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Description of Business One Irwin Guide to Trading Systems

The Business One Irwin Guide to Trading Systems provides in one easy-to-understand volume the most comprehensive and authoritative description of the theory, creation and use of mechanical trading systems ever published. Whether or not you have previous commodity futures trading experience, Babcock shows you:

• what you need to know to understand the problems of speculative trading
  
• why such a high percentage of traders lose
  
• why a completely mechanical approach is your best route to profits
  
• how to create your own system, step by step
  
• how to evaluate expensive commodity trading systems and system software created by others
  
  Written in a readable conversational style, The Business one Irwin Guide to Trading Systems gives you a systematic examination of what does and what does not work. Babcock presents historical tests of various trading system approaches in 10 markets over a five-year period and offers you a simple yet highly effective long-term system created especially for this book.

Title Information

Pages:

316 pages

Format:

Hardback

Product Code:

9223

Publisher:

Advanced Trading Seminars, Inc

Published:

01/01/1989

Press and Industry Reviews

'Successful books become that way because they fill an important need among the investing public. This comprehensive, practical and insightful book, written by an acknowledged authority on trading systems, fills such a need and should become one of the most important books of the year. It should be read by all serious futures traders and will undoubtedly become one of the standard references in the field.'
John Murphy

'A most thorough analysis of the world of trading systems by the leading authority in this area. Even if you never purchase a trading system, The Guide will teach you a good deal about technical analysis.'
Gerald Appel, President Signalert

'Until this book, trading system construction has been in the hands of maybe 20 to 100 people in America. Thanks to Bruce Babcock, now everyone can understand how systems are put together.'
Larry Williams

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Contents of Business One Irwin Guide to Trading Systems

1. An Introduction to the Commodity Trading Problem

You never really buy or sell anything
You are gambling on price movement

The effect of leverage

The costs of trading

Trends

Trading time frame

Predicting the market

The three cardinal rules of successful commodity trading

2. Why People Fail at Commodity Trading

Lack of understanding

Lack of capital

Unrealistic expectations

Lack of patience

Lack of discipline

High risk aversion

3. The Mechanical Approach to Trading

4. Creating Mechanical Trading Systems

Curve-fitted systems

Non-curve-fitted systems

Optimization

5. Testing Commodity Trading Methods

Data interval

Types of data

The test period using different time segments

Using different markets

Costs of trading

Special problems of testing with daily data

Evaluating tests results

6. Optimization

7. A Short history of Systems Merchandising

8. How Well Do Popular Methods Perform - A Frame of Reference

The test markets

The test period and data type

Performance standards and methodology

Four popular systems

The two percent system

The Babcock long-term system

9. Entry Methods

Trend indicators

Oscillators

Entry triggers

Price patterns

Combinations of entry concepts

10. Stop-Loss Methods

Price (volatility) stops

Time stops

Money management stops

Intraday or close-only stops

Reversing stops

11. Exit Methods

Breakeven stops

Trailing stops

Fixed and variable profit objectives

Oscillator profit objectives

12. Systems and Methods

System specialization

The effect of price action on system performance

Trading a portfolio of markets

Trading all the markets at once with the Dennis Commodity Rating Technique

Using trading systems on common stocks

Answers to the market identification quiz

13. Commodity System Software

Buying hardware

Commodity trading software

14. Creating Your Own System

15. Follow Your Own System

Greed and fear

Coping with drawdowns

Underestimating the impact of drawdowns

When has a system failed?

Traders just want to have fun

Understanding the role of luck

16. Money Management

Proper account size

Diversification in markets and systems

Risk management

Trading multiple contracts

17. Trade Management

Varying the number of contracts traded

Equity curve management

18. Summary and Conclusion

Appendices
1. Long-term weekly charts (1978-1988)
2. Bread and butter S&P day trading system
3. Babcock long-term system hypothetical Trades