From the March 01, 2010 issue of Futures Magazine • Subscribe!

The complete guide to investing in short term trading: How to earn high rates of returns safely

The Complete Guide to Investing in Short Term Trading: How to Earn High Rates of Returns Safely

By Alan Northcott
Atlantic Publishing Company
$24.95; 288 pages

You could have no prior trading experience and still be part of Alan Northcott’s targeted readership, but you can’t be intellectually challenged. “The Complete Guide to Investing in Short Term Trading,” a modest paperback, packs abundant information within 285 pages, and much of it is beyond the novice level. Because it does invite the uninitiated to come aboard, either as full or part time traders, there’s some well-covered ground, such as fundamental vs. technical analysis and the psychology of fear and greed.

By the mid sections, however, we’re delving into the math behind stochastic and RSI oscillators, the ADX and Fibonacci numbers. Northcott offers solid advice on prudently testing mechanical systems, emphasizing the importance of walking forward in virgin data. All major trading styles are examined, from momentum and counter-trending to pullback and volatility strategies, day-trading vs. longer-term trading vs. swing trading and so on.

Such market facets aren’t that new, any more than any of the other technical indicators Northcott presents. Rarely, though, has the subject matter been imparted in such a readable and thoughtful fashion. There is a logical progression from the basic trading tools to such professional business considerations as the selection of platforms and software as well as tax ramifications. Northcott has some fresh observations on trader psychology. For added spice, brief interviews with seasoned professionals are interwoven throughout the book and each chapter is summarized with convenient bullet points. The final chapters recap in a succinct overview.

Northcott’s agenda is obviously one of elucidation, which he achieves in near- encyclopedic fashion. Nothing seems like it’s a charlatan-like come-on. (The fact is, Northcott is only marginally plugged into the trading industry. He spent most of his career in engineering, which has spawned many famous market wizards).

The book is largely a guide to finding what trading style would be appropriate and feasible for the trader. There are plenty of choices in trading, and this book is a complete guide to arriving at them.

Art Collins is the author of “Beating the Financial Futures Market” and co-founder of the Trireme Capital hedge fund.

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