Tradings Systems That Work: Building and Evaluating Effective Trading Systems

By Thomas Stridsman

Today's computer trading programs can be a godsend to traders looking for an extra edge. They can also be filled with dangerous--and expensive--pitfalls for the uninitiated. Trading Systems That Work reviews and analyzes today's major software programs, and helps traders determine which will work best for their personal trading style and habits--and which could actually work against them.Emphasizing Tradestation and Excel (the two most popular software trading programs), this valuable guidebook covers all aspects of building, understanding, and evaluating a system. Traders will keep Trading Systems That Work handy for its: *Clear, step-by-step assistance with intricate systems*Techniques to evaluate the true performance of any system

• Format: Hardcover
• Language: English
• ISBN: 007135980X
• ISBN13: 9780071359801
• Release Date: December 2000
• Publisher: McGraw-Hill Companies
• Length: 358 Pages
• Weight: 1.95 lbs.
• Dimensions: 1.2" x 7.6" x 9.6"

Customer Reviews

excellent, practical advice for the mature system developer

First, what this book is not: it is NOT one of those "buy my book and make a million in three weeks" books. He is selling no particular system of trading any market. In fact, this book is targetted at people who have TRIED to trade using one or another simple system and have failed to see those astronomical profits materialize. So he teaches an approach to building simple, robust, thoughtful systems which can be used on many markets. This is like having a really good coach walk you through the elements of any complex task, explaining each element, why it is important, and how it fits in with the others. If you like the approach that Elder and Murphy use in developing trading systems and want to learn more about the nuts and bolts of putting such a system together, this is the book you want. Do not buy this book as your FIRST book--read Elder's book and Murphy's books first, think about them, then get this one. You won't be disappointed.

Best Book on Evaluating a Trading System

I have to laugh at the "Doubt" review below because anyone who thinks that you can make more money as an author than as a decent trader is misguided (unless your name is S. King or D. Steele). By the time the publisher and distributor extract their pound of flesh, the author is left with a meager cut. When an author writes a book, several other factors must be considered: ego, sharing knowledge, recognition, leaving a legacy, etc. Did the reviewer actually read the book or just paint a broad stroke?A mechanical or system trader has plenty of time to focus on other tasks throughout the day in between executing orders. In fact, the reason why many system traders fail is because they spend their time babysitting positions and get sucked into making emotional decisions, i.e., taking the quick profit or ignoring the stop loss. It is so easy to sabotage a system, especially if you feel the need to exercise control over the trading decisions (that's 99% of us).Stridsman's book is important because it provides the framework surrounding a trading system. You can plug any trading system into his evaluation model and generate all of the required performance metrics. Further, a trader who understands the details of the system and understands its behavior gains more confidence in trading the system. I recommend this book and Ralph Vince's "Mathematics of Money Management" for further understanding.

A great book with a mediocre title

This is a wonderful book. But the title is IMO going to attract people that are looking for black box systems that will make them a mint. That isn't what this book is about. It should have been called something like, _Building and Evaluating Good Trading Systems_, or some such.I agree completely with the other reviewers and won't restate what they said. But as an owner of TradeStation I can tell you that there is a real need to have someone spell out--in CODE (both for TradeStation and for Excel)--how to *really* evaluate a trading system. Stridsman tells you point blank which of TS's performance eval stats you should look at, and which ones are worthless.Highly recommended.

Exceptional book on an important topic!!

Without money management and an appreciation for model testing, it is impossible to evaluate and trade a market timing system. Professional traders are aware of these prerequisites but part time traders are often ill-prepared. For most lay traders this approach is the boring component of trading, but for professionals, it's implementation is essential. Mr. Stridsman has accomplished what few others have attempted to do in simple to understand language. As a veteran of the markets, he is certainly respected and knowledgeable. I recommend this book heartily. The strengths are apparent upon a cursory review and the benefits derived are immeasureable. The book should be a primary component of any one's trading library.

Every trader will benefit

The title of the book should be the subtitle: Building and evaluating effective trading systems rather than Trading systems that work. If you purchase the book thinking you have purchase a collection of trading systems that work you will be disapointed. However if you have an interest in evaluating trading systems than this is the book for you and should join similar books as the Encyclopedia of Trading Strategies by Katz. The great fun in reading this book is in the Author's opinions about everyone else. Here are a few choice comments,"There is no way you can use TradeStation as a standalone tool to build a complete straegy" p.339 "If all of these indicators do not work--"p.51 and my favorite "No wonder then that your software supplier,system vender, or market guru of choice says that your worst draw down is still to come-and they do not even know how to calculate it."p.38 This is not a man that is afraid to express his opinion. The especially good points of the book are the arguments for percentages rather than points in evaluation and the TradeStation easy language (who ever thought that up has an great imagination)code to add information to an excel sheet to get it right. If this is the subject you are interested in buy it. You will not be disapointed.