| |
| |
| Foreword | |
| |
| |
| Acknowledgements | |
| |
| |
| Preface | |
| |
| |
| The Most Important Factor in your Success: You! | |
| |
| |
| The Legend of the Holy Grail | |
| |
| |
| The Holy Grail Metaphor | |
| |
| |
| What's Really Important to Trading | |
| |
| |
| Modeling Market Geniuses | |
| |
| |
| Summary | |
| |
| |
| Judgmental Biases: Why Mastering the Market Is So Difficult for Most People | |
| |
| |
| Biases That Affect Trading System Development | |
| |
| |
| Biases That Affect How You Test Trading Systems | |
| |
| |
| Biases That Affect How You Trade Your System | |
| |
| |
| Summary | |
| |
| |
| Setting Your Objectives | |
| |
| |
| Designing Objectives Is a Major Part of Your System Work | |
| |
| |
| Tom Basso on Objectives | |
| |
| |
| Setting Your Own Objectives | |
| |
| |
| Conceptualization of your System | |
| |
| |
| Steps to Developing a System | |
| |
| |
| Take an Inventory | |
| |
| |
| Develop an Open Mind and Gather Market Information | |
| |
| |
| Determine Your Objectives | |
| |
| |
| Determine Your Time Frame for Trading | |
| |
| |
| Determine the Best Historical Moves in That Time Frame and Notice What Those Moves Have in Common | |
| |
| |
| What's the Concept behind Those Moves and How Can You Objectively Measure Your Concept? | |
| |
| |
| Add Your Stops and Transaction Costs | |
| |
| |
| Add Your Profit-Exits and Determine Your Expectancy | |
| |
| |
| Look for Huge Reward Trades | |
| |
| |
| Optimize with Position Sizing | |
| |
| |
| Determine How You Can Improve Your System | |
| |
| |
| Worst-Case Scenario--Mental Planning | |
| |
| |
| Selecting a Concept That Works | |
| |
| |
| Trend Following | |
| |
| |
| Fundamental Analysis | |
| |
| |
| Seasonal Tendencies | |
| |
| |
| Spreading | |
| |
| |
| Arbitrage | |
| |
| |
| Neural Networks | |
| |
| |
| There's an Order to the Universe | |
| |
| |
| Summary of Key Points | |
| |
| |
| Understanding Expectancy and Other Keys to Trading Success | |
| |
| |
| The Six Keys to Investment Success | |
| |
| |
| The Snow Fight Metaphor | |
| |
| |
| Looking at Expectancy under a Magnifying Glass | |
| |
| |
| Expectancy and R Multiples | |
| |
| |
| Expectancy Applied to the Market | |
| |
| |
| Using Expectancy to Evaluate Different Systems | |
| |
| |
| A Review of How to Use Expectancy | |
| |
| |
| Understanding the Key Parts of your System | |
| |
| |
| Using Setups | |
| |
| |
| The Four Phases of Entry | |
| |
| |
| Setups for Stalking the Market | |
| |
| |
| Filters versus Setups | |
| |
| |
| Setups Used by Well-Known Systems | |
| |
| |
| Summary of Setups | |
| |
| |
| Entry of Market Timing | |
| |
| |
| Trying to Beat Random Entry | |
| |
| |
| Common Entry Techniques | |
| |
| |
| Designing Your Own Entry Signal | |
| |
| |
| An Evaluation of Entry Used in Some Common Systems | |
| |
| |
| Summary | |
| |
| |
| Know When to Fold 'Em: How to Protect Your Capital | |
| |
| |
| What Your Stop Does | |
| |
| |
| Using a Stop That Makes Sense | |
| |
| |
| Preserving Capital | |
| |
| |
| Stops Used by Common Systems | |
| |
| |
| How to Take Profits | |
| |
| |
| Purpose behind Profit-Taking Exits | |
| |
| |
| Just Using Your Stop and a Profit Objective | |
| |
| |
| Simplicity and Multiple Exits | |
| |
| |
| What to Avoid | |
| |
| |
| Summary | |
| |
| |
| Exits Used by Common Systems | |
| |
| |
| The Opportunity and Cost Factors | |
| |
| |
| Several Approaches to Take | |
| |
| |
| Factoring in Opportunity | |
| |
| |
| The Cost of Trading Opportunity | |
| |
| |
| Summary | |
| |
| |
| What Do You Mean Position Sizing? I Only Have $10,000 in My Account! | |
| |
| |
| Position-Sizing Strategies | |
| |
| |
| One Unit per Fixed Amount of Money | |
| |
| |
| Equal Value Units for Stock Traders | |
| |
| |
| The Percent Risk Model | |
| |
| |
| The Percent Volatility Model | |
| |
| |
| The Models Summarized | |
| |
| |
| Examples of the Impact of Position Sizing | |
| |
| |
| Summary | |
| |
| |
| Position Sizing Used by Other Systems | |
| |
| |
| Conclusion! | |
| |
| |
| Appendices | |
| |
| |
| Recommended Readings | |
| |
| |
| Key Words Defined | |
| |
| |
| Index | |