From the May 01, 2007 issue of Futures Magazine • Subscribe!

Beating the Financial Markets: Combining Small Biases into Powerful Money Making Strategies

While there are more in-depth books on the subject, Collins lays out a soup to nuts approach to give the reader a clear blueprint to creating trading systems. The book utilizes a building-block approach to creating trading systems and formulas. Readers may benefit from rereading earlier chapters to gain an understanding of material covered in later chapters. This book is easier to understand than more technical books, which focus on designing, testing and implementing mechanical trading systems.

Because this book neither covers advanced topics nor more complex mathematical formulas, the reader should not view it as an end in itself. For instance, it does not cover in detail position sizing, maximum risk and evaluation of performance statistics to determine how one trading system compares to another.

The book does give many trading system ideas and helps the reader focus on developing new ideas by offering a practical approach to back testing and system creation. Traders looking for trading system ideas will enjoy the many systems presented, and Collins provides the actual programming code for all examples in the appendix. In addition, readers can download the code from the publishers Web site and would not need to retype it into TradeStation.

The introductory chapters of the book cover the pros and cons of discretionary trading vs. systematic trading.

Each chapter includes performance statistics and various tweaks. The last few chapters conclude with various tidbits to help with follow-through.

This book is easy to understand, contains many examples and can be used by the trader as a guide to help create mechanical trading systems.

Lawrence M. Seldin, CMC, CPC, has been involved with trading futures, options and currencies since 2002. He can be reached at larry@seldin.net or www.seldin.net.

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