Smarter Trading: Improving Performance in Changing Markets

Are you a stock, bond, or futures trader who would like to build a successful trading system for today's rapidly changing, highly volatile markets? Does your career hinge on being able to track, immediately comprehend, and profit from the bewildering pace of market, volume, and price changes that have been brought about by such recent developments as computerized trading, economic globalization, and the emergence of massive money funds? If so, this savvy, expert guide to building a trading system that is truly change adaptive is for you!

In Smarter Trading, distinguished author and trader Perry Kaufman shows you how to cope with financial market uncertainty by creating a "robust" trading model that adapts quickly to market changes and yields stronger, more predictable results. And he teaches you how to make sense of the current barrage of sophisticated trading technologies - including neural networks, fuzzy logic, and expert systems. You'll learn to select technical tools best suited for your level of sophistication and align them with your own trading strategies. You'll be given the author's time-proven approaches to analyzing and interpreting markets, managing risk, and building virtually self-adjusting trading systems.

And you'll learn how to:

- Discern if one trading strategy or method is really better than another

- Avoid fatal trading losses

- Figure out what to value - and what to discard - from today's near avalanche of market data

- Adapt a trading strategy to fit the unique personalities of widely different markets

Smarter Trading walks you step-by-step through the important techniques and procedures designed to master market volatility. By the time you're finished reading this book, you'll have a sophisticated grasp of:

- Structural change in stock and derivatives markets

- Price shocks

- The benefits of risk and return evaluation

- Integration of technical and fundamental methods

- Principles of trend trading

- Self-adjusting trading techniques

- Testing for robustness

- And much more!

Table of Contents

Preface

1. The Impact of Change on Markets and Trading

2. Assessing Market Reality

3. Reasonable Expectations Give Achievable Results

4. Risk and Return

5. Profit-Taking

6. The Mixed Role of Stops for Controlling Risk

7. Understanding Price Shocks

8. Smarter Trend-Following

9. Computer Learning, Neural Networks, and New Technology

10. Testing for Robustness

11. Improving the Performance of Existing Systems

Appendix: Notation and Terminology

Index