Technical Market Indicators provides a comprehensive testing of indicators that uses a large sample of stocks over a twelve-year time period, encompassing varying market conditions. Instead of using the traditional technical analysis charts, this detailed analysis takes a different approach, calculating numbers based on various relationships and letting the numbers dictate the decisions. This allows the investor to use technical methods without ever consulting a chart.
From an objective standpoint, the authors address both the pro and con arguments of using technical analysis and endeavor to shed additional light onto the controversy through their systematic testing. They also alert the investor to the many different issues that must be addressed when using technical indicators, including performance measurement criteria, consistency of results, combining indicators, portfolio considerations, and leveraging.
This indispensable resource features: - Comprehensive testing of sixty different technical indicators, fully described, including Trading Band Crossover, Relative Strength Peaks, Random Walk Breakout, Candle Belt Hold, and Volume Trend
- An explanation of the underlying concepts behind the indicators and their methods of calculation
- In-depth results of tests on each individual indicator, with over 250 pages of detailed tables
- An examination of trading rules that combine two or more indicators and a report of a sampling of the best combinations
- An annotated bibliography.
For those new to technical analysis or for the experienced analyst looking for some fresh angles on the subject, this one-of-a-kind resource is the only one you'll need to navigate the increasingly complex maze of technical market indicators.
Can technical analysis be used as an effective tool to enhance investment performance?
This question is currently on the minds of many investors and traders. The answer can be found in this invaluable, comprehensive resource, which provides a detailed analysis of the most commonly used indicators, explaining in detail which indicators seem to work best, why, under what conditions, and with which kinds of financial instruments.
'Do technical market indicators provide useful information to the stock trader or is it impossible to beat a buy and hold strategy? Bauer and Dahlquist tackle this controversy by rigorously testing 60 indicators on 878 stocks over a 12-year period. Their explanations of the indicators, the testing process, and the results are clear and concise. The 12 major conclusions based on this extensive research will provide the reader with plenty of opportunities to follow Bauer and Dahlquist's final advice: 'Keep learning and keep thinking. '' — Tom Bierovic Manager, System Trading & Development Education Omega Research, Ltd.
'Who says a technician has to use charts? Here is a book that sidesteps traditional technical analysis and describes how tabular data can be more informative.' — Ralph Acampora Managing Director Prudential Securities.
User popularity level:
Rated by buyers 
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This is a very good reference book. It covers 60 commonly used indicators. The testing time frame covered 12 years, 48 quarters. The time frame is long enough to get objective results. This is the only book on the market to do this kind of research. I was planning to do the same thing with my own money and time in order to pick the best performing indicator combination. Accidentally and luckily I read this book. I was surprised to know how good (or how bad, truthfully) these indicators are. The best one was a little bit more than 61% accuracy. Some indicators are even worse than tossing a coin.
Theoretically, these indicators should work because they have sound theories behind them. Practically, they don't work well in the markets. Trading well is never an easy job. Maybe it is the most difficult job in the world.
If you want to learn trading from this book, you surely will be disappointed. If you want to know how well ( or how bad ) these indicators perform in the markets, this is the right and the only book for you.
There is a very good trading psychology book that I think every serious trader should read---What I Learned Losing a Million Dollars . It is still in print. The author, Brendan Moynihan, is a registered seller @ Amazon.com. Buy from him through Amazon. The book will be signed with a personal message inscribed to you by Brendan. You will love this book. After reading this book, you will move one big step ahead toward success. What I Learned Losing a Million Dollars
Rated by buyers 
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This book was a dissapointment.
The book smacks of the theme "Golly, we just learned how to use the Omnitrader software, lets write a book about it". The authors use the Omnitrader's buy and sell signals but fail to state what the entry or exit conditions are. It simply relies on the Omnitrader "black box". About 90% of the book is fluff associated with printing out pages and pages of meaningless quarterly gains and losses tables. Instead, the authors should have used clear graphs and illustrated differences in gains, including effects of compounding. The authors assumed that when trading, you use a single inicator, and when the inicator is not flashing a signal you stay put in a cash position. By staying in a cash position, obviously that part of their portfolio wasn't making any gains for a majority of the time. Thus they arrived at very erroneous conclusions. The least they could have done is to chose the S&P500 index (SPY) in lieu of the cash position to arrive at more realistic final results.
Bottom line is that this is a very amateurish effort and an insult to the intelligence of the average trader.
Rated by buyers -
As a very experienced trader, my opinion about this book, in a word, is "awful".
1. The tables of results are not really of any particular use to traders...nor to anyone else, as far as I can determine.
2. They used 12 years for testing 60 indicators for 878 equities - 1985 through 1996 period. I don't know what the criteria are those particular symbols, that is not explained. The years used skews the results toward long trades, which shows up in their results.
3. Rather than benchmarking against the S&P, DOW or Nasdaq 100 or some similar benchmark, as is usually done, they strangely used a quarter hold strategy - without really defining the entries and exits for the holds.
4. For most of the testing they assumed apparently immediate fills. For most of the results they ignored commission costs and slippage considerations.
5. They used no money/risk management techniques. Appears that they were either fully invested or fully in cash whenever they assumed a position. This is an assumption on my part because the authors do not explain, other than suggesting near the end that portfolio management may improve the results.
6. Their entries and exits were without any confirmations, on the day period immediately following the signals. No experienced trader whom I know, does that.
7. Only day periods were tested. Not clear to me exactly how they assumed entry and exit - at open, at a specific price, or whatever. Did not find any adequate explanation. One could argue that neither author understands order executions, order routings, order types, intraday fills, stop losses, trailing stops, stop entries or profit targets - because, incredibly, they leave all of that out!
8. From their explanations of how they used each indicator, it does not seem to me that they understood many of the indicators, not really how to correctly use many of them. I think they simply read a little something about each indicator, but whatever they did, too often their inexperience, lack of knowledge, shows through.
Above, plus other things in the book, lead me to believe that neither author, both full time academics, has much actual trading experience.
If they had, they would have measured the tests differently; chosen a more representatively valid selection of years; explained their entries and exits far more explicitly; chosen different indicators in many instances; etc.
They could have sought and heeded the advice of real traders, before beginning their academic exercise - but apparently did not.
Lastly, I strongly suspect that both authors were, their claims to the contrary notwithstanding, biased towards a buy and hold strategy - which 2000 through 2002 pretty much has trashed. Both authors are professors in finance, and that may have predisposed them towards their selection and methods of measures, selection of years to test, and other matters.
The concept of testing indicators is a great idea. Maybe someday someone with adequate research and trading skills will do that well. These two authors did not.
Rated by buyers 
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If you are wondering why the efficient market theory/technical analysis debate can't be put to rest by empirical data, you need wonder no longer. Bauer and Dahlquist establish beyond question (at least to those with open minds) that technical analysis does work. Real TA fans will be disappointed, though, that the edge TA gives is shown to be minuscule. One of the most interesting conclusions from this book is the fact that purely mechanical systems, based on one or two indicators, and applied with no real preselection of stocks, probably will not make you any money. What is missing from this book is a study of the use of chart formations (other than candlesticks) in conjunction with indicators.
Rated by buyers 
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If you have ever wanted to know how bollinger bands are constructed, this is the book for you. It explains how every conceivable indicator is constructed and the theory behind the construction. I am not a trader so I will not comment on the authors' testing methodology. I only used the book for work, for research and anylatical purposes.
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