Seven Trading Systems for the S&P Futures by David Bean

By smilingsynic

Summary

The biggest strength of this book is its focus on testing trading systems empirically. The biggest weakness is the lack of readability. Those who use gaps in their trading will find this book useful, and system writers themselves may get some good ideas on their own just by reading this book. For what it offers, this book is a bargain. For those who remember the days of $3000 trading systems that collapsed upon purchase (or were totally made up insider the so-called trader’s head), this book will be reminder of just how far we’ve come.


Book Information

Seven Trading Systems for the S&P Futures
Capstone Trading, 2010
Written by David Bean

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Review

It is a lot easier than it used to be to publish a book. Many wanna-be trading gurus have flooded the market with e-books for Kindle, or with self-published paperback or hardcover books made in conjunction with Amazon.com. Most of the ones I have seen are poor, at best; embarrassing, at worst; but some are very good, if not outstanding. David Bean’s Seven Trading Systems for the S&P Futures fits into this third group, since it is worthwhile reading.

This is not an introduction to trading, or an introduction to writing trading systems. Above all, this is a collection of trading systems. All of them are based on overnight gaps: four address gap fills, and three gap continuation. The underlying data go back five years.

This is a short book (fewer than 100 pages) but arguably could have been even shorter. For the most part, Bean examines the seven systems enclosed one-by-one, discussing in some detail his thoughts about the systems. As a Tradestation user, Bean provides the Easy Language code for each one, as well as the results. If one does not use TS, or know how to translate EL code into one’s own software, this book may be of limited use.

The systems here were winners at the time of publication, with profit factors between 1.4-1.9, a few over 4.0. As expected, the systems with the highest profit factors trade the least. Experience mechanical traders do not miracles in the markets, and this book does not offer anything like a perfect system.

These systems are not overly curve-fitted. There is no get-rich-quick system here. And that is a positive quality, since systems with a profit curve that looks like a stairway to heaven are almost always curve-fitted to death, as if the exact past necessarily offers a clear vision of the future.

The biggest strength of this book is its focus on testing trading systems empirically. The biggest weakness is the lack of readability. Those who use gaps in their trading will find this book useful, and system writers themselves may get some good ideas on their own just by reading this book. For what it offers, this book is a bargain. For those who remember the days of $3000 trading systems that collapsed upon purchase (or were totally made up insider the so-called trader’s head), this book will be reminder of just how far we’ve come.

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