Synopses & Reviews
Written by the creator of MESA, a popular, proven and successful computerized trading system. Establishes a philosophical foundation for the existence of cycles in the market, detailing their basic characteristics. Traditional moving averages, indicators and momentum functions are examined from the cyclic perspective in order to confirm effects in the dynamic marketplace. All of the principles are combined in examples to illustrate how trading strategies can be altered to improve probability of establishing successful trades.
Synopsis
Shows how to use principles of engineering and signal processing to find cycles. Offers mathematical tools to filter out market "noise" using short-term data to recognize and identify cyclical market behavior.
Synopsis
The Wiley Trader's Advantage is a new series of concise, highly focused books designed to keep savvy futures, options, stocks, bonds, and commodities traders abreast of the latest, successful strategies and techniques used by the keenest minds in the business. Each title delivers timely cutting-edge guidance on a key aspect of trading, including trading systems, portfolio management methods, computerized forecasting, and systems optimization. In MESA and Trading Market Cycles, John Ehlers provides traders and professional speculators with the first full-length, definitive treatment on using MESA (Maximum Entropy Spectral Analysis)--the author's well-known and highly respected computerized trading system--and cyclical analysis to create and execute highly profitable forecasting and trading strategies. This practical book first validates the existence of market cycles by using analogies to physical phenomena and direct measurement. It then profiles the basic characteristics of cycles, and fully describes traditional moving averages, momentum functions, and indicators from the cyclic perspective. From here, the author focuses on MESA, explaining how it works, how it compares to Fast Fourier Transform, and how traders can use its high-resolution spectral estimates to consistently pinpoint and exploit market cycles and trends. For maximum advantage, MESA and Trading Market Cycles walks readers through realistic trading examples that demonstrate the precision and utility of MESA under widely varying market conditions. Throughout, it supplies professional-level guidance on tuning momentum and moving average functions to measured cycles; relating cycle primitives to traditional chartingpatterns and imbuing them with new meaning; deciding when to use cycles for trading and when to avoid them; and differentiating between tradeable cyclic content, trending activities and seasonal factors. The first book to combine cycles, technical analysis, and MESA, this vital guide shows results-driven traders in the futures, options, and stock markets how to boost the probability of establishing successful trades and profitably increase their bottom line.
Description
Includes bibliographical references (p. 135-136) and index.
Table of Contents
Why Cycles Exist in the Market.
Cycle Basics.
Principles of Cycles.
Effects of Moving Averages.
Effects of Momentum.
How Cycles Help Trading.
Setting Stops.
Cycle Measurement.
How MESA Works.
Using the Spectrum to Identify Cycles and Trends.
Putting It All Together.
Trading with MESA.