The Big Trade E-Book

Peter Pham

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 263

Veröffentlichungsjahr: 2012

Beschreibung

A powerful, profitable, and elegantly simple system for traders Markets can be extraordinarily complex, and unfortunately most trading systems are too. The Big Trade presents a new system that helps filter out the noise. It leaves behind only meaningful signals you need to listen to in order to make profitable trades. Employing simple math and charts, it codifies the past behavior of traders in your favourite stock to assist you to recognize high probability trading patterns. Peter Pham's system breaks with traditional analytical tools and rejects the theory of predictability. Instead, it lets traders understand both how markets are structured and how they behave. The result is a simple action plan that is as effective and applicable for day traders as it is for generational investors. Blending his personal story and analytical techniques, The Big Trade guides traders of all experience level to find the probability that a stock price will rise or fall in a particular time period. The Big Trade: * Gives traders a powerful, yet simple trading methodology * Was written by a trader with twelve years of both buy and sell side experience in global equities trading * Is appropriate for most styles of trading, including institutional investing and day trading For traders who want a universal approach that works for any market at any time, The Big Trade offers a new and effective methodology for successful trading without gimmicks or magic formulas.

Leseprobe

Contents

Acknowledgments

Preface

Chapter 1: Breaking with Tradition

Then I Got High

Training Sequence

Technical Difficulties

Reading Is Fundamental

Inductively Coupled Failure

The Big Trade

We’re Getting the Band Back Together

Summary

Chapter 2: The Conditions of Change

Livin’ on the Edge

Closing Time

The Outsiders

Living Day to Day

Sold to the Highest Bidder

Breaking It Down

Finites Move in Infinite Markets

Summary

Chapter 3: Wax On, Wax Off

What Goes Around Comes Around

It’s Always Noon Somewhere

Opening Range Jitters

Objects in Motion

Summary

Chapter 4: As the Market Turns . . .

Subconscious Implications

Elephant Walk

Breakouts versus Reversals

Losing Your Inhibitions

Reversal of Fortune

Traders Do It with Frequency

Rules of Engagement

Turn Around and Make Money

Heading for the Exits

Becoming a Reactionary

Summary

Chapter 5: The Range Is Your Friend

Sideways

Waves of Sentimentality

Where Are They Now?

The Edge of Value

The Great One

Summary

Chapter 6: Closing Arguments

Crossing the Great Stream

Pressing the Issues

The Point of the Journey Is Not to Arrive

Summary

Appendix A: Terms and Definitions

Appendix B: Trading Examples

Appendix C: Spreadsheet Examples

Appendix D: Supporting Data for Nvidia Example in Chapter 4

About the Author

Index

Copyright © 2013 by John Wiley & Sons Singapore Pte. Ltd.

Published by John Wiley & Sons Singapore Pte. Ltd.

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All rights reserved.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as expressly permitted by law, without either the prior written permission of the Publisher, or authorization through payment of the appropriate photocopy fee to the Copyright Clearance Center. Requests for permission should be addressed to the Publisher, John Wiley & Sons Singapore Pte. Ltd., 1 Fusionopolis Walk, #07-01, Solaris South Tower, Singapore 138628, tel: [phone], fax: [phone], e-mail: [email protected].

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor the author shall be liable for any damages arising herefrom.

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ISBN 978-1-118-49895-8 (Hardcover)

ISBN 978-1-118-49896-5 (ePDF)

ISBN 978-1-118-49898-9 (Mobi)

ISBN 978-1-118-49899-6 (ePub)

This book is dedicated to all friends and loved ones as well as those who have provided me with support and challenged me to continuously improve, not only as a professional but as a person.

Acknowledgments

I would like to thank everyone who has an interest in the markets and trading, as you were the inspiration for me to codify my methods and share them with those who are interested in seeking an alternative trading strategy.

I would also like to thank the team at AlphaVN.com, who have risen to the challenge of building something of value from very humble beginnings.

Preface

Over four centuries ago, the invention of both the telescope and microscope brought new focus to a data measurement revolution. The ability to bring far away objects closer and make tiny objects bigger opened the world and sky up to new levels of observation. The science of optics fed our curiosity and ignited our imaginations.

Today our world is awash in data; we are swimming in it. We call this the Information Age but we could just as easily call it the Data Age. The art of statistics and the use of Big Data are leading to revolutions in fields as diverse as the physical sciences, sports, and economics. It doesn’t matter if you’re the general manager of a hockey club or a process engineer working for a solar cell manufacturer, data is your work’s lifeblood, and without accurate and precise data we would not have been able to make the kinds of strides we have. This use of data is spearheading a decision-making revolution that is changing the very foundations of our society.

Similar to how the use of optic lenses four centuries ago paved the way for the Age of Enlightenment, we are living through a leap forward in the types and quality of observations we can make about our world. No longer are we intuiting our decisions based on a mix of anecdotal evidence and supposition. We can make an observation, test its validity, and make decisions based on it. Data is at the heart of how we conduct business and how prices paid form markets for our goods.

Over the past decade I’ve had the pleasure to stumble upon this big and small data phenomenon in my pursuit of understanding capital markets. What I have discovered is that data-driven discovery is fundamentally changing the way our lives work, and those who master its manipulation will have an inherent competitive advantage over their peers. This is especially true in the capital markets, where quantitative analysis mixed with the brute force of vast amounts of capital create a very hostile environment for the individual investor. It is my hope that this book will help level that playing field a little bit for you.

As I said, we live in a world steeped in data. Information comes screaming at us in waves and it is easy to be overwhelmed by it, become lost in it. Big Data can and often does overwhelm the smallest actor. But it doesn’t have to.

The bigger they are, the harder they fall. One person with an idea and the will to implement it in this age of unprecedented access to high-quality information can disrupt things, and use it to their advantage. Previously, information itself was the barrier to entry into the markets. Today, the biggest worry for most established players is not innovating by producing new information but keeping information under their control and away from you. Think of the music industry or Apple’s patent litigation against Samsung and you have an idea of where we’re headed.

Take heart, because inside of each of us is our Big Idea. I believe that. Everyone has at least one, biding its time and waiting for you to believe in it. With time, attention, and the proper use of Big Data, we all have the means to see our Big Idea become real. It’s simple, really, when you stop to think about it. It is a little thing in a big world, but it is the secret to finding and making The Big Trade.

Chapter 1

Breaking with Tradition

Can you imagine what I would do if I could do all I can?

—Sun Tzu

Then I Got High

I don’t know about you, but the day I decide to try my hand at something new, it’s all I can think about. It’s like the smell of a new car. We’re not really sure where it comes from or why it affects us; we only know that it does. There’s an excitement with any new endeavor. The possibilities seem endless. It is the allure of entrepreneurship, the conscious knowledge that we are taking a risk far outside of ourselves; a leap of faith into the world of potential—and that risk is intoxicating.

In our imagination, making money in the markets looks far easier than eking out a living at our boring day jobs. During the last phase of any bull market, that may actually be true for a lot of people, but sooner or later we must leave the world of imagination and enter the world of reality.

The reality is that valuations of the assets in any bull market—be they stocks, gold, or tulips—become fictional with respect to their fundamentals, and the window of opportunity to recognize that the imaginary world can no longer be sustained is very short and requires swift action. shows the spectacular crash of Japan’s Nikkei 225 Index, which, if I’d been paying attention, would have served as a harbinger of things to come.