I am pleased to announce the release of my new book Fooled by Technical Analysis: The perils of charting, backtesting and data-mining.
I decided to publish this book because it is time that someone spoke up about the perils of chart analysis, back-testing and data-mining in a clear and honest way. In this book you will learn why naive chartists and quants have low or no chance to profit from trading the markets and how expert chartists and quants attempt to maximize their winning odds. There are many examples with charts and analysis that illustrate the points made in the book. Below is a partial list of the subjects covered.
- The perils of trading with classical chart patterns
- Why chart analysis has no logical foundation
- Which cognitive biases plague chart analysis
- How expert chartists use patterns and indicators
- How naive quants are fooled by the expectation formula
- Why statistical hypothesis testing is not applicable in system development
- What are the effects of trading friction and timeframes on profitability
- How markets fool you that you have an edge to take your money
- What the primary objective should be when backtesting systems
- When to backtest and when not to
- How data-mining and data snooping bias arise
- Which processes contribute to data-mining bias
- What are some popular myths about data-mining bias
- Why out-of-sample validation tests should be avoided
- Why walk forward optimization and Monte Carlo analysis are ineffective
- Which validation tests are more effective
- How to determine capital requirements for system trading
- How to properly determine position size
- Why you should always use some from of a stop-loss
- What are the current alternatives to technical analysis
and much more.
The book is available online on a 6-month subscription basis. Click here to purchase a subscription.
Click here for the table of contents.
© 2015 Michael Harris. All Rights Reserved. Any unauthorized copy, reproduction, distribution, publication, display, modification, or transmission of any part of this blog is strictly prohibited without prior written permission.