Martin Pring's Breaking the Black Box is a CD tutorial for traders and investors who want to design and apply their own automated or mechanical trading systems.
Part 1 of this 4-hour hour audio-visual presentation takes you systematically through the process of designing, testing and applying systems in the market place, along with tools for risk management, leverage, timing and more. Part 2 and 3 build on these principles with actual market place examples of several tried and tested systems.
Part 2 covers systems based on a single security, such as U.S. equity market, Closed mutual funds, soybeans and the CRB. Even the best systems eventually come apart and this course offers some guidelines on how to check for failure before it becomes too costly.
All subject matter on each CD is reinforced with an interactive multi-media quiz where you can test your knowledge with automatic scoring.
'Very helpful; thought provoking; idea creative; and enlightening. My wife and I are enjoying them immensely and learning from every chapter. I know that I am becoming a good trader and that I am going to be a great trader who enjoys financial independence just like I want to...and I am going to have people like Martin to thank, for making my success a possibility...much sooner than learning by all of my mistakes ever would have.'
D. Nilan
PART ONE: GUIDELINES FOR DESIGNING, TESTING AND APPLYING A SYSTEM
1. The Holy Grail?
Introduction
Using a System as a Filter
Act on Every Signal
A Word of Caution
2. Advantages of Mechanical Systems
Remove Emotion and Apply Discipline
Gain Consistency and Manage Risk
3. Disadvantages of Systems
History Does Not Always Repeat Itself
Random Events and Changing Conditions Can Be Major Problems
4. Designing a System
Trending Environments
Trading Range Environments
Establish a Time Frame
Establish a Methodology
5. Practical Guidelines for System Design
Define the System Precisely and Learn the Securities Characteristics
Develop Filters and Keep Things Simple
6. Tools for Risk Management
Design for Consistency
Limit Drawdowns and Protect Profit
Entering Stops and Other Money Management Techniques
Breakeven Stop
Inactivity and Maximum Loss Stops
Profit Target Stop
Trailing Stops and the Parabolic System
Trailing Dollar Stop
7. The Testing Process
Using Historical Data and Optimization
Walk Forward Analysis
Walk Backwards As Well
Back Test Over Many Years Using Many Securities
8. Reviewing the Results
Top Profits Don't Always Indicate the Best System
Churning and Slippage
Balance Profit vs. Loss, Risk vs. Reward
Compare Market Environments
9. Enhancing the Results
Let the Trend Work in Your Favor
Take Advantage of Carrying Costs
10. Applying the System and Practical Guidelines You Need to Follow
Execute Phantom Trades and Every Signal Without Question
Compare the Actual with the Tested
Reasons for System Failure
The Effect of Commissions
Placing Orders
More on Slippage
Overfitting
11. The (Almost) Perfect System
Make Sure It Fits Your Personality
Be Comfortable with the Markets You Trade
Have Confidence in the System
PART TWO: SYSTEMS BASED ON ONE SECURITY
12. Optimizing For the U.S. Equity Market
Sample Testing and Walk Through
Optimize for the Whole Period
Optimize for Just Long Positions
13. Combining a Moving Average and an Oscillator
Rationale for the System
The System in a Neutral Trend
The System in a Bull Market
The System in a Bear Market
14. Testing a Moving Average and an Oscillator
The Approach
Applied to Soybeans and the CRB
Applied to Closed End Mutual Funds
Applied to the Stock Market
15. A Triple Indicator System
The Rationale
Putting the Indicators Together
Appraising the System
The Advantages of Diversification
16. A Word Regarding Leverage
Using Leverage
PART THREE: SYSTEMS BASED ON INTERMARKET RELATIONSHIPS
17. Equities vs. Short-term Interest Rates
The Relationship
The System
Using Different Buy and Sell Signals
18. CRB vs. Gold
The Relationship
The System
Using Weekly Data
19. Bonds vs. Commodities
The Relationship
The System
20. Systems Using Realative Strength (RS)
The Concept of Relative Strength
Applying an RS System
Applying a More Sensitive RS System
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