"Evidence Based Technical Analysis" by Davir Aronson

[Directional]

"Evidence Based Technical Analysis" by David Aronson

http://www.amazon.co.uk/Evidence-Ba...6418044?ie=UTF8&s=books&qid=1179840595&sr=8-1

I've not recommended a book for ages, but I'm going to recommend this one.

Its quite simply the best book i've ever read on Technical Analysis. If you are serious about developing a strategy and applying scientic/quantitative/statistical processes in determining which approaches yield genuinely valid results then you must have this book on your shelf.

It debunks a lot of the commonly accepted approaches to TA, it is well written and easy to read, even though Aronson covers some complex subjects. Its also logically laid out and all the principles he explores are explained mathematically with formula's etc

 

[grantx]

Arbitrageur,

I’ll trust your judgement any day without question. However, when you say “principles...explained mathematically” this is frequently used to add legitimacy to a pseudo-science.

Of course, it is generally recognised that TA is more art than science but the question for me is whether the principles are sound. If it’s convenient, perhaps you could provide a brief example/illustration?

Hope all’s well in Riga.

Grant.

 

[nine]

The downsides of this book were examined also on elitetrader. The author also contributed to that thread.

 

[Directional]

when you say “principles...explained mathematically” this is frequently used to add legitimacy to a pseudo-science.

Of course, it is generally recognised that TA is more art than science but the question for me is whether the principles are sound. If it’s convenient, perhaps you could provide a brief example/illustration?

Grant,
no prob - i'll shuffle through and write some examples and formulas in here a bit later when I have some time.

Kiwi, yes you're right - I didnt realise there was such a big thread on ET. Hope i'm looking at the right one but it looked like there was a bit of mudslinging over the authors claim that if something cant be proven to work scientifically then its useless. From a quantitative viewpoint, he's correct on that one of course, but i'm sure there are some rich traders out there who trade off pure discretionary "feel" that could never scientifically prove that they have an edge with their "feel" for the market, but obviously their bank balance proves that they must have one.

 

[zupcon]

i'm sure there are some rich traders out there who trade off pure discretionary "feel" that could never scientifically prove that they have an edge with their "feel" for the market, but obviously their bank balance proves that they must have one.

Not necessarily, they may simply be statistical outliers, who just happened to be very lucky

Ive read a few reviews of this book, and finally ordered a copy at the weekend, opinions do tend to be completely polorised, so looking forward to giving it a read.

regards

zu

 

[nine]

When you read the book you will realize the extent to which the "can't test" rule excludes most profitable strategies.

My strategies are very simple (well maybe not "very") but are absolutely untestable in the author's approach. Probably just as well or some s.o.b. would create a program to beat me to the market.