Experiences of Amateur Trader & Review of Curtis Arnold's PPS Book
Tim Jewett
Here is a book review from an unbiased trader. That is, I am an amateur so far, not having opened a brokerage account, but paper trade to learn the markets and gain experience using various approaches. I have no turf to defend, have made no trading errors (by definition), and have neither profits nor losses to cloud my judgment. I believe in and practice a slow, methodical approach.
In the past 15-months, I've read a wheelbarrow full of trading books, plotted lots of price bars, figured out all the option spreads and synthetics, and audited (by tape) and attended trading conferences. My initial orientation to futures trading was contrarian, and it took some time to discover how inappropriate that really is for a new trader.
I have now settled into classical chart pattern analysis, trading breakouts within trends, and naturally have a copy of Edwards and McGee's seminal work. The shortcoming is that this work does not purport to be a guide to the futures markets, and there has been no similar source to turn to for this information. Most authors in Technical Analysis texts seem driven to discuss mathematical indicators, or to offer brief speculations on chart patterns, there being no research to abstract from.
Well, if you're with me so far, and you think you know all you need to know about chart patterns, I strongly recommend you to Curtis Arnold's new book, entitled "Curtis Arnold's PPS Trading System." Dave mentioned this book in a brief review last month. I'd like to amplify his endorsement because this book meets so many needs of so many traders, including mine, for new pattern research in the futures field.
This is one of the very few trading books I've read, which I haven't sent back. Why? If you ever plan to make a trade based on a chart pattern, you're essentially in the dark unless you read this book! The author, having years of bitter trading experience, sat down and researched what actually happened with the very common (futures) chart patterns over 10-years of market data!
He provides some of this raw data, so you can see just what he did. Data are presented for pattern reliability and profitability for each pattern researched, and these numbers depend on the direction of the trend! The conclusions are given very directly, and some of them explode popular myths about some patterns (reliability of the head & shoulders, for one).
There is a pattern recognition workbook section, with answers. He also distills the very best of all the major, must know trading topics to help you put it all into action - from psychology to backwardation. And, if all this is not enough, there is a computer system which has been developed from these pattern concepts, and its operation is well described - to include definitions of all the program variables. A partial demo disk is included with the book.
The systems Curtis Arnold describes have stunning track records for the past 7-years, or since inception. The software allows segregated or group plots of individual markets in a portfolio to analyze good and poor performance markets.
I have no connection with Curtis Arnold or PPS, and have no stake in this review, except to share my excitement in finding just what I had been looking for in a trading book for a long-time. I only found a few obvious numerical errors (in an appendix), and plan to write with a few questions on interpretation of data and conclusions.
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