Trading 102 Getting Down to Business

by Harris, Sunny J.

• ISBN13: 9780471181330
• ISBN10: 0471181331
• Edition: 1st
• Format: Hardcover
• Copyright: 1998-10-06
• Publisher: Wiley

Summary

This unique guide is for individual investors who are thinking about taking the big leap into professional fund management. The first start-up guide pitched specifically to the concerns of professional traders, it covers all the bases, from regulations and taxes, to systems development and money management techniques.

Author Biography

SUNNY J. HARRIS is a professional trader and President of Sunny Harris & Associates Inc. of Carlsbad, California. A member of the Market Technicians Association, she is also publisher of the widely popular Trader's Catalog and Resource Guide (TC&RG).

Table of Contents

PREFACE	XV
CHAPTER 1 PLAN YOUR WORK, THEN WORK YOUR PLAN	1	(4)
CHAPTER 2 TECHNICAL ANALYSIS REVIEW	5	(14)
Technical Analysis vs. Fundamental Analysis	6	(1)
Curve Fitting	7	(2)
What Is Your Goal?	9	(1)
Predicting the Future	10	(1)
Necessary and Sufficient Tools	10	(2)
How Do You Prove Something?	12	(1)
Dancing with the Market	12	(4)
Is That All There Is?	16	(3)
CHAPTER 3 MECHANICAL TRADING SYSTEMS	19	(18)
Systematic Trading	19	(2)
Mechanical Systems	21	(1)
Do You Even Need a System?	21	(6)
Steps to Mechanization	27	(3)
Setting and Following the Rules	30	(4)
Automation	34	(1)
Data Collection	34	(3)
Chapter 4 Calculating Your Potential Hourly Wage^TM (PHW)	37	(20)
Introduction	37	(1)
How Much Can I Risk?	37	(1)
Inflation Rears Its Ugly Head	38	(3)
How Much Money Can You Make?	41	(2)
Step 1--Marking the Ideal Trades	43	(6)
Step 2--Overview Analysis	49	(5)
Step 3--Accounting for Reality	54	(3)
CHAPTER 5 BRAINSTORMING A NEW SYSTEM	57	(12)
Introduction	57	(1)
Chalkboards and Whiteboards	57	(2)
Overlays	59	(1)
What Is True?	60	(2)
Looks Like a Duck, Walks Like a Duck	62	(7)
CHAPTER 6 BUILDING A DATABASE	69	(6)
Introduction	69	(1)
Data Sources	70	(1)
How Much Is Enough?	71	(2)
Synthetic Contracts	73	(2)
CHAPTER 7 SOFTWARE FOR SYSTEMS TRADING	75	(10)
Introduction	75	(2)
What's Available and What Does It Do?	77	(8)
CHAPTER 8 DESIGNING YOUR SYSTEM	85	(12)
Introduction	85	(1)
Profits Swept Under	85	(1)
Design of Experiments	86	(1)
Putting Your Ideas on Paper	86	(1)
Accepting the Results	87	(10)
CHAPTER 9 FORMULAE FOR SYSTEMS DEVELOPMENT	97	(14)
The Proof Is in the Pudding	97	(1)
Getting from Here to There	98	(1)
Cardinal Profitability Constructs (CPC)	98	(9)
More Measures of Success	107	(3)
Conclusion	110	(1)
CHAPTER 10 BACKTESTING AND OPTIMIZING YOUR SYSTEM	111	(14)
Introduction	111	(2)
Your Lab Book	113	(3)
Am I Done Yet?	116	(4)
Comfort Zones	120	(4)
Branching Off	124	(1)
CHAPTER 11 SYSTEM PERFORMANCE ASSESSMENT	125	(8)
Introduction	125	(1)
Keeping Track	125	(1)
Measurements	126	(5)
Conclusion	131	(2)
CHAPTER 12 FOLLOWING YOUR SYSTEM	133	(4)
Introduction	133	(1)
Post-it Notes	133	(1)
Buckle Up for Safety	134	(1)
Conclusion	135	(2)
CHAPTER 13 THE SCIENCE OF ORGANIZING YOURSELF	137	(10)
Time Management Tools	137	(2)
Keeping Track of the Days	139	(1)
Your Hourly Wage	140	(1)
Sorting	141	(1)
More Sticky Notes (Usually Post-it Notes)	141	(1)
Keep All of Your Organizing Tools in One Place	142	(1)
Color Schemes	143	(1)
Organizing Your Trading Ideas	143	(1)
Space Planning	144	(1)
Computer Power	144	(1)
Quick Reference	144	(1)
Your Trading Records	145	(1)
Income and Outgo	146	(1)
Taxes	146	(1)
Summary	146	(1)
CHAPTER 14 THE SCIENCE OF THE BUSINESS	147	(20)
Introduction	147	(1)
Getting Down to Business	148	(1)
Setting Goals	149	(3)
Planning Your Business	152	(4)
Your Trading Business Plan	156	(8)
That's It	164	(3)
CHAPTER 15 DEALING WITH PSYCHOLOGICAL ISSUES	167	(26)
Adrienne Laris Toghraie
Self-Evaluation for Sabotage Traps in Your Trading	169	(3)
The Eight Major Psychological Traps for Traders and the Strategies for Overcoming Them	172	(19)
Summary	191	(2)
APPENDIX A COMPONENTS OF THE DOW JONES INDUSTRIAL AVERAGE	193	(2)
APPENDIX B EXCHANGES	195	(8)
APPENDIX C ANNUAL CLOSING VALUES OF THE DOW JONES INDUSTRIAL AVERAGE AND YEAR OVER YEAR INCREASE	203	(2)
APPENDIX D MARGIN REQUIREMENTS AS OF FEBRUARY 1, 1997--ARRANGED ALPHABETICALLY BY COMMODITY	205	(2)
APPENDIX E MARGIN REQUIREMENTS AS OF FEBRUARY 1, 1997--ARRANGED IN ASCENDING ORDER BY INITIAL MARGIN	207	(2)
APPENDIX F WHO'S WHO IN TRADING	209	(2)
BIBLIOGRAPHY	211	(2)
INDEX	213