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Fooled By Technical Analysis

Fooled by Technical Analysis: The perils of charting, backtesting and data-mining, is available on an annual subscription basis. This is an online book and if you subscribe you will not get a hard copy or a PDF. You can use your username and password to read the book online. (Free extensions of the subscription period will be provided upon request.)

 

 

Publication Date: 09/01/2015
First Revision:       09/20/2017
Second Revision: 04/22/2019
Language: English
270+ pages (6″ x 9″ )
74 high quality charts
Available online only
Table of  Contents

 

First revision: September 20, 2017. A section on pitfalls of validation tests was added.
Second revision: April 22, 2019, under Trading Expectation a reference and quote from a paper by the author were added to clarify further the notion of expectation. 

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It was about time that someone spoke up about the perils of chart analysis, back-testing and data-mining clearly and honestly. In this book you will learn why naive chartists and quants have no chance of profiting from trading the markets and how expert chartists and quants attempt to maximize their winning odds. There are many examples that illustrate the points made in the book.

You will learn why:

  • Classical chart patterns are unprofitable
  • Chart analysis has no logical foundation
  • Statistical hypothesis testing is not applicable in system development
  • Naive quants are fooled by the expectation formula
  • Out-of-sample validation tests should be avoided
  • Walk forward optimization and Monte Carlo analysis are ineffective
  • Frequent backtesting almost always leads to failure
  • Most intraday traders fail and many get ruined
  • Experienced chart traders do not use patterns for market timing 
  • Focusing on invalidating strategies is important

 

You will also learn about: 

  • The limitations of backtesting and how to properly use it
  • Data-mining and data snooping bias
  • Processes that contribute to data-mining bias
  • Popular myths about data-mining bias
  • The pitfalls of strategy validation tests
  • Effective trading system validation tests
  • Determining capital requirements and position size for system trading
  • The current alternatives to technical analysis
  • Cognitive biases that plague chart analysis
  • The effects of trading friction and trading timeframes on profitability

 

and much more.

Click here for the full table of contents. You may subscribe below.

Price: $75/year. A free extension of the subscription period will be provided upon request. Bonus: A free subscription to the book 15 Lies About Trading And Investing.

Terms

Online book subscribers do not receive a hard copy, ebook or PDF. Instead they can use the username and password selected below to read the books online. Note: there are no refunds for cancellations. After subscribing you can download a receipt from your subscription details page

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One Year Subscription to the books Fooled By Technical Analysis and 15 Lies About Trading And Investing

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